SEPT 5 A/GOLD UP $2.30 TO $1195.90/SILVER IS UP 4 CENTS TO $14.20/DESPITE THE GOLD RISE WE HAD ANOTHER RAID AT THE GLD (GOLD) INVENTORY TO THE TUNE OF 8.24 TONNES/NO CHANGE IN SILVER INVENTORY AT THE SLV/USA HAS ANOTHER HUGE 50 BILLION DOLLAR TRADE DEFICIT OF WHICH 36 BILLION DOLLARS CAME FROM CHINA/TRUMP AGAIN WILLING TO SHUT DOWN GOVERNMENT AS HE WANTS HIS WALL!!

 

GOLD: $1195.90 UP  $2.30 (COMEX TO COMEX CLOSINGS)

Silver:   $14.20   UP 4 CENTS (COMEX TO COMEX CLOSING)

 

Closing access prices:

Gold $1196.75

silver: $14.19

 

 

For comex gold:

AUGUST/

 

And now Sept:

NUMBER OF NOTICES FILED TODAY FOR SEPT CONTRACT:  10 NOTICE(S) FOR 1000  oz

Total number of notices filed so far for Sept:  430 for 44,000 (1.337 tonnes)

 

 

For silver: 

Sept

593 NOTICE(S) FILED TODAY FOR

2,965,000 OZ/

Total number of notices filed so far this month: 4668 for 23,340,000 oz

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Bitcoin: BID $6964/OFFER $7048: DOWN  $352(morning)

Bitcoin: BID/ $6898/offer $6983: DOWN  $415(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: $1199.44

NY price  at the same time:$1193.85

 

PREMIUM TO NY SPOT: $5.59

XX

Second gold fix early this morning: $ 1200.47

 

 

USA gold at the exact same time:$1193.10

 

PREMIUM TO NY SPOT:  $7.37

XXXX

 

China is controlling the gold market

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 ROSE BY A CONSIDERABLE 551 CONTRACTS FROM 211,840 UP TO 212,391 DESPITE YESTERDAY’S HUGE 37 CENT FALL IN SILVER PRICING AT THE COMEX. 

 

TODAY WE  MOVED CONSIDERABLY CLOSER TO LAST MONTH’S RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY(WELL OVER 30 MILLION OZ AT THE COMEX FOR JULY , 6 MILLION OZ FOR AUGUST AND NOW OVER 31 MILLION OZ STANDING IN SEPTEMBER. AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S.  WE WERE  NOTIFIED  THAT WE HAD HUMONGOUS SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

EFP’S FOR SEPT.  6151 EFP’S FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 6151 CONTRACTS. WITH THE TRANSFER OF 6151 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 6151 EFP CONTRACTS TRANSLATES INTO 30.75MILLION OZ  ACCOMPANYING:

1.THE 37 CENT FALL IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR THE JUNE/2018 COMEX DELIVERY MONTH. (5.420 MILLION OZ);  30.370 MILLION OZ  STANDING FOR DELIVERY IN JULY, FOR AUGUST: 6.065 MILLION OZ AND NOW 30.330 MILLION  OZ STANDING SO FAR IN SEPT.

 

 

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

8825 CONTRACTS (FOR 2 TRADING DAYS TOTAL 8825 CONTRACTS) OR 44.125 MILLION OZ: (AVERAGE PER DAY: 4413 CONTRACTS OR 22.06 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF SEPT:  144.125 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 6.30% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)*  JUNE’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:           2,081.95    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

ACCUMULATION FOR MAY 2018:                                             210.05         MILLION OZ

ACCUMULATION FOR JUNE 2018:                                           345.43         MILLION OZ

ACCUMULATION FOR JULY 2018:                                            172.84          MILLION OZ

ACCUMULATION FOR AUGUST 2018:                                      205.23          MILLION OZ.

RESULT: WE HAD A CONSIDERABLE SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 551 DESPITE THE 37 CENT FALL IN SILVER PRICING AT THE COMEX YESTERDAY. THE CME NOTIFIED US THAT WE HAD A HUMONGOUS SIZED EFP ISSUANCE OF 6151  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) .

TODAY WE GAINED A MONSTER SIZED: 6702 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 6151 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH A INCREASE OF 551  OI COMEX CONTRACTS. AND ALL OF THIS HUGE GAIN IN DEMAND HAPPENED WITH A GIGANTIC 37 CENT LOSS IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.16 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THE BIG JULY DELIVERY MONTH OF SLIGHTLY OVER 30 MILLION OZ, IN AUGUST ANOTHER BIG 6.065 MILLION OZ IN A NON ACTIVE MONTH AND NOW IN SEPTEMBER AN INITIAL MONSTROUS 30.330 MILLION OZ AMOUNT OF SILVER STANDING FOR DELIVERY IN SEPTEMBER.. NOBODY IS PAYING ATTENTION TO THE HUGE NUMBER OF PHYSICAL OUNCES STANDING FOR SILVER THESE PAST SEVERAL MONTHS.

 

In ounces AT THE COMEX, the OI is still represented by OVER 1 BILLION oz i.e. 1.062 MILLION OZ TO BE EXACT or 152% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT AUGUST MONTH/ THEY FILED AT THE COMEX: 593 NOTICE(S) FOR 2,965,000 OZ OF SILVER

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 243,411 CONTRACTS ON APRIL 9.2018 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51.  

AND NOW WE RECORD FOR POSTERITY ANOTHER ALL TIME RECORD OPEN INTEREST AT THE COMEX OF 244.,196 CONTRACTS ON AUGUST 22/2018 AND AGAIN WHEN THIS RECORD WAS SET, THE PRICE OF SILVER WAS $14.78 AND LOWER IN PRICE THAN PREVIOUS RECORDS.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. AND NOW SEPT:  AN INITIAL HUGE 30.330 MILLION OZ.
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

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).

IN GOLD, THE OPEN INTEREST ROSE BY A VERY STRONG SIZED 6,534 CONTRACTS UP TO 473,118 DESPITE THE DROP IN THE COMEX GOLD PRICE/YESTERDAY’S TRADING (A FALL IN PRICE OF $7.55)THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED AN UNBELIEVABLE SIZED 15.652 CONTRACTS:

OCTOBER HAD EFP’S ISSUED AND, DECEMBER HAD AN ISSUANCE OF 15,652 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 473,118. 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 AN AN ATMOSPHERIC AND AN UNBELIEVABLE SIZED OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 22,186 CONTRACTS6534 OI CONTRACTS INCREASED AT THE COMEX AND 15,652 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN:  22,186 CONTRACTS OR 2,218,800 OZ = 69.00 TONNES.  AND ALL OF THIS ATMOSPHERIC AND UNBELIEVABLE DEMAND  OCCURRED WITH A GIGANTIC FALL IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $7.55?????????????????????????????.

 

 

YESTERDAY, WE HAD 4330 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 19982 CONTRACTS OR 1,998,200 OZ OR 62.15 TONNES (2 TRADING DAYS AND THUS AVERAGING: 9991 EFP CONTRACTS PER TRADING DAY OR 999,100 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: 62.15 TONNES

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

THUS EFP TRANSFERS REPRESENTS 62.15/2550 x 100% TONNES =  2.43% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     5,259.10*  TONNES   *SURPASSED ANNUAL PROD’N

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018:           653.22  TONNES (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY 2018:         649.45 TONNES  (20 TRADING DAYS)

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)

ACCUMULATION OF GOLD EFP’S FOR MAY 2018:                   693.80 TONNES ( 22 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR JUNE 2018                      650.71 TONNES  (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR JULY 2018                       605.5 TONNES     (21 TRADING DAYS)

ACCUMULATION OF GOLD EFP FOR AUG. 2018                       488.54  TONNES  (23 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 VERY STRONG SIZED INCREASE IN OI AT THE COMEX OF 6534 DESPITE THE LOSS IN PRICING ($7.55 THAT GOLD UNDERTOOK YESTERDAY) // .  WE ALSO HAD AN ATMOSPHERIC NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 15652 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 15652 EFP CONTRACTS ISSUED, WE HAD A GAIN OF 27,105 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

15652 CONTRACTS MOVE TO LONDON AND 6534 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 69.00 TONNES). ..AND THIS GAIN IN DEMAND OCCURRED WITH THE LOSS OF $7.75 IN YESTERDAY’S TRADING AT THE COMEX.

 

 

we had: 10 notice(s) filed upon for 100oz 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 $2.30  TODAY: / 

 

THE COMEX BLEEDS GOLD AGAIN AS WE HAVE ANOTHER BIG CHANGE IN GOLD INVENTORY AT THE GLD

A WITHDRAWAL OF 6.24 TONNES

 

/GLD INVENTORY   746.92 TONNES

Inventory rests tonight: 746.92 tonnes.

TO ALL INVESTORS THINKING OF BUYING GOLD THROUGH THE GLD ROUTE: YOU ARE MAKING A TERRIBLE MISTAKE AS THE CROOKS ARE USING WHATEVER GOLD COMES IN TO ATTACK BY SELLING THAT GOLD.  IT SURE SEEMS TO ME THAT THE GOLD OBLIGATIONS AT THE GLD EXCEED THEIR INVENTORY

SLV/

WITH SILVER UP 4  CENTS TODAY

NO CHANGES IN SILVER INVENTORY AT THE SLV;

 

/INVENTORY RESTS AT 329.856 MILLION OZ.

 

NOTE THE DIFFERENCE BETWEEN THE GLD AND SLV: THE CROOKS CAN RAID GOLD BECAUSE THEY DO HAVE SOME PHYSICAL.  THEY DO NOT RAID SILVER PROBABLY BECAUSE THERE IS NO REAL SILVER INVENTORIES BEHIND THEM

 

end

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

1. Today, we had the open interest in SILVER ROSE BY A CONSIDERABLE SIZED 551 CONTRACTS from 211,804 UP TO  212,291  AND MOVING A LITTLE CLOSER TO THE NEW COMEX RECORD SET LAST  MONTH AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..

 

.

OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS  AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:

 

EFP CONTRACTS FOR SEPTEMBER, 6151 CONTRACTS FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 6151 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 551 CONTRACTS TO THE 6151 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A NET GAIN OF 6702 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 33.51 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 6.065 MILLION OZ FOR AUGUST.. AND NOW A HUGE 30.330  MILLION OZ INITIALLY STAND FOR SILVER IN SEPTEMBER….

 

 

RESULT: A CONSIDERABLE SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 37 CENT PRICING LOSS THAT SILVER UNDERTOOK IN PRICING YESTERDAY. BUT WE ALSO HAD A  GOOD SIZED 6151 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, 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

i) WEDNESDAY MORNING/ TUESDAY NIGHT: Shanghai closed DOWN 46.24 POINTS OR 1.68%   /Hang Sang CLOSED DOWN 729.49 POINTS OR 2.61%/   / The Nikkei closed DOWN 116.07 POINTS OR 0.51%/Australia’s all ordinaires CLOSED DOWN 0.93%  /Chinese yuan (ONSHORE) closed UP  at 6.8313 AS POBC HALTS ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER/Oil DOWN to 68.95 dollars per barrel for WTI and 77.36 for Brent. Stocks in Europe OPENED RED //.  ONSHORE YUAN CLOSED  UP AT 6.8313 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8519: HUGE DEVALUATION/PAST SEVERAL DAYS STOPS// TRADE TALKS NOT DOING TOO GOOD   : /ONSHORE YUAN TRADING  STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA/

 

 

 

 

b) REPORT ON JAPAN

 

3 C/  CHINA

 

4/EUROPEAN AFFAIRS

i)Germany/UK/Brexit

Germany’s government have softened their key demands on a Brexit and this will ease the path for the UK to strike a deal with the European union

( zerohedge)

ii)UK/RUSSIA

I can assure you that Putin will not be too happy with these charges against two Russian nationals;  Petrov and Boshirov

( zerohedge)

iib)Just one small problem with this arrest:  both cannot occupy the same space at exactly the same time

have fun with this one;

( zerohedge)

Italy

A good commentary explaining the problems facing Italy as for 20 years, they experienced no growth in their GDP.  The new government no doubt will ask Brussels for a bigger increase in their budget spending..probably north of 3% of their GDP.  Also the migrant issue is also of extreme importance

( Chris Wood/Grizzle.com)

 

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Iran/Lebanon/Hezbollah

Intelligence sources now accuse Iran of supplying missiles to Hezbollah via civilian airlines

( zerohedge)

 

6. GLOBAL ISSUES

This is why it would be foolish for Trump to attack Canada in their NAFTA discussions.  The USA will need Canada’s water

(courtesy Michael Snyder)

 

7. OIL ISSUES

Oil drifted further south despite smaller than expected crude draw down

( zerohedge)

8 EMERGING MARKET ISSUES

i)INDIA
India is a potential problem in the coming years but not as bad as Turkey and Argentina.  It has twin deficits of 3.3% fiscal and 2.3% current account and so far they have adequate USA reserves of 400 billion.  However reserves are declining and this may present future problems.  India taxes it’s citizens equivalent to 60% and the wrong move for the Indian government is to raise taxes again..that will cause a huge flight.  India’s debt in rupees is 96% of total debt..and thus much different to Turkey and Argentina
( Daniel Lacalle)
ii)all other emerging markets

the rout across emerging markets continues unabated.  The definition of contagion:  “catching falling knives inside emerging markets:”

( zerohedge)

9. PHYSICAL MARKETS

i)With the consumption tax set to rise to 10% Japan is bracing itself for another rush of gold smuggling as gold is taxed in Japan but not Hong Kong

( Nikkei/Asian Review/GATA)

ii)Chris Powell and Craig Hemke talk about the lows of gold and silver equal to the cost of production. If the Bozos knock the price further down, then mining companies mothball their properties…supplies dwindle to nothing..and then China buys up the mines at distressed prices while our mining CEO’s gleefully applaud.

( Chris Powell/GATA)

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

 

i)Market trading /GOLD/MARKET MOVERS:

MARKET TRADING

Markets do not like the latest: tech regulations looms from Congress.  Amazing, they seem to turn their heads on emerging market turmoil, on tumbling hard USA data and tightening global central bank policies but regulate technology companies..not good

( zerohedge)

ii)Market data

a)Trump will not be happy as the trade deficit with the world came in at a huge $50.1 billion dollars. The deficit with China was about 36.$ billion of that.  Trump no doubt just received his signal to initiate the 200 billion dollars worth of tariffs on the next lot of Chinese goods

( zerohedge)

b)Rents soar across the USA as the average rises to $1412.  It will be difficult for workers if rent takes up the majority of their income
( zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

a)Seems that in many districts, the Democrats are certainly turning to the left.  in the latest, a democrat backed by Ocasio Cortez topples a 10 term incumbent in a Boston primary
( zerohedge)

b)BERNIE introduces the “stop Bezos Act” as the new bill will require all retailers like Amazon and Walmart to pay back the government for food stamps, and public housing, Medicaid and other federal assistance received by their workers.  He will introduce a 100% tax on those employees to be paid by the corporation.  Lots of fun.

(courtesy zerohedge)

iv)SWAMP STORIES

a)Trump is visibly upset with the “terrible message’ sent by Nike in its latest ad campaign with Colin Kaepernick

( zerohedge)

b)Looks like Mueller is giving in: He will accept written answers from Trump on Russian collusion

(courtesy zerohedge)

c)Trump is willing to shut down government as he wants funding for his wall

( zerohedge)

 

 

Let us head over to the comex:

 

The total gold comex open interest ROSE BY A CONSIDERABLE SIZED 6534 CONTRACTS UP to an OI level 473,118 DESPITE THE  FALL IN THE PRICE OF GOLD ($7.55 LOSS/ YESTERDAY’S COMEX 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 AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. IT IS UNUSUAL TO SEE THE OPEN INTEREST IN GOLD CONTINUE TO CONTRACT AS WE START A NEW MONTH (SIMILAR TO WHAT WE ARE WITNESSING IN SILVER).  MAYBE THE BANKS ARE TRYING TO UNLOAD AS MANY AS POSSIBLE OF THEIR SHORT PAPER GOLD/SILVER CONTRACTS.

 

WE ARE NOW IN THE  NON ACTIVE DELIVERY MONTH OF SEPT..  THE CME REPORTS THAT THE BANKERS ISSUED A  HUMONGOUS SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 15,652 EFP CONTRACTS WERE ISSUED:

OCTOBER: 0 EFP’S AND DECEMBER:  15652 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  15652 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: A 22,186 TOTAL CONTRACTS IN THAT 15,652 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 6534 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES:  22,186 contracts OR 2,218,600  OZ OR 69.00 TONNES.

Result: A STRONG SIZED INCREASE IN COMEX OPEN INTEREST DESPITE THE FALL IN PRICE/ YESTERDAY (ENDING UP WITH THE LOSS IN PRICE OF $7.55). THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES:  22,186 OI CONTRACTS..

We are now in the active contract month of SEPTEMBER. For the September contract month, we lost 43 contracts and thus the number of  open interest contracts standing for gold in this front month is 101 contracts. We had 49 notices filed on Friday so we surprisingly again gained 6 contracts or an additional 600 oz will stand for gold and these guys refused to accept a fiat bonus and transfer to London.  This is very strange for gold to see queue jumping so early in  the delivery cycle.  We have been witnessing this phenomenon for the past 17 months in silver.

 

 

 

 

 

THE NEXT ACTIVE DELIVERY MONTH IS  OCTOBER AND HERE THE OI LOST 1950 CONTRACTS DOWN TO 48,546. NOVEMBER SAW ITS FIRST GAIN OF 17 CONTRACTS TO STAND AT 17 CONTRACTS. DECEMBER SAW ITS OPEN INTEREST RISE BY 8,383 CONTRACTS DOWN TO 362,530.

WE HAD 10 NOTICES FILED AT THE COMEX FOR 1000 OZ.

 

FOR THE UPCOMING SEPT GOLD CONTRACT MONTH;

 

FOR COMEX SEPT/2017  FIRST DAY NOTICE GOLD:  80,700 OZ OR 2.696 TONNES INITIALLY STOOD

BY THE END OF SEPTEMBER:  57,700 OZ OR 1.797 TONNES FINALLY STOOD AS THE OTHERS MORPHED INTO LONDON BASED FORWARDS.

 

 

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And now for the wild silver comex results.

Total silver OI ROSE BY A CONSIDERABLE SIZED 551 CONTRACTS FROM 211,840 UP TO 212,391 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  (THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S OI COMEX LOSS OCCURRED WITH A 37 CENT LOSS IN PRICING.

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF SEPT.AND, WE WERE  INFORMED THAT WE HAD A HUMONGOUS SIZED 6151 EFP CONTRACTS:

FOR SEPT:  0 CONTRACTS  AND FOR DECEMBER: 6151 CONTRACTS 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: 6151.  ON A NET BASIS WE GAINED 6702 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED 551 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 6151 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  AN ATMOSPHERIC 6702 CONTRACTS…AND ALL OF THIS DEMAND OCCURRED WITH A 37 CENT LOSS???????????????????????????????????????????????????????????????

 

 

 

The next active delivery month after August for silver is September and here the OI FELL by 551 contracts DOWN to 1991.

We had 316 notices filed on yesterday so we lost 235  number of contracts or 1,175,000 oz will not stand at the comex as these guys accepted a fiat bonus and  morphed into London based forwards. For the past 17 months starting in April 2017, we have been witnessing on a constant basis queue jumping as the commercials seek physical silver immediately after first day notice. Today they took a little holiday from this exercise.

 

 

 

October LOST 48  contracts to stand at 664. November saw its  gain of 11 contracts to stand at 14.

After Nov., the next big delivery month is December and here the OI rose by 451 contracts up to 186,976 contracts.

We had 593 notice(s) filed for 2,965,000 OZ for the SEPTEMBER 2018 COMEX contract for silver

 

 

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 204,844 contracts

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  438,607 contracts

 

 

 

 

AND NOW FOR THE ACTIVE SEPTEMBER SILVER CONTRACT AND COMPARISON TO LAST YR:

 

 

 

ON FIRST DAY NOTICE FOR THE SEPT/2017 SILVER CONTRACT MONTH:  20.515 MILLION OZ STOOD FOR DELIVERY AND BY MONTH’S END:  A HUGE 32.875 MILLION OZ WAS THE FINAL STANDING AS WE WERE WELL INTO THE PHENOMENON OF QUEUE JUMPING IN SILVER. THUS WE ARE WAY AHEAD OF LAST YEAR AS ALREADY WE HAVE 30.330 MILLION OZ OF SILVER INITIALLY STAND. WE WILL NO DOUBT PASS LAST YEAR’S TOTAL OF 32.875 MILLION OZ ONCE SEPTEMBER ENDS AS THE BANKS SCRAMBLE FOR PHYSICAL SILVER.

 

 

 

 

 

 

 

INITIAL standings for SEPTEMBER/GOLD

SEPT. 5-/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
nil oz
Deposits to the Dealer Inventory in oz NIL oz
Deposits to the Customer Inventory, in oz  

nil

oz

 

 

No of oz served (contracts) today
10 notice(s)
 1000 OZ
No of oz to be served (notices)
91 contracts
(9100 oz)
Total monthly oz gold served (contracts) so far this month
430 notices
43000 OZ
1.337 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

today we have a tiny pulse at  the comex and no gold

entering the comex vaults.  However are we witnessing some investors leaving the comex because they are afraid that the gold there is unallocated.  Also for the first time ever we dropped below 5 tonnes in the registered gold category.

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 2 withdrawals out of the customer account:
i)( Out of HSBC: 27,907.068 oz
ii) Out of JPMorgan: 16,138.561 oz
total customer withdrawals:  44,045.629 oz
we had 0 customer deposit
i
total customer deposits: nil oz
we had 1 adjustments
and it may indicate a settlement for gold:
i) Out of HSBC;  8846.447 oz leaves the dealer and enters the customer account of HSBC

FOR THE SEPTEMBER CONTRACT MONTH)

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 10 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 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 SEPT. contract month, we take the total number of notices filed so far for the month (430) x 100 oz or 43,000 oz, to which we add the difference between the open interest for the front month of SEPT. (101 contracts) minus the number of notices served upon today (10 x 100 oz per contract) equals 52,100 OZ OR 1.6205 TONNES) the number of ounces standing in this non active month of SEPT

 

Thus the INITIAL standings for gold for the SEPT/2018 contract month:

No of notices served (430 x 100 oz)  + {101)OI for the front month minus the number of notices served upon today (10 x 100 oz )which equals 52,100 oz standing OR 1.6205 TONNES in this NON  active delivery month of SEPTEMBER.

Strangely, we added 6 contracts or an additional 600 oz will stand for physical gold at the comex and these guys refused to accept a fiat bonus to move their contracts over to London.  Let us see if this continues throughout the month as the commercials may be scrambling to obtain any physical gold they can.

 

 

 

 

 

THERE ARE ONLY 4.980 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 1.6205 TONNES STANDING FOR SEPTEMBER  

 

 

 

total registered or dealer gold:  160,133.373 oz or   4.980 tonnes
total registered and eligible (customer) gold;   8,388,696.107 oz 260.86 tonnes

IN THE LAST 24 MONTHS 94 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE AUGUST DELIVERY MONTH

SEPTEMBER INITIAL standings/SILVER

SEPT. 5/ 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 20,062.690 oz HSBC

 

 

Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
680,438.334oz
CNT
Scotia
No of oz served today (contracts)
593
CONTRACT(S)
(2,965,000 OZ)
No of oz to be served (notices)
1398 contract
(6,990,000 oz)
Total monthly oz silver served (contracts) 4668 contracts

(23,340,000 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

total dealer withdrawals: nil oz

we had 2 deposit 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 145.4 million oz of  total silver inventory or 50.8% of all official comex silver. (145 million/286 million)

 

 

ii) Into CNT: 599,644.504 oz

iii) into Scotia: 81,292.830 oz

 

 

 

 

 

 

 

total customer deposits today: 680,438.334 oz

we had  1 withdrawals from the customer account;

i) Out of HSBC: 20,062.690 oz

 

 

 

 

total withdrawals: 20,9062.690 oz

we had 1  adjustment

i) out of CNT: 596,585.270 oz was adjusted out of the customer and this landed into the dealer account of CNT

 

 

 

 

 

 

total dealer silver:  88.205 million

total dealer + customer silver:  295.352 million oz

The total number of notices filed today for the SEPTEMBER. contract month is represented by 593 contract(s) FOR 2,965,000 oz. To calculate the number of silver ounces that will stand for delivery in SEPT., we take the total number of notices filed for the month so far at 4668 x 5,000 oz = 23,340,000 oz to which we add the difference between the open interest for the front month of SEPTEMBER. (1991) and the number of notices served upon today (593 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the SEPT/2018 contract month: 4668(notices served so far)x 5000 oz + OI for front month of SEPTEMBER(1991) -number of notices served upon today (593)x 5000 oz equals 30,330,000 oz of silver standing for the SEPT contract month.  This is a huge number of oz standing!!

We LOST 235 contracts or an additional 1,175,000 oz will not stand at the comex as they morphed into London based forwards.

 

 

 

 

 

 

 

 

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ESTIMATED VOLUME FOR TODAY:  66,056 CONTRACTS   

 

 

CONFIRMED VOLUME FOR YESTERDAY: 147,778 CONTRACTS..criminal  

 

YESTERDAY’S CONFIRMED VOLUME OF 147,778 CONTRACTS EQUATES TO 783 million OZ  OR 106% 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 -3.80% (SEPT.4/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.45% to NAV (SEPT 4/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.80%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA):

NAV 12.10/TRADING 11.68/DISCOUNT 3580

END

And now the Gold inventory at the GLD/

SEPT 5/WITH GOLD UP $2.30 TODAY, WE HAD ANOTHER WHOPPER OF A WITHDRAWAL:  6.24 TONNES/INVENTORY RESTS AT 748.92 TONNES

SEPT 4/WITH GOLD DOWN $2.65: ANOTHER 2.65 TONNES OF GOLD LEAVE THE GLD/INVENTORY RESTS AT 755.16 TONNES/

AUGUST 31/WITH GOLD UP $2.15:ANOTHER WITHDRAWAL OF 2.06 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 757.81 TONNES

AUGUST 30/WITH GOLD DOWN $6.90: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 759.87 TONNES

AUGUST 29/WITH GOLD DOWN $2.90 (COMEX TO COMEX BUT UP 6.00 DOLLARS FROM ACCESS CLOSING) THE CROOKS RAIDED THE COOKIE JAR ONCE AGAIN TO THE TUNE OF 4.71 TONNES/INVENTORY RESTS AT 759.87 TONNES AFTER THE WITHDRAWAL.

AUGUST 28/WITH GOLD DOWN $1.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.58 TONNES

AUGUST 27/WITH GOLD UP ANOTHER $3.00: ANOTHER SURPRISE WITHDRAWAL OF 2.65 TONNES FROM THE GLD/SHAREHOLDERS OF GLD ARE DUMB OWING THIS CRAP/INVENTORY RESTS AT 764.58 TONNES

AUGUST 24/WITH GOLD UP $18.65 TODAY/A SURPRISE WITHDRAWAL OF 1.53 TONNES FROM THE GLD/INVENTORY RESTS AT 767.23 TONNES

AUGUST 23/WITH GOLD DOWN $9.20: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 768.70 TONNES

AUGUST 22/WITH GOLD UP $3.45: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTSAT 768.70 TONNES

AUGUST 21: WITH GOLD UP $5.75/A  BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.54 TONNES/INVENTORY RESTS AT 768.70 TONNES

AUGUST 20/WITH GOLD UP $10.20./ANOTHER HUGE WITHDRAWAL OF 1.17 TONNES FROM THE GLD/INVENTORY RESTS AT 772.24 TONNES

 

AUGUST 17/WITH GOLD UP 20 CENTS: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 773.41 TONNES

AUGUST 16/LATE LAST NIGHT, WITH GOLD DOWN $1.05: THE CROOKS RAIDED THE COOKIE JAR ONCE AGAIN: THIS TIME BY 2.06 TONNES/INVENTORY RESTS AT 774.59 TONNES, AND THEN JUST NOW ANOTHER 1.18 TONNES OF GOLD WITHDRAWN TO LEAVE THE INVENTORY LEVEL OF 773.41 TONNES/

AUGUST 15/WITH GOLD DOWN $15.15/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 776.65 TONNES

AUGUST 14/WITH GOLD DOWN $0.45, A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 9.43 TONNES//INVENTORY RESTS AT 776.65 TONNES

AUGUST 13/with gold down $18.00: no changes in gold inventory at the crooked GLD/inventory rests at 786.08 tonnes

AUGUST 10/WITH GOLD DOWN 55 CENTS: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 786.08 TONNES

AUGUST 9/WITH GOLD DOWN BY 70 CENTS, OUR BANKERS AGAIN RAIDED THE GOLD COOKIE JAR TO THE TUNE OF 1.45 TONNES AND THUS THE INVENTORY RESTS AT 786.08 TONNES.ANYBODY HOLDING GOLD AT THE COMEX MUST REMOVE THEIR GOLD IMMEDIATELY AND PLACE IT IN A PRIVATE NON BANK  OR CALL ANDREW MAGUIRE AT KINESIS

AUGUST 8/WITH GOLD UP ANOTHER $2.75, OUR BANKERS MUST BE DESPERATE AS THEY RAIDED THE GOLD COOKIE JAR AGAIN TO THE TUNE OF 1.18 TONNES/INVENTORY RESTS TONIGHT AT 788.71 TONNES. ANYBODY WHO KEEPS HIS GOLD AT THE COMEX IS VERY FOOLISH..ALL GOLD AT THE COMEX IS UNALLOCATED.

AUGUST 7/WITH GOLD UP 0.75 TODAY/ANOTHER GIGANTIC WITHDRAWAL OF 6.04 TONNES AND THIS GOLD WAS TO BE USED IN AN ATTEMPTED RAID TODAY AND FAILED/INVENTORY RESTS AT 788.71 TONNES

AUGUST 6/WITH GOLD DOWN $5.30 TODAY: ANOTHER WITHDRAWAL OF 2.06 TONNES AND THIS GOLD WAS USED IN THE RAID TODAY/GLD INVENTORY RESTS TODAY AT 794.90 TONNES

AUGUST 3/WITH GOLD UP $3.10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 796.96 TONNES

AUGUST 2/WITH GOLD DOWN $7.20/A HUGE WITHDRAWAL OF 3.24 TONNES FROM THE GLD WHICH NO DOUBT WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 796.96 TONNES

AUGUST 1/WITH GOLD DOWN $4.65/NO CHANGE IN GOLD INVENTORY AT THE GLD.INVENTORY RESTS AT 800.20 TONNES

JULY 31/WITH GOLD UP $2.05/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.20

JULY 30/WITH GOLD DOWN $0.95/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.20 TONNES

july  27/WITH GOLD DOWN $2.85 TODAY, NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.20 TONNES

JULY 26./WITH GOLD DOWN $5.65: A WITHDRAWAL OF 2.35 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 800.20 TONNES

JULY 25/WITH GOLD UP $6.45; NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 802.55 TONNES

JULY 24/ WITH GOLD DOWN 10 CENTS: A HUGE DEPOSIT OF 4.42 TONNES INTO THE GLD/INVENTORY RESTS AT 802.55 TONNES

 

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SEPT 5/2018/ Inventory rests tonight at 746.92 tonnes

*IN LAST 449 TRADING DAYS: 184.09 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 349 TRADING DAYS: A NET 27.55 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

 

SEPT 5./WITH SILVER UP 4 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.856 MILLION OZ/

SEPT 4/WITH SILVER DOWN 37 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.856 MILLION OZ/

AUGUST 31/WITH SILVER DOWN ONE CENT TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.856 MILLION OZ/

AUGUST 30/WITH SILVER DOWN 20 CENTS TODAY, A BIG CHANGE IN SILVER INVENTORY: A DEPOSIT OF 742,000 AT THE SLV.INVENTORY RESTS AT 329.856 MILLION OZ/

AUGUST 29/WITH SILVER DOWN 10 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 28/WITH SILVER DOWN 5 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 27/WITH SILVERUP 6 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 24./WITH SILVER UP 26 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 23/WITH SILVER DOWN 20 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 22/WITH SILVER DOWN 1 CENT/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 21/WITH SILVER UP 2 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 20/WITH SILVER UP 6 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/.INVENTORY RESTS AT 329.104 MILLION OZ.

AUGUST 17/WITH SILVER DOWN 4 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ

AUGUST 16/WITH SILVER UP 14 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV” A DEPOSIT OF 1.881 MILLION OZ//INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 15/WITH SILVER DOWN 56 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 327.223 MILLION OZ/

AUGUST 14/WITH SILVER UP 6 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 327.223 MILLION OZ

AUGUST 13./with silver down 31 cents today: no changes in silver inventory/inventory rests at 327.223 million oz/

AUGUST 10/WITH SILVER DOWN 15 CENTS: A BIG CHANGE IN SILVER INVENTOR: A WITHDRAWAL OF 1.222 MILLION OZ  FROM THE SLV INVENTORY /INVENTORY RESTS AT 327.223 MILLION OZ/

AUGUST 9/WITH SILVER UP 3 CENTS TODAY:NO CHANGE IN SILVER INVENTORY /INVENTORY RESTS AT 328.445 MILLION OZ/

AUGUST 8/WITH SILVER UP 5 CENTS TODAY: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 328.445 MILLION OZ

AUGUST 7/WITH SILVER UP 3 CENTS, A RAID OF 1.78 MILLION OZ (A WITHDRAWAL) AT THE SLV.INVENTORY RESTS AT 328.445 MILLION OZ/

AUGUST 6/WITH SILVER DOWN 11 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.034 MILLION OZ INTO THE SLV INVENTORY/INVENTORY RESTS AT 330.326 MILLION OZ/

AUGUST 3/WITH SILVER UP 7 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.292 MILLION OZ/.

AUGUST 2 WITH SILVER DOWN 6 CENTS TODAY/A SMALL CHANGE IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 141,000 OZ FOR THEIR MONTHLY STORAGE AND INSURANCE FEES:INVENTORY RESTS AT 329.292 MILLION OZ/

AUGUST 1/WITH SILVER DOWN 12 CENTS TODAY, NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.433 MILLION OZ/

JULY 31/WITH SILVER UP 5 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.433 MILLION OZ/

JULY 30/WITH SILVER UP 3 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.433 MILLION OZ.

JULY 27/WITH SILVER FLAT TODAY, NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT  329.433 MILLION OZ/

JULY 26/WITH SILVER DOWN 10 CENTS: STRANGE: A BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.046 MILLION OZ OF SILVER/INVENTORY RESTS AT 329.433 MILLION OZ

JULY 25: WITH SILVER UP 8 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 658,000 INVENTORY RESTS AT 328.304 MILLION OZ/

 

JULY 24/WITH SILVER UP 8 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 328.962 MILLION OZ/

 

 

 

SEPT 5/2018:

Inventory 329.856 MILLION OZ

 

6 Month MM GOFO 1.97/ and libor 6 month duration 2.54

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

G0FO+ 1.97

 

libor 2.54 FOR 6 MONTHS/

GOLD LENDING RATE: .57%

XXXXXXXX

12 Month MM GOFO
+ 2.40%

LIBOR FOR 12 MONTH DURATION: 2.84

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.44

end

 

Major gold/silver trading /commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

 

 

Video: Gold Surges To Record Highs In Emerging Market Currencies – New Highs In USD, EUR, GBP In the Coming Months?

– As emerging market currencies internationally collapse in value, there is a real risk of contagion in bond and currency markets
– Turkish lira falls 43.6% and Argentine peso falls 51% and are respectively the 2nd worst and worst internationally traded and non pegged performing currencies in 2018
– Venezuelan bolivar has completely collapsed
– Inflation is going to take off as wheat has surged 28% and oil is up 16% year to date in dollar terms

– Are Argentina, Turkey, South Africa, Indonesia and other emerging markets exceptions? Economists think so but contagion could spread rapidly
– Emerging-market crisis is driving safe-haven demand for German Bunds and soon gold
– Important not to think of gold solely in US dollar terms and realise that gold is again acting as a safe haven for those who need a currency hedge

 

Source: Goldprice.org

 

Market Performance YTD in USD (Finviz.com)

News and Commentary

Gold nudges up as dollar eases; Sino-U.S. trade tensions in focus (CNBC.com)

Mighty Dollar and Trade Fears Drag Silver Down to Two-Year Low (Bloomberg.com)

Gold near 1-wk lows as trade, emerging market concerns boost dollar (Reuters.com)

Bullard says Fed should hold off on raising rates (MarketWatch.com)

EU Looking to Sidestep U.S. Sanctions With Payments System Plan (Bloomberg.com)


Source: Bloomberg.com

Over 1.5 Billion Ounces of Silver Forecast to be Consumed in Crucial Green Technologies Through 2030 (SilverInstitute.org)

COMEX Silver To Test 2015 Lows (SilverSeek.com)

Winter is coming to the markets says Edwards – Gold will benefit (MoneyWeek.com)

Emerging-market selloff has all the hallmarks of contagion (Bloomberg.com)

Dublin’s housing market not yet ripe for a crash (DavidMCWilliams.ie)

Gold Prices (LBMA AM)

04 Sep: USD 1,195.75, GBP 932.57 & EUR 1,034.20 per ounce
03 Sep: USD 1,201.70, GBP 933.00 & EUR 1,035.75 per ounce
31 Aug: USD 1,206.85, GBP 927.58 & EUR 1,034.03 per ounce
30 Aug: USD 1,202.35, GBP 924.25 & EUR 1,028.49 per ounce
29 Aug: USD 1,204.30, GBP 935.14 & EUR 1,032.33 per ounce
28 Aug: USD 1,212.75, GBP 939.88 & EUR 1,037.02 per ounce

Silver Prices (LBMA)

04 Sep: USD 14.25, GBP 11.11 & EUR 12.33 per ounce
03 Sep: USD 14.53, GBP 11.27 & EUR 12.50 per ounce
31 Aug: USD 14.66, GBP 11.27 & EUR 12.56 per ounce
30 Aug: USD 14.67, GBP 11.27 & EUR 12.54 per ounce
29 Aug: USD 14.69, GBP 11.40 & EUR 12.60 per ounce
28 Aug: USD 14.90, GBP 11.56 & EUR 12.74 per ounce

Recent Market Updates

– September Is The Best Month For Gold and Worst Month For Stocks
– Pound Investors Face Months of Volatility Into Brexit Endgame
– This Week’s Golden Nuggets
– Video: “Financial War” Deepens as Russia Buys Gold and Dollar Hegemony At Risk – Rickards on CNN
– Will Indebted Nations Globally Follow Venezuela Into Hyperinflation?
– End Of Dollar Hegemony May Happen Soon and Badly Impact Indebted America
– 10 Incredible Photos From Venezuela Show The Disastrous Risks Of Currency Devaluation
– This Week’s Golden Nuggets
– Video: Is Silver Set for a Massive Breakout?
– Banks Now Long Gold, Short Dollar. What Do They Know?
– Russia Buys 800,000 Ounces Of Gold In July
– Gold Season – Is This It?
– This Week’s Golden Nuggets
– Gold And Silver Prices Fall 1.6% and 4.3% To Near 2 Year Lows
– London House Prices Fall At Fastest Annual Rate Since Height Of Financial Crisis

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Mark O’Byrne
Executive Director

 

end
 
 
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(Andrew Maguire)

 Dear Harvey Organ,

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END

 

The following is self explanatory

(courtesy GATA/Chris Powell and Harvey Organ)

GATA asks bank regulator to check risks of gold

futures maneuver

 Section: 

12:21p ET Sunday, June 10, 2018

Dear Friend of GATA and Gold:

GATA has appealed to the U.S. comptroller of the currency, who has regulatory authority over banks, to review financial risks certain banks may have incurred through derivatives in the monetary metals markets, particularly through the recent heavy use of the “exchange for physicals” mechanism of settling gold and silver futures contracts on the New York Commodities Exchange.

The appeal was made in a letter sent May 5 to the comptroller, Joseph M. Otting, whose office is part of the U.S. Treasury Department, by your secretary/treasurer and GATA futures market consultant Harvey Organ.

“Exchange for physical” settlements of futures contracts long were considered emergency procedures when a seller was not able to deliver metal from an exchange-approved warehouse and wanted to settle with delivery elsewhere. But now such settlements appear to constitute most gold and silver futures settlements on the Comex. It is a strange development that appears to have been necessitated by the increasing difficulties of central banking’s gold and silver price suppression policy.

GATA has received no acknowledgment of the letter. Its text is below and a PDF copy of it is here:

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

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

* * *

May 5, 2018

Joseph M. Otting, Comptroller of the Currency
U.S. Treasury Department
400 7th Street, SW
Washington DC 20219

Dear Comptroller Otting:

Please let us bring to your attention financial risks to major banks involving their possibly unreported exposure to derivatives in the monetary metals markets.

In recent months gold and silver future contracts issued by U.S. banks on the New York Commodities Exchange have been moved off-exchange for delivery through a mechanism known as “exchange for physical” (EFP) contracts. Until recently use of this mechanism was considered an emergency procedure when a seller did not have access to metal for delivery through Comex warehouses. Now the mechanism seems to be in use for a large share of front-month contracts for which delivery is sought.

Here is an example that is happening at the Comex in the front active month of April for gold and the inactive delivery month of April for silver.

In gold, there were 229,436 EFP contracts for 713.64 tonnes, an average of 10,925 contracts and 1,092,500 ounces per trading day.

In silver, there were 77,150 EFP contracts for 385,750,000 ounces, an average of 3,673 contracts and 18,369,000 ounces per trading day.

London Bullion Market Association rules suggest that these contracts may not be reported to regulators. The LBMA’s bylaws say:

“Figures above exclude any contracts not subject to risk-based capital requirements, such as FX contracts with an original maturity of 14 days or less, futures contracts, written options, and basis swaps. Therefore, the total notional amount of derivatives by maturity will not add to the total derivatives figure in this table.”

We are told that these EFP contracts are transferred from the Comex to London as what are called “serial forwards” and their duration is always less than 14 days, which exempts them from being reported.

It is our understanding that in each quarter your office prepares a report detailing risk undertaken by the banks under the comptroller’s supervision.

These risks include derivatives undertaken by U.S. banks and other obligations that may cause a bank to fail. Our concern is that your office may not be aware of large unreported derivative exposure by banks.

Could you review this matter and let us know your conclusions?

Sincerely,

CHRIS POWELL
Secretary/Treasurer

HARVEY ORGAN
Consultant

Gold Anti-Trust Action Committee Inc.
7 Villa Louisa Road
Manchester, Connecticut 06043-7541

end

Finally, they replied and it was a complete brush off

(courtesy zerohedge)

Currency comptroller brushes off GATA’s inquiry on

gold, silver EFPs

 Section: 

11:35a ET Friday, August 10, 2018

Dear Friend of GATA and Gold:

The U.S. comptroller of the currency, a bank regulator, has declined GATA’s request to inquire into the strange explosion of the use of the emergency procedure of “exchange for physicals” in the settlement by banks of the gold and silver futures contracts they have sold on the New York Commodities Exchange.

Your secretary/treasurer and GATA’s consultant about the Comex, Harvey Organ, wrote to the comptroller, James M. Otting, on May 5, calling attention to the recent enormous use of EFPs, which implies derivatives risks being undertaken by U.S. banks that could cause the banks to fail:

http://www.gata.org/node/18303

“Our concern is that your office may not be aware of large unreported derivative exposure by banks,” GATA wrote.

As months passed without any acknowledgment from the comptroller’s office, your secretary/treasurer appealed to his U.S. representative, John B. Larson, D-Connecticut, to ask the comptroller’s office to reply. The congressman’s office made a second inquiry on Monday this week and today the comptroller’s office provided Larson with a copy of a reply written and mailed Wednesday.

The comptroller’s reply, signed by the deputy comptroller for public affairs, Bryan Hubbard, said only that the comptroller’s office has “dedicated examiners” at the largest banks who “continuously evaluate the credit, market, operational, reputation, and compliance risks of bank trading and derivative activities.”

The reply did not say anything about the use of the “exchange for physicals” procedure for settling futures contracts. That is, the reply was a begrudged brushoff and GATA’s letter would have been ignored completely if not for Representative Larson’s repeated intervention.

Of course GATA hardly expected a conscientious reply to its letter, the comptroller’s office being not an independent regulator but part of the Treasury Department, whose mandate includes administration of the Gold Reserve Act of 1934, which, as amended in the 1970s, authorizes the department’s Exchange Stabilization Fund to secretly intervene in and rig any market in the world, directly or through intermediaries:

https://www.treasury.gov/resource-center/international/ESF/Pages/esf-ind…

But there’s always value in demonstrating government’s lack of candor about what it is doing, especially in regard to the monetary metals.

A PDF copy of the reply from the comptroller’s office is posted at GATA’s internet site here:

http://www.gata.org/files/ComptrollerOfCurrencyReply-08-08-2018.pdf

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

END

With the consumption tax set to rise to 10% Japan is bracing itself for another rush of gold smuggling as gold is taxed in Japan but not Hong Kong

(courtesy Nikkei/Asian Review/GATA)

Japan braces for gold smuggling rush in shadow of tax

hike

 Section: 

By Aiko Munakata
Nikkei Asian Review, Tokyo
Tuesday, September 4, 2018

TOKYO — As Japan prepares to raise the consumption tax for the first time in half a decade next year, the Ministry of Finance worries that gold smuggling will also get a boost.

When the tax was last increased in 2014, to 8 percent to 5 percent, smuggling of the precious metal jumped as criminal organizations quickly realized how to game the system for their own enrichment.

The scheme works like this: Procure gold in places like Hong Kong, which does not tax it. Have mules hide it in their luggage and blend in with tourists, traveling to Japan to sell to stores that buy gold from the public. The stores pay for both the gold itself and the consumption tax. The tax component becomes pure profit.

And with the consumption tax set to rise to 10% in October 2019, margins will grow even fatter.

Japan has an unflattering reputation as a “go-to place” for gold smugglers. In 2017, there were 1,347 cases discovered by law enforcement — 112 times the tally from 2013, the year before the last tax hike. Seized gold last year amounted to 6,236 kg, a 47-fold increase.

“It looks like the break-even point for smugglers is between 5 and 8%,” a government source said of the sudden spike.

Japan even “exported” 215 tons of gold in 2017, despite being a producer of only tens of tons domestically. That was almost double the 114 tons exported in 2014.

Official gold imports, meanwhile, dropped to 5 tons in 2017 from 16 tons in 2014. The scale of smuggling is said to exceed 150 tons. …

… For the remainder of the report:

https://asia.nikkei.com/Economy/Japan-braces-for-gold-smuggling-rush-in-…

END
Chris Powell and Craig Hemke talk about the lows of gold and silver equal to the cost of production. If the Bozos knock the price further down, then mining companies mothball their properties…supplies dwindle to nothing..and then China buys up the mines at distressed prices while our mining CEO’s gleefully applaud.
(courtesy Chris Powell/GATA)

Craig Hemke at Sprott Money: Comex silver to test

2015 lows

 Section: 

7:12p ET Tuesday, September 4, 2018

Dear Friend of GATA and Gold:

Craig Hemke of the TF Metals Report, writing at Sprott Money today, argues that futures trader positioning in the monetary metals, by traditional measures enormously bullish at the moment, may mean nothing if central banks and particularly the People’s Bank of China and the Bank for International Settlements aim to keep selling to keep commodity prices down in tandem with the devaluation of the Chinese yuan

The price-positive aspect of this policy, Hemke writes, is that it may push metal prices below their cost of production and cause mines to suspend operations, resulting in the ultimate strain on supply, whereupon China (and maybe other governments) would acquire the mining industry at distress prices before driving metals prices way up to reliquefy themselves.

In any case most gold and silver mining company executives won’t mind more suppression of the price of their products, as with a few exceptions they mine their shareholders more than their properties. For all the sense they make when they talk about the monetary metals “markets,” they already might as well be speaking Chinese.

Hemke’s analysis is headlined “Comex Silver to Test 2015 Lows” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/comex-silver-to-test-2015-lows-craig-he…

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

END

Alasdair Macleod was the first to comment that China has already accumulated 20,000 tonnes of gold from 1984 onward.I am also in his camp on that one.

(courtesy Macleod/Max Keiser/Keiser report)

GoldMoney’s Macleod, interviewed on ‘Keiser Report,’ envisions a gold-backed yuan

 Section: 

9p ET Tuesday, September 4, 2018

Dear Friend of GATA and Gold:

GoldMoney research director Alasdair Macleod, interviewed this week by Max Keiser on Russia Today’s “Keiser Report,” discusses the possibility that China’s gold reserves are far greater than officially reported and possibly as much as 20,000 tonnes, potentially enabling a gold-backed yuan in a world as yet without a practical alternative to the U.S. dollar as the main reserve currency.

Macleod’s interview begins at the 13-minute mark and continues for about 13 minutes at RT here:

https://www.rt.com/business/437595-post-us-dollar-world/

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

END

Cryptocurrencies flash crash on new news:

(courtesy zerohedge)

Cryptocurrencies Flash Crash; Bitcoin, Ethereum Plummet

On No News

Just before 6am ET, cryptocurrencies suddenly flash crashed, tumbling on no news with some plunging as much as 12%, after a largely unchanged overnight session.

Bitcoin, the world’s biggest digital asset, erased gains and fell more than 3% in about minutes, tumbling back under $7000 after trading in the mid-$7300 range earlier.  Litecoin, Ethereum and Ripple followed, with Ethereum crashing by as much as 12%, while litecoin and ripple sank over 8%. There was no catalyst or news behind the selloff, although as Bloomberg’s Andrew Cinko notes, “perhaps its just part of the risk-off mentality gripping all markets amid the latest round of weakness in emerging markets.”

The selloff appears to have stabilized, but so far there is little buying impetus as traders scramble to find what the cause of the selling was.

_____________________________________________________________________________________________________________________________________________________________________________________

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 UP TO 6.8313/HUGE DEVALUATION FOR THE PAST FOUR WEEKS STOPS/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER //OFFSHORE YUAN:  6.8519   /shanghai bourse CLOSED DOWN 46.24 POINTS OR 1.68% /HANG SANG CLOSED DOWN 729.49 POINTS OR 2.61%
2. Nikkei closed DOWN 116.07 POINTS OR 0.51%/USA: YEN RISES TO 111.58/

3. Europe stocks OPENED DEEPLY IN THE RED

/USA dollar index FALLS TO 95.41/Euro RISES TO 1.1589

3b Japan 10 year bond yield: RISES TO . +.12/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.32/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI:: 68.95  and Brent: 77.36

3f Gold UP/JAPANESE Yen DOWN/ CHINESE YUAN  UP ON SHORE/OFF- SHORE UP

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

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

3h Oil 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 RISES TO +.370%/Italian 10 yr bond yield DOWN to 2.89% /SPAIN 10 YR BOND YIELD UP TO 1.44%

3j Greek 10 year bond yield RISES TO : 4.65

3k Gold at $1194.65 silver at:14.16   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 17 /100 in roubles/dollar) 68.36

3m oil into the 68 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 111.58 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9741 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1285 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 +0.37%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.89% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.06%

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

TURKISH LIRA:  UP  TO 6.6788

“It Will Get A Lot Worse”: Global Stocks Tumble As EM

Contagion Roils Markets

Global stocks tumbled on Wednesday, as a drop in European markets followed a broad sell-off across Asia, as rising pressure on emerging markets intensified concerns of contagion and spillover into developed markets, leading to a sea of red in world stocks.

A day after emerging market currencies tumbled, it was the stock market’s turn in the hot seat, with shares sliding from Japan to Australia, and were crushed in Indonesia, where the nation’s benchmark lost almost 4%. Meanwhile, with no let-up in trade tensions near and new $200bn in US tariffs against China likely to be slapped as soon as tomorrow, the dollar strengthened for a fifth session and commodities slipped, led by oil, while the 10-year Treasury yield eased back to 2.89%.

At the same time, with the Fed showing no signs of slowing its rate hikes, investors are turning ever more cautious on emerging markets. Traders were focused on turmoil in developing nations wondering just how high rates will reach to contain the currency selloff, how acute the resulting economic slowdown will be and whether the volatility will spill into developed markets. Overnight, inflation in the Philippines exceeded 6% for the first time in nine years, joining Turkey and Argentina as another developing economy with soaring prices.

Predictably, the ongoing rout in emerging markets has not only not showed any signs of letting up, but accelerated overnight, with most currencies around the globe sliding against the soaring dollar, while the MSCI index of emerging market stocks heading toward a bear market.

Of the 24 most traded EM currencies only the Mexican Peso (+1.44%) is up YTD. In fact 4 have weakened between 10-20% (Indian Rupee, Chilean Peso, Russian Ruble and South African Rand), one between 20-40% (Brazilian Real) and two more than 40% (Turkish Lira, Argentine Peso).

What was initially an “idiosyncratic” rout in Turkey and Argentina, has since spilled to Brazil, Russia, and overnight slammed South Africa, Indonesia and the Philippines.

The negative tone was set Tuesday by the US ISM report, which showed an unexpected surge in US production that boosted the odds of more rate hikes and a strengthening dollar, while South African entered into a recession in the second quarter. As a result, South African bonds led the sell-off in fixed income as the rand slid to its lowest level in more than two years.

The EM selloff shifted from FX to equities, and the MSCI Emerging Markets Index of shares dropped for a sixth day, set for its steepest slide in three weeks.  The emerging-market currency index fell to the lowest level in 16 month, led for a second day by South Africa’s rand.

Worst-hit was Indonesia, where shares tumbled the most in three years amid concern the depreciating rupiah will lead to more rate hikes and higher corporate borrowing costs. Indonesian stocks sank for a fifth day as central bankers attempted to support the rupiah through measures including interest-rate hikes that threaten to slow Southeast Asia’s biggest economy. Meanwhile, the Indonesia Rupee hit another record low against the dollar.

Shares in the Philippines extended losses after a report showed inflation prompted by the sliding currency, surged past 6% last month, foreshadowing further rate hikes.

Elsewhere in Asia, markets traded lower across the board amid ongoing trade uncertainty and ahead of the looming risk events. ASX 200 (-1.0%) declined from the open with broad weakness across its sectors and with firm Q2 GDP data failing to underpin sentiment as the damage had already been done, while Nikkei 225 (-0.5%) was subdued following a destructive and deadly Typhoon which was the strongest to hit Japan in 25 years. Hang Seng (-2.6%) and Shanghai Comp. (-1.7%) were also negative on trade-related jitters as the deadline regarding potential US tariffs on USD 200bln of Chinese goods approaches and following disappointing Chinese Caixin Services and Composite PMI data in which the former posted a 10-month low.

Meanwhile, worries remain that Turkey’s central bank may not do enough at its policy meeting next week to shore up the weakening lira, although for the time being at least the TRY’s volatility has been contained. At the same time, Argentina’s economic outlook has deteriorated even as its officials negotiate with the IMF for accelerated aid. And Russia’s central bank Governor Elvira Nabiullina has begun talking of reasons to raise rates at a meeting next week.

“King dollar” was the main theme in currencies for another day with demand for long exposure in spot and options markets alike. The yen and the Swiss franc stayed in a tighter range than Tuesday as risk-off gained traction with Treasuries bid and a commodity gauge at a three-week low. The pound stayed near day lows even after a slight beat in PMI data while the loonie was little changed before the Bank of Canada rate decision.

The EM contagion has started to make headway into European markets, with the Stoxx 600 dropping as much as 0.9%, flirting with the lowest level in three months. The drop lead by Technology (SX8P -1.8%), Food & Beverages (SX3P -1.6%) and Personal Goods (SXQP -1.5%), while Banks (SX7E little changed) outperformed the broader market. Europe’s mining stocks – the Stoxx 600 basic resources index – dropped as much as 1.3%, flirting with the year lows hit on Aug. 17.

According to Bloomberg, two separate market drivers set the European session, on one hand the rising EM pressure continues to drive cross asset risk-off moves while Italian assets are well supported by further positive budget related comments as the ruling coalition vowed not to take the budget deficit above 2%, a number which changes by the day if not the hour. Italy’s Deputy PM Di Maio said budget will keep accounts in order but will be courageous, adding the government has every intention to last a long time. Di Maio added he cannot say if the 2019 budget deficit will be about 2% of GDP adding the deficit level is not part of today’s talks.

“It has to get a lot worse before it gets better,” Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore, told Bloomberg Television. “Before people talk about structurally buying EM you need to get some kind of comfort on the end of U.S. dollar strength and the end of the Fed tightening and I still think that plays out for a lot longer.”

“This has become now increasingly an issue which is no longer just about EM fundamentals,” Sameer Goel, head of macro strategy for Asia at Deutsche Bank AG in Singapore, said in a Bloomberg TV interview with David Ingles. It’s “increasingly about contagion, which largely happens because of cross-holdings and the pressure of redemptions.”

“Investors have become more selective, and countries with negative news such as weak economic growth, weak external balances and high inflation face stronger sell-offs, ”said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo.

In Brexit-related news, EU’s Barnier reportedly deemed PM May’s Chequers plan as unacceptable in a meeting with the Brexit select committee. Instead the EU has urged PM May to adopt a Canada-style deal favoured by former Foreign Minister Johnson. UK’s Cabinet Office Minister Lidington says the Irish border is the only outstanding Brexit issue; adding UK PM May is very committed to a Chequers deal. Merkel’s CSU allies say in a draft document they want a close partnership with the UK post-Brexit; adding they reject a hard Brexit.

In other markets, gold climbed – somewhat surprisingly alongside the stronger dollar – while WTI oil futures dropped in the context of a strong dollar and a potential build at the Cushing, Oklahoma, storage hub.

Expected data include mortgage applications and trade balance. HD Supply, Couche-Tard, and DocuSign are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.4% to 2,888.00
  • STOXX Europe 600 down 0.7% to 377.28
  • MXAP down 1.4% to 161.55
  • MXAPJ down 1.8% to 521.12
  • Nikkei down 0.5% to 22,580.83
  • Topix down 0.8% to 1,704.96
  • Hang Seng Index down 2.6% to 27,243.85
  • Shanghai Composite down 1.7% to 2,704.34
  • Sensex down 1% to 37,780.71
  • Australia S&P/ASX 200 down 1% to 6,230.45
  • Kospi down 1% to 2,291.77
  • German 10Y yield rose 0.6 bps to 0.363%
  • Euro down 0.1% to $1.1567
  • Italian 10Y yield fell 14.2 bps to 2.746%
  • Spanish 10Y yield fell 0.6 bps to 1.423%
  • Brent futures down 0.7% to $77.60/bbl
  • Gold spot up 0.3% to $1,195.03
  • U.S. Dollar Index little changed at 95.48

Top Overnight News from Bloomberg

  • President Donald Trump is asking advisers whether it would be good politics to provoke an October government shutdown fight over money for his border wall, even though Republicans in Congress say a closure before the midterm elections in November would backfire
  • European Union officials are exploring how to unlock a wider Brexit deal by making the so-called Irish border backstop more palatable to the U.K., according to a person familiar with the deliberations
  • Austria’s new government said it’ll bid for a seat at the European Central Bank’s top table next year as euro-area nations jostle for roles in a shake-up of key monetary and political posts
  • Manfred Weber, head of the European People’s Party caucus in the European Parliament, announced Wednesday he is running to replace Jean-Claude Juncker as European Commission president in elections next year
  • IMF Managing Director Christine Lagarde said Tuesday evening that IMF officials “made progress” with Argentine leaders seeking to reform the $50 billion credit line agreed upon in June following a sharp selloff in the peso last month
  • Europe’s high-yield market is braced for a post-summer rush of new bond sales just as talk of a downturn in the credit cycle gathers pace
  • Corporate issuers may start turning to the green-bond market in search of something more than environmental kudos — volatility-proof funding
  • Italian Deputy PM Salvini reiterates promise to respect all EU restrictions on budget; working on three-year time frame and will not enact all promises immediately; reports that 2019 budget deficit is seen “around” 2% and proposed flat tax will be postponed
  • European Aug. Service PMIs: Spain 52.7 vs 52.0 est; Italy 52.6 vs 53.1 est; France 55.4 vs 55.7 est; Germany 55.0 vs 55.2 est; Eurozone 54.4 vs 54.4 est; U.K. 54.3 vs 53.9 est; Markit note worryingly unbalanced growth with Germany and France solid but Italy and Spain growing sharply slower
  • Fed’s Kashkari: various threats to U.S. expansion such as EM weakness, trade battles and Fed hiking too quickly; does not see any indication that U.S. is running above potential
  • Politico: U.S. Trade Representative Lighthizer and EU Commissioner Malmstrom will discuss scope of a transatlantic trade deal on Monday Sept. 10, according to people familiar
  • BOJ judges its recent YYC adjustments to be working well; not ruling out another change if 10y tests 0.2% and the market function fails to improve, according to people familiar
  • China Aug. Caixin Services PMI 51.5 vs 52.6 est.

Asian equity markets traded lower across the board after the Labor Day hangover on Wall St amid ongoing trade uncertainty and ahead of the looming risk events, although the US majors finished off worst levels and Amazon briefly  entered the USD 1tln club. ASX 200 (-1.0%) declined from the open with broad weakness across its sectors and with firm Q2 GDP data failing to underpin sentiment as the damage had already been done, while Nikkei 225 (-0.5%) was subdued following a destructive and deadly Typhoon which was the strongest to hit Japan in 25 years. Hang Seng (-2.6%) and Shanghai Comp. (-1.7%) were also negative on trade-related jitters as the deadline regarding potential US tariffs on USD 200bln of Chinese goods approaches and following disappointing Chinese Caixin Services and Composite PMI data in which the former posted a 10-month low. Finally, 10yr JGBs saw mild gains amid the backdrop of the widespread risk-averse tone, although price action was relatively muted and stuck within a tight range despite stronger results at this month’s 10yr JGB auction.

Top Asian News

  • BOJ Is Said to See Adjustments Working, Content With Yield Range
  • Bank Indonesia to Take Pre-emptive Steps, Warjiyo Says
  • Iyer Goes Bollywood to Appeal to Central Bank on Yield Surge
  • Indonesia’s Markets Get Hammered by Emerging-Market Contagion

European equities trade on the backfoot (with the exception of the FTSE MIB) as the Euro stoxx 50 index falls over 1%. Sectors are mostly experiencing broad-based losses while financial names are outperforming its peers as Italian banks provide some support to the sector on the back of BTP price action (Italian Banking Index +2.6%). In terms of individual stocks, JC  Decaux (+6.6%) rose to the top if the Stoxx 600 on the back of an upgrade, while heavyweight Bayer (-1.7%) pressures  Germany’s DAX 30 following uninspiring earnings.

Top European News

  • Euro Businesses Show Warning Signs Amid Solid Economic Expansion
  • Bahrain Investment Firm Buys Swiss Bank Stake in Europe Push
  • Ex-BOE Governor King Attacks Government’s Brexit ‘Incompetence’
  • EU Said to Explore Irish Backstop Options to Help May on Brexit

In FX, the focus again was on EM, where amidst more widespread depreciation across the region (and not just contained to currencies), the Zar continues to underperform and extend losses in wake of the ‘unexpected’ Q2 GDP contraction that consigned SA to a first half 2018 recession. Moreover, August’s PMI sank further below the 50.0 threshold to flag ongoing negative economic activity, and the Rand still has next month’s budget update to contend with. Usd/Zar has been just over 15.6900, but currently off worst levels around 15.6000, while the Rub, Mxn and Try also remain on the back foot, with the Cnh retreating as well after recent relative stability and no doubt eyeing the looming threat of additional US import tariffs.  DXY -The index remains firmly above recent near 95.000 lows and mainly towards the top of a 95.275-675 range, with broad gains vs almost all rivals, as noted above. GBP – The Pound is lagging G10 counterparts even though the UK services PMI broke the run of disappointing surveys with an unexpected beat vs consensus, with Cable down through 1.2800 again and Eur/Gbp firmly over 0.9000 to retest key chart resistance. The rationale, more reports that chief EU Brexit negotiator Barnier flatly rejects the Chequers White Paper that UK PM May and Raab are resolutely sticking to.

In commodities, WTI and Brent futures retreated to below 69.00/bbl and USD 77.50/bbl levels respectively following yesterday’s bull run. The Gulf of Mexico has been very much in theme recently, in terms of the latest updates, the NHC stated Storm Gordan is moving farther inland but is likely to weaken to a tropical depression later this morning, as a result WTI and Brent may be unwinding some risk premium accumulated from the past couple of days. Hurricane Florance is a little stronger and moving over the open Atlantic, while Hurricane Olivia has weakened slightly, ableit remains a category 3 hurricane. OPEC Secretary General Barkindo emerged this morning, noting the world will attain 100mln BPD of consumption this later this year; adding this is “much sooner” than expected. Furthermore, Lukoil VP Fundun stated Russian oil production has nearly peaked. Traders will be keeping a close eye on any development at the Gulf of Mexico, also of note: the API crude inventories numbers are to be released later today. In the metals complex, gold has found mild reprieve after losing the USD 1200/oz level yesterday while copper is relatively uneventful. Elsewhere, according to the City Environmental Watchdog, China’s top steel-making city, Tangshan will extend summer output cuts across the steel, coke and power sectors into September.

On today’s calendar there will be a bit of focus on the July trade balance reading. Meanwhile NY Fed President John Williams, Minneapolis Fed President Neel Kashkari, and Atlanta Fed  President Raphael Bostic are all due to speak at separate events. Also potentially worth keeping an eye on will be the Congressional testimony by executives from Twitter, Facebook and Google on Russia’s involvement in the US election.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -1.7%
  • 8:30am: Trade Balance, est. $50.2b deficit, prior $46.3b deficit

DB’s Jim Reid concludes the overnight wrap

EM investors could be excused for having tears in their eyes at the moment with September carrying on the trends of August. The other main story of August – namely Italy – did see positive price action yesterday though, as the endless budget second guessing edged towards the less extreme side. On the EM front, we saw another turbulent day for currencies with South Africa adding to the long list of issues following a second negative quarterly GDP print (-0.7% qoq vs. +0.6% expected) pushing the country into its first recession since 2009.

More on that shortly but the end story for EM FX (-0.65%) was a tenth decline in the last twelve sessions. The South African Rand (-3.16%) led losses and fell to the weakest since June 2016. The Argentine Peso (-1.20%) hit a new all-time low while the Turkish Lira (-0.53%) was weaker for the sixth time in the last seven sessions. Of the 24 most traded EM currencies only the Mexican Peso (+1.44%) is up YTD. In fact 4 have weakened between 10-20% (Indian Rupee, Chilean Peso, Russian Ruble and South African Rand), one between 20-40% (Brazilian Real) and two more than 40% (Turkish Lira, Argentine Peso).

European markets seemed to get swept up in the risk-off emanating from the EM moves. The Stoxx 600 (-0.70%), DAX (-1.10%) and CAC (-1.31%) all fell sharply. The exception was Italy though where the FTSE MIB (+1.01%) climbed for the second successive session along with 10 year BTPs rallying 14.7bps. Headlines trickled in all day with party leaders from the League meeting in Rome with Ansa reporting that they repeated a pledge to “respect EU rules”. However late in the day headlines hit the wires suggesting that Salvini was considering implementing a government programme for the budget over 5 years which, if true, would imply a lot more time for fiscal manoeuvring. At the same time Reuters also reported that the League was targeting a deficit “slightly above 2%”. We’ve lost count of the number of ‘targets’ that now must be out there, but our Italy economists put out this helpful overview of the situation last night

Anyway, as we have come to expect, the US equity market largely ignored most of the above – despite a dip at the open – and in the end although slightly lower it outperformed all other markets (with the exception of Italy). The S&P 500 finished last night -0.17% and NASDAQ -0.23%. Possibly the higher rates and stronger dollar (more below) weighed a little on equities, though this combination was positive for US banks which led gains and closed +0.54%. Amazon also joined Apple in briefly passing the $1tn market cap mark, though with a slightly different price-to-earnings ratio of approximately 200x compared to Apple’s 20x.

Asia appears to be following Europe and EM rather than the US overnight with heavy falls across most bourses. Indeed the Hang Seng (-1.65%), ASX (-0.94%) and Shanghai Comp (-0.92%) have seen the biggest moves while the Nikkei (-0.34%) and Kospi (-0.21%) are also lower. The main stock market in Indonesia is also -3.25% with the Indonesian Rupiah now at the weakest since 1991. It’s hard to ignore the EM data which is coming out at the moment either with the most notable overnight print being Philippines CPI for August which printed at a much higher than expected 6.4% (vs. 5.9% expected) and the highest since 2009. Meanwhile China’s Caixin services PMI also surprised but this time to the downside with the August reading falling 1.3pts to 51.5 (vs. 52.6 expected).

Back to yesterday, if EM FX wasn’t already on the ropes then the knockout blow appeared to come in the afternoon in the form of a bumper ISM manufacturing report across the pond which seemingly helped to contribute to concerns for EM that the Fed and the Dollar strength wouldn’t stop soon. The 61.3 print for August smashed expectations for 57.6 and also represented a jump of 3.2pts from July. That’s the highest reading since 2004, near the highest in 35 years and the biggest one month jump since 2010. New orders (65.1) was the highest since January, employment (58.5) the highest since February and production (63.3) the highest since January. So broad-based strength. Prices paid (72.1) also came in above expectations. Prior to this the manufacturing PMI was also revised up, albeit modestly, by 0.2pts to 54.7, though we certainly put more emphasis on the ISM given its stronger historical track record at predicting growth. Qualitatively, the report said “almost two-thirds (64%) of companies reporting higher input prices explicitly blamed tariffs,” and with the US set to impose another round of tariffs on $200bn of Chinese imports as soon as this week, this issue will continue to dominate headlines. The Atlanta Fed’s Q3 GDP tracker ticked up 0.6pp to 4.7%, largely due to a higher forecast for business fixed investment. DB’s survey tracker ticked up to 3.4%, but we maintain our official forecast for 3.1% GDP growth this quarter.

Treasuries, which in fairness were already a bit weak going into the data, soldoff a bit more post the report and by the close last night 10y yields had ended 3.8bps higher at 2.899%. The 2s10s curve also steepened 1bp and at 24bps is about 5.5bps off the lows from last month. Bond markets across Europe – with the exception of the periphery – were also a bit weaker with Bunds 2.3bps higher in yield. Meanwhile the Dollar index ended up last night +0.31%.

Coming back to currencies it was another weaker day for Sterling yesterday with the Pound edging down another -0.11% versus the Dollar to take the twoday loss to -0.80%. After the fallout from the Brexit rhetoric over the weekend, a Guardian article from Monday night quoting Tory MP Jacob Rees-Mogg and EU Chief Brexit Negotiator Michel Barnier as bonding over a shared assessment that the Chequers plan is “complete rubbish” gained a bit of early attention. Adding to the pain was a much softer than expected August construction PMI (52.9 vs. 54.9 expected). Later in the day BoE Governor Carney’s testimony was more of a  nonevent for markets but the main takeaways were that that Carney may well be open to staying on beyond his current term, more rate hikes are likely needed if the UK economy stays on the current path and the BoE is, unsurprisingly, making preparations for a no-deal Brexit but this is not the BoE’s base case.

In terms of what to look forward to today, this morning we’ll also get the remaining August services and composite PMIs in Europe and the UK as well as July retail sales data for the Euro area. In the US there will be a bit of focus on the July trade balance reading. Meanwhile NY Fed President John Williams, Minneapolis Fed President Neel Kashkari, and Atlanta Fed  President Raphael Bostic are all due to speak at separate events. Also potentially worth keeping an eye on will be the Congressional testimony by executives from Twitter, Facebook and Google on Russia’s involvement in the US election.

 

 

3. ASIAN AFFAIRS

i) WEDNESDAY MORNING/ TUESDAY NIGHT: Shanghai closed DOWN 46.24 POINTS OR 1.68%   /Hang Sang CLOSED DOWN 729.49 POINTS OR 2.61%/   / The Nikkei closed DOWN 116.07 POINTS OR 0.51%/Australia’s all ordinaires CLOSED DOWN 0.93%  /Chinese yuan (ONSHORE) closed UP  at 6.8313 AS POBC HALTS ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER/Oil DOWN to 68.95 dollars per barrel for WTI and 77.36 for Brent. Stocks in Europe OPENED RED //.  ONSHORE YUAN CLOSED  UP AT 6.8313 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8519: HUGE DEVALUATION/PAST SEVERAL DAYS STOPS// TRADE TALKS NOT DOING TOO GOOD   : /ONSHORE YUAN TRADING  STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

North Korea/South Korea/USA/China

3 b JAPAN AFFAIRS

 

3C CHINA

4.EUROPEAN AFFAIRS

Germany/UK/Brexit

Germany’s government have softened their key demands on a Brexit and this will ease the path for the UK to strike a deal with the European union

(courtesy zerohedge)

Futures, Cable Spikes On Reports Germany, UK Drop

Key Brexit Demands

As critical dates loom for the Brexit process, Bloomberg reports that the British and German governments have abandoned key Brexit demands, potentially easing the path for the U.K. to strike a deal with the European Union, people familiar with the matter said.

As Bloomberg details, Germany is ready to accept a less detailed agreement on the U.K.’s future economic and trade ties with the EU in a bid to get a Brexit deal done, according to people speaking on condition of anonymity because the discussions are private.

The U.K. side is also willing to settle for a vaguer statement of intent on the future relationship, postponing some decisions until after Brexit day, according to an official who declined to be named.

The shift means that widespread opposition to U.K. Prime Minister Theresa May’s proposal for the future relationship – known as the Chequers plan – isn’t necessarily an obstacle to getting a divorce deal.

A fudged political declaration on the future relationship may also make it easier for May to approve the backstop, according to Mujtaba Rahman, managing director at Eurasia Group, in a note on Wednesday.

“EU negotiators are now calculating that the British prime minister will be able to sign off on the EU’s backstop in the Withdrawal Agreement because she will be able to argue –pointing explicitly to the political declaration — that it will never need to be implemented,” Rahman wrote.

Negotiators in the U.K. and EU were once planning a document of up to 100 pages; now it could be just a tenth of that, officials say.

The reaction to this headline was immediate buying in cable…

And US Equity Futures also jumped…

Still, German Chancellor Angela Merkel warned on Tuesday that “we don’t want these negotiations to fail, but we can’t rule it out completely.”

end

UK/RUSSIA

I can assure you that Putin will not be too happy with these charges against two Russian nationals;  Petrov and Boshirov

(courtesy zerohedge)

UK Charges 2 Russian Nationals With Attempted

Murder In Skripal Case

In what appears to be the latest escalation in the UK government’s campaign to blame Russia for the poisoning of former double agent Sergei Skripal, his daughter Yulia Skripal and three other seemingly random Britons (one of whom succumbed to the deadly Novichok nerve agent used in the attacks), British prosecutors are saying they have “sufficient evidence” to charge Alexander Petrov and Ruslan Boshirov, both Russian nationals, with conspiracy to murder Skripal, as well as the attempted murder of his daughter and police detective Nick Bailey, according to Reuters.

Reuters UK

@ReutersUK

JUST IN: British prosecutors say they have sufficient evidence to charge two Russian nationals with conspiracy to murder Sergei and Yulia Skripal

The news comes nearly two months after investigators said they had identified the suspected perpetrators of the Novichok attack by crossing referencing CCTV feeds with records of people who entered the country around that time.

Russians

Per the BBC, the Crown Prosecution Service said both men, who were identified by the suspected aliases they used to enter the country, flew in from Moscow two days before the poisoning. Both are also around the age of 40. In a statement released after the charges were announced, a spokesperson for the Russian government said the names “don’t mean anything to us.”  UK Prime Minister is expected to give a statement later today.

Of course, Russia has denied any involvement in the poisoning, though Russian officials aren’t the only ones who have been skeptical of the UK government’s claims. Tory MP and UK Security Minister Ben Wallace declared that “I think this story belongs in the ‘ill informed and wild speculation’ folder”after investigators said they had identified the suspects.While the Skripals survived the poisoning,  Dawn Sturgess, who fell ill around the same time as her boyfriend, Charlie Rowley, eventually died. Police say the latter two victims encountered residue from the Novichok used in the Skripal attack. Bailey, who purportedly encountered the nerve agent during the investigation, eventually recovered.

We imagine Russia will not be pleased if two of its citizen are arrested for a crime considering the serious doubts that have been raised about the evidence. Allies of the UK, including the US, expelled dozens of diplomats following the accusations, which emerged just before Russia hosted the World Cup – an inopportune time to instigate a global diplomatic crisis. While the UK has been content with jumping to conclusions, Russian involvement in the operation would mean they targeted a former MI6 spy, who they released from prison eight years ago, using an ineffective, slow-operating, “military grade” nerve agent, which could be easily traced back to them.

But none of this has deterred the UK so far. However, assuming the men are no longer in the UK, we imagine prosecutors will likely have a difficult time extraditing them to face these charges.

end

Just one small problem with this arrest:  both cannot occupy the same space at exactly the same time

have fun with this one;

(courtesy zerohedge)

Russia’s Alleged Skripal ‘Assassins’ Caught Breaking The

Laws Of Physics

As we detailed earlier, in what appears to be the latest escalation in the UK government’s campaign to blame Russia for the poisoning of former double agent Sergei Skripal, his daughter Yulia Skripal and three other seemingly random Britons (one of whom succumbed to the deadly Novichok nerve agent used in the attacks), British prosecutors are saying they have “sufficient evidence” to charge Alexander Petrov and Ruslan Boshirov, both Russian nationals, with conspiracy to murder Skripal, as well as the attempted murder of his daughter and police detective Nick Bailey, according to Reuters.

The news comes nearly two months after investigators said they had identified the suspected perpetrators of the Novichok attack by crossing referencing CCTV feeds with records of people who entered the country around that time.

Russians

There’s just one thing… About that CCTV feed!

Authored by Craig Murray,

Russia has apparently developed an astonishing new technology enabling its secret agents to occupy precisely the same space at precisely the same time.

These CCTV images released by Scotland yard today allegedly show Alexander Petrov and Ruslan Borishov both occupying exactly the same space at Gatwick airport at precisely the same second. 16.22.43 on 2 March 2018. Note neither photo shows the other following less than a second behind.

There is no physically possible explanation for this. You can see ten yards behind each of them, and neither has anybody behind for at least ten yards. Yet they were both photographed in the same spot at the same second.

The only possible explanations are:

1) One of the two is traveling faster than Usain Bolt can sprint

2) Scotland Yard has issued doctored CCTV images/timeline.

Will any mainstream media organizations question this publicly?

italy

A good commentary explaining the problems facing Italy as for 20 years, they experienced no growth in their GDP.  The new government no doubt will ask Brussels for a bigger increase in their budget spending..probably north of 3% of their GDP.  Also the migrant issue is also of extreme importance

(courtesy Chris Wood/Grizzle.com)

Italy’s Stagnant Economy The Most Likely Trigger To

Europe’s Existential Crisis

Authored by Christopher Wood via Grizzle.com,

With the focus on Turkey and the potential related fallout in other emerging markets in recent weeks, it is easy to forget about the Eurozone. Yet the current Italian government is likely to trigger a renewed existential crisis in the Eurozone once the Europeans return from the beach and the Italian Government comes up with a budget for 2019 which is likely to put it in direct conflict with the Maastricht Treaty.

 

BROKEN BRIDGES UNDER THE EURO

The collapse of a motorway bridge in Genoa last month resulting in 43 deaths, and Italian Interior Minister Matteo Salvini’s exploitation of that event by blaming Brussels-imposed austerity, is a reminder of what is coming.

Having driven over that particularly rickety bridge on more than one occasion, this writer is not surprised to hear about what happened. Similarly, driving through Italy in recent years always serves as a reminder just how poor Italy has become under the euro. Remember, Italy has recorded almost no growth since the formation of the euro at the beginning of 1999, nearly 20 years ago. Italian real GDP has risen by only an annualized 0.4% since 1Q99 and is up only an annualized 0.1% in real GDP per capita terms over the same period (see following chart).

ITALY REAL GDP AND REAL GDP PER CAPITA

 

Source: CLSA, Datastream

The Italian issue is raised again in part because it is timely with the end of the summer holiday season. The view here remains that a systemic event in financial markets is more likely to be triggered by Italy and the Eurozone than other candidates currently discussed by pundits, be it a Donald Trump-triggered trade war, a much anticipated (by talking heads) Chinese currency collapse or overvalued Wall Street FANG stocks.

Still, they are all interconnected phenomena since, for example, a renewed focus on the existential risks in the Eurozone is likely to put renewed downward pressure on the euro which, if what happened in the second quarter is any guide, will then lead to broader US dollar strength against emerging market currencies. This will in turn make it more challenging for China to manage the capital outflow issue.

BURNING THE BRIDGE TO EUROPE, BUILDING A BRIDGE TO THE US

Returning to the Eurozone issue it is also important to remember what is easily forgotten in the financial markets. That is that the anti-euro, anti-immigration populists in Europe now have a supporter in the White House who is openly encouraging them to pursue their agendas. This is, of course, the exact opposite of what was the case under Barack Obama who, unfortunately, intervened in the Brexit debate in Britain with negative consequences for the ‘Remain’ cause he was supporting.

Donald Trump could not have made it clearer that he supports the cause of those in Italy wanting to leave the euro – just as he could not have made it clearer that he supports Brexit. This is not unimportant since a potential future decision by, say, Italy to walk out of the euro looks a lot less risky politically and economically if it has the support of the American president. This will be particularly the case if that particular American president’s political position has been strengthened by the outcome of the November mid-term elections. This is one reason, among many others, why those elections are becoming rather important. The base case here remains that the Republicans will maintain control of the Congress. But, clearly, that is not consensus.

It is also important to remember that Europe has its own upcoming election cycle. Grizzle refers again to the potentially hugely important May 2019 European parliamentary elections. While the focus of financial markets in the coming quarter will likely be on the Italian Government’s budget, and how Brussels and Berlin will respond, next May’s parliamentary elections are likely to be by far the most significant ever.

This is because the anti-euro populist parties are likely to run a far more coordinated campaign. The result could be the emergence of a populist alliance in the European parliament determined to attack from within many of the foundations of the Eurozone, be it the Maastricht Treaty in the economic sphere or ‘free movement’ in terms of the politically charged issue of immigration.

A reminder of this comes from reading a recent article on the growing activities in Europe of Steve Bannon, Trump’s former political strategist (see International New York Times article: “In Europe, a best friend for Bannon”, August 21, 2018 by Ivan Krastev). This article reported how Bannon announced in late July that he plans to establish in Europe a foundation, called The Movement, to create a formal alliance of populist right-wing parties ahead of next May’s European elections.

The mooted foundation will aim to provide polling and policy support. His main ally in Europe in this venture is, according to the same article, Hungarian Prime Minister Viktor Orban who was re-elected in April for his third consecutive four-year term.

Obviously, turning such an alliance into an effective political force is easier said than done, most particularly as there will be different views on specific policies. Still, there will be an easily achieved consensus among the populists on the related issues of immigration and Islam. On this point, the same article reports that Orban intends to make next May’s elections “a referendum on migration and Islam”.

THE SHIFTING TIDE OF IMMIGRATION

This is where the renewed crisis in Turkey, with its focus on a collapsing currency and macro imbalances, meets the issue of European politics. This is, of course, because the main reason the flow of migrants into Europe, and in particular Germany, has declined significantly since late 2016 due to the EU-Turkey migration deal Angela Merkel negotiated with Turkish President Recep Tayyip Erdogan in March 2016.

Under the deal, the EU agreed to pay Turkey €6 billion to halt the human flow with some 3.5 million Syrian refugees remaining in Turkey. As a result, the number of asylum applications lodged in Europe declined by 44% YoY to 728,470 people in 2017 and were down 15% YoY to 301,390 in 1H18, according to the European Asylum Support Office (see following chart). As for Germany, total asylum applications declined by 70% from a peak of 745,545 people in 2016 to 222,683 in 2017 and were down 15% YoY to 110,324 in the first seven months of 2018, according to the Federal Office for Migration and Refugees (see following chart).

ASYLUM APPLICATIONS LODGED IN EUROPE

 

Source: European Asylum Support Office (EASO)

GERMANY – TOTAL NUMBER OF ASYLUM APPLICANTS

 

Note: Data up to July 2018. Source: Federal Office for Migration and Refugees

The above creates obvious leverage for Erdogan to apply against Merkel and the Eurozone. This explains why Merkel in her public comments has taken a conciliatory tone in response to recent developments in Turkey in stark contrast to the provocative posture adopted by the Donald Trump.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

Iran/Lebanon/Hezbollah

Intelligence sources now accuse Iran of supplying missiles to Hezbollah via civilian airlines

(courtesy zerohedge)

Intelligence Sources Accuse Iran Of Supplying Missiles To Hezbollah Via Civilian Airline

We previously detailed how after seven years of a the failed attempt at regime change in Syria, the next target is Hezbollah, itself a key player throughout the war in successfully defending Damascus.

Part of these efforts of the Western-Gulf military alliance will be to wage a powerful propaganda war, which appears to have already begun in earnest.

This week Israeli, Saudi, and US media sources have released multiple reports claiming Iran is now routinely smuggling weapons and missile manufacturing equipment into Lebanon through the use of civilian aircraft, in order to provide a steady resupply stream to Hezbollah.

The reports rely heavily on unnamed Western intelligence officials, who say that at least two recent flights have taken off between Tehran and Beirut that were observed “flying unusual routes”.

A new story published in the Times of Israel, based on a Fox News interview with the intelligence officials,describes:

According to the report, two flights operated by Qeshm Fars Air flights made trips from Tehran to Beirut, flying an irregular route. One Boeing 747 flight on July 9 made a stop in Damascus, Syria. The second flight on August 4, directly from Tehran to Beirut, but followed “a slightly irregular route north of Syria”

While at first glance we might note that of course civilian airline flights would prefer to take an “irregular route” flying over a war zone in which jihadist insurgents possess MANPADS and other advanced weaponry that could take out aircraft flying above, it’s also no earth-shattering revelation that Tehran has long supplied the powerful Lebanese paramilitary group.

But perhaps more worrisome is the new information or angle to this story: after a bombshell Reuters report last week quoted Iranian, Iraqi, and US sources as saying Iran has transferred short range ballistic missiles to Shia allies in Iraqthe new allegations suggest Iran is also ramping up missile manufacturing capabilities in Lebanon as well, which would put Israel within even closer proximity to powerful Iranian missile systems.

The original Fox report fingers Qeshm Fars Air flights as being part of the Iranian clandestine missile and weapons transports:

Western intelligence sources said the airplane carried components for manufacturing precise weapons in Iranian factories inside Lebanon. The U.S. and Israel, as well as other western intelligence agencies, have supplied evidence that Iran has operated weapons factories in Lebanon, Syria and Yemen.

The establishment of such Iranian-sponsored facilities in Lebanon, should the allegations be confirmed, would indeed be an escalation.

Israeli defense officials will no doubt seize upon such reports to potentially justify further violations of Lebanese and Syrian airspace, and more military intervention in the Syrian theatre.

Citing the Fox sources, the UAE-based The National summarizes the suspicious make-up of Qeshm Fars Air its continuing operations, saying “Three members of the airline’s board are members of Iran’s Revolutionary Guards, the elite force tasked with protecting the security of the state.”

The National further notes “It shuttered in 2013 before relaunching in March 2017”.

One widely cited “regional intelligence source” told Fox, “The Iranians are trying to come up with new ways and routes to smuggle weapons from Iran to its allies in the Middle East, testing and defying the West’s abilities to track them down.”

FOX report: One route passed over northern Lebanon after a layover in Damascus. (FlightRadar24/Google Maps)

Last May when President Trump pulled the US out of the 2015 Iran nuclear agreement, he specifically cited Iranian weapons proliferation across the Middle East, and its covertly supplying US designated terror groups like Hamas and Hezbollah.

Though analysts accused Iran of such cross regional weapons transfers originating from Tehran even before the war in Syria in 2011, the West has throughout the conflict accused Iran of greatly intensifying its efforts.

FOX report: Another aircraft flew directly from Tehran to Beirut, following an unusual path. (FlightRadar24/Google Maps)

One outspoken analyst on the issue, the Chatham House’s Lina Al Khatib, told The National“This practice has intensified with the Syrian war and with Iran’s ally Hezbollah tightening its indirect control over Beirut International Airport. This indirect control is due to key personnel of the Airport Security apparatus being members of Hezbollah or loyal to the group.”

However, Beirut International Airport is not a large or sprawling airport by international or regional standards, which would make any large scale weapons smuggling difficult in terms of avoiding the detection of Lebanese authorities or Israeli intelligence to say the least.

Lebanon’s aviation authorities have denied the accusation that such Iranian flights are using Lebanese airspace for such purposes, according to The National.

6. GLOBAL ISSUES

This is why it would be foolish for Trump to attack Canada in their NAFTA discussions.  The USA will need Canada’s water

(courtesy Michael Snyder)

Over Half Of America Suffering Drought As Lake Powell, Lake Mead Drop To “Dangerous” Low Levels

Authored by Michael Snyder via The American Dream blog,

The worst drought in years in the western half of the United States has sparked hundreds of wildfires, has crippled thousands of farms, and has produced what could ultimately be the worst water crisis in modern American history.

As you will see below, Lake Powell and Lake Mead have both dropped to dangerously low levels, and officials are warning that we may soon be looking at a substantial shortfall which would require rationing.  Unfortunately, many in the eastern half of the country don’t even realize that this is happening.  The mighty Colorado River once seemed to be virtually invulnerable, but now it doesn’t even run all the way to the ocean any longer.  Demand for water is continually increasing as major cities in the Southwest continue to grow, and this is happening at a time when that entire region just keeps getting drier and drier.  To say that we are facing a “water crisis” would be a major understatement.

I have written quite a bit about the drought in the Southwest in recent months, and it just keeps getting worse.  According to Forbes, more than half the nation is now experiencing some level of drought…

Drought conditions across the United States have worsened throughout the summer, culminating in more than half the country experiencing abnormally dry or drought conditions by the end of August.

The latest update of the United States Drought Monitor shows that more than half of the country—nearly 56 percent—is abnormally dry or mired in a full-on drought. More than a third of the country is experiencing drought conditions, and almost eight percent is in an extreme or exceptional drought.

Of course most Americans don’t really care as long as water keeps coming out of the taps.  And for the moment, nobody is going without water.

But that could change if this drought continues to intensify.

According to the Denver Post, Lake Powell and Lake Mead have both dropped “to dangerous levels”…

Water levels at Lake Mead and Lake Powell are dropping to dangerous levels, reflecting the Colorado River’s worsening “structural deficit,” scientists said.

A “structural deficit” is simply a very fancy way of saying that we are using water faster than it is being replenished.

Lake Powell is being steadily drained to support Lake Mead, and at this point the water levels in both lakes have fallen to levels that are unprecedented

“I want people to know that what’s going on at Lake Mead is very, very closely tied to what’s going on Lake Powell,” Doug Kenney said, the group’s chair and a professor at the University of Colorado. “We’re draining Lake Powell to prop it up.”

Lake Powell is about 48 percent full, and Lake Mead is about 38 percent full. By the end of the year, Powell’s levels are projected to fall 94 feet (29 meters) below where the reservoir stood in 2000 when it was nearly full.

Many Americans don’t realize how exceedingly important these two lakes are.

Approximately 40 million people in Arizona, California, Colorado, Nevada, New Mexico, Utah, Wyoming and northwestern Mexico rely on water from the Colorado River basinand it has been steadily drying out for about 20 years

The Colorado River basin, which feeds the two reservoirs, has been drying out over the last two decades, scientists said. With the demands from farms and cities exceeding the available the water supply, the strains on the river and reservoirs are being compounded by growing population, drought and climate change.

The Colorado River and its tributaries support about 40 million people and more than 7,800 square miles (20,200 square kilometers) of farmland.

If things don’t change, and there is no reason to believe that they will, we will soon have a shortfall.

What that means is that certain areas would have their water allocations reduced, and Arizona and Nevada would be at the top of that list

The U.S. Bureau of Reclamation said the chances of a shortfall in Lake Mead, the river’s biggest reservoir, are now 57 percent, up from the 52 percent projected in May.

If the surface of Lake Mead drops below 1,075 feet (330 meters) above sea level, some deliveries would be cut under agreements governing the system.

Arizona, Nevada and Mexico would have their shares reduced first in a shortage.

Are you starting to understand how serious this is?

Scientists tell us that the 20th century was an unusually wet period of time for the southwestern United States.  For most of human history, a bleak and barren desert dominated most of the region, and it appears that we may be headed back in that direction.

During the Dust Bowl days of the 1930s, vast numbers of Americans migrated to other areas due to heat, drought, massive dust storms and a lack of water.

Now Dust Bowl conditions are returning, and it is entirely possible that we could see a new wave of migration in the years ahead.

Despite all of our advanced technology, we haven’t discovered a way to defeat drought, and the devastating drought that is currently gripping the Southwest seems to be getting worse with each passing day.

7  OIL ISSUES

Oil drifted further south despite smaller than expected crude draw down

(courtesy zerohedge)

WTI Extends Losses After Smaller Than Expected Crude

Draw

WTI continued to drift lower today into the inventory data amid concern that “emerging-market contagion is going to suppress economic growth and limit demand,” said Gene McGillian, manager of market research at Tradition Energy.

API reported a third weekly draw in a row for Crude inventories but WTI extended the day’s losses as the 1.17mm draw was smaller than the expected 2.99mm draw (and stocks rose at Cushing and for gasoline and distillates).

 

API

  • Crude -1.17mm (-2.9mm exp)
  • Cushing +613k (+600k exp)
  • Gasoline +1.0mm
  • Distillates +1.8mm

 

“The market was clearly overheated on storm concerns,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. “The real sharp run-up yesterday was quite an overreaction.”

WTI sat right around $69 ahead of the API data but extended the day’s losses

More than 9 percent of U.S. Gulf of Mexico oil output remained shut down on Wednesday as Gordon weakened and drifted northward over Mississippi.

Meanwhile the Permian pipeline discounts continue to collapse to record highs…

 

8 EMERGING MARKET ISSUES.

 

INDIA
India is a potential problem in the coming years but not as bad as Turkey and Argentina.  It has twin deficits of 3.3% fiscal and 2.3% current account and so far they have adequate USA reserves of 400 billion.  However reserves are declining and this may present future problems.  India taxes it’s citizens equivalent to 60% and the wrong move for the Indian government is to raise taxes again..that will cause a huge flight.  India’s debt in rupees is 96% of total debt..and thus much different to Turkey and Argentina
(courtesy Daniel Lacalle)

Is India The Biggest Risk In Emerging Markets?

Authored by Daniel Lacalle via DLacalle.com,

The biggest mistakes in analysing macroeconomic data is to assume causality to factors that are just catalysts.

Don’t blame the Fed or Trump. That is just noise. The problem of emerging markets is largely self-inflicted and comes after years of raising imbalances, both at a trade and fiscal level, based on impossible expectations of growth and demand.

The Federal Reserve has warned for two years about rising rates and policy normalization. Yet governments ignored this and continued to increase imbalances as well as rising debt in US dollars.

Governments always consider that economic problems come from lack of demand, and they assign themselves the task of “correcting” that wrong assumption by massively increasing deficits and using monetary policy well beyond any logical measure.

India’s rising populist policies are part of the nation’s current problems.

Recent data is quite concerning.

August Nikkei Services PMI came at 51.5 vs 54.2 in the previous month, a 5% monthly drop.

Sovereign bond yields are at the highest level since 2014.

Industrial production and growth estimates are coming down (via Focus Economics).

 

Trade deficit in July 2018 was the highest since 2013. India’s trade deficit widened to USD 18.02 billion, the largest trade gap since May 2013, as imports jumped 28.81 percent.

According to Kotak Economic Research, India’s current account deficit is forecast to be the highest in six years. Under a $65 a barrel oil price scenario, the current account deficit is likely to be 2.4% of GDP, higher than in 2013-14. As oil prices rise, and imports soar, the overall balance of payments is moving into larger deficits than expected, as capital inflows weaken and are unable to current account deficit.

Another warning comes from the maturities in foreign exchangeNearly $220 billion of short-term debt, equal to more than half of India’s foreign exchange reserves, will come up for maturity in 2018-2019 fiscal year. Moody’s states that India is one of the countries that are least exposed to a rising US dollar. However, Moody’s did not expect the rupee to fall this much.

The average maturity of debt is close to 10 years and over 96 per cent of it is in local currency, according to Moody’s. However, it also notes the country’s low debt affordability. Given that the vast majority of debt is in local currency, the incentive to depreciate the rupee is very high.

Foreign exchange reserves remain acceptable, but are falling rapidly. From $426 billion in April to $403 billion in August, foreign exchange reserves are likely to suffer another dipas the rupee falls against the US dollar.

At the same time, 68% of fiscal deficit target for 2019 consumed in the first quarter. 

India expects a fiscal deficit of 3.3% of GDP in 2018-19 that seems quite challenging, given the weakening of data and the rise in expenses. Deficit was revised up to 3.5% of GDP in 2017-18.

The combination of wider trade and fiscal deficits added to lower reserves makes the currency weaken severely. The rupee keeps plummeting to all-time lows vs the USD, as we explained in WIO News (watch).

India’s government usually solves this equation increasing subsidies and raising taxes. That combination will not work in a world that has lower tolerance for fiscal and trade imbalances and a risk-off scenario. Additionally, tax wedge is already a high burden. As Prateek Agrawal notes, “if one looks at GST and taxes on the affluent sections, India would rank as one of the highest taxed countries globally. For consumption, these sections are actually paying close to 60 per cent of the income as taxes).

Additionally, printing more rupees is not going to solve the challenges.

The situation in India is not as desperate as in Turkey or Argentina, because FX reserves are not being depleted at high rate, but the trend is concerning and the outlook for growth, trade and fiscal balances is weakening.

The government has prefered to raise taxes and increase spending, and the demonetisation policy was a big mistake (read). All the cash that was taken out of the system came back a few months later. It is time for India to change its historical policies of subsidising the low productivity sectors to penalize the high productivity ones with more taxes.

India can easily navigate this turmoil if it changes some misguided demand-side policies. The question is, will the government do it? Or will they prefer to blame an external enemy and increase the imbalances?

If the government decides to ignore these issues, India could become the biggest risk in emerging markets and for the world economy.

 

end

the rout across emerging markets continues unabated.  The definition of contagion:  “catching falling knives inside emerging markets:”

(courtesy zerohedge)

“The Very Definition Of Contagion”: Catching Falling Knives In Emerging Markets

Don’t look now – or look – but while the US stock market trades just shy of all time highs, absent the occasional hiccup in the mighty FANGs, the rout across emerging markets is now the longest since the global financial crisis, or specifically 222 days for stocks, 155 days for currencies, and 240 days for local government bonds.

The duration of each selloff – as calculated by Bloomberg – had taken even the most ardent bears by surprise because “not one of the seven biggest selloffs since the financial crisis – including the so-called taper tantrum – inflicted such pain for so long on the developing world.”

The slump and the duration, calculation in the number of days from peak to trough, has pushed some strategists to say the EM crisis is more than just a knee-jerk reaction to higher U.S. interest rates or the unfolding trade war: “It’s become a full-fledged crisis of confidence for investors in developing nations.

The duration of the decline also impacts trader behavior, as lingering downtrends upend futures and options contracts, forcing traders to take losses. They also lock up investors’ collateral in the form of enhanced margin calls, leaving them little room to make other trading decisions, as Bloomberg notes.

More importantly, the longer selloff also means the argument for buying the dip – one frequently made by money managers earlier this year – gives way to cautions over avoiding a falling knife.

And that, in turn, can persuade money managers who treat emerging markets as one homogeneous group to sell weak and strong markets in tandem, no matter their specific fundamentals. It’s the very definition of contagion.

One strategist who would agree with the gloomy assessment that the EM crisis is in its contagion phase, is Macquarie’s Viktor Shvets who in a note released today, titled appropriately “Catching falling knives & EM contagion” explains – once again – what prompted this particular EM crisis, and why it will be so difficult to exit it.

We excerpt from his note below:

EM equities are continuing to underperform; down 20% from high (Feb’18). And while immediate drivers are weaker EMs, the causes are broad & persistent: these are liquidity compression, US$ & shutdown of growth engines. CBs and China can reverse this trend; alas, at this stage not enough from either.

EM equities are continuing to underperform DMs, as vulnerable EMs refuse to accept unpalatable choices and the global & US$ liquidity continues to compress.

Despite our expectation of some relief, EMs’ underperformance continued to build through the summer. Since the high (Feb’18), EMs underperformed DMs by ~15%, adding effectively another 3-4% in the last two months. The same occurred to funds flow, with Asia ex equity flows to market cap approaching 0.5% (negative) as ~US$32bn left the universe. While valuations are not yet distressed, the multiples (PER) are today trading at ~27% discount (vs historic average of ~20%). Is it the right time to get into EMs, particularly as there are already tentative signs of some return of foreign flows?

The key to determining whether the time is right is the degree of contagion from periphery to sturdier parts of the EM universe. We believe that it is totally incorrect to argue that Turkey’s US$0.5 trillion of FX debt (~8% of entire EM FX debts) is not systemic. In our view, Turkey is highly systemic, from both financial & geopolitical perspective. Besides, if history is any guide, the straw that breaks the camel’s back does not actually need to be critical (it could just easily have been Hungary, for example). The key to contagion is not geography or size of the initial victim but rather assessment of responses and the impact on global and regional liquidity flows. This in turn is determined by reactions of not just countries involved but also of any committee that might have been formed to ‘save the world’ (a la LTCM in ’98, Brady bonds in ‘80s).

The challenge with Turkey and Argentina is not only that these two economies have unsustainable twin deficits and suffer from massively rising inflationary pressures, but also that their responses thus far were either slow or hostile. In reality both face politically unpalatable choice of either deep recession or some form of capital controls & debt renegotiation. The position of other EMs is not as extreme; but it matters little, as long as there is no change in global liquidity.

This remains the key. As long as global CBs insist on reducing liquidity while simultaneously attempting to raise cost of capital, victims would continue to float to the surface, starting with weaker players but then gradually spreading to the sturdier corners. We have already seen a significant rise in EM currency volatilities and a rise in EM and high yield spreads. In addition, investors are coming to terms with the US seeming willingness to ‘weaponise’ trade & US$, while technology and de-globalization are shutting down EM growth engines.

We estimate that the global liquidity growth now stands at less than 5% (not enough to cover global GDP; providing nothing for assets) while US$ liquidity is turning deeply negativethus supporting US$.

But on the other hand, China is moving towards more stimulative position. How do we balance these factors? Unless there is a stronger private sector recovery or China becomes more aggressive, CBs must change their narrative. At this stage, we still don’t see committees to ‘save the world’.

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

Euro/USA 1.1589 UP .0002/ REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES DEEPLY IN THE RED

 

USA/JAPAN YEN 111.58   UP 0.121  (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL

GBP/USA 1.2823 DOWN   0.0034  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3174  UP .0057(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 2 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1556; / Last night Shanghai composite CLOSED DOWN 46.24 POINTS OR 1.68%  /Hang Sang CLOSED DOWN 2729.49 POINTS OR 2.61% /AUSTRALIA CLOSED DOWN  .93% / EUROPEAN BOURSES ALL RED

 

 

The NIKKEI: this TUESDAY morning CLOSED DOWN 116.07 POINTS OR 0.51%

 

Trading from Europe and Asia

1/EUROPE OPENED ALL RED

 

 

 

2/ CHINESE BOURSES / :Hang Sang DOWN 729.49 POINTS OR 2.61%  /SHANGHAI CLOSED DOWN 46.24 POINTS OR 1.68%

Australia BOURSE CLOSED DOWN .93%

Nikkei (Japan) CLOSED DOWN 116.07 POINTS OR 0.51%

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1194.40

silver:$14.15

Early TUESDAY morning USA 10 year bond yield: 2.89% !!! DOWN 1 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 3.06 DOWN 1  IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early WEDNESDAY morning: 95.41 DOWN 3  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing WEDNESDAY NUMBERS \1: 00 PM

 

Portuguese 10 year bond yield: 1.88% UP 1    in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.12%  UP 0 BASIS POINTS from TUESDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY

SPANISH 10 YR BOND YIELD: 1.45% UP 2  IN basis point yield from TUESDAY/

ITALIAN 10 YR BOND YIELD: 2.95 DOWN 7   POINTS in basis point yield from TUESDAY/

 

 

the Italian 10 yr bond yield is trading 150 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.38%   IN BASIS POINTS ON THE DAY

END

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1619  UP .0032(Euro UP 32 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.49 UP 0.028 Yen DOWN 3 basis points/

Great Britain/USA 1.2900 UP .0043( POUND UP 43 BASIS POINTS)

USA/Canada 1.3190  Canadian dollar DOWN 13  Basis points AS OIL FELL TO $69.04

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was FELL BY 32 BASIS POINTS  to trade at 1.1619

The Yen FELL to 111.49 for a LOSS of 3 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 GAINED 43 basis points, trading at 1.2900/

The Canadian dollar LOST 13 basis points to 1.3190/ WITH WTI OIL FALLING TO 69.04

The USA/Yuan,CNY closed UP AT 6.8300  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.8500 (  YUAN UP)

TURKISH LIRA:  6.6043

the 10 yr Japanese bond yield closed at +.12%   UP 0  BASIS POINTS FROM YESTERDAY

 

 

Your closing 10 yr USA bond yield DOWN 1  IN basis points from TUESDAY at 2.89 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.07 UP 0  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, 95.27 DOWN 27 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 

London: CLOSED DOWN  58.96 POINTS OR 0.79%

German Dax : CLOSED DOWN 147.56 POINTS  OR 1.21%
Paris Cac CLOSED DOWN 72,37 POINTS OR 1.35%
Spain IBEX CLOSED DOWN 58.80 POINTS OR 0.63%

Italian MIB: CLOSED UP:  27.46 POINTS OR 0.13%/

 

The Dow closed  UP  22.51 POINTS OR 0.09%

NASDAQ closed DOWN 96.07 points or 1.19% 4.00 PM EST 

 

WTI Oil price; 69.04  1:00 pm;

Brent Oil: 77.28 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    68.42/ THE CROSS HIGHER BY. 23 ROUBLES/DOLLAR (ROUBLE LOWER BY .23 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  6.6043 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.38 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, 4:00 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:$68.90

BRENT: $77.25

USA 10 YR BOND YIELD: 2.90%

USA 30 YR BOND YIELD: 3.07%/

EURO/USA DOLLAR CROSS: 1.1632 UP .0043 ( UP 43 BASIS POINTS)

USA/JAPANESE YEN:111.54 UP 0.071 (YEN DOWN 7 BASIS POINT/ .

USA DOLLAR INDEX: 95.12 DOWN 31 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.2909 UP 52 POINTS FROM YESTERDAY

the Turkish lira close: 6.5915

the Russian rouble:  68.23 DOWN 0.05 roubles against the uSA dollar.(DOWN 5 BASIS POINTS)

 

Canadian dollar: 1.3171 DOWN 3 BASIS pts

USA/CHINESE YUAN (CNY) : 6.8300  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.8426 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.38%


VOLATILITY INDEX:  13.91  CLOSED UP 0.75

LIBOR 3 MONTH DURATION: 2.322%  .LIBOR  RATES ARE RISING

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

TRADING IN GRAPH FORM FOR THE DAY

US Tech Wrecks, Cryptos Crash As Global Contagion

Spreads

Just keep buying, everyone else is…

 is…

 

 

 

Bad night for Chinese stockholders…No afternoon National Team BTFD effort!!

 

European stocks tumbled to their lowest since early April as EM contagion spread on fears of soaring exposures…

 

And US Equities were mixed – The Dow clung to unchanged all day as Nasdaq was battered (supposedly on regulatory concerns from the Congressional hearings)…

 

Futures had dipped overnight – mainly during the European session, then NASDAQ snapped at the US Cash open…

 

Tech is notably underperforming financials in September…

 

Is this the start of stocks’ catch down to VIX…

 

FAANG Stocks were ugly…

Amazon is no longer a trillion dollar company…

With both NFLX and GOOGL below their 50DMA…

TWTR tumbled on the day as Dorsey spoke…

 

And TSLA dropped another 3% to 3-month lows… and TSLA bonds hit a new low…pushing the bond’s yield above 8% – almost as bad as Turkey!

 

Despite stock weakness, Treasury yields are up once again…

 

The Dollar ended the day lower – breaking a four-day win streak

 

Cable spiked and dropped on headlines about Germany’s attitude towards Brexit documents…

 

EM FX bounced modestly today…

 

Yuan remains stable…

 

Cryptos were smacked with the ugly stick today after headlines reported Goldman Sachs delaying its plans for a crypto trading desk…ETH is down 15% this week!

 

Knocking Bitcoin back below $7000…

And Ethereum plunged to its lowest since Sept 2017…

 

WTI Crude slipped lower (below $69) ahead of tonight’s inventory data but PMs and copper limped higher on a modest USD drop…

 

Gold futures managed to scramble back above $1200…

 

Gold buys the most silver in a decade…

 

So is this is the start of the meanest reversion in US stocks to the reality of many other global markets?

end

 

market trading/this morning

Markets do not like the latest: tech regulations looms from Congress.  Amazing, they seem to turn their heads on emerging market turmoil, on tumbling hard USA data and tightening global central bank policies but regulate technology companies..not good

(courtesy zerohedge)

Stocks Slammed After Tech-Regulation Looms From Congress

Emerging Market turmoil and contagion? No problem.

Tumbling ‘hard’ US economic data? Meh.

Tightening global central bank policies? Ha.

Admit 10s of million of “ad viewers” are robots:

ABC News Politics

@ABCPolitics

Twitter CEO @jack on the purpose of his platform: “For our part, we see our platform as hosting and serving conversations… but also to increase the health of that conversation as well.”

…and this happens…Twitter tumbles.

And fears over regulatory talk from the hearings in Congress are not going over well with investors…

FOX Business

@FoxBusiness

.@MarkWarner: “The era of the Wild West in social media is coming to an end. Where we go from here though, is an open question.”

Senator Mark Warner: “Congress will have to set social media regulations.”

 

 

Market data

Trump will not be happy as the trade deficit with the world came in at a huge $50.1 billion dollars. The deficit with China was about 36.$ billion of that.  Trump no doubt just received his signal to initiate the 200 billion dollars worth of tariffs on the next lot of Chinese goods

(courtesy zerohedge)

 

US Trade Deficit With EU, China Hits Record

The July trade deficit – a closely watched number in a time of trade wars – came in at $50.1BN, fractionally better than the $50.2BN expected, but 9.5% worse than last month’s revised print of $45.7BN. This was the biggest one month move since 2015.

The deficit deteriorated as a result of less exports (-1.0%) and more imports (+0.9%). Broken down, July exports were $211.1 billion, $2.1 billion less than June exports, while July imports were $261.2 billion, $2.2 billion more than June imports. The July increase in the goods and services deficit reflected an increase in the goods deficit of $4.2 billion to $73.1 billion and a decrease in the services surplus of $0.1 billion to $23.1 billion.

Some notable highlights from the report:

  • July exports of services ($70.3 billion) were the highest on record.
  • July imports of goods and services ($261.2 billion) were the highest on record.
  • July imports of goods ($213.9 billion) were the highest on record.
  • July imports of services ($47.2 billion) were the highest on record.

Digging into the numbers, even more records were revealed:

  • July exports of industrial supplies and materials ($46.5 billion) were the highest on record.
  • July petroleum exports ($15.8 billion) were the highest on record.
  • July imports of goods ($212.2 billion) were the highest on record.
  • July imports of industrial supplies and materials ($49.3 billion) were the highest since December 2014 ($51.8 billion).
  • July imports of other goods ($9.0 billion) were the highest on record.
  • July petroleum imports ($20.3 billion) were the highest since December 2014 ($23.6 billion).
  • July imports from South and Central America ($10.8 billion) were the highest since December 2014 ($12.1 billion).
  • The July import average price per barrel of crude oil ($64.63) was the highest since December 2014 ($73.60).

But what was most important is the geographic distribution of trade, and this is where Trump will be displeased because in July the trade deficit with both China ($36.8 billion)…

and the EU ($17.6 billion), were the highest on record.

While the number will not have much of an impact on Q3 GDP, it could have a major impact on future trade because if Trump wanted one final “sign” to slap China with $200BN of tariffs on Friday, he just got it.

end

Rents soar across the USA as the average rises to $1412.  It will be difficult for workers if rent takes up the majority of their income
(courtesy zerohedge)

 

Average US Rent Hits All Time High Of $1,412; Biggest Increase In 18 Months

With core CPI printing at a frothy 2.4%, and the Fed’s preferred inflation metric, core PCE finally hitting the Fed’s 2.0% bogey for the first time since 2012, inflation watchers are confused why Jerome Powell’s recent Jackson Hole speech was surprisingly dovish even as inflation threatens to ramp higher in a time of protectionism and tariffs threatening to push prices even higher.

But the biggest concern from an inflation “basket” standpoint has little to do with Trump’s trade war, and everything to do with shelter costs, and especially rent, the single biggest contributor to the Fed’s inflation calculation. It’s a concern because according to the latest report from RentCafe and Yardi Matrix,  which compiles data from actual rents charged in the 252 largest US cities, fewer than expected apartment deliveries this year increased competition among existing units, pushing up the national average rent by another 3.1% – the highest monthly increase in 18 months –  to $1,412 in August, an all time high.

The national average monthly rent swelled by $42 since last August and $2 since last month. Above-average numbers of renters renewing leases at the end of the summer and heightened demand from college-age renters also contributed to the rise in rents this time of year.

The rental market is so hot right now – perhaps a continue sign that most Americans remain priced out of purchasing a home – that rents increased in 89% of the nation’s biggest 252 cities in August, stayed flat in 10% of cities, and dropped in only 1% of cities compared to August 2017. Queens (NYC), Las Vegas, and Phoenix rents increased the most in one year, while Baltimore, San Antonio, and Washington, DC rents have changed the least among the nation’s largest cities.

Here are the main highlights for large, mid-size and small markets:

  • Renter Mega-Hubs: The largest increases were in Orlando (7.7%) and Phoenix (6.8%), while Manhattan (1.9%) and Washington, D.C. (2.1%) saw some of the slowest growing rents in this category. The biggest net changes were felt by renters in Los Angeles, which pay $102 more per month this August compared to last year.
  • Large cities: Rents in Queens and Charlotte surge by 8.4% and 5.2% respectively, but barely move in Baltimore (0.2%) and San Antonio (1.5%).
  • Mid-size cities: Mesa (6.9%), Tampa (6.4%), and Sacramento (5.5%) rents increase at the fastest pace. At the other end of the spectrum, rents only ticked up in Virginia Beach (1.4%) and Albuquerque (1.7%).
  • Small cities: Due to limited stock and high demand, Lancaster and Reno rents soared by 9.7% and 11.3% respectively. Apartment prices in Midland (31.9%) and Odessa (30%) are over $300 per month more expensive than in August 2017. Brownsville (-2%) and Baton Rouge (-0.7%) saw rents decrease over the past year.

Orlando’s fast-growing rents outpaced the nation’s largest renter hubs

Of the top 20 largest renter hubs in the U.S., Orlando apartments are seeing the highest increase in rent over the past year, 7.7%, reaching $1,393 in August, while San Antonio apartments saw the weakest rent growth of the 20 cities, 1.5% in one year, posting an average rent of $996 per month in August. The biggest net changes in rent compared to August 2017 were felt by renters in Los Angeles, who are paying on average $102 per month more this August compared to the same month last year. Orlando rents increased by no less than $99 per monthand Tampa, Chicago, and Manhattan (New York City) rents are $77 above last year’s average. At the opposite end, rents in San Antonio saw the smallest uptick, only $15 more per month than they were one year ago.

NATIONAL LEVEL: Rents in Nevada and Arizona feel the heat from increased demand

Housing in the Permian Basin continues to see the steepest price increases in the country. Apartments for rent in Midland, TX now cost $1,595 per month, a 31.9% leap from one year prior. Likewise, rentals in neighboring Odessa, TX cost $1,365 on average, having jumped 30% in one year.

  • Reno, NV‘s housing crunch is worsening due to limited land development and high demand for rentals. Rents in Reno are the third fastest rising in the country, behind only Midland and Odessa. The average rent in Reno is $1,253 per month, a massive 11.3% increase year over year, or $127 more per month compared to the same time last year. The average rent in Reno was around $900 just three years ago but has jumped by more than $300 in 36 months, making it increasingly unaffordable for renters. Nevada’s growing popularity as a destination for those moving out of California is reflected in rapidly-growing real estate prices. Besides Reno, apartments in Las Vegas are also getting expensive, with the third fastest growing rents in the U.S. compared to other large cities.
  • Peoria, AZ is facing a similar situation. What used to be an affordable town in the Phoenix area, with an average rent of about $900 per month no more than three years ago, now has apartments that go for $1,114 per month on average, over $200 more expensive, a big leap and a heavy burden for the area’s renters. Compared to August 2017, the average rent in Peoria is 10.1% or $102/month more expensive, the fourth fastest growing this August out of 252 cities surveyed. Likewise, rents in other parts of the Phoenix metro are also rising faster than most other parts of the country, as a consequence of strong demand boosted by big increases in population.
  • Lancaster, CA is fifth in the U.S. in terms of fastest-growing rents. The average rent in Lancaster shot up 9.7% year over year, reaching $1,274 per month. The likely reason? Not enough apartments are being built to keep up with the surge in renter population in this town located on the northern fringes of Los Angeles County.

On the other end of the national spectrum, rent prices have decreased in August in border town Brownsville, TX (-2% y-o-y), Orange County’s Irvine, CA (-0.9% y-o-y), Norman, OK (-0.9% y-o-y), Baton Rouge, LA  (-0.7%) and Dallas suburb Richardson, TX (-0.6%). Amarillo, TX, New Haven, CT, Baltimore, MD, Frisco, TX and Stamford, CT round up the 10 slowest growing rent prices in the U.S. in August.

LARGE CITIES: Rents rise the fastest in Queens, NY, Phoenix, AZ and Las Vegas, NV

  • Step aside Brooklyn: rent prices are now racing in the NYC borough of Queens, up 8.4% compared to last year, with an average rent of $2,342, behind Manhattan’s average rent of $4,119 and Brooklyn’s $2,801. Rents in Manhattan are among the slowest growing in the U.S., 1.9%, while in Brooklyn rents were up 3.9%.
  • The second fastest growing rents among the nation’s largest cities are in Phoenix, AZ, up 6.8% over the year. The area has seen a surge in population in search of affordable housing and job opportunities. Even with prices of apartments growing at annual rates of 6-7%, the average rent is still affordable at $996 per month, especially when compared to most other major cities in the country.
  • Las Vegas is an increasingly popular place to move to, as Census population estimates show, but the local real estate market is slow to respond. New apartment construction is low, causing rents to go up significantly. An apartment in Las Vegas costs on average $1,011, up 6.2% since August 2017.

At the same time, rents decreased in August in border town Brownsville, TX (-2% y-o-y), Orange County’s Irvine, CA (-0.9% y-o-y), Norman, OK (-0.9% y-o-y), Baton Rouge, LA  (-0.7%) and Dallas suburb Richardson, TX (-0.6%). Amarillo, TX, New Haven, CT, Baltimore, MD, Frisco, TX and Stamford, CT round up the 10 slowest growing rent prices in the U.S. in August.

MID-SIZE CITIES: Mesa and Tampa apartments see steepest rises in rents

Apartments in Mesa, AZ and Tampa, FL are seeing price increases above 6% in August. Rents in Mesa reached $965 per month, and in Tampa the average rent is $1,287. Sacramento, Pittsburgh, and Fresno wrap up the top 5, with annual price increases of above 5%.

  • Pittsburgh, PA is emerging as a hot rental market, as the city’s job market is gaining traction in tech-related fields. The average rent in Steel City is $1,216, but it is expected to keep growing as apartment construction is not yet in line with the sudden increase in demand.

At the other end of the chart are Wichita, KS, with rents decreasing by 0.8%, Lexington, KY, where prices for apartments moved by 1.1% in one year, Tulsa, OK, where rents changed by 1.3%, Virginia Beach, with prices up by only 1.4% and Albuquerque, NM, where rents saw a 1.7% uptick. The average rent in Lexington sits at $889 per month, in Virginia Beach it is slightly higher, at $1,169 per month, and in Albuquerque, it averages $852 per month.

SMALL CITIES: Rents in Midland and Odessa are over $300 per month more expensive than last year

The most fluctuating prices are in small cities at both ends of the list. The top 20 list of highest annual rent increases is dominated by small cities (17 out of 20). Midland and Odessa,  however, stand out from the rest of them, with annual percentage increases of over 30%, which translate into an additional $300 or more per month to the average rent check. The region is economically centered around the shale/oil industry and it’s booming, and real estate prices are taking off as well.

Small cities make up most of the bottom of the list, as well, in terms of slowest growing rents: Brownsville, TX, Irvine, CA, Norman, OK, Baton Rouge, LA, and Richardson, TX saw rents stagnate over the past year. Akron, OH, Thousand Oaks, CA, and McKinney, TX are in the same boat

In terms of absolute prices, the top cities with the 10 highest rents in the country remains unchanged. Manhattan is still the most expensive, with apartment rents at $4,119, San Francisco is second, with an average rent of $3,579, and Boston is third, with an average rent of $3,388. San Mateo, CA and Cambridge, MA also have an average rent above $3,000 per month. The cheapest rents of the 252 cities surveyed are in Wichita, Brownsville, and Tulsa, all below $700 per month.

According to RentCafe, much of the change in rent prices we see this year is driven by how much demand there is in a specific area and what that area does to deal with it. However, the underlying factors are more complex. The housing market continues to change as a result of the 2007 subprime crisis, according to Doug Ressler, Director of Business Intelligence at Yardi Matrix. Furthermore, markets are undergoing a significant change driven by dramatically different demographic trends. Trends vary by market and will be impacted by population aging, population growth, immigration and home ownership trends, says Ressler.

Naturally, they will also be impacted by the state of the economy, the Fed’s monetary policy and the level of the capital markets.

However, should the current rental surge continue, the Fed will have no choice but to hike rates far higher than the general market consensus expects, especially following Powell’s “dovish” Jackson Hole speech.

USA economic/general stories
Seems that in many districts, the Democrats are certainly turning to the left.  in the latest, a democrat backed by Ocasio Cortez topples a 10 term incumbent in a Boston primary
(courtesy zerohedge)

In Latest Shock Upset, Democrat Backed By Ocasio-Cortez Topples 10-Term Incumbent In Boston Primary

This is starting to look like a trend.

Ayanna Pressley, a former staffer for John Kerry the first black woman to serve on the Boston City Council, has now become the second female, far-left woman of color to oust a member of the Democratic firmament in an upset primary victory that echoed Bronx “native” Alexandria Ocasio-Cortez’s June waxing of Queens Rep. Joe Crowley – the No. 4 House Dem who was once rumored to be in line to succeed Nancy Pelosi. On Tuesday night, Pressley defeated 10-term Massachusetts Rep. Michael Capuano to win the Democratic nomination to represent Massachusetts’ 7th Congressional District – surging ahead to claim victory despite her opponent’s double-digit lead in the polls.

Capuano conceded 30 minutes before the Associated Press officially called the race; at the time, Pressley was leading by more than 10,000 votes with 70% of precincts reporting, according to Fox News. Barring some unforeseeable catastrophe, Pressley will likely become the first black female member of Congress from Massachusetts in Novemeber since she will be running unopposed in the general election (that is, unless Capuano decides to stage an upstart independent bid). The 7th District, which cuts a north-south swath across the city of Boston, was designated the state’s first majority-minority district.

Pressley

Capuano, left, Pressley, right

While she’s avoided the label of Democratic Socialism, Pressley has espoused a progressive agenda that will almost certainly set the media pundits chirping about the failures of the Democratic establishment (and, if Presley’s lucky, earn her a fawning interview segment with the hosts of “Morning Joe”).

While not a socialist, as Axios carefully reminds us, Pressley supports progressive immigration and health care policies that really aren’t all that different from those espoused by Capuano. Still, she managed to ride a wave of anti-establishment sentiment to victory, as voters in her district apparently decided en masse that now would be a good time to usher in a new generation of leaders. “I’m not running to keep things as they are…I’m running to change them,” Pressley said – which is ironic considering she has also acknowledged that she would likely vote the same way on a number of issues as Capuano would. Capuano, like Crowley, was an early supporter of Medicare-for-All, but has staked his claim even further to the left by supporting the impeachment of President Trump (to the consternation of the Democratic leadership) while pushing to make Somerville, Mass. a sanctuary city.

But in keeping with this primary season’s overriding theme, Pressley declared that “it seems like change is on the way” during her primary speech (funny, that phrase sounds familiar…)

Kyle Griffin

@kylegriffin1

Ayanna Pressley: “It seems like change is on the way.” (via WBZ)

As Fox points out, Capuano is the fourth House member to lose a primary this year, along with Reps. Robert Pittenger of North Carolina and Mark Sanford of South Carolina – both Republicans.

Of course, anti-Trump pundits will be eager to tout Pressley’s victory as a sign that the female-led “blue wave” will sweep Trump supporting Republicans out of office and hand control of Congress to the Democrats. Though, with President Trump’s approval rating hovering at its highest level since his inauguration (thanks in part to a 4.2% GDP print), Dems should be careful not to count their eggs before they hatch…

Blue

 

end

BERNIE introduces the “stop Bezos Act” as the new bill will require all retailers like Amazon and Walmart to pay back the government for food stamps, and public housing, Medicaid and other federal assistance received by their workers.  He will introduce a 100% tax on those employees to be paid by the corporation.  Lots of fun.

(courtesy zerohedge)

Bernie Sanders Introduces The “Stop BEZOS Act”

One week after a war of words erupted between Bernie Sanders and Jeff Bezos, the vendetta between the Vermont Senator and the world’s richest man escalated on Wednesday when Sanders introduced a Senate bill called the “Stop BEZOS Act”, that would require large employers like Amazon and Walmart to pay back the government for food stamps, public housing, Medicaid and other federal assistance received by their workers.

The bill’s acronym is a direct dig at Bezos and stands for Bad Employers by Zeroing Out Subsidies Act. It seeks to establish a 100% tax on government benefits received by workers at companies with at least 500 employees, Sanders said on Wednesday according to the Washington Post.

“In other words, the taxpayers of this country would no longer be subsidizing the wealthiest people in this country who are paying their workers inadequate wages,” Sanders said at a press conference announcing the bill. “Despite low unemployment, we end up having tens of millions of Americans working at wages that are just so low that they can’t adequately take care of their families.”

The proposed bill came one day after Amazon briefly hit $1 trillion in market cap, just a month after Apple did the same, although a quick look at recent price appreciation suggests that Amazon will soon eclipse even Apple to become the world’s most valueable company.

Bezos, who founded Amazon, is the world’s wealthiest man: he has added $67 billion to his fortune in 2018, giving him a $167 billion net worth on the Bloomberg Billionaires Index. The median Amazon worker, meanwhile, was paid $28,446 last year, according to company filings.

The increase in Bezos’ wealth has outpaced the rest of the billionaires tracked by Bloomberg by an obscene margin.

Some other statistics putting Bezos’ $167BN in context, courtesy of Bloomberg:

  • It’s more than the entire market capitalization of FedEx Corp.
  • Bezos’s gain this year alone would make him the seventh-richest person on Earth, ahead of Mexico’s Carlos Slim and Alphabet Inc.’s Larry Page and Sergey Brin.
  • It’s about the equivalent of Walt Disney Co.’s blockbuster bid for most of the assets of 21st Century Fox Inc.
  • His wealth has increased by an average of about $8 million an hour in 2018.
  • It’s roughly 10 times Amazon’s total net income since it went public in 1997.
  • The 499 other billionaires on the Bloomberg ranking have added a net combined $8.3 billion to their fortunes this year.

None of this was lost on Sanders who on Tuesday tweeted that “Amazon is worth $1 TRILLION,” adding that “Thousands of Amazon workers have to rely on food stamps, Medicaid and public housing to survive. That is what a rigged economy looks like.”

In a surprising retaliation, last week Amazon publicly fired back against Sanders and his claims that thousands of Amazon employees rely on federal benefits to make ends meet. Those figures are “inaccurate and misleading,” the company said last week, because they include temporary workers as well as those who choose to work part time.

Amazon’s answer did not dent Sanders’ enthusiasm to redistribute some of Bezos’ wealth, and according to the WaPo a spokesman for Sanders said the senator’s office had heard from hundreds of current and former Amazon workers in recent weeks who had to rely on food stamps, Medicaid and other government programs to cover their families’ basic needs. There is no official measure of a “living wage,” but the federal poverty level for a family of four is currently $24,600.

SWAMP STORIES

Trump is visibly upset with the “terrible message’ sent by Nike in its latest ad campaign with Colin Kaepernick

(courtesy zerohedge)

 

Trump Says Nike Sent “Terrible Message” As NFL Backs Kaepernick

President Trump has finally broken the day’s silence on the Nike-Kaepernick debacle, telling The Daily Callerthat Nike is sending a “terrible message” by featuring the has-been quarterback.

“I think it’s a terrible message that they’re sending and the purpose of them doing it, maybe there’s a reason for them doing it.”

“But I think as far as sending a message, I think it’s a terrible message and a message that shouldn’t be sent. There’s no reason for it.”

However, President Trump also acknowledged that Nike has the right to feature whoever they want in the ad campaign.

“As much as I disagree with the Colin Kaepernick endorsement, in another way — I mean, I wouldn’t have done it,” he said.

“In another way, it is what this country is all about, that you have certain freedoms to do things that other people think you shouldn’t do, but I personally am on a different side of it.”

Trump also said in the interview that “Nike is a tenant of mine,” referencing Nike’s five-floor Niketown store at Trump’s property on 57th Street in New York City.

However, while Trump rejects the message (but understands it) and outraged conservatives burn their Nikes in disgust over the shoemaker’s “Just Do It” ad campaign featuring Colin Kaepernick, the NFL has released a statement backing the former QB who hasn’t played in two years (and is suing the league):

“The National Football League believes in dialogue, understanding and unity. We embrace the role and responsibility of everyone involved with this game to promote meaningful, positive change in our communities,” Jocelyn Moore, the NFL’s executive vice president of Communications and Public Affairs, said in a statement on Tuesday.

“The social justice issues that Colin and other professional athletes have raised deserve our attention and action.”

Ian Rapoport

@RapSheet

The NFL has released a statement on social justice, saying the issues that Colin Kaepernick and others have raised deserve attention and action.

Since the virtue-signaling sweat-shop operating shoe company rolled out their Kaepernick ad, they’ve shaved off nearly $4 billion in value since Friday, after shares fell over 3% in trade on Wednesday.

Things White Folks Like@Things4WhitePpl

Setting half their lawn on fire while burning Nike shoes

Kaepernick, who achieved peak greatness in the 2013 Super Bowl, sued the NFL for colluding to keep him from being signed by any other NFL team. Last week he was granted a preliminary win, after a court granted him a full hearing on the dispute, according to the New York Times.

A hearing could begin by the end of the year, though the two sides could settle the case before then. Kaepernick is seeking damages equal to what he would have earned if he were still playing in the league.

The case has attracted so much attention, experts said, that it would have been difficult for Burbank to dismiss it.

“Politically, if you’re the arbitrator, in a case as big as this is, there’s no way to throw it out,” said Charles Grantham, a former executive with the National Basketball Players Association who is now the director of the Center for Sport Management at Seton Hall University. “We knew that, as soon as Donald Trump put his fingerprints on the issue.” –New York Times

Meanwhile, former CIA Director John Brennan joined former Iranian President Mahmoud Ahmadinejad have praised the former NFL star.

John O. Brennan

@JohnBrennan

Colin Kaepernick drew our collective attention to the problem of continued racial injustice in America. He did so not to disrespect our flag but to give meaning to the words of the preamble of our Constitution—“in order to form a more perfect union.” Well done, Colin, well done.

Colin Kaepernick

@Kaepernick7

Believe in something, even if it means sacrificing everything. #JustDoIt

View image on Twitter

Mahmoud Ahmadinejad

@Ahmadinejad1956

The season will start this week, unfortunately once again @Kaepernick7 is not on a NFL roster. Even though he is one of the best Quarterbacks in the league.

end
Looks like Mueller is giving in: He will accept written answers from Trump on Russian collusion
(courtesy zerohedge)

Mueller Will Accept Written Answers From Trump On Russian Collusion

Special counsel Robert Mueller will accept written answers from President Trump on questions about whether his campaign conspired with Russia’s election interference, Mueller’s office told Trump’s lawyers in a letter, the NYT reports.

But on another significant aspect of the investigation, whether the president tried to obstruct the inquiry itself, Mueller and his investigators understood that issues of executive privilege could complicate their pursuit of a presidential interview and did not ask for written responses on that matter, according to the letter, which was sent on Friday.

 

While Mueller did not say if he was giving up on an interview altogether, including on questions of obstruction of justice, but the tone of the letter and the fact that the special counsel did not ask for written responses on obstruction has prompted some Trump allies to conclude that if an interview takes place, its scope will be more limited than Mr. Trump’s legal team initially believed, the NYT reported.

The letter was the latest in lengthy negotiations that the two sides have engaged in about whether Mr. Trump will be formally interviewed in the investigation. “We continue to maintain an ongoing dialogue with the office of the special counsel,” Mr. Trump’s lawyer Jay Sekulow said, adding that it was the legal team’s policy to not discuss its communications with the special counsel’s office.

As reported previously, Trump’s lawyers have been eager to avoid a formal interview, saying repeatedly that to determine whether the Trump campaign conspired with Russia’s election interference and whether Mr. Trump tried to obstruct the inquiry, Mueller can find the answers in the interviews that his investigators have conducted with witnesses, including senior White House aides and administration officials, and more than 1.4 million documents turned over by the White House.

They did, however, offer written answers as a possibility, and the Mueller team appears receptive to it as an interim measure.

END

 

Trump is willing to shut down government as he wants funding for his wall

(courtesy zerohedge)

Trump Defies Republicans And Democrats With Shutdown Threats

Republicans

With the end of the federal government’s fiscal year looming, President Trump is once again wielding threats of a “good” government shutdown as a cudgel to batter intransigent Democrats and Republicans who are standing in the way of his plans to build his promised wall along the US’s southern border.

Of course, this isn’t the first time Trump has threatened a shutdown – and at this point in the game, with the outrageous allegation from Bob Woodward’s tell-all vying for dominance in the news cycle and Trump’s trade war contributing to the stress in emerging markets – the president might view a shutdown fight as an advantageous distraction ahead of the Nov. 6 midterm vote.

Republicans

But there’s also reason to believe the president could be sincere about this threat. After all, even his Republican allies in Congress have done seemingly everything in their power to avoid the issue of funding for the border wall.

Here’s Bloomberg:

“On the wall, the House spending panel has backed spending $5 billion next year while the Senate has backed $1.6 billion. The House proposal, worked out in talks with the White House budget office, falls short of the total $23 billion Trump has sought.”

While Congressional leaders have been lobbying Trump for months to pass a half-dozen or so spending bills before the Oct. 1 deadline, immigration hardliners in the West Wing have been encouraging Trump to stand his ground, according to Politico. The reasoning, according to the hardliners, is that funding for the wall will be effectively dead in the water if Democrats wrestle back control of Congress after the midterms – so why not press the advantage now?

For months, GOP leaders have been laying the groundwork to avoid a shutdown on Sept. 30, the end of the fiscal year and just five weeks before Election Day. Speaker Paul Ryan (R-Wis.), Senate Majority Leader Mitch McConnell (R-Ky.), House Majority Leader Kevin McCarthy (R-Calif.) and even Vice President Mike Pence are already quietly lobbying Trump to postpone a shutdown fight over his border wall with Mexico until after the election, Hill and Trump administration sources say.

But any carefully laid plans could be for naught, as Trump receives contradictory advice from rival factions in the West Wing. Some White House officials are confident that Trump will sign spending bills keeping the government open.

A smaller subset of immigration hard-liners inside the White House, however, are encouraging Trump to fight on the border wall issue now, while Republicans still control Congress. These officials think the House majority is already gone — and they have encouraged Trump to hold the line for his border wall and secure a win while he can, according to multiple sources on Capitol Hill and in the administration.

Trump, along with Republican congressional leaders, is trying to set up a meeting with the Democrats next week to try and hash out some of these issues. But it’s unclear how successful that might be. According to Politico, forcing a shut down would “almost certainly” cost Republicans their majority in the House. However, that analysis is based on the polling data – and as we learned in 2016, polls are sometimes wrong.

But a shutdown now would almost certainly cost Republicans their House majority. Democrats are currently favored to win the lower chamber. And GOP lawmakers are already being dragged down by Trump’s abysmal approval ratings and the criminal cases involving Paul Manafort and Michael Cohen. There’s a sense that a shutdown would be the final nail in the coffin for House Republicans.

“A shutdown’s not good for anybody, whether Republicans or Democrats,” Senate Appropriations Chairman Richard Shelby (R-Ala.) said. “I want to do everything I can to avoid a shutdown.”

Given Trump’s unpredictability GOP leaders have been preparing for the worst-case scenario: That Trump puts his foot down and insists on the shutdown. If he does, lawmakers will have little recourse – unless they could muster the votes to override a presidential veto.

Finally we note that the spread between pre-fiscal-year-end and post-fiscal-year-end Treasury Bill yields is spiking signaling the market is starting to price in some anxiety across that crucial dateline…

 

end

WE WILL SEE YOU ON THURSDAY NIGHT.

 

 

HARVEY

 

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