JAN 28GOLD HOLDS UP QUITE WELL RISING BY $5.30 TO $1304.10/SILVER FOLLOWS GOLD UP 5 CENTS TO $15.75/JAPAN ADMITS THAT ITS DATA HAS BEEN FUDGED/CHINA FINALLY DETAILS HOW A HUGE AMOUNT OF DOLLARS ARE LEAVING THIS NATION/ALSO THE USA SET TO FILE CRIMINAL CHARGES AGAINST HUAWEI..AND THAT WOULD END ANY CHANCE OF A TRADE DEAL/CBO RELEASES USA BUDGETARY DEFICITS UPON WHICH THE MEDIA POUNCED ON THEM FOR BEING INACCURATE/MORE SWAMP STORIES FOR YOU TONIGHT/

 

 

 

 

GOLD: $1304.10 UP $5.30 (COMEX TO COMEX CLOSING)

Silver:   $15.75 UP 5 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1303.50

 

silver: $15.76

 

 

 

 

 

 

 

 

For comex gold and silver:

JANUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 0 NOTICE(S) FOR NIL OZ (0.0000 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  555 NOTICES FOR 55100 OZ  (1.7262 TONNES)

 

 

SILVER

 

FOR JANUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

5 NOTICE(S) FILED TODAY FOR 25,000  OZ/

 

total number of notices filed so far this month: 819 for 4,095,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE $3426: DOWN 124

 

Bitcoin: FINAL EVENING TRADE: $3429 DOWN   $122 

 

end

 

XXXX

JPMorgan or Goldman Sachs are taking a huge issuance (stopping) of gold at the comex.

today 0/0

 

I wrote the following Friday night:

 

“Starting Monday we generally see a contraction in open interest once we approach first day notice in an active month.  This usually begins 4 days prior to first day notice. The fall is due to spreaders who generally must liquidate. The contraction in OI never effects price because each trade has a buy and a sell of gold at the exact same price..i.e. a buy order and a sell order.

 

However while this is going on, we had a huge gain in gold price today and that should have caused our bankers to supply endless paper.  It will be interesting to see the OI for comex gold for Monday.

Also remember that we are 4 days away from options expiry from London/OTC gold/silver. These expire at around 12 noon on the 31 st of January.  So expect the crooks to take advantage of the higher price as they continue to supply unlimited non backed paper.”

 

Since the inception of the EFP’s we have always seen the contraction of OI begin 4 days prior to first day notice. Somehow this did not happen today. Let us see if it begins tomorrow.  We did however see a huge gain in OI in gold. Remember we have 3 days left before first day notice and you know the crooks always raid prior to expiry.

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total OPEN INTEREST ROSE BY A HUGE SIZED 4776 CONTRACTS FROM 186,697 UP TO 191,473 ACCOMPANYING YESTERDAY’S 40 CENT GAIN  IN SILVER PRICING AT THE COMEX. TODAY WE ARRIVED CLOSER TO  AUGUST’S 2018  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY AS WE NOW HAVE JUST LESS THAN 22 MILLION OZ STANDING IN DECEMBER. 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 A FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

1100 EFP’S FOR MARCH,  0 FOR APRIL, 200 FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1300 CONTRACTS. WITH THE TRANSFER OF 1300 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 1300 EFP CONTRACTS TRANSLATES INTO 6.50 MILLION OZ  ACCOMPANYING:

1.THE 40 CENT GAIN IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST SIX MONTHS:

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING FOR NOVEMBER AND

 21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

AND NOW: INITIALLY 5.805 MILLION OZ STAND IN JANUARY.

 

 

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JANUARY: 40,032 CONTRACTS (FOR 18 TRADING DAYS TOTAL 40,032 CONTRACTS) OR 200.01 MILLION OZ: (AVERAGE PER DAY: 2224 CONTRACTS OR 11.120 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  200.01 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 28.57% 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 2019 TO DATE SILVER EFP’S:           200.01    MILLION OZ.

 

 

 

RESULT: WE HAD A FAIR SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 4776 WITH THE 40 CENT GAIN IN SILVER PRICING AT THE COMEX //YESTERDAY..THE CME NOTIFIED US THAT WE HAD A GOOD SIZED EFP ISSUANCE OF 1300 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 GIGANTIC SIZED: 6076 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1300 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 4887 OI COMEX CONTRACTSAND ALL OF THIS  DEMAND HAPPENED WITH A 40 CENT GAIN IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.70 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST UNDER 1 BILLION oz i.e. .896 BILLION OZ TO BE EXACT or 128% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JANUARY MONTH/ THEY FILED AT THE COMEX: 5 NOTICE(S) FOR 25,000 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. , SEPT:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./ DEC. AT 21.925 MILLION OZ  AND NOW JANUARY AT  5.825 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 HUMONGOUS SIZED 14,377 CONTRACTS UP TO 537,605 WITH THE RISE IN THE COMEX GOLD PRICE/(A GAIN IN PRICE OF $17.90//YESTERDAY’S TRADING)

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG  SIZED 7727 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 7585 CONTACTS  APRIL 142 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 537,605. 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 ATMOSPHERIC SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 22,104 CONTRACTS: 14,377 OI CONTRACTS INCREASED AT THE COMEX AND 7727 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 22,104 CONTRACTS OR 2,210,400 OZ = 68.75 TONNES. AND ALL OF THIS HUMONGOUS DEMAND OCCURRED WITH A RISE IN THE PRICE OF GOLD/ FRIDAY TO THE TUNE OF $17.90

 

 

 

 

 

FRIDAY, WE HAD 7069 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY : 140,464 CONTRACTS OR 14,046,400 OZ  OR 436.88 TONNES (18 TRADING DAYS AND THUS AVERAGING: 7803 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 18 TRADING DAYS IN  TONNES: 436/88 TONNES

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

THUS EFP TRANSFERS REPRESENTS 436.88/2550 x 100% TONNES = 17.13% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     436.88  TONNES

 

 

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

Result: A HUMONGOUS SIZED INCREASE IN OI AT THE COMEX OF 14,377 WITH THE GAIN IN PRICING ($17.90) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 7727 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 7727 EFP CONTRACTS ISSUED, WE HAD ANOTHER HUMONGOUS GAIN OF 22,104 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

7727 CONTRACTS MOVE TO LONDON AND 14,377 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 68.75 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE GAIN OF $17.90 IN YESTERDAY’S TRADING AT THE COMEX??????????.  THIS IS THE 9TH STRAIGHT DAY THAT WE RECORDED STRONG RISES IN OI ON BOTH EXCHANGES!

 

 

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

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD UP $5.30 TODAY 

 

NO CHANGES IN GOLD INVENTORY AT THE GLD

 

 

 

 

 

/GLD INVENTORY   809.76 TONNES

Inventory rests tonight: 809.76 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 5 CENTS  IN PRICE  TODAY:

 

 

NO CHANGES IN SILVER INVENTORY/

 

 

 

 

 

 

/INVENTORY RESTS AT 307.251 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER ROSE BY A GIGANTIC SIZED 4776 CONTRACTS from 186,697 UP TO 191,473  AND MOVING CLOSER TO THE NEW COMEX RECORD SET LAST IN AUG.2018 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:

 

1100 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL., 200 FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1300 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 4776 CONTRACTS TO THE 1300 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A GIGANTIC GAIN  OF 6076  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 30.38 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..  A HUGE 39.505  MILLION OZ  STANDING FOR SILVER IN SEPTEMBER… OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.,  7.440 MILLION OZ FINALLY STANDING IN NOVEMBER.  21.925 MILLION OZ  STANDING IN DECEMBER AND 5.825 MILLION OZ STANDING IN JANUARY..

 

 

RESULT: A HUMONGOUS SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 40 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// FRIDAY.BUT WE ALSO HAD A GOOD SIZED 1300 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)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 4.75 PTS OR 0.18% //Hang Sang CLOSED UP 7.77 POINTS OR 0.03% /The Nikkei closed DOWN 124.56  PTS OR 0.60%/ Australia’s all ordinaires CLOSED UP 0.68%

/Chinese yuan (ONSHORE) closed UP  at 6.7432 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 52.70 dollars per barrel for WTI and 60.66 for Brent. Stocks in Europe OPENED RED 

//ONSHORE YUAN CLOSED UP AT 6.7432 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7566: / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING 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//USA/Sweden

 

 

b) REPORT ON JAPAN

This is not good:  Japan has another scandal on its hands as they now admit that over 40% of its economic data is fake.  On Wednesday night that reported that labour costs were wrong by at least .7% and that has been going on for several years.  Japan has a problem..nobody believes their data.

( zerohedge)

 

 

3 C/  CHINA

 

 

 

 

 

i) CHINA/HONG KONG

Very important…The Chinese are very clever as they find a great way to get around capital controls…fake invoices for gems.  China has a big problem as dollars are fleeing their country

(courtesy zerohedge)

ii)The POBC fixes the yuan dramatically stronger following gold’s rise
(courtesy zerohedge)

iii)At 3 pm this afternoon: as I promised you, criminal charges will be laid against Huawei and that will just about do it with respect to any hope for a USA/China trade deal

(courtesy zerohedge)

4/EUROPEAN AFFAIRS

 

i)FRANCE/

The Yellow vest movement rages on for its 11th straight week.  Macron increases tensions with the red scarf movement that supports his carbon tax due to his assessment of global warming.

( zerohedge)

ii)UK

It looks like Theresa May is nearing a BREXIT deal by the elimination of the Irish backstop with “other arrangements”

( zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)/Russia

 

 

 

6. GLOBAL ISSUES

Caterpillar is such a good Bellwether as he good look on global growth. The company blames the fight with the USA as the reason for its poor forward guidance.

( zerohedge)

7. OIL ISSUES

 

 

 

 

8 EMERGING MARKET ISSUES

i)VENEZUELA

 

Slowly Maduro is losing his grip on Venezuela

( zerohedge)

 

9. PHYSICAL MARKETS

i)Andrew Maguire on King World News correctly describes how the physical monetary metals, gold and silver are tighter than it has ever been since 1971.  The financial analysts are always trying to discourage you from buying the real stuff.
a must read..
( Andrew Maguire /Kingworldnews/
ii)Chris Waltzek interviews Gata chairman Bill Murphy( GATA/Goldseek)

iii)The following was the big story on Friday where the Fed is considering to stop selling their bond portfolio. This is what ignited the price of gold.

( Timiraos/Wall Street journal/GATA)

 

iv)It has been our contention that the gold at Fort Knox has been gone for quite some time.  Now Von Greyerz reports that reliable sources told Von Greyerz that DeGaulle was sure 50 yrs ago that the USA had already exhausted its gold reserve to suppress the price of gold. It has been reported that on March 1/1968 through to March 31.1968 huge number of trucks were loading something at Fort Knox. Interestingly enough on March 31, Lyndon Johnston stated that he would not run for another term as President, opposite to what he stated a few months earlier…

a must read…

( Von Greyerz/Kingworldnews)

v)The official release of the Bank of England’s refusal to return 1.2 billion dollars worth of gold to Venezuela

(courtesy  RT)

vi)This is the reason why we own gold( John Rubino)

vii)Huge commodity trader Vale crashes 20% and suspends its dividend as it was the owner of the mine that built the dam that collapsed in Brazil.  They are a huge derivative player.

( zerohedge)

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

 

 

MARKET TRADING

 

ii)Market data/

 

 

 

iii)USA ECONOMIC/GENERAL STORIES

a)Vodafone whacks Hauwei over its head as the halt purchases.  Mainland China is not happy

( zerohedge)

b)Trump states that he did not cave:  He will move forward on the wall in 21 days, deal or not

( zerohedge)

c) i)This is getting really bad;  Pelosi set to block Trump’s state of the Union speech in Congress chambers.

( zerohedge)
c) ii
I guess the heat was getting too hot for Nancy…she now invites Trump for the State of the Union address on the 5th of February
( zerohedge)

d)Trump will build the wall with our without Congress:  Mick Mulvaney.

( zerohedge)

e)Monday morning:  Trump doubts Congress will strike an acceptable border deal as stocks slump( zerohedge)

f)The CBO’s projection has always been way off.  First of all, the announce that this year’s budget deficit will be only 897 billion, but it is already heading for 1 billion dollars.  We should also note that 400 billion dollars worth of debt is not included in the figures as these are student and auto loans as they are also an asset on the books so supposedly it did not count as official debt.  This is why the 12 month running debt to the penny is running over 1.4 trillion dollars …the real real true deficit.. It should also be noted that there is going to be a 250 billion debt runoff from the Fed. This amount is an additional amount of debt that must be funded.

(zerohedge)

iv)SWAMP STORIES

How the Democrat hopefuls for President will begin eating themselves up preparing for2020

a good one..

Tom Luongo

E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

@gatewaypundit: The more @realDonaldTrump continues to talk right now after handing over power to @SpeakerPelosi the more I want to throw up

@paulsperry_: Speaker Pelosi in presser just boasted that President Trump “underestimated” her and her Democrat caucus’ “power” in resisting pressure to fund the border wall.  Your move, Mr. President

@RealSaavedra: Chuck Schumer mocks President Trump: “Hopefully now the president has learned his lesson… Democrats are firmly against the wall.”

@AnnCoulter: Good news for George Herbert Walker Bush: As of today, he is no longer the biggest wimp ever to serve as President of the United States.

Trump was unnerved by the avalanche of erstwhile supporters’ criticism and venom.

@realDonaldTrump [on Friday night]: I wish people would read or listen to my words on the Border Wall. This was in no way a concession. It was taking care of millions of people who were getting badly hurt by the Shutdown with the understanding that in 21 days, if no deal is done, it’s off to the races!

Reports on Friday night and Saturday averred that DJT was livid with the GOP leadership [McConnell & Graham] that advised him to do the short-term deal.  DJT stupidly keeps embracing Swamp creatures.  Most of Trump’s problems are self-inflicted, the result of hiring the wrong people.

@fisheri: Most interesting to me after big news day, from @mikeallen quoting republican official. “The Senate Rs were about to cut and run. He had no exit ramp.”

DJT’s cave to Pelosi unleashed grousing from Trump supporters that had been suffering silently while Trump hired, coddled and embraced establishment figures, NeverTrumpers and Swamp creatures.

@kausmickey: If it’s going to be 21 days of the Jared Kushner Show, with your out-of-league son-in-law offering up increasingly large & awful amnesty plans in exchange for some wall money, please PULL THE PLUG NOW.

end

 

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN ROSE BY AN HUMONGOUS SIZED 14,377 CONTRACTS UP TO A LEVEL OF 537,605 WITH THE RISE IN THE PRICE OF GOLD ($17.90) IN FRIDAY’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. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE  NON ACTIVE DELIVERY MONTH OF JANUARY..  THE CME REPORTS THAT THE BANKERS ISSUED A STRONG SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 7727 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  7585. FOR APRIL 142 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  7727 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:  22,104 TOTAL CONTRACTS IN THAT 7727 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A HUMONGOUS SIZED 14,377 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 22,104 contracts OR 2,210,400  OZ OR 68.75 TONNES.

 

We are now in the NON active contract month of JANUARY and here the open interest stands at 48 contracts as we LOST  5 contracts. We had 5 notices filed on yesterday so we GAINED 0 contracts or NIL ADDITIONAL oz will stand for delivery as these guys refused to morph into London based forwards as well as negating a fiat bonus.

 

 

The next active delivery month is February and here the OI LOST 10,897 contracts DOWN to 148,905 contracts.  After February, March GAINED 161 contracts to stand at 1167.  After March, the next big delivery month is April and here the OI rose by 21,137 contracts up to 277,439 contracts. We have 3 days left before first day notice.

AT THIS TIME OF THE DELIVERY CYCLE LAST YEAR WE HAD FEB 2018 OPEN INTEREST OF 77,049 CONTRACTS//2 DAYS BEFORE FDN.( vs today:  148,905 contracts//3 DAYS BEFORE FDN)

 

 

 

FOR COMPARISON TO THE  January 2018 contract month/AND FEBRUARY 2018

 

 

ON JANUARY 1/2018: 1.297 TONNES STOOD FOR DELIVERY  (Jan 1 2019 initial standing 1.306 tonnes)

EVENTUALLY ON JAN 31.2018: 2.17 TONNES STOOD FOR DELIVERY AS QUEUE JUMPING STARTED IN EARNEST AT THE GOLD COMEX

ON FEB 1.2018: 20.07 TONNES OF GOLD STOOD FOR DELIVERY, BUT BY THE END OF MONTH ONLY 8.55 TONNES EVENTUALLY STOOD AS THE REST MORPHED INTO LONDON BASED FORWARDS.

 

WE HAD 0 NOTICES FILED AT THE COMEX FOR NIL OZ. (0..0000 tonnes)

 

 

 

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And now for the wild silver comex results.

Total silver OI ROSE BYA HUGE SIZED 4776  CONTRACTS FROM 186,697 UP TO 191,473(AND FURTHER FROM 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 GAIN  OCCURRED DESPITE A 40 CENT GAIN IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JANUARY AND THE  AMOUNT OF OPEN INTEREST READY TO STAND IS 358 CONTRACTS HAVING GAINED  2 CONTRACTS FROM FRIDAY.  WE HAD 3 NOTICES FILED ON YESTERDAY, SO WE GAINED 5 CONTRACTS OR  25,000 ADDITIONAL OZ OF SILVER WILL STAND FOR SILVER AS THESE GUYS REFUSED TO  MORPH INTO LONDON BASED FORWARDS AS WELL AS NEGATING A FIAT BONUS. QUEUE JUMPING IS THE NORM AT THE SILVER COMEX AS THE DEALERS SCRAMBLE FOR WHATEVER PHYSICAL THEY CAN OBTAIN.

 

 

 

THE NEXT NON ACTIVE DELIVERY MONTH IS FEBRUARY AND HERE THE OI FELL BY 17 CONTRACTS DOWN TO 428. AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI GAINED BY 2407 CONTRACTS UP TO 138,159 CONTRACTS.

COMPARISON VS LAST YR:

AS A COMPARISON TO LAST YEAR WITH 2 DAYS TO GO BEFORE FIRST DAY NOTICE WE HAD 148 CONTRACTS STANDING FOR DELIVERY (VS 428 TODAY/3 DAYS BEFORE FIRST DAY NOTICE).

 

 

ON A NET BASIS WE GAINED 6076 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 4887 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1300 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  6076 CONTRACTS...AND ALL OF THIS OCCURRED WITH A 40 CENT GAIN IN PRICING// FRIDAY

 

 

 

 

 

FOR COMPARISON TO THE COMEX 2017 CONTRACT MONTH AND JANUARY 2018 CONTRACT MONTH AND FEB 2018

 

 

 

ON FIRST DAY NOTICE JAN 1/2018 CONTRACT MONTH WE HAD A GOOD 2.695 MILLION OZ STAND FOR DELIVERY’

AT THE CONCLUSION OF JAN/2018 WE HAD 3.650 MILLION OZ STAND AS QUEUE JUMPING WAS THE NORM FOR SILVER

.

ON FIRST DAY NOTICE FEB 1 CONTRACT MONTH WE HAD 670,000 OZ.  AT THE MONTH’S CONCLUSION WE HAD 2.035 MILLION OZ STAND AS WE WITNESSED QUEUE JUMPING ON A REGULAR BASIS AT THE SILVER COMEX.

 

 

 

 

 

 

 

We had 5 notice(s) filed for 25,000 OZ for the FEB, 2018 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  363,578 CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  306,722  contracts

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  JAN/GOLD

JAN 28/2019.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
96.45
Int. Delaware
3 kilobars
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

nil

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
0 notice(s)
 NIL OZ
No of oz to be served (notices)
48 contracts
(4800 oz)
Total monthly oz gold served (contracts) so far this month
560 notices
56,000 OZ
1.7418 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entries:

 

 

total dealer deposits: NIL oz

total dealer withdrawals: 0 oz

We had 1 kilobar entries

 

we had 0 deposits into the customer account

 

 

 

total gold customer deposits;  nil oz

 

we had 1 gold withdrawals from the customer account:

i) Out of Int Delaware:  96.45 oz

(3 kilobars)

 

 

total gold withdrawing from the customer;  96.45 oz

 

we had 1  adjustments….
i) out of Delaware:
1999.97 oz was removed from the customer account and this arrived into the dealer account of Delaware

FOR THE JAN 2019 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 0 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the JANUARY/2019. contract month, we take the total number of notices filed so far for the month (560) x 100 oz , to which we add the difference between the open interest for the front month of JAN. (48 contract) minus the number of notices served upon today (0 x 100 oz per contract) equals 60,800 OZ OR 1.891 TONNES) the number of ounces standing in this NON  active month of JANUARY

 

Thus the INITIAL standings for gold for the JAN/2019 contract month:

No of notices served (560 x 100 oz)  + {48)OI for the front month minus the number of notices served upon today (0 x 100 oz )which equals 60,80oz standing OR 1.891 TONNES in this NON  active delivery month of JANUARY.

Today we GAINED 0 contracts or an additional NIL oz will stand in this non active month of January

.

 

 

 

 

 

THERE ARE ONLY 23.055 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 1.891 TONNES STANDING FOR JANUARY

LAST MONTH WE HAVE 23.37 TONNES OF GOLD SUPPOSEDLY DELIVERED UPON BUT THIS AMOUNT OF GOLD DID NOT LEAVE THE REGISTERED GOLD CATEGORY AT THE COMEX.

 

 

total registered or dealer gold:  743,234.607 oz or   23.11 tonnes
total registered and eligible (customer) gold;   8,422,945.67 oz 261.98 tonnes

IN THE LAST 27 MONTHS 92 NET TONNES HAS LEFT THE COMEX.

 

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

JAN INITIAL standings/SILVER

JAN 28, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
28m548.680 oz
int delaware
HSBC
Scotia

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
1,332,798.216 oz
Brinks
CNT
No of oz served today (contracts)
5
CONTRACT(S)
25,000 OZ)
No of oz to be served (notices)
353 contracts
1,765,000 oz)
Total monthly oz silver served (contracts) 819 contracts

(4,095,000 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: 0 oz

we had 2 deposits into the customer account

 

i) Into JPMorgan: nil  oz

 

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

JPMorgan now has 147.7 million oz of  total silver inventory or 50.77% of all official comex silver. (149.787 million/295 million)

 

ii) Into Brinks: 744.983.116 oz

iii) Into CNT: 587,815.180 oz

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 1,332,798.216   oz

we had 3 withdrawals out of the customer account:
i) Out of I Delaware:  14,607.870 oz

ii) Out of HSBC  3046.32 oz

iii) Out of Scotia:  10,894.410 oz

 

 

 

 

 

total withdrawals: 28,548.680    oz

 

we had 0 adjustments..and all settlements, dealer to customer:

 

 

total dealer silver:  86.112 million

total dealer + customer silver:  297.455 million oz

 

 

 

 

The total number of notices filed today for the JANUARY 2019. contract month is represented by 5 contract(s) FOR 25,000  oz

To calculate the number of silver ounces that will stand for delivery in JAN., we take the total number of notices filed for the month so far at 819 x 5,000 oz = 4,095,000 oz to which we add the difference between the open interest for the front month of JAN. (356) and the number of notices served upon today (5x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JANUARY/2019 contract month: 819(notices served so far)x 5000 oz + OI for front month of JAN( 358) -number of notices served upon today (5)x 5000 oz equals 5,860,000 oz of silver standing for the JANUARY contract month.  This is a strong number of oz standing for an off delivery month. We gained 5 contracts or an additional 25,000 oz will  stand for delivery and these guys refused to morph into London based forwards as well as negating a fiat bonus.

 

 

 

 

 

 

 

 

 

 

 

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TODAY’S SILVER VOLUME:  57,833 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 88,451 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 88,451 CONTRACTS EQUATES to 442 million OZ  63.1% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -3.50% (JAN 28/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.67% to NAV (JAN 28 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.50%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.25/TRADING 12.77/DISCOUNT 3.63

END

And now the Gold inventory at the GLD/

JAN 28/WITH GOLD UP $5.30 TODAY:NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 809.76 TONNES

JAN 25/WITH GOLD UP $17.90: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 809.76 TONNES

jAN 24/WITH GOLD DOWN $3.70?: NO CHANGES AT THE GLD/INVENTORY RESTS AT 809.76 TONNES

JAN 23/WITH GOLD UP 50 CENTS: NO CHANGES AT THE GLD/INVENTORY RESTS AT 809.76 TONNES

JAN 22/WITH GOLD UP A TINY $.85 A MASSIVE PAPER DEPOSIT OF 12.06 TONNES OF GOLD INTO THE FRAUDULENT GLD/INVENTORY RESTS AT 809.76 TONNES

JAN 18/WITH GOLD DOWN $9.65: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71

JAN 17/WITH GOLD DOWN $1.10: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71

JAN 16/WITH GOLD UP $5.40 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71

JAN 15/WITH GOLD DOWN $1.65: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71 TONNES

JAN 14/WITH GOLD UP $1.60/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 797.71 TONNES

JAN 11/WITH GOLD UP $2.30 TODAY ANOTHER WITHDRAWAL OF 1.47 TONNES OF GOLD/INVENTORY RESTS AT 797.71 TONNES

JAN 10/WITH GOLD DOWN $4.00/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 799.18 TONNES

JAN 9/WITH SILVER UP $6.00/ TWO TRANSACTIONS: a) A TINY WITHDRAWAL OF .25 TONNES TO PAY FOR FEES ETC b) A HUGE DEPOSIT OF 2.65 TONNES INTO THE GLD INVENTORY./INVENTORY RESTS AT 799.18 TONNES

JAN 8/WITH GOLD DOWN $3.70 TODAY, A WITHDRAWAL OF 1.47 TONNES AND THIS GOLD WAS USED IN THE RAID/INVENTORY RESTS AT 796.78 TONNES

JAN 7/WITH GOLD UP $4.45 TODAY: A HUGE DEPOSIT OF 2.94 TONNES OF GOLD ENTERED THE GLD/INVENTORY RESTS AT 798.25 TONNES

JAN 4/WITH GOLD DOWN $8.65 TODAY; NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 795.31 TONNES

JAN 3/2019/WITH GOLD UP $10.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 795.31 TONNES

JAN 2.2019/WITH GOLD UP $3.35 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 7.64 TONNES/INVENTORY RESTS AT 795.31 TONNES

DEC 31/WITH GOLD DOWN $2.20 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 787.67 TONNES

DEC 28/WITH GOLD UP $2.20 STRANGELY A WITHDRAWAL OF 2.35 TONNES FROM THE GLD/INVENTORY RESTS AT 787.67 TONNES

DEC 27/WITH GOLD UP $8.65: A MASSIVE 15.88 TONNES WAS ADDED INTO THE GLD/INVENTORY RESTS AT 790.02 TONNES

DEC 26/WITH GOLD UP $0.15: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 774.14 TONNES

DEC 24/WITH GOLD UP $15.15: A HUGE DEPOSIT OF 5.00 TONNES INTO THE GLD/INVENTORY RESTS AT 774.14 TONNES

DEC 21/WITH GOLD DOWN $10.15 TODAY: A HUGE WITHDRAWAL OF 2.65 TONNES/INVENTORY RESTS AT 769.14 TONNES

DEC 20/WITH GOLD UP $11.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY AT 771.79 TONNES

DEC 19/WITH GOLD UP $3.15 TODAY: A HUGE DEPOSIT OF 8.23 TONNES OF GOLD ENTERED THE GLD/INVENTORY RESTS AT 771.79 TONNES

DEC 18/WITH GOLD UP $1.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC  17 WITH GOLD UP $10.60 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 14/WITH GOLD DOWN $5.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 13/WITH GOLD DOWN $2.00: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 763.56 TONNES

DEC 12/WITH GOLD UP $3.05 A HUGE DEPOSIT OF 3.24 TONNES OF GOLD INTO THE GLD/SOMETHING IS BURNING…/INVENTORY RESTS AT 763.56 TONNES

DEC 11/WITH GOLD DOWN $4.85 A SMALL DEPOSIT OF .59 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 760.32 TONNES

DEC 10/WITH GOLD DOWN $3.05 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 759.73 TONNES

 

 

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JAN 28/2019/ Inventory rests tonight at 809.76 tonnes

*IN LAST 542 TRADING DAYS: 125.39 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 442 TRADING DAYS: A NET 34.64 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 28/WITH SILVERUP 5 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 307.251 MILLION OZ/

JAN 25/WITH SILVER UP 40 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 307.251 MILLION OZ/

JAN 24/WITH SILVER DOWN 7 CENTS TODAY: NO CHANGES IN SILVER INVENTORY

JAN 23/WITH SILVER UP 4 CENTS: A HUGE LOSS OF 938,000 FROM THE SLV/INVENTORY RESTS AT 307.251 MILLION OZ/

JAN 22/WITH SILVER DOWN 5 CENTS: A HUGE DEPOSIT OF 1.179 MILLION OZ INTO THE SLV/SLV IS A FRAUDULENT VEHICLE/INVENTORY RESTS AT 308.189 MILLION OZ/

JAN 18/WITH SILVER DOWN 13 CENTS: NO CHANGE IN SILVER INVENTORY/NO DOUBT THE MASSIVE WITHDRAWAL OF PAPER SILVER WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 307.110

JAN 17/WITH SILVER DOWN 9 CENTS TODAY:ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV; A MASSIVE WITHDRAWAL OF 3.895 MILLION OZ./INVENTORY RESTS AT 307.110 MILLION OZ/

JAN 16/WITH SILVER FLAT TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV

A WITHDRAWAL OF 2.158 MILLION OZ/INVENTORY RESTS AT 311.005 MILLION OZ/

JAN 15/WITH SILVER DOWN 4 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 469,000 OZ FROM ITS INVENTORY/INVENTORY RESTS AT 313.163 MILLION OZ/

JAN 14/WITH SILVER UP ONE CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 313.632 MILLION OZ/

JAN 11/WITH SILVER UP 4 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 313.632 MILLION OZ/

JAN 10/WITH SILVER DOWN 11 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 313.632 MILLION OZ/

JAN 9/WITH SILVER  UP 4 CENTS TODAY; A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.126 MILLION OZ/INVENTORY LOWERS TO 313.632 MILLION OZ/???

JAN 8/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.758 MILLION OZ

JAN 7/WITH SILVER DOWN ONE CENT: A HUGE WITHDRAWAL OF 2.347 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 314.758 MILLION OZ/

JAN 4/WITH SILVER DOWN 3 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 317.105 MILLION OZ

JAN 3/2019/WITH SILVER UP 22 CENTS A SMALL CHANGE TODAY: A WITHDRAWAL OF 118,000 OZ TO PAY FOR FEES:  INVENTORY RESTS AT 317.105 MILLION OZ/

JAN 2/2019/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 31/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 28/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.233 MILLION OZ/

DEC 27/WITH SILVER UP 22 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: AN ADDITION OF 94,000 OZ/INVENTORY RESTS AT 317,233

DEC 26/WITH SILVER UP 27 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.139 MILLION OZ

DEC 21/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.139 MILLION OZ/

DEC 20/WITH SILVER UP 4 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.408 MILLION OZ OF SILVER FROM THE SLV/ INV. RESTS AT 317.139 MILLION OZ/

DEC 19/WITH SILVER UP 10 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 751,000 OZ INTO THE SLV./INVENTORY RESTS AT 318.547 MILLION OZ/

DEC 18/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.796 MILLION OZ/

DEC 17/WITH SILVER UP 13 CENTS TODAY/ A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 939,000 OZ FROM THE SLV/INVENTORY RESTS AT 317.796 MILLION OZ/.

DEC 14/WITH SILVER DOWN 22 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 13/WITH SILVER UP 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

DEC 12/WITH SILVER UP 22 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ

DEC 11/WITH SILVER UP ONE CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY ESTS AT 318.735 MILLION OZ/

DEC 10/WITH SILVER DOWN 8 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.735 MILLION OZ/

 

 

JAN 28/2019:

 

Inventory 307.251 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

 

 

THE RISE IN LIBOR IS CREATING A SCARCITY OF DOLLARS BECAUSE FOREIGN EXCHANGE SWAPS (COSTS) ARE SIMPLY PROHIBITIVE

YOUR DATA…..

6 Month MM GOFO 2.22/ and libor 6 month duration 2.85

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

G0LD LENDING RATE: + .63

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.55%

LIBOR FOR 12 MONTH DURATION: 3.03

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.48

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold Consolidates Above $1,300 After 1.2% Gain Last Week

via Marketwatch:

Gold futures settled above $1,300 an ounce on Friday, with prices for the yellow metal at their highest since June as the U.S. dollar pulled back and investors eyed geopolitical turmoil and global growth worries.

Rising gold prices reflect “political uncertainty” in the U.S., Eurozone, Venezuela and pockets of South America, as well as China-U.S. trade talks, said George Gero, managing director in RBC.

Gold for February delivery added $18.30, or 1.4%, to settle at $1,304.20 an ounce after trading as high as $1,305.80. The April contract notched its highest finish since June and climbed by 1.2% for the week, according to FactSet data.

March silver rose 39.9 cents, or 2.6%, to $15.699 an ounce—settling 2% higher for the week.

Gold Note

The strong gains seen in gold and silver last week and gold’s close above $1,300 per ounce are bullish technically. It suggests that gold has broken out of its recent range and could move higher in the coming days.

Possibly what will determine gold’s short term price outlook is how equity markets perform. If risk appetite continues and stocks make further gains, gold may see some selling again. However, if stocks resume their declines then gold will likely catch a safe haven bid again.

We have seen an increase in safe haven demand from UK and Irish clients in recent days. It is nothing major though and nothing compared to the increase in demand we saw after the Brexit vote, the Northern Rock bank run or indeed the global financial crisis in 2008.

We are seeing little or no selling and nearly all buying. Bullion buyers tend to be risk averse and motivated by wealth preservation and therefore focus on owning gold (and silver) for the long term.

 

News and Commentary

Parliament to Challenge May for Brexit Power in Crucial Votes (Bloomberg.com)

U.K. Military Stockpiles Food, Fuel, Ammo Ahead of Brexit: Sky (Bloomberg.com)

Gold firm near 7-month peak on U.S. rate pause hopes (Reuters.com)

Asia shares pare gains as focus turns to crucial Sino-U.S. trade talks (Reuters.com)

Trump doubts border security deal, another government shutdown looms (Reuters.com)

Oil falls on increased U.S. rig count, China industrial slowdown (Reuters.com)


Source: Bloomberg

Bitcoin Investors Are Running From Crypto To Invest In Gold This Year (CNBC.com)

Why This Billionaire Just Bought Gold for the First Time in His Life (GoldSeek.com)

U.S. is behind Bank of England’s freeze of Venezuela’s gold (Bloomberg.com)

How Should We Then Invest? (GoldSeek.com)

Tumbling Asian Exports Confirm Global Earnings Recession (ZeroHedge.com)

How the U.K. Parliament Is Trying to Seize Control of Brexit (Bloomberg.com)

Chemical elements which make up mobile phones placed on ‘endangered list’ (St-Andrews.Ac.UK)

Listen on iTunes,Blubrry & SoundCloud  & watch on YouTube above

Gold Prices (LBMA PM)

25 Jan: USD 1,282.95, GBP 981.33 & EUR 1,132.08 per ounce
24 Jan: USD 1,279.75, GBP 981.70 & EUR 1,128.36 per ounce
23 Jan: USD 1,284.90, GBP 990.14 & EUR 1,131.74 per ounce
22 Jan: USD 1,284.75, GBP 994.14 & EUR 1,130.58 per ounce
21 Jan: USD 1,278.70, GBP 995.08 & EUR 1,124.11 per ounce
18 Jan: USD 1,285.05, GBP 993.34 & EUR 1,126.86 per ounce
17 Jan: USD 1,294.00, GBP 1,004.92 & EUR 1,135.87 per ounce

Silver Prices (LBMA)

25 Jan: USD 15.37, GBP 11.74 & EUR 13.55 per ounce
24 Jan: USD 15.30, GBP 11.75 & EUR 13.48 per ounce
23 Jan: USD 15.38, GBP 11.80 & EUR 13.54 per ounce
22 Jan: USD 15.26, GBP 11.84 & EUR 13.44 per ounce
21 Jan: USD 15.26, GBP 11.86 & EUR 13.42 per ounce
18 Jan: USD 15.47, GBP 11.96 & EUR 13.56 per ounce
17 Jan: USD 15.57, GBP 12.08 & EUR 13.66 per ounce

Recent Market Updates

– Gold Bullion Will Protect From Politicians, Brexit and Increasing Market Volatility In 2019
– Brexit – The Pin That Bursts London Property Bubble
– Davos: David Attenborough Warns We Are Damaging The World ‘Beyond Repair’
– Gold May Return 25% In 2019 Given Brexit, Trump and Other Risks – IG TV Interview GoldCore
– Brexit, EU, Germany, China and Yellow Vests In 2019 – Something Wicked This Way Comes
– Three Reasons Gold May Embark On An Extended Rally
– Political Turmoil in UK & US Sees Gold Hit 2 Week High
– Gold Holds Steady Over €1,100/oz – Increased Possibility Of A Disorderly Brexit
– Turbulence and Brexit Make Safer Options Like Gold and Cash Essential
– Where Will The “Pending” Financial Crisis Originate?
– Gold and Silver Prices To Rise To $1,650 and $30 By 2020? Video Update
– Gold Outlook 2019: Uncertainty Makes Gold A “Valuable Strategic Asset” – WGC
– Blackrock Say Gold Will Be A “Valuable Portfolio Hedge” In 2019

Mark O’Byrne
Executive Director
GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER
Andrew Maguire on King World News correctly describes how the physical monetary metals, gold and silver are tighter than it has ever been since 1971.  The financial analysts are always trying to discourage you from buying the real stuff.
a must read..
(courtesy Andrew Maguire /Kingworldnews/

Physical gold and silver markets tightest since 1971, Maguire tells KWN

 Section: 

11:25a ET Friday, January 25, 2019

Dear Friend of GATA and Gold:

London metals trader Andrew Maguire tells King World News today that the physical monetary metals market is tighter than it has ever been since 1971 and much disinformation is being distributed to discourage buyers. The interview is excerpted at KWN here:

https://kingworldnews.com/andrew-maguire-gold-silver-in-massive-coiling-…

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

END

Chris Waltzek interviews Gata chairman Bill Murphy

(courtesy GATA/Goldseek)

GoldSeek Radio interviews GATA Chairman Murphy

 Section: 

9:45p ET Friday, January 25, 2019

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy, interviewed this week by GoldSeek Radio’s Chris Waltzek, says physical silver easily could be cornered on the long side, triggering an explosion in price. The rise in the stock market has curbed interest in gold and silver and curtailed exploration for the metals, making both metals vulnerable to supply shortages, Murphy adds. The interview is 11 minutes long and can be heard at Goldseek Radio here:

http://news.goldseek.com/radio/1548451700.php

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

END

Bloomberg reports that it is the USA that is behind the freeze on Venezuela’s gold. This is probably true but the other reason for the freeze is the lack of physical gold at the B. of E.  I am sure that the B. of E would have paid in dollars  what is owed but that request was also stymied.

 

(courtesy GATA/Bloomberg)

U.S. is behind Bank of England’s freeze of Venezuela’s gold

 Section: 

By Patricia Laya and Ethan Bronner
Bloomberg News
Friday, January 25, 2019

Nicolas Maduro’s embattled Venezuelan regime, desperate to hold onto the dwindling cash pile it has abroad, was stymied in its bid to pull $1.2 billion worth of gold out of the Bank of England, according to people familiar with the matter.

The Bank of England’s decision to deny Maduro officials’ withdrawal request comes after top U.S. officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, lobbied their U.K. counterparts to help cut off the regime from its overseas assets, according to one of the people, who asked not to be identified.

… 

 

The U.K. followed the U.S. and other countries on Wednesday in recognizing Juan Guaido, the National Assembly leader, as the legitimate president of Venezuela. Maduro, an authoritarian ruler who has overseen the country’s collapse into economic chaos, refuses to give up power, though, and has the backing of the military. The European Union threatened to recognize Guaido unless a “credible” presidential election is called with eight days, according to a draft statement seen by Bloomberg.

The U.S. officials are trying to steer Venezuela’s overseas assets to Guaido to help bolster his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign reserves held by the Venezuelan central bank. The whereabouts of the rest of them is largely unknown. Turkey, though, has emerged recently as a destination for freshly mined Venezuelan gold.

The U.S. is leading an international effort to persuade Turkey — a key Maduro backer, along with Russia and China — to stop being a conduit for these gold shipments. Europe’s shift of position clarifies the international battles lines over Venezuela and aligns key powers such as Germany, France, and Spain more closely with the Trump administration ..

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-01-25/u-k-said-to-deny-madu…

 END

The following was the big story on Friday where the Fed is considering to stop selling their bond portfolio. This is what ignited the price of gold.

(courtesy Timiraos/Wall Street journal/GATA)

Fed considers earlier stop to sale of bond portfolio

 Section: 

Fed Officials Weigh Earlier-Than-Expected End to Bond Portfolio Runoff

By Nick Timiraos
The Wall Street Journal
Friday, January 25, 2019

Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they’d expected when they began shrinking those holdings two years ago, putting an end to the central bank’s portfolio wind-down closer into sight.

Officials are still resolving details of their strategy and how to communicate it to the public, according to their recent public comments and interviews. With interest rate increases on hold for now, planning for the bond portfolio could take center stage at a two-day policy meeting of the central bank’s Federal Open Market Committee next week. …

… 

Fed officials led markets to expect the process would take several years to play out. When the runoff began in October 2017, various officials estimated the portfolio — then around $4.5 trillion — could shrink to anywhere between $1.5 trillion and $3 trillion. New York Fed President John Williams said in April 2017, when he was the San Francisco Fed’s president, that runoff could last five years.

“In about three or four years, we’ll be down to a new normal,” said Fed Chairman Jerome Powell at his Senate confirmation hearing in November 2017.

The latest discussions indicate the runoff could end much sooner. …

… For the remainder of the report:

https://www.wsj.com/articles/fed-officials-weigh-earlier-than-expected-e…

END

It has been our contention that the gold at Fort Knox has been gone for quite some time.  Now Von Greyerz reports that reliable sources told Von Greyerz that DeGaulle was sure 50 yrs ago that the USA had already exhausted its gold reserve to suppress the price of gold. It has been reported that on March 1/1968 through to March 31.1968 huge number of trucks were loading something at Fort Knox. Interestingly enough on March 31, Lyndon Johnston stated that he would not run for another term as President, opposite to what he stated a few months earlier…

a must read

(courtesy Von Greyerz/Kingworldnews)

De Gaulle was sure U.S. gold was gone 50 years ago, von Greyerz says

 Section: 

7p ET Sunday, January 27, 2019

Dear Friend of GATA and Gold:

At this distance in time it’s just hearsay but Swiss gold fund manager Egon von Greyerz tells King World News tonight that reliable sources tell him that French President Charles de Gaulle was sure a half century ago that the United States had already exhausted its gold reserve through its price-suppression policy.

At least no one is likely to argue that President Nixon’s terminating the U.S. dollar’s convertibility into gold for foreign sovereigns suggested a great surplus of the monetary metal in U.S. government vaults.

Von Greyerz’s comments are posted at KWN here:

https://kingworldnews.com/greyerz-sources-close-to-de-gaulle-have-inform…

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

END





iii) Other Physical stories
Due to the criminal conviction of trader Edmonds, the USA prosecution is seeking to halt the civil lawsuit. I was misinformed: all discoveries in a civil suit are public and because of that, the prosecution gives the defendants the right to plead the 5th if their testimony incriminates them
(courtesy zerohedge/Chris Powell)

US seeks halt in civil lawsuit accusing JP Morgan of manipulating metals market, citing criminal case

  • The U.S. wants a federal judge to halt a civil lawsuit accusing J. P. Morgan of manipulating precious metals markets. The Justice Department cited an ongoing criminal case as its reason for the request.
  • A former J. P. Morgan trader pleaded guilty in Connecticut last month to manipulation charges.
  • In the guilty plea, the trader said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors.

A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

Amr Alfiky | Reuters
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

The Justice Department is asking a judge to put the brakes on a civil lawsuit against J. P. Morgan Chase, citing an ongoing probe into a “related criminal case” that involves alleged manipulation of precious metals markets.

The department wants a six-month postponement in the proceedings of the civil lawsuit, which was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders. The government also says it could ask for a longer delay in the case, according to a court filing on Monday.

The move comes days after Shak’s lawyer, David Kovel, sought permission to reopen questioning of two former J. P. Morgan traders and the bank’s current global head of base and precious metals trading.

Kovel, in making the request with the Manhattan federal judge in the civil case, cited last month’s guilty plea by one of those former traders, John Edmonds, in federal court in Connecticut.

Edmonds admitted making bogus bids on precious metals contracts while working at the bank from 2009 to 2015.

Neither J. P. Morgan Chase nor Kovel’s clients have opposed the Justice Department’s request.

In arguing for a delay, the Justice Department said Shak’s lawsuit is “related” to Edmonds’ criminal case and that Edmonds has “pleaded guilty and acknowledged his own participation in such conduct, as well as that of other traders.”

“Edmonds awaits sentencing, but the broader investigation is ongoing,” the Justice Department said. The U.S. wants to delay the civil case “to protect the integrity of its ongoing criminal investigation,” it said.

J. P. Morgan did not respond to a request for comment by CNBC. Kovel declined to comment.

Tuesday night, after this story first was published, Judge Paul Engelmayer ordered the federal prosecutors to explain in detail by Monday why postponing proceedings in the civil lawsuit would not harm those involved, and why reopening questioning “would be detrimental to the Government’s ongoing criminal investigation.”

Englemayer also wrote that he regards Edmonds’ guilty plea “as potentially highly consequential” to the civil case.

In his guilty plea, the 36-year-old Edmonds said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors. He admitted to working with “unnamed co-conspirators” at J. P. Morgan, according to the Justice Department.

Kovel wants to question Edmonds again as well as Michael Nowak, the bank’s global head of base and precious metal trading, and former J. P. Morgan Chase Managing Director Robert Gottlieb. The three had previously answered questions under oath in the civil case.

Kovel said in court filings that Nowak was the immediate supervisor of Edmonds, while Gottlieb was Edmonds’ mentor.

In his prior deposition, Edmonds said that Gottlieb sat only a “couple feet” away from him for about five years, and that he was “somebody [he] looked up to in the business,” who helped guide and train him.

Nowak is described by Edmonds as his direct supervisor, with whom he would sometimes discuss trading strategies. Nowak was also the person responsible for overseeing the performance and risk of Edmonds’ portfolio, according to the deposition.

Edmonds also stated in his prior deposition that he would enter precious metals trades for both Nowak and Gottlieb, among others.

The civil lawsuit claims Shak and his fellow plaintiffs lost tens of millions of dollars as a result of actions by J. P. Morgan’s traders.

The official release of the Bank of England’s refusal to return 1.2 billion dollars worth of gold to Venezuela
(courtesy  RT)

Bank of England refused to return $1.2bn in gold to Venezuela – reports

Bank of England refused to return $1.2bn in gold to Venezuela – reports
Britain rejected Venezuela’s request to withdraw $1.2bn in gold stored in the UK, according to reports. It was enough for the self-declared and US-backed ‘president’, Juan Guaido, to support the alleged move.

The Bank of England blocked Venezuela’s attempts to retrieve $1.2 billion worth of gold stored as the nation’s foreign reserves in Britain, sources told Bloomberg on Friday.

According to the media outlet, officials in Caracas have for weeks been trying to withdraw the gold, with Calixto Ortega, the head of Venezuela’s central bank, traveling to London in mid-December to seek access to the nation’s assets.

The talks were “unsuccessful,” as US Secretary of State Mike Pompeo and the national security advisor to President Donald Trump, John Bolton, pressured their British counterparts to freeze the Venezuelan assets, Bloomberg reported, citing people familiar with the matter.

By some estimates, Venezuela holds more than $8 billion in foreign reserves. According to earlier reports, the amount of Venezuelan gold kept in the Bank of England doubled in recent months, growing from 14 to 31 tons.

The South American nation has reportedly experienced problems in extracting its own gold from the Bank of England in the past. Bankers in Britain were allegedly concerned that Venezuelan officials would sell the state-owned gold “for personal gain.”

The Bank of England, along with press officials for Pompeo and Venezuelan leader Nicolas Maduro, declined to comment.

Despite the fact that the story was not confirmed, the alleged move of the British bank was swiftly praised by the self-proclaimed ‘interim president’ of Venezuela. “The process of protecting the assets of Venezuela has begun,” Juan Guaido tweeted.

“We will not allow more abuse and theft of money intended for food, medicine and the future of our children.”

Guaido, the speaker of the national parliament, declared himself ‘interim president’ of the state earlier with week in opposition to Maduro. He was subsequently recognized as the “legitimate” leader of Venezuela by the US, Canada, and the majority of South American nations.

Maduro was backed by states like Mexico, Russia, China, and Turkey. He slammed the US for endorsing Guaido, ordering its diplomats to leave the county.

Moscow said it will continue to recognize Maduro as the sole democratically-elected leader of the country and called on others to not allow “destructive foreign interference” in Venezuelan affairs.

ALSO ON RT.COMFrance, Germany & Spain issue ‘identical’ threats to recognize Venezuela’s self-appointed presidentVenezuela has seen a series of large-scale anti-government protests in recent years. Some of them spiraled into riots and clashes with police. Nicolas Maduro blasted “foreign interference” as a source behind the unrest, while in particular accusing US officials of endorsing the rallies and Washington of planning to overthrow him. The anti-government protests were met with counter-demonstrations by Maduro supporters.

Like this story? Share it with a friend!

 

end

 

This is the reason why we own gold

(courtesy John Rubino)

If You Could Design A Perfect World For Gold…

Authored by John Rubino via DollarCollapse.com,

Are you sick of your gold just sitting there when it was supposed to have long since made you rich? Have you been fantasizing about a world in which your gold really does make you rich?

If so you’re in good – or at least numerous – company.

So let’s sketch out such a world.

Start by envisioning an America in which a handful of oligopolies have captured banking, media, healthcare and several other important industries, while a tiny group of super-rich neo-aristocrats control as much wealth as the 200 million least-rich citizens.

Toss in a US president who goes out of his way to pick fights which he then proceeds to lose, leading to both falling poll numbers and derisive headlines around the world.

That’s a good start but probably not enough to take gold to its rightful price of $10,000. So let’s add a US opposition party – which, given the above president’s declining popularity, has at least a 50-50 shot at taking power in the next election – that is skewing madly, unprecedentedly to the left. For more on the three most popular Democrats:

Meanwhile, imagine that that same opposition party recently gained control of the branch of Congress that can investigate the President, leading to an escalating battle between legislature and executive that adds an element of legal chaos to what would already have been a presidential campaign of off-the-charts vitriol.

Now that’s a crazy country where gold should be in demand.

But it’s just one place. There’s a whole big world out there where gold and silver can trade. For precious metals to truly go to the moon everyone, not just traumatized Americans, has to desperately crave sound money.

So let’s imagine France roiled by violent street protesters with numerous but nebulous aims, forcing a rattled government to ramp up deficit spending on pretty much everything that anyone seems to want. And let’s have misguided but at least emotionally stable German Chancellor Angela Merkel be pushed out of office in favor of no one knows what.

Italy has to be in there somewhere, of course. So let’s pretend its banking system has some insane amount of nonperforming loans. Maybe 18% of total loans – three times what would normally be considered extremely dangerous. We can’t even call that banking system a zombie. Instead let’s go with “persistent vegetative state.”

To sum up our hypothetical Europe, all its current problems require extremely easy money from both governments and the central bank for as far as the eye can see. Negative interest rates and an inflation target of 5% or more will soon be proposed by formerly-rational cabinet ministers and headline writers, and agreed-to by voters.

The required level of global chaos is getting close. We just need a dash of…China. Let’s pretend that it has quintupled its debt since 2008, in the course of which it recapitulated three generations of Western financial bubbles in one cycle, apparently without a sense of how those previous bubbles ended. And now it’s running out of new bubbles to inflate even as its growth slows to dangerously low levels.

That should just about do it. So let’s step back and consider our precious metals paradise:

  • A US run by a trillion-dollar-deficit spender with an ever-lengthening list enemies at home and abroad, to be followed in 2020 by either more of the same or a bunch of literal, not-trying-to-hide-it socialists who institute wealth taxes, marginal income tax rates reminiscent of 1970s Great Britain and cradle-to-grave free entitlements with only “the rich” expected to cover all the bills — and who love the idea of Modern Monetary Theory, which states that governments should dispense with the whole taxing and borrowing thing and just create as much money as they need. (Can you spot this theory’s fatal flaw in the previous sentence?)
  • A Europe spinning apart as the unworkability of a single monetary system housing both Germany and Italy is finally revealed.
  • A China with multiple bubbles popping at the same time and no historical or theoretical framework for understanding what, why, or how.

Just in case you missed the rhetorical device, none of the above is actually hypothetical. It’s all real, and heading this way fast.

Where will everyone hide in the dysfunctional world of 2019? In the old kinds of money that the Fed, ECB, and Peoples Bank of China can’t manufacture out of thin air when their debts finally come due. Of course.

In that world the demand for real money will rise to levels that are hard to imagine (since the human mind apparently can’t visualize the concept of “trillions”). It won’t be a fun world, or a safe world. But at least your gold will soften the blow.

END
Huge commodity trader Vale crashes 20% and suspends its dividend as it was the owner of the mine that built the dam that collapsed in Brazil.  They are a huge derivative player.
(courtesy zerohedge)

Vale Crashes 20%, Suspends Dividend After Deadly Dam Breach

Vale SA, the world’s largest iron ore miner, suspended its planned shareholder dividends, share buybacks and executive bonuses as it braces for the financial fallout from a Friday catastrophe in which a dam breach left at least 58 people dead and more than 300 missing. Vale’s board of directors also created independent committees to investigate the causes of the Friday dam burst in the state of Minas Gerais and monitor relief efforts in the devastated town of Brumadinho and surrounding area.

As Bloomberg notes, the collapse of a tailings dam at the Feijao mine in the rural state of Minas Gerais is Vale’s second fatal disaster since 2015, when the Samarco mine spewed billions of gallons of waste. More importantly for investors, Mayor Avimar de Melo of the city of Brumadinho, which was partly leveled by the spill, is seeking millions in damages and blamed Vale’s “incompetence” for the incident.

Flood waters in Brumadinho, Brazil, on Jan. 27

And, as many expected, the response from the market was instant, with Vale stock plunging 20% on Monday morning.

Worse, this may just the beginning of pain for investors, given that this is the second dam burst linked to Vale, we would expect more stringent remediation requirements and tougher penalties,” Macquarie Capital Ltd. analysts including Grant Sporre wrote on Monday. The company’s 750 million euro bond due in January 2022 dropped the most on record, tumbling 10 cents on euro to about 100 cents.

Meanwhile, as noted earlier, iron ore futures in China surged to the highest in more than a year on concern that global supplies will be interrupted.

As Bloomberg adds, the disaster will be the first major test of Vale Chief Executive Officer Fabio Schvartsman, who took the job less than two years ago. His predecessor, then-CEO Murilo Ferreira, was heavily criticized for his early reaction to the Samarco disaster. The seemingly lackluster response was later used against him by rivals eager to replace him.

Schvartsman said the latest disaster must spur the company to raise safety standards to a level “far superior to what we have today.” The Feijao project is one of its smaller operations, producing 7.8 million tons of ore in 2017.

Adding to the uncertainty facing the company, on Sunday, Renan Calheiros, a candidate for Senate president, tweeted that Vale’s top management should resign. Meanwhile, S&P Global Ratings put Vale’s bonds on CreditWatch on Friday, warning that it may be forced to shut some operations. Three judges have already frozen almost $3 billion of the miner’s funds to ensure it will be able to compensate victims and pay for the clean-up. Vale has also agreed to set up committees to probe the disaster and support the victims.

The disaster also comes less than a month after the inauguration of Brazil President Jair Bolsonaro and may upend his plans to ease environmental restrictions and boost mining production through reforms in Congress.

Following this perfect storm for the company, late on Sunday, Vale’s board decided to halt dividends after an extraordinary meeting. It was initially unclear whether dividends had been suspended or the board had just debated the possibility because an English-language statement on the company’s website said it “deliberated” over the matter. But a spokesperson for Vale in Beijing later directed Bloomberg toward the Portuguese statement.

Analysts at Macquarie estimated that the earnings hit would be limited because of the company’s balance sheet strength and robust cash generation.

“The company can cover the remediation cost with ease,” Macquarie said. “However, Vale’s equity re-rating story was in part a reputational one which has now been dealt a body blow.”

end
GOLD TRADING/THIS MORNING

 

Your early MONDAY 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 6.7432/

 

//OFFSHORE YUAN:  6.7560   /shanghai bourse CLOSED DOWN 4.75 PTS OR 0.18%

 

HANG SANG CLOSED UP 7.77 POINTS OR 0.03%

 

 

2. Nikkei closed DOWN 124.56  POINTS OR 0.60%

 

 

 

 

 

3. Europe stocks OPENED ALL RED

 

 

 

 

 

 

 

/USA dollar index RISES TO 95.85/Euro RISES TO 1.1345

3b Japan 10 year bond yield: FALLS TO. +.00/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.46/ 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:: 52.70 and Brent: 60.66

3f Gold UP/JAPANESE Yen UP CHINESE YUAN:   ON -SHORE UP/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 +.22%/Italian 10 yr bond yield DOWN to 2.69% /SPAIN 10 YR BOND YIELD UP TO 1.25%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.57: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 4.07

3k Gold at $1299.40 silver at:15.69   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 5/100 in roubles/dollar) 66.05

3m oil into the 52 dollar handle for WTI and 60 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 109.46 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 0.9952 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1326 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 +0.22%

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 2.76% early this morning. Thirty year rate at 3.07%

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

6.  TURKISH LIRA:  UP  TO 5.300

 

Global Stocks Slide Ahead Of Crazy Week; Iron Ore Soars

It’s a sea of red in global equity markets as Friday’s euphoria fizzled after President Donald Trump made clear he won’t take no for an answer in his effort to construct a border wall while investors are hunkering down ahead of an action-packed week which includes the UK Parliament’s Brexit “Plan B” vote, a Fed meeting, a new round of US-China trade talks, the deadline for the Huawei CFO extradition notice, a potential Venezuela showdown, January US payrolls report and the busiest week of earnings season.

While stocks jumped on Friday after Trump “caved” and agreed to reopen the government, the party mood was dented after Trump tweeted “Does anybody really think I won’t build the WALL?” late on Sunday as the committee of lawmakers crafting a plan for the southern U.S. border is expected to start meeting this week. On Sunday, Trump told the WSJ he’ll get the funding even if he has to use emergency powers while Trump’s acting chief of staff said he’s prepared to shutter the government again or declare an emergency if needed to get the wall money.

The dollar was flat as were 10Y TSY yields, while iron ore prices soared following a deadly dam collapse at a mine in Brazil which killed at least 58 people in a huge blow to Brazil mining giant Vale, the world’s biggest producer iron ore, which announced overnight it would suspend its dividend as it shores up liquidity ahead of what could be a crushing legal penalty.

Asian markets started off the week mixed, as bourses in Shanghai, Hong Kong, Tokyo and Seoul all losing ground: Japanese shares retreated along Chinese peers due to trade tensions, while stocks in Hong Kong pared gains to close little changed. The yuan appreciated to its strongest against the dollar since July, the CNH rising some 400 pips tracking the weaker dollar, before Vice Premier Liu He’s trip to Washington for trade talks, and as the People’s Bank of China freed up a potential $37 billion for bank lending and a new chief was named to lead the country’s main securities regulator.

Overnight concerns about China’s slowing economy re-emerged after earnings at China’s industrial firms shrank for the second straight month, suggesting trouble ahead for manufacturers struggling with falling orders, job layoffs and factory closures amid a protracted trade war with the United States.

“A slowdown in the Chinese economy could be sometimes taken as an idiosyncratic event which would be dealt with by Beijing,” said Philip Shaw, chief economist at Investec. It’s pretty clear that the current situation is more global, in terms of the tariff tension between the U.S. and China and the threat of that dispute spilling over more widely.

Investors are now waiting for Chinese Vice Premier Liu He’s visit to the United States on Jan. 30-31, for the next round of trade negotiations with Washington. But with the sides still far from resolving trade issues, the dollar stood firm as traders sought a safe haven as they await news from U.S.-China talks on Tuesday and Wednesday.

The MSCI world equity index, which tracks shares in 47 countries, fell 0.1 percent, while MSCI’s main European Index dropped 0.5 percent. The broader Euro STOXX 600 index also fell 0.5%, failing to rebound from a slide at the open after two days of gains, with most sectors falling except miners which followed the rising price of iron ore. West Texas oil fell below $53 a barrel after America’s rig count rose for the first time this year.

In addition to Trump’s border wall crusade, traders will focus on negotiations between the US and China which are set to resume in a very busy week which also include: Fed chair Jerome Powell will host a press briefing after the U.S. central bank’s policy decision, some of the biggest technology companies including Apple, Microsoft, Facebook are reporting Q4 results, and there will be another series of potentially key votes in the U.K. Parliament about Brexit. To cap it all, a flurry of American economic figures including GDP and jobs data are also set for release.

Elsewhere, Bitcoin fell again, putting the biggest cryptocurrency on track for its lowest close since December. Emerging-market stocks edged lower while their currencies climbed. Gold retreated. Russia’s MOEX stock index touched an intraday record high after sanctions were lifted on Rusal, before reversing gains to trade lower as oil prices slumped.

The dollar index, a gauge of its value versus six major peers, was flat at 95.801 as the dollar recovered following the Tokyo fix and Treasuries gained as global stocks started the week on a defensive note. “In this environment the dollar was holding up well,” said Thu Lan Nguyen, a forex strategist at Commerzbank. “I assume that this will continue to be the case, even as the conflict intensifies at the end of the week.”

The dollar will also get a strong steer from this week’s Fed meeting, where the central bank is expected to signal a pause in its tightening cycle and to acknowledge growing risks to the world’s biggest economy. Though the Fed has forecast two more interest rate hikes for 2019, a darkening global economic outlook and highly volatile stock markets have clouded the policy picture.

Elsewhere in currencies, sterling drifted lower as investors consolidated positions ahead of crucial votes in the British parliament designed aim to break the Brexit deadlock. The British currency edged down a quarter of a percent lower to $1.3164. Lawmakers earlier this month rejected Prime Minister Theresa May’s EU withdrawal agreement, which included a nearly two-year transition period to help minimize economic disruption. That defeat set up a series of votes on Tuesday through which lawmakers and the government will try to find a way forward.

Emerging-market currencies rose to the strongest level since June before the rally lost steam, while oil prices consolidated.

In commodities, Brent crude futures were down 1.8 percent, at $61.01 a barrel. Oil prices fell amid signals that crude output may rise further, and worries grew over the signs of economic slowdown in China, the world’s second-largest oil user. Gold was slightly down. Spot gold was down 0.2 percent at $1,300.56 per ounce, hovering just below a more than 7-month high of $1,304.40 reached earlier in the session.

Market Snapshot

  • S&P 500 futures down 0.4% to 2,652.00
  • STOXX Europe 600 down 0.3% to 356.69
  • MXAP down 0.1% to 154.68
  • MXAPJ up 0.01% to 504.86
  • Nikkei down 0.6% to 20,649.00
  • Topix down 0.7% to 1,555.51
  • Hang Seng Index up 0.03% to 27,576.96
  • Shanghai Composite down 0.2% to 2,596.98
  • Sensex down 1% to 35,665.99
  • Australia S&P/ASX 200 up 0.7% to 5,905.61
  • Kospi down 0.02% to 2,177.30
  • German 10Y yield rose 0.4 bps to 0.197%
  • Euro unchanged at $1.1406
  • Brent Futures down 1.8% to $60.51/bbl
  • Italian 10Y yield fell 1.0 bps to 2.293%
  • Spanish 10Y yield rose 0.4 bps to 1.235%
  • Brent Futures down 1.8% to $60.51/bbl
  • Gold spot down 0.3% to $1,301.52
  • U.S. Dollar Index up 0.04% to 95.83

Top Overnight News

  • Trump said in an interview Sunday with the Wall Street Journal that he doubted whether a group of 17 lawmakers could strike a deal before the next lapse in government funding in less than three weeks and vowed to build a wall anyway, even if he has to use emergency powers
  • Prime Minister Theresa May risks losing control of Brexit in a series of votes in Parliament this week that could see her forced to suspend the entire divorce or sent back to Brussels to negotiate the impossible.
  • According to weekend news reports, European Commission President Jean-Claude Juncker told Theresa May in a private phone call that the price for the EU revising the Irish backstop would be a permanent customs union for the U.K.
  • U.K. Prime Minister Theresa May has told cabinet ministers she won’t take the country out of the EU without a deal, the Sun reported, citing people familiar with meetings between May and her ministers over the past week
  • Trump is prepared to close the federal government again if he and congressional leaders are unable to strike a budget deal that includes funding for a U.S.-Mexico border wall, acting White House Chief of Staff Mick Mulvaney said
  • One Bank of Japan board member said it would be very difficult to make out the underlying price trend in the year starting in April because of a sales tax hike, softening oil prices and a reduction in cell- phone related fees, Dec. minutes show
  • Europe’s retail crisis deepened as companies in the U.K. and Germany are set to cut thousands of jobs as online shopping accelerates the erosion of sales from traditional stores
  • U.S. and China will hold a pivotal round of talks this week in an attempt to end their trade war. Interpreting if they’d made real progress toward a truce won’t be an easy matter

Asian equity markets initially began the week mostly higher as the region resumed the positive momentum seen on Friday in the US, where all majors gained and President Trump agreed with lawmakers to end the record-long government shutdown. This lifted sentiment across the Asia-Pac bourses in early trade with ASX 200 and Nikkei 225 (-0.7%) the exceptions as Australia remained closed for holiday and Japanese stocks were hampered by recent currency flows, with Japan Display among the worst hit after it flagged a severe situation regarding its FY net. Elsewhere, Hang Seng (U/C) and Shanghai Comp. (-0.2%) positive for most the session as corporate updates also provided a catalyst in which Sinopec were underpinned by an increase in preliminary FY net and revenue. However, the region later failed to hold on to early gains amid several factors including PBoC liquidity inaction, a consecutive monthly decline in Chinese Industrial Profits and looming risk events including US-China trade discussions. Finally, 10yr JGBs were relatively uneventful with only brief support despite the underperformance of Tokyo stocks and BoJ presence in the market for JPY 1tln of JGBs, while the BoJ minutes from the December meeting also failed to garner a reaction as it provided no surprises and considering there was also a more recent meeting held last week.

Top Asian News

  • Here Are Three Scenarios for U.S.-China Trade Talks This Week
  • India Stocks Extend Drop as Company Share Pledges Sour Sentiment
  • How Low Can China Bond Yield Go? 10-Year Rate Flirts With 3%
  • Morgan Stanley’s Quant Signals Say to Stay Long Emerging Markets

Major European equities are in the red [Euro Stoxx 50 -0.5%] following on from a negative end to Asia ahead of key risk events US-China talks and the Brexit ‘Plan B’ vote. Sectors are similarly in the red, energy names are underperforming (amid the price action in the complex) with some outperformance seen in telecom names; with the likes of Dixons Carphone (+3.1%) in the green after being upgraded at Morgan Stanley. Other notable movers include, Telecom Italia (+1.4%) who were initially at bottom of the Stoxx 600, though the company pared losses amid reports suggesting that Enel’s (-0.3%) open fibre unit are said to be seeking a pact with the Co. Elsewhere, London-listed Ocado (+2.7%) are towards the top of the Stoxx 600 following reports that the Co. have held talks with Marks and Spencer (+0.4%) concerning the launch of a food delivery service. Finally, miners are initially outperformed (Rio Tinto +1.6%) amid hopes of rising iron ore prices following the dam collapse at the Vale mine in Brazil.

Top European News

  • U.K. PM Told Cabinet Ministers She Will Rule Out ‘No Deal’: Sun
  • Poland Vows to Stop ‘Speculators’ as Soros Bids for Radio Zet
  • Scottish Investors See CPI-Linked Gilts as ‘Unrealistic’: DMO
  • Kering Drops on $1.6 Billion Tax Fine From Italy Over Gucci

In FX, GBP – The main G10 underperformer ahead of Tuesday’s Brexit vote, as Cable recoils from 1.3200+ overnight peaks and Eur/Gbp bounces off circa 0.8637 lows to trade around 1.3150 and 0.8670 respectively. Consolidation, profit-taking and/or position paring has stemmed the latest advance in Sterling, along with a broader stabilisation in the Dollar and relative resilience in the single currency (holding above 1.1400 vs the Usd) following firmer than forecast Eurozone M3 data. Note, decent Eur/Usd option expiry interest between 1.1400-15 as 1.4 bn rolls off at the NY cut. Back to the Pound, some chance of additional impetus via BoE members today including Governor Carney, Broadbent and Ramsden, but in truth tomorrow’s Plan B Parliament judgement will likely be the next major driver.

  • NZD – The Kiwi tops the major league, albeit helped by external factors, like a firmer Yuan and Aud cross flows, as Australia’s national day celebrations spilled over to Monday. Nzd/Usd is pivoting 0.6850 and Aud/Nzd has dipped below 1.0500, while Aud/Usd hovers just under 0.7200. Back to the Kiwi, NZ trade data looms and could be key.
  • DXY – As noted, the Buck appears to have gleaned some traction in the run up to the FOMC, US-China trade talks and NFP, with perhaps a degree of support coming via the deal to re-open Government. However, the index still looks vulnerable sub-96.00 within a 95.920-671 range, and as the Greenback remains softer vs the Jpy and Chf circa 109.50 and 0.9915.

In commodities, Brent (-1.6%) and WTI (-1.7%) are both firmly in the red, weighed on by risk sentiment, ahead of this week’s key events including US-China trade talks in Washington. Furthermore, Friday’s Baker Hughes rig count showed the number of active oil rigs increased by 10 (first increase this year); adding additional downward pressure to the complex.

Gold (-0.2%) is marginally in negative territory, weighed on by dollar strength despite of the negative risk sentiment, as the yellow metal detaches itself from its safe-haven status (again). Elsewhere, the US has removed sanctions on Rusal and two other firms connected with Russian billionaire Deripaska; with the move returning some certainty to the aluminium markets supply. Separately, iron ore prices have moved higher as markets react to news of a dam collapse at the Corrego do Feijao iron ore mine in Brazil; for reference the mine has an approximate capacity of 7.8mln tonnes.

The focus today will be central banks, with the ECB’s Draghi speaking at a European parliament hearing in Brussels, while the BoE’s Carney, Broadbent, Ramsden, Place and Woods will also be speaking. In terms of data, there is the Chicago Fed National Activity Index for December and the Dallas Fed Manufacturing activity for January. We also have earnings from Caterpillar and the US Congressional Budget Office will be releasing its Budget and Economic outlook.

US event calendar and backlogged econ data:

  • Jan. 28-Feb. 4: Advance Goods Trade Balance, est. $76.1b deficit, prior $77.2b deficit, revised $77.0b deficit
  • Jan. 28- Feb. 4: Retail Inventories MoM, prior 0.9%, revised 0.8%
  • Jan. 28- Feb. 4: Wholesale Inventories MoM, est. 0.45%, prior 0.8%
  • Jan. 28-Feb. 4: New Home Sales, est. 567,000, prior 544,000
  • Jan. 28- Feb. 4: New Home Sales MoM, est. 4.22%, prior -8.9%
  • Jan. 28-Feb. 4: Construction Spending MoM, est. 0.2%, prior -0.1%
  • Jan. 28-Feb. 4: Factory Orders, est. 0.3%, prior -2.1%
  • Jan. 28-Feb. 4: Factory Orders Ex Trans, prior 0.3%
  • Jan. 28-Feb. 4: Durable Goods Orders, est. 0.8%, prior 0.8%
  • Jan. 28-Feb. 4: Durables Ex Transportation, prior -0.3%
  • Jan. 28-Feb. 4: Cap Goods Orders Nondef Ex Air, prior -0.6%
  • Jan. 28-Feb. 4: Cap Goods Ship Nondef Ex Air, prior -0.1%
  • Jan. 28-Feb. 4: Trade Balance, est. $54.0b deficit, prior $55.5b deficit
  • Jan. 28-Feb. 4: Monthly Budget Statement, est. $10.0b deficit, prior $204.9b deficit
  • Jan. 28-Feb. 4: Retail Sales Advance MoM, est. 0.1%, prior 0.2%
  • Jan. 28-Feb. 4: Retail Sales Ex Auto MoM, est. 0.0%, prior 0.2%
  • Jan. 28-Feb. 4: Retail Sales Ex Auto and Gas, est. 0.4%, prior 0.5%
  • Jan. 28-Feb. 4: Retail Sales Control Group, est. 0.4%, prior 0.9%
  • Jan. 28-Feb. 4: Business Inventories, est. 0.3%, prior 0.6%
  • Jan. 28-Feb. 4: Net Long-term TIC Flows, prior $31.3b
  • Jan. 28-Feb. 4: Total Net TIC Flows, prior $42.0b
  • Jan. 28-Feb. 4: Housing Starts, est. 1.25m, prior 1.26m
  • Jan. 28-Feb. 4: Building Permits MoM, est. -2.93%, prior 5.0%
  • Jan. 28-Feb. 4: Housing Starts MoM, est. -0.48%, prior 3.2%
  • Jan. 28-Feb. 4: Building Permits, est. 1.29m, prior 1.33m
  • 8:30am: Chicago Fed Nat Activity Index, prior 0.2
  • 10:30am: Dallas Fed Manf. Activity, est. -2.7, prior -5.1

DB’s Jim Reid concludes the overnight wrap

Here we go again. It’s January, yesterday was bitterly cold with wind and hail in equal measure, I played a miserable round of golf not helped by being battered by the elements and what happens when I get home? Yes a bout of golf club foliage related hay fever kicked in. I spent much of the evening sneezing and rubbing my itchy eyes. Good job my new house (when it’s ready in April) isn’t opposite the entrance to the golf club!! Oh wait it is. Time for my annual ingesting of daily anti-histamines, nasal sprays, local honey and eye drops.

This always happens to me at the golf club from January onwards and how time has flied since last year’s bout. In markets, with only 4 days of January left we are fast coming up to the first anniversary of the vol shock we had after a surprisingly high average hourly earnings print in the January 2018 US payroll report. As you’ll remember the VIX traded over 50 at the intra-day peak in the first week of February as ETF vol products saw a massive unwind. One year on, this Friday will see the latest payroll report with very few people worried about inflation. That surprise print a year ago was +2.8% YoY. Last month we again surprised on the upside at +3.2%. So US inflation has still been building up over the last 12 months, and if you want a curveball for 2019 it’s that inflation continues to edge up and the Fed has to choose between controlling it on one hand and appeasing financial markets on the other, with the latter making it quite clear that it doesn’t want tighter policy. Indeed hopes of the Fed ending its balance sheet wind down early and positive thoughts about China’s latest stimulus (see Zhiwei Zheng’s note on how this moves them closer to QE here ) helped markets end last week on a high.

Updating our screens this morning, Asia has opened the week on a mixed note following Friday’s rally. Although the Hang Seng (+0.42%), the Shanghai Composite (+0.32%) and the KOSPI (+0.44%) have opened higher, the Nikkei (-0.38%) and other Japanese markets are trading lower as investors await the outcome of US-China trade talks and the latest batch of earnings reports. Ahead of those trade talks, the Chinese yuan appreciated to its highest level against the dollar in six months, while in commodity markets WTI oil is trading lower (-0.63%) as investors assess the implications of the current political turmoil in Venezuela.

Back to the week ahead now. Outside of payroll Friday the highlights are the FOMC on Wednesday, fresh Brexit votes from Tuesday, Chinese Vice Premier Liu He arriving in Washington for 2-days of trade talks on Wednesday, the very important global manufacturing PMIs on Friday and 123 S&P 500 companies reporting with Europe’s earnings season also kicking into gear.

Going through these in a little more detail, Wednesday’s Federal Reserve meeting is the first to be followed by a press conference as they all now will. No change is expected to interest rates, but investors will be closely watching Powell’s comments as they aim to discern the future path of monetary policy this year. With no change expected the focus might be on questions on an early end to balance sheet reduction. For a full discussion of DB’s expectations see “January FOMC preview: See you in June” (link here ).

On an approximate basis as I’ve lost count, Brexit reaches pivotal week number 25 with the other 24 or so not in the end proving that pivotal. The UK parliament votes on the possible next steps on Tuesday. MPs will be further debating the government’s Brexit plan, and have the opportunity to vote on a variety of different amendments, which have been proposed by MPs from across the political spectrum. These could include one that says parliament should be able to hold indicative votes on different Brexit outcomes, one that requires the Prime Minister to extend Article 50 if the House of Commons has not approved a Brexit deal by February 26, another simply that the UK should not leave without a deal, and another calls for an expiry date on the backstop. The Speaker of the House of Commons will decide which are to be debated by MPs. The one regarding having an expiry date on the Irish backstop seems to be one both the PM and Tory party Brexiters are gravitating towards at the moment so it will be interesting to watch the support for this. However the Irish and the EU have both suggested there is no wiggle room on renegotiating the backstop. So we will see!!

Last night the Sun reported that Prime Minister May has privately told cabinet ministers that she wouldn’t leave the EU without a deal, with reports suggesting it is being kept on the table as a negotiating tactic. Sterling rallied on the news, trading above $1.3200 for the first time since October as investors priced in the decreasing likelihood of a no-deal outcome. This continues a trend (the pound has gained against the dollar for the last six consecutive weeks) of sterling gains, and comes after a majority in the House of Commons, including a number of Conservative ministers and backbenchers, have made clear their opposition to a no-deal outcome.

The other major political event for markets this week comes as Chinese Vice Premier Liu He visits Washington for trade talks on Wednesday, meeting with Treasury Secretary Mnuchin and US Trade Representative Lighthizer. Last week saw a host conflicting headlines on how much progress has been made so expect more of the same.

Earnings season continues, with 123 companies in the S&P 500 reporting this week and the European season building. Those reporting globally include Caterpillar today (always lots of snippets on how they see global activity), Apple, Pfizer and SAP on Tuesday, Microsoft, Facebook, Boeing and Alibaba on Wednesday, Amazon and Samsung on Thursday, and on Friday, we have Exxon Mobil, Chevron, Merck and Sony. With 109 companies in the S&P 500 having reported, 75% have beaten earnings expectations and 59% have beaten sales expectations.

For payrolls DB is forecasting a gain of 165k jobs which is around the same as consensus. The aforementioned average hourly earnings is expected to remain at 3.2%, the joint highest since the GFC. Other releases of note will be the Q4 GDP data on Wednesday and the Core PCE Price Index on Thursday. With the shutdown now over – for at least the next three weeks – also expect to see the backlog of data slowly come out. Finally, keep an eye out today for the US Congressional Budget Office who will be releasing its Budget and Economic Outlook, including ten-year economic budget projections. These were quite shocking this time last year in terms of the debt and deficit projections. On a rounded up basis the US wasn’t expected to see a deficit below 5% of GDP over the next decade and indeed out to the end of their forecasting period 30 years ahead. Pretty stunning stuff.

Turning to Europe, there are number of data highlights. On Thursday, we have the first release of Q4 GDP for the Euro Area, which will give an indication of whether the slowdown of the European economy continued through the end of the year. Markets are expecting quarter on quarter growth of 0.2%, as in Q3. Elsewhere, Wednesday will see the European Commission release its consumer confidence indicator for January, while Friday will see the release of manufacturing PMIs for January as well as the flash estimate of January’s CPI for the Euro Area. The full week ahead is at the end.

Turning to a recap of last week now where we saw the S&P 500 dip slightly for its first weekly decline of the year, dropping -0.22% (but +0.85% on Friday). The DOW and NASDAQ were close to flat, up +0.12% and +0.04%, respectively (+0.75% and +1.27% Friday). Semiconductor stocks outperformed, with the Philadelphia semiconductor index gaining +4.30% after strong earnings reports (+2.17% Friday). In Europe, the STOXX 600 advanced +0.22% (+0.61% Friday), with equities across the continent gaining. The exception was the UK, where the FTSE 100 fell -2.28% (-0.14% Friday) as the pound rallied +2.52% versus the dollar (+0.99% Friday). As mentioned, the pound’s outperformance was due to the perception that the worst case risk for Brexit is diminishing though the dollar retreated more broadly, with the DXY index down -0.56% (-0.84% Friday) and EM currencies up +0.46% (+0.22% Friday).

Sovereign bonds rallied on the week, with yields on Bunds and Treasuries down -6.9bps and -2.6bps, respectively (+4.3bps and +1.3bps Friday). Flash European PMIs came in soft and the ECB shifted its balance of risks to the downside, boosting safe havens. Peripheral yields rallied as well, with BTPs -8.1bps on the week (-1.0bps Friday) partly as markets started to price in a likelihood of fresh TLTROs even if Draghi gave no additional hints at Thursday’s ECB meeting. Despite a rally on Friday, HY credit ended the week +6bps and +2bps wider in the US and Europe respectively (-10bps and -4bps Friday respectively). WTI oil retraced a drop of as much as -3.73% early in the week to close the week down only -0.20% (+0.90% Friday).

The focus today will be central banks, with the ECB’s Draghi speaking at a European parliament hearing in Brussels, while the BoE’s Carney, Broadbent, Ramsden, Place and Woods will also be speaking. In terms of data, there is the Chicago Fed National Activity Index for December and the Dallas Fed Manufacturing activity for January. We also have earnings from Caterpillar and the US Congressional Budget Office will be releasing its Budget and Economic outlook.

3. ASIAN AFFAIRS

i)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 4.75 PTS OR 0.18% //Hang Sang CLOSED UP 7.77 POINTS OR 0.03% /The Nikkei closed DOWN 124.56  PTS OR 0.60%/ Australia’s all ordinaires CLOSED UP 0.68%

/Chinese yuan (ONSHORE) closed UP  at 6.7432 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 52.70 dollars per barrel for WTI and 60.66 for Brent. Stocks in Europe OPENED RED 

//ONSHORE YUAN CLOSED UP AT 6.7432 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7566: / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING 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

 

 

 

 

i)North Korea//USA/Sweden

 

end

3 b JAPAN AFFAIRS

This is not good:  Japan has another scandal on its hands as they now admit that over 40% of its economic data is fake.  On Wednesday night that reported that labour costs were wrong by at least .7% and that has been going on for several years.  Japan has a problem..nobody believes their data.

(courtesy zerohedge)

 

Japan Data Scandal: Tokyo Admits 40% Of Its Economic Data Is “Fake News”

When it comes to the biggest monetary experiment in modern history, namely Japan’s QE which has seen the BOJ buy enough Japanese bonds to match the GDP of Japan, there is nothing more important than the BOJ having accurate metrics to determine if its “inflation targeting” is working, i.e., if wages and broader inflation are rising. Alas, the recent news that Japan’s labor ministry published erroneous statistics for years, has raised doubt about not only the accuracy of economic analysis released by the Bank of Japan, but prompted investors to doubt absolutely every economic report published by Tokyo.

For those who are unfamiliar with the latest economic fake news scandal, on Wednesday Japan’s labor ministry revised its monthly labor survey for the period between 2012 and 2018 admitting it had overstated nominal year-on-year wage increases by as much as 0.7 percentage point between January and November of last year, to take just one example.

Unfortunately, there are many other examples, and according to an Internal Affairs Ministry report released late Thursday, nearly half of Japan’s key economic government statistics need to be reviewed with 22 discrete statistics, or roughly 40% of the 56 key government economic releases, turning out to be “fake news” and in need to be corrected.

This is a major problem for Kuroda and the Bank of Japan which uses statistics from the labor ministry to compile two key pieces of economic data, in making its ongoing decisions whether to continue, taper or expand QE.

One, according to Nikkei, is the quarterly output gap which compares the nation’s supply capacity with total demand. Supply capacity is derived from elements such as labor and capital spending. Data from the labor ministry survey, such as the number of hours logged by the workforce, is used to compute the output gap.

Japan’s output gap has climbed further and further into positive territory. That has partially informed the BOJ’s judgement that “Japan’s economy is expanding moderately.” The gap is also considered a leading indicator for inflation. A sustained positive reading could lead companies to raise prices and lift wages.

Meanwhile, even as Japan’s consumer price index that excludes fresh foods continues to print below 1%, the BOJ has been stubbornly saying that prices are maintaining momentum toward its 2% inflation target, with the conclusion based in part on the output gap.

In retrospect, it now appears that the BOJ may have been “mistaken” and since the underlying data was erroneous for all the years during which Japan’s QE was running, the BOJ will now face pressure to rework its entire framework and estimates in light of the data scandal.

“With regard to the extent of the impact, we intend to undertake a careful examination based on upcoming results of government studies,” a BOJ spokesperson told Nikkei, offering a few other details.

In addition to the output gap, the services producer price index, released monthly, is the second key BOJ indicator reliant on the labor survey. If the BOJ is forced to drastically revise either this indicator or the output gap, it could introduce uncertainty about the conclusions reached by the central bank which has bought trillions in government bonds and stock ETFs relying on… fake economic data!

“There is no telling how far the impact has spread,” said a senior BOJ official, and for the BOJ to admit that economic data in Japan is now sheer chaos and that inflation had been overstated for years, is nothing short of catastrophic.

Meanwhile, adding insult to injury, Japan’s latest scandal means that whereas everyone had long been making fun of China’s economic data for being manipulated, fabricated and goalseeked, Japan’s own “data” was far, far worse.

In the BOJ’s quarterly Outlook for Economic Activity and Prices, at least eight out of roughly 60 diagrams incorporate data from the labor survey. Those include charts depicting individual income, nominal wages and consumer spending. The latest report, released Wednesday, amusingly describes a “steady improvement in the employment and income situation.” Alas, it turns out the improvement was only possible because the underlying data was wrong and/or “cooked.”

The outlooks are considered valuable since they are based on the conclusions about the economy and prices reached by BOJ Gov. Kuroda. The central bank may see no need to revise earlier statements, but the reliability of the body risks being thrown into question regardless.

Meanwhile, just to demonstrate how much of a circular farce “data” in developed countries has become, after Japan’s labor ministry admitted it published faulty wage data, 79% of respondents in a Nikkei poll taken between Friday and Sunday said they now can’t trust government statistics, while 14% said they can. And, making the farce complete, a separate poll found that the approval rating for PM Shinzo Abe rose 6% from last month to 53% in the Nikkei poll, with his disapproval rating falling 7%.

We wonder how long before Japan admits that all of its polls showing support for the prime minister were just as fake.

3 C CHINA

i) CHINA/HONG KONG

Very important…The Chinese are very clever as they find a great way to get around capital controls…fake invoices for gems.  China has a big problem as dollars are fleeing their country

(courtesy zerohedge)

Chinese Capital Is Fleeing Offshore Again… And Now We Know How

Officially, China has maintained quasi capital controls for years: on paper no individual is allowed to move more than $50,000 out of the country in any given year while Chinese companies can exchange yuan for foreign currencies only for approved purposes.

Unofficially, China’s capital controls had been skirted for years, leading to massive capital outflow from the nation over the past decade, leading to such aberrations as massive luxury housing bubbles in places such as Vancouver, London, New York and San Francisco, and seemingly middle-class Chinese politicians and oligarchs sporting Swiss bank accounts funded in the hundreds of millions (or billions).

In fact, as we detailed in 2017, Beijing has an interesting way of dealing with capital outflows. While they closely monitor many methods, they don’t actively pursue shutting them down. They often watch from afar, and if capital reserves aren’t impacted, or their reputation isn’t damaged, they allow them to continue. The PBoC announced in 2017 they were going to deploy a massive anti-money laundering framework, designed to further halt capital outflows.As we said at the time, we’ll have to see if they were serious, or if this was just to win reputation points with international countries.

Well, two years later, we may have the answer. After an apparent lull in outflows, potentially driven by the reforms cracking down on capital flight, there are signs that China is facing an exodus of cash once again.

As we first reported two weeks ago, amid all the headlines about China’s surplus with US and the ongoing trade tensions, there was a message hidden in China’s trade data, namely that capital outflow probably accelerated significantly last month. It’s a reminder of why the PBOC would probably be reluctant to let the yuan decline significantly. That would encourage even further outflows and risk a vicious circle. While China’s total imports plunged 7.6% in dollar terms from a year earlier, its purchases from Hong Kong surged 106%.

Only… they didn’t, as this has traditionally been the way to “book-keep” China’s capital outflows, meaning there isn’t really a surge in Hong Kong exports but rather just Chinese importers laundering money by pretending to overpay for Hong Kong exports.

Elsa Lignos, global head of FX Strategy at RBC in London, wrote recently that this outlier resembles the jump in 2015-2016 when mainland companies used inflated invoices to take money out of the country. The timing of the sudden shift is telling as it coincides with a lagged reaction to a sudden devaluation  – just as we saw in 2015/2016.

Now two weeks later, with more detailed information available, we know just how this massive Chinese capital flight is taking place: the answer: precious stones.

As noted China skeptic Kyle Bass noted yesterday, “wealthy Chinese are running again – precious stones — diamonds, sapphires, etc were 53% China’s total imports from Hong Kong in Nov(up from 2.9% early 2018).” Yet at the same time, the actual sales of jewelry(watches, clocks, and gifts) were down 3.9% in  HK same period, or as Bass notes, just like in the period before the 2015 devaluation.

Kyle Bass

@Jkylebass

Wealthy Chinese are running again – precious stones — diamonds, sapphires, etc were 53% China’s total imports from Hong Kong in Nov(up from 2.9% early 2018). But sales of jewelry(watches, clocks, and gifts) were down 3.9% in HK same period. Same as pre-deval 2015 and 2016#china

Bass is referring to a follow up report by the above mentioned RBS fx strategist, Elsa Lignos, who not only noted the recent surge in Chinese “imports” from Hong Kong, but more importantly, pointed out a surge in Chinese imports of precious stones from Hong Kong.

“In November, for example, precious stones — diamonds, sapphires, opals and the like — accounted for 53 per cent of China’s total imports from Hong Kong, up from a low of just 2.9 per cent last February”, she noted according to the FT. Yet at the same time, as Kyle Bass pointed out above, analysts at Jefferies noted that sales of jewellery, watches, clocks and valuable gifts were down 3.9 per cent in Hong Kong in November.That was led by “slower consumption of big-ticket gem-set jewellery” in a market where mainland customers account for about three-quarters of sales.

As the FT concludes, correctly, “if some mainlanders are again using the notoriously opaque gem trade to evade capital controls and transfer assets out of China” – which they are – “this may be an ominous sign for the direction of the Chinese currency, and by extension, the economy.”

The flipside is that at least we know China’s depositors are not using Bitcoin to transfer their money offshore… yet.

As for what happens next, Bloomberg’s Ye Xie points out that as the yuan has appreciated this year, “it would be safe to assume that the urgency for local residents and companies to skirt capital controls and move money out has diminished somewhat.” If that is indeed the case, imports from Hong Kong should retreat a bit. However, if China’s “imports of precious stones” from Hong Kong accelerate in the months ahead, it will confirm that capital outflow pressure remains persistent and the yuan’s strong performance this month will be short-lived; worse it would suggest that at least according to China’s local population, another devaluation of the yuan may be imminent.

END
The POBC fixes the yuan dramatically stronger following gold’s rise
(courtesy zerohedge)

PBOC Fixes Yuan Dramatically Stronger Following Gold Spike

PBOC fixed the yuan dramatically stronger against the dollar overnight, sending offshore yuan surging to its strongest against the dollar in six months.

While the Chinese currency is reportedly strengthening on the heels of trade talks optimism (which is entirely the opposite of the rhetoric coming out of Washington), we note that this was the biggest positive shift in the yuan fix in 19 months…

Notably, the yuan is strengthening considerably more against the dollar than it is against the broad basket of trade partner currencies…Shanghai Accord 2.0?

And coincidentally, the surge in yuan comes the day after gold prices broke out higher…

Perhaps the PBOC’s aggressive action was prompted to manage the Yuan peg against gold back into balance?

end
At 3 pm this afternoon: as I promised you, criminal charges will be laid against Huawei and that will just about do it with respect to any hope for a USA/China trade deal
(courtesy zerohedge)

US To Announce Criminal Charges Involving Huawei

Days before Liu He, the Chinese Vice Premier tasked with managing the trade negotiations, is expected to travel to Washington to hold a “very, very important” round of trade talks with Robert Lighthizer & Co., the US is stepping up its feud with Chinese telecoms giant HuaweiBloomberg reported Monday afternoon that the US is planning to unveil criminal charges involving Huawei int he near future.

Katia Dmitrieva

@katiadmi

Breaking: U.S. Planning to Announce Criminal Charges Related to Huawei

Acting Attorney General Matthew Whitaker, Homeland Security Secretary Kirstjen Nielsen, Commerce Secretary Wilbur Ross, and FBI Director Christopher Wray will make a “China-related enforcement announcement” at 4:30 pm ET, according to the DOJ. As the Guardianreported last night, what started out as a beef over IP theft has transformed into a US campaign against the telecoms giant, which has been accused of violating US and EU sanctions against Iran, stealing trade secrets and carrying out espionage on behalf of the Chinese government. US lawmakers are calling for a ban on US firms selling American-made chips and components to Huawei and fellow Chinese telecoms giant ZTE.

They will be joined by officials from the US attorneys’ offices in Brooklyn, New York and Seattle, which have been leading investigations into allegations of sanctions violations and the theft of trade secrets.

The charges could be related to Huawei CFO Meng Wanzhou; the US is expected to formally request her extradition from Canada by the end of the month over charges that she misled banks in an effort to mask the company’s violations of sanctions against Iran.

Since its launch in 1987, Huawei has ballooned into the world’s largest seller of telecoms equipment, and second-largest maker of smartphones.

Trade talks are set to take place in Washington on Jan. 30 and 31.

end

4.EUROPEAN AFFAIRS

FRANCE/

The Yellow vest movement rages on for its 11th straight week.  Macron increases tensions with the red scarf movement that supports his carbon tax due to his assessment of global warming.

(courtesy zerohedge)

 

Watch Live: Yellow Vests Rage For 11th Straight Week; Organizers Plan Night Rallies, Human Chain Of 50,000

France’s Yellow Vests are out again en masse – taking to the streets of Paris and other cities across the country for the 11th straight week of anti-government protests despite rainy conditions.

Embedded video

Oh boy what a shot@ohboywhatashot

protest:

– 11th Saturday of in France
– Protest against Rothschild Macron government, high climate change taxes, new labor laws

Once again, the tear gas flew as protesters clashed with police – as documented by journalist Sotiri Dimpinoudis.

Sotiri Dimpinoudis@sotiridi

: Still Thousands of protestors marching peaceful in the city of of the protests. Video Credit: @frederic_RTfr

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Sotiri Dimpinoudis@sotiridi

: Lots of Tear Gas being used right now in the City of towards the protestors in Video credit: @Libre_Insolent What i heard Antifa is causing riots. pic.twitter.com/kKT9n2KcaG

Embedded video

Embedded video

Sotiri Dimpinoudis@sotiridi

: Heavy clashes with protestors and police forces in the town of right now.

Sotiri Dimpinoudis@sotiridi

: Some protestors trying to break in to a bank, in the most protestors left the march and heading back home in this protest. Video Credit: @HMurail

Embedded video

Sotiri Dimpinoudis@sotiridi

: An protestor very likely an member had thrown a Molotov cocktail to some police officers at the “Place de la bastille” in today in the protest. pic.twitter.com/pdgJBTfHNs

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33 people are talking about this

French riot police began storming protesters in Paris who had lit barricades on fire:

Sotiri Dimpinoudis@sotiridi

: Police now storming in the protestors in who formed barricades and lit up some fires, in this protest.

Embedded video

Sotiri Dimpinoudis@sotiridi

: Lots of police forces now at the “Place de la Bastille” evacuating the square of the protestors for taking the whole square in. protest. pic.twitter.com/M9yDEmF7T1

Embedded video

Embedded video

Divad BMC@BmcDivad

Jerome Rodrigues attaqué par les crs en direct. Il perd son œil sous vos yeux.

Night protests planned

Yellow Vests on Facebook are now planning night protests, during which organizers asked participants not to engage in “violence” or “threatening behavior.”

“We’ll gather every night from this Saturday onwards, and we’ll keep coming till at least the end of the national consultation [Grand Debat],” reads one Facebook post. “We’ll make Place de la République our giant ring road.”

Human Chain

On Sunday, Yellow Vests have planned a human chain of 50,000 people along the “entire west coast of France, from Hendaye to Versailles,” according to France Bleu. The human chain will converge with four other human chains.

The yellow vests hope to mobilize 50,000 people in the Landes alone this Sunday, January 27. It is not a new manifestation, but a human chain between Hendaye in the Pyrénées-Atlantiques to Versailles. Four other human chains will be formed in parallel, starting from Lille, Marseilles, Strasbourg and Chateaulin, and all will converge at the same right, in Yvelines.

In all, this represents 2,600 kilometers , including 140 in the Landes (from Tarnos to Saugnacq-et-Muret). The goal of the yellow vests is to beat the world record. “For me, it symbolizes the solidarity we have met since the beginning of the movement, it was lost [until then], everyone was individualist, since the beginning of the movement we see a brotherhood reborn in our country” , s enthusiasm Laurence Verouil, organizer of the human chain in the Landes. –France Bleu (translated)

Looks like they’re getting some practice in:

Embedded video

Sotiri Dimpinoudis@sotiridi

: Some 800 protestors formed a human chain and currently surrounding the arena in . Video Credit: @GazettedeNimes

 

 

Meanwhile, the Yellow Vest movement is gaining momentum again outside of France – as Iraqis donned yellow reflective vests to protest corruption and poor services.

https://players.brightcove.net/665003303001/4k5gFJHRe_default/index.html?videoId=5993715093001&usrPersonaAds=false

end

UK

It looks like Theresa May is nearing a BREXIT deal by the elimination of the Irish backstop with “other arrangements”

(courtesy zerohedge)

Is Theresa May Nearing A Brexit Deal Breakthrough?

Prime Minister Theresa May may finally be on the verge of a breakthrough that could save her Brexit Deal – or at least a version of her Brexit Deal – by finally acquiescing to demands that she throw out the hated Irish Backstop, something that MPs in her fractured Conservative Party, as well as members of the Democratic Unionist Party, the 10 MPs from Northern Ireland who prop up her government, have been begging her to do for months.

According to the Telegraph, the DUP is preparing to back an amendment tabled by Graham Brady, the leader of the Tory backbenchers, that will call for the removal of the Irish Backstop, to be replaced by an unspecified “alternative arrangement”. Though the EU27 has insisted that the negotiations over the Brexit deal are finished, and that it wouldn’t be willing to make any more alterations to the deal, May’s team believes that if she can show that she has the support to pass a modified version of the deal, the EU27 might reluctantly come to the table in a bid to avert a “no deal” Brexit scenario, which economists believe would be a disaster both for the UK and the Continent.

DUP

Brady’s amendment is broader than another amendment tabled by Tory MP Andrew Murrison, which calls for adding an expiration date of Dec. 21, 2021 to the backstop. However, Murrison tabled a similar amendment ahead of the meaningful vote earlier this month, but the amendment was rejected by Speaker John Bercow.

To be sure, the Brady amendment is just one of what are expected to be a raft of amendments proposed by MPs from all parties. And while May has continued to publicly oppose throwing out the backstop, the fact remains that it has been clear for months now that any deal with the backstop attached has a snowball’s chance in hell of survival.

Because of this, May is reportedly quietly hoping that, if she can get the DUP on board, along with some 80% of Tories who it’s believed would support a deal without the backstop, it would give her enough juice to convince the EU27 that it would be worth renegotiating the deal.

DUP sources confirmed that the Brady amendment would be essential to passing the Brexit deal.

A DUP source said Sir Graham’s amendment represented the best way forward and that it would send the issue back to Brussels with a clear demand for change.

“Certainly the Graham Brady amendment looks promising for us,” the source said.

The DUP believes the EU is beginning to accept changes will have to be made to the backstop for Mrs May’s deal to be agreed by MPs.

Sir Graham told The Telegraph the backstop “can’t get through the House of Commons – and that leads to alternative arrangements” as he said he hoped his amendment would secure Government support.

“It seems to me the only agreed exit from the EU that can command a majority is the Withdrawal Agreement without a backstop,” he said.

Adding more fuel to the fire that has propelled the British pound past its highs from November (the currency is currently on track for its best weekly performance in a year), BuzzFeed reported that May’s Chief Whip Julian Smith has been quietly trying to drum up support for the amendments by hinting that the government would push for a reopening of the agreement.

Over a series of meetings with Tory backbenchers on both the Remain and Leave sides this week, details of which have been shared with BuzzFeed News, Julian Smith lobbied colleagues to help Theresa May pressure the EU into making concessions on the backstop, the insurance policy that keeps the Irish border open in all circumstances.

At one meeting, Smith asked MPs if they would support an amendment in the name of 1922 committee chair Graham Brady, which says they would back a deal if the backstop is “replaced with alternative arrangements to avoid a hard border”, according to a source familiar with the discussion.

In earlier talks, Smith discussed coordinating a letter signed by Brexiteers from the European Research Group explicitly stating that they would vote for the withdrawal agreement if the backstop was changed. The plan for a letter was later dropped as focus was directed to an amendment.

Another source said Smith indicated the government could attempt to reopen the withdrawal agreement, something the EU’s chief Brexit negotiator Michel Barnier ruled out three times in an interview on Monday. EU and European government officials have also repeatedly rejected suggestions that the backstop could be time-limited.

Though some MPs are reportedly skeptical of Smith’s intentions, questioning whether May truly intends to push for meaningful changes to the backstop…or whether Smith has merely been given a “license to bullshit.”

One MP said they were sceptical as to whether May would genuinely seek meaningful changes to the backstop if the Brady amendment passed. They questioned if Smith had been given a “licence to bullshit” by Number 10, describing the amendment as a “bait and switch” that could fool the ERG and the Democratic Unionist Party into keeping the PM’s deal alive.

“We have been here before,” they added, referring to Brexiteers’ belief that they have been misled by Downing Street on previous occasions.

Whatever the case, one fact remains clear: No clear alternative to May’s deal has emerged, meaning that the a modified version that doesn’t include the backstop could feasible pass Parliament.

One thing’s for sure: The EU27 really doesn’t like the idea of adding time limits to the backstop (as Michel Barnier again made clear earlier this week). But clearly investors are so eager for good news on the Brexit deal, that they’re pinning their hopes once again on the notion that an alliance between May, the DUP and the Brexiteers might finally materialize – and that everything else (namely, the EU27) will just fall into place.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

6. GLOBAL ISSUES

Caterpillar is such a good Bellwether as he good look on global growth. The company blames the fight with the USA as the reason for its poor forward guidance.

(courtesy zerohedge)

 

Caterpillar Tumbles, FALLS on Lower On Huge Miss, Poor Guidance; Blames China

All eyes were on industrial bellwether Caterpillar’s Q4 earnings this morning for confirmation whether the China slowdown is indeed trickling down into China-facing US companies (after China reported overnight that total industrial profits posted a second consecutive Y/Y decline in December, sliding -1.9% vs -1.8% in November), and that’s precisely what CAT reported, when it announced Q4 EPS of $2.55, a huge miss to expectations of $2.99, on revenue of $14.3BN, also slightly below the $14.36BN expected.

While the numbers were not a disaster on a comparable basis, with sales up 11% from a year earlier, while adjusted EPS also rising 18% from Q4 2017, the EPS miss was the biggest since 2009 as Wall Street failed to adjusted its expectations lower for what is clearly a China slowdown story.

Some more troubling highlights from the report via Bloomberg:

  • For 2018, the mark-to-market adjustment on pension and OPEB plans was a net loss of $495 million, primarily due to lower than expected returns on plan assets, partially offset by higher interest rates
  • During the fourth quarter of 2018, CAT recognized a $50 million increase to the estimated charge for the cost of mandatory deemed repatriation of non-U.S.
  • Dealer machine and engine inventories increased about $200 million during the fourth quarter of 2018
  • At the end of the fourth quarter of 2018, the order backlog was $16.5 billion, about $800 million lower than the third quarter of 2018

Just as troubling as the huge historical miss was the company’s guidance, with the company now expecting “2019 profit to increase to a range of $11.75 to $12.75 per share”, which is dangerously on the low end of Wall Street’s consensus of $12.72

Adding to investor angst, the company said that after several quarters of stellar growth, CAT is now assuming “modest sales increase based on the fundamentals of our diverse end markets as well as the macroeconomic and geopolitical environment.”

Sure enough, just like Apple, CAT was quick to blame… who else: “Sales in Asia/Pacific declined due to lower demand in China, partially offset by higher demand in a few other countries in the region” the company said in its earnings reports, adding that “unfavorable currency impacts also contributed to the sales decline.”

And as the following chart shows, growth in China is indeed slowing down rapidly, and was the lowest since Q3 2016.

It was not all bad news, however, with the company making the following comment on the energy sector where Caterpillar is a major supplier of pumps and engines, noting that oil and gas-related sales were up due to higher engine demand, citing oil and gas-related activities helping construction equipment demand in North America. All this despite the big dip in oil prices during the fourth quarter.

Furthermore, despite concerns that a global trade war will hurt demand for industrial metals, miners are still spending. Caterpillar said “mining activities were robust as commodity market fundamentals remained positive.” Although judging by the EPS miss, just not “positive enough.”

There was another troubling note in the CAT Financial results, where the company’s Financial Products’ operating profit was lower primarily “due to an increase in the provision for credit losses, which was mostly driven by a $72 million unfavorable impact from an increase in allowance rate and an increase in write-offs of $13 million, due to continued weakening in the Cat Power Finance portfolio. ”

Despite, or perhaps due to the slowdown in the business, CAT was even busier repurchasing stock, and in Q4 Caterpillar repurchased $1.8 billion in company stock, and $3.8 billion for the full year.

And after what may be the first big earnings miss of the quarter – aside from Apple’s guidance cut of course at the start of the year – CAT stock is tumbling more than 5%…

… and is not only dragging its peers such as Deere  and CNH Industrial lower by more than 1.5%, but has also hit the Dow Jones index, adding over 50 points in losses to the industrial index.

end

 

7  OIL ISSUES

8. EMERGING MARKETS

VENEZUELA

Slowly Maduro is losing his grip on Venezuela

(courtesy zerohedge)

end
Late this afternoon: Sanctions against Venezuela as the USA is determined to remove Maduro.

 

“U.S. government officials on Monday announced sanctions on Venezuela’s state-owned oil company, Petroleos de Venezuela SA, also known as PDVSA. “The United States is holding accountable those responsible for Venezuela’s tragic decline, and will continue to use the full suite of its diplomatic and economic tools to support Interim President Juan Guaidó, the National Assembly, and the Venezuelan people’s efforts to restore their democracy,” said Treasury Secretary Steven Mnuchin.”

 

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

Euro/USA 1.1415 UP .0014 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  RE

 

 

 

 

 

USA/JAPAN YEN 109;46  DOWN 0.063 (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…DEADLY TO OUR YEN SHORTERS

GBP/USA 1.3153     DOWN   0.0031  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3237 UP .0023 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 MONDAY morning in Europe, the Euro ROSE by 14 basis points, trading now ABOVE the important 1.08 level RISING to 1.1415/ Last night Shanghai composite CLOSED  DOWN 4.75 POINTS OR 0.18% 

 

 

//Hang Sang CLOSED UP 7.77POINTS OR 0.03%

 

/AUSTRALIA CLOSED UP 0.68%  /EUROPEAN BOURSES RED

 

 

 

 

 

 

The NIKKEI: this MONDAY morning CLOSED DOWN 124.56 POINTS OR 0.60%

 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED RED 

 

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 7.77 POINTS OR 0.03% 

 

 

 

/SHANGHAI CLOSED DOWN 4.75 PTS OR 0.18%

 

 

 

 

Australia BOURSE CLOSED UP .68%

 

Nikkei (Japan) CLOSED  DOWN 124.56 PTS OR 0.60%

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1300.20

silver:$15.69

Early MONDAY morning USA 10 year bond yield: 2.76% !!! UP 1 IN POINTS from FRIDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

 

The 30 yr bond yield 3.07 UP 1  IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/

USA dollar index early MONDAY morning: 95.85 DOWN 28 CENT(S) from  FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.65% DOWN 0    in basis point(s) yield from  FRIDAY/

JAPANESE BOND YIELD: +.00%  DOWN 0   BASIS POINTS from FRIDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.22% DOWN 1   IN basis point yield from FRIDAY

ITALIAN 10 YR BOND YIELD: 2.67 UP 2     POINTS in basis point yield from FRIDAY/

 

 

the Italian 10 yr bond yield is trading 135 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.21%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.46% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.1434 UP   .0034 or 34 basis points

 

 

USA/Japan: 109.26 DOWN  0.2666 OR 27 basis points/

Great Britain/USA 1.3158 DOWN.0025( POUND DOWN 25  BASIS POINTS)

Canadian dollar DOWN 49 basis points to 1.3264

 

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The USA/Yuan,CNY closed UP AT 6.7453 0N SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.7571(  YUAN DOWN)

TURKISH LIRA:  5.3362

the 10 yr Japanese bond yield closed at +.00%

 

 

 

Your closing 10 yr USA bond yield UP  0 IN basis points from FRIDAY at 2.74 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.05 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, 95.71 DOWN  8  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 MONDAY: 12:00 PM 

London: CLOSED DOWN 62.12 OR 0.91%

German Dax : DOWN 71.48 POINTS OR 0.63%

Paris Cac CLOSED DOWN 37,24 POINTS OR 0.76%

Spain IBEX CLOSED DOWN 122 POINTS OR  1.34%

Italian MIB: CLOSED DOWN 202.39 POINTS OR 1.02%

 

 

 

 

WTI Oil price; 51.56 12:00 pm;

Brent Oil: 59.77 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66/18  THE CROSS HIGHER BY 0.17 ROUBLES/DOLLAR (ROUBLE LOWER BY 17 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.3362 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.21 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 :  52.17

 

 

BRENT :  59.98

USA 10 YR BOND YIELD: … 2.74

 

 

USA 30 YR BOND YIELD: 3.07

 

 

 

EURO/USA DOLLAR CROSS:  1.1428 ( UP 27    BASIS POINTS)

USA/JAPANESE YEN:109.38 DOWN .146 (YEN UP 15   BASIS POINTS/..

 

.

 

USA DOLLAR INDEX: 95.74 DOWN 5 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA:1.3162  DOWN 22 POINTS FROM YESTERDAY

the Turkish lira close: 5.3238

the Russian rouble 66.27:   DOWN .26 Roubles against the uSA dollar.( DOWN 26 BASIS POINTS)

 

Canadian dollar:  1.3253 DOWN 39 BASIS pts

USA/CHINESE YUAN (CNY) :  6.7453  (ONSHORE)

USA/CHINESE YUAN(CNH): 6.7502  (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.21%

 

The Dow closed DOWN 208.98 POINTS OR 0.84%

 

NASDAQ closed DOWN 79.18 POINTS OR 1.11%

 


VOLATILITY INDEX:  18.95 CLOSED UP  1.53 

 

LIBOR 3 MONTH DURATION: 2.765%  .LIBOR  RATES ARE RISING/

 

FROM 2.779

 

 

 

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

TRADING IN GRAPH FORM FOR THE DAY/WEEKLY SUMMARY/FOLLOWED BY TODAY

 

China, Chips, CAT, Crude, Copper, & Crypto All Clubbed…

So… apart from China’s Industrial profits collapsing, CAT earnings crashing, NVDA’s outlook crushed, The ECB talking back up QE as the EU economy is clubbed like a baby seal, and US earnings expectations at 6-month lows, “all is well”...

 

China

China’s Industrial Profits plummeted overnight, and stocks did not see the “good” news in that bad news…

Yuan spiked to 6-month highs (after a big strengthening of the fix) before tumbling back weaker on the day

European markets opened weak , bounced briefly and then weakened into the close. UK’s FTSE is down 5 days in a row…

As European banks rolled over hard, unable to sustain any gains…

 

US Futures were weak from the open last night and as CAT and NVDA hit (The Dow and Nasdaq most respectively), markets legged lower into and across the open.

Trannies managed to scramble back to unchanged as China talks headlines were dropped yet again…

 

Dead CAT did not bounce…

 

Nvidia was clubbed like a baby seal…

The market is running out of short-squeeze ammo…

 

Credit and equity protection costs surged on the day (equity more than credit)…

 

Treasuries ended the day lower in yield (though the ubiquitous late day ramp in stocks prompted selling bonds led by the long-end)…


This is the 15th day in a row that 10Y Yield closed with a 2.7x% handle…

Stocks and Bonds recoupled today…

 

The dollar trod water on the day despite some serious vol in the Yuan…

 

The week has not started well for cryptos…

 

Copper and Crude were hit hard today after dismal China data, PMs trod water…

 

Notably WTI tested down to its

 

Gold futures pushed above $1300 and held it…

 

Finally, this is “probably nothing…”

 

END

market trading/

MARKET DATA

USA ECONOMIC STORIES OF INTEREST

Vodafone whacks Hauwei over its head as the halt purchases.  Mainland China is not happy

(courtesy zerohedge)

World’s Largest Mobile Phone Carrier Halts Huawei Purchases

The largest mobile carrier in the world – outside of China – Vodafone, has gone on record that it is temporarily halting purchases of certain components made by Huawei. The fallout caused by security concerns at Huawei could pose a threat to its growth and further harm its reputation, according to the WSJ.

Vodafone said it will temporarily halt the purchase of gear from the company for use in its new 5G networks that it is in the midst of a European roll out. As the reason, the company cited uncertainty about whether or not certain governments will eventually ban the Chinese company’s hardware.

Vodafone says the suspension is only going to affect networks in Europe and it hasn’t ruled out Huawei components from other large markets like India and Turkey. The company is now in talks with European government officials about what the potential impact of a ban on Huawei could be.

While wireless carriers around the globe are spending massive amounts of capital in their roll out of 5G, Vodafone wants to make sure it gets it right the first time. Huawei equipment in question is “core” component gear that “directs calls and internet traffic”. It would not have an effect on non-core network components, like cell towers.

A spokesperson for Huawei came out and said that the gear it provides to Vodafone only represents a small portion of the company’s business and that it’s going to continue to work with Vodafone to try and find a solution.

“We are grateful to Vodafone for its support of Huawei, and we will endeavor to live up to the trust placed in us,” a Huawei representative told the Wall Street Journal.

In recent memos, Huawei’s founder told employees to expect growth to slow due to the global scrutiny that’s been placed on the company. Ericsson also said on Friday that security concerns have caused some uncertainty in planning for its new networks. For now, the company’s CEO said it was still too early to tell whether or not Ericsson’s business would be affected.

“We probably won some contracts that we wouldn’t have otherwise,” a smaller telecom competitor executive said about scrutiny on Huawei.

US officials have long held Huawei as a national security threat, a symbol of China’s relentless information transfer, worried that the Chinese government could compel it to use its infrastructure and know-how to spy or reverse engineer the latest western technologies. The U.S. scrutiny has led governments in Australia, Britain, Canada, Germany, Poland and Japan to all examine their telecom supply chain, as well,while Australia and New Zealand have already restricted Huawei’s potential involvement in their coming 5G networks.

END
Trump states that he did not cave:  He will move forward on the wall in 21 days, deal or not
(courtesy zerohedge)

“This Was In No Way A Concession”: Trump Vows To Move Forward On Wall In 21 Days – Deal Or Not

Friday’s agreement between President Trump and Congressional Democrats to reopen the government for three weeks has been celebrated by gloating Democrats, and panned by Trump’s base. The temporary deal will pay roughly 800,000 federal employees who were set to miss their second paychecks on Friday, while negotiations over Trump’s wall will occur over the next 21 days. Federal workers will receive backpay as part of the deal.

Fending off a wave of criticism from the right, Trump defended his decision over Twitter – tweeting that the deal was “taking care of millions of people who were getting badly hurt by the Shutdown,” and that “in 21 days, if no deal is done, it’s off to the races!” – implying that he would declare a national emergency and divert federal funds towards building the wall if an agreement can’t be reached.

Sarah Sanders

@PressSec

In 21 days President @realDonaldTrump is moving forward building the wall with or without the Democrats. The only outstanding question is whether the Democrats want something or nothing

Donald J. Trump

@realDonaldTrump

I wish people would read or listen to my words on the Border Wall. This was in no way a concession. It was taking care of millions of people who were getting badly hurt by the Shutdown with the understanding that in 21 days, if no deal is done, it’s off to the races!

On Saturday Trump tweeted: “21 days goes very quickly. Negotiations with Democrats will start immediately. Will not be easy to make a deal, both parties very dug in,” adding “The case for National Security has been greatly enhanced by what has been happening at the Border & through dialogue. We will build the Wall!”

Donald J. Trump

@realDonaldTrump

21 days goes very quickly. Negotiations with Democrats will start immediately. Will not be easy to make a deal, both parties very dug in. The case for National Security has been greatly enhanced by what has been happening at the Border & through dialogue. We will build the Wall!

Trump then made the case for why the wall is needed – noting that the United States has turned away two major caravanas “at great expense,” but that a new one with 8,000 people has formed and is heading north. “If we had a powerful Wall, they wouldn’t even try to make the long and dangerous journey. Build the Wall and Crime will Fall!” Trump tweeted.

Donald J. Trump

@realDonaldTrump

We have turned away, at great expense, two major Caravans, but a big one has now formed and is coming. At least 8000 people! If we had a powerful Wall, they wouldn’t even try to make the long and dangerous journey. Build the Wall and Crime will Fall!

Perhaps Trump should point out that if civil war breaks out in Venezuela, millions of refugees will also need a place to call home. Perhaps Soros would help out with Caribbean NGO taxis to Florida.

Donald J. Trump

@realDonaldTrump

“We absolutely need a physical barrier or Wall, whatever you want to call it. The President yesterday laid all that out. We need to do it all, including the Wall. I provided the same information to the previous administration, & it was ignored.” Mark Morgan, Border Chief for “O”!

Trump faced intense backlash from his base after “caving” on Friday – perhaps most prominently from conservative pundit Ann Coulter, who savaged the President over Twitter – and then on “Real Time With Bill Maher” Friday night.

Ann Coulter

@AnnCoulter

Good news for George Herbert Walker Bush: As of today, he is no longer the biggest wimp ever to serve as President of the United States.

“I promise you the country would be run much better if I had a veto over what Donald Trump is doing. It’s crazy that I expect a president to keep the promise he made every day for 18 months,” Coulter told Maher.

Brian@Teacher731

Tough day for Mammoth. It’s now the 2nd biggest cave in the world.

Others defended Trump, suggesting that Trump has things under control:

Justin@JustinShofler

To be clear, he just caved and got NOTHING he wanted.

nsering@nsering

He didn’t cave, it’s a strategy. He’s going to sign a temp bill that will fund the gov for 2-3 weeks. That allows him to make the State of the Union address. When we still don’t have the wall funding, he will declare a state of emergency for the wall.

Mike Cernovich 🦍🇺🇸

@Cernovich

Trump is a broken man. It’s over for him.

John@John7Istheman

Mike.

He set up the board.

1. State of Union (something is planned)
2. Failure to negotiate will be Nancy & Chuck
3. He stepped back, let everyone off hook and looks like benevolent father

This is a classic.

Sahil Kapur

@sahilkapur

SHUTDOWN STATUS

Trump 🤷‍♂️
Pelosi 😎
McCarthy 🤐
McConnell 😒
Schumer 😄
Appropriators 🤑
Freedom Caucus 😞
Federal workers 😌
Ann Coulter 😡
Liberal activists 😂

end
This is getting really bad;  Pelosi set to block Trump’s state of the Union speech in Congress chambers.
(courtesy zerohedge)

Pelosi To Block Trump’s SOTU Address Despite Government Reopening

In a move that’s sure to infuriate President Trump and likely impede negotiations over the border security funding that Trump has demanded be part of any permanent plan to avert another shutdown, House Speaker Nancy Pelosi is still planning to postpone the State of the Union by refusing to officially invite the president to give the annual speech on Tuesday.

Asked about the SOTU, Pelosi saidafter a deal to end the shutdown had been reached that she and the president would discuss holding the SOTU once the government had reopened, a cryptic response that many interpreted as meaning that the speech would be postponed, according to USA Today.

“What I said to the president is when the government is opened we will discuss a mutually agreeable date,” Pelosi said, adding “I’ll look forward to doing that” and welcoming Trump in the House chambers when that is done. 

Drew Hammill, a spokesman for House Speaker Nancy Pelosi, later affirmed that the speech wouldn’t be happening on 1/29. And on Sunday, CNN’s Jim Sciutto reported that an aide to Pelosi had anonymously confirmed that the House wouldn’t consider the concurrent resolution that must be passed to officially invite the president to House chambers, where the speech has traditionally been held.

Jim Sciutto

@jimsciutto

New: Pelosi aide confirms SOTU will not take place this Tuesday. No information about when House Speaker Nancy Pelosi might invite President Trump to deliver the address, CNN reporting.

For his part, Trump has said that he wouldn’t look for an alternative venue for the speech. On Jan. 23, he tweeted that no venue would match the “history, tradition and historic importance of the House Chamber”.

Donald J. Trump

@realDonaldTrump

As the Shutdown was going on, Nancy Pelosi asked me to give the State of the Union Address. I agreed. She then changed her mind because of the Shutdown, suggesting a later date. This is her prerogative – I will do the Address when the Shutdown is over. I am not looking for an….

Donald J. Trump

@realDonaldTrump

….alternative venue for the SOTU Address because there is no venue that can compete with the history, tradition and importance of the House Chamber. I look forward to giving a “great” State of the Union Address in the near future!

We imagine we’ll be hearing more from Trump on this very sensitive subject in the near future.

end
I guess the heat was getting too hot for Nancy…she now invites Trump for the State of the Union address on the 5th of February
(courtesy zerohedge)

Pelosi Invites Trump To Deliver SOTU On Feb 5th

Just two short days after the end of the government shutdown, Speaker Pelosi has invited President Trump to deliver his State of The Union address before a Joint Session of Congress on February 5th…

And some said she never would.

 

Trump will build the wall with our without Congress:  Mick Mulvaney.
(courtesy zerohedge)

Mulvaney: Trump Will Build The Wall “With Or Without Congress”

Both Democrats and Republicans gleefully lit into President Trump on Friday after he announced his plan to pass a three-week stopgap to reopen the government for three weeks – a bill that critics said sounded suspiciously similar to a proposal from Senate Democrats, which was voted down on Thursday. Anne Coulter accused Trump of outdoing George HW Bush as the “biggest wimp ever” and the NY Daily News ran an editorial entitled “The Art Of The Cave”.

In response, Trump reminded the world in a tweet that “21 days isn’t a long time…” and that he still has a Trump card – calling a national emergency to bypass Congress and build the wall with money earmarked for disaster relief.

Donald J. Trump

@realDonaldTrump

21 days goes very quickly. Negotiations with Democrats will start immediately. Will not be easy to make a deal, both parties very dug in. The case for National Security has been greatly enhanced by what has been happening at the Border & through dialogue. We will build the Wall!

As Trump has repeatedly insisted, the battle over the border wall isn’t over. And to try and drive that point home, the White House dispatched one of its top surrogates, Acting Chief of Staff Mick Mulvaney, to make the rounds once again on the Sunday shows to warn Democrats that Trump is absolutely prepared to shut down the government again in three weeks if he doesn’t get his wall funding.

During an interview with Fox News Sunday, Mulvaney said that while it would be better to get the money approved by Congress, Trump is committed to defending the nation “with or without” Congress.

“It’s still better to get it through legislation,” Mulvaney said. “At the end of the day, the president’s commitment is to defend the nation and he’ll do it either with or without Congress,” he added.

Ultimately, Trump will be judged not by how the process unfolds, but by what happens at the end – that is, whether he succeeds in winning funding for a border barrier, or not. And while nobody likes a government shutdown, sometimes, when the president vetoes a funding bill, that’s just what happens.

“No one wants a government shutdown,” Mulvaney said. “But when a president vetoes a bill that’s put in front of him on a spending package, sometimes that has the effect of shutting the government down. We don’t go into this trying to shut the government down.”

Mulvaney also stopped by CBS’s Face the Nation, where he insisted that Trump “actually is” ready to shut down the government again in three weeks.

Embedded video

Aaron Rupar

@atrupar

.@margbrennan: “Is the president really prepared to shut down the govt again in 3 weeks?”@MickMulvaneyOMB: “Uh, yeah. I think he actually is. Keep in mind he’s willing to do whatever it takes to secure the border.”

Pressed about what this would accomplish, Mulvaney said that despite Pelosi and Schumer’s insistence that a wall would be a “moral outrage”, in private, some rank and file Democrats have been approaching the Trump administration to tell them that they think a barrier at the border would be a good idea – but that they were unwilling to negotiate during a shutdown.

Embedded video

Aaron Rupar

@atrupar

CBS: “Why does POTUS think outcome will be different in 21 days? Dems remained largely unified”

MULVANEY: “B/c so many of them came to us & said, ‘you know, we think you might be right on this barrier thing, but we can’t negotiate w/you during a shutdown’… now’s their chance.”

Of course, the fact that Democrats think the wall is a good idea shouldn’t be news to anybody: We’ve pointed out the Democrats’ border wall hypocrisy many times.

end

Monday morning:  Trump doubts Congress will strike an acceptable border deal as stocks slump

(courtesy zerohedge)

Trump Says He Doubts Congress Will Strike An Acceptable Border Deal; Stocks Slump

Stocks jumped on Friday after President Trump “caved” to the Democrats and agreed to reopen the government via a three-week stopgap bill to facilitate negotiations over a border security package. But investors who interpreted this as a sign that Trump was giving up on his ambitions to build the wall – or that the president had decided prolonged government shutdowns were too politically damaging to risk a second one – might soon realize that this is simply not the case.

To wit, stock futures pointed to a lower open on Monday after President Trump warned on Sunday during an interview with the Wall Street Journal that he was personally pessimistic about the possibility that a bipartisan group of lawmakers will strike a deal that he would find acceptable. And if no deal is forthcoming, Trump vowed to build the wall anyway.

Though Trump said the group of 17 negotiators included some “very good people”, Trump said he believed the chances of Congress averting another lapse in government funding were “less than 50-50.” Asked if he would accept less than $5.7 billion in the next round of negotiations, Mr. Trump said: “I doubt it…I have to do it right.”

Shutdown

Responding to Democrats’ insistence that they support border security measures like fencing, levees, bollard barriers, more immigration judges, technology and agents, Trump said he would be skeptical of any deal that trades wall funding for other border security measures. Asked if he would agree to citizenship for the so-called “Dreamers”, Trump again said “I doubt it.”

“That’s a separate subject to be taken up at a separate time,” Trump said, though he offered three years of temporary protections for the Dreamers as part of a deal he had offered the Democrats.

But most importantly, during the interview, Trump said he wouldn’t rule out another shutdown: “It’s certainly an option,” he said, echoing comments from his Acting Chief of Staff Mick Mulvaney, who made the rounds on the Sunday shows to push back against the perception that Trump had somehow “caved” by offering to reopen the government.

Whatever agreement is ultimately struck – assuming the two sides can strike a deal – it will ultimately hinge on the nature of the border barrier that Trump has demanded since the earliest days of his campaign.

The thorniest question is likely to be what kinds of physical barriers would be funded along the border. Mr. Trump has been insistent on a wall in order to deliver on his signature campaign promise, while Democrats have been equally resistant to one.

“Have I not been clear on a wall?” House Speaker Nancy Pelosi (D., Calif.) said Friday. “I’ve been very clear on the wall.”

Asked about the form of barrier he would accept on the border with Mexico, Mr. Trump said: “I have to see what it is. As long as it can stop criminals, gangs, human trafficking and drugs, I’m open to anything. But the only thing that will work is a very strong form of physical barrier.”

But Democrats and Republicans often use different rhetoric when describing the same provisions, suggesting they may be able to agree on some kind of funding that Republicans would consider a wall but Democrats would say constitutes border security.

If Trump goes the national emergency route, something that would inevitably be met with a legal challenge from Democrats (though Trump’s record installations of federal judges and his recent appointments of two new SCOTUS justices would give him a slight edge), Trump could divert funding from military-funded projects like disaster relief.

On Sunday, Trump warned in a tweet that anybody who doubts his intentions to build the border wall will soon be sadly mistaken.

Donald J. Trump

@realDonaldTrump

After all that I have done for the Military, our great Veterans, Judges (99), Justices (2), Tax & Regulation Cuts, the Economy, Energy, Trade & MUCH MORE, does anybody really think I won’t build the WALL? Done more in first two years than any President! MAKE AMERICA GREAT AGAIN!

A very important commentary today from Alasdair Macleod:  the most important point is that the trade tariffs will trigger the downturn in the economy

(courtesy Alasdair Macleod)

 

Trump’s Trade Tantrum Triggers Turndown

Authored by Alasdair Macleod via GoldMoney.com,

For decades, Western governments have been pursuing a policy of transferring wealth from the public to themselves, their licensed banks and the banks’ favoured customers by means of interest rate suppression and monetary inflation. Consequently, inflation of financial asset prices has benefited the financial sector to the detriment of those employed in the productive economy. Over time, this has badly weakened productive capacity and the long-term ability of the market economy to fund future government spending.

It is a situation which seems bound to eventually lead to major economic and monetary problems. Additionally, global economic prospects have worsened considerably as a result of President Trump’s tariff wars against China and others. Empirical evidence from the 1930s as well as economic analysis illustrate how trade tariffs have a devastating effect on domestic economic activity, a prospect wholly unexpected by today’s economists.

The coming together of a trade-induced slump and the public’s discovery of its true losses through underreported wealth transfer by means of monetary inflation is set to become a major issue for fiat currencies worldwide, risking a catastrophic loss of confidence in them.

We shall commence by explaining why trade tariffs are likely to be the trigger for a possible slump before moving on to the important issues that arise from the public’s discovery of its own financial precariousness, the discrediting of macroeconomic theories and the likely reactions in currency markets.

The trade tariff problem

Those worried by the bigger picture cannot fail to have noticed that globally, there are now geopolitical shifts on a tectonic scale. The American government is alienating China, its key Eurasian creditor, which with its principal Asian partners has been planning to reduce exposure to the dollar. The influence of this movement against the dollar extends to China’s trade counterparties nearly everywhere outside the United States. This even includes Japan, which remains officially on side with America for now, but her zaibatsu are being drawn into China’s sphere of influence. Good Europeans such as Poland and Hungary are hedging their dollar bets by accumulating gold reserves, now that the silk road is transiting goods to and from the Far East.

Meanwhile, there is no sign of America’s twin deficits reducing and they are more likely to increase (explained below), particularly given an emerging global recession. China will still have its trade surpluses with America, but America is restricting Chinese re-investment in America and wherever it still has influence. It is a deliberate policy to contain China’s technological development but will have the effect of forcing Chinese entities to instruct the People’s Bank (PBOC) to swap their surplus dollars for yuan or another currency. The PBOC then has to decide whether to reinvest them in US Treasuries, leave them on deposit in American banks or just sell them.

The row over trade deficits and the introduction of tariffs by America is underestimated as a major cause of the global economic slowdown. To guide us, we have the precedent of the Smoot-Hawley Tariff Act of 1930, which played a major part in driving the world into the depression. China’s economy is now contracting rapidly, and while analysts are blaming China’s shadow banking squeeze, there can be no doubt that its export markets have contracted sharply as well. It is this dimension, one of contracting global trade for which China is the bellwether, which few analysts know how to analyse and even fewer governments know how to handle.

Let us walk through an example. A welfare-spending state (such as the US) facing a contraction in economic activity, will experience a significant increase in government welfare spending at a time of falling tax revenues. The budget deficit rapidly escalates. Unless it is offset by an increase in savings, a rapidly increasing budget deficit must lead to a broadly matching increase in the trade deficit. We can explain this with the following national accounting identity, for which there can be no other result.

(Imports – Exports) = (Investment – Savings) + (Government Spending – Taxes)

In other words, a trade deficit is the net result of a shortfall in the combination of savings and budget deficits. More correctly it applies to both capital and goods without distinction and is captured by balance of payments statistics.

The US has two problems with this issue. Not only does the budget deficit need funding by foreign investors recirculating their capital, but the trade deficit will continue to rise irrespective of tariffs. If the currency was to be fully recirculated from the trade deficit to fund the budget deficit, the cost of that funding would be set mainly by domestic considerations. This is unlikely to happen in America for political reasons.

We have seen President Trump try to reduce the trade deficit by imposing tariffs. It is clear he does not understand that his government is causing the trade deficit by running a budget deficit.And when the trade deficit widens further as a consequence of the rising budget deficit in the coming year, further restrictions on trade will also be unsuccessful and counterproductive. Assuming there is no increase in savings (they are discouraged by neo-Keynesian government economists anyway) then with the trade deficit still increasing, it will be domestic production that ends up being curtailed. It is the only way the sums can add up.

Given the parlous condition of state finances in most advanced nations, escalating deficits and tariffs in combination will end up squeezing both consumers and manufacturing businesses in all net importing countries. Unemployment then rises rapidly, and as the Smoot-Hawley episode informed us, before long a recession becomes a deepening slump as all nations are sucked into a trade vortex.

In other words, President Trump’s tariff wars are in large part responsible for the global economic slowdown. Worse, the slowdown can be expected to feed on itself as an increasing trade deficit ends up collapsing domestic output. This is the nightmare yet to come. But it is not all. We must put the trade issue to one side while we delve into an even larger issue that has undermined the economic performance of high-spending welfare states for a considerable time and is likely to be exposed by the impending slump in international trade.

A conventional analysis of the current global outlook

Government statistics round the world, which are alarming financial commentators, now reflect stalling GDP growth. Those few of us who have been beating the drum of credit cycle theory and the inevitability of a destructive economic and monetary crisis a magnitude larger than any recently experienced are not yet being taken seriously.

Our financial and economic futures are beginning to coalesce perhaps, but the route towards and extent of a new credit cycle termination are unclear. There are likely to be two broad possibilities. The first suggests that central banks will attempt to save the world from recession through a renewed expansion of their balance sheets if necessary. Interest rate rises will be put on hold, or perhaps temporarily reversed. The creation of wealth through asset price inflation will resume, and the credit crisis which ends all periods of credit expansion deferred perhaps for another year or so.

If the bull market in financial assets cannot be rescued in this manner, the alternative may be brutal. Financial troubles surface, stock markets crash, and financial, economic and monetary collapse are suddenly upon us, perhaps in a different variation from the Lehman crisis.

That’s the white and black of it, without much grey in between. Government economists and commentators are obviously preparing themselves for the first possibility with an easing of monetary policy enough to prevent anything worse than a brief mild recession. Collectively, central banks have quietly been doing this since mid-November. Unfortunately, the policy often fails, because a self-feeding momentum of deteriorating conditions is already under way and it is too late. There is therefore an element of hope over experience in the belief that an easing of monetary policy is all that is needed to keep economies bubbling along.

The businesses primarily affected by current conditions are the 80% (measured by GDP) that make up the small and medium-size enterprises (SMEs) not normally worthy of macroeconomic headlines. They are the riskier loans that offer banks the best lending margins. Banks, whose confidence in the business outlook has improved in recent years, have been increasing their loans of working capital to SMEs. Mark Carney, Governor of the Bank of England, recently warned MPs on the UK’s Treasury Select Committee that leveraged loans (which are strongly related to bank credit leant to SMEs) have all the hallmarks of the subprime mortgage bubble twelve years ago. Until last month, Carney also chaired the Financial Stability Board, hosted by the Bank for International Settlements, so speaks for the wider banking community. Any lender who has ignored this danger is now on notice and will be more likely to withdraw loan facilities from its SME customers.

Fear spreading over lending risk is why monetary easing following signs of trouble in credit markets often precipitates the crisis the authorities are trying to prevent. The Bank of England, or the Fed for that matter, could even halve interest rates and announce a resumption of quantitative easing, and despite a brief euphoric valuation moment in financial markets, the signal sent of escalating credit risk could still become self-fulfilling.

It appears financial markets and events generally have arrived close to this point. Having fallen sharply since last September, stocks have had a brief recovery. The recent fall in US Treasury yields, reflecting a flight into low risk bonds, has now paused and yields have risen slightly. Central banks hope the process of bank credit creation will resume, but based on experience from earlier credit cycles, the next signal will probably come from the banks trying to reduce lending risk even further. Furthermore, a central bank buying government debt from the banks, which is what QE amounts to, misdiagnoses the failure.

Dealing with an evolving credit crisis is not helped by the establishment’s self-serving approach to economics, and its belief that risk is caused entirely by free markets, when the crisis is always the consequence of failed government economic and financial policies.

This article now proceeds to not only point out the dangers posed by trade tariffs, but to draw the reader’s attention to the most important failures of mainstream economic analysis and monetary policy, in the context of what lies ahead.We can identify the future risks to our savings and lifestyles through a combination of empirical precedence and the lodestar of sound economic theory, as distinct from being misled by the Government’s self-serving macroeconomics.

Timing will then become the principal issue for investors and savers, which must be assessed by them in the context of their own situations as time progresses. But so that potential outcomes can be better understood, an investor or saver must first appreciate how the state finances itself at his or her expense. Furthermore, it must be recognised that state finances everywhere are rapidly deteriorating, and the ability of their peoples to continue to support them are diminishing towards a destructive singularity.

The growth myth

The common assumption that economic progress equates to growth in GDP is a fallacy and is only relevant to the state’s finances. A state’s finances improve when GDP grows. It is therefore hardly surprising that the arms of the state would have everyone believe that growth in GDP is synonymous with economic progress.

GDP is no more than a money-total. If you create more money in the form of base money or bank credit issued out of thin air, the extent to which it ends up in the non-financial economy simply inflates the GDP number. The extra money can be spent uselessly or even destructively, but GDP will still increase. Furthermore, the inclusion of a government’s economically destructive activities in GDP is a grievous error, ranking closely with the carelessness of financial analysts not recognising that the only productive part of the economy is the private sector providing goods and services.

GDP therefore has nothing to do with an overall increase in prosperity. It is the mirror opposite, because monetary inflation, the means by which GDP increases, transfers wealth from ordinary people to the government, the banks and their favoured customers. So even though extra money leads to an increase in nominal GDP, the average person employed in the non-financial private sector is made poorer.

For governments and their epigones in the economics profession, this is a truth too inconvenient to address. They would rather pursue the tired Keynesian argument that a little monetary and deficit stimulus benefits the private sector. It was a seductive argument when this story evolved from the Thornton-Bagehot concept of a central bank being the lender of last resort. But today, it has become increasingly clear that what was intended to be a one-off stimulus to get things going has become both a continual failure and an accelerating currency debasement to boot.

Not only is it in a government’s perceived interest to look no further than an increase in GDP, but the abuse of statistics by way of the introduction of a price deflator has reached remarkable levels. In the Alice-in-Wonderland of government economics a price deflator is necessary to measure the increase in welfare liabilities arising from indexation. Indexation has simply become a cost to be controlled by fiddling the figures.

The art of concealing price inflation

Independent estimates of price inflation in the United States are in the region of nine or ten percent annually, compared with the most recent official estimate of 1.9%. Governments can cheat in this way because there is no such thing as an indisputable price index. Each person has an experience of prices that is personal, and the variation of price inflation experiences differs widely. This means governments can construct an index which cannot be challenged on the basis it is wrong, because any alternative calculation is similarly flawed. And as we all know, the government is always assumed to be right by default.

Government calculations of price inflation around the world are also harmonised, which means they draw further credibility from being standardised internationally, and the flaws are ubiquitous. It amounts to a global concealment of the effects of monetary inflation on the wealth producers in non-financial economies, allowing almost unlimited creation of new currency. Because government statisticians say the price effect of monetary inflation is minimal does not mean that it is so. It is inevitable that at some point this fraudulent representation of the effect of monetary debasement on prices risks leading to a systemic shock and thus fatally undermines any residual trust in fiat currencies.

John Williams of Shadowstats.com has been pointing out the corruption of US Government inflation statistics for years. The process of deliberate data corruption started in 1980, and Williams estimates price inflation today to be in line with Chapwood’s calculation of nine or ten per cent, when all the changes to the state’s calculation methods are removed. Furthermore, according to Shadowstats, annual price inflation averaging close to these levels has existed since 2001, admittedly with some variation, severely denting the purchasing-power of the salaries of ordinary people. It is no wonder so many families resort to consumer credit to finance their day-to-day subsistence and life-styles.

Therefore, the transfer of wealth from the productive economy by means of monetary debasement, including the reduction in real terms of the value of wages, has been compounding at a far greater rate than official statistics would have us believe. Consequently, the US’s non-financial, non-government economy has been in a long-term decline in absolute terms for some time. The depredations on personal wealth and wages in the productive sector are only made tolerable by economic progress, which as we have noted above cannot be captured in GDP statistics. Economic progress always emanates from free markets, which are under increasing suppression from tax demands and escalating currency debasement.

The erosion of wealth in the productive base might appear to have been moderated by the price inflation of financial assets, itself another source of tax revenue. By excluding financial assets from price inflation statistics, the illusion of wealth-creation through rising financial asset prices acts as a convenient cover for currency dilution. The expansion of mortgage finance subsidised by suppressed interest rates creates a similar effect by driving up house prices, which then become eligible as collateral for further personal loans.

If you want an explanation of income and wealth disparities, look no further. Monetary inflation benefits people employed in financial activities at the expense of genuine producers of goods and services. This can only work until the productive, non-government non-financial sector runs too low on its collective wealth to support the burden of the rest, then the whole economy enters a catatonic state. Vide Greece, Italy, Spain, France…

A rough guide to the cumulative wealth transfer effect and loss of true wage income in America can be obtained by deflating the GDP figure by a number closer to the Chapwood and Shadowstats estimates, instead of those of the Bureau of Economic Analysis. If we make a rough assessment based on an annual compounding loss of the dollar’s domestic purchasing power averaging a conservative seven per cent since 2000, today’s price level is about 250% higher than then, which feels more correct than the BEA’s official estimate of a cumulative rise in prices of only 48%.

Eventually, the wider public is bound to rumble the deceit: discontent is already on the increase from a general public aware something is badly wrong, but it is not yet sure what it is. It should then be no surprise that the accumulation of currency debasement since 1980 will lead sooner or later to a larger crisis than seen in the last thirty years, and possibly over the entire course of the fiat money experience.

The end of macroeconomic posturing

We are considering the broadest of policy overviews, broader even than a trade-induced slump. They are the result of decades of monetary corruption, the consequences of which are being increasingly covered up by statistical manipulation. Failures of banking systems, whole countries and even entire economic blocs such as the EU are concerns for individual credit crises. The true problem lies buried more deeply in the tension created between wealth destruction and monetary creation. It can only end with the myth that free markets can be managed and improved by monetary manipulation and government intervention finally being overturned.

The economics of free markets had to be discredited for government control and intervention to be credible. The abandonment of free markets has been a gradual process that dates on some measures to before the creation of the Fed in December 1913. That event marked the first successful attempt by the leading American banks to gain full monetary control and was further consolidated when the Fed became operationally integrated with the US Government.

The economic justification for the creation of a monetary monopoly followed later, with mathematical economists in the 1930s such as Irvin Fisher and JM Keynes working up ideas to provide theoretical cover. Central to the implementation of their ideas was a split from what was subsequently termed microeconomics, which reflects our day-to-day experience. The new social science of macroeconomics was somehow above both our experiences and established classical economics. The creation of macroeconomic theory was the method by which Say’s law was deliberately abandoned.

The development of national statistics was with the intention of feeding the equations of the new mathematically-based macroeconomics. The abandonment of sound money was the next step, necessary to permit the further advancement of the mathematical illusion by feeding in monetary inflation. That was justified by claiming that dispensing with gold backing was necessary to remove the risk of price deflation. It was then consolidated with an unproved assertion that rising prices stimulate consumption, when in fact they are simply the primary consequence of monetary debasement.

The expansion of money and bank credit creates a temporary illusion of prosperity, while concealing the wealth transfer from ordinary people to the government, its licensed banks and their favoured customers. The economic progress that has benefited us all has emanated entirely from an increasingly supressed and diminishing free market, despite all government depredations upon it. The pace of depredation has accelerated in recent years but is now at a rate where widespread economic destruction is becoming visible, notably in failing statist nations within the European Union. America and Britain are treading the same path, with the supposed trade-off between wealth destruction and asset inflation increasingly difficult to sustain.

Macroeconomics as an economic subject was invented by agents of the state to justify giving the state control over free markets. It has ended up fooling everyone, but just as communism undermined itself by ignoring the socialist calculation issue, macroeconomics also appears to be moving towards its finality.

Conclusion

There are warning signals that the crisis that ends all monetary expansions may be upon us, with an obvious slowdown in global economic activity. It follows an unprecedented period of monetary debasement, the price effects of which have been concealed through the subterfuge of government statistical manipulation. It is a problem that has been growing over several credit cycles since the 1980s.

The consequence has been an accelerating wealth transfer from the productive segment of economies to governments, the banks and their preferred customers. Over time, this has undermined core economic activity, leaving governments with twin deficits in a precarious position.

Revelation of the full debilitating effects of the prolonged wealth transfer from productive economic sectors in the welfare-driven nations is only a matter of time, but probably requires a trigger for it to be widely understood. That trigger seems set to evolve from a potentially rapid contraction of global trade, brought about in large measure by American tariff policies.

The combination of a trade-induced slump and a public realisation that it has been a longstanding victim of a multi-government Ponzi scheme is likely not only to worsen the upcoming credit crisis, but to fatally undermine unbacked fiat currencies to boot.

end

This is one individual that you must pay attention the legendary John Williams of Shadowstats.  For years Williams has been correcting the faulty data provided to us by Washington.  Correctly he states that the Fed is in a box..no matter what it does, it is in trouble..if they raise rates despite the lousy economy, the stock market tanks.  If they stop raising rates, the dollar tanks, gold/silver skyrockets and inflation will rear its ugly head

(courtesy Greg Hunter/John Williams)

John Williams: “The Fed Will Crash Markets & The Dollar”

Via Greg Hunter’s USAWatchdog.com,

Economist John Williams warns the Federal Reserve has painted itself into a very tight no-win corner.

No matter what the Fed does with rates it’s going to be a disaster. Williams explains, “You had some very heavy selling towards the end of the year and when you saw the big declines in the stock market you also saw that accompanied by a falling dollar and rising gold prices.”

That was foreign capital which was significant fleeing our markets.So if the Fed continues to raise interest rates, and they want to do and they still don’t have rates where they want them, it’s going to intensify the economic downturn. That’s going to hit the stock market. If they stop raising rates . . . and they have to go back to some sort of quantitative easing, that’s going to hit the dollar hard. Foreign investors are going to say the dollar is going to get weaker and let’s get out of the dollar. Then, you are going to see heavy selling in the stock market.

So either way they go, they created a conundrum for themselves because of the way they bailed out the banking system (in 2008-2009). At this point they don’t have an easy way out of this.”

Williams saysthe U.S. is already entering into a recession.Williams contends,

“The first quarter, which is the quarter we are in right now, the first quarter of 2019 likely will be in contraction partially due to the government shutdown. That is slowing the economy on top of the interest rate hikes, butthe cause of the recession here is not the government shutdown. It’s the Fed hiking rates…

the fundamental driving factor that was putting us into recession even before the government shutdown was the rapid rise in interest rates.”

Williams says that in the first and second quarters of 2019 do not look good.

“I think we will have back to back contractions that will give you a formal recession…Even if we did not have the government shutdown I think we would have back to back negative quarters in the first and second quarter.”

Williams also warns, “This is a very dangerous time both domestically and globally.” Maybe this is why gold and silver prices keep steadily climbing higher. Williams says,

“As things get worse here there is going to be a flight from the dollar into other currencies and in particular into gold. Gold is the long term store of wealth here…

Where we are ultimately headed here the precious metals are a long term store of wealth. They preserve the purchasing power of your assets… if you have high inflation you will still have your purchasing power. With debt collapsing and currencies collapsing you are going to end up with inflation. Expanded debt is rapid money supply growth. It is debasement of the currency and debasement of the currency means inflation…

It’s the type of thing that can be accelerated very rapidly if you have another crisis such as a big stock market crash. The economy is tanking and people start fleeing the dollar means you are going to be seeing rising inflation.   If you see a big hit on the dollar gasoline prices will go up.”

Join Greg Hunter as he goes One-on-One with economist John Williams founder of ShadowStats.com.

To Donate to USAWatchdog.com Click Here

There is free information on the newly revamped ShadowStats.com. You can also become a subscriber and get weekly detailed reports without the distortions of government data accounting gimmicks. Click here to subscribe to ShadowStats.com.

END
The CBO’s projection has always been way off.  First of all, the announce that this year’s budget deficit will be only 897 billion, but it is already heading for 1 billion dollars.  We should also note that 400 billion dollars worth of debt is not included in the figures as these are student and auto loans as they are also an asset on the books so supposedly it did not count as official debt.  This is why the 12 month running debt to the penny is running over 1.4 trillion dollars …the real real true deficit.. It should also be noted that there is going to be a 250 billion debt runoff from the Fed. This amount is an additional amount of debt that must be funded.
(zerohedge)

CBO Unveils Apocalyptic Long-Term Debt Picture With US Set To Borrow Over $1 Trillion For Second Year

On Monday morning, the CBO announced  in its latest forecast that, as widely expected, U.S. budget deficits are set to widen further in coming years and economic gains will be muted” – a growth outlook that’s weaker than the Trump administration’s target of at least 3 percent growth. However, the surprise was that contrary to the CBO’s last forecast, the budget deficit is now expected to hit $1 trillion two years later than previously projected.

Specifically, the U.S. budget deficit is forecast to widen to “only” $897 billion over the 12 months through September, from $779 billion last year. This means that contrary to the CBO’s last forecast in April, the U.S. budget deficit will top $1 trillion in fiscal 2022. The CBO estimated in April that the budget deficit for the entire fiscal year would increase to $804 billion, before widening to $981 billion in fiscal 2019 and topping $1 trillion in 2020.

“That reduction in projected deficits results primarily from legislative changes — most notably a decrease in emergency spending,” the CBO said, somewhat optimistically especially since the economy is forecast to slow over the next three years with the growth rate easing to 2.3% in 2019, 1.7% next year, and 1.6% in 2021, the CBO forecasted; growth was an estimated 3.1% last year.

“The slowdown begins in 2019 as the positive effects of recent tax legislation on business investment are expected to wane and federal purchases under current law are projected to drop sharply starting in the fourth quarter of this year,” according to the report.

There is one problem with this forecast: Wall Street disagrees vehemently, and according to analyst forecasts, the Treasury Department will see further acceleration in sales of long-term debt to finance the government’s widening budget deficit, with new issuance projected to top $1 trillion for a second-straight year. As Bloomberg notes, many strategists at primary-dealer firms predict that this Wednesday’s quarterly refunding announcement will see the Treasury maintain note and bond sales at the record high levels they have boost.

“We’ve seen deficits continue to blow out,” said Brian Edmonds, head of interest-rates trading at Cantor Fitzgerald in New York. “We are going to see more and more supply.” Cantor, along with dealers including Citigroup Inc., TD Securities, Deutsche Bank AG and Wells Fargo Securities, sees the Treasury keeping auction sizes unchanged for nominal coupon-bearing debt.

According to one specific forecast, that of Steven Zeng from Deutsche Bank, the Treasury’s total net new issuance in 2018 amounted to $1.34 trillion, more than double the 2017 level of about $550 billion. In 2019, it will be $1.4 trillion, with $1.11 trillion from more coupon-bearing debt and the rest in bills.

Some more details from DB:

Since February 2018, the Treasury has increased auction sizes for coupon securities at each quarterly refunding meeting, boosting gross public issuance by $341bn to $2,388bn last year. Net issuance climbed from $419bn in 2017 to $942bn in 2018, and we estimate it will rise further to $1,111bn in 2019.

The increased Treasury issuance follows tax cuts and government spending increases implemented under the Trump administration, and, as Bloomberg notes, “that’s darkening a fiscal outlook already made worrisome by rising entitlement-program expenses and higher costs to service America’s nearly $16 trillion in debt. Meanwhile, the Federal Reserve’s balance-sheet runoff is also adding to supply, forcing the Treasury to reach out to the public for even more funding.

The fiscal 2018 U.S. budget gap hit a six-year high of about $780 billion, and the Congressional Budget Office forecasts it will reach $973 billion in 2019 and top $1 trillion the next year. Over the next decade, the U.S. government will spend about $7 trillion just to service the nation’s debt, according to the CBO.

Of course, there is no change to the CBO’s long-term forecast of debt issuance which is, basically, apocalyptic as the following chart confirms.

Curiously despite the flood of supply, Treasury yields haven’t surged higher because demand hasn’t dropped for the world’s safest securities, as confirmed by the just concluded very strong 2Y auction.

“With all these problems, we’re still in better shape than so many of the other advanced economies,” said Phillip Swagel, a University of Maryland professor and former Treasury official during the George W. Bush administration.

Yet investors aren’t so sanguine, most notably DoubleLine Capital LP’s Jeffrey Gundlach who has repeatedly warned that the U.S. economy will be plagued by an ocean of debt. He cited the fiscal 2018 rise in America’s national debt among risks in his annual webcast, and just overnight tweeted that currently the US has “$122 Trillion US unfunded liabilities per Debtclock. That’s 564% of Fiscal ‘18 GDP.  To fund would require 10% of GDP for 56+ yrs.”

Jeffrey Gundlach

@TruthGundlach

Currently $122 Trillion US unfunded liabilities per Debtclock. That’s 564% of Fiscal ‘18 GDP. To fund would require 10% of GDP for 56+ yrs.

682 people are talking about this

Billionaire investor Seth A. Klarman, in a letter presented at the World Economic Forum in Davos, Switzerland, said global social tension, receding American leadership and rising debt levels all present a red flag.

Yet while it is a virtual certainty that the CBO is wrong, and that US deficits will continue to soar as the US is forced to issue over $1 trillion in net debt each year, the wildcard is whether the Fed will slow down is balance sheet tapering. Last year, the Fed’s Treasury holdings fell by about $230 billion in 2018, compared with a reduction of $18 billion in 2017. An additional $271 billion should roll off this year, according to JPM, and the Treasury will have to find an offsetting amount of demand for this paper.

“Net borrowing needs will continue to increase due to the expected increase in the deficit combined with funding needs coming from the Fed’s debt run off,” said Margaret Kerins, global head of fixed-income strategy at BMO Capital Markets Corp.

“Given the global backdrop with Brexit and China’s economy slowing down, there is really a bid for safety, liquidity and quality — which means Treasuries — and that’s keeping yields in check to some degree.”

Of course, at some point the market will finally start focusing on America’s long-term – and very much unsustainable – debt picture as the CBO has warned year after year. When it does, and when there is another major selloff in stocks, US Treasurys will no longer be the “safe haven.” If and when that happens, that will be the signal that the time to get out of Dodge has finally arrived.

SWAMP STORIES

How the Democrat hopefuls for President will begin eating themselves up preparing for2020

a good one..

Tom Luongo

Luongo: Democrats Begin Eating Themselves Prepping For 2020

Authored by Tom Luongo,

Ideological possession always ends in pogroms. When the leadership of the most powerful organization in the world is at stake nothing is off limits, especially for power-hungry Democrats.

This is why we’re now seeing a concerted effort to smear Bernie Sanders just after he announced his Presidential campaign for 2020.

The Democrats blame him for splitting the party in 2016 which allowed Trump to win.

This, of course, is nonsense. Trump took up Bernie’s mantle of championing Hillary’s ‘deplorables’ and repackaged it as MAGA. Simply good marketing. And since she didn’t have a campaign and was seen as one of the architects of the policies which brought those people out for Bernie, handicapping the election was really easy.

The response was predictable. The American left lost its collective mind in November 2016.

Since then, to assuage their grief, they have latched onto the patently insane idea that Trump was an agent of the Kremlin. As Special Counsel Robert Mueller’s investigation has dragged on and on we’ve been given the pretty clear picture that it was Hillary and the rest of the DNC who concocted this story to get Trump removed from office.

And failing that it would be an open wound to keep Democrats hopeful, Trump chasing his tail and any reforms he might make to the unreal levels of corruption in D.C. stymied.

All of this in the hopes of ruining Trump for the Democrats to win in 2020. It was coldly calculated. The media was happy to oblige. And what’s next is the demonization of Bernie Sanders.

Burning for Bernie

Because Bernie Sanders is a secret Kremlin agent.

You see, at some point in the past Bernie’s campaign manager worked with *gasp* Paul Manafort! And that makes him a suspect. Then he wouldn’t vote for sanctions and wasn’t for endless war with Russia.

Caitlin Johnstone has a great article up detailing the insanity of the Bernie as Russian Spy story. She’s right that it is the delusional RussiaGate that has made this possible.

Since it [RussiaGate] has no basis in facts or reality, the only way to keep alive a crisis that is made of pure narrative is to keep feeding it with more narrative. Anyone who has helped do that is partly responsible for the frenzied, hysterical environment we now see before us in which a Bernie Sanders campaign which hasn’t even begun yet is already being undermined by completely baseless allegations of Kremlin collusion.

And Ms. Johnstone is also correct that Bernie himself, keeping his 2020 aspirations high, has helped the very thing being used to smear him now, RussiaGate.

But, this smear campaign has a cause, and it isn’t just the lunatic Left smarting over the rejection of their lunacy by desperate, ten-toothed deplorables.

Because the DNC are delusional enough to think that it was Bernie, like Ralph Nader in 2000, who cost the Democrats the presidency. It couldn’t have possibly been a terrible candidate, lack of message, and appearing as the party of the unelected oligarchy who were too busy strip-mining the country to notice that a lot of people were really angry about it.

No. It was Bernie’s fault. Self-reflection is not a strong point of ideologues.

You see, Bernie could have been a Manchurian Candidate all along as part of Putin’s nefarious plot to thwart the imperial aspirations of the anointed femi-Nazi Hillary.

These are talking points created by the Clinton wing of the DNC to discredit Bernie by painting him with the guilt-by-association brush.

There are few things in this life that made me laugh louder than this.

But it is also very dangerous.

Proxy Wars

Turning the mob on Bernie is exactly the same type of thinking that led to funding the Mujahadeen to fight the Soviets in Afghanistan in the 1980’s.

It’s the same misguided planning that created ISIS to overthrow Assad. Use proxies to undermine your opponent. Accuse them of things patently untrue and raise suspicion of them and their motives.

Then create an army of radicalized, frothing-at-the-mouth, unthinking lunatics to do your bidding on the battlefield. It doesn’t matter whether its the Syrian desert or the digital ones of Twitter and Facebook. What matters is keeping people hating The Other with an intensity that defies reason and ensures that no outside information makes it through the filter of the cult.

Alinsky 101. And who is the chief Alinskyite of the DNC? Hillary Clinton.

Make no mistake that’s because Hillary still thinks she can win a rematch in 2020.

Still think Hillary isn’t running? So it’s just coincidence that days after Kamala Harris (D – Herself) announced her candidacy Willie Brown breaks his silence on their affair.

This is prima facia evidence that the Democrats’ crazy has jumped the shark, however. In their single-minded quest to beat Trump the Clintons and their allies do not see the damage they are doing to not only the institutions they think they deserve to control but also to their own feathered nests.

The problem here is the unintended consequences of unleashing forces you can’t control. Proxy wars (political or military) create knock-on effects that grow beyond you.

They take on lives of their own. This is especially true among leftists who have rejected all other forms of limits on their behavior. They have been encouraged, by people like Clinton, to view culture as despotic.

Pelosi calls walls immoral.

New York has made infanticide a legal right.

The MAGA hat is the new Swastika.

It’s not about ideas anymore. It’s about purity. And the left turning on Bernie Sanders was already in full swing before Hillary mobilized a few of her media quislings.

This mania leads to people becoming so insane they think it’s okay to incite violence against 15 year old kids for standing still and smiling inext to grown men act like jackasses in public while cheering on pre-pubescent transvestite drag queens.

Do you think Hillary has the chops to navigate this insanity for a year and a half?

She couldn’t handle Trump in 2016… or campaigning for that matter.

Eat the Rich

Your clue that things have reached that point is none other than everyone’s media darling, Marxist lunatic Alexandria-Ocasio Cortez.

Machine Democrats lost seats in the primaries to ideologues like Cortez. She’s not stupid, folks. She’s Nancy Pelosi and Hillary Clinton 30 years ago. And she’s going to run their playbook better than they ever did.

Pelosi has no idea what she’s up against. She still thinks she’s got this under control. But she is in a fight for her political life with Trump over the border wall which he will win if he wants to.

Because he’s laying the groundwork to declare the emergency after raking them over the coals politically. He can’t lose this fight to her now when he has all the tools to make it happen. She’s the one with no cards to play now that the government is back in business looting people.

All it will take to beat her is a small cadre of Democrats to cross the line and cut a deal with Trump. He already offered a politically reasonable trade.

Does anyone think AOC won’t lead a small insurrection against Nasty Nancy over this? Or, at least, demand even more concessions from the party vis a vis committee appointments.

The Hildebeast

Hillary is the queen of slash and burn politics. She is Emperor Palpatine without the charisma.

And she’s also, like all generals, fighting the last war. Sending her media shock troops out against Bernie Sanders, a man already reviled for selling out to her in 2016, is an admission that she’s completely out of touch with the realities of 2019.

What Hillary is missing is that the political calculus of her past is over. If you don’t speak for the people you cannot win today. She will not be able to remake herself into a populist. She is damaged goods at a fundamental level. The kids who voted for AOC will never vote for her.

The Deplorables no matter how upset they are with Trump, if he stands firm on the wall and throws them some crumbs on foreign policy, will happily vote for him over her.

Hillary’s not stupid, however. She knows the Democratic field is a puddle rather than a lake. So she is looking to destroy up front those candidates she thinks are the strongest.

It’s why Fauxcahontas will get a pass because she’s a laughing stock and even more unlikeable than Hillary is.

And that’s why Hillary’s throwing her hat in the ring now, via her proxies. But, between now and when she actually announces she will let her opposition Democrats fall on each other like zombies on the last corpse.

SWAMP STORIES/MAJOR STORIES//THE KING REPORT
and special thanks to Chris Powell of GATA for sending this down for us:

@gatewaypundit: The more @realDonaldTrump continues to talk right now after handing over power to @SpeakerPelosi the more I want to throw up

@paulsperry_: Speaker Pelosi in presser just boasted that President Trump “underestimated” her and her Democrat caucus’ “power” in resisting pressure to fund the border wall.  Your move, Mr. President

@RealSaavedra: Chuck Schumer mocks President Trump: “Hopefully now the president has learned his lesson… Democrats are firmly against the wall.”

@AnnCoulter: Good news for George Herbert Walker Bush: As of today, he is no longer the biggest wimp ever to serve as President of the United States.

Trump was unnerved by the avalanche of erstwhile supporters’ criticism and venom.

@realDonaldTrump [on Friday night]: I wish people would read or listen to my words on the Border Wall. This was in no way a concession. It was taking care of millions of people who were getting badly hurt by the Shutdown with the understanding that in 21 days, if no deal is done, it’s off to the races!

Reports on Friday night and Saturday averred that DJT was livid with the GOP leadership [McConnell & Graham] that advised him to do the short-term deal.  DJT stupidly keeps embracing Swamp creatures.  Most of Trump’s problems are self-inflicted, the result of hiring the wrong people.

@fisheri: Most interesting to me after big news day, from @mikeallen quoting republican official. “The Senate Rs were about to cut and run. He had no exit ramp.”

jared Kushner, a Confident Negotiator, Finds Immigration Deal to Be Elusive

Mr. Kushner had advised the president against declaring a national emergency, which would enable him to get funding for his wall without approval from Congress. Instead, he ultimately pushed Mr. Trump toward the announcement he made on Friday, supporting it as a way to buy more time to reach a deal.

Mr. Trump… has become wary of his son-in-law’s advice on this issue, the aides said…

    Within the White House, several aides said, Mr. Kushner is not interested in opinions that vary from his, and tends to view people who disagree with him as problems, closing them out of discussions…

https://www.nytimes.com/2019/01/26/us/politics/jared-kushner-immigration-reform.html

DJT’s cave to Pelosi unleashed grousing from Trump supporters that had been suffering silently while Trump hired, coddled and embraced establishment figures, NeverTrumpers and Swamp creatures.

@kausmickey: If it’s going to be 21 days of the Jared Kushner Show, with your out-of-league son-in-law offering up increasingly large & awful amnesty plans in exchange for some wall money, please PULL THE PLUG NOW.

@CurtMills: Another source re the appointment of Elliot Abrams as envoy for Venezuela: “It’s like the chief qualification for influence in Trump’s State Department is having opposed Trump and what he stands for.”

@nytimes: President Trump was said to have met last week with a group of hard-right activists led by Ginni Thomas, wife of Justice Clarence Thomas. The group accused White House aides of blocking Trump supporters from getting jobs in the administration [DJT stupidly empowered the Swamp.]

https://www.nytimes.com/2019/01/26/us/politics/trump-ginni-thomas-meeting.html?smtyp=cur&smid=tw-nytimes

@RyanGirdusky: Not a single Republican who’s strong on border security or with Trump’s base on immigration is on the border security conference committee

Ex-SBUX CEO @HowardSchultz: I love our country, and I am seriously considering running for president as a centrist independent.  [Dems went nuts; saying this would guarantee a DJT win in 2020]

Texas says it found 95,000 non-citizens on voter rolls; 58,000 have voted

https://www.foxnews.com/politics/texas-says-it-has-discovered-95000-non-citizens-on-voter-rolls-58000-have-voted

Elderly Swede on Trial for Calling Somali Migrants ‘Lazy’ Online

https://www.breitbart.com/europe/2019/01/25/elderly-swede-trial-calling-somali-migrants-lazy-online/

The enforcement of socialism brings great repression.  You can look it up!

@PeterLBrandt: The Founders of the Constitution never envisioned career politicians. The idea was for citizens to spend a period in service then return back to private life. Only term limits and ban against former politicians from being lobbyists will save us   [Drain the Swamp!  Give us term limits!]

and special thanks to Chris Powell of GATA for sending this down for us:

end

I WILL SEE YOU WEDNESDAY NIGHT
.
H
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