FEB 1/GOLD DOWN $3.00 TO $1317.60/SILVER DOWN 14 CENTS AS THE CHINESE START THEIR WEEK LONG NEW YEAR CELEBRATIONS/CHINESE PMI TUMBLES FOR THE SECOND CONSECUTIVE MONTH INDICATING RECESSION OVER THERE/ANOTHER BOGUS JOBS REPORT/MORE SWAMP STORIES FOR YOU TONIGHT/

 

 

 

GOLD: $1317.60 DOWN $3.00 (COMEX TO COMEX CLOSING)

Silver:   $15.92 DOWN 14 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1317.60

 

silver: $15.92

Late this afternoon begins the long Chinese New Year celebrations. So it was easy for our crooks to start whacking as they knew the physical Chinese zone will not come back until Monday Feb 11.

 

I am very encouraged to see that throughout options expiry on both comex and London/OTC, the crooks were afraid to supply paper gold/silver. They can only offer paper when they know chances of delivery are smaller.

 

 

 

 

 

 

 

 

 

For comex gold and silver:

FEBRUARY

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  FEB CONTRACT: 5296 NOTICE(S) FOR 529600 OZ (16.472 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  6235 NOTICES FOR 623500 OZ  (19.393 TONNES)

 

 

SILVER

 

FOR FEBRUARY

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

53 NOTICE(S) FILED TODAY FOR 265,000  OZ/

 

total number of notices filed so far this month: 339 for 1,695,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE $3466: UP 31

 

Bitcoin: FINAL EVENING TRADE: $3477 UP   $43

 

end

 

XXXX

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

today 3020/5296

EXCHANGE: COMEX
CONTRACT: FEBRUARY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,319.700000000 USD
INTENT DATE: 01/31/2019 DELIVERY DATE: 02/04/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
072 C GOLDMAN 2
072 H GOLDMAN 4005
132 C SG AMERICAS 18
323 C HSBC 317
323 H HSBC 830
357 C WEDBUSH 6
624 C MERRILL 97
657 H MORGAN STANLEY 494
661 C JP MORGAN 2 1489
661 H JP MORGAN 1529
685 C RJ OBRIEN 10
686 C INTL FCSTONE 15
690 C ABN AMRO 155
732 C RBC CAP MARKETS 1
737 C ADVANTAGE 18 107
800 C RCG 7 32
880 H CITIGROUP 1449
905 C ADM 2 7
____________________________________________________________________________________________

TOTAL: 5,296 5,296
MONTH TO DATE: 6,235

 

 

 

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total OPEN INTEREST ROSE BY A HUGE SIZED 4074 CONTRACTS FROM 199,314 UP TO 203,388 ACCOMPANYING YESTERDAY’S 15 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 STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

2206 EFP’S FOR MARCH,  0 FOR APRIL, FOR MAY, 0 FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 2206 CONTRACTS. WITH THE TRANSFER OF 2206 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 2206 EFP CONTRACTS TRANSLATES INTO 11.03 MILLION OZ  ACCOMPANYING:

1.THE 15 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.

5.845 MILLION OZ STAND IN JANUARY.

AND NOW 2.350 MILLION OZ STANDING FOR FEBRUARY.

 

 

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF FEBRUARY: 43,491 CONTRACTS (FOR 1 TRADING DAYS TOTAL 2206 CONTRACTS) OR 11.03 MILLION OZ: (AVERAGE PER DAY: 2206 CONTRACTS OR 11.03 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF FEB:  11.03 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 1.57% 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:           228.485    MILLION OZ.

JANUARY 2019 EFP TOTALS:                                                      217.455. MILLION OZ.

 

 

RESULT: WE HAD A HUGE SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 4074 WITH THE 15 CENT GAIN IN SILVER PRICING AT THE COMEX //YESTERDAY..THE CME NOTIFIED US THAT WE HAD A GOOD SIZED EFP ISSUANCE OF 2206 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 HUGE SIZED: 6280 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 2206 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 4074 OI COMEX CONTRACTSAND ALL OF THIS  DEMAND HAPPENED WITH A 15 CENT GAIN IN PRICE OF SILVER  AND A CLOSING PRICE OF $16.06 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 OVER 1 BILLION oz i.e. 1.018 BILLION OZ TO BE EXACT or 145% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED AT THE COMEX: 53 NOTICE(S) FOR 265,000 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   JANUARY AT  5.825 MILLION OZ.AND NOW FEB 2019:  2.350 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 STRONG SIZED 5783 CONTRACTS UP TO 477,244 WITH THE RISE IN THE COMEX GOLD PRICE/(A GAIN IN PRICE OF $9.80//YESTERDAY’S TRADING). WE HAVE NOW ENDED THE FORCED LIQUIDATION OF SPREADERS AS WE PASS FIRST DAY NOTICE.

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG  SIZED 6708 CONTRACTS:

 

FEBRUARY HAD AN ISSUANCE OF 0 CONTACTS  APRIL 6708 CONTRACTS, DECEMBER: 0 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 477,244. 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 A VERY STRONG SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 12,491 CONTRACTS: 5783 OI CONTRACTS INCREASED AT THE COMEX AND 6708 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 12,491 CONTRACTS OR 1,249,100 OZ = 38.85 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A RISE IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $9.80.

 

 

 

 

 

YESTERDAY, WE HAD 11,261 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEBRUARY : 6708 CONTRACTS OR 670,800 OZ  OR 20.86 TONNES (1 TRADING DAYS AND THUS AVERAGING: 6708 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 1 TRADING DAYS IN  TONNES: 20.86 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 20.86/2550 x 100% TONNES = 0.818% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     4,552.21  TONNES

JANUARY 2019 TOTAL EFP ISSUANCE;   531.20 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 STRONG SIZED INCREASE IN OI AT THE COMEX OF 5783 (LIQUIDATION OF THE SPREADERS HAS CEASEDDESPITE THE GAIN IN PRICING ($9.80) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6708 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 6708 EFP CONTRACTS ISSUED, WE HAD A HUGE GAIN OF 12,491 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

6708 CONTRACTS MOVE TO LONDON AND 5783 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 38.85 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE GAIN OF $9.80 IN YESTERDAY’S TRADING AT THE COMEX

 

 

we had:  5296 notice(s) filed upon for 529,600 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $3.00 TODAY 

 

NO CHANGES IN GOLD INVENTORY AT THE GLD

 

 

 

 

 

 

 

/GLD INVENTORY   823.87 TONNES

Inventory rests tonight: 823.87 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 DOWN 14 CENTS  IN PRICE  TODAY:

 

 

 

 

 

 

 

 

 

/INVENTORY RESTS AT 310.723 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 HUMONGOUS SIZED 4074 CONTRACTS from 199,314 UP TO 203,388  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:

 

2206 CONTRACTS FOR MARCH. 0 CONTRACTS FOR MAY., FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2206 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 4074 CONTRACTS TO THE 2206 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG GAIN  OF 6280  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 31.40 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 , 5.845 MILLION OZ STANDING IN JANUARY..AND NOW 2.350 MILLION OZ STANDING IN FEBRUARY.

 

 

RESULT: A STRONG SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 15 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A GOOD SIZED 2206 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)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 33.66 PTS OR 1.30% //Hang Sang CLOSED DOWN 11.73 POINTS OR 0.04% /The Nikkei closed UP 14.90  PTS OR 0.07%/ Australia’s all ordinaires CLOSED DOWN .03%

/Chinese yuan (ONSHORE) closed UP  at 6.7354 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 53.73 dollars per barrel for WTI and 60.81 for Brent. Stocks in Europe OPENED RED 

//ONSHORE YUAN CLOSED DOWN AT 6.7354AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7469: / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

 

 

i)North Korea//USA

 

 

b) REPORT ON JAPAN

 

 

3 C/  CHINA

 

 

i) CHINA

 

This is not good at all for China..the engine for growth for the world.  It’s PMI tumbles to a 3 year low..the biggest drop on record down from 49.7 last month to 48.3.  Anything below 50 is contraction.

extremely important..

( zerohedge)

ii)How is this for alarm bells:  A huge 440 Chinese companies issued profit warnings in just one day.  Interestingly enough almost all of them(86%) were profitable last year.

( zerohedge)

iii)A little difficult to understand.  However, the heart of this important commentary is that Chinese RRR cuts which are meant by the POBC to stimulate the Chinese economy is doing the opposite:  the banks are hoarding because the Chinese economy is faltering and with it many dark holes.

a very important read.
( Jeffrey Snider)

4/EUROPEAN AFFAIRS

 

i)UK/EU

A good one..how the Brexit nonsense and the 11 weeks of protests in France are/will have a devastating effect on the EU economies

( Tom Luongo)

ii)They are back:  The EU needs for money so it is accusing 8 banks of rigging European government bond markets.

Only European government bonds?

( zerohedge)

iii)Italy/EU

What total absurdity:  Salivini has been charged with kidnapping migrants as they try and enter Italian shores. Salvini is continually gaining strength against its coalition partner.  The EU are running scared.

(courtesy Tom Luongo)

iv)Germany/Deutsche bank
Deutsche bank is totally hopeless.  These guys are the leaders in the world in derivative trading and they are offside on a huge number of trades.  However the Bundesbank must prop them up or else the entire globe’s finances disintegrates.
(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

 

 

6. GLOBAL ISSUES

 

7. OIL ISSUES

 

 

 

 

8 EMERGING MARKET ISSUES

 

 

VENEZUELA/USA

Twitter bans over 2,000 pro Maduro accounts in Venezuela as demands for regime change escalate

( zerohedge)

9. PHYSICAL MARKETS

I)We brought this story to you yesterday as central banks are buying gold like crazy..i.e. central banks of Eastern persuasion.  Chris Powell remarks that both Pierre Lassonde and Doug Casey say that central banks do not care about gold but that is totally nonsense.
(Bloomberg/GATA/Chris Powell)

II)Former bus driver and leader of the bankrupt nation of Venezuela sells 15 tonnes of gold to the UAE for paper Euros. Maduro is such a nut case.

( Reuters)

III)Quite a story: the 20 tonnes of gold that was suppose to be on a Russian plane did not board that aircraft. Actually the 20 tonnes of gold is still on the ground as the world tells all authorities not to buy this gold as Maduro will steal the money. I guess he cannot bury the gold in Venezuela as he probably will not be alive to enjoy it.

( Bloomberg/GATA)

IV)Ronan Manly makes the case that all of those nations that supposedly story their gold at the Bank of England, he wishes them the best of luck..they might never see the stuff again

( Ronan Manly/Bullionstar)

V)This continues on from last week where Macleod states that trade wars and increases in tariffs will only add to the trade/current account deficit

( Alasdair Macleod)

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

 

 

MARKET TRADING

JOBS REPORT

a)The bogus January payroll report:  the USA supposedly added 304,000 jobs last month ans now they will bring out Trump and Kudlow to crow

( zerohedge)

b)Amazing what fudged numbers will do.  There were 380,000 government workers who were out of a job in January. However there were 500,000 additional gains in part time workers in January, something that we have not seen in decades.  The bozos added the government workers even though they did not work but because they were going to be back paid.  But these workers got a part time job in January and that is why 1/2 jobs were added. Also a huge number of B/D additions.

( zerohedge)

c)Dave Kranzler is all over the fraudulent employment report
a must read..
(courtesy Dave Kranzler/IRD)

ii)Market data/

i)Both Markit and ISM manufacturing buck the global trend and rebounds in manufacturing

( zerohedge)

ii)Wholesaler sales tumble while wholesale inventories climb..not a good sign
(courtesy zerohedge)

iii)USA ECONOMIC/GENERAL STORIES

a)With the left going bonkers, the bankers will use this problem to deliver martial law.  This will come to the forefront as soon as Venezuela defaults and quite possibly Brazil and Argentina.  We will then see huge numbers of migrants appear at the USA southern border.  At that point, the pundits will ask for martial law and that is the object of the exercise for our bankers
( Brandon Smith)

b)trust me on this: there will be no trade deal with China because China will not deal with the forced transfer of technology and other important demands of the USA

important..

(courtesy zerohedge)

iv)SWAMP STORIES

New evidence destroys Adam Schiff’s theory that Donald Jr spoke to his father

( zerohedge)

 

 

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

 

end

 

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN ROSE BY AN STRONG SIZED 5783 CONTRACTS UP TO A LEVEL OF 477,244 WITH THE RISE IN THE PRICE OF GOLD ($9.85) IN YESTERDAY’S COMEX TRADING).FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES., THE REASON FOR THE COLLAPSE IN OPEN INTEREST IS THE FORCED LIQUIDATION OF THE SPREADERS.

 

 

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 6708 EFP CONTRACTS WERE ISSUED:

FOR FEBRUARY:  0. FOR APRIL 6708, FOR DECEMBER: 0 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  6708 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 LOST THE FOLLOWING TODAY ON OUR TWO EXCHANGES:  12,491 TOTAL CONTRACTS IN THAT 6708 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A GOOD SIZED 5783 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES:12,491 contracts OR 1,249,100  OZ OR 38.85 TONNES.

 

We are now in the active contract month of FEBRUARY and here the open interest stands at A WHOPPING 9,079 contracts, and thus undergoing a loss of 1436 contracts.  We had 939 contracts stand for delivery yesterday so we lost only 497 contracts or 49,700 additional oz will not stand for delivery in this very active delivery month of February.

 

 

 

The next non active delivery month after February is  March and here we  LOST 292 contracts to stand at 1644.  After March, the next big delivery month is April and here the OI rose by 5480 contracts up to 337,179 contracts.

 

 

 

FOR COMPARISON FEBRUARY 2019 TO THE  FEBRUARY 2018 COMEX GOLD CONTRACT MONTH

 

 

 

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.

TODAY’S NOTICES FILED:

WE HAD 939 NOTICES FILED TODAY AT THE COMEX FOR 93,900 OZ. (2.9206 tonnes)

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total COMEX silver OI ROSE BY A STRONG SIZED 4074  CONTRACTS FROM 199.314 UP TO 203,388(AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  (THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S OI COMEX GAIN  OCCURRED DESPITE A 15 CENT GAIN IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF FEBRUARY AND THE  AMOUNT OF OPEN INTEREST READY TO STAND IS  175 CONTRACTS, HAVING LOST 235 CONTRACTS FROM YESTERDAY.  WE HAD 286 NOTICES FILED YESTERDAY SO WE GAINED 51 CONTRACTS OR AN ADDITIONAL 255,000 OZ WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF FEBRUARY.

 

.

 

 

 

THE NEXT NON ACTIVE DELIVERY MONTH AFTER FEBRUARY IS THE VERY BIG AND ACTIVE DELIVERY MONTH OF MARCH AND HERE THE OI ROSE BY 1749 CONTRACTS UP TO 141,956 CONTRACTS. AFTER MARCH, APRIL RECEIVED ITS INITIAL 15 OPEN INTEREST CONTRACTS.  AFTER APRIL, THE NEXT BIG ACTIVE DELIVERY MONTH IS MAY AND HERE THE OI ADVANCED BY 1836 CONTRACTS UP TO 29,790 CONTRACTS.

 

 

 

 

ON A NET BASIS WE GAINED 6280 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 4256 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 2206 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  6280 CONTRACTS...AND ALL OF THIS OCCURRED WITH A 15 CENT GAIN IN PRICING// YESTERDAY

 

 

 

 

 

FOR COMPARISON SILVER COMEX CONTRACT MONTH  FEB 2018 VS FEB 2019

 

 

 

 

ON FIRST DAY NOTICE FEB 1/2018 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.

TODAY THE INITIAL AMOUNT OF SILVER STANDING IS 2.050 MILLION OZ./

 

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 286 notice(s) filed for 1,430,000 OZ for the FEB, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  191,467 CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  240,118  contracts

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  FEB/GOLD

FEB 1/2019.

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

 

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

NIL

 

OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
5296 notice(s)
 529600 OZ
No of oz to be served (notices)
3783 contracts
(378,600 oz)
Total monthly oz gold served (contracts) so far this month
623500 notices
623500 OZ
19.393 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 0 kilobar entries

 

we had 0 deposit into the customer account

 

 

total gold customer deposits;  nil oz

 

we had 0 gold withdrawals from the customer account:

 

 

 

total gold withdrawing from the customer;  NIL oz

 

we had 1  adjustments….
i) Out of HSBC: 58,356.410 oz was adjusted out of the customer and into the dealer.
no settlement yet.

FOR THE FEB 2019 CONTRACT MONTH)

Today, 0 notice(s) were issued from JPMorgan dealer account and 2 notices were issued from their client or customer account. The total of all issuance by all participants equates to 5296 contract(s) of which 1529 notices were stopped (received) by j.P. Morgan dealer and 1489 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 2 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the FEBRUARY/2019. contract month, we take the total number of notices filed so far for the month (6235) x 100 oz , to which we add the difference between the open interest for the front month of FEB. (9079 contract) minus the number of notices served upon today (5296 x 100 oz per contract) equals 1,001,900 OZ OR 31.163 TONNES) the number of ounces standing in this active month of FEBRUARY

 

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

No of notices served (6235 x 100 oz)  + {9079)OI for the front month minus the number of notices served upon today (5296 x 100 oz )which equals 1,001,900 oz standing OR 31.163 TONNES in this active delivery month of FEBRUARY.

WE LOST 497 CONTRACTS OR AN ADDITIONAL 49700 OZ WILL NOT STAND AT THE COMEX AS THE MORPHED INTO A LONDON BASED FORWARD AND ALSO RECEIVED A FIAT BONUS FOR THEIR EFFORTS.

 

 

 

 

 

THERE ARE ONLY 24.988 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 31.163 TONNES STANDING FOR JANUARY

 

 

total registered or dealer gold:  803,375.667 oz or   24.988 tonnes
total registered and eligible (customer) gold;   8,439,056.807 oz 262.48 tonnes

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

 

end

And now for silver

AND NOW THE NOV DELIVERY MONTH

FEB INITIAL standings/SILVER

FEB 1, 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
726,159.369  oz
CNT
Delaware

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
nil oz
No of oz served today (contracts)
53
CONTRACT(S)
265,000 OZ)
No of oz to be served (notices)
122 contracts
610,000 oz)
Total monthly oz silver served (contracts) 339 contracts

(1,695,000 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 1 inventory movement at the dealer side of things

i) Into Brinks dealer:  564.937.98 oz

 

total dealer deposits:  564,937.98  oz

total dealer withdrawals: 0 oz

we had  4 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)

 

i) Into everybody else:  nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: nil   oz

we had 2 withdrawals out of the customer account:

i) Out of CNT:  710,540.489 oz

ii) Out of Delaware: 15,618.880 oz

 

 

 

 

 

 

 

total withdrawals: 726,159.369    oz

 

we had 0 adjustment..

 

 

 

total dealer silver:  88.142 million

total dealer + customer silver:  297.278 million oz

 

 

 

 

The total number of notices filed today for the FEBRUARY 2019. contract month is represented by 53 contract(s) FOR 265,000  oz

To calculate the number of silver ounces that will stand for delivery in FEB., we take the total number of notices filed for the month so far at 339 x 5,000 oz = 1,695,000 oz to which we add the difference between the open interest for the front month of FEB. (175) and the number of notices served upon today (53x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the FEBRUARY/2019 contract month: 339(notices served so far)x 5000 oz + OI for front month of FEB( 175) -number of notices served upon today (53)x 5000 oz equals 2,305,000 oz of silver standing for the FEBRUARY contract month.  This is a strong number of oz standing for an off delivery month.

WE GAINED 51 CONTRACTS OR AN ADDITIONAL 255,000 OZ WILL STAND AT THE COMEX AS THESE GUYS REFUSED TO MORPH INTO LONDON BASED FORWARDS AND ALSO NEGATING A FIAT BONUS. QUEUE JUMPING CONTINUES AT THE COMEX UNABATED.

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

TODAY’S SILVER VOLUME:  73,517 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 88,877 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 88877 CONTRACTS EQUATES to 444 million OZ  63.4% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -3.51% (FEB 1/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.99% to NAV (FEB 1 /2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.51%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.40/TRADING 12.90/DISCOUNT 3.70

END

And now the Gold inventory at the GLD/

FEB 1/WITH GOLD DOWN $3.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 823.87 TONNES

JAN 31/WITH GOLD UP $9.80 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 823.87 TONNES

JAN 30/WITH GOLD UP $.65: A HUGE HUGE MONSTROUS ADDITION OF 8.23 TONNES OF PAPER GOLD ENTERED THE GLD/INVENTORY RESTS AT 823.87..SO FAR IN JANUARY: 28.56 TONNES HAVE BEEN ADDED

JAN 29/WITH GOLD UP $6.15/A HUGE ADDITION OF 5.88 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 815.64 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

FEB 1/2019/ Inventory rests tonight at 823.87 tonnes

*IN LAST 544 TRADING DAYS: 111.28 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 444 TRADING DAYS: A NET 48.75 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

FEB 1/WITH SILVER DOWN 14 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY  RESTS AT 310.723 MILLION OZ/

JAN 31/WITH SILVER UP 15 CENTS TODAY: ANOTHER BIG DEPOSIT OF 1.126 MILLION OZ/INVENTORY RESTS AT 310.723 MILLION OZ/

JAN 30/WITH SILVER UP 7 CENTS: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 938,000 INTO THE SLV INVENTORY./INVENTORY RESTS AT 309.597 MILLION OZ.

JAN 29/WITH SILVER UP 9 CENTS TODAY/A HUGE DEPOSIT OF 1.408 MILLION OZ  IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 308.659 MILLION OZ/

JAN 28/WITH SILVER UP 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/

 

 

FEB 1/2019:

 

Inventory 310.723 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 2.21/ and libor 6 month duration 2.80

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

G0LD LENDING RATE: + .59

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.51%

LIBOR FOR 12 MONTH DURATION: 2.98

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.47

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

Central Banks Buy More Gold In 2018 Than Any Year Since 1967

– Central banks buy gold in largest buying spree in a half century
– 2nd largest year of gold purchases by banks on record – WGC
– Central banks bought more gold bullion last year than anytime since 1967, prior to the U.S. ending the gold standard in 1971
– Governments added 651.5 tonnes (metric) of gold to their foreign exchange reserves in 2018, a 74 percent increase from the previous year
– Surge in gold purchases by central banks and strong demand for gold coins and bars in Europe and Iran helped push global demand for gold up 4 percent last year

Source: World Gold Council

Queen Elizabeth inpects gold
The Queen inspects a gold vault at the Bank of England

 

Source: World Gold Council

Central Banks Are on the Biggest Gold-Buying Spree in a Half Century (Bloomberg)

Central Banks Bought More Gold in 2018 Than Any Year Since 1967: WGC (Reuters)

Gold Demand Trends Full year and Q4 2018 (Full Report from World Gold Council here)

 

News and Commentary

Gold hits 9-month peak on Fed rate freeze; eyes monthly gain (Reuters.com)

Central banks bought more gold in 2018 than any year since 1967 (651.5 tonnes – 74 % more than in 2017) (Reuters.com)

Exclusive: Venezuela prepares to fly tonnes of central bank gold to UAE – source (Reuters.com)

Fed pause sets stocks for best January on record, yields fall (Reuters.com)

Gold prices settle higher, up a 4th month in a row (MarketWatch.com)


Source: Bloomberg

Gold Demand Trends Full year and Q4 2018 (WGC) (Gold.org)

Central Banks Are on the Biggest Gold-Buying Spree in a Half Century (Bloomberg.com)

How India Elections Could Mean a Surge in Gold Buying (Bloomberg.com)

Silver Shortage Promises to Boost Price in 2019 (Bloomberg.com)

Italy Officially Slides Into Recession After Budget Battle With Brussels (ZeroHedge.com)

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

Gold Prices (LBMA PM)

31 Jan: USD 1,322.50, GBP 1006.95 & EUR 1,152.16 per ounce
30 Jan: USD 1,312.95, GBP 1002.04 & EUR 1,148.44 per ounce
29 Jan: USD 1,308.35, GBP 994.48 & EUR 1,143.24 per ounce
28 Jan: USD 1,301.00, GBP 987.98 & EUR 1,139.81 per ounce
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

Silver Prices (LBMA)

31 Jan: USD 16.07, GBP 12.24 & EUR 13.99 per ounce
30 Jan: USD 15.91, GBP 12.15 & EUR 13.92 per ounce
29 Jan: USD 15.85, GBP 12.05 & EUR 13.87 per ounce
28 Jan: USD 15.68, GBP 11.93 & EUR 13.75 per ounce
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

Recent Market Updates

– Gold Breaks Out of Range After Dovish Fed – Further 1% Gain to $1,321/oz
– U.S.-China War May Be “Just A Shot Away”
– Buy Bitcoin or Gold? Bitcoin Buyers Investing In Gold In 2019
– Gold Consolidates Above $1,300 After 1.2% Gain Last Week
– 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

Mark O’Byrne
Executive Director
GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER
We brought this story to you yesterday as central banks are buying gold like crazy..i.e. central banks of Eastern persuasion.  Chris Powell remarks that both Pierre Lassonde and Doug Casey say that central banks do not care about gold but that is totally nonsense.
(Bloomberg/GATA/Chris Powell)

But Pierre Lassonde and Doug Casey say central banks don’t care about gold

 Section: 

Central Banks Are on the Biggest Gold-Buying Spree in a Half Century

By Rupert Rowling and Susanne Barton
Bloomberg News
Thursday, January 31, 2019

Central banks bought more bullion last year than anytime since 1971, when the U.S. ended the gold standard.

Governments added 651.5 tons of gold to their coffers in 2018, a 74 percent increase from the previous year, according to a report from the World Gold Council.

 

 

Russia, which is “de-dollarizing” its reserves, was the biggest buyer, followed by Turkey and Kazakhstan. Hungary also made a large purchase, citing gold’s lack of counterparty risk and role as a hedge against changes in the international finance system, the WGC said.”Central banks chose to significantly increase their gold reserves, reinforcing the importance of gold as a reserve asset,” the WGC said. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-01-31/gold-demand-up-amid-b…

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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END

Former bus driver and leader of the bankrupt nation of Venezuela sells 15 tonnes of gold to the UAE for paper Euros. Maduro is such a nut case.

(courtesy Reuters)

Venezuela to sell 15 tonnes of gold to UAE for euros, source tells Reuters

 Section: 

By Corina Pons and Mayela Armas
Reuters
Thursday, January 31, 2019

CARACAS, Venezuela — Venezuela will sell 15 tonnes of gold from central bank vaults to the United Arab Emirates in coming days in return for euros in cash, a senior official with knowledge of the plan said, in an effort by the troubled OPEC member to stay solvent.

The sale this year of gold reserves that back the bolivar currency began with a shipment on Jan. 26 of 3 tonnes, the official said, and follows the export last year of $900 million of mostly unrefined gold to Turkey.

 

END

Quite a story: the 20 tonnes of gold that was suppose to be on a Russian plane did not board that aircraft. Actually the 20 tonnes of gold is still on the ground as the world tells all authorities not to buy this gold as Maduro will steal the money. I guess he cannot bury the gold in Venezuela as he probably will not be alive to enjoy it.

(courtesy Bloomberg/GATA)

Venezuela’s 20-ton pile of gold in suspense in Caracas vault

 Section: 

By Patricia Laya
Bloomberg News
Thursday, January 31, 2019

With 20 tons of gold stacked up for loading and shipping out of Venezuelan vaults, the mystery surrounding them — and the saber-rattling they’re sparking — is intensifying.

The Russian airplane that a Venezuelan lawmaker alleged was in Caracas to spirit the gold away left the country without it. But now a cargo plane has landed from Dubai, triggering a new wave of speculation that the gold is headed there instead.

As Nicolas Maduro, the authoritarian ruler, tries to stave off mounting international pressure to relinquish power, the fate of those gold bars has become a cause of great concern both in Venezuela and abroad. Valued at about $850 million, they are an important source of wealth in a country that has plunged into extreme poverty under Maduro’s leadership.

On Thursday, Marco Rubio, the Florida senator who has helped spearhead the U.S.’s hard-line stance toward the Maduro regime, fired off a tweet calling out the United Arab Emirates’ Noor Capital as the financial firm orchestrating the gold transaction with Venezuelan authorities. Rubio went on to warn the firm that both it and any airline it hires to take the gold away will be subject to U.S. Treasury sanctions.

As of late today the 20 tons had yet to leave the central bank, according to a person with direct knowledge of the matter. They had, though, been weighed and separated for shipment, the person said. He did not know where the gold might be heading or the nature of the transaction. The cargo plane was still at the airport in Caracas, according to the website Flightradar24.

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-02-01/maduro-s-20-ton-pile-…

END

Ronan Manly makes the case that all of those nations that supposedly story their gold at the Bank of England, he wishes them the best of luck..they might never see the stuff again

(courtesy Ronan Manly/Bullionstar)

Store Your Gold At The Bank Of England And You Might Never See It Again

Submitted by Ronan Manly, BullionStar.com

In early November 2018, it first came to light that the Bank of England in London was delaying and blocking the withdrawal of 14 tonnes of gold owned by the Venezuelan central bank, Banco Central de Venezuela (BCV). At the time, Reuters and The Times of London both reported that according to unnamed British ‘public officials’, the delays were being caused by the difficulty and cost of obtaining insurance for the gold shipment back to Venezuela, and also due to “standard measures to prevent money-laundering“.

As I explained in a BullionStar article on 15 November titled ‘Bank of England refuses to return 14 tonnes of gold to Venezuela’, the explanations given to Reuters and the Times for the withdrawal delays were completely bogus, and that the real reason for blocking the BCV gold withdrawal was undoubtedly US and UK joint government interventions to stall the withdrawal. As I wrote at the time:

“The reasons put forward by official sources in the Reuters and Times articles for why Venezuela can’t withdraw its gold from the Bank of England are clearly bogus. The more logical and likely explanation is that the US, through the White House, US Treasury and State Department have been liaising with the British Foreign office and HM Treasury to put pressure on the Bank of England to delay and push back on Venezuela’s gold withdrawal request.”

As it turns out, this was an entirely correct prediction, since by 25 January, Bloomberg confirmed in an ‘exclusive report’ (two and a half months later) that:

“The Bank of England’s decision to deny Maduro officials’ withdrawal request comes after top U.S. officials, including Secretary of StateMichael Pompeo and National Security Adviser John Boltonlobbied 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.”

Why Bloomberg took so long to state the obvious is not clear, but from the outset, the entire interventionalist playbook of the Americans and British in this saga has been entirely predictable to anyone observing the situation. This intervention by the Bank of England on behalf of the US and UK shows a complete disregard for sovereign gold property rights, and the Bank of England has now literally ripped up a custody gold storage agreement that it had entered into with another of the world’s central banks.

Predicting the Coup – Look to the Gold

More interestingly, the Bank of England’s stalling tactics on the BCV gold withdrawal has also been useful in predicting the timing of the current Western powers’ move against Maduro and in signaling how long this foreign backed coup has been in the planning in Washington DC and elsewhere. Let’s look at a few facts and their timing.

From at least early September 2018, the Bank of England (BoE) began stalling on allowing a central bank gold custody customer (the BCV) to withdraw sovereign property (gold bars) that the BCV had entrusted to the Bank of England under a gold custody agreement.

Why early September 2018? Because, as the Reuters report dated 5 November stated, the BCV gold withdrawal request had “been held up for nearly two months”. This would put the original BCV withdrawal request to at least early September. And since the BCV’s gold withdrawal request was not actioned by the BoE at that time in early September, then this implies that the Bank of England already had its instructions to begin stalling the BCV during at least early September, which also implies that the British and US governments were already involved.

Arguably, concern in Bank of England, British Foreign Office and US State Department circles, and associated hatching of plans to stall and block BCV gold bar withdrawals, could have began as early as April 2018. This was the month in which the BCV paid Citibank $172 million to recover gold bars at the Bank of England that the BCV had put up as collateral in a gold swap operation with Citibank. According to a Reuters article last June about the termination of this BCV-Citi gold swap, “the policy [of the BCV] is to recover the gold“.

So when the swap was closed out last April, the Bank of England and associated intelligence actors (UK Treasury, Foreign Office, State Department, US Treasury etc) would all have known that the BCV again had title to some gold bars in the Bank of England’s vaults and wanted to “recover the gold”.  So its also possible that the BCV gold withdrawal request to the Bank of England was pending from at least May onwards.

Stalling while awaiting backup

It is now also apparent that the Bank of England was engaged in its stalling tactics while waiting for new US sanctions to come into affect as well as for the beginning of Maduro’s new presidential term on 10 January 2019, when the US and associated allies then upped the coup rhetoric.

Specific sanctions appeared on 01 November, when the United States signed Executive Order 13850, an order which imposed sanctions on Venezuela’s gold industry and which bullies the global gold industry not to do business with Venezuela and its gold sector. To put the issue into the public domain and control the narrative in the run up to Washington’s intervention, Reuters and the Times were then feed various bogus stories a few days later by “public officials” and “British officials”, and the resulting stories published firstly by Reuters (story one) and then by the Times (story two).

On the election front, while Venezuela’s president Maduro was re-elected in elections that were held on 20 May 2018, his inauguration was only held on 10 January this year. As other countries jumped on the bandwagon condemning Maduro’s new term and endorsing the relatively unknown Venezuelan national assembly leader Juan Guaidó, if the Bank of England was able to stall until 10 January, then it’s stalling tactics would appear more palatable since by then reneging a sovereign gold custody contract could be buried amid the media scramble and merely be another footnote in the escalating conflict.

This, the Bank of England has managed to do to an extent. In early December, the BoE stalled in its meeting with BCV president Calixto Ortega Sánchez and Venezuelan finance minister Simón Zerpa Delgado when they flew over from Caracas to London for a meeting requesting BCV gold withdrawal. See BullionStar article from 18 December, titled “Venezuela’s gold in limbo amid tug-of-war at the Bank of England” for more details.

The BoE’s stalling also enabled the US-backed Venezuelan opposition to throw its own spanner in the works during December, when Venezuelan opposition politicians Julio Borges (former Venezuelan national assembly president and founder of the Justice First party) and Carlos Vecchio (co-founder of the Voluntad Popular party) petitioned the BoE’s governor Mark Carney to “refuse the handover of fourteen tonnes of gold“.

John Bolton: From the Swamp?

 

Doubling down on the Gold, doubling up the Stake

In the immediate aftermath of Maduro’s re-inauguration, a number of intriguing developments regarding the BCV’s gold at the Bank of England have also now come to light. These developments merit attention, and are briefly summarised below.

Firstly, the BCV significantly upped the ante in December 2018 by doubling down on its gold holdings at the Bank of England. It did this by closing out another gold swap, this time one that its had on the table with the now troubled Deutsche Bank. This is according to a Reuters reportout of Caracas dated 21 January. According to Reuters, the BCV’s gold holdings at the Bank of England:

more than doubled in December to 31 tonnes, or around $1.3 billion, after Venezuela returned funds it had borrowed from Deutsche Bank through a financing arrangement that uses gold as collateral, known as a swap…

..Under the deal struck with Deutsche Bank in 2015, Venezuela put up 17 tonnes of gold in exchange for a loan.

By upping the amount of gold at stake from 14 tonnes to 31 tonnes, the BCV piled on the pressure with the BoE. If 14 tonnes sounds like a lot of gold, then 31 tonnes sounds like a lot more.

Back in December, I did a calculation of how many Good Delivery gold bars equates to 14 tonnes and wrote that it “would be in the region of about 1125 gold bars” which was  27% of the original 4,089 gold bars that the BCV left stored at the Bank of England in late 2011. I said that:

“This is the gold now being frozen by the Bank of England, about 1125 gold bars. If this gold is in custody, it will be set-aside or allocated and the BCV will know the individual serial numbers of every bar.

…the BCV should at the very least publish for everybody to see, the weight list / serial number list of all of these gold bars so that they cannot be confiscated or used by the Bank of England or bullion banks for other purposes, such as being sold to other central bank customers or sold to gold-backed ETFs.”

If 1,125 Good Delivery gold bars equate to 14 tonnes, then about 2,491 Good Delivery gold bars equate to 31 tonnes. So the BCV is now looking to withdraw approximately 2,500 wholesale gold bars from the Bank of England vaults in London. That is not a small number, and should cause ‘consternation’ among the LBMA and Bank of England vault managers that the reputation of the London Gold Market has now been tainted by freezing the withdrawal of 2500 large gold bars belonging to another sovereign nation. Not to mention ‘consternation’ among the world’s other central banks (more then 70 central bank gold custody customers) which store their gold in the BoE vaults in London.

Guaido and Maduro

Late January news also saw official confirmation from Bloomberg that the trip to the Bank of England in December by the Venezuelan central bank president Ortega Venezuelan finance minister Zerpa Delgado had been a waste of time. Again confirming the stalling tactics of the G30 member (Mark Carney) led Bank of England. According to a January 25 article by Bloomberg:

“those talks were unsuccessful, and communications between the two sides have broken down since. Central bank officials in Caracas have been ordered to no longer try contacting the Bank of England. These central bankers have been told that Bank of England staffers will not respond to them, citing compliance reasons, said a Venezuelan official…”

On 27 January, Reuters revealed that Venezuela’s political opposition, not content with just a letter from Borges and Vecchio to Mark Carney in December which pleaded to “refuse the handover of fourteen tonnes of gold“, had gone one step further and roped in Venezuela’s presidential contender Juan Guaido to write additional letters both to British prime minister Theresa May and the BoE’s governor Carney, claiming that Venezuela’s Maduro aimed to sell the BCV gold. “I am writing to ask you to stop this illegitimate transaction” said the Guaido letters, according to Reuters.  Remarkably, Guaido’s letter to Thersea May was his first letter ever to a foreign head of government, and shows the desperation of the US-UK forces to block access to this 31 tonnes of gold. Who said gold was just a pet rock?

On 28 January, Britain’s Foreign Office also entered the meddling, when Foreign Office minister Alan Duncan, with a straight face, told the British parliament in a parliamentary debate that the fate of the 31 tonnes of gold:

“is a decision for the Bank of England, not for government……It is they who have to make a decision on this.”

Duncan conveniently forget to mention that “top U.S. officials, including Secretary of State Michael Pompeo lobbied his UK counterparts” (i.e. Duncan) to help cut off Venezuela’s overseas assets. Duncan’s comments can be read on Hansard here, and a Bloomberg summary is here. So the British government is fully involved in blocking the BCV gold withdrawal request from the Bank of England but pretends that its an independent decision from the Bank of England – which itself has been stalling on the withdrawal request for months now.


Troops guarding central bank of Hungary’s gold repatriated from London

Conclusion

In all of this saga, perhaps the most amusing aspect is how any central bank now thinks that the Bank of England and London Gold Market are free from political risk and that London is somehow still a secure and safe place for central banks to store gold bars and to trade gold bars.

Back on the 30 January 2012, when the last shipment of gold came back into Caracas on the instruction of former Venezuelan president Hugo Chavez, the then BCV head Nelson Merentes noted that:

“gold stored in BCV [in Caracas] will reach 86% of the total while the rest, about 50 tonnes, will stay in the banks in which the Republic needs to maintain open accounts for international financial operations.”   

Merentes was of course referring here to the Bank of England vaults, where the BCV left 4,089 Good Deliver bars in storage when it repatriated another 12,819 Good Delivery bars to Caracas. These 4,089 Good Delivery gold bars at the Bank of England’s vaults totaled approximately 50.8 tonnes. Fast forward exactly 7 years later and it’s laughable that the Venezuelan gold that was left in London for international financial operations has been blocked by the very custodian that was supposed to be minding that gold on behalf of another central bank.

In the same vein, all of the smug central bankers around Europe who countered calls for their nations’ to repatriate gold from London with the argument that it was being safely held in an international trading center, will now have to backtrack on their claims that the Bank of England vaults are free from political and confiscation risk.

To cite just a few, Germany’s Bundesbank has 432 tonnes of gold stored in London which it claims is stored there “to be able to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.

The Austrian central bank keeps about 84 tonnes of gold at the Bank of England in London and 56 tonnes in Zurich, which it justifies at these locations since “different storage locations helps the Austrian central bank reduce concentration risk, while still being able to use gold in the gold markets of London and Zurich should the need arise.”

The Bundesbank also claims that

“the part of the Bundesbank’s gold reserves which is to remain abroad could, in particular, be activated in an emergency. Therefore one part will remain… in London, the world’s largest trading centre for gold.

In the event of a crisis, the gold could be pledged as collateral or sold at the storage site abroad, without having to be transported. In this way, the Bundesbank could raise liquidity in a foreign reserve currency.”

The Central Bank of Hungary now looks to have been shrewd when it purchased 28.4 tonnes of gold at the Bank of England last October, and immediately repatriated all of this newly bought gold back to Budapest, and in an instant ring-fenced that gold from confiscation and political interference at the now compromised Bank of England. With many governments and nations of myriad political systems and styles holdings gold in the Bank of England vaults, some of these central banks must at least be wondering if its now time to get their gold out of London.

In a short space of time, the Bank of England reputation’s as an impartial and safe location for the storage and trading of gold looks to have been irreversibly damaged.

This article was originally published on the BullionStar.com website under the title “Bank of England tears up its Gold Custody contract with Venezuela’s central bank”.

end

This continues on from last week where Macleod states that trade wars and increases in tariffs will only add to the trade/current account deficit

(courtesy Alasdair Macleod)

Alasdair Macleod: Trade wars — a catalyst for economic crisis

 Section: 

7:50p ET Thursday, January 31, 2019

Dear Friend of GATA and Gold:

GoldMoney research director Alasdair Macleod argues tonight that trade wars will weaken the U.S. dollar by reducing the flow abroad of dollars that have been recycled into U.S. Treasury instruments.

Macleod writes: “The dollar is likely to face a developing problem. It is already becoming evident that surplus dollars arising from the slowdown in international trade are shifting out of the dollar into other currencies and gold. …

The dollar’s bear market appears to be resuming after completing an eight-month counter-trend consolidation. Given record levels of foreign ownership of dollars and dollar investments, further declines in the dollar could easily trigger currency liquidation, making it impossible for the U.S. government to continue to fund budget deficits from foreign investors.”

Macleod’s analysis is headlined “Trade Wars — A Catalyst for Economic Crisis” and it’s posted at GoldMoney here:

https://www.goldmoney.com/research/goldmoney-insights/trade-wars-a-catal…

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

* * *

 a proven accounting identity to show that the end result of President Trump’s trade tariffs would be to increase the trade deficit, assuming there is no change in the savings rate. The savings rate is important, because if it does not change, then the budget deficit must be financed by any combination of three variables: monetary inflation, the expansion of bank credit, or capital inflows. This is captured in that equation, where the trade balance is the balance of payments, thereby including capital flows as well as goods and services:

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

It assumes the economy is working normally, and as we shall see, there is no major economic contraction or systemic crisis.

This article explores the implications of the relationship between the twin deficits in the context of the current situation for the United States, which may or may not be on the edge of a significant economic retrenchment. It looks at the detail of how trade tariffs act on the economy at the current stage of its credit cycle and the implications for the economic outlook and for monetary policy. It examines the problem through the lens of sound economic theory, but empirical evidence is invoked as well for confirmation.

The empirical evidence

Looking at history, we find that the effect of tariff increases has depended on the stage of the credit cycle. The best clearest examples are the tariffs introduced after the First World War (the Fordney-McCumber tariffs of 1922) early in the credit cycle, and the Smoot-Hawley Tariff Act of 1930 at the end of it. On the face of it, Fordney-McCumber had little effect, while Smoot-Hawley, it is generally agreed, had a significant effect. Of course, this is in the context of a US-centric viewpoint.

The Fordney-McCumber tariffs were introduced early in the US’s credit cycle. At that time, the US economy still had the legacy of wartime production, whereby imported goods and agricultural products were minimal, having been virtually eliminated by wartime economic planning. The impact of tariffs on the US’s domestic economy was therefore barely relevant to the economic situation. Consequently, unlike the European economies which had been ravaged by war, US agricultural and industrial production were both higher in 1920 than they had been in 1913, the year before the outbreak of war. The effect on Europe was another matter.

European economies found themselves needing dollars to pay reparations (in Germany’s case) and to repay war debt in the case of the Allies. US Tariffs made it extremely difficult for the Europeans to earn those dollars. A number of European economies collapsed into hyperinflation as governments continued the wartime practice of money-printing to finance themselves and service wartime obligations.

Another factor affecting America was the collapse of agricultural prices from inflated wartime levels. By 1921, wheat had collapsed from $2.58 a bushel to 92 cents and hogs from 19 cents per pound to under 7 cents. Tariffs did not help farmers, because at that time, they depended on export markets to a significant degree. And when other countries introduced or increased their tariffs against agricultural products as a response to US tariffs, they proved to be wholly counterproductive for US farmers.

Of course, tariffs were not the sole problem for America’s farmers. Rapid mechanisation increased Canada’s wheat yields, the Argentine was increasing beef production and Cuba exporting large quantities of sugar. Consumers were benefiting from catastrophically lower prices despite tariffs. Other than the pain faced by producers, pain which in free markets is only alleviated by redeploying economic resources away from overcapacity in agriculture, the overall economic effect of the Fordney-McCumber tariffs on America was not significant.

Smoot-Hawley was different. Congress voted in favour of it on 31 October 1929, and the stockmarket clearly saw it coming. The Wall Street Crash commenced on Black Thursday, 24 October, when the market fell 11% that day, before recovering most of the fall. Black Monday followed, when the market fell 13%. By the close on Tuesday 29 October the market had lost over 34% in just fifteen calendar days.

At today’s stock prices, that would be a loss of over 8,000 Dow points. The stockmarket continued its fall to a low on 13 November of 198.7 on the Dow, and after rallying for six months entered a pernicious and continual bear market to a final low of 41.22 on 8 July 1932.

It is always a mistake to attribute a market failure to a single cause: the only certainty was the market fell. However, the importance of the Smoot-Hawley vote to the stockmarket is often missed by economic historians.

The difference between late-1929 and today perhaps, is that Congress voting for it then was a definite event, whereas Trump’s tariffs are progressing as a fluid mixture of bluff and fact. Another key difference was the dollar’s gold exchange standard of $20.67 to the ounce. So long as the exchange rate was defended, a slump would certainly lead more dramatically to widespread bankruptcies. Markets therefore had to discount the enhanced risks from trade protectionism to the economy more immediately compared with today’s fiat currency economy, when it is assumed future investment risk will be ameliorated by monetary expansion.

Pursuing this line of thought is unlikely to lead us to a definite conclusion. A more fruitful approach is to look at the effect of tariffs and trade protectionism in the context of the credit cycle. We have established from our examination of the 1921 Fordney-McCumber tariffs that early in the credit cycle trade protectionism had a limited impact on financial markets and the economy. It stands to reason that an economy floating on a tide of money and credit is in a different position, and more vulnerable to disruption from upsetting events such as the introduction of tariffs.

Adverse changes in trade policy at any time are an upset to market assumptions, and it is clear from both Smoot-Hawley and common sense that Trump’s trade interventions today are a serious spanner in the works of highly valued markets. That is tantamount at the minimum to a claim that Trump has upset the speculators. This is evidently the case, but to understand why Trump’s trade protectionism should be taken more seriously, we need to examine in greater detail the flows implied in the equation at the beginning of this article linking the two deficits.

Why external trade has become central to the whole US economy

Since the oil shocks of the early 1970s, the US has relied on foreign holders of dollars to accumulate US Treasuries issued to finance budget deficits. That recycling of dollars earned by foreigners selling more things to America than America buys from foreigners has through trade imbalances allowed the US Government to run mounting budget deficits.

The Americans have become used to foreigners having no credible alternative to reinvesting their accumulating dollars. However, we can now see that the dollar hegemony behind this proposition is being eroded by China and Russia, acting as the powers which are increasingly directing Asian trade flows. Clearly, as their determination to do away with dollars bears fruit, instead of currently held dollars remaining invested they will be surplus to trade requirements and sold. So far, they have been bought by other foreigners, which is why we see China’s holdings of US Treasuries decline, while those of other foreigners increase, and why Russia’s disposal of cash dollars earned through energy sales has little apparent effect on the exchanges. Meanwhile, the US Government has managed to fund itself without a critical increase in borrowing costs.

This cannot continue ad infinitum, because relative to the volumes of trade concerned and the size of the US economy, there are already large quantities of dollar balances and dollar investments accumulated in foreign hands, which on the last available figures at over $22tn exceed US GDP of around $20tn.

The failure of American trade policy is to not recognise the consequences of upsetting what has become a very delicate balance in capital flows. By imposing aggressively protectionist policies, the Trump presidency has set back cross-border trade significantly, reducing the future availability of dollars from non-domestic sources to fund the budget deficit. Furthermore, US efforts to restrict inward commercial investment by China muddy these waters further.

On these grounds alone, we can see that attempts to restrict Chinese imports are cutting off a vital source of future finance for the US Government. Yet, the accounting identity that explains the twin deficit phenomenon tells us in the absence of an increase in the savings rate the trade deficit will continue. Furthermore, due to tax cuts the budget deficit is still increasing at this late stage of the credit cycle, and an emerging slowdown in the rate of GDP growth tells us it will increase even more rapidly than currently forecast.

Therefore, American protectionist policies risk destabilising the market for US Treasuries, which have increasingly relied on foreign buyers recycling their surplus dollars. The question then arises as to what happens if a contraction in international trade develops out of the current slowdown.

The ending of the dollar’s hegemony

The dollar is likely to face a developing problem. It is already becoming evident that surplus dollars arising from the slowdown in international trade are shifting out of the dollar into other currencies and gold. The following chart of the dollar’s trade weighted index illustrates the position.

end of jan
The dollar’s bear market appears to be resuming after completing an eight-month counter-trend consolidation. Given record levels of foreign ownership of dollars and dollar investments, further declines in the dollar could easily trigger currency liquidation, making it impossible for the US Government to continue to fund budget deficits from foreign investors.It appears this is a periodic problem, first encountered when the dollar devalued in 1934, and then in the 1960s when the gold pool failed. This time, with the dollar being unbacked by gold, there is little to stop the dollar’s exchange rate falling as cross-border capital is repatriated to their currencies of origin or into gold.A secondary effect of today’s trade policies has been to interrupt the Fed’s monetary normalisation, leading to what the Fed hopes is just a temporary pause in the process. This assumes the banks are not going to become more risk-averse and is where a contraction in international trade could disrupt the expansion of bank credit, upon which financial markets in particular have become so reliant. How this might occur is an important question that should be addressed.

How contacting trade contracts bank credit

To understand the mechanisms of how changes in the trade balance can affect the level of bank credit, we must first explain why in the absence of a change in savings, a budget imbalance leads to a similar trade imbalance.

Let us assume a government is running a budget deficit. The deficit represents excess spending over tax and other incidental income and requires to be financed. If the government issues bonds, the extent to which they are subscribed to by members of the public, their pension funds and insurance policies, is not inflationary financing, merely diverting capital resources from other investments. If the government issues bonds that are subscribed to by banks, then they are financed through the expansion of bank credit, and unless that credit is withdrawn from other bank customers, it is inflationary. Lastly, the deficit may be financed by the central bank, directly or indirectly buying government bonds and bills. This is also inflationary.

As the government spends the proceeds of these bond issues, to the extent they are not financed by private sector savings they put extra currency into circulation. This extra currency ends up mostly in the hands of consumers through welfare payments, as well as earnings and payments by the government for goods and services. But given there is a degree of inelasticity between the supply of extra goods and services and the inflation-fuelled demand for them, it takes time for markets to respond to the inflationary demand. Consequently, imported goods and services rise to fill in the gap, the more so because they are unaffected, at least initially, by price pressures arising from the monetary inflation.

In effect, it is the expansion of money and credit that emanates from covering a budget deficit, assuming no change in total savings, that leads to a trade deficit. What happens to the exchange rate depends on whether the currency proceeds arising from imports are reinvested or simply sold on the foreign exchanges. Balance of payments figures are designed to capture the net position between trade and capital flows, and it is these figures that are used in the deficit relationship.

All this assumes a reasonable degree of economic stability. That is to say, trade continues without severe disruption. It is not the case at the end of a long credit cycle, when capital misallocation in the private sector has become so great that sooner or later market forces emerge to trigger a correction. It is at that point obstacles to balance of payment flows are likely to have the greatest impact, setting off and intensifying an unwinding of the accumulated distortions in the domestic economy.

This was the reason the events following the passing of Smoot-Hawley were so different from those following Fordney-McCumber. The approval of key provisions in Smoot-Hawley by Congress in October 1929 crashed Wall Street in the preceding fortnight, and when President Hoover signed it into law the following June, not only did Wall Street continue to fall for a further two years, but retaliatory action from other nations ensured the ensuing global economic disaster worsened and America’s exports in turn suffered badly.

We are at the same point in the credit cycle, which has run for a similar time as that of the 1920s, and we have an analogous rise in American protectionism. Complacency is common to both. Irving Fisher, the renowned American economist, reflected the super-optimism before the crash of 1929 when he stated the stock market had reached a permanently high plateau. Even Keynes and Winston Churchill were taken in and lost money.

They were far from being alone, and the prospect of a substantial fall in stocks today is widely assumed to be unjustified scaremongering. When he was wiser after the event, Fisher went on to define the vicious relationship between falling collateral values and contracting bank credit. Insofar as today’s economists claim it was the cause of the depression’s severity, they are incorrect. The cause was the monetary and speculative excesses that had built up before the crash. If anything, the imbalances and misallocation of capital today should be a far greater concern than they were in 1929.

We know that a feature of the post-Smoot-Hawley events was the unwinding of malinvestments, and the severe contraction of outstanding bank credit that accompanied it. Thousands of banks went under. A repeat of these events today is wholly unexpected, with even the bears thinking the economy can be rescued by just lowering interest rates and reverting to quantitative easing. However, a proper and thorough examination of the risks today reveals that a slowdown triggered by trade protectionism will be almost impossible to prevent escalating into a full-blown slump.

The central question in any analysis of future economic and monetary prospects has to be what will happen to the twin deficits. We know as surely as the sun will rise tomorrow and every day thereafter that as an economy moves from a stockmarket fall towards a slump, budget deficits will rise inexorably, particularly in the welfare states. Yet, with demand collapsing in the private sector, trade deficits cannot increase in lock-step with budget deficits. The only way the national accounts can be balanced in a fiat-money economy is for there to be an offsetting contraction in bank obligations to the private sector. A contraction of bank credit in this event will be impossible to stop, and it matters not how well capitalised a bank is for regulatory purposes. Fractional reserve gearing will ensure that widespread bank insolvencies and bankruptcies ensue.

It seems increasingly likely that spurred on by falling stockmarkets and dollar weakness, a foreign liquidation of an overhang of dollar cash and assets will follow. If so, the dollar will fall and in accordance with Irving Fisher’s analysis, a self-feeding implosion of private sector bank lending will then take place. Whether other currencies fall with the dollar is immaterial: the fall will be measured in its purchasing power and credibility measured in gold.

The difference from the experience of the events that led into the Great Depression is today’s money is not backed by gold. Inflationists believe that the problems of the 1930s could have been solved if the gold standard had been abandoned, or if excess gold reserves had been monetised. They argue that similar conditions today can be avoided by allowing the currency to weaken, and therefore to prevent prices from sliding.

Monetary policy today is and surely will continue to be guided by these inflationist assumptions. Central banks, led by the Fed, the ECB, Bank of Japan and Bank of England will coordinate aggressive money expansion in a vain attempt to prevent a slump developing. And while the quantity of outstanding bank credit contracts, it will be more than made up for by the expansion of central bank money.  Today’s central bankers are unquestionably on the same course set by Rudolf Havenstein, president of the Reichsbank during Germany’s hyperinflation of 1920-23.

Havenstein was imbued in a system that financed itself predominantly through money-printing. Today’s central bankers are not much different, believing that inflation of the money quantity must be a continuing, and if necessary accelerating process.

Conclusion

Pre-Keynesian economic theory, refined by the Austrian school, identified the credit cycle as the primary cause of periodic booms and busts. To this we can add a sporadic cycle of trade protectionism, which at the wrong moment can have a devastating effect. While it is impossible to satisfactorily link cause and effect, there is little doubt that it was the combination of Smoot-Hawley tariffs and the end of an inflation-fuelled boom that devasted the world economy in the 1930s.

This article has shown that similar conditions exist today. We must hope that they don’t repeat, but it would be foolish to ignore the possibility.

The obvious difference is currencies are now unbacked, giving governments an initial policy choice. They can let commercial banks go bust, as happened in large numbers in the 1930s and cut government spending to preserve a degree of currency stability. Or they can trash their currencies in an attempt to protect jobs and the state. We can be sure in advance the course that will be taken.

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.

Quite an interesting email to us from Nicholas:

Good Morning Bill/Harvey (from Africa)

Yesterday I wrote a note on the rise of the PetroYuan. The other side of the coin is the health, or otherwise, of the PetroDollar. This morning the European Tour tees off for the second round of its inaugural full tournament in Saudi Arabia. Last year the BBC broke ranks and published an article (with a picture) concerning current crucifixions in that Kingdom. On Tuesday, the BBC golfing editor published an editorial that was extremely critical of named leading UK golfers who were playing in this tournament, thus indicating that they were oblivious to the human rights record of the Saudis. Is it business as usual for the PetroDollar if leading golfers are admonished by a bastion of MSM for just playing golf in that country? Talking of countries behaving badly, I hear that New York and at least one other state are legalizing full term abortion. I was talking to someone from the baby organ harvesting industry, and she said that the product is far superior when harvested one minute after birth, instead of one minute before birth (now quite legal). She said that her industry was working on a business model based on the premise “what is just two minutes between friends’’.

I think it was Putin who said that it was very difficult to deal with Americans who confuse Austria with Australia. Well ‘’down under’’ (that would be a reference to Australia if you are unsure), the tarmac on the roads is melting (apart from other catastrophes).The actuaries (and the politicians) balance out the prevailing +45 degrees Celsius in Australia with the frozen Niagara Falls and declare ,on average everything is normal and awesome. Chris Martenson was spot on in his interview with Greg Hunter, just before the announcement of the Fed capitulation, with his succinct message: ’’this time it is truly over, there is no way back’’. I read a headline that suggested that this new kid on the block, Alexandria Ocasio Cortez is one of the few (only?)  politicians that appreciates that humanity is on the cusp of extermination. The headline quoted her statement of “12 years to the midnight hour’’ but actually Dane Wigington says it is just eleven years, but congratulations to her for referencing the consequences of demonic climate engineering. Imagine, sometime in the near future when Alexandria becomes more powerful and is in a position to print even more trillions to fund all her ideas on free stuff. Paul Krugman is already penciled in are her senior financial advisor and just envisage , no matter how many fiat ameros are created, his perpetual criticism that it is not enough, it is simply not enough.

Accumulate and hold onto your physical gold as TEOTWAWKI bears nigh. If you think the market has got things right, please try this test. Hold 6 single ounce gold coins in one hand and hold one of those green containers of 500 American silver Eagles in the other hand and ask yourself whether current pricing equivalence intuitively seems remotely fair. Don’t be stupid-it is impossible to hold 500 Eagles in just one hand, but did you know that?

Regards

Nicholas

end

Silver eagle sales jump in January

(courtesy Steve St Angelo/SRSRocco )

Silver Eagle sales jump in January

(SRSRocco) – As the demand for precious metals shows some life once again, sales of the U.S. Mint Silver Eagles jumped in January. Not only have Gold, and Silver Eagle sales increased, so have the precious metals prices. In the past two months, gold and silver prices have gained 7% and 11% respectively. Today, gold reached $1,320, while silver topped $16.

While January sales of Silver Eagles fell to a low last year at 3.2 million oz (Moz), down from 5.1 Moz in 2017, they picked up this month surpassing 4 Moz. According to the U.S. Mint’s most recent update, Silver Eagle sales totaled 4,017,500 versus 3,235,000 last year:

————————

end

We now have total silver supply for 2018 at 26,000 tonnes or 835.9 million oz.  This includes scrap supplies from silver melting of around 180 million oz.  Thus supply form the mines are decreasing coming in at 656 million oz.  Demand is just over 1.04 billion oz and thus the deficit is again at around 200 million oz.

(courtesy Bloomberg)

Silver Shortage Promises to Boost Price in 2019

(Bloomberg) — Think of it as a potential silver lining for investors. A deepening shortage is promising to help boost prices as haven demand for the precious white metal rebounds in 2019.

Silver surged 9.1 percent in December, its biggest monthly gain in almost two years. The commodity has benefited as a persistent trade war, weakening dollar and prospects of slower pace of U.S. rate increases drove haven demand for precious metals. The price outlook is improving at a time when demand for gold’s cheaper cousin is poised to top production for a seventh straight year.

With miners avoiding new projects amid global economic uncertainty, the price could spike as high as $17.50 an ounce from about $15.87 now, according to a Bloomberg survey of 11 traders and analysts. About 26,000 tons of silver is expected to be produced this year, according to estimates by Robin Bhar, a London-based analyst at Societe Generale SA. That would be the least since 2013, and means global physical demand will again top output.(Harvey:  26,000 tonnes = 835.9 million oz./they also include scrap as supply./)

 

“Supply growth has started to slow, more than for any other precious metal,” said John LaForge, the head of real assets strategy at Wells Fargo Investment Institute.

What do all the headlines mean for future demand? As technical analyst Michael Oliver told mining analyst Jay Taylor in a recent interview:

Even [financial advisors] who don’t like gold are getting calls from clients asking “how come we don’t have any gold in our accounts? It’s the best performing asset for the last six months.” Once non-gold people realize it’s the best performing asset out there, they’ll be forced into it, which will widen the investor base for gold mining stocks. If just a small part of what’s in the broader stock market flowed into gold that’s a huge rush of money for such a small sector. The gold and silver miners will probably be the best place on the planet.

-END-

Saw this from expert John Brimelow:  Gold smuggling into India is set to increase 25 to 50% this year owing to the high prices and import duties of 10%

(courtesy scrap Register)

Gold smuggling into India liable to increase 50% in 2019

MUMBAI (Scrap Register): India is likely to witness a sharp increase of 25-50 per cent in the entry of smuggled gold in 2019 from the previous year owing to the high price of the precious metal and import duty of 10 per cent imposed by the government.

Gold prices have risen 10 per cent to more than Rs 33,000 per 10 gram since Dec 28, 2018.

The volume of smuggled gold may increase to 150-180 tonnes this year from around 120 tonnes estimated to have entered the country last year.

In the B2B (business-to-business) segment, people are preferring to deal in cash rather than cheque, which is an indication that smuggling is going up. The price difference between cash and cheque in the spot market is around Rs 50,000 per kg of gold.

Demand is muted due to high price, the industry had expected the momentum to pick up from December 15 with the onset of the wedding season. Consumers are waiting for Gold prices to cool off, which does not seem likely to happen in the near future.

-END-

An excellent reason not to invest in cyrptocurrencies:  Canadian exchange Quadriga is seeking bankruptcy protection after the mysterious death (from Crohn’s????) of its founder, Gerry Cotton.   He seems to have died without telling anyone the keys! to open the cold storage wallets

(courtesy zerohedge)

Crypto Exchange Seeks Bankruptcy Protection After Founder’s Mysterious Death

More than ten years after the birth of bitcoin, the crypto industry remains riddle will con artists, scammers and fraud. And sometimes, businesses that for years appeared to be legitimate enterprises will suddenly be outed as long-running frauds – a la Bernie Madoff – when they hit a speed bump.

Quad

For Canadian crypto exchange QuadrigaCX, that moment of truth apparently arrived earlier this month when its CEO Gerry Cotten died suddenly from complications related to Crohn’s disease . According to a statement from the company, he died while traveling in India where “he was opening an orphanage to provide a home and safe refuge for children in need.”

QuadrigaCX@QuadrigaCoinEx

We’ve posted an update regarding the latest on our company operations: https://www.quadrigacx.com

Since his death, 115,000 customers of the exchange have been struggling with Mt. Gox-style “liquidity issues” as those trying to withdraw their funds have suddenly found it extremely difficult – if not impossible – to do so successfully. Finally, on Thursday, Quadriga’s board released a statement announcing that it would be filing for bankruptcy protection. In the statement, the company said the filing was prompted by an inability “to locate and secure our very significant cryptocurrency reserves held in cold wallets.”

An application for creditor protection in accordance with the Companies’ Creditors Arrangement Act (CCAA) was filed today in the Nova Scotia Supreme Court to allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers. The Court is being asked at a preliminary hearing on Tuesday February 5 to appoint a monitor, Ernst & Young Inc., as an independent third party to oversee these proceedings.

For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.

The implication is, of course, that Cotten, a sickly young man with a chronic illness, was the only person who had the key to the exchange’s cold storage, and that he took this information to his grave.

This would be easy to overlook if the sum was relatively insignificant. But according to an article in CoinDeskQuadrigaCX owes its clients a total of $190 million.

The exchange holds roughly 26,500 bitcoin ($92.3 million USD), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million, according to the affidavit.

It’s unclear what percentage of these holdings was kept in ‘hot’ wallets as opposed to the cold storage wallets. But adding another layer of intrigue, Cotten’s widow reportedly told a Canadian judge that her deceased husband held “sole responsibility for handling the funds and coins,:” and that the remaining team members have had “no luck” accessing the exchange’s coins.

And as users on Reddit swiftly pointed out, something about QuadrigaCX’s story doesn’t add up, leading some to ponder whether the whole business was one big scam.

On Quad’s website they write they can’t locate or access their cold wallets. The unstated suggestion is that the private keys were lost when the CEO died.

But that CEO wasn’t hit by a car. Allegedly he died from “complications related to Crohn’s Disease”. So while he was on his deathbed for all that time, he didn’t once think to tell someone the private keys? Highly unlikely.’

I’d also love to know the name of the “orphanage” he was supposedly building in India, and/or the name of even one independent witness who saw him building it.

QuadrigaCX made headlines last year when it challenged CIBC for refusing to process transactions involving Quadriga. However, during that time, stories like this one suggested that the fault lay with Quadriga, which appeared to be deliberately delaying – or outright refusing to process – customers’ transactions, leading money to seemingly “vanish into thin air.”

Given this checkered history, we certainly could empathize with those harboring a more conspiratorial viewpoint might seriously consider whether Cotten may have absconded with his clients’ money before faking his own death in a foreign land.

end

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

i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.7354/

 

//OFFSHORE YUAN:  6.7469   /shanghai bourse CLOSED UP 33.66 PTS OR 1.30%

 

HANG SANG CLOSED DOWN 11.73 POINTS OR 0.04%

 

 

2. Nikkei closed UP 14.90  POINTS OR 0.07%

 

 

 

 

 

3. Europe stocks OPENED ALL RED

 

 

 

 

 

 

 

/USA dollar index FALLS TO 95.51/Euro RISES TO 1.1466

3b Japan 10 year bond yield: FALLS TO. –.01/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.92/ 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:: 53.73 and Brent: 60.81

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.15%/Italian 10 yr bond yield DOWN to 2.76% /SPAIN 10 YR BOND YIELD DOWN TO 1.22%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.61: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 3.97

3k Gold at $1321.60 silver at:16.00   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 8/100 in roubles/dollar) 65.47

3m oil into the 53 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 108.97 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 0.9933 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1391 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 FALLING to +0.18%

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 2.63% early this morning. Thirty year rate at 2.99%

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

6.  TURKISH LIRA:  UP  TO 5.2122

 

Futures Flat On Lack Of Trade Progress, Global Econ Slump; Amazon Slide Hits Nasdaq

Following the best month for global markets in seven years, February has started off with a whimper as S&P were following the lack of tangible progress in US-China trade talks, Nasdaq futures sliding after disappointing guidance from Amazon, a European rally fizzled dragged down by banks and dismal German and Italian PMI data, and mixed Asian markets after the worst Chinese Caixin PMI in 3 years.

While stocks soared this week after the Fed all but abandoned plans for further rate hikes, and on optimism that a U.S.-China trade deal might be on the cards, the lack of any actual progress in trade negotiations coupled with the lowest Caixin/Markit index of Chinese manufacturing since February 2016, added to a growing list of economic readings indicating slowing global growth.

On Thursday, technology shares gained thanks to solid corporate reports, though a disappointing sales forecast from Amazon.com has now curbed optimism. On the trade front, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer head to China in mid-February.

Meanwhile, Washington trade negotiations, that had been tipped as “determinative”, in the end broke up with an agreement to keep talking. Underwhelming news that China plans to buy substantially more American agricultural and energy goods failed to spark buying euphoria in either soybeans or global stocks.

MSCI’s World Index came off its highest level since Dec. 4 after its best January gain on record when it rose an unprecedented 7.79% on the month. The weak Chinese data also took MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.2%, though that followed a 7.2% gain in January. The Australian dollar, the best barometer of investor sentiment towards China, tumbled half a percent.

Europe’s mood was only slightly better as several strong earnings reports helped offset the Chinese survey, providing an early boost to Europe’s STOXX 600 index, although while most European bourses were slightly positive to start, the rally fizzled as banks slumped, and it wasn’t just the aforementioned Deutsche Bank: Spain’s CaixaBank and Sabadell fell Friday after they released fourth-quarter numbers. Jefferies called CaixaBank’s earnings “messy,” citing the one-time items that pushed profit below estimates. At Sabadell, provisions weren’t as severe as expected, but analysts said its business in the U.K. looked weak. CaixaBank slumped 7.3% and Sabadell 6%, making them the biggest decliners on the Stoxx 600 Banks Index.

Separately, PMI prints for Italy and Switzerland came in below expectations, and even though Germany’s was just below expectations, it still posted the first contraction in over 3 years.

Friday’s market slump followed another strong day for US markets, when stocks also gained after U.S. President Donald Trump said he would meet Chinese President Xi Jinping soon to try to seal a comprehensive trade deal as the top U.S. negotiator reported “substantial progress” in the talks. Beijing’s trade delegation said the talks made “important progress”, China’s official Xinhua news agency reported although neither side was willing to provide details, suggesting that little – if anything – was actually achieved.

The previously upbeat mood was also chilled somewhat by White House insistence that March 1 was a hard deadline for a deal, a failure of which would lead to an increase in U.S. tariffs on Chinese goods.

“Analysts mostly remain deeply skeptical that a genuine trade deal can be done on this time frame,” Commonwealth Bank of Australia economists wrote. “We are less pessimistic since these negotiations are being conducted by senior politicians, not by trade bureaucrats,” they added. “Both sides also have an incentive, and arguably a growing incentive, to get a meaningful deal done.”

Traders now turn their attention to Friday’s monthly American labor report amid an ongoing earnings season that’s given investors mixed signals.

In FX, the Bloomberg dollar index moved in a tight range before today’s January payrolls data, while Treasuries were little changed. The euro rose as core inflation in the area beat estimates, shrugging off PMI misses in Germany and Italy. On Thursday, the euro slumped when Bundesbank President Jens Weidmann painted an unusually bleak picture of the German economy, saying the slump will last longer than initially thought. The pound led G-10 currency losses amid euro-sterling buying and after U.K. manufacturing data came in weaker than expected. Bunds edged lower, leading core and semi-core bond declines.

In commodities, oil prices were subdued as the China data offset signs major exporters were reducing output in line with a pact to cut supply. Gold prices hovered just short of nine-month highs supported by the fall in bond yields and expectations for a softer dollar. Spot gold stood at $1,318.41 per ounce, having touched a top of $1,326.30.

Key events include the employment report, manufacturing PMI readings. Exxon Mobil and Chevron are due to report earnings

Markets Snapshot

  • S&P 500 futures down 0.03% to 2,703.75
  • STOXX Europe 600 up 0.3% to 359.69
  • MXAP down 0.09% to 156.50
  • MXAPJ up 0.01% to 511.47
  • Nikkei up 0.07% to 20,788.39
  • Topix down 0.2% to 1,564.63
  • Hang Seng Index down 0.04% to 27,930.74
  • Shanghai Composite up 1.3% to 2,618.23
  • Sensex up 0.7% to 36,500.77
  • Australia S&P/ASX 200 down 0.03% to 5,862.83
  • Kospi down 0.06% to 2,203.46
  • German 10Y yield rose 1.1 bps to 0.16%
  • Euro up 0.1% to $1.1459
  • Brent Futures down 1.9% to $60.71/bbl
  • Gold spot down 0.1% to $1,321.48
  • U.S. Dollar Index down 0.1% to 95.52
  • Italian 10Y yield fell 1.0 bps to 2.233%
  • Spanish 10Y yield rose 1.4 bps to 1.21%

Top Overnight Headlines

  • China promised to “substantially” expand purchases of U.S. goods after the latest round of trade talks, and both sides planned further discussions to reach a breakthrough with only a month to go before the Trump administration is set to ratchet up tariffs
  • Europe’s primary bond market racked up a record 221.7 billion euros of sales in January, allaying fears that the European Central Bank’s wind-down of stimulus measures would hammer issuance; Issuance jumped 18% versus January 2018, partly because of a rush to get covered-bond sales and sterling public- sector deals done before looming risks such as Brexit
  • Ministers in Theresa May’s government are setting out to woo members of the opposition Labour Party, in the hope that they’ll provide enough votes to get her Brexit deal through
  • Japan’s Government Pension Investment Fund lost 9.1%, or 14.8 trillion yen ($136 billion), in the three months ended Dec. 31. The decline in value and the rate of loss were the steepest based on comparable data back to April 2008
  • Despite a recession in Italy and a significant loss of economic momentum in Germany, the ECB president isn’t showing much urgency to reverse course on a stimulus-withdrawal path that was originally supposed to include an interest-rate increase late this year, according to Oxford Economics
  • There’s a gold rush on as investors pour more and more funds into bullion. Global holdings in exchange-traded funds surged 70.6 metric tons in January, bringing assets to the highest in almost six years as prices rally

Asian equity markets traded cautiously as disappointing Chinese data clouded over the momentum from Wall St. where most major indices finished positive and the S&P 500 posted its best January performance in over 3 decades, with sentiment driven by earnings and progress in US-China trade discussions. ASX 200 (Unch.) and Nikkei 225 (Unch.) both opened higher amid broad optimism following the trade talks and with corporate updates dominating news flow in Japan, although China slowdown concerns later pressured both indices off intraday highs. Hang Seng (Unch.) and Shanghai Comp. (+1.3%) traded indecisively after Chinese Caixin Manufacturing PMI printed its weakest in around 3 years. However, the mainland has kept afloat on trade-related hopes and after another liquidity effort by the PBoC ahead of the Lunar New Year week-long market closure, while Barclays also speculate the PBoC could lower interest rates as soon as today due to the weak data. Finally, 10yr JGBs were higher as they continued to track the upside in T-notes in the aftermath of this week’s dovish Fed, and as Japanese yields continued to decline in which 20yr and 30yr JGB yields fell to their lowest since 2016.

Top Asian News

  • India Overshoots Budget Deficit Target for Second Straight Year
  • India Stocks Rally as Budget Offers Tax Bonanza to Consumers
  • Modi Woos Indian Voters With Tax Cuts, Payouts to Farmers
  • Malaysians, Chinese Lead Record Influx of Tourists to Indonesia

Major European equities initially posted slight gains but have since deteriorated into negative territory [Euro Stoxx 50 -0.1%]. The FTSE 100’s Shell (+0.6%) shares strengthened after initially opening in the red as the energy sector is underperforming weighed on by the oil complex. Other sectors are broadly in the green. Other notable movers include, Electrolux (+9.8%) who are at the top of the Stoxx 600 following a revenue beat and the Co’s largest investor supporting their proposed split. JC Decaux (+9.4%) are also at the top of the Stoxx 600, following their earnings. At the bottom of the Stoxx 600 are Caixabank (-7.9%) as their net profit missed expectations. Deutsche Bank (-3.4%) were the mornings most notable earnings release as the Co. shrank for the 8th consecutive quarter, with sources stating that time is running out for the Co. to turn around on its own; making a merger with Commerzbank (-1.2%) or another European bank more likely. Separately Adidas (-2.9%) are in the red following a downgrade at UBS.

Top European News

  • Thyssenkrupp Shares Jump as Major Holders Support Breakup
  • UBS Downgrades Euro Forecasts, Still Sees Room for Appreciation
  • Germany to Forfeit Billions in Carbon Sales With Coal Exit
  • Italian Industry Slump Worsens Outlook for Economy in Recession

In FX, USD The Dollar is pretty evenly split in terms of relative performance against G10 counterparts going into the monthly US jobs data, as the DXY hovers around 95.500 and roughly midway between weekly highs and lows, so far (95.987-157). However, the Buck remains pressured after Wednesday’s dovish Fed and net short positioning for month end, so a bullish/upbeat NFP report is needed to confirm a near term base for the index, and expectations are not skewed to the upside after such a bumper payroll number last time around.

  • GBP Sterling is the clear laggard, and already looking precarious before the UK manufacturing PMI miss. Indeed, the Pound succumbed to accelerated selling once Cable relinquished the 1.3100 handle and Eur/Gbp breached 0.8750, with the former subsequently declining through the 200 HMA (1.3085-90) and testing, but not yet breaking the 200 DMA (1.3045), while the cross got to within a few pips of offers said to be sitting up at 0.8800 before fading.
  • AUD/CAD Also underperforming, albeit to a lesser extent, with the Aud undermined by benign Aussie PPI data and a sub-forecast/even deeper contraction in China’s Caixin manufacturing PMI. Aud/Usd is currently around 0.7260 having almost reached 0.7300 yesterday, while the Loonie continues to meet resistance ahead of 1.3100 and some key chart support just above the big figure following pretty sanguine comments from BoC’s Wilkins on Canadian wages.
  • CHF/EUR/NZD All modestly firmer vs the Usd, with the Franc rebounding from 0.9950+ levels towards 0.9920 and not unduly deterred by weaker than expected Swiss retail sales or headline manufacturing PMI. Similarly, the single currency largely took more bleak Eurozone manufacturing PMIs in stride, before deriving some traction from firmer core inflation and technically a recovery in Eur/Usd of its 100 DMA (1.1441). The Kiwi remains above 0.6900, and perhaps benefiting from the Aud’s demise as the cross retreats back below 1.0500.
  • JPY On a more even keel than major rivals and holding above 109.00 vs the Usd.

In commodities, Brent (-0.1%) and WTI (Unch) are choppy, with prices for both around the middle of a slim USD 1/bbl range; impacted by global growth concerns following the weak Chinese PMI data. In terms of recent news flow, Russian oil product exports from the Port of Tuapse are forecast at 1.128mln tonnes vs. 1.463mln in January. Markets are looking ahead to today’s Baker Hughes rig count, which previously showed total rigs increased by 9 to 1059, with gas rigs up by 9 at 862.  Gold (Unch) is also around the middle of its range, with the yellow metal uneventful mimicking the dollar’s lack of direction ahead of today’s US jobs report. Elsewhere, Glencore have said they see 2019 copper production at 1.54MT, alongside the Co’s subsidiary being told to halt the production of a new system which removes uranium from their cobalt supplies. Separately, US metal importers are reportedly losing hope that the tariff exemptions, which some applied for over 8 months ago, will be approved by the Commerce Department as the US shutdown further delays the ruling.

US Event Calendar

  • 8:30am: Change in Nonfarm Payrolls, est. 165,000, prior 312,000
  • 8:30am: Unemployment Rate, est. 3.9%, prior 3.9%
  • 8:30am: Average Hourly Earnings MoM, est. 0.3%, prior 0.4%; YoY, est. 3.2%, prior 3.2%
  • 8:30am: Labor Force Participation Rate, est. 63.0%, prior 63.1%
  • 9:45am: Markit US Manufacturing PMI, est. 54.9, prior 54.9
  • 10am: U. of Mich. Sentiment, est. 90.7, prior 90.7; Current Conditions, prior 110; Expectations, prior 78.3
  • 10am: Construction Spending MoM, est. 0.2%, prior -0.1%
  • 10am: Wholesale Inventories MoM, est. 0.5%, prior 0.8%; Wholesale Trade Sales MoM, prior -0.2%
  • Wards Total Vehicle Sales, est. 17.2m, prior 17.5m

DB’s Jim Reid concludes the overnight wrap

Welcome to February where we’ve woken up to a few millimetres of snow here in the south of England. This will no doubt ground us to a halt here. Given it’s payroll Friday, it’s the 12 month anniversary of the higher than expected average hourly earnings print that broke the long period of ultra low vol and started the vol quake that saw the VIX trade over 50 just four days later. Back then, the expectation for AHE was 2.6% and it came in at 2.9% (eventually revised to 2.8%). Ironically 12 months later very few people are worried about inflation even though a print of 3.2% is expected today after a higher than expected surprise last month (3.2% vs 3.0% expected). Even the Fed have thrown the towel in and gone full circle in their dovishness. So we’ll see what today brings for the overall release. We’ll preview it in full later.

The last day of January proved in the end to be a decent microcosm of how the record-breaking month played out with US equities extending gains, credit tightening, and bonds rallying across the board. Indeed the tech sector led the charge again as the NASDAQ rallied +1.37% which means the index had 8 days in January with gains of at least 1%. That’s the most in a single month since October 2011. The NYSE FANG index also rose +2.74% which put it up +13.06% in January while the S&P 500 last night finished +0.87%. The index received a boost just before the US close, as USTR Lighthizer spoke positively about the US-China trade talks (details below). In fairness the DOW (-0.06%) did close a bit lower mainly due to DowDupont falling -9.23% following a profit warning. The other big laggards were US large-cap banks, with Goldman Sachs down -2.21% as lower yields weighed on the sector, with the S&P 500 banks index dropping -1.21%.

Indeed it was earnings that really dictated how things played out yesterday. The headliners were Facebook (+10.82%) and General Electric (+11.43%) which rallied by the most in 3 years and 10 years respectively. GE’s 2035 bonds rallied -24.6bps and they are now -128.5bps tighter from their November wides, around the time they got downgraded from A to BBB+ by the major credit ratings agencies. A reminder that it was GE which sparked all the concern about the swelling of the BBB credit market in the US last year.

Elsewhere Charter Communications (+14.19%), AmerisourceBergen (+6.19%), UPS (+4.09%), and Mastercard (+3.54%) deserve honorable mentions too after the market also viewed their latest earnings reports favorably. Much like how we saw companies get punished for small misses in previous quarters, the market has started rewarding companies who appear to be painting a less negative outlook picture.

After the close last night, Amazon beat consensus expectations on the profit and revenue fronts for the fourth quarter. Nevertheless, shares slid over -5% after hours as first quarter guidance was a touch lower than anticipated and international momentum softened surprisingly. To be fair, the stock is still up over 27% since its Christmas Eve though. Futures on the S&P 500 (unch) and NASDAQ (-0.40%) are trading flat and slightly lower respectively.

Overnight in Asia, stocks have fallen back after the China Caixin manufacturing PMI came in below expectations at 48.3 (vs. 49.6 expected), the second consecutive monthly reading below the 50-mark and the lowest since February 2016. The Nikkei (+0.12%), Hang Seng (-0.31%), and the Kospi (+0.06%) all fell after the release, although the Shanghai Composite (+0.77%) continues to climb as no dramas came out of the latest round of trade talks.

Indeed the sound bites trickling out of this week’s US-China trade talks have been on balance positive without necessarily seeing any breakthroughs. Yesterday we heard from President Trump who tweeted that “meetings are going well with good intent and spirit on both sides” however “no final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult posts”. He also suggested that both sides were working towards an agreement by March 1st which is when tariffs on China are due to go up. The WSJ yesterday reported that China are pushing for a Trump-Xi meeting this month, while Bloomberg reported that the Chinese negotiators offered no other major proposals or concessions in this week’s talks. Nevertheless, USTR Lighthizer, one of the more influential and hawkish members of the US administration, said that progress is being made and Chinese Vice Premier Liu He said that hopes to accelerate the timetable, possibly signaling increased confidence. President Trump then said that Lighthizer and Mnuchin will travel to China to continue talks and that have already made “tremendous progress,” though that “doesn’t mean we have a deal” yet. Both sides have released statements overnight. China have said talks went well and they will buy more goods from the US and “will actively respond to US concerns on intellectual property, creating (a) fair market environment”. The US statement was a bit more neutral. So all to play for over the next 4 weeks ahead of the current March 1st deadline for further escalation.

Back to yesterday where, as mentioned earlier, it was also a decent day for credit with cash HY spreads c.-4bps tighter in the US and Europe. EM hard currency spreads were also -2.9bps tighter while bond markets in Europe rallied anywhere from -1.1bps (in Italy – after the country officially entered a technical recession as expected) to -5.9bps lower (in Spain). Treasuries rallied -4.4bps and -4.3bps at the 2y and 10y points of the curve with the curve broadly unchanged while oil traded close to flat.

That move for Treasuries comes ahead of a busy end to the week for data today including the aforementioned first employment report of the year tonight in the US. In terms of what else to expect from the report the consensus is running at 165k for nonfarm payrolls (following 312k in December) while earnings are expected to have risen +0.3% mom which would keep the annual rate at +3.2% yoy as discussed above. Our US economists also expect a 165k payrolls reading however are slightly below market on earnings at +0.2% which in their view would lower the annual rate slightly to +3.1%. However, they also note that if hours worked remain at 34.5 as they anticipate, the payroll proxy for nominal income growth would rise to 5.5% (year-over-year), matching its post-recession high. Therefore they note that in short, while the January employment report may not be as eye-popping as the prior month, it should still be consistent with further tightening of the labour market and strong income growth.

Meanwhile yesterday’s economic data certainly caught the eye. It started with Italy which confirmed a technical recession with its second consecutive negative qoq GDP print (-0.2% vs. -0.1% expected). So that’s now 6 recessions since the inception of the euro for Italy. Contrast that with Australia that leads the developed world pack by not seeing a recession since 1991. Growth for the broader Euro Area was confirmed at +0.2% qoq as expected which leaves the yoy rate at +1.2% and down from +1.6% in Q3.

In the afternoon in the US the Q4 ECI disappointed slightly at +0.7% qoq (vs. +0.8% expected) however given the dovish pivot for the Fed this is perhaps less significant than it previously would have been. More notable was the jump in claims last week to 253k from 200k which was the largest jump since the September 2017 hurricane-impacted month. The report was probably influenced by some transitory factors (the government shutdown affecting DC, the public teachers’ strike in California, weather in the Midwest). Worth watching if these end up being one-offs or not in next week’s data. Also out yesterday was the Chicago PMI which plummeted unexpectedly by -7.1 points – the biggest in nearly four years – to 56.7 (vs. 61.5 expected). That perhaps raises the potential of downside risks to today’s ISM reading in the US. Finally new home sales in November were confirmed as rising a much greater-than-expected +16.9% mom (vs. +4.8 expected).

In terms of the day ahead, this afternoon’s January employment report in the US will almost certainly be the biggest crowd puller. However prior to that this morning we get the final January manufacturing PMIs in Europe where the market will be on close lookout for the sub-50 readings in Germany (49.9 expected) and Italy (48.8 expected) especially. We’ll also get the January CPI report for the Euro Area (no change to the +1.0% yoy core reading expected) while due out in the US is the manufacturing PMI (no change to 54.9 expected), November construction spending (+0.2% mom expected), November wholesale inventories (+0.5% mom expected), January ISM manufacturing (54.0 expected), final January University of Michigan consumer sentiment survey revisions (headline 90.7 reading expected) and January vehicle sales data (17.2m expected). In addition to that, the Fed’s Kaplan is due to speak this afternoon while the earnings highlights include Exxon Mobil, Chevron and Merck.

 

3. ASIAN AFFAIRS

i)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 33.66 PTS OR 1.30% //Hang Sang CLOSED DOWN 11.73 POINTS OR 0.04% /The Nikkei closed UP 14.90  PTS OR 0.07%/ Australia’s all ordinaires CLOSED DOWN .03%

/Chinese yuan (ONSHORE) closed UP  at 6.7354 AS TRUCE DECLARED FOR 3 MONTHS /Oil UP to 53.73 dollars per barrel for WTI and 60.81 for Brent. Stocks in Europe OPENED RED 

//ONSHORE YUAN CLOSED DOWN AT 6.7354AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7469: / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED   : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

 

 

 

i)North Korea//USA/Sweden

 

end

3 b JAPAN AFFAIRS

 

3 C CHINA

i) CHINA/

This is not good at all for China..the engine for growth for the world.  It’s PMI tumbles to a 3 year low..the biggest drop on record down from 49.7 last month to 48.3.  Anything below 50 is contraction.

extremely important..

(courtesy zerohedge)

Yuan Plunges After China Caixin PMI Tumbles To 3 Year Low; Biggest Drop On Record

One day after China’s official manufacturing PMI number printed in contraction territory for the second month in a row, moments ago the Caixin/Markit China manufacturing PMI confirmed that China’s manufacturing sector is effectively in recession, when it tumbled from 49.7 in December to 48.3 (from 51.5 a year ago), its second consecutive month in contraction territory, and missing estimates of a 49.6 print. This was the lowest print in the series of the revised index which came online in March of 2016.

The 1.4 post slump may not sound like a lot, but it was the biggest drop in the series’ 3 year history.

Among the key indicators, output fell to 48.1 from 50.3 in Dec, the lowest reading since June 2016 and reverses the recent expansion trend; Meanwhile, new orders also fell vs prior month, sliding to the lowest reading since Sept. 2015.

In the monthly report, Caixin said that the latest survey data signaled subdued overall operating conditions in the Chinese manufacturing sector at the start of 2019. Production and total new work were both slightly down at the start of the year, despite a renewed increase in export orders. Relatively muted demand conditions underpinned the first fall in purchasing activity for 20 months, while firms also registered lower inventories of both purchased and finished items.

There was a silver lining in the employment and confidence indicators: workforce numbers at manufacturing firms in China fell only slightly in January. Furthermore, the rate of reduction was the slowest seen for nine months. At the same time, companies reported a further modest increase in the amount of outstanding orders. The softer fall in employment was accompanied by a slight improvement in business confidence. Notably, sentiment regarding the 12-month business outlook was at its most positive since May 2018. Some firms anticipate new products and planned company expansions to boost output over the next year.

That said there was no mistaking what was an almost uniformly negative print, as manufacturers also adopted a cautious approach to inventories, as firms reduced their holdings of both stocks of purchases and finished items at the start of 2019. After broadly stabilizing at the end of 2018, average suppliers’ delivery times also increased across China’s manufacturing sector in January.

More concerning is that deflation appears to be re-emerging, because in contrast to the marked increases seen through most of 2018, average input costs faced by Chinese manufacturers fell for the second month running.  “According to panelists, lower cost burdens were due to reduced prices for raw materials. At the same time, output charges also fell in January, amid reports of a general drop in market prices.”

Commenting on the poor print, Zhengsheng Zhong said “The subindex for new orders dipped further into contractionary territory, pointing to a moderate contraction in demand across the manufacturing sector. Yet the gauge for new export orders rose notably above the 50 level, the dividing line that separates contraction from expansion, reaching its highest point since March 2018, showing that companies’ export orders have obviously rebounded since the truce in the China-U.S. trade war.”

So some good news, perhaps? Well, not really, because as the report admitted, “on the whole, countercyclical economic policy hasn’t had a significant effect. While domestic manufacturing demand shrank, external demand turned positive and became a bright spot amid positive progress in Sino-U.S. trade talks. As companies were more willing to reduce their inventories, their output declined, indicating notable downward pressure on China’s economy.”

The report’s conclusion: “China is likely to launch more fiscal and monetary measures and speed up their implementation. Yet the stance of stabilizing leverage and strict regulation hasn’t changed, which means the weakening trend of China’s economy will continue.

Following the report, the Yuan tumbled almost 300 pips, falling for the first time in 8 days, and undoing much of the recent trade talk optimism.

end
How is this for alarm bells:  A huge 440 Chinese companies issued profit warnings in just one day.  Interestingly enough almost all of them(86%) were profitable last year.
(courtesy zerohedge)

More Alarm Bells As 440 Chinese Companies Issue Profit Warnings In One Day

Alarm bells are ringing in China as Beijing continues its relentless crackdown on shadow banking.

Hundreds of Chinese companies issued profit warnings, telling their investors that earnings for the full year were going to be below expectations, according to Bloomberg. No less than 440 zombie companies disclosed the bad news on Wednesday, still one day before the deadline for such disclosures. The companies cited the country’s economic slowdown (which is also catalyzing sales of Chinese-held U.S. real estate), as well as recent accounting changes that followed a $2.3 trillion equity market selloff last year.

The change is stunning: out of more than 2400 mainland listed companies, 373 have said they’re going to post a loss – and what’s more concerning, 86% of those companies were profitable in 2017.

There may be more bad news on the way: Thursday is the official deadline for companies to disclose whether or not they expect “substantial changes” in their financial results, so expect even more guidance cuts.

Meanwhile, fears about China’s economy, and corporate profitability in a time of record bankruptcies now that the government is no longer backstopping every corporation, has become a collective concern among market participants.

Lv Changshun, a money manager at Beijing Dajun Zhimeng Investment Management Co., told Bloomberg: “Private companies are particularly vulnerable to the economic downturn. The deleveraging campaign and the deterioration of their corporate health is normal for any economy that is shifting gears and slowing down.”

Among those issuing the concerning guidance are companies like Ford’s biggest partner in China, Changan which warned that 2018 profit was likely going to tumble 93%. China Life, a massive insurer by market share in China, said its net income could be lower by 70%. 

Beijing HualuBaina Film & TV Co., cloud-storage operator Gosun Holding Co. and First Tractor Co. also all said they’d post billions of yuan in losses for the year after having profitable 2017s. Anhui Shengyun Environment Protection Group Co. and Anhui Ankai Automobile Co. disclosed that their net losses would be twice as big as they were in 2017. Guangdong Homa Appliances Co. was halted limit down during Wednesday trading after guiding for a loss in 2018 after stating just months ago that they’d be profitable.

And since profit warnings in China – where companies notoriously misrepresent the rosy state of their finances (recall that one week ago, a Chinese company which filed for bankruptcy, reported that it “had” 15 times more cash than due debt yet it couldn’t meet its debt obligations) tend to be an early warning for liquidity problems, or worse, insolvency, the bond market has also felt aftershocks. The bonds of Chinese furniture maker Yihua Lifestyle Technology Co.’s fell to less than half of par. Air conditioning producer Zhejiang Dun’an Artificial Environment Co. has been put on a negative watch Chinese credit agency China Lianhe Credit Rating Co.

One reason why China’s companies are suddenly “coming clean” was suggested by Qi He, a fund manager at Huatai Pinebridge Fund Management, who said that “companies whose shares are already quite battered have nothing to lose by lowering earnings forecasts or taking large impairments for 2018. Many of these companies are actually ‘taking a bath’ to begin anew in 2019.”

Meanwhile, others are understandably worried that it’s only going to get worse: Yu Dingheng, a fund manager at Shenzhen Flying Tiger Investment & Management Ltd. said: “we’re only just seeing the beginning of deterioration in corporate earnings as the economy slows further. Things will continue to go downhill for firms seeing business slowing and even as the macro-economy recovers, these individual firms will never be what they were.”

As for China’s economy recovering, that still remains wishful thinking for now: after China’s greatest liquidity injection ever (over 1.1 trillion yuan two weeks ago) and after weak Chinese macro data in the last few months, which saw a plunge in China’s trade data…

… all eyes were on last week’s avalanche of Chinese economic data. The Q3 bounce in macro data was extremely weak. We reported just last week that China’s 2018 GDP growth had slowed significantly. China’s annual GDP growth in 2018 was +6.6% – the weakest annual GDP growth since 1990.

Which is why as Rabobank’s Michael Every said earlier today “That Chinese stimulus had better arrive soon…”

END
A little difficult to understand.  However, the heart of this important commentary is that Chinese RRR cuts which are meant by the POBC to stimulate the Chinese economy is doing the opposite:  the banks are hoarding because the Chinese economy is faltering and with it many dark holes.
a very important read.
(courtesy Jeffrey Snider)

An Important Wrinkle In Chinese Bank Hoarding

Authored by Jeffrey Snider via Alhambra Investment Partners,

In theory, it is always so simple. For China, it was intended that RRR cuts are stimulus. By allowing banks to use more of the reserves they’ve built up over the years it is meant to add to overall interbank liquidity. From there, banks flush with RMB supported by robust RMB money markets will lend and undertake more direct economic transactions.

Voila, stimulus.

The theory gets complicated by a very different kind of reality, one which pressures RMB markets from two sides. The first is the direct result of the overriding issue. The eurodollar market malfunctions, forcing China to deal with a “dollar” shortage by having its central bank (and others) intervene out of its own stockpile of FX reserves. Simple accounting, the PBOC’s asset side shrinks which must be met by the same on the money side.

So, RRR cuts already begin from inside a domestic monetary hole. To even get to the position of adding liquidity, banks have to mobilize more of their reserves than the central bank has pulled back in its own.

The second liquidity problem is just that: banks have to mobilize meaning actually use more of their reserves. The Economics textbook simply says that if given the opportunity no bank will refuse the license. Policy says, bank books do. In theory.

In practice, banks have to operate in the real world. If the PBOC is in a situation already where it feels compelled to respond to less-than-ideal effective conditions via an RRR cut perhaps it really isn’t a conducive time for banks to be so generous? Reserve operations of this type don’t usually happen unless things are already dicey, a factor bank managers are going to be pretty well aware.

Therefore, RRR cuts may not lead to the flood of non-public liquidity the theory assigns. Chinese banks, especially the biggest institutions, may opt to hoard that liquidity instead. If they do, then RRR measures cannot be stimulus especially having begun at first in the central bank hole.

When Chinese banks hoard, obviously nothing good will result. The illiquidity is not contained within China’s borders, either, as these kinds of financial irregularities flow into the real Chinese economy and are then transported to the rest of the world (further amplified by more negative feedbacks in the eurodollar system).

This was Euro$ #3’s devastating global downturn story of 2015 and early 2016.

We are on the lookout for evidence of China bank hoarding so as to figure a possible repeat here well within Euro$ #4. From the very first we see just that sort of difficulty in real-time market prices, in this case SHIBOR and other RMB money rates. The correlation is ridiculously obvious; RRR cuts have unleashed volatility and instability rather than what would look like monetary stimulus.

Chinese banking statistics back up the negative association – with an added wrinkle (more on that below).

Since the first 2018 RRR cut back in April last year, the big banks aren’t really lending more in the unsecured interbank markets. They are, however, borrowing more from them; a lot more. The difference is almost surely the reason for harmful volatility in domestic money.

The biggest banks are drainingliquidity (net) from unsecured RMB rather than contributing more to them. The relationship with volatility in SHIBOR is established.

The primary reason is equally evident: this is the same period in which bank reserves have been declining. The PBOC’s eurodollar squeeze leading to the systemic limit on its money (liability) side is being echoed by the majority of the domestic banking sector.

Without a liquidity cushion either in that money remainder (growing bank reserves) or in terms of robust central bank RMB expansion at its liquidity windows (such as MLF) there just isn’t any appetite for banks to add anything to these crucial interbank spaces.

The wrinkle in all this is repo. We know why the biggest institutions are borrowing more unsecured – they are barely borrowing (sources) in repo! Depending more and more on unsecured interbank transactions instead of the repo market, you can start to appreciate why these particular banks are perhaps more than a little skittish no matter what policy the PBOC might undertake.

If conditions worsen in China, more economic slowing and therefore higher perceived overall risk, being reliant in greater proportion on unsecured markets for so much marginal funding isn’t an ideal liquidity situation. To put it mildly.

The question is why they aren’t in repo. It may be that China’s authorities told us last month when they began to really champion the issuance of perpetual bonds to be used along with the central bank bill swap. It certainly seems to fall in line with what we see here; if the big banks are in a collateral crunch, why not just create collateral out of thin air (first the perpetual and then the swap into usable repo instruments).

I wrote about this just a few days ago:

To aid the situation on both counts, the PBOC last month hit upon a two-part scheme. The central bank would encourage the use of perpetual bonds that meet the definitions for being included as bank capital. Any Chinese bank that issues these securities will be able to boost their ratios, making it seem like it has more loss absorption capacity (which, in theory, it would).

The second part is this bill swap program. Perpetual bonds are illiquid therefore unacceptable in repo…

To circumvent these technical deficiencies, the PBOC will allow banks who issue perpetual bonds to swap them with its own holdings of central government debt bills which they can then use either in private repo or even in targeted MLF at that particular monetary policy window.

This data can’t, unfortunately, tell us why a collateral crunch seems to have developed. Such a negative outcome would further explain the hoarding of liquidity along with the greater desperation on the part of monetary authorities – escalating official responses that don’t seem to get anywhere. China’s money hole across a couple dimensions seems to be bigger than we already think.

It is, as Abraham Lincoln once said, the equivalent of shoveling fleas across a barnyard; not half of them get there. “There” being RMB liquidity. This isn’t monetary stimulus indicated here, hoarding is instead, a huge and growing monetary deficiency which seems to be squeezing the Chinese economy. Again.

end

4.EUROPEAN AFFAIRS

They are back:  The EU needs for money so it is accusing 8 banks of rigging European government bond markets.

Only European government bonds?

(courtesy zerohedge)

The ‘Cartel’ Is Back: EU Accuses 8 Banks Of Rigging European Government-Bond Markets

First it was the Libor-rigging cartel, then the FX exchange-rate manipulation cartel, now, European regulators have moved on to prosecuting “anti-competitive” practices in euro-denominated sovereign bond markets.

One month after the European antitrust regulators charged Deutsche Bank, Credit Agricole and Credit Suisse of being a part of a ‘bond trading cartel’, regulators are bringing a separate case against eight unidentified European banks alleging that they conspired to rigging euro-denominated sovereign bond markets.

Reuters reported Thursday that the European Union’s antitrust authority has charged the banks with operating the cartel behind 2007 and 2012.

Screen

Just like in past cartel cases, traders at the accused banks allegedly used chat rooms to share “commercially sensitive information and coordinated trading strategies” that they presumably used to rig markets to benefit their own trading books – and shortchange their “counterparties”.

If they’re found guilty, the banks could face fines equal to up to 10% of their global turnover.

“The Commission has concerns that, at different periods between 2007 and 2012, the eight banks participated in a collusive scheme that aimed at distorting competition when acquiring and trading European government bonds,” the Commission said.

“Traders employed by the banks exchanged commercially sensitive information and coordinated on trading strategies. These contacts would have taken place mainly – but not exclusively – through online chatrooms.”

Regulators told Reuters that they wanted to make one thing clear: The allegations aren’t meant to imply that euro-denominated bond markets are subject to pervasive “anti-competitive” practices (though maybe they should talk to Mario Draghi about that).

But don’t worry: We’re sure the information traded in these chatrooms fell neatly within the bounds of “market color.”

end

 

UK/EU

A good one..how the Brexit nonsense and the 11 weeks of protests in France are/will have a devastating effect on the EU economies

(courtesy Tom Luongo)

Flash-Balls, Pitchforks, And A Backstop

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

It’s educational and even somewhat entertaining to observe the role of the western press in the ongoing erosion and demise of democracy in Europe. But while it’s entertaining, it also means their readers and viewers don’t get informed on what is actually happening. The media paints a picture that pleases the political world. And it it doesn’t please politicians to lift a veil here and there, too bad for the public.

The Shakespearian comedy that was performed this week in the UK House of Commons is a lovely case in point. Basically, MPs voted whether or not to allow PM Theresa May to change the Brexit deal she had told them about a hundred times couldn’t possibly be changed. Brexit has turned full-blown Groucho by now: “Those are my principles, and if you don’t like them… well, I have others.”

It was exactly two weeks ago last night that lawmakers voted by a historic 432 to 202 count to reject May’s Brexit deal. And now they voted to a) let her change it and b) go talk to the EU about changing it though Brussels has said as often as May herself that it cannot be changed. Remember: the UK is set to leave the EU 59 days from now, and counting.

It’s like in a game of chess that has long turned into a stalemate or threefold repetition situation: you stop playing. No such luck in British politics. The only way the parliament could find ‘unity’ (in a narrow vote) was to agree to ditch the Irish backstop that is an integral part of why the EU accepted May’s deal to begin with.

There are/are even serious voices saying Ireland should leave the EU along with the UK, to make it easier for the latter to do what the former absolutely doesn’t want. That’s also part of the kind of mindset in which this plays out. Brexit has turned into a complete delusion, in which bickering and blame-games have been more important than practical solutions, for all sides.

A hard Brexit is used as some ultimate deterrent, and 59 days before the big moment it may actually turn into the disaster some Project Fear or another has been talking about for over 2.5 years. If that time has been used the way it should have, adapting deals, agreements, contracts, laws, all might have been fine(r).

What the role of May’s opposition in all this consists of is ever more confusing. It certainly never was to profile itself or come up with original ideas. In the process, Jeremy Corbyn appears to have hurt his reputation as much, if not more, than May. Quite the achievement. And now May says Corbyn “has no plan for Brexit”, but she does: only, it was voted down in the largest defeat in modern parliamentary history.

And then all of a sudden, as everyone is busy doing something else, Britain finds itself in a huge crisis of democracy.

Over Two Thirds Of UK Public Don’t Feel Represented By Political Parties

More than two thirds of the British public feel they are not represented by the main political parties, according to a new report on the divisions caused by Brexit. Research by campaign group Hope Not Hate found that the disconnect had increased from 60% to 67% over the last six months as Theresa May negotiated the EU withdrawal agreement.

The poll of nearly 33,000 people and results from focus groups also revealed that many felt they were being left in the dark or were “overwhelmingly bored” by the process. It has also seen an increase in the proportion of the public feeling pessimistic about the future – with very few believing that Brexit will address the frustrations and inequalities that lay behind the vote to leave the EU in 2016.

More people also believe that Brexit is feeding prejudice and division and taking the UK “backwards”, up from 57% in July 2018 to 62% last month. Just 20% of people said they could trust the government to deliver a “good Brexit”. Almost as many Leavers (66%) as Remainers (75%) said they do not trust the government to deliver a Brexit that works for them.

None of the options being considered by parliament have consensus support across the UK, according to the report, and 42% of people think that it would be sensible to delay leaving the EU by a few months so we can agree a better deal with the EU or hold a Final Say vote.

Perhaps that is the topic that should have been discussed yesterday in the House of Commons. But the MPS far preferred to regurgitate long discredited useless stalemate ‘moves’. That’s how much they all care for their own voters. They go from one election to the next, and why would they care about the time in between, what could possibly happen to them?

Well, for one thing, pitchforks could happen. Which methinks is a clean poetic link to another European country that finds itself in deep crisis and distress but refuses to recognize it. France.

The interwebs are full of video’s and photos of police brutality perpetrated during the by now 11 Saturdays the Yellow Vests have protested president Macron and their people’s overall situations. It didn’t start out with all that violence, and sure, part of it may have been in response to protests, but what’s gone on in the last few Saturdays is something else.

And the media once again are silent, or mostly. Macron gets more coverage for telling Venezuela’s Maduro to resign than for his own regime’s cruelty towards its own people. But the French people do watch those videos, social media trump traditional ones in these cases, so there’s something good about them after all.

And the Yellow Vests, though the people don’t like the violence, still very much have their sympathy. Seeing Macron’s police beating them up the way they have will only increase the resolve. People losing their eyes, their hands, hundreds if not thousands with less severe but still serious injuries, it’s all being added to Macron’s tally.

French Police Weapons Under Scrutiny After Gilets Jaunes Injuries

The French government is under growing pressure to review police use of explosive weapons against civilians after serious injuries were reported during gilets jaunes street demonstrations, including people alleged to have lost eyes and to have had their hands and feet mutilated.

France’s legal advisory body, the council of state, will on Wednesday examine an urgent request by the French Human Rights League and the CGT trade union to ban police from using a form of rubber-bullet launcher in which ball-shaped projectiles are shot out of specialised handheld launchers. France’s rights ombudsman has long warned they are dangerous and carry “disproportionate risk”.

Lawyers have also petitioned the government to ban so-called “sting-ball” grenades, which contain 25g of TNT high-explosive. France is the only European country where crowd-control police use such powerful grenades, which deliver an explosion of small rubber balls that creates a stinging effect as well as launching an additional load of teargas.

The grenades create a deafening effect that has been likened to the sound of an aircraft taking off. France’s centrist president, Emmanuel Macron, is facing renewed calls to ban such weapons after Jérôme Rodrigues, a high-profile member of the gilets jaunes (yellow vests) demonstrators was hit in the eye on Saturday in Paris. He is said by his lawyer to have been disabled for life.

Rights groups say Rodrigues’s case is the tip of the iceberg. Lawyers estimate that as many as 17 people have lost an eye because of the police’s use of such weapons since the start of the street demonstrations, while at least three have lost their hands and others have been left with their face or limbs mutilated. Injuries have happened at demonstrations in Paris and other cities, including Bordeaux and Nantes.

The whole thing is utterly insane, but the craziest thing may well be the European Court of Human Rights rejecting a temporary ban on flash-balls last month. Go ahead, Emmanuel, we won’t tell a soul! Flash-balls being an improved -and ‘home-grown’- form of rubber bullets, which in turn have been ‘improved’ upon.

French ‘Flash-Ball’ Row Over Riot-Gun Injuries

Appalling injuries caused by French police riot guns during the yellow-vest protests have triggered anger and calls for the weapon to be banned. The LBD launchers known by protesters as “flash-balls” have left 40 people severely wounded, reports say. France’s human rights chief has called for the weapon’s use to be halted, but the government insists it is deployed only under very strict conditions.

Since the “gilets-jaunes” protests began in November, 3,000 people have been injured or even maimed and thousands more arrested. The LBD40 is described as a non-lethal weapon which in fact replaced the old “flash-ball” in France. But the old name is still widely used. It shoots 40mm (1.6in) rubber or foam pellets at a speed of up to 100m per second and is not meant to break the skin. However, some of the accounts of people hit by flash-balls have been shocking.

Volunteer firefighter Olivier Béziade, 47, was shot in the temple by a riot gun during a protest on 12 January in Bordeaux. Video at the time caught him running from police and then collapsing in the street, his face covered in blood. He was taken to hospital, treated for a brain haemorrhage and left in an artificial coma, from which he emerged on Friday. He was one of five seriously wounded on that day alone.

Many of those wounded have been young. One teenager called Lilian Lepage was hit in the face in Strasbourg on Saturday and suffered a broken jaw. His mother said he had been shopping in the city centre when a policeman fired at him. Two schoolboys were badly wounded by flash-ball pellets in separate protests last month. Campaigners say a dozen people have lost an eye ..

A lawyer for some of the victims, Étienne Noël, said many had been maimed. He said police did not have sufficient training in use of the riot guns and many victims had been hit in the head. Earlier this week police made clear the riot gun would be used only where security forces faced violence or if they had no other means of defence. Only the torso and upper or lower limbs could be targeted.

Interior Minister Laurent Nuñez told the French Senate on Thursday that the use of force by police was always proportionate and under very strict and controlled conditions. “If the police hadn’t used these means of defence perhaps some of them would have been lynched,” he said. The European Court of Human Rights rejected a temporary ban on flash-balls last month, in a case brought by several people who said they had been hit by flash-balls.

There is also a grenade version of the flash-ball, named the sting-ball. Throw it into a crowd and everyone around gets hit by rubber balls at high speed.

But of course it’s not the weapons that cause the injuries and deaths, it’s the people deploying them. And the people deploying these people. The instructions to use excessive violence because the government feels threatened by its own citizens. And after that the pitchforks and guillotines, real or not. Yanis Varoufakis was right a few weeks ago, Macron is a spent force.

Only a blind fool would use these things against his own people. Or a dictator with absolute power, but Macron doesn’t have that.. By the way, when is Brussels going to condemn Macron for his use of violence?

And this is all before the European elections, and Merkel’s goodbye that will throw Germany into chaos, and and and. Europe, we never knew ya.

END

 

Italy/EU

What total absurdity:  Salivini has been charged with kidnapping migrants as they try and enter Italian shores. Salvini is continually gaining strength against its coalition partner.  The EU are running scared.

(courtesy Tom Luongo)

Salvini-The-Kidnapper Officially Has The EU Running Scared

Authored by Tom Luongo,

A court in Sicily has ruled that Interior Minister, leader of The League and all-around Euroskeptic bad-ass Matteo Salvini should stand trial for kidnapping migrants held in abeyance off Italy’s shores.

“I confess,” Salvini said in a video posted to his Facebook page, “there is no need for a trial. It’s true, I did it and I’d do it again.”

“I risk 3 to 15 years in prison for blocking illegal landings in Italy. I have no words,” wrote Salvini, the leader of the ultra-nationalist Lega (League) party, which now rules Italy in a coalition with the anti-establishment Five Star Movement (M5S).

If this wasn’t so stupid it would be hysterical, actually. But it exists and it’s an attack on Salvini that has a number of angles to it.

As Dr. Steve Turley explains in the video below one of the goals of this attack is to drive a wedge between Five Star Movement (M5S) and its coalition partner, The League.

Early returns on this look to be it will go nowhere as M5S leader Luigi DI Maio supported Salvini. But, the real issue isn’t the coalition government.

If somehow Di Maio can’t ride herd over his faction with the Italian parliament and they vote to allow this trial to go forward then M5S will continue sinking into obscurity and The League’s rising poll numbers will accelerate.

As Turley points out it is not in M5S’s best interest to betray its partner at this point. They enjoy parliamentary representation well above their current polling.

So, they would jeopardize everything they’ve worked to shape Italian domestic policy.

But that’s not the real issue here. The real issue is this is an attempt by the EU and The Davos Crowd behind them to slow down the integration of the Euroskeptic movement around Europe to challenge the current status quo in the European Parliament.

Salvini called for a “League of Leagues” after his meeting with Hungary’s Viktor Orban.

That’s why Salvini is calling for “A League of Leagues” across Europe.  He will succeed.

This is the guy who successfully rebranded the secessionist Northern League into the MIGA party – Make Italy Great Again.

Then he and Five Star Movement leader Luigi Di Maio navigated the Italian Swamp to form a government experts said couldn’t work, while simultaneously neutering establishment stalking horse Silvio Berlusconi.
Thanks to Salvini’s strategic genius Italian politics will never be the same again.  His League now polls around 30%, which bodes well for it in next year’s European Parliamentary Elections.

Because now his sights are MEGA – Make Europe Great Again.

In fact, this frivolous lawsuit is prima facia evidence that the EU oligarchs in Brussels are officially scared of what’s coming in May’s European Parliamentary elections.

If Salvini wasn’t a threat they wouldn’t be going after him this way.

If you bind Salvini down with having to whip up support in Italy he’s not spending that time convincing the leaders of Alternative for Germany (AfD) or Marine Le Pen’s National Rally to coalesce into a unified opposition against the hardcore leftist European integrationists.

Populist Euroskeptic movements are still rising all across Europe. And the EU needs to get past this election to ensure that the real power in Brussels remains in the hands of The Davos Crowd. This has become an existential threat to the European project.

It has to stay on course despite the will of the people of Europe.

It’s an act of pure desperation. It’s no different than how they are handling Brexit. And it’s why the EU will not cave on Brexit until the last minute, if at all. They cannot empower Salvini, Le Pen, Kurz, Orban, et.al. against them.

Caving to the U.K. on Brexit will reveal how weak they truly are.

So, Salvini and Di Maio were right to embrace the accusations rather than soft-peddle. The people are craving competent leadership and this initial show of solidarity demonstrates that.

This will have to be dealt with and it will be a real test of the political situation in Italy. If the Senate votes this down then Salvini can ignore it and, worse for Brussels, campaign harder on it.

It will also shore up his support abroad as the real prize, the European Commission Presidency comes into focus. If it fails then that will make it much harder to put together a coalition strong enough to block Jean Claude-Juncker’s expected successor.

The future of the EU actually hangs in the balance on this frivolity. That tells you just how desperate things really are for the current leadership of the rapidly disintegrating European Union.

*  *  *

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end
Germany/Deutsche bank
Deutsche bank is totally hopeless.  These guys are the leaders in the world in derivative trading and they are offside on a huge number of trades.  However the Bundesbank must prop them up or else the entire globe’s finances disintegrates.
(courtesy zerohedge)

“An Inability To Turn Around”: Deutsche Bank Slides After Reporting Dismal Earnings

That merger between Deutsche Bank and Commerzbank, which is contingent on the biggest German lender’s inability to turn operations around, is looking increasingly likely, because earlier today Deutsche Bank reported earnings which confirmed that, well, it is simply unable to make said much-needed turn.

Deutsche Bank reported Q4 net revenue of €5.58BN – the lowest quarterly print in years – and 2.6% below the average analyst estimate of €5.73, led by another decline in trading revenue, resulting in a pretax loss of €319 million in line with estimates of a €331.0 million loss.

And as the bank shrank for an eighth straight quarter in the final months of last year, CEO Christian Sewing pledged even more cost cuts although it is clear by now that cost cutting has starting to eat into profits.

To wit, in the volatile fourth quarter, in which market gyrations were supposed to help the company’s trading desk (despite images of police raiding the bank’s headquarters in November) revenue shrank another 2.4%, led by a slump in the key fixed-income trading business that did even worse than peers. The key bank’s securities unit slumped, losing market share particularly in fixed income trading, where revenue slumped 23%, but also in equities, which declined 0.8%; both missed consensus estimates. The bank’s U.S. peers on average reported a 17% drop in FICC and 4% higher equities revenue.

Here are the key results in a nutshell:

  • 4Q FICC sales & trading revenue €786 million, missing the est. €992.0 million
  • 4Q equities sales & trading revenue €379 million, missing the est. €372.0 million
  • 4Q sales and trading revenue €1.17 billion, missing the est. €1.34 billion
  • 4Q Investment Bank revenue €2.60 billion, missing the est. €2.72 billion

And so clearly unable to rightsize the company’s revenues, the bank focused on cutting even more costs instead. To appease angry shareholders, CEO Sewing boosted his target for adjusted costs, promising to keep them below 21.8 billion euros this year, compared with the 22 billion euros previously announced, and affirmed a plan to return at least 4% on tangible equity “despite a challenging market environment.”

Sewing also said the bank would return to “controlled” growth, a promise that eluded his predecessor, and said if revenue keeps disappointing, he’ll find more savings. At some point, though, even he will have to admit that at this point DB has cut out all the fat and is increasingly chopping away muscle, with any new terminations resulting in direct hits to the bottom line.

“Management has delivered on what is in their control in the medium term: cost, capital and liability optimization,” JPMorgan Chase analyst Kian Abouhossein said. “However, for now, we remain concerned about Deutsche Bank’s inability to turn around fixed-income trading.”

Despite the latest dismal results, Sewing did deliver on one pledge: to post the first annual profit in four years, with Deutsche Bank reporting net income after minority interests of 267 million euros for 2018, despite a bigger-than-expected loss in the final three months. The bank also achieved a target of keeping costs, adjusted for one-time items, to below 23 billion euros.

Looking ahead, however, there was little clarity, with the company merely focusing on more cost-cutting instead of providing a roadmap to higher revenues: “If the revenue environment does not develop as we expect, we will seek additional savings,” Sewing said. “Beyond 2019, we are still committed to further reducing our costs and improving our cost-income ratio.”

As Bloomberg notes, the prolonged revenue contraction is adding pressure on the CEO and Chairman Paul Achleitner to explore alternative fixes for Germany’s largest lender. Sewing, who only took over last year, has pleaded for patience with his strategy of expense controls and a scaled-back investment bank, but government is worried he may not succeed before the next economic slowdown.

To be sure, DB’s CFO tried his best to spin the results in a favorable light: “We feel we are in control of our destiny, we’re executing against our plans,” James von Moltke, the bank’s chief financial officer, said in an interview on Bloomberg TV. Still, “there’s a lot of talk in the sector overall, that over time mergers, consolidation in the European banking sector would be sensible for a variety of reasons. We’ve tended to agree with that.”

Von Moltke also said that the recent police raid “absolutely impacted” business in December. A group of about 170 law-enforcement officials searched the bank’s headquarters and other offices in late November, in a case tied to the Panama Papers, fueling market concern about potential legal fines. Sewing said at the time that the bank had considered the case closed, having examined it in 2016, when news about the Panama Papers first broke.

“Clearly being in the headlines in that way is unhelpful for client confidence,” von Moltke said. “We’ve gone some way to restoring that. There’s more work to do to communicate the nature of these issues.”

The bigger problem than money laundering, however, is that Germany’s largest bank has been facing declining revenue for four years, turning the shrinkage, especially in the most profitable investment banking division, into the top concern among investors and analysts alike and sparking speculation it may ultimately seek a merger with Commerzbank which may come as soon as this summer.

While a deal is viewed by some as an imperfect solution, the German government — which on Wednesday slashed its economic growth forecast for this year — has said it wants strong international banks to support Germany’s export-oriented companies. The country still owns a large stake in Commerzbank after a bailout. It doesn’t own a stake in Deutsche Bank.

For now however, investors appear to have thrown in the towel, with DB stock initially jumping then sliding 3.4% after the results.

The good news is that for now at least, DB, which was the worst performing Stoxx 600 member in 2018,is still up on the year. We don’t expect this to hold, especially if the yield on longer-dated European yields keeps sliding and there is no rebound in Germany’s economy, which after today’s terrible German Mfg PMI is not looking likely.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

I

 

6. GLOBAL ISSUES

 

7  OIL ISSUES

 

8. EMERGING MARKETS

Twitter bans over 2,000 pro Maduro accounts in Venezuela as demands for regime change escalate

(courtesy zerohedge)

.

Twitter Bans 2,000 Pro-Maduro Accounts As Demands For Regime Change Escalate

On the evening before National Security Advisor John Bolton reiterated that “all options [including, presumably, military intervention] are on the table” regarding the situation in Venezuela, Twitter announced that it had joined the US-backed coup by taking down 2,000 accounts that it said were engaged in a “state-backed influence campaign”, according to RT.

In a blog post, Twitter said it removed 1,196 accounts located in Venezuela which it deemed to “appear to be engaged in a state-backed influence campaign targeting domestic audiences.” The company also removed another 764 accounts, but said “we are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country.”

VZ

The purge was part of a crackdown on “foreign information operations”, which also serves as a resource for researchers hoping to investigate these operations. In the post, Twitter announced that it was adding five new sets of account sets to its archive of foreign influence campaigns.

Twitter has removed 764 accounts located in Venezuela. We are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country. However, these accounts are another example of a foreign campaign of spammy content focused on divisive political themes, and the behavior we uncovered is similar to that utilized by potential Russian IRA accounts. We are disclosing them out of an abundance of caution and welcome the feedback of researchers.

Additionally, we have removed 1,196 accounts located in Venezuela which appear to be engaged in a state-backed influence campaign targeting domestic audiences. We have shared information on these accounts with our industry peers, and continue to investigate malicious activity originating in Venezuela, both targeting audiences with in Venezuela and abroad.

Abby Martin, host of YouTube series Empire Files, lamented that amid Twitter censorship of pro-government supporters, “pro-coup Venezuelans and right-wing exiles dominate the media sphere.”

Abby Martin

@AbbyMartin

While pro-coup Venezuelans & right-wing exiles dominate the media sphere, tech companies are actively censoring pro-government accounts they say are working to “influence” people

Marco Rubio

@marcorubio

Twitter took down 2,000 accounts located in #Venezuela engaged in a “state-backed disinformation & influence campaign via @POLITICO for iOS

View image on Twitter
1,480 people are talking about this

While at least one independent journalist accused Twitter of acting as an “extension” of the US government.

Ben Norton

@BenjaminNorton

Twitter is now removing thousands of accounts supposedly linked to Venezuela’s sovereign government.

This comes after Twitter suspended Venezuelan government accounts 1.5 years ago.

Social media corporations act as an extension of US government interestshttps://twitter.com/marcorubio/status/1091089955642884097 

Marco Rubio

@marcorubio

Twitter took down 2,000 accounts located in #Venezuela engaged in a “state-backed disinformation & influence campaign via @POLITICO for iOS

View image on Twitter
361 people are talking about this

And another journalist highlighted Twitter’s caveat that the company wasn’t able to “definitively tie” the accounts to the Maduro regime, meaning that some pro-Maduro Venezuelans with no ties to the government may have found their accounts eliminated.

Max Blumenthal

@MaxBlumenthal

Amazing how one dataset is Venezuela, just days after US set a coup into motion against its government. As usual, the caveat is buried: “We are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country.”

Yoel Roth

@yoyoel

Today we’re releasing five new datasets relating to suspected foreign interference efforts we’ve identified on Twitter. https://blog.twitter.com/en_us/topics/company/2019/further_research_information_operations.html 

199 people are talking about this

Of course, this isn’t the first time Twitter has cracked down on pro-government Twitter accounts. In September, Twitter suspended the official account of the Venezuelan government’s press team, reportedly without giving any explanation.  In an interesting twist on a punitive technique often employed against conservatives, Twitter and several other US social media companies also removed the “verified” labels from accounts belonging to Maduro.

But of course anybody who questions Twitter’s commitment to open expression is a bigot – and probably a Nazi.

end

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

Euro/USA 1.1467 UP .0019 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  RED 

 

 

 

 

 

USA/JAPAN YEN 108.92  UP 0.079 (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 1.3054     DOWN   0.0053  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3140 UP .0014 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 19 basis points, trading now ABOVE the important 1.08 level RISING to 1.1466/ Last night Shanghai composite closed UP 33.66 POINTS OR 1.30% 

 

 

//Hang Sang CLOSED DOWN 11.73 POINTS OR 0.04%

 

/AUSTRALIA CLOSED DOWN 0.03%  /EUROPEAN BOURSES RED

 

 

 

 

 

 

The NIKKEI: this FRIDAY morning CLOSED UP 14.90 POINTS OR 0.07%

 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED RED

 

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 11.73 POINTS OR 0.04% 

 

 

 

/SHANGHAI CLOSED UP 33.66 PTS OR 1.30%

 

 

 

 

Australia BOURSE CLOSED DOWN .03%

 

Nikkei (Japan) CLOSED UP 14.90 PTS OR 0.07%

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1320.90

silver:$15.98

Early FRIDAY morning USA 10 year bond yield: 2.63% !!! DOWN 0 IN POINTS from TUESDAY’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 2.99 DOWN 1  IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/

USA dollar index early FRIDAY morning: 95.51 DOWN 7 CENT(S) from  THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.64% UP 2     in basis point(s) yield from THURSDAY/

JAPANESE BOND YIELD: -.01%  DOWN 2   BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.22% UP 2   IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 2.75 UP 16     POINTS in basis point yield from THURSDAY/

 

 

the Italian 10 yr bond yield is trading 145 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.17%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.58% 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 FRIDAY

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

Euro/USA 1.1471 UP   .0023 or 23 basis points

 

 

USA/Japan: 109.54 UP  0.700 OR 70 basis points/

Great Britain/USA 1.3091 UP.0017( POUND UP 17  BASIS POINTS)

Canadian dollar up 34 basis points to 1.3093

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY closed UP AT 6.7433 0N SHORE  (YUAN DOWN)

THE USA/YUAN OFFSHORE:  6.7557(  YUAN DOWN)

TURKISH LIRA:  5.216

the 10 yr Japanese bond yield closed at -.01%

 

 

 

Your closing 10 yr USA bond yield UP 5 IN basis points from THURSDAY at 2.83 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.03 UP 4  in basis points on the day /

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

Your closing USA dollar index, 95.51 DOWN 7 CENT(S) ON THE DAY/1.00 PM/

 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 12:00 PM 

London: CLOSED UP 51.37 OR 0.74%

German Dax : DOWN 7.56 POINTS OR 0.07%

Paris Cac CLOSED UP 26.54 POINTS OR 0.53%

Spain IBEX CLOSED DOWN 37.30 POINTS OR  0.41%

Italian MIB: CLOSED DOWN 154.01 POINTS OR 0.78%

 

 

 

 

WTI Oil price; 54.74 12:00 pm;

Brent Oil: 62.10 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    65.49  THE CROSS HIGHER BY 0.11 ROUBLES/DOLLAR (ROUBLE LOWER BY 11 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS +.15 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 :  55.33

 

 

BRENT :  62.81

USA 10 YR BOND YIELD: … 2.69..

 

 

 

USA 30 YR BOND YIELD: 3.03

 

 

 

EURO/USA DOLLAR CROSS:  1.1459 ( UP 11    BASIS POINTS)

USA/JAPANESE YEN:109.50 UP.654 (YEN DOWN 65   BASIS POINTS/..

 

.

 

USA DOLLAR INDEX: 95.58 UP 1 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA:1.3082  DOWN 26 POINTS FROM YESTERDAY

the Turkish lira close: 5.2069

the Russian rouble 65.47:   DOWN .09 Roubles against the uSA dollar.( DOWN 9 BASIS POINTS)

 

Canadian dollar:  1.3090 UP 37 BASIS pts

USA/CHINESE YUAN (CNY) :  6.7422  (ONSHORE)

USA/CHINESE YUAN(CNH): 6.7562  (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.17%

 

The Dow closed UP 64.22 POINTS OR 0.26%

 

NASDAQ closed DOWN 17.87 POINTS OR 0.25%

 


VOLATILITY INDEX:  16.22 CLOSED DOWN 0.35 

 

LIBOR 3 MONTH DURATION: 2.737%  .LIBOR  RATES ARE FALLING/

 

FROM 2.736

 

 

 

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

 

Powell-Pivot Sends Gold To 8-Month Highs, Dow Up Sixth Straight Week

What made The Fed stomp on the brakes and slam the monetary trajectory into reverse so fast? Probably nothing!!

 

China’s stock markets were levitated late Thursday, early Friday (after The Fed) back into the green for Shanghai Composite (tech heavy indices underperformed)…

 

A Mixed week too in Europe with UK’s FTSE outperforming and Spain and Italy underperforming…

 

No “mix” for US stocks – they are all green. Trannies were best on the week with the rest of the majors holding around the same gains (Dow up 6 straight weeks)

 

S&P, Dow, and Small Caps all lifted into the close to end green but Nasdaq ended red (Thanks to AMZN)

 

Futures show today a little better – the surge on payrolls and again on ISM then fade from the European close…

 

The major US equity indices all stalled at the 100DMA…

 

Energy, Financials, and Tech continue to lead the market this year, though financials underperformed on the week…

 

AMZN spoiled the party this week (down for 2 straight weeks, back into bear market)…and is unchanged since Jan 7th…

 

VIX tumbled to a 16 handle and credit spreads crashed in the week…

 

As the Fed’s implied easing plunged…

 

Treasury yields tumbled on the week after The Fed but rose today after good payrolls/ISM data…

 

This was the biggest yield drop for 2Y since 2018… sending the curve notably steeper… (though hitting resistance once again)

 

And the market shifted more hawkish on the day after the “good” data…

 

The Dollar plummeted after The Fed flip-flop and only rebounded around half of the loss after good data today…

 

Yuan was practically unchanged on the week after a big roller-coaster run higher then lower…

 

Litecoin managed to rally on the week but the rest of the major cryptos continued their slide…

 

Commodities are higher across the board this week, led by WTI…

 

Gold had a second good week in a row – closing at the highest since May 2018…

 

And against the Yuan, surged back to early Jan highs…

 

WTI rose to its highest since November, back above $55…

 

And the coldest week on record prompted a big sell-off in NatGas…

 

As The Nattie/WTI ratio continues to re-normalize…

 

Finally, we note that while macro surprises have exploded today (thanks to payrolls), earnings expectations continue to tumble (to six month lows)…

Let’s just hope its not 2018 deja vu all over again…

And remember what is driving all this exuberance in stocks…

 

END

market trading/

MARKET DATA

The bogus January payroll report:  the USA supposedly added 304,000 jobs last month ans now they will bring out Trump and Kudlow to crow

(courtesy zerohedge)

January Payrolls Soar By 304K, Record 100th Consecutive Month Of Job Gains

It’s official: January marked the record 100th consecutive month of consecutive job growth, and it did so in style, with the US adding a whopping 304K jobs last month, nearly double the 165K expected, however much of this appears to have come at the expense of a revised December number which was revised lower from 312K to 222K.

The change in total nonfarm payroll employment for November was revised up from +176,000 to +196,000, and as noted above, the change for December was revised down from +312,000 to +222,000. With these revisions, employment gains in November and December combined were 70,000 less than previously reported. After revisions, job gains have averaged 241,000 per month over the last 3 months.

Curiously, according to the report, “there were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings from the establishment survey.”

Perhaps more importantly, the average hourly earnings grew by 3.2% for a second consecutive month, with December revised slightly lower from 3.3% to 3.2%. However, on a monthly basis, earnings rose only 0.1%, the lowest rate since October 2017, and below the 0.3% expected increase, providing some more fuel to the Fed’s dovish fire.

In January, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $27.56, following a 10-cent gain in December. Over the year, average hourly earnings have increased by 85 cents, or 3.2 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $23.12 in January.

The average workweek for all employees was unchanged at 34.5 hours in January. In manufacturing, both the workweek and overtime decreased by 0.1 hour to 40.8 hours and 3.5 hours, respectively. The average workweek for production and nonsupervisory employees on private nonfarm payrolls held at 33.7 hours.

The unemployment rate rose again, printing at 4.0%, up from 3.9% last month, and above the 3.9% expected.

Of note, the underemployment (U-6) rate, saw a big jump, from 7.6% to 8.1%, rising by the most since May 2009.

More notably, the labor force participation rate rose again, hitting 63.2%, the highest level since March 2014 as more people jump back into the labor force.

As the BLS notes, the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by about one-half million to 5.1 million in January.

Nearly all of this increase occurred in the private sector and may reflect the impact of the partial federal government shutdown.

Some other details:

  • In January, employment in leisure and hospitality rose by 74,000. Within the industry, job gains occurred in food services and drinking places (+37,000) and in amusements, gambling, and recreation (+32,000). Over the year, leisure and hospitality has added 410,000 jobs.
  • Construction employment rose by 52,000 in January. Job gains occurred among specialty trade contractors, with increases in both the nonresidential (+19,000) and residential (+15,000) components. Employment also rose in heavy and civil engineering construction (+10,000) and residential building (+9,000). Construction has added 338,000 jobs over the past 12 months.
  • Employment in health care increased by 42,000 in January. Within the industry, job gains occurred in ambulatory health care services (+22,000) and hospitals (+19,000). Health care has added 368,000 jobs over the past year.
  • Over the month, employment in transportation and warehousing rose by 27,000, following little change in December. In January, job gains occurred in warehousing and storage (+15,000) and among couriers and messengers (+7,000). Over the year, employment in transportation and warehousing has increased by 219,000.
  • In January, retail trade employment edged up by 21,000. Job gains occurred in sporting goods, hobby, book, and music stores (+17,000), while general merchandise stores lost jobs (-12,000). Employment in retail trade has shown little net change over the past 12 months (+26,000).
  • Mining employment increased by 7,000 in January. The industry has added 64,000 jobs over the year, almost entirely in support activities for mining.
  • Employment in professional and business services continued to trend up over the month (+30,000) and has increased by 546,000 in the past 12 months.
  • Employment in manufacturing continued to trend up in January (+13,000). Over-the-month job gains occurred in durable goods (+20,000), while employment in nondurable goods changed little (-7,000). Manufacturing employment has increased by 261,000 over the year, with more than four-fifths of the gain in durable goods industries.
  • Employment in federal government was essentially unchanged in January (+1,000). Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received pay (or will receive pay) for the pay period that included the 12th of the month.
  • Employment showed little change over the month in other major industries, including wholesale trade, information, and financial activities.

end

Amazing what fudged numbers will do.  There were 380,000 government workers who were out of a job in January. However there were 500,000 additional gains in part time workers in January, something that we have not seen in decades.  The bozos added the government workers even though they did not work but because they were going to be back paid.  But these workers got a part time job in January and that is why 1/2 jobs were added. Also a huge number of B/D additions.

courtesy zerohedge)

Where The Record Government Shutdown Can Be Spotted In Today’s Jobs Report

On the surface, today’s blistering jobs report which notched the 100th consecutive monthly gain in payrolls in style, with some 304K (estimated) jobs added to the US economy, was not impacted by the record government shutdown which lasted for nearly the entire duration of January, with the BLS stating that “there were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings from the establishment survey.”

Bloomberg economist Yelena Shulyatyeva doubled down on this, stating that “the government shutdown had no impact on January payrolls. While the shutdown affected roughly 380,000 government workers who were deemed “non-essential,” they were counted as employed since they received back pay.”

To justify why the BLS “pro formad” the jobs report, it explained that “employment in federal government was essentially unchanged in January (+1,000). Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received pay (or will receive pay) for the pay period that included the 12th of the month.”

And yet it is not true that the shutdown did not affect the jobs report.

For one thing, as the BLS says in the very first line of the jobs report, “Both the unemployment rate, at 4.0 percent, and the number of unemployed persons, at 6.5 million, edged up in January. The impact of the partial federal government shutdown contributed to the uptick in these measures,”

Next, employment as measured by the Household Survey, actually tumbled by 251K to 156.694MM, with the slide impacting both the U3 and U6 unemployment rates which rose to multi-year highs as the total level of the civilian labor force was roughly unchanged.

Third, there was yet another place where the government shutdown impacted the jobs report: as the BLS notes, the number of persons employed part time for economic reasons (i.e., involuntary part-time workers) increased by about one-half million to 5.1 million in January. This was the biggest increase since 2012; nearly all of this increase occurred in the private sector and according to the report, “reflects the impact of the partial federal government shutdown” (persons employed part time for economic reasons would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs). This is shown in the chart below.

Still, despite these “glitches” the broader report was certainly very strong, as Neil Dutta from Renaissance Macro explains:

“We are told not to pay attention to any one jobs report and that goes double for this one because of the government shutdown. That being said, the main story comes through loud and clear. The U.S. economy is not operating at full employment. Strong growth continues to draw workers back into the labor force, driving the participation rate higher. This justifies a go-slow approach from the Fed. Buy stocks.”

Or maybe the jobs report wasn’t strong at all for another, far simpler reason: much more of its was estimated than normal. As Bloomberg’s Andrew Cinko warns, we should probably brace ourselves for another big revision to the job-market data when February rolls around. That’s because the survey response rate for January was even lower than December’s woefully weak rate: consider that today’s report was based on a 60.7% response rate; December’s initial estimate was based on a 61.0% rate, which rose to 88.3% for today’s revised data. The low December response rate was a reason Wells Fargo economist Mark Vitner was wary of the big December job gain.

Ironically, whether it is correct or entirely fabricated for political reasons or otherwise, it is safe to say that the jobs report, or any other economic indicator for that matter, is now irrelevant at least until the summer when the Fed’s “patient” period is expected to expire, and concerns about the Fed potentially hiking again return.

Until then, Dutta is right: “buy stocks“… on autopilot.

end
Dave Kranzler is all over the fraudulent employment report
a must read..
(courtesy Dave Kranzler/IRD)

There Are Lies, Damned Lies, Statistics and The Employment Report

February 1, 2019Financial Markets, Market Manipulation, U.S. EconomyBLS, employment report, stock bubble, unemployment rate

Last month the Government’s Bureau of Lies And Statistics served up an employment report purporting 312,000 new jobs in December. This despite massive seasonal retail lay-offs in the latter half of the month. The BLS happily counts those jobs when hired in October but forgets to remove them when are dismissed at the end of the holiday shopping season. As John Williams (Shadow Government Statistics), the 312,000 jobs were created by re-doing the spreadsheets for prior months’ jobs reports:

Surging December payrolls were a reporting fraud, a canard, no more than massive prior-period revisions “recalculation of seasonal factors” that shifted growth from past months into the October 2018 to December 2018 time-frame, without showing the headline downside revisions to the earlier months from which the growth was borrowed

The same re-calc’ing of the spreadsheets created the 304,000 pop in jobs, December’s 312,000 print revised down to 222,000, with the jobs shifted into January’s number. But no one looks at the revisions, besides a handful of tin-foil hat conspiracy theorists.

My good friend and colleague, John Titus of Best Evidence videos wrote a scathing commentary on the nefarious Labor Force Participation Rate metric, which allegedly rose in January:

The labor force participation rate ticked up this month, from 63.1% last month to 63.2% this month. Great news, right? Umm, not unless shameless fraud designed to mask an economy headed for a depression is good news. The fraud in this case arises from the blatant manipulation of the two data points underlying the participation rate.

The participation rate is simply the number of people in the labor force divided by the working age population (the latter of which is called the civilian non- institutional population). Stated differently, the participation rate is the percentage of working age people who are working or looking for work. So the labor force is slightly larger than the straight-up number of workers because it includes workers PLUS anyone who’s looked for work in that last 4 weeks.

All three numbers—the participation rate, the labor force. and the working age population—are reported each month. But only the participation rate gets any media attention (and precious little at that). This month, as noted, the participation rate ticked up 01% as noted.

What’s curious, though, is that the labor force itself ticked down slightly, by 11,000 workers. For the participation rate to tick up, then, in the teeth of a shrinking labor force, means that the working age population had to have declined quite a bit. And that’s what’s weird—populations tend to increase, relentlessly so.

Indeed over the last 60 years (720 months), the working age population has ticked down only 8 times. And guess what? By far the largest two declines occurred recently— this month and in January 2017 (when Trump was inaugurated). In both cases, the working age population supposedly shrank by 650,000 people! Holy shit! Neither Wyoming nor Vermont have 650,000 people in total, much less 650,000 working age people. Did the media miss a couple of huge meteor hits?

The gloves are off now when it comes to fraudulent data manipulation, as the powers that be will do flat-out anything to disguise the gangrenous cadaver that is the U.S. economy. Sadly, the rot is concentrated among young people. who are now taking on huge amounts of educational debt—debt that cannot be discharged in bankruptcy—that would more properly be called welfare. This situation cannot sustain itself for very long, and won’t.

Basically all of our country’s ills are due to a monetary system predicated on fraudulent interest-bearing debt. Jefferson is rolling in his grave. I plan to go into this and a lot more when I re-launch my Youtube channel with an enhanced vlog-style format.

***

Both Markit and ISM manufacturing buck the global trend and rebounds in manufacturing

(courtesy zerohedge)

US Manufacturing Bucks Global Collapse Trend – Rebounds In January

With European, Japanese, and Chinese manufacturing PMIs plunging, all eyes are on today’s ISM and Markit manufacturing data (after ADP reported the greatest surge in manufacturing jobs since 1968) as the latter confirmed its Flash print, rebounding to 54.9 – against the global trend…

Below the surface of the Manufacturing PMI, however, it was not all sunshine and unicorns as new export order growth slumped but overall it seems the government shutdown did not affect survey respondents’ sentiment at all as business confidence rebounded notably.

Chris Williamson, Chief Business Economist at IHS Markit said:

January saw US manufacturers start the year with renewed vigour. Production rose at a markedly increased rate, commensurate with the factory sector contributing to robust economic growth of approximately 2.5% in the first quarter if such momentum can be sustained in coming months.

“Other encouraging signs included an improved rate of job creation and increased purchasing of inputs, suggesting firms are in the mood for expanding capacity.

“The upturn in business activity in January helped lift confidence in the outlook, though many companies clearly remain concerned about the impact of trade wars and rising protectionism.

Domestic markets provided the main source of new work for manufacturers, offsetting a near-stalling of export trade, the latter linked to subdued demand for US goods in foreign markets.

“Although higher than December, the overall rise in new orders was the second-lowest since last August, hinting at a slight cooling of demand growth in recent months which served to keep the headline PMI below the average recorded last year.”

It seems, from the first chart above, that perhaps US sentiment is on a lag to the rest of the world – remember there is no decoupling.

And after December’s plunge in ISM Manufacturing data, expectations were for no bounce, but like Markit’s PMI, ISM rebounded from an upwardly revised 54.3 to 56.6 in January…

…as New Orders soared as prices paid and employment slipped…

 

ISM respondents are notably les ebullient than the headline projects:

“Unlike in the last few years, we are experiencing a first quarter slowdown.” (Paper Products)

“Overall, business continues to be good; however, margins are being squeezed.” (Transportation Equipment)

“Concerns about oil prices are fueling questions of how strong the economy will be the first half of 2019.” (Chemical Products)

“We continue to enjoy the benefits of a strong general economy. We are busy and maintain a backlog of sales orders.” (Machinery) . We are busy and maintain a backlog of sales orders.” (Machinery)

“Business conditions are good, and our demand and production are tracking to our forecasted growth levels for the year. (Miscellaneous Manufacturing)

“Going to be a very strong spring. Business levels will be just as good [compared to] the same time frame in 2018.” (Fabricated Metal Products)

“Sales nationally appear to be on target for 2019 and slightly ahead of 2018.” (Nonmetallic Mineral Products)

Mixed enough for everyone to be happy.

end
Wholesaler sales tumble while wholesale inventories climb..not a good sign
(courtesy zerohedge)

‘Field Of Dreams’ Economy Failing As Wholesale Sales Tumble, Inventories Rise

Wholesale Inventories-to-Sales ratios rose in November (the latest data released today) to 14-month highs as ongoing inventory builds appear not to have encourage ‘them’ to come spend as wholesale sales tumbled.

 

Wholesales Sales growth slumped to its weakest since Nov 2016, dropping back below wholesale inventories growth for the first time since Sept 2016…

Is this the ‘bad’ news that is also ‘good’ news?

 

USA ECONOMIC STORIES OF INTEREST

trust me on this: there will be no trade deal with China because China will not deal with the forced transfer of technology and other important demands of the USA

important..

(courtesy zerohedge)

Trump Still Unwilling To Make “Tough Trade Offs” With China After Talks Yield No Tangible Result

 

Two days of intense trade talks in Washington have yielded some progress…but not nearly as much as the Trump administration has let on. Looking past US Trade Rep Robert Lighthizer’s post-hoc press conference, where he revealed that, during two days of intense discussions, the two sides had focused on US demands for structural reforms by Beijing (including ending the forced transfer of technology from US companies and reining in the use of industrial subsidies, two of the US’s biggest asks), as well as the requirements for enforcement. But it doesn’t appear that the US or China were in the mood to make any new commitments.

No specific concessions had been made by Beijing. Instead, a US delegation led by Lighthizer and Mnuchin are planning to travel to Beijing after the Chinese New Year for another round of talks. And after that, President Trump – the “closer” in chief himself – is expected to meet Xi on the southern island of Hainan after the second summit with North Korean leader Kim Jong Un to seal the deal with President Xi.

Trump

Trump told reporters in the Oval Office that “I think that probably the final deal will be made, if it’s made, between myself and President Xi.” But he offered little in the way of anything concrete to justify why investors should be optimistic now. As China’s Xinhua news agency reported, the two sides had “clarified the timetable and roadmap for the next consultation” after holding “frank, concrete and constructive” discussions on issues like technology transfers and IP protections. But though the two sides had “clarified the roadmap” toward a deal, it doesn’t appear that any actual progress was made, despite Xi telling Trump in a letter delivered by the Chinese delegation that the “intensive consultations” had yielded “good progress,” according to Bloomberg.

And the US has continued to insist that if there isn’t a deal by March 1, tariffs on $200 billion in Chinese goods will increase from 10% to 25%.

China

“I hope our two sides will continue to work with mutual respect and win-win co-operation,” the Chinese president wrote, adding that an agreement would “send a positive signal to our two peoples and the broader international community.” So far, China has offered to boost its purchases of soybeans and discuss improving market access to international investors – but neither of these offers is anything new.

But as the Financial Times points out, China remains unwilling to reduce state support for its economy in any way that could impact its ability to compete with the US. So whatever progress was made on this key US demand, it was, apparently, superficial, at best. Setting aside the administration’s optimistic tone, Trump’s team is apparently leaning on the notion that the US has the upper hand because the Communist Party would be unwilling to rock the boat at a time when the economy is slowing. But the US is facing pressures of its own – pressures that have been exacerbated by the government shutdown – and nothing about China’s behavior so far suggests they’re leaning toward caving.

Plus, Beijing’s simmering outrage over the US’s perceived persecution of Huawei remains a major complication.

But the White House is facing pressure of its own – in the form of the hit taken by the US economy this month from the partial government shutdown and Mr Trump’s sensitivity to adverse movements in equity markets.  Politically, Mr Trump is striving to fulfil one of his key 2016 campaign pledges – to reset trade relations with China. But any agreement that is seen as weak or inconclusive would expose him to attacks from Democratic rivals. 

The chance of a big breakthrough this week in the trade talks was relatively low, after Beijing reacted with outrage to Monday’s indictment of Huawei, the Chinese telecoms equipment maker, on criminal charges it stole US technology and violated US sanctions. But US officials said there was no evidence it adversely affected the negotiations.

A new summit between Mr Trump and Mr Xi would follow their steak dinner in Buenos Aires on December 1, just after the G20 summit in the Argentine capital. That meeting resulted in a commercial ceasefire between the US and China and avoided a tariff escalation that was originally scheduled for January 1.

Speaking with the FT, a professor of economics at Syracuse University named Mary Lovely highlighted what appears to be the biggest obstacle to a deal: The Trump administration remains unwilling to make big concessions.

Mary Lovely, a professor of economics at Syracuse University and a senior fellow at the Peterson Institute for International Economics, a think-tank, said it was still unclear whether the US was prepared to make “tough trade-offs” with the Chinese in the final stretch.

This was perhaps best encapsulated by Trump’s hint (a suggestion he later walked back) that the talks could be extended past the March 1 deadline.

“This isn’t going to be a small deal with China,” Trump said. “This is either going to be a big deal or it’s going to be a deal that we’ll just postpone for a while.”

So if the administration doesn’t have a change of heart, it would be easier – and more politically expedient – for Trump to continue hailing incremental “progress” while putting off the “real” breakthroughs until the next meeting…and the next meeting…and the next meeting.

end
With the left going bonkers, the bankers will use this problem to deliver martial law.  This will come to the forefront as soon as Venezuela defaults and quite possibly Brazil and Argentina.  We will then see huge numbers of migrants appear at the USA southern border.  At that point, the pundits will ask for martial law and that is the object of the exercise for our bankers
(courtesy Brandon Smith)

Martial Law Is Unacceptable Under Any President

Authored by Brandon Smith via Alt-Market.com,

In the midst of the three ring circus known as the false Left/Right paradigm it is sometimes easy to forget that there is a motive behind the chaos; that there is an intended end-game. Part of that end-game, I believe, is the eventual erasure of individual liberties and the implementation of martial law in the US.   However, the establishment quest for government lockdown requires something very special in order to succeed – They need a considerable percentage of the population to support and defend it.

Governments rarely attempt outright martial law. The reason should be obvious; no military, no matter how advanced, has the capacity to suppress a unified citizenry. If the public is armed, the task becomes even more impossible. The laws of attrition alone would make the conflict bloody and costly.

Martial law is a mechanism that cannot be exploited in a vacuum. The-powers-that-be understand that it can only be used when a large percentage of the public is conned into supporting it. This is usually accomplished through the triggering of engineered crisis events, but there is also another method for getting the masses to back martial law, and that is to push both sides of the political spectrum to extreme zealotry until one side decides to use government as a weapon against the other.

Whether by disaster or political division, the public can be influenced to rationalize government dominance of every aspect of life.

The agenda to engineer crisis is evident. In past articles such as ‘The Federal Reserve Is A Suicide Bomber With A Deeper Agenda’, I have outlined the facts behind economic decline and how it is often utilized by central banks and their international banking partners to accumulate and centralize wealth while also manipulating society into accepting reduced living standards for generations to come. There is another more important motive, though. The banking elites also use the controlled demolition of the economy as a tool to create fear.

The Hegelian Dialectic of problem-reaction-solution is a powerful potion that mesmerizes the unaware population. Those who are dependent are easily frightened because they have no control over their own futures. They become reactive rather than proactive; they seek to be led rather than to lead. They will readily accept promises and solutions from anyone in apparent authority rather than maintaining their objectivity and reason. They become slaves to the social and political tides, always waiting for someone else to fix the problems around them.

This conundrum also transfers over to political conflict. In my article ‘Order Out Of Chaos: The Defeat Of The Left Comes With A Cost’, published just after the 2016 election, I explored the dangerous possibility that Trump supporters were being fooled into participating in the false Left/Right paradigm while believing that they had transcended it.

When we refer to the “false Left/Right paradigm” in the alternative media, we are referring to the fact that the political gatekeepers within government actually tend to share the same beliefs and agenda regardless of the “party” or ideology they claim to support. That is to say, Republican and Democratic leaders play their respective roles and their battles are scripted, not legitimate. The Trump campaign was a rather different animal, in that Trump was a candidate without a longstanding political record. He was a relative unknown compared to Clinton, and this made him enticing to conservatives and liberty activists that had all but abandoned participation in US elections.

It takes time to identify a political fake or controlled opposition. With Trump, we had no point of reference. Two years have changed this…

Trump’s campaign was built upon two very important positions:

First, Trump promised small government conservatives that he was going to “drain the swamp” in Washington of the kind of globalists and banking elites that Clinton was notorious for associating with. Trump’s background already had at least one red flag in this regard – his empire was bailed out by the Rothschild banking family in the 1990’s during his debt crisis and Taj Mahal casino failures. This alone was not enough to discount him, though. Many businessmen have at least some interactions with banking elites by necessity and the way the system is designed. Unfortunately Trump’s relationship with the bankers did not stop there.

Trump’s cabinet picks were a perfect opportunity for him to establish his independence from globalists, bankers and their think tank partners. This did not happen. Trump brought in Wilber Ross as Commerce Secretary, the same Rothschild agent who arranged his bailout in the 1990’s. He brought in people like Steve Mnuchin, formerly of Goldman Sachs, Larry Kudlow, formerly of the NY Fed, and John Bolton from the Council On Foreign Relations. Trump was adding to the swamp, not draining it.

Second, Trump also argued for economic transparency during his campaign, which for many of us was a breath of fresh air. Trump pointed out the fallacy of the stock market and the fact that the Fed had been supporting a fabricated rally for years using artificially low interest rates and stimulus. Trump argued against false economic stats like mainstream unemployment numbers, which ignore the 95 million jobless people in the US that are no longer counted by the BLS.

Yet, as soon as Trump entered office, all of this changed. Trump immediately started taking credit for the bull market rally in stocks as if it was his own rather than a product of Fed manipulation. He took credit for fraudulent jobs numbers too, despite the tens of millions of people still listed as “non-participatory”. Trump has tied his administration to the performance of a fake economy sitting atop a massive deflating bubble.

I would also note that during Trump’s campaign and in the two years since Trump has barely mentioned the word “Constitution”. This is rather odd to me. A liberty advocate should be defending constitutional protections regularly, driving home the need for the Bill of Rights to be secured and honored. Our very society depends upon the survival of such principles, after all.

It has become clear that Trump is not the “savior” that the liberty movement was hoping for, but many people will continue to applaud him all the same because of a specific factor: The increasingly deranged political left.

Consider the endless absurdity of Russiagate; a conspiracy theory with absolutely no evidence to back it.It never seems to die despite all logic and reason, but the motives behind this are not what conservatives usually assume. Russiagate is a drug, a drug for leftists. They love it, they need it, it dulls the pain of their loss in 2016 and it confirms their biases. They didn’t “fail” in 2016, and they aren’t the biggest losers of all time; the election was “stolen” from them by Trump and his Russian handlers. Therefore, they are now justified in any level of insanity they display in their activism and opposition. They believe they are righteous.

At the same time, conservatives are ever more bewildered by the cultism and zealotry of the left. Each new incident pokes at their ribs with a pointy knife. Trump is being “railroaded”, they think to themselves. The left must be planning a coup. They won’t let him build the border wall. They try to delay or obstruct his State Of The Union Address. They spew nonsensical drivel and froth at the mouth and scream and wail and act like overgrown toddlers. They are dangerous. Drastic measures might need to be taken…

And so we are confronted with a perilous choice; do we as conservatives becomes zealots ourselves in order to defeat the zealotry of leftists?

But this is a false choice. The left hand of the paradigm has reached full bore lunacy, but this is designed to push conservatives into our own brand of blindness. The goal? To get conservatives to champion actions that are completely contrary to our principles. The goal, I believe, is to condition us into cheering for greater government power and centralization in the name of stopping the leftist menace.

Three weeks from now the government shutdown fight is set to return. The mainstream media has been avidly reporting that the uncertainty is over, but this is a preposterous conclusion. What the nation faces now is even greater confusion as the shutdown fight prepares to return in February or a national emergency is declared, or both. My concern is that this is leading to conservative support for extreme measures.

Consider the current geopolitical environment in the western hemisphere today.  South America is on the verge of potential implosion, in no small part due to the failures of socialism, but also due to Trump’s globalist infested administration seeking destabilization of an already fragile region.  Increasing US sanctions on Venezuela, Trumps support for Madruro’s political opponent (John Guaido), and John Bolton’s notepad snafu would suggest there are military plans being made to take advantage of the chaos.

I have warned in the past that the ongoing breakdown in South America is suspiciously similar to the martial law scenario described in the US government’s secretive Rex 84 plan which was exposed during the Iran/Contra hearings.  To summarize, it suggests that a South American crisis would lead to mass migrations to the southern US border, and that this would be used as a rational for martial law measures in America.  I have to say, this sounds a lot like what is happening now.

If you think the border wall debate is a hot button issue this year, just wait until a collapse in Venezuela or an economic disaster in Brazil or Argentina results in millions of people seeking refuge illegally in the US.  Trump’s wall will be all that any conservatives talk about, while leftists will be blaming his administration for the very calamity that brought about the migrant hordes in the first place.  Both sides would be fully disillusioned with each other if they are not already.  Conservatives would certainly support a declaration of national emergency for the wall.

The cleverness of this ruse is that both sides would be partly right, but also mostly wrong.

What would a national emergency entail? Simply building a border wall? Building a border wall using the military? What about martial law on the border? Why stop there?  Why not have martial law throughout the entire country?  That would finally put an end to leftist interference, right?  Knowing what we now know about Trump’s associations with banking elites, how can we trust that it will end at the border?

It seems to me that the fight between left and right is being driven beyond the information wars and beyond activism into a realm that could include actual civil war. If the current trend continues, I see no other outcome.

But as always we must ask who benefits the most from this?

While the left has gone off the deep end into cartoonland and must be stopped, the real threat to America is the banking cabal which influences both sides of the paradigm The fact is, Trump works with them everyday in the White House. Economic crisis and geopolitical crisis are inevitable catalysts for greater centralization and totalitarianism, and the left is being used as a cattle prod to ensure that the political right is infuriated enough to jump on the bandwagon.

The only right answer, the only solution is to refuse to support martial law under any circumstances or under any president, and to fight against it should it ever arise.  Borders can and should be secured without giving government carte blanche to do whatever it pleases without restriction.  In fact, any problem can be better resolved without selling our souls to big government in exchange for temporary power over our political opponents.

I would remind liberty activists that by opening such a Pandora’s box, there is no going back. It is a power that would allow for infinite and irreversible corruption, a power that can only be used for evil and never for good.  Even if you truly believe Trump’s motives to be honorable, there are no guarantees that these measures will ever be rescinded once they are started, nor can we be sure that they will not be used by a future president with ill intent once Trump is gone. Some people might argue that my concerns are unwarranted; that it will never come to martial law. We shall see. The trend developing today is certainly not encouraging.

*  *  *

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SWAMP STORIES

New evidence destroys Adam Schiff’s theory that Donald Jr spoke to his father

(courtesy zerohedge)

New Evidence Destroys Adam Schiff’s Trump Tower Conspiracy Theory

New evidence obtained by Senate investigators reveal that Donald Trump Jr. did not speak with his father from a blocked telephone number days ahead of the 2016 Trump Tower meeting, as first reported by CNNcontradicting Democratic conspiracy theories.

Records provided to the Senate Intelligence Committee show the calls were between Trump Jr. and two of his business associates, the sources said, and appear to contradict Democrats’ long-held suspicions that the blocked number was from then-candidate Donald Trump. –CNN

Democrats led by Rep. Adam Schiff (D-CA) have pointed to the blocked-number calls as evidence that President Trump himself had knowledge that his son, son-in-law Jared Kushner and Paul Manafort met with a Russian attorney who said she had dirt on Hillary Clinton.

According to Schiff, “We wanted to get the phone records to determine, was Donald Trump talking to his son about this meeting,” he told CNN last November. “It’s an obvious investigative step, but one the Republicans were unwilling to take because they were afraid of where the evidence might lead.

California Senator Dianne Feinstein (D) also pointed to the blocked calls in a Democratic report last year detailing the Senate Judiciary Committee’s investigation of the Trump Tower meeting. “We also do not know who they told about this meeting, including whether they ever discussed it with Mr. Trump,” wrote Feinstein – who noted that Trump Jr. placed three calls to the blocked numbers.

Schiff’s report, however, states that the first call on June 6 was incoming, while CNN reports that the records provided to Congress do not indicate whether the blocked calls were incoming or outgoing.

Democrats have long suggested that Trump Jr. lied to Congress and that President Trump has lied about whether he knew about the Trump Tower meeting before it happened. Trump claims he learned about it when the press began covering it in 2017, over a year after it took place.

Donald J. Trump

@realDonaldTrump

Just out: The big deal, very mysterious Don jr telephone calls, after the innocent Trump Tower meeting, that the media & Dems said were made to his father (me), were just conclusively found NOT to be made to me. They were made to friends & business associates of Don. Really sad!

40.9K people are talking about this

The Russian attorney at the Trump Tower meeting, Natalia Veselnitskaya, met with Fusion GPS co-founder Glenn Simpsonhours before she met with Trump Jr. Also in attendance was Russian-American lobbyist Rinat Akhmetshin.

Hillary Clinton’s campaign paid Fusion GPS to produce the “Steele dossier” used by the FBI to justify spying on the Trump campaign – and later leaked to the public to smear the President. Both Veselnitskaya and Akhmetshin were working with Fusion GPS, however they claim the Trump Tower meeting was unrelated to their work with the opposition research firm.

Also working with Fusion GPS was Nellie Ohr, the wife of the former #4 official at the DOJ, Bruce Ohr.

Donald J. Trump

@realDonaldTrump

Nellie Ohr, the wife of DOJ official Bruce Ohr, was long ago investigating for pay (GPS Fusion) members of my family, feeding it to her husband who was then giving it to the FBI, even though it was created by ousted & discredited Christopher Steele. Illegal! WITCH HUNT

34.2K people are talking about this

The Daily Caller‘s Chuck Ross notes the irony in CNN breaking the news regarding the blocked calls, given their sloppy and embarrassing reporting surrounding the matter:

Ironically given CNN’s role in breaking the new story, the network has been behind other reporting about Trump Jr. and his Trump Tower conversations that have turned out to be false.

CNN reported in July 2018 former Trump attorney Michael Cohen was involved in a conversation in which Trump Jr. told his father that the meeting with Russians was going to take place. But on Aug. 22, 2018, Cohen adviser Lanny Davis acknowledged he was a source for the CNN article and that he was mistaken. He said Cohen did not know whether Trump Jr. told Trump about the meeting.

CNN also retracted a story Dec. 8, 2017, that falsely claimed Trump Jr. had received an email Sept. 4, 2016, that included a link to a WikiLeaks emails that had yet to be made public. It turned out the email was actually dated Sept. 14, 2016, a day after WikiLeaks had posted the emails. A person who Trump Jr. did not know sent him the email with a link to information that had already been made public. –Daily Caller

Andrew Surabian@Surabees

A lot of people look dumb today.

“Records provided to the Senate Intelligence Committee show the calls were between Trump Jr. & two of his business associates…and appear to contradict Democrats’ long-held suspicions that the blocked number was from then-candidate Donald Trump”

Manu Raju

@mkraju

NEWS: Senate Intel has obtained info showing Donald Trump Jr.’s mysterious phone calls ahead of the 2016 Trump Tower meeting were not with his father, sources tell @PamelaBrownCNN @KaraScannell @jeremyherb and me. Dems had suspected that it was Trump’s. https://www.cnn.com/2019/01/31/politics/senate-investigators-blocked-phone-calls-not-father-trump/index.html ….

4,419 people are talking about this
SWAMP STORIES/MAJOR STORIES//THE KING REPORT
and special thanks to Chris Powell of GATA for sending this down for us:

Also after the close: @GretaLWall: In meeting between Chinese Vice Premier and President Trump in the Oval Office, Trade Rep Lighthizer announces he and Treasury Secy Mnuchin “will be going over there (China) shortly and then we’ll see where we are.”

     Chinese Vice Premier brought President Trump letter from Chinese President Xi Jinping who reportedly has agreed to purchase 5 million tons of soybeans per day.

    President Trump says tremendous progress has been made in negotiations in Washington but that ‘doesn’t mean we have a deal’. President says he may meet with Xi once or twice but no date set yet.

 

Today – The January Employment Report should have little or no effect with the Fed in dovish mode for the foreseeable future.

With the end of the two-day US-China trade negotiations, the countdown to the March 1 deadline has commenced.  Part of the recent manic rally could be the usual suspects getting long in anticipation of positive news or more hype about a US-China trade deal.

For over a year, the MSM and some Dems suggested that DJT Jr. calls to blocked numbers before & after a meeting with Russians at Trump Tower were to his dad.  They called it evidence of perjury or collusion with Russia.  The narrative blew up yesterday. Cong. Schiff and others owe DJT Jr. a public apology.

CNN: Trump Jr.’s mysterious calls weren’t with his father

Records provided to the Senate Intelligence Committee show the calls were between Trump Jr. and two of his business associates, the sources said, and appear to contradict Democrats’ long-held suspicions that the blocked number was from then-candidate Donald Trump… Schiff declined to comment through a spokesperson for this story…

https://www.cnn.com/2019/01/31/politics/senate-investigators-blocked-phone-calls-not-father-trump/index.html

@DonaldJTrumpJr: Has anyone heard from Adam Schiff? I imagine he’s busy leaking other confidential info from the House Intelligence Committee to change the subject?!? [Jr. blames Schiff for leaking details of his testimony to CNN and others.]

Donald Trump Jr.: “Schiff & his staff seem to leak about everything”

Chairman of the House Intelligence Committee Rep. Adam Schiff said Sunday to This Week’s, host George Stephanopoulos that he wants Special Counsel Robert Mueller to investigate whether Donald Trump Jr. lied to Congress… [About his phone calls]

https://saraacarter.com/donald-trump-jr-schiff-his-staff-seem-to-leak-about-everything/

The fact that CNN got the leak suggests it emanated from the Dem camp.  For the past few weeks, leaks have appeared that undermine long-held MSM and Dem narratives about Team DJT.  It appears someone is trying to prepare DJT haters for a Mueller report disappointment.

@RyanGirdusky: Mike Pompeo has flooded the State Dept. with ppl who not only opposed Trump in 2016, but are vocal critics of his world view. Why aren’t we out of Syria or Afghanistan yet? Look to Pompeo and Bolton

‘Never Trumpers’ Can Get State Department Jobs with Pompeo There

Trump called one aide a ‘major loser.’ She’s now on his team.

https://www.bloomberg.com/amp/news/articles/2019-01-31/-never-trumpers-can-get-state-department-jobs-with-pompeo-there

Judicial Watch: Documents Reveal Obama State Department Urgently Provided Classified ‘Russiagate’ Documents to Multiple Senators Immediately Ahead of Trump Inauguration

     “These documents show remarkable evidence of the non-stop, unethical effort in the Obama State Department to gather and send its own dossier of classified information on Russia in an effort to discredit the incoming Trump administration,” said Judicial Watch President Tom Fitton…

https://www.judicialwatch.org/press-room/press-releases/judicial-watch-documents-reveal-obama-state-department-urgently-provided-classified-russiagate-documents-to-multiple-senators-immediately-ahead-of-trump-inauguration/

The Party of Death [Quick history lesson on Catholic’s century-long loyalty to the Democratic Party]

Catholics long were a bulwark of the Democratic Party.  This allegiance crystalized in the 1884 election in which James Blaine and the Republicans smeared opponent Grover Cleveland’s Democrats as the party of “Rum, Romanism, and Rebellion,” referring to alcohol legality, Catholic churches, and former Confederate support.  The phrase badly backfired on Blaine, making Cleveland president and creating a solid Catholic voting bloc for Democrats for a century.

     Today, Catholic Americans are a pivotal swing voter group, with incredible success in deciding national winners.  This bloc was especially determinative in 2016 when working-class Catholics in the Midwest, many of whom had voted twice for President Obama, flocked across the aisle and delivered Pennsylvania, Ohio, Michigan, and Wisconsin for Donald Trump.  In fact, Trump won the Catholic vote by a 52 percent-45 percent spread, almost the same Catholic margin that had returned Obama to office in 2012… [Remainder of article claims the Dem lurch to the left is alienating Catholics.]

https://www.realclearpolitics.com/articles/2019/01/31/the_party_of_death_139331.html

NY Daily News Editorial Board: Stand up for Israel, Dems: The party must reassert its support for the Jewish state –The erosion of support for Israel among a small but vocal contingent of Democrats is bad for the party, bad for the Jewish state and bad for America…

https://www.nydailynews.com/opinion/ny-edit-israel-20190130-story.html

WaPo: Illinois town [Mount Carroll] drops to minus-38 degrees, a state record, as deadly Arctic blast plunges Midwest into a deep freeze [Global warming arrives on Sunday; a 50 degree high is forecast.]

end

Let us close out the week with this offering courtesy of Greg Hunter

Wall Fight to Shutdown, Gold Rising, Economic Warnings Abound

By Greg Hunter On February 1, 2019

President Trump is in the process of building a wall on the southern border to fend off caravans, drug dealers and human trafficking. Is Congress going to give the President the money he wants to secure the border and America? Pelosi says no way. Is America heading for another partial government shutdown—way.

Gold has been rising lately. Is the long awaited turnaround in price finally here after crashing from the $1,900 per ounce level back in 2011? Central banks seem to think so because they are buying the yellow metal at a record pace.

Hundreds of Chinese companies just released profit warnings. Renowned California power company PG&E just filed for bankruptcy, and most of America’s biggest cities are facing severe financial problems. Those are just a few of the problems flashing there is something really wrong with the global economy.

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

 

-END-

-END-

 

I WILL SEE YOU MONDAY NIGHT
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