SEPT 6//GOLD DOWN $9.80 ON AN ORCHESTRATED RAID THIS AFTERNOON//SILVER DOWN 60 CENTS TO $18.15../BOTH GLD AND SLV HAVE PAPER WITHDRAWALS/POOR JOBS REPORT INITIALLY SENDS GOLD AND SILVER HIGHER BUT IT IS FRIDAY AND THEY RAIDED AGAIN//THE LARGEST SHIPPING COMPANY IN THE WORLD, MAERSK ANNOUNCES GLOBAL SHUTDOWN AND THEY CANCEL AN ASIAN TO EUROPEAN ROUTE.

GOLD:$1508.00 DOWN $9.80 (COMEX TO COMEX CLOSING)

 

 

 

 

 

 

 

 

 

 

 

Silver:$18.15 DOWN 60 CENTS  (COMEX TO COMEX CLOSING)

 

 

Closing access prices:

Gold : $1507.00

 

silver:  $18.16

 

You could tell that the bankers were dead set on whacking gold and silver.  On onslaught started last night proceeded to knock gold down to 1503.00 and silver to 18.03..then the jobs report and that took the wind out of the sails of our crooked bankers.  But rest assured it is Friday and a 1 pm est with London safely put to bed they raided again on stupid comments from Powell. Actually they were very bullish for gold and silver as it looks that he is set to lower rates in Sept.  As I promised you, we will be zero bound in USA terms shortly.

 

 

 

we are coming very close to a commercial failure!!

 

 

 

COMEX DATA

 

 

 

 

 

JPMorgan has been receiving gold with reckless abandon and sometimes supplying (stopping)

today RECEIVING 8/13

EXCHANGE: COMEX
CONTRACT: SEPTEMBER 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,515.400000000 USD
INTENT DATE: 09/05/2019 DELIVERY DATE: 09/09/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
118 H MACQUARIE FUT 2
661 H JP MORGAN 8
737 C ADVANTAGE 4 3
905 C ADM 9
____________________________________________________________________________________________

TOTAL: 13 13
MONTH TO DATE: 1,626

NUMBER OF NOTICES FILED TODAY FOR  SEPT CONTRACT: 13 NOTICE(S) FOR 1300 OZ (0.0404 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  1626 NOTICES FOR 162600 OZ  (5.0575 TONNES)

 

 

 

SILVER

 

FOR SEPT

 

 

276 NOTICE(S) FILED TODAY FOR 1,380,000  OZ/

 

total number of notices filed so far this month: 6786 for   33,930,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ 10815 UP 246 

 

 

 

Bitcoin: FINAL EVENING TRADE: $ 10,429 DOWN 203

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI FELL BY A HUGE  SIZED 6304 CONTRACTS FROM 222,986 DOWN TO 216,682 WITH THE 68 CENT LOSS IN SILVER PRICING AT THE COMEX.

TODAY WE ARRIVED FURTHER FROM  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 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 HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:,

 FOR SEPT  0, FOR DEC: 3637 AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  3637 CONTRACTS. WITH THE TRANSFER OF 3637 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 3637 EFP CONTRACTS TRANSLATES INTO 18.19 MILLION OZ  ACCOMPANYING:

1.THE 68 CENT LOSS IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST 12 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  AND

21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

5.845 MILLION OZ STAND IN JANUARY.

2.955 MILLION OZ STANDING FOR FEBRUARY.:

27.120 MILLION OZ STANDING IN MARCH.

3.875 MILLION OZ STANDING FOR SILVER IN APRIL.

18.845 MILLION OZ STANDING FOR SILVER IN MAY.

2.660 MILLION OZ STANDING FOR SILVER IN JUNE//

22.605 MILLION OZ  STANDING FOR JULY

10.025   MILLION OZ INITIAL STANDING IN AUGUST.

38.020   MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)

WE HAD NO DOUBT CONSIDERABLE COVERING OF BANKER SHORTS AT THE SILVER COMEX  YESTERDAY WITH THE HUGE RAID ORCHESTRATED BY THE CROOKED BANKERS.  HOWEVER THE LOSS IN TOTAL OI WAS MUCH SMALLER THAN I HAD EXPECTED WITH A 68 CENT DRUBBING IN PRICE.

THE LIQUIDATION OF COMEX OI OF SPREADERS HAVE STOPPED AND WE WILL NOW COMMENCE WITH THE ACCUMULATION PHASE OF SPREADERS GOLD OPEN INTEREST

 

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

11,593 CONTRACTS (FOR 4 TRADING DAYS TOTAL 11,593 CONTRACTS) OR 57.97 MILLION OZ: (AVERAGE PER DAY: 2898 CONTRACTS OR 14.490 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF AUGUST:  57.97 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 8.28% 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:          1607.68   MILLION OZ.

JANUARY 2019 EFP TOTALS:                                                      217.455. MILLION OZ

FEB 2019 TOTALS:                                                                       147.4     MILLION OZ/

MARCH 2019 TOTAL EFP ISSUANCE:                                          207.835 MILLION OZ

APRIL 2019 TOTAL EFP ISSUANCE:                                              182.87  MILLION OZ.

MAY 2019: TOTAL EFP ISSUANCE:                                                136.55 MILLION OZ

JUNE 2019 , TOTAL EFP ISSUANCE:                                               265.38 MILLION OZ

JULY 2019   TOTAL EFP ISSUANCE:                                                175.74 MILLION OZ

RESULT: WE HAD A HUGE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 6304, WITH THE 68 CENT LOSS IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A  HUGE SIZED EFP ISSUANCE OF 3637 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 LOST A STRONG  SIZED: 2667 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 3637 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 6304 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 68 CENT LOSS IN PRICE OF SILVER AND A CLOSING PRICE OF $18.75 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A STRONG 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. 1.083 BILLION OZ TO BE EXACT or 155% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 276 NOTICE(S) FOR 1,380,000, OZ OF SILVER

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 244,196 CONTRACTS ON AUG 22.2018 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $14.78.  

 

.

 

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 FEB 2019:  2.955 MILLION OZ/ MARCH: 27.120 MILLION OZ/  APRIL AT 3.875 MILLION OZ/ A MAY:  18.845 MILLION OZ ..JUNE 2.660 MILLION OZ//JULY 22.605 MILLION OZ; AUGUST 10.025 MILLION OZ/  SEPT 38.020 MILLION OZ// 
  2.  THE  RECORD WAS SET IN 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 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 COMEX OPEN INTEREST FELL BY AN ATMOSPHERIC AND CRIMINALLY SIZED 25,323 CONTRACTS, TO 618,240 ACCOMPANYING THE HUGE  $33.80 PRICING LOSS WITH RESPECT TO COMEX GOLD PRICING// YESTERDAY// /

THE SPREADING LIQUIDATION OPERATION IS NOW OVER FOR SILVER..AND WE WILL NOW MORPH INTO AN ACCUMULATION PHASE OF SPREADING CONTRACTS FOR GOLD.  THEY WILL ACCUMULATE CONSIDERABLE AMOUNT OF THE CONTRACTS AND THEN LIQUIDATE ONE WEEK PRIOR TO FIRST DAY NOTICE

FOR THOSE OF YOU WHO ARE NEWCOMERS HERE IS A BRIEF SYNOPSIS OF HOW THE CROOKS FLEECE UNSUSPECTING LONGS IN THE SPREADING ENDEAVOUR;

MODUS OPERANDI OF THE CORRUPT BANKERS AS TO HOW THEY HANDLE THEIR SPREAD OPEN INTERESTS:

 

 

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES:

 

 

“AS YOU WILL SEE, THE CROOKS WILL NOW SWITCH TO GOLD AS THEY INCREASE THE OPEN INTEREST FOR THE SPREADERS. THE TOTAL COMEX GOLD OPEN INTEREST WILL RISE FROM NOW ON UNTIL ONE WEEK PRIOR TO FIRST DAY NOTICE AND THAT IS WHEN THEY START THEIR CRIMINAL LIQUIDATION.

HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF SEPT HEADING TOWARDS THE  ACTIVE DELIVERY MONTH OF OCTOBER FOR GOLD.

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES, HERE IS THE BANKERS MODUS OPERANDI:

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST  STARTS TO RISE IN THIS NON ACTIVE MONTH OF SEPT BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN GOLD WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING ACTIVE DELIVERY MONTH (OCT), AND THAT IS WHEN THE CROOKS SELL THEIR SPREAD POSITIONS BUT NOT AT THE SAME TIME OF THE DAY.  THEY WILL USE THE SELL SIDE OF THE EQUATION TO CREATE THE CASCADE (ALONG WITH THEIR COLLUSIVE FRIENDS) AND THEN COVER ON THE BUY SIDE OF THE SPREAD SITUATION AT THE END  OF THE DAY. THEY DO THIS TO AVOID POSITION LIMIT DETECTION. THE LIQUIDATION OF THE SPREADING FORMATION CONTINUES FOR EXACTLY ONE WEEK AND ENDS ON FIRST DAY NOTICE.”

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A HUMONGOUS SIZED 15,860 CONTRACTS:

OCT 2019: 0 CONTRACTS, DEC>  15,860 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 621,535,,.  ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A SMALLER SIZE LOSS IN TOTAL CONTRACTS ON THE TWO EXCHANGES THAN EXPECTED:  9463 CONTRACTSOF WHICH 25,323 CONTRACTS DECREASED AT THE COMEX  AND 15,860 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI LOSS OF 9463 CONTRACTS OR 946,300 OZ OR 29.43 TONNES.  YESTERDAY WE HAD A LOSS OF $33.80 IN GOLD TRADING....AND WITH THAT LOSS IN  PRICE, WE  HAD A SMALLER THAN EXPECTED LOSS IN GOLD TONNAGE OF 29.43  TONNES!!!!!! THE BANKERS WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER WITH RECKLESS ABANDON AS OVER 9 BILLION DOLLARS WORTH OF GOLD SHORTS WERE CALLED UPON TO WHACK OUR PRECIOUS METAL TO KINGDOM COME. FROM THE DATA THE BANKERS KNOCKED OUT THE OPEN INTEREST AT THE COMEX BUT MOST OF THESE GUYS LANDED IN EFP’S AS THEY MORPHED INTO LONDON BASED FORWARDS AND RECEIVED A FIAT SPECIAL FOR ENGAGING IN THIS CRIMINAL ACTIVITY.

 

 

 

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 40,372 CONTRACTS OR 4,037,200 oz OR 126.82 TONNES (4 TRADING DAY AND THUS AVERAGING: 10,093 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 4 TRADING DAY IN  TONNES: 126.82 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES

THUS EFP TRANSFERS REPRESENTS 126.82/3550 x 100% TONNES =3.57% OF GLOBAL ANNUAL PRODUCTION

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     4276.69  TONNES

JANUARY 2019 TOTAL EFP ISSUANCE;   531.20 TONNES

FEB 2019 TOTAL EFP ISSUANCE:             344.36 TONNES

MARCH 2019 TOTAL EFP ISSUANCE:       497.16 TONNES

APRIL 2019 TOTAL ISSUANCE:                 456.10 TONNES

MAY 2019 TOTAL ISSUANCE:                    449.10 TONNES

JUNE 2019 TOTAL ISSUANCE:                   642.22 TONNES

JULY 2019: TOTAL ISSUANCE:                    591.56 TONNES

AUG. 2019 TOTAL ISSUANCE:                    639.62 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 DECREASE IN OI AT THE COMEX OF 25,323 WITH THE  PRICING LOSS THAT GOLD UNDERTOOK YESTERDAY($33.80)) //.WE ALSO HAD  A HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 15,860 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 15,860 EFP CONTRACTS ISSUED, WE  HAD A SMALLER THAN EXPECTED  SIZED LOSS OF 9463 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

15,860 CONTRACTS MOVE TO LONDON AND 25,323 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE LOSS IN TOTAL OI EQUATES TO 29.43 TONNES). ..AND THIS HUGE DECREASE OF  DEMAND OCCURRED WITH THE  LOSS IN PRICE OF $33.80 WITH RESPECT TO YESTERDAY’S TRADING AT THE COMEX.

THE COMEX IS NOW UNDER FULL ASSAULT WITH RESPECT TO GOLD AND SILVER.

 

 

 

 

 

 

 

 

we had:  13 notice(s) filed upon for 1300 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD..

 

WITH GOLD DOWN $9.80 TODAY//(COMEX-TO COMEX)

A BIG CHANGE IN GOLD INVENTORY AT THE GLD//

A PAPER WITHDRAWAL OF 6.15 TONNES  (AND NO DOUBT THIS WAS USED IN THE RAID)

 

INVENTORY RESTS AT 889.75 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 60 CENTS TODAY:

 

 

A BIG CHANGE IN SILVER INVENTORY AT THE SLV:

A WITHDRAWAL OF 842,000 OZ OF PAPER SILVER

 

/INVENTORY RESTS AT 386.604 MILLION OZ.

 

 

 

 

 

OUTLINE OF TOPICS TONIGHT

 

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

1. Today, we had the open interest in SILVER FELL BY A HUGE SIZED 6093 CONTRACTS from 222,986 DOWN TO 216,682 AND FURTHER FROM 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…..

 

 

 

EFP ISSUANCE: 

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

 

FOR SEPT. 0; DEC: 3637 AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 3637 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE OI LOSS AT THE COMEX OF 6093  CONTRACTS TO THE 3637 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A SMALLER  SIZED THAN EXPECTED LOSS OF 2667 OPEN INTEREST CONTRACTS.THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 13.34 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 7.475 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. 2.955 MILLION OZ STANDING IN FEBRUARY,  27.120 MILLION OZ FOR MARCH., 3.875 MILLION OZ FOR APRIL  18.765 MILLION OZ FOR MAY  NOW 2.660 MILLION OZ FOR JUNE WITH JULY AT 22.605 MILLION OZ AUGUST AT 10.025 MILLION OZ//SEPT 2019: 37.020 MILLION OZ

 

RESULT: A GIGANTIC SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE 68 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A STRONG SIZED 3637 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR THIS MONTH, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

BOTH THE SILVER COMEX AND THE GOLD COMEX ARE IN STRESS AS THE BANKERS SCOUR THE BOWELS OF THE EXCHANGE FOR METAL

 

 

(report Harvey)

.

 

2 ) 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 13.74 POINTS OR 0.46%  //Hang Sang CLOSED UP 175.23 POINTS OR 0.66%   /The Nikkei closed UP 113.63 POINTS OR 0.54%//Australia’s all ordinaires CLOSED UP .48%

/Chinese yuan (ONSHORE) closed UP  at 7.1155 /Oil UP TO 55.31 dollars per barrel for WTI and 59.31 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED UP // LAST AT 7.1155 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 7.1113 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING BELOW LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

3A//NORTH KOREA/ SOUTH KOREA

 

3b) REPORT ON JAPAN

3C  CHINA

i)China

The Chinese economy is suffering pretty bad due to the tariffs and the global slowdown.  Now China cuts its banking Reserve Ratio in an attempt to stimulate their economy.

(zerohedge)

ii)With a major part of the pig market in China destroyed by the Pig Ebola, Chinese demand for donkey meat is now threatening to wipe out stocks of this meat in Kenya

(zerohedge)

iii)An excellent commentary from Brandon Smith and the fallacies about the China/USA trade war. he explains what the globalists are up to.

(Brandon Smith)

4/EUROPEAN AFFAIRS

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey

Lira tumbles after a Turkish politician gets a 10 yr sentence for insulting Erdogan.

(zerohedge)

6.Global Issues

i)Blackrock is a powerful company.  Here is how they see the end game

(Blackrock)

ii)Maersk
Collapsing global demand is causing havoc for our no 1 shipper Maersk as they halt one of their routes:  the Asia-Europe Loop
(zerohedge)

7. OIL ISSUES

 

8 EMERGING MARKET ISSUES

i)WHAT on earth was this guy smoking? Former Lehman hedge fund trader takes a one billion dollar loss betting on Argentinian bonds recovering. What a doorknob

(zerohedge)

ii)India

India’s auto sector has now come to a screeching halt as sales crash in August

(zerohedge)

9. PHYSICAL MARKETS

i)An excellent paper from Alasdair Macleod as he claims that in a downturn the USA dollar is more at risk than the yuan

(Alasdair Macleod)

the entire article is in the USA section of my commentary.

ii)BILL MURPHY interviewed by Chris Marcus

(courtesy Chris Marcus/GATA)

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

MARKET TRADING//USA

a)Market trading/LAST NIGHT/USA

 

b)MARKET TRADING/USA/AFTERNOON

ii)Market data/USA

The jobs report which is a phony anyway, missed big time. The number of new jobs disappoint but hourly earnings jump and thus in the words of one investor: “it looks like a stagflation report:  They were all set to whack gold and silver but that failed as our two precious metals recovered from their earlier whacking

(zerohedge)

iii) Important USA Economic Stories

i)A super commentary from Alasdair Macleod on which currency is going to hurt more in a recession/depression: the yuan or the dollar.  MacLeod states that the yuan will win out for various reasons.  Central to his theme is that China has only 2 trillion USA dollars of debt..and since it has 3$ trillion of dollar assets it could withstand a collapse in global economies.  Also China does not have the social welfare system that the USA has.

a  must read…

(Alasdair MacLeod)

ii)Rabobank strategists are pretty good.  Here is Phillip Mare//Senior uSA analyst at Rabobank

the subject: Powell’s remarks.  His conclusion: we are going zero bound
(Marey/Rabobank)

iv) Swamp commentaries)

v) King report/Courtesy of Chris Powell of GATA which includes the major swamp stories.

 

LET US BEGIN:

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN INTEREST FELL BY AN ATMOSPHERIC AND CRIMINALLY SIZED 25,323 CONTRACTS TO A LEVEL OF 618,240 ACCOMPANYING THE LOSS OF $33.80 IN GOLD PRICING WITH RESPECT TO YESTERDAY’S // COMEX TRADING)

WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF SEPT..  THE CME REPORTS THAT THE BANKERS ISSUED GIGANTIC SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 15,860 EFP CONTRACTS WERE ISSUED:

 FOR OCT; 0 CONTRACTS: DEC: 15,860   AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  15,860 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 OUR 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: 9463 TOTAL CONTRACTS IN THAT 15,86LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A HUMONGOUS SIZED 25,323 COMEX CONTRACTS. 

THE BANKERS SUPPLIED THE NECESSARY AND INFINITE AMOUNT OF SHORT PAPER IN GOLD IN OUR RAID YESTERDAY ON THE PRECIOUS METALS.  THE BANKERS SUCCEEDED IN LOWERING GOLD’S PRICE BY A CONSIDERABLE $33.80. HOWEVER THE LOSS OF OPEN INTEREST CONTRACTS WAS NOT AS STRONG AS EXPECTED AS MOST OPEN INTEREST CONTRACTS MORPHED INTO LONDON BASED FORWARDS.( 15,860/22028 = 72%)

 

NET LOSS ON THE TWO EXCHANGES ::  9463 CONTRACTS OR 946300 OZ OR 29.43 TONNES.

 

 

 

We are now in the NON  active contract month of SEPT and here the open interest stands at 64 CONTRACTS and surprisingly we gained 8 contracts.  We had 17 notices filed yesterday so despite the raid and liquidation of contracts we gained 25 contracts or an additional 2500 oz of gold that will  stand for delivery at the comex and the siege continues as the story for physical gold is the name of the game despite the criminal antics of the bankers.

The next active delivery month is October and here the OI FELL by 2301 contracts DOWN to 43,056. The month of November saw another 9 contracts added in OI for a total of 19.  The very big December contract month saw its oi clobbered by 23,040 contracts down to 457,970

 

 

TODAY’S NOTICES FILED:

WE HAD 13 NOTICES FILED TODAY AT THE COMEX FOR  1300 OZ. (0.0404 TONNES)

 

 

 

 

 

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And now for the wild silver comex results.

Total COMEX silver OI FELL BY A GIGANTIC SIZED 6304 CONTRACTS FROM 222,986 DOWN TO 216,682 (AND FURTHER FROM THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S HUGE  OI COMEX LOSS OCCURRED  WITH A 68 CENT LOSS IN PRICING.//YESTERDAY.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF SEPT.  HERE WE HAVE 1094 OPEN INTEREST STAND FOR DELIVERY WITH A LOSS OF 288 CONTRACTS.  WE HAD 378 NOTICES FILED YESTERDAY SO WE AGAIN SURPRISINGLY GAINED A FULL 90 CONTRACTS OR AN ADDITIONAL 450,000 OZ OF SILVER WILL STAND AT THE COMEX…. AND THESE GUYS REFUSED TO MORPH INTO A LONDON BASED FORWARD AS WELL AS NEGATING A FIAT BONUS. LET US WAIT AND SEE IF THEY ARE SUCCESSFUL IN OBTAINING PHYSICAL METAL ON THIS SIDE OF THE POND..  THE NEXT NON ACTIVE CONTRACT MONTH IS OCTOBER AND IT RECEIVED ANOTHER 58 CONTRACTS TO STAND AT 1499. NOVEMBER SAW A SMALL GAIN OF 9 CONTRACTS TO STAND AT 93. THE NEXT ACTIVE DELIVERY MONTH AFTER SEPT IS DECEMBER AND HERE THE OI FALLS BY 5984 CONTRACTS DOWN TO 171,019.

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 276 notice(s) filed for 1,380,000, OZ for the SEPT, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY: 541,168  CONTRACTS//raid 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  633,194  contracts//raid

 

 

 

 

 

INITIAL standings for  SEPT/GOLD

SEPT 6/2019

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

 

No of oz served (contracts) today
13 notice(s)
 1300 OZ
(0.0404 TONNES)
No of oz to be served (notices)
51 contracts
(5100 oz)
0.1586 TONNES
Total monthly oz gold served (contracts) so far this month
1626 notices
162,600 OZ
5.0575 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 entry:

We had 0 kilobar entries

 

 

 

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

 

we had 0 deposit into the customer account

i) Into JPMorgan:  nil oz

 

ii) Into everybody else: 0

 

 

 

 

total gold deposits: nil  oz

 

very little gold arrives from outside/ today: nothing arrived

 

we had 0 gold withdrawal from the customer account:

 

 

 

total gold withdrawals; nil  oz

 

 

i) we had 0 adjustment today
FOR THE SEPT 2019 CONTRACT MONTH)Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 13 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 8 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

To calculate the INITIAL total number of gold ounces standing for the SEPT /2019. contract month, we take the total number of notices filed so far for the month (1626) x 100 oz , to which we add the difference between the open interest for the front month of  SEPT. (64 contract) minus the number of notices served upon today (13 x 100 oz per contract) equals 167,700 OZ OR 5.216 TONNES) the number of ounces standing in this NON active month of SEPT

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

No of notices served (1626 x 100 oz)  + (64)OI for the front month minus the number of notices served upon today (13 x 100 oz )which equals 165,200 oz standing OR 5.216 TONNES in this  active delivery month of AUGUST.

 

We surprisingly again gained a GOOD 25 contracts or an additional 2500 oz will seek metal on this side of the pond instead of morphing over to London.  The gold comex is now under siege for any remaining physical metal.

 

SURPRISINGLY WE HAVE BEEN WITNESSING NO GOLD ENTERING THE COMEX VAULTS FOR THE PAST YEAR!!  WE HAVE ONLY 22.91 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 27.153  TONNES OF GOLD STANDING //AUGUST AND 5.216 TONNES IN SEPT.// JUDGING BY THE HUGE SIZE OF THE COMEX NOTICES FILED TODAY, IT LOOKS LIKE SOMEBODY IS WILLING TO TAKE ON THE CROOKS AT THE COMEX.

ACCORDING TO COMEX RULES:

FOR A SETTLEMENT YOU NEED A TRANSFER FROM THE DEALER (REGISTERED) ACCOUNT OVER TO AN ELIGIBLE ACCOUNT. FOR THE  ENTIRE MONTH OF AUGUST WE HAD O TRANSACTIONS ON THIS FRONT AND THUS I WILL ADD THE 27.153 TONNES TO THE 5.216 TONNES (EQUALS 32.369 TONNES) AGAINST THE 22.91 TONNES OF REGISTERED GOLD.

 

total registered or dealer gold:  736,702.381 oz or  22.91 tonnes 
total registered and eligible (customer) gold;   8,090,958.669 oz 251.662 tonnes

IN THE LAST 35 MONTHS 107 NET TONNES HAS LEFT THE COMEX.

 

THE GOLD COMEX IS NOW IN STRESS AS
1. GOLD IS LEAVING THE COMEX 
2. GOLD IS LEAVING THE REGISTERED CATEGORY OF THE COMEX.

 

 

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end

And now for silver

AND NOW THE  DELIVERY MONTH OF SEPT

INITIAL  standings/SILVER

IN TOTAL CONTRAST TO GOLD, HUGE ACTIVITY IN SILVER TODAY.
SEPT 6 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 nil oz

 

 

Deposits to the Dealer Inventory
841,653.681 oz
Brinks
CNT

 

Deposits to the Customer Inventory
599,079.510 oz
Scotia
No of oz served today (contracts)
276
CONTRACT(S)
(1,380,000 OZ)
No of oz to be served (notices)
818 contracts
 4,090,000 oz)
Total monthly oz silver served (contracts)  6786 contracts

(33,930,000 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 2 inventory movement at the dealer side of things

i) Into Brinks:  243,168.090 oz

ii) Into CNT    598,485.591 oz

 

total dealer deposits: 841,653.681 oz  oz

total dealer withdrawals: nil oz

we had  1 deposits into the customer account

into JPMorgan:  nil  oz

into Scotia: 599.079.510 oz

 

 

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

JPMorgan now has 153.4 million oz of  total silver inventory or 50.36% of all official comex silver. (153.4 million/304.6 million

 

 

 

 

total customer deposits today:  nil  oz

 

we had 0 withdrawals out of the customer account:

 

 

 

 

 

 

 

total nil  oz

 

we had 0 adjustment :

 

total dealer silver:  84.586 million

total dealer + customer silver:  311.543 million oz

 

The total number of notices filed today for the SEPTEMBER 2019. contract month is represented by 276 contract(s) FOR 1,380,000 oz

To calculate the number of silver ounces that will stand for delivery in SEPTEMBER, we take the total number of notices filed for the month so far at 6786 x 5,000 oz = 33,930,000 oz to which we add the difference between the open interest for the front month of SEPT. (1094) and the number of notices served upon today 276 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the SEPT/2019 contract month: 6786 (notices served so far) x 5000 oz + OI for front month of SEPT (1094)- number of notices served upon today (276)x 5000 oz equals 38,020,000 oz of silver standing for the SEPT contract month. 

We gained a whopping 90 contracts or a huge 450,000 additional oz of silver will stand at the comex as these guys refused to morph into London based forwards.

LADIES AND GENTLEMEN:  THE COMEX IS UNDER ASSAULT FOR BOTH PHYSICAL GOLD AND SILVER AND DESPITE THE MASSIVE RAID LONGS CONTINUE WITH THEIR HUNT AT THE COMEX. 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 276 notice(s) filed for 1,380,000 OZ for the SEPT, 2019 COMEX contract for silver

 

 

 

 

 

 

 

 

 

 

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TODAY’S ESTIMATED SILVER VOLUME:  210,782 CONTRACTS //raid

 

 

CONFIRMED VOLUME FOR YESTERDAY: 202,135 CONTRACTS..//raid

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 202,135 CONTRACTS EQUATES to 1,0105 million  OZ 144.3% OF ANNUAL GLOBAL PRODUCTION OF SILVER..makes sense!!

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.

 

end

 

 

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NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -2.46% ((SEPT 6/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -1.30% to NAV (SEPT 6/2019 )
Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into NEGATIVE/ -2.46%

(courtesy Sprott/GATA)

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

NAV 15.24 TRADING 14.77/DISCOUNT 3.10

 

 

 

 

END

And now the Gold inventory at the GLD/

SEPT 6//WITH GOLD DOWN $9.80: A BIG CHANGE IN GOLD INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 6.15 TONNES//INVENTORY RESTS AT 889.75 TONNES

SEPT 5/WITH GOLD DOWN $33.80 TODAY: A BIG ADDITION (DEPOSIT) OF 5.86 OF PAPER GOLD TONNES PROBABLY ADDED BEFORE THE RAID/EXPECT A HUGE PAPER WITHDRAWAL TOMORROW:  INVENTORY RESTS AT 895.90 TONNES

SEPT 4/WITH GOLD UP $5.00 TODAY: A BIG CHANGE: A HUGE PAPER DEPOSIT OF:  11.73 TONNES/INVENTORY RESTS AT ….890.04 TONNES

SEPT 3/WITH GOLD UP $25.60 TODAY: STRANGE: A WITHDRAWAL OF 2.05 PAPER TONNES FROM THE GLD// /INVENTORY RESTS AT 878.31 TONNES

AUGUST 30 WITH GOLD DOWN $7.00: A BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.05 TONNES/INVENTORY RESTS AT 880.36 TONNES

AUGUST 29/WITH GOLD DOWN $11.65: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 9.09 PAPER TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS AT 882.41 TONNES

AUGUST 28/WITH GOLD DOWN $2.15 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 873.32 TONNES

AUGUST 27//WITH GOLD UP $14.50 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 13.49 TONNES INTO THE GLD///INVENTORY RESTS AT 873.32 TONNES

AUGUST 26/WITH GOLD UP 0.25 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 4.99 TONNES/INVENTORY RESTS AT 859.83 TONNES

AUGUST 23/WITH GOLD UP $28.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 854.84 TONNES

AUGUST 22.WITH GOLD DOWN $6.80 TODAY: TWO HUGE CHANGES IN GOLD INVENTORY AT THE GLD: I)A PAPER DEPOSIT OF 6.74 TONNES INTO THE GLD (LATE YESTERDAY EVENING) AND 2) A PAPER DEPOSIT OF 2.93 TONNES LATE THIS AFTERNOON./INVENTORY RESTS AT 854.84 TONNES

AUGUST 21/WITH GOLD DOWN $.30 TODAY:A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 1.76 TONNES INTO THE GLD INVENTORY/GOLD INVENTORY RESTS AT 845.17 TONNES

AUGUST 20//WITH GOLD UP $2.90 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/GOLD INVENTORY RESTS AT 843.41 TONNES

AUGUST 19/WITH GOLD DOWN $11.20//A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .88 TONNES//INVENTORY RESTS AT 843.41 TONNES

AUGUST 16/WITH GOLD DOWN $7.35: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 844.29 TONNES

AUGUST 15/WITH GOLD UP $3.55 TODAY//WE HAVE A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: WE GOT BACK 7.63 TONNES OUT OF 11.11 TONNES LOST ON WEDNESDAY( A DEPOSIT OF 7.63 TONNES)/INVENTORY RESTS AT 844.29 TONNES

AUGUST 14/WITH GOLD UP $7.60 TODAY (AND DOWN $2.90 YESTERDAY) WE HAD A MONSTROUS WITHDRAWAL OF 11.11 TONNES OF GOLD FROM THE GLD/AND THIS WAS USED IN AN ABORTED RAID YESTERDAY:  INVENTORY RESTS AT 836.66 TONNES

AUGUST 13.2019: WITH GOLD DOWN $2.60 TO DAY: A HUGE 7.92 PAPER GOLD TONNES WERE ADDED TO THE GLD/INVENTORY RESTS AT 747.77 TONNES

AUGUST 12.2019: WITH GOLD UP $7.30: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 839.85 TONNES

 

AUGUST 9/WITH GOLD DOWN $2.00//NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY REMAINS AT 839.85 TONNES OZ/

AUGUST 8: WITH GOLD DOWN $4.20: TWO TRANSACTIONS:  A)A MONSTROUS PAPER DEPOSIT OF 8.50 TONNES WAS ADDED TO THE GLD/INVENTORY RESTS AT 845.42 TONNES  b)  A HUGE WITHDRAWAL OF 5.59 TONNES FROM THE GLD//INVENTORY RESTS AT 839.85 TONNES…ABSOLUTE FRAUD!

August 7/ WITH GOLD UP $31.00//A GOOD PAPER DEPOSIT OF 1.86 TONNES OF GOLD INTO THE GLD INVENTORY//INVENTORY RESTS AT 836.92 TONNES

AUGUST 6.2019: WITH GOLD UP $7.85 A STRONG DEPOSIT OF 4.50 TONNES OF PAPER GOLD INTO THE GLD LATE LAST NIGHT/INVENTORY RESTS AT 835.16 TONNES

AUGUST 5/2019//WITH GOLD UP $18.80/A STRONG DEPOSIT OF 2.94 TONNES OF PAPER GOLD INTO THE GLD/INVENTORY RESTS AT 830.76 TONNES.

AUGUST 2/2019: WITH GOLD UP $25.20: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 827.82 TONNES

AUGUST 1/2019: WITH GOLD DOWN $4.90 TODAY: TWO TRANSACTIONS: i) A PAPER WITHDRAWAL OF 1.47 TONNES (USED IN THE RAID THIS MORNING)/ and ii) A PAPER DEPOSIT OF 4.40 TONNES THIS AFTERNOON!/INVENTORY RISE TO 827.82 TONNES

JULY 31/WITH GOLD DOWN 3.90 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 824.89 TONNES

JULY 30//WITH GOLD UP $9.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 824.89 TONNES

 

 

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SEPT 6/2019/ Inventory rests tonight at 889.75 tonnes

 

 

*IN LAST 658 TRADING DAYS: 45.63 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 558- TRADING DAYS: A NET 121,02 TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

 

 

end

 

Now the SLV Inventory/

SEPT 6/WITH SILVER DOWN ANOTHER 60 CENTS TODAY: A RATHER TIMID CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 842,000 PAPER OZ FROM THE SLV///INVENTORY RESTS AT 386.604 MILLION OZ//

SEPT 5/WITH SILVER WHACKED 68 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 387.446 MILLION OZ//

SEPT 4/WITH SILVER UP 28 CENTS TODAY:STRANGE!! A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 708,000 OZ FROM SLV’S INVENTORY:/INVENTORY RESTS AT 387.446 MILLION OZ//

SEPT 3/WITH SILVER UP 83 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT  388.154 MILLION OZ/

AUGUST 30/WITH SILVER DOWN 2 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 388.154 MILLION OZ

AUGUST 29/WITH SILVER DOWN 13 CENTS TODAY: A HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 2.714 MILLION OZ INTO THE SLV INVENTORY//INVENTORY RESTS AT 388.154 MILLION OZ/

AUGUST 28/WITH SILVER UP 19 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 385.440 MILLION OZ/

AUGUST 27/WITH SILVER UP 52 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 385.440 MILLION OZ//

AUGUST 26/WITH SILVER UP 23 CENTS TODAY: A BIG  CHANGE IN SILVER INVENTORY AT THE SLV; A DEPOSIT OF 1.59 MILLION OZ INTO SLV INVENTORY///INVENTORY RESTS AT 385.440 MILLION OZ//

AUGUST 23/WITH SILVER UP 37 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 383.850 MILLION OZ//

AUGUST 22/WITH SILVER DOWN 11 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 3.696 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 383.850 MILLION OZ//

AUGUST 21/WITH SILVER UP 1 CENT TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154 MILLION OZ/

AUGUST 20.WITH SILVER UP 20 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154 MILLION OZ//

AUGUST 19/WITH SILVER DOWN 21 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154 MILLION OZ/

AUGUST 16/: WITH SILVER DOWN 9 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154  MILLION OZ//

AUGUST 15/2019 WITH SILVER DOWN 2 CENTS: ANOTHER BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WHOPPING 3.977 MILLION OZ PAPER DEPOSIT/INVENTORY RESTS AT 380.154 MILLION OZ/

AUGUST 14/2019 WITH SILVER UP 27 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 4.538 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 376.177 MILLION OZ//

AUGUST 13/2019: WITH SILVER DOWN 9 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 6.082 MILLION OZ///INVENTORY NOW RESTS AT 371.637 MILLION OZ

AUGUST 12/2019: WITH SILVER  UP 11 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 365.557 MILLION OZ.

AUGUST 9/2019//WITH SILVER UP 2 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV; A DEPOSIT OF 2.245 MILLION OZ INTO THE SLV INVENTORY/INVENTORY ADVANCES 365.557 MILLION OZ

AUGUST 8/WITH SILVER DOWN 23 CENTS: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT: 1.409 MILLION OZ INTO INVENTORY///INVENTORY RESTS AT 363.311 MILLION OZ//

AUGUST 7/WITH SILVER UP 74 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 361.907 MILLION OZ/

AUGUST 6/ WITH SILVER UP 5 CENTS: TWO TRANSACTIONS: A HUGE PAPER DEPOSIT OF 2.34 MILLION OZ WAS DEPOSITED INTO THE SLV LATE LAST NIGHT: THEN A HUGE 2.994 MILLION OZ OF A PAPER DEPOSIT THIS AFTERNOON: INVENTORY RESTS AT 361.907 MILLION OZ

AUGUST 5.2019: WITH SILVER UP 12 CENTS A TINY 142,000 OZ WITHDRAWAL AND THAW AS TO PAY FOR FEES//INVENTORY RESTS AT 356.573 MILLION OZ..

AUGUST 2/2019: WITH SILVER UP 10 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 356.715 MILLION OZ/

AUGUST 1//WITH SILVER DOWN 23 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 356.715 MILLION OZ//

 

JULY 31/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 356.715 MILLION OZ//

JULY 30/2019: WITH SILVER UP 8 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 356.715 MILLION OZ//

SEPT 6/2019:

 

 

Inventory 386.604 MILLION OZ

 

 

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.02/ and libor 6 month duration 1.99

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

G0LD LENDING RATE: – .03

 

XXXXXXXX

12 Month MM GOFO
+ 1.90%

LIBOR FOR 12 MONTH DURATION: 1.89

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = –.01

GOLD LEASE RATES NEGATIVE ALL THE WAY UP TO ONE YR

end

 

 

end

 

PHYSICAL GOLD/SILVER STORIES
i) GOLDCORE BLOG/Mark O’Byrne

Gold In Japan Reaches Highest Since 1980 – Surging Demand Results In Delays To Buy Gold

Gold has reached its highest price in Japanese yen since 1980 at 165,045/oz (see charts below) as the yen depreciates amid “global economy jitters”

◆ A surge in demand in Japan is resulting in gold buyers needing to wait “2-3 hours to close deals” on gold bars according to Japan’s largest gold broker Tanaka Kikinzoku

◆ Gold is up 16% year to date in Japanese yen and near 40 year nominal highs due to concerns about the outlook for the yen, the Japanese and the global economy

◆ There is a “global hunt for the safe haven precious metal amid worries that the U.S.-China trade row could further depress the global economy” according to Reuters (see story below)

◆ Tokyo Commodity Exchange (TOCOM) gold futures have been surging since August and one commodity brokerage said Japanese speculators were taking profits at these levels

◆ Gold in dollars is down 1% and silver 0.4% this week after sharp falls yesterday; This follows gains earlier this week and strong gains over the summer which have made gold one of the best performing assets this year with gains of 18.4%

Surge in demand for gold bars according to Tanaka Kikinzoku
This image has an empty alt attribute; its file name is gold_all_data_o_jpy_x.png
This image has an empty alt attribute; its file name is gold_15_year_o_jpy_x.png

News and Commentary

Gold down 2.2% on China trade optimism, upbeat private-jobs data

Japan’s retail gold price clambers to highest since 1980 amid global economy jitters

Silver Rising in Value To $25/oz or $30/oz – Bloomberg Video

Fitch downgrades Hong Kong as city braces for more protests

China, HK stocks set for best week since June amid trade optimism

Former Zimbabwe president Robert Mugabe dead at 95

With tariffs eating into profits, some Asian companies are moving home

EU Bank Bosses Warn Of “Grave Consequences” If ECB Keeps Cutting Rates


Gold Prices (LBMA – USD, GBP & EUR – AM/ PM Fix)

05-Sep-19 1542.60 1529.10, 1257.06 1238.72 & 1397.44 1380.78
04-Sep-19 1538.80 1546.10, 1265.05 1269.97 & 1397.69 1403.86
03-Sep-19 1532.45 1537.85, 1278.06 1277.80 & 1400.35 1403.44
02-Sep-19 1523.35 1525.95, 1260.42 1265.01 & 1388.69 1391.51
30-Aug-19 1526.55 1528.40, 1253.14 1251.15 & 1382.75 1383.51
29-Aug-19 1536.65 1540.20, 1260.51 1262.96 & 1387.29 1392.03
28-Aug-19 1541.75 1537.15, 1263.31 1258.77 & 1389.89 1387.43

Click here to listen to the latest GoldCore Podcast

Receive our free Daily or Weekly Updates by signing up here and click here to subscribe to GoldCore’s You Tube Channel

 

Mark O’Byrne
Executive Director

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

An excellent paper from Alasdair Macleod as he claims that in a downturn the USA dollar is more at risk than the yuan

(Alasdair Macleod)

the entire article is in the USA section of my commentary.

Alasdair Macleod: U.S. dollar is more at risk than China’s yuan

 Section: 

China or U.S.?

By Alasdair Macleod
GoldMoney.com, St. Helier, Jersey, Channel Islands
Thursday, September 5, 2019

China has made some silly errors in its conflict with the United States, reflecting the arrogance that often afflicts every state actor. But the appearance that China is being backed into a corner over Huawei, trade tariffs, and Hong Kong is misleading.

China is progressing her own plans, and they do not require an accommodation with America. With Russia in tow, she is now the chief foreign influencer for up to three-quarters of the world’s population, so it is American hegemony that’s being backed into a corner. One day this will be reflected in a currency shootout. This article concludes that the dollar is more at risk than the yuan, the opposite of perceptions in Western capital markets. …

… For the remainder of the commentary:

https://www.goldmoney.com/research/goldmoney-insights/china-or-us?gmrefc…

END

BILL MURPHY interviewed by Chris Marcus

(courtesy Chris Marcus/GATA)

GATA chairman’s interview cites all the metals-friendly factors that didn’t change today

 Section: 

9p ET Thursday, September 5, 2019

Dear Friend of GATA and Gold:

In a discussion put on video today as gold and silver were suffering long-awaited smashdowns, GATA Chairman Bill Murphy and Chris Marcus of Arcadia Economics reviewed all the issues and circumstances tending to push monetary metals prices higher, issues and circumstances that didn’t change in the slightest today.

The interview is 31 minutes long and can be seen at You Tube here:

https://www.youtube.com/watch?v=YddZ2YY_Fh0

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

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.

A federal judge tells traders that they can combine cases (with the other 6 banks) as they accused JPMorgan of rigging the precious metals market
(courtesy CNBC)

Federal judge tells traders they can combine cases accusing JP Morgan of rigging metals market

  • Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.
  • Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.

71671201

Spencer Platt | Getty Images

A group of traders from across the U.S. who allege that J. P. Morgan Chase manipulated precious metals markets for years are one step closer to bringing a class action suit against the nation’s largest bank.

Earlier this month, a federal judge said five separate lawsuits making similar allegations against the bank could be combined, potentially including thousands of people who traded in the precious metals market from Jan. 2009 through Dec. 2015.

Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.

J. P. Morgan declined to comment on this story.

Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.

Vincent Briganti, a partner at the firm, filed the first suit seeking class action status in November on behalf of Dominick Cognata, a trader who alleges he suffered losses due to J.P. Morgan’s illegal trading conduct in the silver and gold futures and options markets.

That was after the federal court in Connecticut unsealed a criminal plea agreement by John Edmonds, a former J.P. Morgan metals trader. In his guilty plea, Edmonds, who is 36-years old, admitted that he and other “unnamed co-conspirators” fraudulently manipulated the precious metals markets while they were employed at J. P. Morgan from 2009 to 2015.

Edmonds said he had learned the illegal trading tactics from senior traders, and then used them hundreds of times with the knowledge of and consent of his immediate supervisors.

Briganti’s lawsuit also names John Edmonds and a group of yet-to-be-identified precious metals traders and the bank as defendants.

On Wednesday, the lawyers sent a letter to Judge Koeltl saying they were having difficulty locating Edmonds to serve him legal papers and requested a 30-day extension to do so, which the judge granted on Thursday. Briganti noted that they have been in contact with Edmonds’ attorney in the criminal case. Edmonds’ attorney and Briganti could not be reached for comment.

“We are hopeful that this extension will result in completing service on Mr. Edmonds without formal motion practice and a request for alternative means of service,” Briganti said in the letter.

The next step in the civil case is for the plaintiffs to file an amended class action complaint and set a schedule for defendants to respond.

In addition to the proposed class action, J. P. Morgan also faces a separate civil suit which also accuses the bank of rigging precious metals markets.

end

March 4.2019

Parker City News

JP Morgan faces potential class action lawsuit after guilty pleas by a former metals trader

Traders from across the U.S. are banding together to accuse J. P. Morgan Chase of manipulating precious metals markets for years.

At least six lawsuits, all making similar allegations against the nation‘s largest bank, have been filed in New York federal court in the past month, since federal prosecutors in Connecticut with a former J. P. Morgan Chase metals trader.

The cases could potentially include thousands of people who traded in the precious metals market. The White Plains, N.Y., law firm Lowey Dannenberg is asking the court to combine the cases and name it as the lead.

The law firm‘s commodities group is led by Vincent Briganti, the attorney who filed the first lawsuit on behalf of Dominick Cognata, a New York resident who alleges he suffered losses due to J. P. Morgan‘s trading conduct in the silver and gold futures and options markets.

A combined case, seeking class action status, would include anyone who purchased or sold futures contracts or an option on NYMEX platinum or palladium or COMEX silver or gold between at least Jan. 1, 2009, and Dec. 31, 2015. The lawyers believe that “at least hundreds, if not thousands” of traders would be eligible to join the case.

Named as defendants in all of the lawsuits are John Edmonds, a 36-year old former metals trader at J. P. Morgan, a group of yet-to-be-identified precious metals traders and the bank.

Edmonds, a New York resident, pleaded guilty in October to one count of conspiracy to defraud the market and manipulate prices of precious metals futures contracts and one count of commodities fraud. In the criminal plea, Edmonds admitted that he and other “unnamed co- conspirators” at J. P. Morgan, fraudulently manipulated precious metals markets from 2009 to 2015, the same time frame covered in the class action suits.

Briganti filed the initial class action on Nov. 7, just one day after the Justice Department unsealed Edmonds‘ plea in the U.S. District Court of Connecticut.

Edmonds admitted in his guilty plea that he deployed the illegal trading scheme hundreds of times with the direct knowledge and consent of his immediate supervisors. Plaintiffs say they have suffered economic injury, including monetary losses, as a direct result of actions by Edmonds and the other unnamed J. P. Morgan metals traders in the futures and options contracts.

One of the suits alleges that “the number of unlawful trades that JP Morgan traders executed in precious metals futures markets is at least in the thousands.”

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

The Justice Department‘s criminal investigation is still ongoing and recently caused a separate related civil case to be put on hold for at least six months while the government continues its investigation. That civil lawsuit, which also accuses J. P. Morgan of rigging the precious metals market, was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders.

After reviewing the details of the plea agreement, David Kovel, the attorney for Shak‘s suit, sought to re- interview Edmonds, along with two other current and former senior traders at the bank. However, the government argued that reopening questioning would be detrimental to the ongoing criminal investigation. The federal judge overseeing the proceedings ordered a six-month stay in the civil case.

Kovel declined to comment.

Edmonds was originally scheduled to be sentenced in Hartford, Conn., on Wednesday, Dec. 19, but a court filing on Nov. 27 shows the sentencing has been postponed until June. A spokesman for the U.S. Attorney for Connecticut could not elaborate on why the sentencing was postponed since the court filing is under seal.

-END-

Justice Department stalls another class action in gold market rigging, this one against JPM

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

Proceedings in the federal class-action anti-trust lawsuit against JPMorganChase charging the investment bank with manipulating the gold and silver futures markets —

http://www.gata.org/node/18844

— have been suspended for three months at the request of the U.S. Justice Department, just as the department has arranged suspension of proceedings in the class-action anti-trust lawsuit against Deutsche Bank charging similar market manipulation.

… 

In both cases the Justice Department has told U.S. District Court for the Southern District of New York that proceedings would jeopardize its criminal investigation into market rigging, which has been admitted by a former JPMorganChase trader, John Edmonds, who awaits sentencing.

According to court filings, the White Plains, New York, law firm representing the plaintiffs against JPMorganChase, Lowey Dannenberg, concurred in the government’s request to suspend proceedings. The stay is to continue for three months and may be extended.

The Justice Department’s motion, granted by the court on February 26 —

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

— said “the government is not seeking an open-ended stay that could indefinitely postpone this matter and thus jeopardize the parties’ interests in a timely resolution.” The motion added, “Any developments in the criminal case during the period the consolidated action is stayed may reduce or completely resolve the need to litigate certain issues in the consolidated action.”

Much of the Justice Department’s motion is redacted to conceal from the public evidence still under investigation. Edmonds has said he and other traders manipulated the gold and silver markets for years with the knowledge of their supervisors at JPMorganChase. In its motion to conceal that evidence, also granted by the court on February 26, the Justice Department said disclosure “could lead to destruction of evidence, flight from prosecution, and otherwise interfere with the government’s ability to conduct its investigation”:

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

Monetary metals investors may be skeptical of the Justice Department’s stalling the Deutsche Bank and JPMorganChase cases, since the department and the U.S. Commodity Futures Trading Commission do not seem ever to have responded conscientiously to complaints of gold and silver market rigging until the class actions commenced.

How much time will the court give the Justice Department to delay getting to the bottom of the issue? The court might hasten matters if enough monetary metals mining companies protested the harm done to them and their shareholders by market rigging, but of course most monetary metals mining companies don’t mind at all.

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

* * *

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/7 AM EST

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 7.1155/ 

 

//OFFSHORE YUAN:  7.1113   /shanghai bourse CLOSED UP 13.74 POINTS OR 0.46%

HANG SANG CLOSED UP 175.23 POINTS OR 0.66%

 

2. Nikkei closed UP 113.63 POINTS OR 0.54%

 

 

 

 

3. Europe stocks OPENED ALL MIXED/

 

 

 

USA dollar index UP TO 98.50/Euro FALLS TO 1.1026

3b Japan 10 year bond yield: RISES TO. –.24/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.96/ 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//CARRY TRADERS GETTING KILLED

 

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 55.31 and Brent: 59.53

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO -.60%/Italian 10 yr bond yield UP to 0.92% /SPAIN 10 YR BOND YIELD DOWN TO 0.20%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 1.52: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 1.60

3k Gold at $1505.00 silver at: 18.13   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 36/100 in roubles/dollar) 65.88

3m oil into the 55 dollar handle for WTI and 59 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 106.96 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 .9912 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0928 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 NEGATIVE territory with the 10 year RISING to 0.60%

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 1.59% early this morning. Thirty year rate at 2.08%

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

6.  TURKISH LIRA:  UP  TO 5.7083..

Futures Drift Higher Ahead Of Payrolls And Powell, Boosted By China Stimulus

US equity futures and global stocks were drifting rangebound ahead of today’s key payrolls data and Powell speech, when news of a targeted and broad RRR stimulus from China just after 5am ET helped cap a strong week for global markets while bond buyers and dollar dealers were patiently waiting for a major disappointment in today’s economic data after their first significant selloffs in months.

 

S&P 500 futures rose, pushing the broad US equity index to within 2% of its all-time high, although they have found some resistance just around 2,980, while Europe’s Stoxx 600 fluctuated, with automakers rising as energy shares fell on a drop in oil prices. Equities pared some gains after jumping briefly as China cut the amount of cash banks must hold as reserves, injecting liquidity into an economy facing headwinds to growth. The MSCI Asia Pacific Index headed for its biggest weekly advance since June.

 

After a roller-coaster week dominated by UK and Italian political drama, Washington and Beijing trade talk, global monetary stimulus and Argentina’s imposing capital controls, calm looked to have returned. Then Beijing cut in. Just as Chinese markets were closing, the country’s central bank said it was slashing the amount of cash that banks must hold as reserves for the third time this year and the first time since 2015 that Beijing announced a broad and targeted RRR cut. That released a total of 900 billion yuan ($126.35 billion) to shore up the slowing economy.

“It feels to me like the air is coming out of it a bit,” Societe Generale strategist Kit Juckes said, referring to the recent surge in volatility. “So we will see what we get from the payrolls.”

Light volumes and sluggish price action dominated the European morning’s wait ahead of payrolls and scheduled comments from Fed’s Powell. Europe’s pan-region Stoxx 600, London FTSE, Paris CAC 40 and DAX in Frankfurt were all higher, after rising to their highest in more than month on Thursday.

Asian equities followed Wall Street higher as trade war angst subsides; MSCI Asia-Pacific index ex Japan rose for a third day, adding 0.6% and giving it a 2.4% weekly gain, its best week since mid-June. The rise in Asian stocks was led by financial firms and energy producers, following a U.S. rally supported by strong jobs data. Almost all markets in the region were up, with India and Hong Kong among the top performers. The Topix advanced 0.2%, driven by automakers and electronics firms. Japanese households increased spending again in July despite poor weather, showing solid consumer confidence ahead of a sales-tax hike in October. The Shanghai Composite Index added 0.5%, with Ping An Insurance Group and CSC Financial among the biggest boosts. The gauge climbed for a fifth straight day to finish its best week since June. India’s Sensex rose 0.7%, buoyed by Reliance Industries and HDFC Bank. Automakers rallied as the government considered more measures including lower taxes to boost vehicle sales.

In rates, Treasuries fell, with 10-yr yield higher at 1.60% while JGB futures dipped. Euro zone bond yields steadied after their worst one-day selloff in more than a year. Bunds/USTs dipped after a choppy start, while peripheral spreads broadly tightened to core bonds. Italian short-end outperformed with 2y and 5y yields off 4.5bps, with Moody’s scheduled to review Italy later Friday. Long-end JGB yields rise ~7bps, digesting commentary from BOJ’s Kuroda who earlier in the session said yields on 20-, 30-year JGBs have “fallen a bit too far” noting that returns for life insurers and pension funds have fallen significantly, negatively impacting consumer sentiment.

 

In FX, the Yen was steady with the Bloomberg dollar index while the euro and pound saw weekly gains after the biggest drop for the dollar in a month. In Asia, the Aussie was 0.1% higher, while the CNY gained notably after the RRR Cut announcement.

In commodities, WTI crude steady near $56.37; while brent oil futures were little changed at $60.97 per barrel. Brent had climbed to a one-month peak of $62.40 per barrel on Thursday after data showed U.S. crude stockpiles decline and the news about U.S.-China trade talks. Gold retreated after reaching a 2019 high earlier in the week. Meanwhile, Hurricane Dorian threatens to hit cotton, tobacco, hemp and corn in the U.S. Southeast.

In other overnight news, Fitch downgraded Hong Kong’s rating to ‘AA’ from ‘AA+’ and kept the outlook negative due to protests related to the extradition billFitch said in a statement that months of persistent conflict and violence are testing the perimeters and pliability of the “one country, two systems” framework that governs Hong Kong’s relationship with China.

With a barrage of news in the rearview mirror, the closely watched U.S. non-farm payrolls report due at 830 am is expected to show 160,000 jobs were added in August and the unemployment rate was unchanged at 3.7% (see our full preview here). Surveys on Thursday had suggested the U.S. may be in better shape than investors have been fearing. Services activity accelerated in August and private employers increased hiring more than expected. Despite the reassuring signs, bond markets still expect the Federal Reserve to cut U.S interest rates this month and a total of 55 basis points of cuts by the end of the year.

In terms to what the market wants from today’s payroll, DB’s Jim Reid notes that it’s hard to know where the ‘risk-friendly’ number lies. With all the concerns about the economy in recent weeks, we’re probably still in a period where good is good for risk, even if it will price out the more extreme central bank action. This week we’ve already seen markets respond negatively to a weak ISM manufacturing and then positively to strong ISM non-manufacturing yesterday. So it appears that we’re treating data on its merit again. DB economists expect a below consensus NFP print of 140k, partly reflecting a one-tenth increase in average weekly hours. DB also notes that headline and private payrolls have missed the consensus forecast in four of the last five August numbers with the median miss being 38k. For wages, they expect average hourly earnings to have increased +0.3% mom, which is in-line with the market although the risk is that the annual rate rounds down to +3.0% yoy. The unemployment rate is expected to hold steady at 3.7%.

 

“The strong U.S. data are the main part of the latest turn in markets as they are key factors impacting equities and U.S. yields, therefore determining how long this ‘risk on’ phase will last,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. The August payrolls report “will get more attention than usual as it could further fuel the risk-on phase, which in turn would boost the dollar,” Ishikawa said.

Also on deck today, Powell is slated to speak on the economic outlook at an event in Zurich at 12:30pm ET. “While this has been some positive economic data, it makes it a little more difficult for the Fed to cut rates,” Kristina Hooper, chief global market strategist at Invesco, told Bloomberg TV. “I suspect what we will hear from Powell is a very tepid commentary on the Fed’s ability to provide monetary policy accommodation.”

A reminder that the Fed’s media blackout period kicks in at the weekend so it’s a last opportunity for the Fed and Powell to get a message across, if they want to. Consensus expects Powell’s comments to largely mirror his Jackson Hole speech which was broadly dovish in acknowledging the argument for future policy accommodation but not pre-committing to any specific policy actions.

Top Overnight News

  • Boris Johnson’s opponents are seeking ways to outmaneuver him on Brexit. Their latest idea is to hold a U.K. election in late October
  • The Bank of England will start topping up its 10 billion-pound ($12 billion) corporate-bond holdings next week, providing a test of its ability to support credit markets just weeks before a potential no-deal Brexit.
  • German industrial production unexpectedly declined further in July as trade tensions and waning business confidence continued to weigh on global demand.
  • Mario Draghi is expected to go big in a final stimulus push as European Central Bank president, overriding protests from among his ranks that tools such as bond purchases aren’t yet needed.
  • The EU still doesn’t know whether Boris Johnson is bluffing when he says he wants to leave the bloc with a deal, according to officials close to the Brexit negotiations
  • Mario Draghi is expected to go big in a final stimulus push as European Central Bank president, overriding protests from among his ranks that tools such as bond purchases aren’t yet needed.
  • After August’s historic drop, it was starting to seem like Treasury yields could only fall. And then came Thursday, when an enormous surge reminded bulls the world’s biggest bond market isn’t a one-way street
  • Fitch Ratings downgraded Hong Kong as an issuer of long-term, foreign currency debt for the first time since 1995, saying that recent political turmoil raises doubts about its governance
  • Oil is heading for the biggest weekly advance since mid-July as American crude stockpiles shrunk more than forecast, while U.S.-China trade talks look set to continue in Washington next month

Market Snapshot

  • S&P 500 futures up 0.2% to 2,978.50
  • STOXX Europe 600 down 0.04% to 385.78
  • MXAP up 0.5% to 156.04
  • MXAPJ up 0.6% to 506.49
  • Nikkei up 0.5% to 21,199.57
  • Topix up 0.2% to 1,537.10
  • Hang Seng Index up 0.7% to 26,690.76
  • Shanghai Composite up 0.5% to 2,999.60
  • Sensex up 0.8% to 36,937.75
  • Australia S&P/ASX 200 up 0.5% to 6,647.33
  • Kospi up 0.2% to 2,009.13
  • Brent Futures down 0.03% to $60.93/bbl
  • Gold spot down 0.7% to $1,507.92
  • U.S. Dollar Index down 0.02% to 98.39
  • German 10Y yield fell 0.2 bps to -0.596%
  • Euro up 0.06% to $1.1042
  • Brent Futures down 0.03% to $60.93/bbl
  • Italian 10Y yield rose 13.2 bps to 0.604%
  • Spanish 10Y yield fell 3.2 bps to 0.203%

Asian equity markets traded higher after sustaining the momentum from Wall St. where all major indices rallied and the S&P 500 notched a 1-month high amid US-China trade hopes, while better than expected ISM Non-Manufacturing and ADP jobs data ahead of today’s NFP report added to the optimism. ASX 200 (+0.5%) and Nikkei 225 (+0.5%) were higher with the gains in Australia led by tech following similar outperformance of the trade-sensitive sector stateside and with the JPY-risk dynamic at play in Tokyo. Hang Seng (+0.7%) and Shanghai Comp. (+0.5%) conformed to the global optimism although gains in the region were somewhat capped ahead of the key US jobs data and after a mostly inactive PBoC this week resulted to a net weekly liquidity drain of CNY 100bln. Finally, 10yr JGBs were lower following the extended its slide below 155.00 after-hours yesterday as the heightened risk appetite triggered declines across global bonds. However, downside has since been stemmed on selling fatigue and with the BoJ present in the market for over JPY 1.2tln of JGBs heavily concentrated on 1yr-10yr maturities, while BoJ Governor Kuroda also reiterated that lowering rates further into negative territory is always an option and noted both 20yr and 30yr yields have declined a bit too far.

Top Asian News

  • Axiata, Telenor Call Off Talks on Forming Asian Mobile Giant
  • Bali Beaches, Thai Temples Go Quiet as Chinese Stay at Home
  • Bank Bonds Gain in India as Mergers Set to Boost Credit Profiles
  • Hong Kong ‘Will Be Done’ If China Deploys Troops, Jimmy Lai Says

Major European bourses are flat [Eurostoxx 50 +0.1%] after the region saw a tentative open ahead of today’s key risk events (US Jobs data, Fed Chair Powell to speak on economic outlook and monetary policy). Bourses experienced some short-lived upside upon the PBoC’s announcement of its 50bps RRR cut effective Sep 16th. Further RRR cuts will be implemented on some banks in two phases of 50bps each on October 15th and November 15th. The PBoC estimates a release of CNY 900bln in liquidity.  Sectors are mixed with marginal outperformance in consumer discretionary names whilst utilities lag. Looking at individual movers Telenor (-4.3%) are subdued after the Co. and Axiata agreed to end discussions regarding a non-cash combination of their telecom infrastructures. Meanwhile Sodexo (-3.7%) is just below on the Stoxx 600 on the back of a broker move. On the flip side, Thyssenkrupp (+2.2%) share continues its ascent amid constructive comments from Kone (+2.0%) regarding the former’s elevator unit, with indicative bids for this unit to be submitted by Wednesday.

Top European News

  • Markets Are Expecting Too Much From the ECB, Constancio Says
  • Aviva Chairman to Lead U.K. Finance Lobby’s Advisory Council

In FX, pre-NFP caution and consolidation has curtailed the Dollar’s recovery, with the index churning within a tight 98.309-463 range just shy of Thursday’s post-ADP and non-manufacturing ISM high (98.538). In terms of Friday’s fundamental drivers, the data spotlight falls on US jobs ahead of Fed chair Powell ahead of the September FOMC and pre-policy meeting purdah, but from a technical perspective the DXY is delicately placed between 10 and 20 DMAs at 98.480 and 98.210 respectively.

  • NZD/AUD/CAD – In keeping with this week’s evolving and improving risk tone, supplemented by 50-100 BP PBoC RRR cuts, high beta and more sensitive to overall sentiment G10 currencies have forged further gains, with Nzd/Usd managing to clamber back above 0.6400 and overtaking Aud/Usd in the process as the cross fades after several 1.0700+ forays. However, the Aussie has formed a firmer footing vs its US counterpart and nibbled through buy-stops between 0.6830-35 alongside a more pronounced bounce in the Yuan (Usd/Cnh eyeing 7.1100 compared to highs not far from 7.2000 recently). Meanwhile, Usd/Cad has slipped back to test 1.3200 after comments from BoC’s Schembri basically underscored Wednesday’s rates appropriate for now guidance, albeit adding more emphasis on weak commodity prices and not ruling out NIRP in extreme circumstances. Next up for the Loonie, Canadian labour data alongside US NFP, and then IVEY PMI after this week’s sub-50 Markit manufacturing print.
  • EUR – The single currency is holding rock steady against the Greenback between 1.1030-50 and may not venture much further ahead of the aforementioned US labour report, or after given hefty option expiry interest at 1.1045-55 (1.8 bn) and Fib resistance near the middle of that band (1.1049).
  • JPY/GBP/CHF – All on the back foot, with the Yen pivoting 107.00 and wary of decent expiries between the big figure and 107.05 (1.7 bn), but cushioned by bids reportedly layered from 107.10 to 107.20 ahead of corporate supply at 107.50. Elsewhere, Sterling has been more volatile amidst the ongoing UK political and Brexit uncertainty, with Cable waning ahead of 1.2350 and losing grip of the 1.2300 handle again before gleaning some traction on the High Court’s ruling that PM Johnson’s Parliament suspension is not unlawful. Conversely, the Franc is underperforming around 0.9900 and under 1.0900 vs the Euro after reiterations from SNB head Jordan that sub-zero Swiss interest rates are still required, and in advance of another scheduled appearance by the chief alongside his US peer.
  • EM – Try aside, regional currencies are revelling in the stronger appetite for risk, and the Rub is now exception even though the CBR is widely expected to lower rates by 25 bp shortly.

In commodities, WTI and Brent crude futures are lower on the day thus far, as is usually the case on US jobs report day, with participants also awaiting Fed Chair Powell’s speech on economic outlook and monetary policy. WTI futures reside under the 55.50/bbl mark after it failed to convincingly breach its 100 DMA to the upside yesterday whilst today breaching both its 50 and 200 DMAs to the downside (both at 56.15/bbl). Meanwhile, Brent futures trade below 60.00/bbl at time of writing. In terms of weekly performance, both energy benchmarks were swayed by the flip-flop in risk sentiment over the week, WTI futures fluctuated in-between its 50 WMA (57.63/bbl) and 200 WMA (53.25/bbl), whilst its Brent counterpart printed a weekly range of 57.26-60.90/bbl for now. Elsewhere, gold prices remain on the backfoot despite a weaker Buck as the recent bout of risk appetite (driven by US/China trade hopes and better-than-forecast ISM N-manufacturing) took the yellow metal closer to the 1500/oz mark (vs. weekly high at 1557/oz). Meanwhile, as it stands, copper is poised to end the week on a more positive note as prices remain above the 2.60/lb level (vs. sub-2.50/lb low). Finally, nickel ore prices saw a correction of around 3.0% amid supply glut concerns followings its recent rally with downside attributed to Indonesia stated that nickel miners can apply for new export quotas for the rest of the year in addition to their already approved quotas.

US Event Calendar

  • 8:30am: Change in Nonfarm Payrolls, est. 160,000, prior 164,000
    • Unemployment Rate, est. 3.7%, prior 3.7%
    • Average Hourly Earnings MoM, est. 0.3%, prior 0.3%
    • Average Hourly Earnings YoY, est. 3.0%, prior 3.2%
    • Average Weekly Hours All Employees, est. 34.4, prior 34.3
    • Labor Force Participation Rate, prior 63.0%
    • Underemployment Rate, prior 7.0%
  • 12:30pm: Powell Speaks in Zurich on Economic Outlook

DB’s Jim Reid concludes the overnight wrap

15 years ago today, I met my current long-term partner after breaking up with my previous partner of 9 years – my first relationship. Having never been with anyone else, I didn’t really know what to expect. Was it love at first sight? I wouldn’t say so but love has subsequently blossomed. I’ve no idea if they’ve ever wanted to divorce me but probably best I don’t know. There have been rows, tensions and disagreements but over the years a great mutual respect has developed. Yes, on September 6th 2004 I joined DB and to a great bunch of people in research. The previous week, I’d climbed Kilimanjaro at the end of my gardening leave, so the last 15 years have been pretty straightforward relative to that.

After one of the biggest bond routs yesterday for years in some cases, it’s amusing to reflect that when I started at DB, 10yr yields in the US, Germany and the UK were all comfortably above 4%. Will I see such yields in my career again? Anyway, today’s payrolls report comes at a fascinating time given yesterday’s move. 10y and 2y Treasury yields rose +9.8bps (a further +1bps this morning) and +10.2bps (a further +0.5bps) – both the sharpest sell-offs since January 4. Europe saw similar moves. In fact, 30y Bunds (+14.2bps) had their sharpest sell-off in 4 years and even briefly turned positive again having touched a low of -0.311% as recently as August 16. In the end, 10y Bunds rose +8.1bps and back to the gravity-defying heights of -0.594% while BTPs were up +13.5bps. The bond moves helped US and European Banks to rally +2.46% and +3.35%, respectively.

Firmer data and the positive trade war news we mentioned yesterday appeared to cause the mini-shockwave through the bond market. As we’ve also been highlighting this week, it’s been a bumper few days for US IG supply with $74bn of issuance so far since Monday already eclipsing the previous weekly record of $66bn in September 2013. There was also some attention paid to a WSJ article from chief economic correspondent Nick Timiraos, who has developed a reputation for being well connected to the Fed. The article said that “the idea of an aggressive half-point cut to battle the slowdown hasn’t gained much support inside the central bank,”. This helped spark a sell-off in fed funds futures with implied odds of 12% for the larger 50bps cut this month, down from 30% on Wednesday. Through year-end, there are now 60bps of cuts priced, down -7.5bps yesterday.

In terms to what the market wants from today’s payroll, it’s hard to know where the ‘risk-friendly’ number lies. With all the concerns about the economy in recent weeks, we’re probably still in a period where good is good for risk, even if it will price out the more extreme central bank action. This week we’ve already seen markets respond negatively to a weak ISM manufacturing and then positively to strong ISM non-manufacturing yesterday. So it appears that we’re treating data on its merit again. The consensus expects a 160k reading, which is broadly in line with last month’s 164k reading. Our economists are, however, below consensus at 140k, partly reflecting a one-tenth increase in average weekly hours. Our colleagues also make the point that headline and private payrolls have missed the consensus forecast in four of the last five August numbers with the median miss being 38k. For wages, they expect average hourly earnings to have increased +0.3% mom, which is in-line with the market although the risk is that the annual rate rounds down to +3.0% yoy. The unemployment rate is expected to hold steady at 3.7%.

If the data fails to provide much direction, then there’s always Fed Chair Powell speaking at 5.30pm BST/12.30pm EST in Zurich at a SNB event. A reminder that the media blackout period kicks in at the weekend so it’s a last opportunity for the Fed and Powell to get a message across, if they want to. Our colleagues expect Powell’s comments to largely mirror his Jackson Hole speech which was broadly dovish in acknowledging the argument for future policy accommodation but not pre-committing to any specific policy actions.

Risk assets go into these two big events on the back of a decent two-day rally with a +1.30% return for the S&P 500 yesterday putting it back to within 1.65% of the all-time highs. That’s also now six positive days out of the last eight. The DOW (+1.41%) and NASDAQ (+1.75%) also had strong days while in credit US HY spreads finished -13bps tighter. The incrementally positive news about trade including the announcement from Chinese Vice Premier Liu He (from the Asian session yesterday) about agreeing to a visit in early October was a driver, as was the data.

The headline news though was the better-than-expected ISM non-manufacturing where the August reading bounced +2.7pts to 56.4 (vs. 54.0 expected). New orders (60.3 vs. 54.1) were a big driver; however, it didn’t go unnoticed that the employment component slid over 3pts to 53.1 and to the lowest level since December 2017. That was somewhat countered by a strong ADP reading where the August print of 195k bettered expectations for 148k even though revisions subtracted -14k from July’s figure. An interesting divergence also opened between the ISM manufacturing employment index and manufacturing hiring in ADP. Historically these two series have been fairly well correlated.

Asian markets are following Wall Street’s lead this morning with the Nikkei (+0.60%), Hang Seng (+0.64%), Shanghai Comp (+0.16%) and Kospi (+0.17%) all up. Futures on the S&P 500 are +0.22% higher while spot gold prices are down -0.30% to 1514.50/ troy ounce. 10y JGB yields have tracked up +2.1bps this morning to -0.253%. As for overnight data releases, Japan’s July household spending came in line with consensus at +0.8% yoy, marking the 8th straight increase and the longest streak on record in comparable data dating back to 2000, as consumer spending remains elevated ahead of the planned October sales tax hike. Real labour cash earnings surprised on the downside though with the reading at -0.9% yoy (vs. -0.7% yoy expected).

In other overnight news, Fitch have downgraded Hong Kong’s rating to ‘AA’ from ‘AA+’ and kept the outlook negative due to protests related to the extradition bill. Fitch said in a statement that months of persistent conflict and violence are testing the perimeters and pliability of the “one country, two systems” framework that governs Hong Kong’s relationship with China.

In terms of Brexit developments yesterday, there were none really. All eyes will be on Monday when Mr Johnson will try to get an election vote through and all depends on whether the Labour and/or SNP party support it. Overnight, Bloomberg and other news outlets have reported that Labour’s Corbyn is in talks with the SNP’s leadership over pushing for a delay with their preference being October 29th and thus trying to force Mr Johnson to go to Brussels, against his will, to ask for an extension. I’m sure they’ll be lots of rumours in the weekend papers.

As for the rest of the US data yesterday, jobless claims remained low at 217k and are still yet to show any signs of meaningful deterioration. The services PMI was revised down 0.2pts to 50.7 while nonfarm productivity and unit labour costs were revised up one-tenth and two-tenths, respectively, to 2.3% and 2.6% for Q2. Elsewhere, factory orders were reported as rising a slightly better-than-expected +1.4% mom in July while core capital goods orders were revised down two-tenths to +0.2% mom.

In Europe the only data of note was the volatile factory orders series in Germany, where orders were reported as falling -2.7% mom in July (vs. -1.4% expected). That didn’t stop the STOXX 600 from climbing +0.72%.

Onto the day ahead, where the obvious focus is the US employment report this afternoon. Prior to that we’ll get July industrial production and Q2 labour costs data in Germany this morning along with the July trade balance in France. Not long afternoon we’ll get the final Q2 GDP revisions for the Euro Area where the last estimate pegged growth at +0.2% qoq. The other potentially important event for markets is Powell’s speech tonight in Zurich.

 

3A/ASIAN AFFAIRS

I)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 13.74 POINTS OR 0.46%  //Hang Sang CLOSED UP 175.23 POINTS OR 0.66%   /The Nikkei closed UP 113.63 POINTS OR 0.54%//Australia’s all ordinaires CLOSED UP .48%

/Chinese yuan (ONSHORE) closed UP  at 7.1155 /Oil UP TO 55.31 dollars per barrel for WTI and 59.31 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED UP // LAST AT 7.1155 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 7.1113 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING BELOW LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

3 a./NORTH KOREA/ SOUTH KOREA

South Korea

 

b) REPORT ON JAPAN

 

3 C CHINA

China

The Chinese economy is suffering pretty bad due to the tariffs and the global slowdown.  Now China cuts its banking Reserve Ratio in an attempt to stimulate their economy.

(zerohedge)

China Cuts Required Reserve Ratio Releasing $126BN In Liquidity; Yuan Surges

As had been widely previewed in China’s official financial press in recent days, on Friday the PBOC announced it would cut the required reserve ratio (RRR) for all banks by 0.5% effective Sept. 16 (and by 1% for some city commercial banks, to take effect in two steps on Oct. 15 and Nov. 15), releasing 900 billion yuan ($126 billion) of liquidity, helping to offset the tightening impact of upcoming tax payments.

While today’s rate cut – which was expected following the State Council meeting and ahead of the Oct.1 National Day Chinese holiday – was more than the previous cuts in January and May, which released 800 billion yuan and 280 billion yuan, respectively, the PBOC stated that “China won’t adopt flood-like monetary stimulus” and that they will continue “prudent” monetary policy to “keep liquidity at (a) reasonably ample level” and will “strengthen the counter-cyclical adjustment” which is basically gibberish for it will do whatever it sees appropriate.

With the Chinese economy slowing drastically in recent months, with various economic indicators at multi-decade lows, the RRR cut was aimed at supporting demand by funneling credit to small firms and echoes the earlier cuts this year. Indeed, as Bloomberg notes, China’s economy softened substantially in August after poor results in July, and will likely deteriorate further in the remainder of the year. Trade tension between China and the U.S. expanded onto the financial front recently after China allowed the currency to decline below 7 a dollar, prompting the U.S. to name it a currency manipulator.

Anticipating cries of foul play from Trump’s twitter account which is just minutes away from unleashing hell at the Fed for not doing what China is doing, the cut “doesn’t reflect an aggressive easing,” said Commerzbank economist Zhou Hao. “In fact, China has recently massively tightened property financing. Hence this is still a re-balancing – to lower the funding costs for the manufacturing sector but tighten liquidity in the property sector due to asset bubble concerns.”

The widely anticipated news of further Chinese easing helped boost US equity futures, with the Emini S&P 500 future spiking to session highs of 2,986 after the announcement, although it has since faded much of the gains.
The offshore yuan gained 0.35% to 7.1128 a dollar as of 6:30 p.m. in Beijing.

Amusingly, the PBOC pulled a page from the Fed’s “mid-cycle adjustment” playbook and emphasized that the policy change wasn’t a massive step up in easing. “The cut is not flooding the economy with stimulus and the stance of prudent policy has not changed,” it said in a separate statement. The RRR cut will offset the tax season in mid-September, and the overall liquidity in the banking system will stay basically stable, according to the PBOC.

“The cuts don’t mean significant easing in monetary policy,” said Standard Chartered economist Ding Shuang. “Rather it is something they must do, a sort of marginal easing, in order to prevent tightening in monetary policy.”

Whether the impact of the RRR cut is limited or not, it will certainly antagonize Trump, especially since PBOC officials indicated recently they are wary of larger-scale easing measures, and have so far refrained from following the U.S. Federal Reserve in cutting benchmark interest rates.

Meanwhile, even though the rate cut should – in theory – be currency negative, in today’s upside down world, the offshore yuan surged from around 7.14 to just stronger than 7.11 against the dollar.

And now we await Trump’s angry response, slamming the Fed for failing to keep up with every other central bank.

END
With a major part of the pig market in China destroyed by the Pig Ebola, Chinese demand for donkey meat is now threatening to wipe out stocks of this meat in Kenya
(zerohedge)

Chinese Demand Threatens To Wipe Out Kenyan Donkey Stocks As ‘Pig Ebola’ Outbreak Worsens

As African swine flu – better known as ‘pig ebola’ – continues to ravage Chinese pig farms, triggering a massive surge in pork prices, we’ve written about how consumers’ search for alternatives to the dietary staple has turned duck farmers into millionaires overnight.

But duck isn’t the only protein alternative that Chinese consumers are buying up in droves as pork prices have climbed nearly 70% over the past year, to near-unprecedented levels.

As China Dialogue, a China-based English-language publication, reports, surging demand for Donkey meat and skin in China is rapidly depleting donkey stocks in Kenya. If demand continues to climb, animal rights activists warn, the Kenyan Donkey could soon disappear from the East African country.

 

Over the past five years, four new donkey abbattoirs have opened up in Kenya to help meet rising demand in China. This, of course, predates the ‘pig ebola’ outbreak, as the Communist Party and state-backed agribusiness has struggled to source food for China’s 1.4 billion consumers even under normal conditions.

Though most US consumers would probably cringe at the thought of eating donkey, their meat is considered a delicacy in China. Their skins are also processed into a traditional remedy called ejiao that’s used to treat everything from anemia to dizziness. Ejiao has also grown in popularity alongside China’s growing prosperity.

According to a report by the African Network for Animal Welfare, the slaughterhouses are operating at less than half of their capacity, as demand from China has already depleted the donkey population from around 1.8 million animals in 2009 to roughly half that level – about 900,000 – today.

Some activists have warned that Chinese demand is making the Kenyan donkey trade ‘unsustainable’. Like other forms of livestock, donkeys are slow to reproduce, with gestation periods of 11-14 months.

The rising demand has also caused the price of donkey meat to soar. Today, one donkey can fetch a price of between 15,000 to 25,000 Kenyan shillings ($145-$242), up from 6,000 to 8,000 shillings ($58 to $78) four years ago. Males typically cost more.

This could create serious problems for the local economy. Many Kenyans rely on donkeys for transportation, particularly in the northern part of the country, where donkeys pull carts that carry water, firewood and other supplies. Higher donkey prices mean these staples are increasingly out of reach for the average merchant or farmer.

The Kenyan government is facing criticism for not exercising more oversight of the abbattoirs. Some believe the government could have implemented breeding programs to ensure that donkey stocks would keep up with rising demand. Others believe it’s too late for any remedy short of calling for a total ban on the trade in donkey meat and ejiao (though it’s unlikely Beijing would let that happen).

As the the swine flu outbreak worsens, news reports earlier this week claimed that Beijing is on the verge of releasing some of its emergency pork reserves as the number of pig casualties from the swine flu crosses 100 million, equivalent to one-third of China’s pig population.

That doesn’t bode well for the donkeys.

end
An excellent commentary from Brandon Smith and the fallacies about the China/USA trade war. he explains what the globalists are up to.
(Brandon Smith)

The Ugly Truth About The Trade War

Authored by Brandon Smith via Alt-Market.com,

This past week was an interesting exercise in false expectations and assumptions. Once again, trade war theatrics were used to stall a stock market plunge as insinuations of a possible “deal” were made by Donald Trump, followed by China’s claim that maybe, just maybe, they would not immediately issue a new round of tariffs right now, but possibly tomorrow, or in a month…

Then, all hell broke loose again when only a few days later both sides jumped into a new round of tariffs leaving markets confused and algo trading computers bewildered, so much so that sometimes they even buy on bad news thinking it’s good news. This is the problem with the Pavlovian response mechanism – You train a dog to salivate at the sound of a bell because he thinks he’s going to get a treat, but then what if you change the bell, or the treat, or the entire dynamic of the process? The dog’s whole world is turned upside down and he curls up in a ball in the corner of the room to make the mental anguish stop.

 

This is exactly the kind of reaction the globalists are looking for, hence the stop/start insanity of trade discussions, not to mention the dove/hawk behavior of the Federal Reserve. Everything people once thought predictable is being deliberately discombobulated.

Ultimately the circus and the confusion are only products of peoples biases. They want to believe they will get a treat if they act a certain way when certain indicators signal. They want to believe the trade war can be won, or at least that Trump is trying to win. They want to believe that the Fed will save them with a surge of QE. They want to believe that the instability will be smoothed away by the hands of the political and banking elites. But what if the elites have no intention of doing this? What if they WANT an economic crisis?

In terms of the trade war, there are some facts that do not support some of the assumptions out there on either side of the debate.These facts run contrary to the mainstream narrative, as well some narratives within the alternative media. On the conservative side I ‘m seeing a kind of artificial patriotic fervor; an organized attempt using memes and propaganda to convince conservatives that the trade war requires mindless fealty to the anti-China message.

First, to be clear, I think China is a despicable communist regime with a record of human rights abuses, but that’s what makes it a rather perfect distraction for Americans on the political right.  I’m reminded of the war fever against Iraq after 9/11, and how so many conservatives bought into the very thin claim of Iraqi involvement and the lies about WMDs. We don’t like dictators, and we don’t like China, but conservatives are being duped into thinking the trade war against China is an ideological crusade that will lead to a better America, or a better world.This is not what the trade war is intended to do.

Let’s start with the assumptions (as well as lies and disinformation) surrounding the trade war and then look at the evidence that debunks them…

Fallacy #1: China Is Dependent On The US Consumer

I’m not sure where this idea comes from specifically, but it’s not based on anything tangible. I sometimes wonder if the notion that the world depends on the American consumer for its bread and butter is perhaps a kind of appeal to people’s narcissism? Making the average American feel superior, or feel special, simply by telling them that their steady debt based consumption keeps the engine of the global economy running.

In the case of China, here are the facts:

The US only comprises around 18% of Chinese exports. While this is a nice piece of the pie, it’s hardly enough leverage to bring down China’s economy. China would suffer profit losses in certain sectors as well as a recession, but not the kind of crisis that some in the alternative media are predicting.

Around 40% of China’s GDP is generated domestically, and 80% of its GDP growth comes from private consumption. For quite some time I have warned that China was shifting its economic model from an export based system to a more self reliant domestic based system, and that this might be an indication of a coming economic war with the US. As it turns out, this is exactly what has happened. Since 2010, China’s domestic market has grown dramatically, indicating that China has no intention of relying on the US consumer as an economic pillar.

The US consumer is almost tapped out. While retail sales in certain areas remain steady and this has been used by the mainstream media and the Fed to promote the idea that the economy is still “going strong”, this is not the big picture. The reality is that US consumption is driven by historic levels of debt. Household debt is now FAR above levels last seen after the last financial crisis, with total debt at $1.2 trillion higher today than its last peak in 2008.

The downturn in retail is more obvious in the steady closings of thousands of outlets in 2019 alone. This year has seen a 29% increase in store closings compared to 2018, even though 2018 saw a considerable spike in store shutdowns. Around 12,000 stores are slated to close this year.

So the question is, with the US consumer stretched thin by debt and US retail on the verge of a recessionary plunge, why would China feel threatened by the loss of the American consumer market? They are losing it already by attrition. The truth is they aren’t threatened, which is why, as I predicted last year, the trade war continues unabated despite the fact that so many people argued that China would “quickly fold” to Trump’s demands.

I realize this is not what many people want to hear, but it is foolish to get caught up in a farcical mob mentality and ignore the fundamentals in the trade war. If you think that the US is going to “win” based on leverage, you are sorely mistaken.  The US is in no better shape economically than China; in many ways we are much worse off.

Fallacy #2: Manufacturing Will Come Back To The US

This is perhaps the most persistent and fraudulent “carrot” that has been held out to the American people over the years to get them to go along with certain destructive fiscal policies. Whether it be dollar devaluation or a trade war that goes nowhere, the American people are always being told that manufacturing jobs are “right around the corner”.  People buy into it because they desire a return to the golden years of American economic expansion, and there are a number of reasons why this is an absurd fantasy.

First, as it stands now manufacturing in the US makes up only 11% of total economic output. I don’t think that many people understand the consequences of this. We have a 70% retail and service based economy, meaning the majority of US citizens in the job market have no experience whatsoever in the manufacturing sector, and the average US company has no guidelines for how to establish a manufacturing base using the American labor pool.

Second, American labor expects a certain level of wage compensation as well as union organization that makes manufacturing far more expensive here than in China or in other parts of the world. The average factory worker in China makes around $3.60 per hour – how exactly would the American market ever compete with this? Tariff’s alone are not enough to force corporations to spend the billions necessary to rebuild factories in the US and hire American workers at $15+ an hour. It’s just not going to happen.

Third, there are many places besides China to build a manufacturing base. No company is going to bring its factories to the US when they can build in Vietnam, or Taiwan etc. In many cases, it is cheaper to ship raw materials and products to these countries, have them finished by workers in Asia, and then have the items shipped back, than it is to build the product from start to finish in the US.

Fourth, we can talk all day about patriotism, but in the end the average American is not going to buy “Made in USA” for most goods out of a sense of patriotic duty if the price is twice as much or more. Walmart and Amazon dominate the retail market for a reason – they sell things cheap.

Fifth, raising tariffs on foreign exporters would only work to encourage consumption of domestically manufactured goods if the US already had a large manufacturing base and produced all the items other nations produce.Entering into a trade war without a resilient manufacturing sector is backwards. You don’t fight a trade war to get manufacturing to come back, you fight a trade war to promote the goods you already manufacture.

If Trump had really intended to bring factories back to the US, he should have given corporations tax break incentives in exchange for creating manufacturing jobs on US soil. Instead, he gave corporations tax break incentives for nothing.

Fallacy #3: China Will Starve Without American Agricultural Products

Uh, no. This is a very weird argument. It’s as if some people assume that the US is China’s only potential source for food. China buys agricultural products from all over the world, and has alternative sources for foods like soybeans and pork, including Brazil, Mexico and Russia.

Prices will rise in China, sure, but nowhere near the point of collapse. Again, the Chinese are not reliant on the US for anything, so, the idea that the US has overt leverage in the trade war is simply not true.

Fallacy #4: The World Will Side With The US Over China

This is a prime question – would the world choose the US consumer base or China’s cheap export market if they had to pick only one? As noted earlier, the US consumer is nearly tapped out. China has the largest import/export market in the world. The US has little manufacturing to speak of. I also question the validity of the idea that Europe or most other nations have loyalty to American markets.

Think about it; do they really? Do they see us as indispensable? Or is the rest of the world being sent on a path towards globalism while the US is being made to look like a barbaric and archaic throwback, a Neanderthal man that is desperately clinging to power and is willing to drag everyone else down with him if he doesn’t get his way?

Many in the liberty movement understand that this is not the case. We know that the globalists have sabotaged this country from within, and we know that they are using Trump as controlled opposition and a useful puppet in this task. But the majority of the rest of the world does NOT understand this. If there is an economic crash which sends shockwaves through multiple economies, the trade war will most likely be blamed along with Trump and his “populist” supporters. The rest of the world will see us as the villains, because they do not understand the nature of 4th Generation Warfare, nor do they understand the globalists strategy of “order out of chaos”.

The narrative that has been pushed in the mainstream is that China is the victim of US aggression, and that the trade war and the economic crisis are purely a product of Trump’s madness. Who do you honestly think the world will eventually side with?

Fallacy #5:  The Trade War Will Be Over Soon

We’ve been hearing this for well over a year and a half now.  Trade wars are “easy to win”, right?  Every couple of months the trade war deal hype is recycled and every couple of months the markets are hit with renewed disappointment.  The latest trade talks are set for October and if they happen at all, it is unlikely they will result in anything of significance.  At most, they will be heralded as the “start of a great deal” and both sides will claim “progress was made”, and then, once again, nothing will happen and the conflict will accelerate.  You would think people would have figured it out by now, but the investment world learns very slowly and functions solely on blind hope.  At the very least, economic analysts are starting to realize that no deal is coming and that the situation is only going to get more tense.  In fact, it is designed to get more tense.

Fallacy #6: The US Dollar Is Untouchable

This claim revolves mainly around the idea that because the US dollar is the world reserve currency, the US has the upper hand in trade negotiations and the rest of the world will follow the currency leader because there “is no other option”. I disagree.

As Bank of England governor Mark Carney has openly admitted, the plan is to replace the dollar as the world reserve currency anyway. How? Well with a global cryptocurrency, of course, just as I warned about in my article ‘The Globalist One World Currency Will Look A Lot Like Bitcoin’.

Carney’s mention of Bitcoin and Facebook’s Libra as models for this currency system seems to have confused some people. Carney did NOT say that Libra should be the next world reserve currency. He said that the next world reserve currency will look LIKE Libra. But how do the elites plan to institute such a monetary system and force people to go along with a cashless society?

They need a massive crash event, and they need the US dollar to go the way of the dodo.It seems rather convenient to me that China has been preparing for just such an event. While many analysts point out that China has generated intense amounts of debt over the past decade, they seem to forget that this was a requirement in order for China to attach the Yuan to the IMF’s Special Drawing Rights basket, which is the foundation for a global currency mechanism.  Chinese economic officials and the globalist both argue that the current monetary system, based on a single national currency (the dollar) as the world reserve is inherently unstable.

Their solution?  basket of currencies monitored by the IMF, followed by a single digital currency mechanism.  I would note that China and the globalists have consistently hinted that a major economic crisis event will act as a catalyst for this “reset” in the world monetary order, and that the dollar must be replaced in the process.

China has also been stockpiling large amounts of gold for the past decade. This would indicate they are expecting a monetary devaluation event, most specifically in the dollar.  It’s as if they know something the rest of us only suspect.

The trade war is the perfect cover for the collapse of the US dollar that the globalists desire. While some people suggest that China’s dumping of US treasuries is the “nuclear option” in the trade war, this is not exactly true. The REAL nuclear option is for China to dump the US dollar as the reserve trade mechanism and go to a basket of currencies, which the IMF will happily aid them with. As the largest exporter/importer in the world, China can drop the dollar and most of their trading partners will follow their lead. The US economy would crumble in response, as the dollar is the only thread holding our system together.

This is the ugly truth behind the trade war. It is nothing more than a farce, a smoke and mirrors distraction leading up the the dismantling of the US dollar and paving the way for the globalist one world digital currency system. Whether or not the plan succeeds relies on ample resistance from people who see the danger ahead, but make no mistake, the globalists are not afraid of an economic crash or the decline of the dollar; they WANT these things to happen so they can establish even more centralized control.

*  *  *

If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.

end

4/EUROPEAN AFFAIRS

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey

Lira tumbles after a Turkish politician gets a 10 yr sentence for insulting Erdogan.

(zerohedge)

Lira Tumbles After Turkish Politician Gets 10 Year Sentence For “Insulting” Erdogan

At the end of week which saw Turkish strongman Recep Tayyip Erdogan say his country should develop nuclear weapons, and further he’ll flood Europe with Syrian refugees if the world doesn’t back his ‘safe zone’ plan on Syrian territory, a Turkish politician is now headed to prison for merely “insulting” the president on Twitter.

“A Turkish court convicted an opposition party branch leader Friday of engaging in terrorist propaganda and insulting Turkish government officials with a series of social media posts, a verdict the opposition immediately alleged was politically motivated,” the Associated Pressreports. Upon Friday’s verdict Canan Kaftancioglu, head of the secular Republican People’s Party Istanbul branch, received a whopping nine years and eight months prison sentence.

The Turkish lira suddenly tumbled as soon as news of the verdict hit Turkish media and grabbed international headlines:

Kaftancioglu plans to appeal the sentence and won’t see prison time until those appeals are complete. She was initially facing up to 17 years on an avalanche of charges including “insulting” the Turkish republic and Erdogan himself, as well as “making terrorist propaganda” and “inciting public enmity,” according to state media.

Her supporters say it’s clearly a case driven by political “vengeance” after she helped deal a major blow to Erdogan in Istanbul’s recent mayoral election, propelling her colleague Ekrem Imamoglu to an upset victory over ruling Justice and Development party (AKP) candidate and Erdogan pick, Binali Yıldırım.

 

Turkish opposition member Canan Kaftancioglu. Image source: AFP

She received sentences on five charges, including 20 months for “humiliating” the state, 18 months for “insulting a public official”, 28 months for “insulting the president” and 32 months for “inciting the people to hatred”. — SCMP

“This trial is aimed at punishing Istanbul and those who helped the victory of the people of Istanbul. I will never give up my ideas and my convictions. They think they can scare us but we will continue to speak,” Kaftancioglu said.

The Twitter posts in question were actually said to be several social media posts over years, which the state deemed “terrorist propaganda” – including tweets criticizing Ankara’s harsh response and crackdowns on Kurdish groups and anti-Erdogan protesters. She also reportedly criticized the government’s response to the 2016 failed coup attempt.

6.Global Issues

Blackrock is a powerful company.  Here is how they see the end game

(Blackrock)

Blackrock CIO: The Endgame Is Coming And Central Banks Will Debase Everything To Spark Inflation

Blackrock’s Chief Investment Officer, Rick Rieder, best known perhaps for recently suggesting that the ECB should monetize stocks, writes in the Blackrock blog today and highlights the economic policy state-of-play today, and where it may lead to should economic growth falter, productivity not materialize, and populism continue to thrive.

* * *

The major global central banks continue to draw bigger guns in their battle against deflation, yet in some places, it appears to be of no avail. The fact is that the share of sovereign yields that are in negative territory keeps increasing and the average level of these interest rates becomes ever more negative. Further, quantitative easing (QE) purchases of sovereign debt have transitioned to purchases of corporate debt, and in some places equities; with inflation still elusive and improved growth prospects in questionThat all leads one to wonder where (and how) these policies end? What is today’s monetary policy endgame?

Turn to economic history for perspective

 

In order to envision the monetary policy endgame several years (or a decade) from now, let’s start by stepping back and examining two of the foundational tenets that have driven the global economy and financial markets since the 1970s. The first principle is that the major central banks embraced a roughly 2% inflation target (implicit for the Federal Reserve since, at least, 1995 and explicitly stated since 2012), and the second factor is the end of the Bretton Woods monetary system; marking the shift away from the gold standard and into a world of fiat currency fluctuation. The commitment to the 2% inflation target is extremely important for understanding our current monetary policy challenges, because that target was premised around structural forces that no longer exist (given this era of demographic aging and rapid technological development, which both hold down broad-based inflation). Still, the switch to fiat currency about two decades before the 2% inflation target was set, ironically paves the way for the inflation target to be met – eventually. The question that remains, then, is just “how” this will be the case?

However, before we answer that we must examine why inflation peaked in 1979 and why it has been in a downtrend since then? In other words, what are the structural forces creating disinflation? There are four major forces that created inflation prior to 1979 and resulted in disinflation afterward. First, the population growth rate following the post war Baby Boom peaked around 1979/1980 and subsequently slowed. Second, the growth rate of female participants in the labor force also peaked around 1979/1980 and subsequently slowed. Third, the U.S. and China opened diplomatic and trade relations in 1979, as a result of Deng Xiaoping’s reforms, arguably marking the beginning of the latest stage of globalization. Finally, the oil shocks of the 1970s, ending with the 1979 Iranian Revolution and a surge in oil-driven inflation were a critical factor in the price rises of that time.

This latter event was followed by the subsequent commitment from a then relatively newly formed OPEC that it would act as an oil supplier of last resort, helping to keep oil prices from becoming too volatile (a role it has largely maintained until today). Fascinatingly, in recent years technological innovations have taken hold that form an important new disinflationary force. Specifically, we’ve seen price transparency and information symmetry, which are driven by the proliferation of smartphones, the Internet and the Information Age, more broadly. These forces are flattening supply curves across a huge variety of products, making traditional aggregate demand stimulus less effective in creating inflation. Demand expands, but prices don’t rise as they did in the past, because everyone is aware of exactly what the marginal good should cost and will not pay a cent more than can be (instantly) found at the cheapest online supplier.

Thus, some huge inflationary forces pre-1979 have since abated, and some tremendous disinflationary forces have entered the picture post-1979, but at the end of the day these are all significant, secular, factors that are not likely to be reversible (with the possible exception of globalization, but even then, only to a modest degree). The fact is that central banks’ actions, so far, have simply been too modest to matter against the backdrop of these tectonic changes. Moreover, we would argue that central banks have already achieved meaningful price stability (for instance, the volatility of CPI is near its lowest levels in history), but the natural rate of inflation is simply not 2%, but rather is something lower. So, despite the seemingly large size of monetary policy stimulus by historic standards, central banks have still only brought “a knife to a gun fight,” to paraphrase a film from the late-1980s, at least as far as creating sustained 2% inflation is concerned.

What ammunition central banks have yet to deploy

While the point is debatable, we do not think the arsenal of central bank tools is near exhausted, which brings us to the endgame and the concept of fiat currency. There are two ways inflation is created: one is to actually raise the prices of goods and services organically, but the other is to debase the currency in which those goods and services are sold (think helicopter money). Because the former method relies on traditional aggregate demand stimulus (lower interest rates), which has not been working, since the natural rate of aggregate demand growth is now so low (and in some places is contracting) and the supply curve is so flat; the endgame may well be monetary debasement. Under the gold standard this would not have been possible, as every new dollar would have to be backed by physical gold mined from the earth (a very slow and expensive process, and likely without the requisite volumes), but today money is created by printing presses, or even a few computer keystrokes.

In order to debase a currency, money needs to be created at a faster pace than goods and services are (essentially, liquidity growth needs to exceed world GDP growth). What does this mean for investors? Real rates will definitionally need to be negative – and in fact more negative than the real rates of competitors (think competitive devaluation). The U.S. is not quite there yet, but we will see as soon as next month how much closer the ECB gets to monetary debasement (we think they’re still some ways away, as they haven’t fully exhausted their negative interest rate path, it seems).Ironically, the beggar-thy-neighbor implications of competitive devaluations will almost certainly incite a response from countries who may not originally even have needed to resort to currency debasement in the first place, raising the potential for full blown currency war.

Investment implications

How should one position for such an endgame? As is probably evident, any nominal instrument will be devalued in real terms, so the solution is to hold an asset that maintains its real value – an asset that cannot be printed. We would include stocks (dividend yields are set on payout ratios, companies have some degree of pricing power, and shares outstanding are limited in number), real estate (it is difficult and expensive to expand the stock of real estate), and even commodity currencies, like gold (again, limited supply and expensive to extract). By definition, the worst asset to hold would be a sovereign bond with a negative yield, closely followed by paper money at zero yield, both with a theoretically infinite supply.

Unfortunately, such extreme devaluations in currencies could not only inflate the prices of real assets but could also push Gini coefficientsto historically wide levels (a measure of the rich/poor divide) and may well fuel a continued rise in populist politics. Ultimately, this could have a real influence on central banking as we know it today, and/or the value of fiat currency. All of this is very difficult to anticipate in terms of the breadth and influence of these types of actions and ultimate reactions in terms of how prices, markets, investors, and central banks consequently adjust.

Coming back from these extreme policies is very difficult, particularly as the aging demographic and concurrent potential growth trends embedded in the system provide a ceiling on above-trend growth, which otherwise could aid the economy in soft-landing from these policies. And, potentially more importantly, extremely low rates can and will encourage fiscal actors to add more, and potentially dramatically more, debt to an already historically-levered set of economies (e.g. the increased discussion of MMT). Hence, all of this leads one today to consider assets that can participate in an inherent devaluation of the local currency, which is to say: equities, real estate, and even hard assets that have historic value-relevance, such as gold.

end
Maersk
Collapsing global demand is causing havoc for our no 1 shipper Maersk as they halt one of their routes:  the Asia-Europe Loop
(zerohedge)

It’s Happening Again: Maersk Halts Asia-Europe Loop Amid Global Slowdown  

Growth in the world continues to collapse into late summer, so much so that Maersk and Mediterranean Shipping Company (MSC) had to “temporarily suspend” their AE2/Swan Asia to North Europe loop until mid-November, removing 20,000 twenty-foot equivalent unit (TEU) a week from trade, reported The Loadstar.

Collapsing demand and plunging shipping container rates have led to pain for carriers who sail their vessels along the route. This is the second time Maersk and MSC have suspended the circuit, and the last time this happened was last fall.

Maersk and MSC said it’s working hard to “balance its network to match reduced market demand for the upcoming [Chinese factory shutdown] Golden Week.”

Maersk and MSC said the AE2/Swan suspension would “help us to match capacity with the expected weaker demand for shipping services” from Asia to Europe.

Maersk and MSC said the service would resume “in line with demand pickup,” suggesting the suspension could be extended into 1H20 as global trade isn’t expected to pick up for the next six to eight months.

Maersk and MSC adopted a similar strategy last year, suspending AE2/Swan Asia to North Europe loop from September to December, this was right around the time when stock markets across the world crashed from October to December, on fears the world economy was slowing. It just so happens that the global synchronized slowdown is much worse this year, likely the world has entered a manufacturing/trade recession in late summer 2019.

The suspension of AE2/Swan loop will see 12 17,800-20,500 TEU vessels idled for the next several months.

The last time the AE2/Swan loop was halted, it was during the period when world stocks collapsed last fall.

Freightos freight data for China to Europe 40 ft shipping containers shows muted price recovery over the last several years.

Global rates for 40 ft shipping containers also show depressed prices, which usually means global trade is weak.

As for global trade, the Merchandise World Trade Monitor by CPB Netherlands Bureau for Economic Policy Analysis shows peak globalization in 2017 and 2018, and the index is now sliding for the first time since the financial crisis.

It should be no mystery why the world’s largest shipping companies are idling vessels – it’s because a global recession has likely started.

end

7. OIL ISSUES

 

8 EMERGING MARKET ISSUES

WHAT on earth was this guy smoking? Former Lehman hedge fund trader takes a one billion dollar loss betting on Argentinian bonds recovering. What a doorknob

(zerohedge)

Former Lehman Trader’s Hedge Fund Lost $1 Billion Betting On Argentinian Bonds Last Month

As it turns out, Michael Hasenstab wasn’t the only one who got killed by the collapse in Argentinian assets last month. As it happens, the Wall Street Journal has rooted out one macro-focused hedge fund that took it on the chin so hard, its LPs are probably rethinking their investment decisions (which is probably how the news got out: people love to complain, after all).

Autonomy Capital, founded by former Lehman trader Robert Gibbins, took a $1 billion – or 23% – hit last month after its concentrated position in Argentinian debt went horribly awry. Gibbins, who founded the firm in 2003 and has successfully grown it over the years into a firm with roughly $4 billion in assets, is known for making large, concentrated bets.

That strategy paid off in 2018, when the firm notched a 17% return, making it one of the best-performing funds in its class. Per WSJ, Gibbins started betting on an economic recovery in Argentina last year, and eventually built a large position in a range of Argentine bonds, including the infamous century bond.

 

At the time, Argentina was just getting over the near-collapse of its currency after being bailed out by the IMF. But for savvy investors, the writing on the wall was already clear: the pro-business government of President Mauricio Macri was not long for this world.  Last month, when Macri lost an important primary to Alberto Fernandez, a leftist candidate running on the same ticket as former president Cristina Kirchner, it rattled Argentine markets, causing the century bond’s worst one-day drop yet.

Macri’s defeat now appears extremely likely, as his government has failed to stave off a worsening economic crisis in Argentina. Kirchner has already presided over one sovereign default.

Apparently not one to cut his losses, Gibbins is doubling down, and offering his LPs an “opportunity” to put more capital into the fund. Given his track record, it’s likely that some will buy his pitch for how Argentina’s battered markets will recover.

After all, a person “familiar with Mr. Gibbins’ thinking” is confident he can turn it all around.

“When all is said and done on this trade, I think we will make money,” said a person familiar with Mr. Gibbins’s thinking.

For what it’s worth, Fernandez has exhibited the same level of sheer unjustifiable confidence, saying on Thursday that Argentina will honor its debt “as it always has.”

“As it always has” – aside from those eight sovereign defaults, you mean?

END

India

India’s auto sector has now come to a screeching halt as sales crash in August

(zerohedge)

India’s Auto Sector Comes To A Screeching Halt, Sales Crash In August

At the heart of the global manufacturing slowdown, is the slump in the auto industry in China, Europe, and India. More specifically, it’s the spectacular crash of the Indian automobile industry in 2019.

The Indian automobile industry continued in the slow lane in August with all major manufacturers reporting a plunge in their respective sales.

Hard times at Tata Motors contributed to a 49% drop in its August domestic sales YoY; Maruti Suzuki India reported 32.7% decline in its vehicle sales last month YoY, and Mahindra and Mahindra’s (M&M) local sales declined 26% YoY last month.

Nationwide, more than 350,000 workers in the automobile industry have been laid off since 1Q19, in response to collapsing car sales for the 10th straight month.

“The auto industry continued to be subdued in August due to several external factors,” Veejay Ram Nakra, Chief of Sales and Marketing, Automotive Division, M&M.

The high goods and services tax (GST) and a liquidity crunch in the country are some of the reasons behind the faltering automobile sector.

The crisis has spread to small and medium-sized businesses in the towns and villages around Manesar, an industrial hub in Gurugram district of the State of Haryana, where Maruti Suzuki cars are made.

“There are already fewer workers in the village and those who still have jobs are either not getting paid for working overtime or are not spending much out of fear they may lose work and need the money,” said grocer Rahul Jain, his shelves stacked with toothpaste and soaps.

Reports of basic items like cooking oil, flour, and rice, have dropped in demand. In services, barbers, restaurants, grocery stores, and entertainment facilities have said they’re seeing fewer customers thanks to the auto slowdown.

Shoe shop owner Subhay Singh, in Manesar’s Aliyar village, said there are days when business is dead.

“My monthly earnings have halved,” said Singh, who a year ago made an average Rs 8,000 a day. “I don’t know what’s happening.”

India’s automotive industry is ranked the fourth largest in the world, with more than 35 million employed, directly and indirectly, and accounting for at least half of India’s manufacturing output.

All of India’s major auto manufacturers are hurting, the pain, as shown above, is radiating outwards into consumers.

The auto crisis is cyclical and isn’t expected to turn back up for the next several years. Industrials have been the first domino to fall, and next will be Indian consumers.

end

 

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

Euro/USA 1.1026 DOWN .0008 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS/HONG KONG CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /MIXED

 

 

USA/JAPAN YEN 106.96 DOWN 0.113 (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…

GBP/USA 1.2297   DOWN   0.0008  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3224 DOWN .0006 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 FELL BY 8 basis points, trading now ABOVE the important 1.08 level FALLING to 1.11026 Last night Shanghai COMPOSITE CLOSED UP 13.74 POINTS OR 0.46% 

 

//Hang Sang CLOSED UP 175.23 POINTS OR 0.66%

/AUSTRALIA CLOSED UP 0,48%// EUROPEAN BOURSES ALL MIXED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL MIXED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 175.23 POINTS OR 0.66%

 

 

/SHANGHAI CLOSED UP 13.74 POINTS OR 0.46%

 

Australia BOURSE CLOSED UP. 48% 

 

 

Nikkei (Japan) CLOSED UP 113.63  POINTS OR 0.58%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1506.30

silver:$18.14-

Early FRIDAY morning USA 10 year bond yield: 1.59% !!! UP 3 IN POINTS from THURSDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 2.08 UP 3  IN BASIS POINTS from THURSDAY night.

USA dollar index early FRIDAY morning: 98.50 UP 9 CENT(S) from  THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 0.19% DOWN 6 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.24%  DOWN 2   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.17%//DOWN 6 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:0.88 DOWN 7 points in basis points yield from yesterday./

 

 

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

 

GERMAN 10 YR BOND YIELD: FALLS TO –.64% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 1.52% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A HUGE 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 1.1043  UP     .0009 or 9 basis points

USA/Japan: 106.81 DOWN .267 OR YEN UP 27  basis points/

Great Britain/USA 1.2296 UP .0029 POUND UP 29  BASIS POINTS)

Canadian dollar UP 65 basis points to 1.3170

 

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The USA/Yuan,CNY: AT 7.1164    ON SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  7.112  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  5.7202 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.24%

 

Your closing 10 yr US bond yield DOWN 1 IN basis points from THURSDAY at 1.55 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.03 DOWN 2 in basis points on the day

Your closing USA dollar index, 98.29 DOWN 12  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED DOWN 11.17  0.15%

German Dax :  CLOSED UP 64.95 POINTS OR .54%

 

Paris Cac CLOSED UP 10.62 POINTS 0.19%

Spain IBEX CLOSED DOWN 2.60 POINTS or 0.03%

Italian MIB: CLOSED DOWN 7.74 POINTS OR 0.04%

 

 

 

 

 

WTI Oil price; 55.95 12:00  PM  EST

Brent Oil: 60.92 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    65.72  THE CROSS LOWER BY 0.52 RUBLES/DOLLAR (RUBLE HIGHER BY 52 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.64 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 :  56.56//

 

 

BRENT :  61.49

USA 10 YR BOND YIELD: … 1.55  down 1 basis point and did not buy the Dow advance today…

 

 

 

USA 30 YR BOND YIELD: 2.01  down 4 points and did not  buy the Dow advance….

 

 

 

 

 

EURO/USA 1.1026 ( down 8   BASIS POINTS)

USA/JAPANESE YEN:107.92 DOWN .157 (YEN UP 16 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 98.42 up 1 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2294 down 30  POINTS

 

the Turkish lira close: 5.7204

 

 

the Russian rouble 65.79   up 0.45 Roubles against the uSA dollar.( UP 45 BASIS POINTS)

Canadian dollar:  1.3181 UP 49 BASIS pts

USA/CHINESE YUAN (CNY) : 7.1164   (ONSHORE)/

USA/CHINESE YUAN(CNH): 7.1051 (OFFSHORE)

 

German 10 yr bond yield at 5 pm: ,-0.64%

 

The Dow closed UP 69.31 POINTS OR 0.26%

 

NASDAQ closed UP 13.75 POINTS OR 0.17%

 


VOLATILITY INDEX:  15.10 CLOSED DOWN 1.17

LIBOR 3 MONTH DURATION: 2.102%//libor dropping like a stone

 

USA trading today in Graph Form

 

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

MARKET TRADING//USA

a)Market trading/MORNING/USA

Stocks & Bond Yields Rise On Trade War Hope, Commodities Collapse Most In 28 Years

Stocks within inches of record highs and bonds within mm of record low yields… and all on the back of a call and a possible round of trade talks in a month…

Awesome” as long as Powell delivers at least 125bps of rate-cuts in the next 15 months…

Source: Bloomberg

A big week for Chinese stocks with the tech-heavy ChiNext leading the way…

Source: Bloomberg

A big week for European stocks too, led by Italy which is now apparently ‘fixed’…

Source: Bloomberg

30Y German bond yields very briefly went positive this week, but despite gains in stocks today, bonds were also bid…

Source: Bloomberg

Ugly end to the week for an exuberant post-mid-week pumpathon…the dump started at 330ET

Second day in a row that a late-day sell program hit…

Source: Bloomberg

After a tough open (with a holiday-shortened week), US equity markets soared/squeezed higher to end green with Nasdaq leading and Small Caps lagging…

 

Futures show the volatility intraday best (or extra-day in this case)…

 

Small Caps remain below the 200DMA…

 

As the odds of a US-China trade deal shot higher this week…

Source: Bloomberg

Cyclicals made a big comeback after the trade deal headlines, but defensives also ended the week positive…

Source: Bloomberg

 

Treasury yields ended the week higher (with 30Y +6bps, 2Y +2.5bps)

Source: Bloomberg

30Y Yields remained above 2.00% but tumbled during today’s day session after the weak jobs data…

Source: Bloomberg

The yield curve steepened on the week but 3m10Y remains drastically inverted…

Source: Bloomberg

The dollar has fallen 4 straight days back to 2-week lows…

Source: Bloomberg

China’s offshore yuan had its 2nd best week in 7 months, soaring back up near the fix by week’s end…

Source: Bloomberg

Cryptos ended the week broadly higher, despite a sudden puke today, with Bitcoin a notable outperformer vs altcoins…

Source: Bloomberg

Despite today’s tumble, Bitcoin ended the week back above $10k and increasingly set for a breakout one way or another…

Source: Bloomberg

 

Gold and Silver ended the week lower, crude and copper higher…

Source: Bloomberg

WTI spiked up to what seems like a magic number of $56.50 today…

 

Gold erased most of Trump’s tariff tantrum gains (with some crazy vol today)…

 

No real surprise that things are getting a bit more volatile in gold as flows near record highs again…

Silver was also extremely volatile today…

 

Gold’s drop tracked the fall in the value of global negative-yielding debt (Bitcoin decoupled)…

Source: Bloomberg

Gold rebounded from its intraweek underperformance against silver…

Source: Bloomberg

As Bloomberg details, soft commodities are on their longest losing streak in at least 28 years as trade tensions and currency swings add further woes to oversupplied markets. The Bloomberg Softs Spot Subindex tracking coffee, sugar, and cotton headed for the 10th straight week of declines, the longest stretch since 1991 when the index started.

Source: Bloomberg

“The ratcheting-up of trade tensions, which is of itself feeding into broader concerns about global growth” are putting pressure on prices, and the weak Brazilian real is adding stress on sugar and coffee, said Caroline Bain, chief commodities economist at Capital Economics in London.

Finally, we note that, with stocks within a percent of record highs and US macro data back into positive territory for the first time in 7 months, who would blame Powell for cutting 50bps… what could go wrong?

Source: Bloomberg

Since the last Fed rate-cut, the dollar and stocks are unchanged, bonds and bullion up around 6%…

If at first you utterly fail, try to cut rates again?

END

Stocks Shrug Off Poor Payrolls Print, Dollar & Bond Yields Plunge

Bad news is good news… for bonds, no news for stocks, and bad news for the dollar…

Treasury yields… down

 

Source: Bloomberg

Dollar… down

 

Source: Bloomberg

Stocks… not down

 

Source: Bloomberg

Which one will end up right at the close?

b)MARKET TRADING/USA/AFTERNOON

ii)Market data/USA

The jobs report which is a phony anyway, missed big time. The number of new jobs disappoint but hourly earnings jump and thus in the words of one investor: “it looks like a stagflation report:  They were all set to whack gold and silver but that failed as our two precious metals recovered from their earlier whacking

(zerohedge)

“Looks Like A Stagflation Report”: August Private Payrolls Miss Huge, But Hourly Earnings Jump

In our preview of the August jobs report we warned that while census hiring was a potential positive wildcard to today’s print, it was the seasonals that were a major negative risk, with August jobs missing consensus in 8 of the past 10 annual prints.

Well, make that 9 of the past 11 and even with census hiring, because moments ago the BLS reported that in August, a total of just 130K payrolls were added, with hiring for census accounting for 25,000 of the total, sharply below the 160k expected. Oddly, the picture presented by the Household Survey was vastly different, with the number of employed workers surging by 590K, to 157.878 million as the labor force soared by 571K, suggesting the US has a way to go before hitting full employment.

However, it was the private payroll subset that was especially disappointing with the 96K print far below the 150K expected, and far below last month’s downward revised 131K. Worse, on a YTD basis, the number of private jobs created in 2019 is the worst going back at least 6 years.

Additionally, as Bloomberg notes the one-month diffusion index, which shows the breadth of hiring, slumped to 53.5 in August for private employers. “That’s the weakest since May 2016 and not a good sign for the job market.”

That was the bad news, the good news is that average hourly earnings, were stronger than expected on both a sequential and annual basis – rising 3.2% YoY and 0.4% MoM, for all workers even as the average workweek actually increased this time, rising from 34.3 to 34.4, in line with expectations. Earnings for production/non-supervisory workers also rose 3.5% YoY after 3.4% in July.

Some more good news: the unemployment rate held steady at 3.7%, with the black unemployment dropping to a new all time low.

Also in the good news column: the participation rate jumped from 63.0% to 63.2%, matching the highest since February.

Looking at the composition of job increases in August, one thing that stuck out was that retail payrolls declined for a seventh straight month, matching the longest streak since 2009. Offsetting the Amazonification of America, manufacturers continued to add jobs, though at a slower pace with August factory payrolls rising 3,000 after a downwardly revised 4,000. Meanwhile, the leading indicator for future job growth, temporary help agency employment, jumped by 15,400 after falling the previous three months and raising concerns of broader labor-market weakness.

Commentary on the report ranged from optimistic to pessimistic, with Deutsche Bank’s Torsten Slok saying on Bloomberg TV that it Looks like a stagflation report,” calling the jump in U6 – a more expansive definition of the unemployment rate – concerning.

Yet others were less pessimistic, few had anything good to say about today’s report: “This was a meh jobs report. But the Household survey was considerably stronger than the Establishment survey. The employment-to-population ratio has jumped to a cycle high. Labor market conditions are still improving, on net, albeit more slowly than before.”

Bloomberg Economics Associate Eliza Wing echoed the “meh” sentiment: “Weaker business confidence spilled over to slower private hiring. While aggregate hours rebounded and hourly earnings popped, aggregate income creation – the product of aggregate hours worked and average hourly earnings – stayed relatively low. The cooling trend is a powerful signal that consumers will drive the expansion with reduced vigor in the months ahead.”

The question then is what does this do to the Fed’s rate cut calculus, and the answer is – nothing, because while a 25bps rate cut is now in the bag, the number was nowhere near bad enough for a 50bps rate cut; and since 25bps is fully priced in by the market if anything there may be some modest disappointment in stocks as the case for 2 rate cuts on Sept 18 completely fizzles.

END

Where The August Jobs Were: Who Is Hiring And Who Isn’t… And The Retail Apocalypse

Whether today’s payrolls report was “stagflationary” or simply lousy, is debatable, but with just 96K private payrolls created in August (government added 34K jobs, the best “job category” in the month) one thing is certain: this was the 4th lowest private jobs print in the past 3 years.

And yet, if one looks at the various job sectors, the emerging picture is hardly a dismal one, with 9 industries adding jobs, and 4 losing.

Some of the highlights: US manufacturers continued to add jobs, though at a slower pace with August factory payrolls rising 3,000 after a downwardly revised 4,000. Meanwhile, the leading indicator for future job growth, temporary help agency employment, jumped by 15,400 after falling the previous three months and raising concerns of broader labor-market weakness.

Separately, government added 34K jobs, “not great, not terrible“, while low paying jobs in the education and health category were the second biggest addition in August, at 32,000; meanwhile Professional, Business and Service jobs added 21.6K (ex-temp). Below is a visual breakdown of all the main categories:

 

Looking at wage growth, below is the 3 month annualized growth in average hourly earnings in select industries:

  • Financial activities  5.2%
  • Information  5.1%
  • Wholesale trade  4.7%
  • Professional and business services  4.5%
  • Transportation and warehousing  4.5%
  • Retail trade  4.5%
  • Trade, transportation, and utilities  4.5%

Finally, digging into the numbers above, below we show the fine detail level for industries with the highest and lowest rates of employment growth for the most recent month.

 

But the big surprise – or perhaps not – was retail, where the Amazonification of America is accelerating, in the process destroying the legacy brick and mortar sector, which peaked in Jan 2017, and has lost jobs for 7 consecutive months, and 8 of the past 9, as the legacy retail sector is getting gutted.

END

A super commentary from Alasdair Macleod on which currency is going to hurt more in a recession/depression: the yuan or the dollar.  MacLeod states that the yuan will win out for various reasons.  Central to his theme is that China has only 2 trillion USA dollars of debt..and since it has 3$ trillion of dollar assets it could withstand a collapse in global economies.  Also China does not have the social welfare system that the USA has.

a  must read…

(Alasdair MacLeod)

“It’s American Hegemony That’s Being Backed Into A Corner” – The Dollar Is More At Risk Than The Yuan

Authored by Alasdair Macleod via GoldMoney.com,

China has made some silly errors in its conflict with the US, reflecting the arrogance that often afflicts every state actor. But the appearance that China is being backed into a corner over Huawei, trade tariffs and Hong Kong is misleading. China is progressing her own plans, and they do not require an accommodation with America. With Russia in tow, she is now the chief foreign influencer for up to three-quarters of the world’s population, so it is American hegemony that’s being backed into a corner. One day, this will be reflected in a currency shoot-out. This article concludes that the dollar is more at risk than the yuan, the opposite of perceptions in western capital markets.

Introduction

 

In the undeclared war between the US and China, the focus has been on the obvious battles.

  1. Huawei has been badly wounded but looks like surviving.
  2. The trade tariff battle continues and,
  3. the battle in Hong Kong is ongoing and yet to be resolved.

China made expensive choices in all three.

With Huawei, accusations of security breaches from the Americans perhaps could have been more immediately addressedwith British and European governments.

Over tariffs, China should have ignored President Trump’s provocation and not imposed tariffs of her own.Tariffs arise out of political ignorance of the economics of trade imbalances. They are a tax on the people and are therefore self-harming. China should have recognised that it was better to leave America depressing its own economy. By refusing to get involved, China would have also taken the high ground internationally, keeping the objective of free trade open, isolating American trade policy and isolating America itself.

Hong Kong should never have been allowed to escalateThe proposed extradition law should have been killed at birth. Instead, it has given the US an opportunity to encourage riots in Hong Kong. China’s intelligence services were well aware of America’s involvement, and there’s no excuse for this blunder. Now that this has finally been recognised with Hong Kong dropping the proposed law only this week, it remains to be seen whether the rioting subsides.

Hong Kong was also the most serious of the three errors. The island is the channel through which international money flows freely into and out of China through Shanghai Connect, and international portfolio flows will now be deterred from investing in China and her projects. America’s true objective regarding Hong Kong was probably to undermine China’s future development plans and to divert international portfolio flows to finance US Government spending instead.

China’s errors are certainly serious, but they hog the headlines to the exclusion of the bigger picture. China in partnership with Russia is consolidating control over the Eurasian continent. Furthermore, with Russia being the world’s largest energy exporter, Iran being driven by America under the Chinese/Russian umbrella, and the Saudis increasingly recognising their future lies with Asian energy consumers, China with Russia is positioned to take control of the global energy market. That’s three vital quasi-monopolies: physical gold, rare earths and energy.

As the ace up its sleeve, America obviously believes the world’s dependency on the dollar makes it its prisoner. But the more that ace is played, the shallower other nations’ toleration with America becomes. Through its demand for energy and commodities, China has already forged alliances with all sub-Saharan Africa, helping to turn it into the most dynamic regional prospect outside Asia for the next fifty years. South-East Asia is the cultural preserve of the Chinese diaspora, links with America only being a legacy of the past. Putting the whole of Asia and Africa together with Eastern Europe accounts for three quarters of the world’s population, no longer suited to and slipping from American hegemony.

We can therefore say the informal war between China and the US is far from over. America’s undoing could be accelerated by her new inward-looking foreign policies, rendered by the Trumpian introspective view that the world has been taking America for a ride. But there is another factor: the credit cycle is on the turn and combining with American and Chinese trade tariffs this synergistic mix threatens a crisis likely to change the outlook for fiat currencies entirely. Bolstered by the risk of owning anything else, will the dollar re-emerge as a safe haven, and will the yuan collapse under a sea of debt? This is the focus for the rest of this article.

The dollar and yuan in a crisis

From their tweets and writings, many commentators appear to be aware that too much debt is dangerous, and they seem to buy into a theory of a cycle of credit. How much so is often hard to discern, since very few of them in this Keynesian milieu appear to have a consistent grasp of economic theory, and more specifically a tenable theory of money and credit. This should not surprise us. They are, one must admit, often ahead of central planners in these matters, but then we are setting a very low bar.

Commentary from Western capital markets is also couched in an east versus west theme. China bad, America good. In Europe it’s China not so good, America getting worse. Or for Germany it is America bad for screwing up its exports to China and possibly to America as well. But sticking with money and credit rather than trade, a common theme from American commentators is that China has created too much debt and has expanded credit proportionally at a far greater rate than the US. Presumably, their thoughts are that if there’s a financial crisis, or a new slump, China will suffer catastrophically, and often there is an additional subtext: it will no longer be a threat to American hegemony and world peace.

One can imagine this line of thinking being popular in the White House, where the rock-crushing machinery of trade tariffs and restrictions on Chinese technology is expected to bring China to her knees. But there are two issues with very different considerations. There is the currency and how that is likely to behave in a credit and trade downturn, and there is credit. While their unit values are the same, they don’t necessarily suffer the same fate. It will be the interplay between the two that will determine relative monetary prospects between the US and China.

Which will be the stronger in a crisis: dollar or yuan?

Let’s take the currency first. There are two background considerations ahead of any crisis: the level of government debt and the potential increase of it in a credit-induced recession or a credit crisis (which amounts to the same thing). In this, the Chinese government scores far better than the US, with a government debt to GDP of 51% against 105%.

Furthermore, the Congressional Budget Office forecasts a baseline of projected budget deficits of $903bn for next year rising to $1,138 in 2023, assuming real GDP growth in the US averages 1.7%. Obviously, in a recession, US budget deficits will turn out to be far higher even without allowing for the cost of rescuing the financial system in a credit crisis.

How China’s government finances will hold up in a recession is a more complex question. It is not burdened with the welfare costs that bedevil more democratic mature nations, so government borrowing is likely to rise at a lesser pace than that of the American government. Instead, China uses its state-owned banks to expand credit to contain unemployment and promote GDP growth. In other words, with its five-year plans laying down political and economic objectives China will attempt to carry on regardless.

A key difference between the dollar and the yuan is that America has replaced its savings driven culture with consumer credit as the mainspring of economic progress.While consumer debt in the US continually increases, China is overwhelmingly savings driven. On this factor alone, the yuan’s purchasing power should be more stable than the dollar’s in a global credit crisis.

US-centric commentators claim the opposite; that in a crisis everyone needs dollars to cover the contraction of bank credit. They have a point, but only relevant if the Fed fails to flood the system with money. Furthermore, speculative money flows (financial balances that have little to do with the non-financial sector) currently tend to be long of the dollar and short of other currencies, so if there is a grand credit shakeout, the flows could turn out to be the other way.

On the most recent US Treasury TIC estimates, foreigners own $19.4 trillion of investments in the US (June 2018, up from $18.4 trillion in June 2017) and they had cash balances in the banking system of $4.5 trillion, giving a total of $23.8 trillion. This compares with US ownership of foreign assets recorded at $12.4 trillion at end-2017, suggesting that in a general liquidation the dollar will come under pressure from adverse flows, other things being equal. Of that figure, only $162.3 bn was in China, less than US residents’ exposure to Sweden.

US residents and multi-nationals accounting in dollars have relatively illiquid investments in production facilities in China. These may or may not be hedged against currency risk. Given a tendency for all international corporations to reduce foreign exposure when global trade contracts, it appears there are substantially more ready dollars in foreign ownership (the $4.5 trillion referred to in the previous paragraph) than foreign currencies in American ownership. China’s yuan should fare better than the dollar on this score, as well as China’s lower level of government debt to GDP.

Against this, the dollar is the world’s reserve currency, and ingrained conventional thinking is that Triffin’s dilemma will always hold; that America runs deficits to provide the dollars for international trade to act as its reserve currency.While that has been true at a time of increasing international trade, the opposite is true when trade contracts, a condition that has demonstrably already started.

Ahead of a potential credit crisis, the figures show that when it arrives currency flows are likely to differ from last time. In a global dash for cash, the dollar index rose from 77.7 when Lehman went bust in August 2008 to 88.2 by mid-November. By the following June, total foreign investment in US long- and short-term holdings had fallen by $681bn from the previous year, the first decrease since 2002. It wasn’t foreigners buying dollars that drove the dollar higher, but US corporations and investors reducing equity and bond investments in foreign currencies, which they did to the tune of nearly $3 trillion.

Today, foreign investments in dollar assets will have risen from 70% of US GDP when Lehman failed, to 115% of US GDP currently. US holdings of foreign investments has also risen, with the most recent total being $12.4 trillion at end-2017, a sharp jump on 2016. However, the volatility of total US investment in foreign securities strongly suggests that changes are predominantly liquid portfolio flows, with hedge funds and others buying foreign securities when the dollar is falling and selling them when it rises. Furthermore, American corporations had been accumulating global profits offshore to avoid corporation tax, an anomaly that was removed by President Trump after 2017. So, if one combines the strength of the dollar since 2017 with the repatriation of foreign-earned profits, exposure to foreign currencies will have already fallen considerably.

Nevertheless, the initial reaction on a developing recession is likely to see the dollar marked up. Perhaps we are seeing that now,with the trade-weighted index approaching 100 and the Yuan rate to the dollar having fallen a little less than four per cent in the last six weeks. But in evolving monetary conditions, markets tend to take only one step at a time: traders will foresee a move into riskless liquidity (conventionally dollar cash and US Treasury bills) and only later look any further. Therefore, the dynamics of foreign exposure to the dollar and Americans’ exposure to foreign currencies will probably play out subsequent to a dollar rally.

While the initial reaction may be for the dollar to be marked up, contraction of global trade and America’s overt protectionism is therefore likely to then drive the dollar down. To this we must add the appraisal markets will make with respect to government finances, with prospects for government indebtedness becoming an important consideration. With China’s official base rate currently set at 4.35% there is also the sheer cost of maintaining a speculative bear position against the yuan while being a bull of dollars.

China’s credit markets

Having debated the currency outlook, we now turn our attention to credit. China’s critics point out that at over 300% to GDP, in its economy China has proportionately greater debts than almost any other nation. However, unlike nations with underdeveloped capital markets, debt in China is overwhelmingly in yuan.External debt in all foreign currencies across the whole economy is estimated to be nearly $2 trillion equivalent, about 5% of the total, and less than China’s foreign currency reserves of $3 trillion.

Within the total of roughly 300% debt to GDP, consumer credit is recorded as relatively low, with household debt (substantially residential mortgages) at 54% of GDP, compared with 76% for Americans, who have a far greater dependency on unsecured credit. With student loans, credit card debt and car loans, in a recession and in the absence of accessible savings, the US economy is in a worse position in this respect than China.

Instead of consumers, China’s bank credit has been aimed at non-financial businesses, where debt to GDP is at 157%, compared with 74% for all businesses in the US.

If the level of China’s non-financial business loans existed in the US, there is no doubt it would be regarded as extremely destabilising, but it is a mistake to assume what applies in America automatically applies in China too. In China, there is undoubtedly a high level of malinvestment, which would in another country create severe difficulties for the banks in a credit crisis. The difference is the Chinese government owns the four largest commercial banks, along with other specialist lenders. Furthermore, the 150 or so city commercial banks are also state and local government owned. Private sector bank ownership is insignificant.

Particularly through the largest banks, loans have been directed, which despite lacking a purely commercial imperative, conforms with the government’s strategic objectives. This being the case, loan books may be riddled with bad debts, but the state is likely to never allow them to come to light. And like Japan, with an economy heavily driven by savers, it is unlikely that the parlous condition of bank credit will ever be challenged domestically by bank depositors.

This contrasts with the American position, where a bank failure becomes a public event. As the recession develops, major corporations come under pressure and some will fail. The markets then seek out the banks most exposed and punish them through falling share prices, rising spreads on their bonds and punitive interbank rates.

The implications of ZIRP and NIRP

From statistical and industry survey evidence, it appears increasingly likely that a recession will take hold and we will see the Fed reduce the Fed Funds Rate to zero, and possibly even take it negative. Even if they stick at zero, we can expect the ECB under Christine Lagarde to go more deeply negative, taking along the Japanese, the Swiss, the Swedes and the Danes. Unlike in 2012-13, when it gradually became clear that the post-Lehman world would not face an immediate systemic collapse and therefore interest rates at some stage would return to normality, this time there is no such prospect. Therefore, USD interest rates are likely to remain supressed below the time preference value for everything from commodities to day-to-day goods. Even at zero interest rates, everything will be at or close to a technical backwardation in dollar terms, which means dollars will cease to operate properly as money, not just for Americans, but for all international trade.

Meanwhile, China has savers and an interest rate which is almost certain to remain definitely positive. In the event of a global recession, the Peoples Bank has the room to cut without transgressing the general level of time preference the Chinese population places between current ownership of goods and their ownership in the future.

Summarising so far, China is likely to have a fundamentally sounder currency than America in a deepening recession. Given the relative foreign ownerships of their two currencies, there are more dollars likely to be sold than yuan. In a banking crisis, China has a more authoritarian grip on commercial banks through state ownership. The failure of a systemically important bank will not be permitted, unlike in the Eurozone and America, where the best case becomes a highly expensive and public rescue.

The view that China’s yuan is built on a better foundation is undoubtedly controversial and unpopular in western capital markets. It is likely to be incorrect in the short-term as the recession and credit crisis evolve. But when markets begin to look at the future after an initial rush into the dollar, these fundamentals can be expected to come into play.

It raises a question, while admitting that the Chinese government is not necessarily in control of events. Is it just possible that the war waged against China will be won by the last fiat currency left standing, and is it possible that some far-sighted individuals in the Chinese administration understand enough about the theories of money and credit to plan for this outcome?

It is certainly possible. This is the nation that has taken control of the physical gold market, encouraged its people to accumulate some 15,000 tonnes since 2002, and doubtless as a state accumulated huge quantities of bullion before encouraging its people to do the same.

The problem we have is reconciling a basic understanding of the benefits of sound money and the protection it affords a nation, with the unfettered use of credit expansion to finance economic objectives. It would appear the Chinese have escaped communism (in all but name) only to embrace radical Keynesianism. Furthermore, there is a new generation of central planners since Deng Xiaoping laid the foundations for China’s prosperity, likely to be western-influenced and infected with Keynesian ideas.

On this only time will tell. But we do see a China prepared to be as independent from America as possible, instead concentrating on its own political and economic objectives.

But we must conclude that despite America’s pyrrhic victories against Huawei, trade tariffs and Hong Kong, China’s dependence on trade with America was never going to last, and the Chinese leadership now have other domestic and Asian fish to fry.

end
Rabobank strategists are pretty good.  Here is Phillip Mare//Senior uSA analyst at Rabobank
the subject: Powell’s remarks.  His conclusion: we are going zero bound
(Marey/Rabobank)

Powell Doesn’t Change His Tune… And Rabobank Sees Fed Cutting To Zero

Authored by Phillip Marey, senior US Strategist at Rabobank

  • The tone of Fed Chairman Powell’s remarks in Zurich was similar to that of his speech in Jackson Hole. Powell repeated the statement that the Fed will ‘act as appropriate to sustain the expansion,’ which indicates that he is leaning toward a September rate cut.
  • Earlier today, the Employment Report for August showed that the weakness in the manufacturing sector and business investment has spread to employment growth. This strengthens the case for an insurance cut in September, although Powell said that the labor market remained in quite a strong position.
  • In our view the feedback loop between trade policy and monetary policy is likely to lead to another insurance cut, probably in OctoberMeanwhile, the inverted yield curve points to a recession in 2020 that will force the Fed to cut rates all the way to zero before the end of 2020.

Powell doesn’t change his tune

Fed Chairman Jerome Powell did not bring a prepared speech to the SNB event at the University of Zurich today, instead he took part in a moderated Q&A with SNB President Thomas Jordan on the economic outlook and monetary policy. Powell said that the US economy is still in a good place and the most likely outlook remains favorable. However, there are the significant risks to the outlook: global economic growth, uncertainty about trade policy and persistently low inflation. He said that ‘As we move forward, we’re going to continue to watch all of these factors, and all the geopolitical things that are happening, and we’re going to continue to act as appropriate to sustain this expansion.’

 

This was basically a repetition of the key phrase in his prepared speech at Jackson Hole. This confirms that Powell is still leaning toward a September rate cut. In fact, after another question on monetary accommodation he repeated his ‘act as appropriate to sustain the expansion’-mantra and said that he had nothing further to say about it this evening.

Weakness spreads to the labor market

Earlier today, the Employment Report for August showed that the impact of the US-China trade war is not limited to manufacturing activity and business investment. Nonfarm payroll growth slowed down to 130K in August from 159K in July (revised). And this is including 25K census workers boosting federal employment. Otherwise, nonfarm payroll growth would have been only 105K. At this rate employment growth should be just enough to absorb the inflow to the labor market. Unemployment remained unchanged at 3.7%. The slowdown in employment growth strengthens the case for an insurance cut. With employment growth weakening, and business investment and manufacturing activity declining, the escalation of the US-China trade conflict is a threat to the economic expansion. In fact, a deterioration in the labor market could hurt consumer spending, bringing us closer to a recession. However, during the Q&A Powell said that the labor market was in a good place and that today’s Employment Report was consistent with that outlook.

Meanwhile, average hourly earnings growth slowed down to 3.2% from 3.3% in year-on-year terms. But in month-on-month terms there was an acceleration to 0.4% from 0.3%. However, this is not enough to avert the Fed’s next rate cut. Year-on-year this is still a wage growth rate that the Fed back in 2015 imagined at the start of the hiking cycle, rather than after the end of the cycle.

Trump’s tweets less effective than his tariffs

Even before the Employment Report President Trump tweeted “I agree with @jimcramer, the Fed should lower rates. They were WAY too early to raise, and Way too late to cut – and big dose quantitative tightening didn’t exactly help either. Where did I find this guy Jerome? Oh well, you can’t win them all!” It is clear that Trump thinks the Fed is moving too slowly.

However, the central bank is adjusting monetary policy in the direction he prefers. While the Fed has been trying to ignore President Trump’s criticism on monetary policy, the central bank has managed to get itself entangled in his trade policies. As we explained in ‘Fed back to zero’, by taking a risk management approach to trade policy uncertainty, the Fed is amplifying the effect of trade policy on monetary policy. All Trump needs to do is raise tariffs or take another protectionist measure to get the Fed to cut rates further. In fact, the Fed is enabling the US administration to be tough on trade as the central bank has promised to offset any expected negative impact on the US economy by cutting rates in advance. This means that the Fed is bolstering Trump’s bargaining position in the ‘game of chicken’ between the US and China that we analyzed a few years ago in ‘The Trump Trade War Game’. But it also makes it more likely that President Trump will continue to escalate the trade war. And that makes it more likely that the Fed will have to make additional insurance cuts before the end of the year. Consequently, there is now a strong feedback loop between trade policy and monetary policy that will force the FOMC to make more insurance cuts in the near future, most likely in September and October.

From insurance cuts to recession cuts

What’s more, we think that this is only the beginning. The inversion of the yield curve points to a recession in 2020H2. While the Fed is downplaying this signal because quantitative easing is supposed to be distorting the yield curve, in our recent special Yield curve inversion: This time is not different we showed that the Fed’s argument is both flawed and contradicted by the data. Therefore, the recession signals given by the yield curve should be taken seriously. In fact, we have a recession in 2020H2 in our baseline scenario that will force the Fed to go all the way back to zero next year. Our full forecast of the Fed’s rate path is summarized in table.

end

iv) Swamp commentaries)

A Deeper Dive Into The Epstein-Dubin Wall Street Connection

Jeffrey Epstein may be dead, but there are still many stones to turn over while investigators sift through his network of high-profile friends, some of whom may be guilty of sex crimes themselves.

The wealthy pedophile, transhumanist, and financier’s circle of friends included Bill Clinton, Ehud Barack, Prince Andrew, and Victoria’s Secret boss Les Wexner.

It also included billionaire hedge fund manager Glenn Dubin and his wife, Dr. Eva Andersson-Dubin – a former Miss Sweden who dated Epstein for three years before she and Dubin married in 1994.

The Dubins and Epstein were close, and remained close after his 2008 conviction for pedophilia – inviting him to their Palm Beach home for Thanksgiving the following year. Eva even wrote an email to Epstein’s probation officer insisting that she was “100% comfortable” with the pedophile and registered sex-offender being around her minor children.

According to Vanity Fairs William Cohan, several sources said that Epstein was the godfather to the Dubins’ three children – a claim which the family disputed (“The Dubins are Jewish and Jewish people do not typically do godparents,” said a spokesman).

Epstein, Dubin and Wall Street

In 2004, Epstein reportedly received a $15 million fee after JPMorgan Chase bought control of Dubin’s hedge fund, Highbridge Capital. Epstein had introduced Dubin to then-JPM Exec Jes Staley, who is now CEO of Barclays. According to Bloomberg, Staley “visited Epstein on the private island, accompanied by his wife Debora.”He also visited Epstein at his Palm Beach office while the Epstein was on prison work-release. 

Dubin, meanwhile, also directed some of Epstein’s money to at least two hedge fund mangers; Dan Zwirn and Joseph Kusnan – both former Highbridge employees who left to start their own firms.

“Glenn Dubin introduced me to Epstein as a new manager that he was familiar with and thought highly of,” Kusnan told Vanity Fair – insisting that he and Epstein only met once, and never communicated again. Notably, Kusnan delivered “a good rate of return on his modest investment.”

The relationship between Epstein and Dubin also ventured into more controversial realms, if one believes the depositions recently unsealed in an old court case between one of Epstein’s alleged victims, Virginia Giuffre, and Epstein’s longtime companion and alleged madam, Ghislaine Maxwell. According to Giuffre’s May 2016 deposition, Dubin was the “first” powerful person that Maxwell sent her to have sex with “after my training.” She also said that she was instructed by Maxwell to have sex with, among others, Alan Dershowitz, the Harvard Law professor; George Mitchell, the former U.S. senator; Bill Richardson,the former New Mexico governor; and Jean-Luc Brunel, a French model scout. “My whole life revolved around just pleasing these men and keeping Ghislaine and Jeffrey happy,” Giuffre said in her deposition. “[Maxwell and Epstein’s] whole entire lives revolved around sex. They call massages sex. They call modeling sex.” She said Maxwell told her to give Dubin “a massage.” (The Dubins categorically deny Giuffre’s allegations. Their spokesperson also provided evidence they say disproves Giuffre’s account. Dershowitz, Mitchell, Richardson, and Brunel have also denied her allegations.) –Vanity Fair

Did the Dubins bring in a 15-year-old girl?

Former Dubin chef and assistant Rinaldo Rizzo claimed in a recently unsealed June 2016 deposition that when he and his wife Debra worked for the Dubins, Andersson-Dubin brought home a 15-year-old Swedish girl who had been with Epstein and Maxwell during a visit to the Dubins’ home.

The girl was “distraught,” “upset,” and “she was shaking” said Rizzo, who added that the girl seemed “on the verge of crying.”

According to the report, “[T]he girl told him and his wife that she worked for Epstein as his “executive personal assistant,” and when Rizzo expressed shock that such a young girl could have that job, “she just breaks down hysterically.” Rizzo stated that the girl told him she was involved in some forced sexual activity at Epstein’s Caribbean island and was told by Maxwell and Epstein not to discuss it.

But about a month later, according to Rizzo, the Dubins, along with the girl and the Rizzos, were on Dubin’s private jet back to Sweden and the girl was returned home. “We flew to Sweden,” Rizzo said in his deposition, “we stopped at an airport we didn’t usually stop at and she got off the plane.” The Rizzos left the Dubins’ employ in October 2005, following those events, he said in his deposition. “My wife and I had discussed these incidents, and this last one was just, we couldn’t deal with it,” he said. –Vanity Fair

The Dubins have denied everything – stating through a spokesman who shared flight records “There was never a 15-year-old Swedish nanny in the Dubins’ home and flight records for trips to Sweden on the Dubins’ plane do not include any minors other than family members.” The Dubins’ longtime live-in nanny also attested “with certainty” that they had never employed an underage nanny.

That said, the Dubins did confirm having traveled with Epstein on his private jet – occasionally flying between Palm Beach and New York, where they all had homes. Maxwell, meanwhile, flew on Dubin’s plane twice along with his children; once in 2004 and again in 2010.

Pilot Jim Dowd who flew for both Epstein and the Dubins said that both men were “friends” who liked “vacationing together.”

Meanwhile, a Russian model who worked for French modeling exec and accused rapist Jean-Luc Brunel was reportedly “friendly” with Andersson-Dubin. The model, Lana Pozhidaeva, recently made headlines for having received a $55,000 donation from Epstein for her New York-based nonprofit.

Dubins and Wexner

Last but not least, Vanity Fair‘s Cohan notes that the Dubins were close enough to Victoria’s Secret boss (and former Epstein pal) Leslie Wexner, the billionaire founder and CEO of L Brands. Wexner – Epstein’s only known financial client – allowed the Dubins and their children to use their 316-foot, $100 million yacht, Limitless, for a Mediterranean vacation.

“Wexner’s wife, Abigail,“graciously invited the Dubins to use their boat for four days while Eva Dubin was recovering from breast cancer surgery,” Dubin’s spokesperson explained,” according to the report – which adds that it was “quite unusual for Wexner to let anyone use Limitless when he was not on board.”

Interestingly – all parties have denied all wrongdoing, and many claim to have had no knowledge of Epstein’s proclivities despite hanging out with him during and following his conviction for pedophilia. What’s wrong with these people?

v) King report/Courtesy of Chris Powell of GATA which includes the major swamp stories.

Stocks soared globally on Thursday due to a story that said the US and China had high-level talks on trade.  Hasn’t Trump repeatedly tweeted that talks were ongoing and they were ‘going well’?

Trade talks between the US and China were supposed to occur in August.  Then it was September.  Now the market surges because the talks will purportedly occur in October.

Anyone still believe in the EMH and the omniscience of the stock market?

The US recession fears fomented by weak manufacturing metrics were mitigated on Thursday due to strong service, factory orders, employment and consumer sentiment data.

  • The ISM Non-Manufacturing PMI for August jumped to 56.4 from 53.7.  54 was expected.
  • Markit Aug US Services PMI 50.7; 50.9 expected
  • The ADP Employment Change for August jumped to 195k from 142k.   148k was expected.
  • July Factory Orders rose 1.4%; 1% was expected
  • Durable Goods increased 2%; 2.1% was expected, Ex-Trans were the expected -0.4%
  • The Bloomberg Consumer Comfort index for Sept. 1 rose to 63.4 from 62.5

Due to the above factors, the S&P 500 Index exploded out of its rectangle consolidation that had endured since August 2.  The index soared above the 2938-43 upper band.  With the index hitting a high of 2885.86 during the first hour of NYSE trading, the index is only 1.75% from an all-time high.

After the 10:16 ET peak, ESUs and stocks rolled over.  They went inert at midday.  From 13:10 ET until the final hour, ESUs traded in 4-handle range.  The final hour rally aborted during the final 20 minutes.  After the manic buying during the first 45 minutes of NYSE trading, buyers largely disappeared.

Perhaps wiser guys became troubled by this: How can the Fed cut rates in 12 days if the S&P 500 Index is at or near an all-time high?

We’ve mentioned numerous times over the past several years that S&P 500 Index eMini futures are manipulated during the thin overnight market regularly.  Several studies have showed that over the past few years, most of the gain for US stocks is produced when the NYSE is closed.

As measured by opening gap in the S&P 500 Index, the overnight volatility has worsened during Trump’s reign.  The following link, which tracks the rolling 180 day Close-Open Volatility for the S&P 500 Index, shows that from May 1995 through June 2007, the opening gap never hit 1% and exceeded 0.5% only 5 times.  This year, the metric has hit 8%, easily exceeding the previous 6% peak in 2009.

@HayekAndKeynes: Gap risk reaches new extremes in the era of Trump.  [Chart at link]

https://twitter.com/HayekAndKeynes/status/1169364072472690689/photo/1

Trump Administration Aims to Privatize Fannie Mae and Freddie Mac – After years of bipartisan talk of abolishing the firms, Treasury launches process to diminish government control over time

https://www.wsj.com/articles/trump-administration-aims-to-privatize-fannie-mae-and-freddie-mac-11567717213

For August 2018, the BLS’s hokey Birth/Death Model fabricated 105k jobs.  The BLS counted 505k jobs NSA.  This was seasonally adjusted to 282k.  Ergo, the seasonal adjust is -223k for August 2018.

https://www.bls.gov/web/empsit/cesbd.htm

Today is a big day: August jobs report and Powell speaks in Zurich at 12:30 p.m. ET on “Economic Outlook and Monetary Policy.”  And you can be sure that Donald “Have Tweet will Gravel” Trump will comment on both the jobs report and Powell.

Even if we knew the NFP number before its release, we couldn’t fathom the market reaction.  Is good economic news bad for stocks and vice versa?  Or is any NFP number good for stocks because the usual suspects want to push the S&P 500 Index to a new high before the FOMC Meeting on Sept 17-18?

Marc Faber’s current report, The Urge to Intervene is a False Front for the Urge to Rule, has some great quotes about intrusive government.

 

When a managed economy begins to fail, the only direction is to manage it more and more.  It’s how ‘democratic socialism’ leads to repression.” – Garry Kasparov [Describes central banks/pols perfectly]

 

Everyone wants to live at the expense of the state.  They forget that the state lives at the expense of everyone.” – Frederic Bastiat

 

Remember, democracy never lasts long.  It soon wastes, exhausts, and murders itself.  There was never a democracy yet that did not commit suicide.” – John Adams

 

When a government takes over a people’s economic life it becomes absolute, and when it has become absolute, it destroys arts, the minds, the liberties and the meaning of the people it governs.”  — Maxwell Anderson

 

On Wednesday night, at a Climate Change town hall soiree, Dem presidential candidates offered solutions to fight climate change.

 

Bernie supported population control to fight climate change.

 

@RepDougCollins: Sanders wants to prevent disadvantaged populations from reproducing by forcing taxpayers to help poor people across the world kill their children. This is sickening.  And prejudiced

 

Sanders under fire for remarks on population control

He said he would be open to discussing population control as a means to combat climate change…

https://thehill.com/homenews/campaign/460045-sanders-under-fire-for-remarks-on-population-control

 

@RNCResearch: Bernie says with his climate plan we’ll have “a lot of taxpayers out there who will be paying more in taxes”   https://youtu.be/0B0_ECVgFdw

 

Biden advocated the elimination of fossil fuels and “combustion engine vehicles”.  Kamala Harris supported the need to reduce red meat consumption.

 

Joe Biden: “We have to take combustion engine vehicles off the road as rapidly as we can.” 

https://twitter.com/DaveNYviii/status/1169417127201247233

 

Biden allies expect natural gas company founder to remain co-host of fundraiser despite climate outcry – despite Biden’s pledge to refuse money from fossil-fuel executives.

https://www.cnbc.com/2019/09/05/biden-likely-sticking-with-natural-gas-firm-founder-as-fundraiser-host.html

 

@RealSaavedra: Buttigieg: If you eat hamburgers or use straws, you are “part of the problem

https://twitter.com/RealSaavedra/status/1169627426646831105

 

People then posted pictures of Buttigieg eating burgers and drinking out of a straw at campaign events.

 

Stonewall Jackson @1776Stonewall: The Democrats had an entire 7 hour Town Hall on climate change. Think about this, when Americans listed their top 10 reasons for voting next year, climate change wasn’t even in the top 10. Yet the Democrats just had a whole town hall dedicated to it

[Among big donors, climate change is a paramount issue.]

 

Biden Suggests Appointing Barack Obama to the Supreme Court [Obama still won’t endorse Joe!]

https://trendingpolitics.com/biden-suggest-appointing-barack-obama-to-the-supreme-court/

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

(Greg Hunter)

Democrat Climate Crazy Time, Trump Wall Win, Economic Update

By Greg Hunter On September 6, 2019

There was a 7 hour CNN town hall on climate change where all the top Democrat Presidential candidates weighed in on banning everything from fossil fuels to beef, and even plastic straws in an effort to save the planet from the evils of mankind. To me, this is nothing more than an excuse to control the masses under the false narrative of saving the planet from climate change.

President Trump has scored another big win on building the wall on the southern border with Mexico. He’s diverting $3.6 billion from the Pentagon budget. This was all made possible with the July Supreme Court decision that allows the Trump Administration to divert money from the Pentagon budget for wall construction. The Left is in total meltdown over this, and that means it was a direct hit on them flooding America with illegal voters in time for the 2020 election.

Even with the big boost in the stock market this week, there are still plenty of warning signs. One top financial expert says the end game of this economic episode will feature very big inflation. So, he says buy hard assets.

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

(To Donate to USAWatchdog.com Click Here) (You Tube demonetized this video right out of the gate.  There must be really good information and analysis in it for you.  Enjoy!!!)

-END-

World economic news:

Well that is all for today

I will see you Monday night.

 

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