JAN 21//RAID ORCHESTRATED BY BANKERS FAILS AGAIN: GOLD DOWN ONLY $2.00 TO $1558.00//SILVER DOWN 24 CENTS TO $17.82//HUGE QUEUE JUMPING IN BOTH GOLD AND SILVER//THE CORONAVIRUS HAS NOW SPREAD FROM CHINA TO OTHER COUNTRIES//IRAN WITHDRAWS FROM THE NON PROLIFERATION TREATY AND ARE NOW SUBJECT TO UN SANCTIONS//IMPEACHMENT TRIAL BEGINS TODAY: MORE SWAMP STORIES FOR YOU TONIGHT///

GOLD:$1558.00 DOWN $2.00    (COMEX TO COMEX CLOSING)

 

 

 

 

 

 

Silver:$17.82 DOWN 24 CENTS  (COMEX TO COMEX CLOSING)

Closing access prices:

 

Gold :  $1558.50

 

silver:  $17.82

 

 

COMEX DATA

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

today RECEIVING:  2/78

EXCHANGE: COMEX
CONTRACT: JANUARY 2020 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,558.800000000 USD
INTENT DATE: 01/17/2020 DELIVERY DATE: 01/22/2020
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
355 C CREDIT SUISSE 23
435 H SCOTIA CAPITAL 49
657 C MORGAN STANLEY 8
661 C JP MORGAN 50 2
737 C ADVANTAGE 5 14
800 C MAREX SPEC 3
905 C ADM 2
____________________________________________________________________________________________

TOTAL: 78 78
MONTH TO DATE: 2,657

we are coming very close to a commercial failure!!

NUMBER OF NOTICES FILED TODAY FOR  JAN CONTRACT: 78 NOTICE(S) FOR 7800 OZ (0.2426 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  2657 NOTICES FOR 265700 OZ  (8.2653 TONNES)

 

 

 

 

SILVER

 

FOR JAN

 

 

70 NOTICE(S) FILED TODAY FOR 350,000  OZ/

total number of notices filed so far this month: 517 for  2,585,000 oz

 

XXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ 8651 UP $8 

 

 

 

 

Bitcoin: FINAL EVENING TRADE: $ 8797 UP 72

 

Let us have a look at the data for today

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IN SILVER THE COMEX OI ROSE BY A FAIR SIZED 696 CONTRACTS FROM 235,420 UP TO 236,116 DESPITE OUR STRONG  12 CENT GAIN IN SILVER PRICING AT THE COMEX.

TODAY WE ARRIVED CLOSER TO AUGUST’S 2018  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S.  WE WERE  NOTIFIED  THAT WE HAD A  STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:,

; FEB 0; MARCH:  1346 AND MAY: 0 AND JULY: 120 ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  1466 CONTRACTS. WITH THE TRANSFER OF 1466 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 1466 EFP CONTRACTS TRANSLATES INTO 7.330 MILLION OZ  ACCOMPANYING:

1.THE 12 CENT GAIN 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.

43.030   MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)

7.32     MILLION OZ INITIALLY STANDING IN OCT

2.630     MILLION OZ STANDING FOR NOV.

20.970   MILLION OZ  FINAL STANDING IN DEC

2.600     MILLION OZ INITIALLY STANDING IN JAN

FRIDAY, AGAIN OUR CROOKS USED COPIOUS PAPER IN ORDER TO CONTAIN SILVER’S PRICE…AND THEY WERE  UNSUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT ROSE 12 CENTS).. AND, OUR OFFICIAL SECTOR/BANKERS  WERE  UNSUCCESSFUL IN THEIR ATTEMPT TO FLEECE  SOME SILVER LONGS AS THE TOTAL GAIN IN OI ON BOTH EXCHANGES TOTALED 2162 CONTRACTS. OR 10.81 MILLION OZ…..

THE TREND SEEMS TO BE THAT OUR BANKERS ARE BECOMING LOATHE TO SUPPLY THE COMEX SILVER (AND GOLD) PAPER. THE EMPHASIS IS NOW ON INCREASINGLY SUPPLYING EXCHANGE FOR PHYSICALS.

 

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

17,213 CONTRACTS (FOR 13 TRADING DAYS TOTAL 17,213 CONTRACTS) OR 86.07 MILLION OZ: (AVERAGE PER DAY: 1324 CONTRACTS OR 6.620 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JAN:  86.07 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 12.293% 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 2020 TO DATE SILVER EFP’S:          86.07 MILLION OZ.

JANUARY 2020 EFP TOTALS SO FAR: 86.07 MILLION OZ

 

 

RESULT: WE HAD A FAIR SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 696, DESPITE THE STRONG 12 CENT GAIN IN SILVER PRICING AT THE COMEX /FRIDAY… THE CME NOTIFIED US THAT WE HAD A  STRONG SIZED EFP ISSUANCE OF 1466 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON  AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA)

TODAY WE GAINED A STRONG SIZED  SIZED: 2162 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 1466 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 696 OI COMEX CONTRACTS. AND ALL OF THIS STRONG DEMAND HAPPENED WITH A 12 CENT GAIN IN PRICE OF SILVER AND A CLOSING PRICE OF $18.06 // FRIDAY’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. 1.180 BILLION OZ TO BE EXACT or 169% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JAN MONTH/ THEY FILED AT THE COMEX: 70 NOTICE(S) FOR  350,000 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 $14.70

 

.

 

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 43.030 MILLION OZ//OCT: 7.665 MILLION OZ//   NOV: 2.630 MILLION OZ//DEC:  20.970 MILLION OZ; JAN: 2,600,000  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)

 

GOLD

 

IN GOLD, THE COMEX OPEN INTEREST ROSE BY A SMALL SIZED 257 CONTRACTS TO 793,842 AND MOVING CLOSER TO OUR NEW RECORD OF 799,541 (SET JAN 16/2016)  AND COMING CLOSER TO OUR PREVIOUS  RECORD (SET JAN 6/2020) AT 797,110.

THE SMALL RISE IN COMEX OI OCCURRED WITH A GAIN OF $9.60 IN PRICING ACCOMPANYING COMEX GOLD TRADING// FRIDAY//  

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A  STRONG SIZED 6555 CONTRACTS:

JAN 2020: 0 CONTRACTS, FEB>  5555 CONTRACTS; MARCH 00 APRIL: 0; JUNE. 1000 AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 793,842,.  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 STRONG SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 6580 CONTRACTS: 257 CONTRACTS INCREASED AT THE COMEX  AND 6555 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 6580 CONTRACTS OR 658,000 OZ OR 20.47 TONNES.  FRIDAY WE HAD A STRONG GAIN OF $9.60 IN GOLD TRADING….

AND WITH THAT GAIN IN  PRICE, WE  HAD A STRONG GAIN IN GOLD TONNAGE OF 20.47  TONNES!!!!!! THE BANKERS/OFFICIAL SECTOR WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER WITH RECKLESS ABANDON. THE BANKERS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO LOWER GOLD’S PRICE (UP $9.60) THEY WERE TOTALLY  UNSUCCESSFUL IN THEIR ATTEMPT TO  FLEECE  GOLD LONGS FROM THE GOLD ARENA AS WE HAD OUR GOOD GAIN IN OPEN INTEREST ON OUR TWO EXCHANGES (20.47 TONNES). THE SPREADING OPERATION HAS NOW SWITCHED OVER TO SILVER.

SPREADING LIQUIDATION HAS NOW STOPPED IN SILVER AS THEY MORPH INTO GOLD AS THEY HEAD TOWARDS THE NEW FRONT MONTH WILL BE FEBRUARY.

 

 

FOR THOSE OF YOU WHO ARE NEW, HERE IS THE MODUS OPERANDI OF THE SPREADERS AND THE CRIMINAL ELEMENT BEHIND IT:

 

THE SPREADING LIQUIDATION OPERATION IS NOW OVER FOR GOLD..AND WE WILL NOW MORPH INTO AN ACCUMULATION PHASE OF SPREADING CONTRACTS FOR SILVER.  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 SILVER 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 JAN HEADING TOWARDS THE  NON ACTIVE DELIVERY MONTH OF FEBRUARY 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 JAN.BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN SILVER WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING  ACTIVE DELIVERY MONTH (FEB), 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.”

 

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JAN : 109,847 CONTRACTS OR 10,984,700 oz OR 341.67 TONNES (13 TRADING DAYS AND THUS AVERAGING: 8607 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 13 TRADING DAY(S) IN  TONNES: 341.67 TONNES

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

THUS EFP TRANSFERS REPRESENTS 341.67/3550 x 100% TONNES =9.62% OF GLOBAL ANNUAL PRODUCTION

 

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:    341.67  TONNES

JANUARY 2220 TOTAL EFP ISSUANCE; SO FAR: 341.67 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 SMALL SIZED INCREASE IN OI AT THE COMEX OF 257 DESPITE THE STRONG  PRICING GAIN THAT GOLD UNDERTOOK FRIDAY($9.60)) //.WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6555 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 6555 EFP CONTRACTS ISSUED, WE  HAD A STRONG SIZED GAIN OF 6580 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

5555 CONTRACTS MOVE TO LONDON AND 257 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 20.47 TONNES). ..AND THIS  INCREASE OF DEMAND OCCURRED WITH THE  GAIN IN PRICE OF $9.60 WITH RESPECT TO FRIDAY’S TRADING/// AT THE COMEX.

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

 

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

GLD...

 

 

WITH GOLD DOWN $2.00 TODAY

 

NO CHANGE IN GOLD INVENTORY AT THE GLD//

 

 

 

JAN 21/2019/Inventory rests tonight at 879.49 tonnes

 

 

 

 

 

SLV/

 

 

WITH SILVER DOWN 24 CENTS TODAY

NO CHANGE IN SILVER INVENTORY AT THE SLV…

 

JAN 21/INVENTORY RESTS AT 354.857 MILLION OZ.

 

 

 

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

 

 

end

 

OUTLINE OF TOPICS TONIGHT

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

1.Today, we had the open interest in SILVER ROSE BY A GOOD SIZED 696 CONTRACTS from 235,420 UP TO 236,116 AND CLOSER TO OUR NEW COMEX RECORD.  THE LAST RECORDS WERE SET  IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD TO THAT 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  2 3/4 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.

 

EFP ISSUANCE 1466

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

 FOR FEB. 0; FOR MAR  1346:  AND MAY: 0; JULY: 120 CONTRACTS   AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1466 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE OI GAIN AT THE COMEX OF 790  CONTRACTS TO THE 1466 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG GAIN OF 2162 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 10.81 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: 43.030 MILLION OZ///OCT: 7.32 MILLION OZ//NOV 2.63 MILLION OZ//DEC: 20.970 MILLION OZ//JAN: 2.600 MILLION OZ//

 

 

RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 12 CENT GAIN IN PRICING THAT SILVER UNDERTOOK IN PRICING// FRIDAY. WE ALSO HAD A STRONG SIZED 1466 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)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED DOWN 53.64 POINTS OR 1.41%  //Hang Sang CLOSED DOWN 810.58 POINTS OR 2,81%   /The Nikkei closed DOWN 218.93 POINTS OR 0.91%//Australia’s all ordinaires CLOSED DOWN .22%

/Chinese yuan (ONSHORE) closed DOWN  at 6.9040 /Oil UP TO 57.24 dollars per barrel for WTI and 64.15 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED DOWN // LAST AT 6.9040 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.9079 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 ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

3A//NORTH KOREA/ SOUTH KOREA

NORTH KOREA

Now it is North Korea that is threatening to endits moratorium on missile testing and nuclear enirichment

(zerohedge)

3b) REPORT ON JAPAN

3C  CHINA

i)CHINA

The new deadly coronavirus outbreak is now spreading to other countries. We must be very mindful of this

(zerohedge)

ii)CHINA

Xi warns party officials not to cover up the proliferation of the coronavirus.

(zerohedge)

4/EUROPEAN AFFAIRS

Europe/USA/China

A super commentary from Daniel Lacalle as he explains how Europe is the big loser in the new trade agreement between China and the uSA.

The agreement with China is only phase one and they must now deal with phase 2 which will be most difficult.  Europe is set to introduce a digital tax on USA giants which will annoy Trump to now end.  Europe also has mountains of  hurdles for agricultural operations to sell to the EU.

Expect a trade war to begin with Europe and the uSA shortly.

(Daniel Lacalle)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)IRAQ

A good look at the situation inside Iraq right now.  With the USA threatening to pull out, that might give ISIS the strength to attack the oil fields in Kirkuk again

(OilPrice.com)

ii)LIBYA/EUROPE/TURKEY

General Hafter who is head of the lNA (and USA backed) controls all of the Libyan oil.  He has now blocked all oil exports one day before the Berlin conference

(zerohedge)

iii)IRAN/GLOBE

Iran is angry as they now threaten to withdraw form the big 1970 Non Proliferation treaty. This will no doubt cause the uN to again sanction Iran.

(zerohedge)

iv)TURKEY/EU

Turkey is continually getting itself into hot water as they engage in a massive incursion into the drilling area on that massive gas/oil find. Now in a leaked letter, the EU is threatening to cut off aid to Turkey in a their “pre accession to the EU.  They still have not cut aid to Turkey for housing Syrian migrants.

(zerohedge)

v)TURKEY/LIBYA/SYRIA

Thousands of Turkish mercenary fighters have now flooded into Libya as the Berlin talks begin. Turkey is trying to defend the Libyan airport

(zerohedge/South Front)

6.Global Issues

i)You must always read Von Greyerz: he is now ready for a stock market crash. He advises that you should get  a private gold storage facility.

(Egon von Greyerz)

ii)Switzerland

Negative interest rates are killing European banks.  UBS tumbles big time as they miss key targets..investors are pulling their money out of the largest Swiss Bank

(zerohedge)

iii)THE GLOBAL ECONOMY

The Baltic Dry Index continues to collapse signalling that global growth has come to a halt. The iMF has just slashed global GDP growth

(zerohedge)

iv)LOCUSTS  EARTHQUAKES AND STRANGE WEATHER PATTERNS

Swarms of locusts plague India and Africa destroying crops. Earthquakes occur in diverse places and strange weather like extreme cold temperatures in Alberta which experienced temperatures colder than on Mars.  We also witnessed huge amt of snow in Newfoundland.
strange events
(courtesy Michael Snyder)

7. OIL ISSUES

 

8 EMERGING MARKET ISSUES

 

9. PHYSICAL MARKETS

i)For the past several years I have been highlighting to you the fraudulent reporting of the jobs report. Pam and Russ go a little deeper into this fraudulent reporting

(Pam and Russ Marten/Wall Street on Parade)

i b)How the New York Fed has come to dominate the repo market:

(Pam and Russ Martens)

ii)Venezuela’s cash is now below $1 billion and drying up fast. It will not be long before a default occurs here

(Bloomberg/GATA)

iii)The ECB is having trouble explaining to citizens the perception of high inflation that is now occurring especially with the massive printing of paper money.

(London’s financial times/GATA)

iv)Rosenberg predicts two major things:

1. we are going to have helicopter money released

2. gold reaches 3,000 dollars this year

(Gisiger/Rosenberg/)

v)the fraud of rehypothecation of gold explains beautifully what is going on in this arena..

As for the GLD and SLV, both metals can leave from either these three methods:

1. swapping of metal for dollars

2. rehypothecation of existing gold/silver which may or many not have the precious metals leave inventory

3 dealers accumulate 100,000 shares and tender for metal.

this is why the real inventory of the GLD/SLV is a lot lower than recorded by the crooks.

(Charles Hugh Smith)

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

iii) Important USA Economic Stories

iv) Swamp commentaries)

i)Dershowitz: the GAO is wrong on its interpretation of whether Trump had the right to withhold Ukraine funds. He explains why..(Alan Dershowitz)

ii)An important read..

McConnell may have a “kill switch” which will shut down the impeachment trial if Democrats get wild

(zerohedge)

iii)This is an important read as it outlines the dilemma facing Roberts as he becomes the judge in the impeachment trial. If he casts the deciding vote in case of a tie, he will no doubt have to recuse himself from a potential Supreme Court hearing on say Bolton whether there is Presidential executive privilege or not.

(zerohedge)

iv)McConnell gives the Democrats just two days to present their case in the impeachment trial in the Senate.  Naturally the Democrats are fuming and claiming the trial is rigged..what foods..

(zerohedge)

v)Stefan Halper used her to gain a liaison with Flynn.  She claims she will expose the Russian hoax origins and we have no doubt that she could.(Sara Carter)

vi)This is a good one:  Sidney Powell, Flynn’s lawyer claims that Flynn never lied and now she has an eyewitness to the event: Joe Pientka, the FBI agent that was with Strzok

(Peter Svav/EpochTimes)

vii)McConnell slightly blinks: he grants an extra day of trail submissions sought by the Democrats

(zerohedge)

 

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 ROSE BY SMALL SIZED 257 CONTRACTS TO 793,842 MOVING CLOSER TO OUR RECORD SET THIS PAST WEEK: {799,541  OI(SET JAN 16/2020)} AND COMING CLOSE TO OUR PREVIOUS RECORD OF 797,110 (SET JAN 7/2020).  THE SMALL GAIN IN COMEX OI OCCURRED WITH OUR STRONG ADVANCE OF $9.60 IN GOLD PRICING // FRIDAY’S // COMEX TRADING)

IT NOW SEEMS THAT OUR BANKER FRIENDS ARE LOATHE TO SUPPLY THE COMEX PAPER. THEY ARE CONCENTRATING MORE ON THE ISSUANCE OF EXCHANGE FOR PHYSICAL PAPER

 

WE ARE NOW IN THE  NON ACTIVE DELIVERY MONTH OF JAN..  THE CME REPORTS THAT THE BANKERS ISSUED A STRONG SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 6555 EFP CONTRACTS WERE ISSUED:

  FEB: 5555′; MARCH 00 AND APRIL: 0,  JUNE : 1000 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE: 6555 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 GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A STRONG SIZED 6580 TOTAL CONTRACTS IN THAT 6555 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A SMALL SIZED 257 COMEX CONTRACTS.

THE BANKERS SUPPLIED THE NECESSARY AND INFINITE AMOUNT OF SHORT PAPER IN GOLD.  THE BANKERS WERUNSUCCESSFUL IN LOWERING GOLD’S PRICE //// (IT FELL BY $9.60). AND THEY WERE MOST DEFINITELY UNSUCCESSFUL IN FLEECING ANY LONGS AS WE GAINED A STRONG SIZED  6580 CONTRACTS ON OUR TWO EXCHANGES…..

 

 

NET GAIN ON THE TWO EXCHANGES ::  6580 CONTRACTS OR 766,900 OZ OR 20.47 TONNES.  

 

COMMODITY LAW SUGGESTS THAT COMMODITY FUTURES OPEN INTEREST SHOULD APPROXIMATE 3% OF TOTAL PRODUCTION.  IN GOLD THE WORLD PRODUCES AROUND 3500 TONNES PER YEAR BUT ONLY 2200 TONNES ARE AVAILABLE FROM THE WEST (THUS EXCLUDING RUSSIA, CHINA ETC..WHO KEEP 100% OF THEIR PRODUCTION)

THUS IN GOLD WE HAVE THE FOLLOWING:  793,842 TOTAL OI CONTRACTS X 100 OZ PER CONTRACT = 79.38 MILLION OZ/32,150 OZ PER TONNE =  2,469 TONNES

THE COMEX OPEN INTEREST REPRESENTS 2,469/2200 OR 112.2% OF ANNUAL GLOBAL PRODUCTION OF GOLD.

 

We are now in the   NON active contract month of JAN.  This month is generally one of the poorest of delivery months for the year.  Here we have a total of 96 open interest left to be served upon, for a GAIN of 9 contracts.   We had 39 notices served up on yesterday so we surprisingly gained another 48 contracts or an additional 4800 oz will stand for delivery in this non active delivery month of January. I can now safely say that the comex is under attack for metal!!

The next active delivery month after January is February and here we witnessed a LOSS OF ONLY 11,875 in contracts DOWN to 378,948.  

March GAINED 100 contracts to stand at an open interest of, 1243.

The next active delivery month after March is April and here we witnessed a gain of 8979 contacts up to 280,291 oi contracts.

We had 78 open interest notices served upon today for 7800 oz

the front month of February is not contracting enough (WITH RESPECT TO OI) and thus it seems we will have another strong amount of gold standing for delivery.  

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results

Total COMEX silver OI ROSE BY A FAIR SIZED 696 CONTRACTS FROM 235,420 UP TO 236,116 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018 (244,196).  THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND OUR   OI COMEX GAIN OCCURRED WITH A STRONG 12 CENT RISE IN PRICING/FRIDAY.

AS IN GOLD, OUR BANKERS ARE LOATHE TO SUPPLY ADDITIONAL SILVER COMEX PAPER.

WE ARE NOW INTO THE  NON-ACTIVE DELIVERY MONTH OF JAN.

Here we have a GAIN of 22 contracts TO 73. We had 44 notices served on yesterday, so we gained 66 contracts or an additional 330,000 oz will stand for delivery during this non active delivery month of January. Silver along with gold are under attack for metal!! Our bankers have their work cut out for them.

 

 

 

After January, we have  the non active month of February and here we saw a GAIN of 7 contracts TO A LEVEL OF  451.  March is a very active month and here we witness a GAIN of 460 contracts UP to 177,225

WE ARE GOING TO HAVE A STRONG FEBRUARY SILVER STANDING FOR METAL.

 

 

We, today, had 70 notice(s) filed for 350,000, OZ for the JAN, 2019 COMEX contract for silver

Trading Volumes on the COMEX TODAY: 510,980 contracts    

 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY316,465 contracts

 

 

 

INITIAL standings for  JAN/GOLD

 

 

 

Let us head over to the comex:

JAN 21/2020

 

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 101.51 oz

 

HSBC

 

 

Deposits to the Customer Inventory, in oz  

nil

 

No of oz served (contracts) today
78 notice(s)
 7800 OZ
(0.2426 TONNES)
No of oz to be served (notices)
18 contracts
(1800 oz)
0.0559 TONNES
Total monthly oz gold served (contracts) so far this month
2657 notices
265,700 OZ
8.2653 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: 0 oz

 

we had 0 deposit into the customer account

i) Into JPMorgan: nil  oz

 

 

ii)into

everybody else: 0

 

total deposits:  0  oz

 

 

 

we had 1 gold withdrawals from the customer account:

i) Out of HSBC:  101.51 oz was withdrawn

 

 

total gold withdrawals;  101.51 oz

 

ADJUSTMENTS:  0

NEW PLEDGED GOLD:  BRINKS

3027.500 OZ  ADDED TO THE PLEDGED ACCOUNT JAN 10.2020

207,363.857 oz NOW PLEDGED  JAN 21.2020

 

 

 

 

 

 

FOR THE JAN 2020 CONTRACT MONTH)Today, 0 notice(s) were issued from JPMorgan dealer account and 50 notices were issued from their client or customer account. The total of all issuance by all participants equates to 78 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

To calculate the INITIAL total number of gold ounces standing for the JAN /2020. contract month, we take the total number of notices filed so far for the month (2657) x 100 oz , to which we add the difference between the open interest for the front month of  JAN. (96 contracts) minus the number of notices served upon today (78 x 100 oz per contract) equals 267,500 OZ OR 8.3203 TONNES) the number of ounces standing in this NON active month of JAN

Thus the INITIAL standings for gold for the JAN/2020 contract month:

No of notices served (2657 x 100 oz)  + (96)OI for the front month minus the number of notices served upon today (78 x 100 oz )which equals 267,500 oz standing OR 8.3203 TONNES in this  NON active delivery month of JAN.

WE GAINED 48 CONTACTS OR AN ADDITIONAL 4800 OZ WILL STAND AT THE COMEX AND THUS REFUSE TO MORPH INTO LONDON BASED FORWARDS. BY REFUSING TO TRAVEL TO LONDON THEY ALSO NEGATED A FIAT BONUS.

 

 

 

SURPRISINGLY WE HAVE BEEN WITNESSING NO REAL PHYSICAL GOLD ENTERING THE COMEX VAULTS FOR THE PAST YEAR!! ..ONLY PHONY KILOBAR ENTRIES…. WE HAVE ONLY 34.956 TONNES OF REGISTERED GOLD WHICH CAN SETTLE UPON LONGS.

HERE IS WHAT STOOD DURING THESE PAST 5 MONTHS:  AUGUST 27.153 TONNES

SEPT:                                                                      5.4525 TONNES

OCT…………………………………………………………………………..   37.99 TONNES

NOV……                                                                5.3841 tonnes

DEC………………………….                                              45.912 TONNES

JAN……………………                                                    8.3203 TONNES

 

total: 130,21 tonnes

ACCORDING TO COMEX RULES:

 

IF WE INCLUDE THE PAST 6 MONTHS OF SETTLEMENTS WE HAVE 19.2540 TONNES SETTLED

 

IF WE ADD THE FIVE DELIVERY MONTHS: 130.21  tonnes

 

Thus:

130.21 tonnes of delivery –

19.2540 TONNES DEEMED SETTLEMENT

= 110.956 TONNES STANDING FOR METAL AGAINST 34.956 TONNES OF REGISTERED OR FOR SALE COMEX GOLD! THIS IS WHY GOLD IS SCARCE AT THE COMEX.

 

total registered or dealer gold:   1,334,232.623 oz or  41.50 tonnes
which  includes the following:
a) registered gold that can be used to settle upon: 112,383.13 oz (34.956 tonnes)
b) pledged gold held at HSBC + BRINKS  which cannot settled upon   210,391.357 oz x ( 6.54403    TONNES)//
true registered gold  (total registered – pledged tonnes  112,383.13  (34.956 tonnes)
total registered, pledged  and eligible (customer) gold;   8,699,373.299 oz 270.570 tonnes

 

 

THE GOLD COMEX IS NOW IN STRESS AS
1. GOLD IS LEAVING THE COMEX 
2. GOLD IS LEAVING THE REGISTERED CATEGORY OF THE COMEX.
3. NO GOLD IS ENTERING THE COMEX

WHY ARE THEY NOT SETTLING?

 

THE COMEX IS AN ABSOLUTE FRAUD..

 

end

And now for silver

AND NOW THE  DELIVERY MONTH OF JAN.

INITIAL  standings/SILVER

JAN 21/2020
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 300,326.120 oz
Scotia

 

 

Deposits to the Dealer Inventory
nil oz

 

Deposits to the Customer Inventory
600,281.196 oz
CNT
No of oz served today (contracts)
70
CONTRACT(S)
(350,000 OZ)
No of oz to be served (notices)
3 contracts
 15,000 oz)
Total monthly oz silver served (contracts)  517 contracts

2,585,000 oz)

Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month

**

 

we had 0 inventory movement at the dealer side of things

 

 

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

i)we had 1 deposits into the customer account

into JPMorgan:   0

 

ii) Into CNT: 600,281.196  oz

 

 

 

 

 

 

 

 

 

 

 

 

 

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

JPMorgan now has 161.3 million oz of  total silver inventory or 50.4% of all official comex silver. (161.3 million/319.730 million

 

 

 

 

total customer deposits today:  600,281.196  oz

 

we had 1 withdrawals out of the customer account:

 

 

 

i) Out of  Scotia:  300,326.120 oz

 

 

 

 

 

 

 

 

 

 

 

 

total withdrawals; 300,326.120   oz

We had 1 adjustment:

i) out of BNS:  out of Scotia:  347,942.140 oz was adjusted out of the customer and this landed into the dealer account 347,942.140 oz

 

 

 

total dealer silver:  83.314 million

total dealer + customer silver:  319.725 million oz

 

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The total number of notices filed today for the JAN 2020. contract month is represented by 70 contract(s) FOR 3500,000 oz

To calculate the number of silver ounces that will stand for delivery in  JAN, we take the total number of notices filed for the month so far at 517 x 5,000 oz =2,585,000 oz to which we add the difference between the open interest for the front month of JAN. (73) and the number of notices served upon today 70 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JAN/2019 contract month: 517 (notices served so far) x 5000 oz + OI for front month of JAN (xx- number of notices served upon today (70) x 5000 oz equals 2,600,000 oz of silver standing for the JAN contract month.

WE GAINED 66 CONTRACTS OR AN ADDITIONAL 330,000 OZ WILL STAND FOR METAL AT THE COMEX AND REFUSE TO MORPH INTO LONDON BASED FORWARDS. BY DOING THIS THEY ALSO NEGATED RECEIVING A FIAT BONUS.

 

 

LADIES AND GENTLEMEN:  THE COMEX IS UNDER ASSAULT FOR BOTH PHYSICAL GOLD AND SILVER WITH SILVER IN THE LEAD BY FAR. DESPITE  MASSIVE RAIDS, LONGS CONTINUE WITH THEIR HUNT AT THE COMEX FOR PHYSICAL METAL.. IT WILL NOT BE LONG BEFORE WE WITNESS A COMMERCIAL FAILURE..STAY TUNED..WE WITNESSED CONSIDERABLE BANKER SHORT COVERING IN SILVER TODAY AND AN ATTEMPTED BANKER SHORT COVERING IN GOLD WITH ZERO SUCCESS.

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 44 notice(s) filed for 220,000 OZ for the JAN, 2019 COMEX contract for silver

 

 

TODAY’S ESTIMATED SILVER VOLUME:  135,899 CONTRACTS //

 

 

CONFIRMED VOLUME FOR YESTERDAY: 71,576 CONTRACTS..

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 71,576 CONTRACTS EQUATES to 357 million  OZ   51.11% OF ANNUAL GLOBAL PRODUCTION OF SILVER..

 

 

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

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

 

end

 

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NPV for Sprott

 

1. Sprott silver fund (PSLV): NAV RISES TO -0.97% ((JAN 20/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO +0.46% to NAV (JAN 20/2019 )…FIRST TIME IN TEN YEARS GOLD PREMIUM IS POSITIVE
Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into NEGATIVE/ -0.97%

(courtesy Sprott/GATA)

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

NAV 15.46 TRADING 14.96///DISCOUNT  3,08

 

END

 

 

 

 

And now the Gold inventory at the GLD/

JAN 21/2010//WITH GOLD DOWN $2.00 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 879.49 TONNES

JAN 17/WITH GOLD UP $9.60 TODAY: A BIG CHANGES IN GOLD INVENTORY AT THE GLD: ANOTHER PAPER DEPOSIT OF 1.17 TONNES//INVENTORY RESTS AT 879.49

JAN 16//WITH GOLD DOWN $3.00 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.80 TONNES OF GOLD INTO THE GLD./INVENTORY RESTS AT 878.32

JAN 15/WITH GOLD UP $9.55 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 874.52 TONNES

JAN 14/WITH GOLD DOWN $5.00 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 874.52 TONNES

JAN 13/WITH GOLD DOWN $8.75 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 7.6 TONNES OF GOLD WHICH WAS USED IN THE RAID TODAY////INVENTORY RESTS AT 874.52 TONNES

JAN 10/WITH GOLD UP $5.80 TODAY:NA HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 4.69 TONNES//INVENTORY RESTS AT 882.12 TONNES

JAN 9/WITH GOLD DOWN $5.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 886.81 TONNES

JAN 8/WITH GOLD DOWN $14.10 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 9.37 TONNES FROM THE GLD//INVENTORY RESTS AT 886.81 TONNES

JAN 7/WITH GOLD UP $7.00 A GOOD INVENTORY PAPER DEPOSIT OF 0.88 TONNES  IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 896.18 TONNES

JAN 6/WITH GOLD UP #15.40 NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 895.30 TONNES

JAN 3/WITH GOLD UP $24.60: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 2.05 TONES INTO THE GLD../INVENTORY RESTS AT 895.30

JAN 2/2020//WITH GOLD UP $5.20: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 893.25

DEC 31/WITH GOLD UP $4.65: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 893.25 TONNES

DEC 30//WITH GOLD UP $2.05//NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 892.37 TONNES

DEC 27/WITH GOLD UP $4.10 TODAY: A BIG  CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 3.51 PAPER TONNES INTO THE GLD////INVENTORY RESTS AT 892.37 TONNES

DEC 26/WITH GOLD UP $9.85 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 2.93 TONNES INTO THE GLD.///INVENTORY RESTS AT 888.86 TONNES

DEC 24/WITH GOLD UP $14.60//NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 885.93 TONNES

DEC 23/WITH GOLD UP $7.75: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 2.64 TONNES OF PAPER GOLD INTO THE GLD////INVENTORY RESTS AT 885.93 TONNES

DEC 20/WITH GOLD DOWN $3.15 TODAY; NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 883.29 TONNES

DEC 19/WITH GOLD UP $6.65 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 2.65 TONNES INTO THE GLD///INVENTORY RESTS AT 883.29 TONNES

DEC 18/WITH GOLD DOWN $2.00 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 5.56 TONNES FROM THE GLD////INVENTORY RESTS AT 880.66 TONNES

DEC 17/WITH GOLD UP $.30 TODAY: 1 SMALL CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF .29 TONNES/INVENTORY RESTS AT 886.22 TONNES

DEC 16//WITH GOLD DOWN $.40 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 885.93 TONNES

DEC 13/ WITH GOLD UP $8.60 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 885.93 TONNES

DEC 12/WITH GOLD DOWN $2.65: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 885.93 TONNES

DEC 11/WITH GOLD UP $7.00: A SMALL CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .30 TONNES/INVENTORY RESTS AT 885.93 TONNES

DEC 10//WITH GOLD UP $3.00: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 886.23 TONNES

DEC 9//WITH GOLD DOWN $.60: A HUGE PAPER WITHDRAWAL OF GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.34 TONNES//INVENTORY RESTS AT 886.23 TONNES

DEC 6//WITH GOLD DOWN $16.75 NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 888.57 TONNES

DEC 5/2019: WITH GOLD UP $3.60 TODAY: A  SMALL CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF .59 TONNES/INVENTORY RESTS AT 888.57 TONNES

DEC 4/2019/WITH GOLD DOWN $4.00 TODAY//NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 889.16 TONNES

DEC 3/WITH GOLD UP $15.00 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 7.32 TONNES/INVENTORY RESTS AT 889.16 TONNES

 

DEC 2 /WITH GOLD DOWN $.40 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 895.60 TONNES

NOV 29/WITH GOLD UP $9.85//A SMALL  CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL TO PAY FOR FEES ETC./INVENTORY RESTS AT 895.60 TONNES

 

NOV 27//WITH GOLD DOWN $6.10 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 896.48 TONNES//

 

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JAN 21/2019/Inventory rests tonight at 879.49 tonnes

*IN LAST 745 TRADING DAYS: 57.96 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 645 TRADING DAYS: A NET 109.09. TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JAN 21/WITH SILVER DOWN 24 CENTS TODAY: NO CHANGES IN SILVER INVENTORY FROM THE SLV//INVENTORY RESTS AT 354.437 MILLION OZ//

JAN 17/WITH SILVER UP 12 CENTS TODAY: A SMALL WITHDRAWAL OF 420,000 OZ FROM THE SLV//INVENTORY RESTS AT 354.437 MILLION OZ.

JAN 16/WITH SILVER DOWN 2 CENTS TODAY: A CONSIDERABLE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 840,000 OZ FROM THE SLV//INVENTORY RESTS AT 354,857 MILLION OZ//

JAN 15/WITH SILVER UP 21 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 355.697 MILLION OZ//

JAN 14/WITH SILVER DOWN 23 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 355.697 MILLION OZ//

JAN 13/WITH SILVER DOWN 10 CENTS TODAY: A HUGE  CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 1.261 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 355.697 MILLION OZ//

JAN 10/WITH SILVER UP 16 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 356.958 MILLION OZ//

JAN 9/WITH SILVER DOWN 24 CENTS TODAY: A HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 3.268 MILLION OZ////INVENTORY RESTS AT 356.958 MILLION OZ///

JAN 8/WITH SILVER DOWN 21 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 360.226 MILLION OZ//

JAN 7.//WITH SILVER UP 23  CENTS TODAY: ANOTHER MASSIVE PAPER WITHDRAWAL OF 1.214 MILLION OZ IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 360.226 MILLION OZ..

JAN 6/WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 361.440 MILLION OZ///

JAN 3/2020//WITH SILVER UP 12 CENTS TODAY: ANOTHER HUGE PAPER WITHDRAWAL OF 1.176 MILLION OZ  IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 361.440  MILLION OZ///

SINCE DEC 23 WE HAVE HAD A 94 CENT GAIN CORRESPONDING TO A 2.39 MILLION OZ OF PAPER WITHDRAWALS..AN ABSOLUTE FRAUD!

JAN 2/2020/WITH SILVER UP 12 CENTS TODAY: A HUGE PAPER WITHDRAWAL OF 1.214 MILLION OZ FROM THE SLV INVENTORY: INVENTORY RESTS AT 362.616 MILLION OZ

DEC 31/WITH SILVER DOWN 7 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 363.830 MILLION OZ//

DEC 30/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 363.830 MILLION OZ//

DEC 27/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 363.830 MILLION OZ

DEC  26//WITH SILVER UP 16 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 363.830 MILLION OZ//

DEC 24/WITH SILVER UP 32 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 363.830 MILLION OZ///

 

DEC 23/WITH SILVER UP 26 CENTS TODAY: A HUGE PAPER WITHDRAWAL OF 1.028 MILLION PAPER OZ IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 363.830 MILLION OZ//

DEC 20/WITH SILVER UP 7 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 364.858 MILLION OZ//

DEC 19/WITH SILVER UP 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 364.858 MILLION OZ//

DEC 18/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 364.858 MILLION OZ//

DEC 17//WITH SILVER DOWN 5 CENTS TODAY: A FAIR SIZED CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 747,000 OZ FROM THE SLV/INVENTORY RESTS AT 364.858 MILLION OZ/?

DEC 16/WITH SILVER UP 12 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 365.605 MILLION OZ//

DEC 13//WITH SILVER UP 7 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 365.605 MILLION OZ//

DEC 12/WITH SILVER UP 9 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 365.605 MILLION OZ

DEC 11/WITH SILVER UP 13 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 365.605 MILLION OZ//

DEC 10//WITH SILVER UP 5 CENTS TODAY:  A BIG CHANGE IN SILVER INVENTORY: A PAPER WITHDRAWAL OF 1.495 MILLION OZ//// INVENTORY RESTS  AT 365.605 MILLION OZ//

DEC 9/WITH SILVER UP 3 CENTS TODAY: A HUGE PAPER WITHDRAWAL OF 1.869 MILLION OZ FROM SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 367.100 MILLION OZ/

DEC 6/WITH SILVER DOWN 42 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 368.969 MILLION OZ//

DEC 5//WITH SILVER UP 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 368.969 MILLION OZ//

DEC 4/WITH SILVER DOWN 31 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 368.969 MILLION OZ//

DEC 3//WITH SILVER UP 25 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 1.512 MILLION OZ FROM THE SLV.//INVENTORY RESTS AT 368.969 MILLION OZ..

DEC 2/WITH SILVER DOWN 9 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 370.481 MILLION OZ

NOV 29/WITH SILVER UP 4 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 2.383 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 370.481 MILLION OZ//

 

NOV 27/WITH SILVER DOWN 8 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 1.868 MILLION OZ OF SILVER FROM THE SLV///INVENTORY RESTS AT 372.864 MILLION OZ//

 

JAN 16.2020:  SLV INVENTORY

354.437 MILLION OZ

 

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 1.82/ and libor 6 month duration 1.83

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

G0LD LENDING RATE: + .01

 

XXXXXXXX

12 Month MM GOFO
+ 1.83

LIBOR FOR 12 MONTH DURATION: 1.92

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.11

end

 

 

end

 

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

Gold Near Two Week High on Safe Haven Bid Due To Virus and IMF Global Growth Concerns

◆ Gold prices rose to a two-week high today prior to giving up the initial gains; Spot gold prices reached their highest since January 8th at $1,568.40/oz prior to falling to $1,556.60/oz

 The spread of a new virus in China stoked fears of a wider epidemic in Asia, sparking a sudden bout of risk aversion and sell-off in Asian stocks, European stocks and U.S. stock futures

 The International Monetary Fund (IMF) cutting its world growth forecast for 2020 and 2021 is likely also leading to risk aversion and safe haven bids

 The World Health Organisation (WHO) has convened an emergency meeting on the virus outbreak in Hong Kong and China

 Chinese Lunar New Year celebrations begin this weekend and there is expected to be the traditional strong demand for gold in China and there may be increased demand due to the virus

“The fear of outbreak is going to drive up demand for gold for a couple more days,” one analyst told Reuters (see News below)

 Safe-haven bids for gold were seen overnight as three rockets fell inside Baghdad’s Green Zone which houses government buildings, foreign missions including the U.S. embassy and U.S. troops

NEWS and COMMENTARY

Gold climbs to 2-week high as China virus scare spurs safe-haven bid

Gold Edges Higher After IMF Shaves World Growth Forecast

Hong Kong falls beyond 2%, leading losses among major markets following Moody’s downgrade

BOJ holds fire, nudges up growth forecast on receding global risks

Asia shares feel a chill as China virus risks mount

Global stocks stay near record highs; focus turns to central banks, earnings

Surging Swiss franc may have become a gold proxy – Goldman Sachs

GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)

20-Jan-20 1559.25 1560.15, 1200.93 1200.38 & 1406.76 1407.72
17-Jan-20 1556.50 1557.60, 1193.21 1195.15 & 1399.60 1402.93
16-Jan-20 1555.20 1554.55, 1190.97 1190.94 & 1393.61 1394.90
15-Jan-20 1551.90 1549.00, 1194.65 1189.01 & 1394.23 1389.14
14-Jan-20 1544.95 1545.10, 1190.69 1188.49 & 1387.83 1389.35
13-Jan-20 1550.35 1549.90, 1194.54 1192.96 & 1394.85 1393.52
10-Jan-20 1548.80 1553.60, 1185.45 1189.28 & 1395.78 1399.64
09-Jan-20 1547.85 1550.75, 1186.89 1188.49 & 1393.99 1396.14
08-Jan-20 1582.85 1571.95, 1206.13 1197.35 & 1421.87 1412.87

Is Your Gold and Silver Bullion S.A.F.E. ?
Segregated, Actionable, Flexible and what are the total Expenses?

SIGN UP FOR OUR AWARD WINNING MARKET UPDATES HERE

Mark O’Byrne
Executive Director

END

ii) Important gold commentaries courtesy of GATA/Chris Powell

For the past several years I have been highlighting to you the fraudulent reporting of the jobs report. Pam and Russ go a little deeper into this fraudulent reporting

(Pam and Russ Marten/Wall Street on Parade)

Pam and Russ Martens: How the fake unemployment number was created to subdue anger at Wall Street

 Section: 

12:15p ET Friday, January 17, 2020

Dear Friend of GATA and Gold:

Wall Street on Parade’s Pam and Russ Martens show today how the U.S. employment data is falsified to conceal an unemployment rate so high that it would enrage the public against the bailout kings of Wall Street if it was ever properly understood. The Martenses’ analysis is headlined “Here’s How the Fake Unemployment Number Was Created to Subdue Anger Against Wall Street” and it’s posted here:

https://wallstreetonparade.com/2020/01/heres-how-the-fake-unemployment-n…

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

Here’s How the Fake Unemployment Number Was Created to Subdue Anger Against Wall Street

By Pam Martens and Russ Martens: January 17, 2020 ~

On February 3, 2015, Jim Clifton, the Chairman and CEO of the iconic 85-year old polling company, Gallup, penned an article for his company in which he called the reported unemployment number issued by the U.S. Government “The Big Lie.”

Wall Street On Parade has now discovered that a speech by former Fed Chairman Ben Bernanke and a statement made by the current Fed Chairman Jerome (Jay) Powell,  support the view that today’s reported unemployment rate of 3.5 percent is statistically impossible based on a long-held economic model known as “Okun’s Law.”

Named after economist Arthur Okun, the economic law works like this according to a speech given by the Fed Chair Ben Bernanke in March 2012:

“Okun noted that, because of ongoing increases in the size of the labor force and in the level of productivity, real GDP growth close to the rate of growth of its potential is normally required just to hold the unemployment rate steady.  To reduce the unemployment rate, therefore, the economy must grow at a pace above its potential. More specifically, according to currently accepted versions of Okun’s law, to achieve a 1 percentage point decline in the unemployment rate in the course of a year, real GDP must grow approximately 2 percentage points faster than the rate of growth of potential GDP over that period. So, for illustration, if the potential rate of GDP growth is 2 percent, Okun’s law says that GDP must grow at about a 4 percent rate for one year to achieve a 1 percentage point reduction in the rate of unemployment.”

Here’s the common sense version of Okun’s Law: when there is a financial crash and millions of workers are thrown out of their jobs and businesses shut down, it is going to take a significant increase in GDP to create new jobs for those workers plus create jobs for the new job entrants coming from high school and college graduates.

But that never happened. From 2009, the year after the epic financial collapse on Wall Street, through 2018, U.S. GDP has grown at an average rate of 1.8 percent. That substandard rate has persisted despite three rounds of Quantitative Easing (QE) by the Federal Reserve; $29 trillion in secret revolving loans from the Fed to bail out Wall Street trading houses and their foreign derivative counterparties; vast amounts of federal government fiscal spending to stimulate the economy; and the massive tax cut [corporate welfare] of the Trump administration.

But somehow, magically, alongside a subpar growth rate of 1.8 percent, unemployment has shrunk from 9.6 percent in 2010 to 3.5 percent today.

This is an excerpt of what Jim Clifton of Gallup had to say about the government’s unemployment number in 2015:

“Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is ‘down’ to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.

“None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast ‘falling’ unemployment.

“There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.

“Yet another figure of importance that doesn’t get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%. Few Americans know this.”

Everything Jim Clifton reported above is precisely correct. And there’s more, as we reported in 2017:

…here’s the quirky thing about how the U.S. government counts people as being employed: according to the official web site of the U.S. Department of Labor’s Bureau of Labor Statistics, an individual can be counted as employed even if they didn’t receive a dime in salary during the week the data is collected. The BLS explains its rationale as follows:

People are considered employed if they did any work at all for pay or profit during the survey reference week. This includes all part-time and temporary work, as well as regular full-time, year-round employment. Individuals also are counted as employed if they have a job at which they did not work during the survey week, whether they were paid or not, because they were: on vacation; ill; experiencing child care problems; on maternity or paternity leave; taking care of some other family or personal obligation; involved in a labor dispute; prevented from working by bad weather.

The government counts these individuals as employed under the rationale that “they have a specific job to which they will return.” But in a labor market where workers are frequently paid on a per diem basis and live from paycheck to paycheck, what the government is reporting and the economic reality on the ground may be quite two different things.

There is another situation where an individual could not be receiving a dime of compensation – on a long term basis – but still counted as employed by the U.S. government. The BLS provides two examples:

“Garrett is 16 years old, and he has no job from which he receives any pay or profit. However, Garrett does help with the regular chores around his parents’ farm and spends about 20 hours each week doing so.

“Lisa spends most of her time taking care of her home and children, but she helps in her husband’s computer software business all day Friday and Saturday.

“Both Garrett and Lisa are considered employed. They fall into a group called unpaid family workers, which includes any person who worked without pay for 15 hours or more per week in a business or farm operated by a family member with whom they live. Unpaid family workers comprise a small proportion of total employment. Most of the employed are either wage and salary workers (paid employees) or self-employed (working in their own business, profession, or farm).”

All of the above is how the U.S. government has been able to defy Okun’s Law and make the labor market look dramatically better than it is since Wall Street imploded the U.S. financial system in 2008 and crashed the U.S. economy and housing market, putting millions of Americans out of work and causing the greatest foreclosure crisis since the Great Depression.

The sitting Chairman of the Federal Reserve, Jay Powell, apparently knows the current 3.5 percent U.S. unemployment rate is statistically impossible. Prior to becoming Fed Chair, Powell sat on the Board of the Federal Reserve. Minutes for the October 23-24, 2012 Fed meeting reveal the following statement by Powell:

“While I see some improvement at the margin, it still feels to me like a world with 2 percent inflation and 2 percent economic growth, which is obviously not strong enough to reduce unemployment.”

In Bernanke’s speech referenced above, which occurred in March of 2012, he attempted to save face among global economists who were skeptical that U.S. unemployment could be showing such an improvement with such a tepid rate of GDP growth. Bernanke offered them this nugget:

“…the combination of relatively modest GDP growth with the more substantial improvement in the labor market over the past year is something of a puzzle. Resolving this puzzle could give us important insight into how the economy is likely to evolve. To illustrate the tension, consider the relationship between the recent changes in the unemployment rate and in real GDP relative to the predictions of Okun’s law…the decline in the unemployment rate over the course of 2011 was greater than would seem consistent with GDP growth over that period. Indeed, with last year’s real GDP growth below 2 percent, less than what most economists would estimate to be the U.S. economy’s potential rate of growth, one might have expected little change in the unemployment rate last year or even a slight increase.”

What was this smoke and mirrors all about? Just imagine how much more public anger there would be against Wall Street’s fat cats and their bailout kingpins at the Federal Reserve if the media had reported the real unemployment rate along with the fact that Wall Street banks and their foreign derivative counterparties had received a secret $29 trillion bailout from the Fed, allowing them to pay billions in bonuses to their miscreant bosses, while average Americans’ lives and dreams were shattered.

end

How the New York Fed has come to dominate the repo market:

(Pam and Russ Martens)

Pam and Russ Martens: Here’s why the New York Fed doesn’t want you to see its Wall Street-esque trading floor

 Section: 

By Pam and Russ Martens
Wall Street on Parade
Monday, January 20, 2020

The New York Fed is so protective of its surreptitious trading relationship with Wall Street that it previously denied Wall Street On Parade a photo of its trading floor. (We obtained the one pictured in this column from a Fed educational video.) The New York Fed is, by the way, the only one of the 12 regional Federal Reserve banks to have a trading floor.

The New York Fed has been allowed by Congress to insert itself so deeply in markets that it’s highly possible that history will find it at least partly responsible for the next market implosion.

… 

The well-promulgated notion that the Federal Reserve began heavily meddling in the repo loan market on September 17 of last year is a piece of fiction. According to the U.S. government’s own database, residing at the Office of Financial Research, from 2014 through December 31, 2017, the New York Fed was engaged in repo transactions with U.S. money market funds with $200 billion to $400 billion changing hands on pivotal days. For example, on December 31, 2015, the Fed engaged in $424 billion in repo transactions; on December 31, 2016, $403 billion changed hands; and as recently as June 30, 2017, $354 billion changed hands between money market funds and the New York Fed.

These repo transactions were called reverse repurchase agreements (reverse repos), where the New York Fed sold U.S. Treasury securities it held to money market funds with a stated agreement to repurchase the security at a specified price on a specified date in the future. The difference between the sale price and the repurchase price, adjusted for the number of days outstanding, implies a rate of interest paid by the New York Fed on the transaction.

Because a money market fund could make a very large transaction with the New York Fed without concern about a default by a dozen other Wall Street bank counterparties among whom it might have otherwise attempted to spread its risk, the New York Fed became the reverse repo loan counterparty of choice, rapidly dominating the market. …

… For the remainder of the analysis:

https://wallstreetonparade.com/2020/01/heres-why-the-new-york-fed-doesnt…

END

Venezuela’s cash is now below $1 billion and drying up fast. It will not be long before a default occurs here

(Bloomberg/GATA)

 

Venezuela’s cash below $1 billion with gold locked up

 Section: 

By Patricia Laya and Alex Vasquez
Bloomberg News
Friday, January 17, 2020

Venezuela’s international reserves, already at a 30-year low, have hit a grim new milestone as cash holdings fall below $1 billion amid crippling economic sanctions.

Venezuela’s central bank now has only about $800 million left in cash and an additional $200 million of other liquid assets, according to three people with knowledge of the bank’s balance sheet. While the country holds some 73 tons of gold in local vaults, selling it has become increasingly difficult amid the U.S. efforts to cut off Nicolas Maduro’s regime from a global network of buyers, banks and middlemen.

… 

The shrinking coffers mark a new low for Venezuela, where an economic crisis rooted in the collapse of its all-important oil industry has been exacerbated by wide-reaching U.S. sanctions that have cut the nation off from international capital markets. A shortage of cash could threaten the Maduro regime’s ability to continue food subsidy programs, import basic goods and maintain support from top military officials.

Press officials for Venezuela’s central bank didn’t respond to requests for comment.

A significant chunk of Venezuela’s gold, 32 tons worth about $1.6 billion, remains in London after the Bank of England declined multiple requests from Maduro to repatriate the gold. While the central bank is independent, the U.K. government doesn’t recognize Maduro as the country’s legitimate leader and says his regime shouldn’t have access to overseas assets. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2020-01-17/venezuela-s-cash-hoar…

* * *

Toast to a free gold market
with great GATA-label wine

Wine carrying the label of the Gold Anti-Trust Action Committee, cases of which were awarded to three lucky donors in GATA’s recent fundraising campaign, are now available for purchase by the case from Fay J Winery LLC in Texarkana, Texas. Each case has 12 bottles and the cost is $240, which includes shipping via Federal Express.

Here’s what the bottles look like:

http://www.gata.org/files/GATA-4-wine-bottles.jpg

Buyers can compose their case by choosing as many as four varietals from the list here:

http://www.gata.org/files/FayJWineryVarietals.jpg

GATA will receive a commission on each case of GATA-label wine sold. So if you like wine and buy it anyway, why not buy it in a way that supports our work to achieve free and transparent markets in the monetary metals?

To order a case of GATA-label wine, please e-mail Fay J Winery at bagman1236@aol.com.

* * *

Join GATA here:

Mining Investment Asia
InterContinental Hotel, Singapore
Tuesday-Thursday, March 17-19, 2020
https://www.mininginvestmentasia.com/

Mines and Money Asia
Conrad Hotel, Hong Kong
Tuesday-Wednesday, March 31-April 1, 2020
https://asia.minesandmoney.com/

* * *

Help keep GATA going:

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

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

end

The ECB is having trouble explaining to citizens the perception of high inflation that is now occurring especially with the massive printing of paper money.

(London’s financial times/GATA)

ECB struggles to ease consumer perception of high inflation

 Section: 

By Martin Arnold
Financial Times, London
Sunday, January 19, 2020

Sebastian Werner’s family farm has had a weekly stall selling its apples, berries and honey beside the 1,000-year-old cathedral in the German town of Mainz since the 1970s — but in the past few years he has noticed a worrying shift.

“I know almost all our customers here and some of the older ones stopped buying our produce after they retired, saying they can no longer afford it,” he said. “Prices keep going up — rents, petrol and electricity — so they have less money to spend.”

Heidi Sohn, a butcher from just across the Rhine in Wiesbaden, agreed with him. “Prices are a bit too high — rents are definitely too much,” she said, adding that to afford somewhere to live she needed to move out of the city.

Ask anyone at the European Central Bank’s headquarters 20 miles away in Frankfurt about inflation and they are likely to express frustration at its persistently low level. Yet at the Mainz farmers’ market, many people think the opposite.

Prices shot up in shops and restaurants when the euro replaced the Deutsche Mark in 2002, said Ludwig Kloster, a baker from the nearby town of Bad Kreuznach, adding: “The cost of living is still going up.” He aims to retire to Latin America, where “things cost half as much.”

In recent years eurozone consumers have consistently believed inflation in the bloc to be much higher than it actually is. Households thought annual inflation averaged close to 9 per cent between 2004 and 2015, according to a European Commission survey. …

… For the remainder of the report:

https://www.ft.com/content/39b474d4-379b-11ea-a6d3-9a26f8c3cba4

end

iii) Other physical stories:

Rosenberg predicts two major things:

1. we are going to have helicopter money released

2. gold reaches 3,000 dollars this year

(Gisiger/Rosenberg/)

Got Gold? – David Rosenberg Warns “We’re Going To Have Helicopter Money”

Authored by Christoph Gisiger via TheMarket.ch,

David Rosenberg, Chief Economist & Strategist of Rosenberg Research, doesn’t believe in the sustainability of the stock market rally, and warns that investors may be disappointed at the end of the year. He is bullish on energy stocks – and predicts that the gold price will surge to $3000.

Mr. Rosenberg is also the author of Breakfast with Dave, a daily distillation of his economic and financial market insights.

“At this level, many things have to go optimally so that the prices are higher at the end of the year,” comments David Rosenberg on the growing complacency among investors.

The renowned economist and strategist is one of the most profound experts on the U.S. economy and one of the last remaining skeptics to warn of a correction.

His bearish view is based on exorbitantly high equity valuations and over-optimistic earnings expectations. He also thinks that the US consumer sector is in worse shape than the consensus believes.

Rosenberg, who recently launched his own economic consulting firm, explains in this extensive interview with The Market/NZZ why he is pleasantly surprised by the phase one agreement between the United States and China, why the Federal Reserve’s balance sheet is currently the most important determinant for the financial markets, and why he is betting on gold, Treasuries, energy stocks and emerging markets.

Mr. Rosenberg, after a strong start to the year, equity markets seem to be somewhat more hesitant recently. What’s your outlook for the coming months?

This is a liquidity and momentum driven market. It’s been that way for the past four months where the correlation between the S&P 500 and the Fed’s balance sheet has expanded to a 95% relationship. This is a case of a very accommodative Fed policy. The double-digit growth in the money supply is bypassing the real economy and has entered into asset markets broadly, and specifically into equities. So as long as the Fed is in the game priming the monetary pump, shorting stocks is going to be a very dangerous game to play.

How sustainable is this rally?

I’m not bullish. Valuations are at extreme levels and the level of complacency is also a red flag. There are needles in the haystack, but this overall market rally is more a house of straw than a house of brick. You can rent liquidity rallies, and you can rent them for an extended period of time, but they’re very difficult to own. This is not a fundamentally based bull market like in the 1980s and 1990s. Back then, gains in stocks where premised on much better demographics and much more solid productivity growth.

What are your main concerns regarding the U.S. economy?

There’s this view that we’re going to have either a growth stabilization globally or a re-acceleration of economic growth. I don’t see that in any leading indicator. I think there’s going to be a lagged response in the U.S. economy to the sharp slowing that we saw abroad. Remember, twelve years ago it was the rest of the world that ultimately followed the U.S. This time around, the U.S. will follow the rest of the world.

Then again, concerns of a U.S. recession have faded since last summer. Are we definitely out of the woods?

People will claim that there is no recession. Statistically speaking that’s true as far as GDP is concerned. But we know for a fact that we actually had a four-quarter earnings recession. I never quite understood why GDP is so important to an equity investor who is buying an earnings stream. There’s no ticker “GDP” on the New York Stock Exchange. So it’s not about the overall level of GDP, it’s really about earnings and about the fact that if you look at the 30% share of the U.S. economy that is outside of the consumer space, we actually have been in a recession in the past two quarters.

Why would you exclude the other 70% of the economy from an investor’s point of view?

As an equity strategist, you look at the stock market from a breadth perspective to gauge the overall health of the marketplace. You should do the same thing to examine the breadth of GDP. On a median basis, the U.S. economy has stopped growing three quarters ago. Also, the U.S. consumer is not as nearly in good shape as people think. We see signs that the labor market is starting to show some fatigue. Moreover, there is a big split between spending growth on discretionary and non-discretionary items where things don’t look as robust. We surely saw that not just in the latest retail sales report but also in the CPI numbers this week. If consumer demand was really that strong the underlying inflation rate would be accelerating not decelerating. The Fed would not be cutting interest rates three times and then re-extending its balance sheet at a rate that even exceeds what they were doing with QE3.

How stimulative is monetary policy right now?

The most important correlation to the stock market today is the Fed’s balance sheet. The power of the Fed has become so acute that it has replaced the economy as a principle influence over the stock market to the point where there is only a 7% correlation between GDP and the S&P 500. Historically, in any given cycle that relationship was anywhere between 30% and 70%. The amount of easing that the Fed has done since the beginning of October by expanding the balance sheet is just about as strong in terms of basis points as the three rate cuts they engineered last year. They have cut rates almost a 150 basis points when you look at it on an equivalent basis.

How are the financial markets going to react when the Fed tries to wind down its “Not-QE”-program?

A lot will depend on what the macroeconomic background looks like, especially what’s happening with earnings estimates. But we have a template of what happened when the Fed provided a lot of liquidity juice to the marketplace with the Y2K special lending facilities in late 1999. At that time, the market strongly surged, and kept on rallying into the early part of 2000. Then, the Fed started to withdraw that liquidity and it wasn’t a pretty picture.

Keep in mind that the recession didn’t start until March of 2001, even though the problems in the stock market and particularly in technology started about a year ahead of the economic downturn.

What do you think will happen this time?

It’s tough to time when the Fed is finally going to sit back and say: “Ok, you know what: I’m not handing any more candy to the kindergarten class”. My sense is that the response to the Fed no longer priming the pump could be significant. We could end up unwinding almost anything we saw since last October. That wouldn’t surprise me at all. It doesn’t necessarily bring you a 20% stock market correction, but it certainly could bring you a 10% pull back.

At what level will the S&P 500 trade at the end of the year?

I would be surprised if the market is higher than today. The question will be how much lower, because earnings are going to be very challenged to meet the double-digit growth forecast based on the consensus view. Earnings will disappoint this year and I don’t think we’re going to get another 4-point multiple expansion. The question also will be the extent to which companies continue on this path of share buybacks. The principal source of demand in the stock market have been the corporations themselves. There is a big disconnect between the dollar level of earnings and earnings per share. The share count has been driven down to the lowest level in two decades, and that’s providing the support on a per share basis.

On a positive note, the U.S. and China have finally signed the long-awaited trade agreement. What do you make out of this deal?

The deal preserves the U.S. bargaining “stick” in the form of tariffs remaining on $360 billion of goods imported from China. But investors do seem impressed with this ‘Phase One’ trade deal, which did end up addressing IP protection issues, forced technology transfer, and termination clauses/dispute resolutions if either party reneges. Even skeptics like me have to be open minded to the possibility that there is more to this agreement than met the eye initially. At a minimum, the hostilities appear to be behind us for now and President Trump does have something tangible to campaign on. But the trade war is not over despite rising hopes that this trade deal with China is going to open up a prolonged period of appeasement. In fact, this is a much broader economic war between two clashing ideologies.

It’s not much more than two weeks until the start of the Democratic primaries. To what degree are the U.S. elections going to impact the financial markets?

Most market participants think that Donald Trump has a lock on the November elections. He may well, but I don’t think the odds are as close to a 100% as people think. There is going to be political risk in polling, and that’s going to inject more volatility into the marketplace.

What should investors do in this kind of environment?

I believe in Bob Farrell’s 10 Rules for investing. He was a legend at Merrill Lynch & Co. for several decades, and his first rule is that markets tend to return to the mean over time. Whether you’re looking at price/earnings, price/book or price/Ebitda, we’re pressing against the valuation levels we saw at the peaks back in 2000. So at this stage, a lot of things have to go right for the market to continue to appreciate until the end of the year. It can happen, but there is going to be bumps along the road. So to me, it’s less about buying the index. It’s more about identifying the sectors and subsectors that will hold up well in that sort of environment.

What’s your advice for a Swiss investor coping with deeply negative interest rates?

You want to be investing in things that are reversely correlated to negative interest rates. Firstly, as a Swiss investor or a European investor, I truly would want to be invested in bonds that have a positive yield and liquidity. That means you want to be in other countries’ fixed income markets where Central Banks have the capacity to ease monetary policy. The United States fits that bill. That’s why I’m still a big fan of Treasuries. I think the U.S. Treasury market will be a very good refuge.

Where else do you spot opportunities?

Gold is inversely correlated with either near zero rates, zero rates, or negative rates which makes it an ideal investment. Mark Twain coined the phrase “Lies, damned lies, and statistics”. But the thing about charts is that they don’t lie. Gold went through a long-term, multi-year basing period. Now, it has broken out and the chart looks fantastic. Also, gold is no country’s liability. For example, in the United States M2 growth is running at double digits. So when you compare the new supply of gold against the supply of money coming into the system from Central Banks, to me it’s a very clear cut case that you want to have very high exposure to bullion.

You’re predicting that the gold price will surge to $3000 an ounce. What are the fundamentals your forecast is based on?

It’s just a matter of when, not if. Gold demand is predicated on the final act which is going to be right-out debt monetization. When we get to the lows of the next recession, we’re going to find that these Central Banks that already have been extremely aggressive are going to engage in what is otherwise known as the “debt jubilee” or a right-out debt monetization which was actually the final chapter of the Bernanke playbook. Remember, Ben Bernanke got his nickname “Helicopter Ben” because in a speech in 2002 he suggested that helicopter money could always be used to prevent deflation. So we’re going to have helicopter money.

That doesn’t sound very encouraging.

 

Would you ever have thought that, at or near the peak of this cycle interest rates would be at the lowest level since the 1500s? Just imagine what happens to monetary policy in the next downturn.

What do you think?

This debt morass has been the principal reason why – notwithstanding how wonderful the stock market has done – this has been the weakest global expansion on record. What happens in the next recession is that the cash flows to service that debt are going to become significantly impaired and we’re going to get a destabilizing default and delinquency cycle. I know, that sounds absolutely horrible, but we’ve hit the end of the road on negative interest rates, and we’ve really hit the end of the road on quantitative easing. So the Central Banks are going to go into a new, non-conventional toolkit called debt monetization. They will lose control of the monetary base and then we will go into a situation where, even with technology and with aging demographics in the industrialized world, we will be talking about inflation again. That might come in the next 18 to 24 months, and gold is going to skyrocket.

Do you also see attractive investments in the stock market?

There is not a lot of visibility in terms of earnings. But defense and aerospace is an area where the earnings surprises will be on the upside for the foreseeable future. So you want to participate in that. Every single country is raising its defense budget, and Donald Trump has successfully pressured his NATO allies to ramp up their military spending. For the first time in the post World War II area, we see Japan doing the same thing. We’re not talking about classic warfare. We’re really talking about defense technology and cybersecurity. It’s just like the chart of gold: Even though multiples in this sector have been re-rated because of the earnings visibility, this is a chart you want to buy.

What about opportunities from a value perspective?

The energy sector’s market capitalization relative to the overall stock market valuation is the lowest it’s ever been. We’re down to almost a 4% energy share of the S&P 500. That’s lower than it was when the oil price was $11 a barrel back in 1998. We will not all be sitting in driverless electric cars three years from now. Fossil fuels are not going to go away that quickly. At this stage, there is a very firm floor. The energy sector is nowhere close to being priced for where oil prices are right now and there is justification for why the oil price will remain close to where it is for an extended period of time. So in a world where practically every asset class from real estate to corporate credit to equities is extremely expensive, energy offers very deep value. At peaks of the cycle this is where you want to be buying.

Are there also promising investments globally?

Sticking to the concept of mean reversion, I want to be taking my profits out of growth and moving into value. Part and parcel of that is taking profits in the US and moving them into other markets that are a lot cheaper and that have lagged well behind. Emerging markets are inherently riskier, but the valuations are very compelling. Moreover, I expect the U.S. dollar to go down rather than go up which is an additional benefit for the emerging market space.

What countries should investors look at?

You can’t get much cheaper than Hong Kong. But there are other markets that look pretty attractive. I would say Korea is another market that you would be focusing on as well.

And how about countries in the developed world?

The most positive story is Japan. I continue to believe that Prime Minister Shinzō Abe has emerged as a transformational leader. There has been a positive re-rating of Japan’s secular growth rate as a result of his policies. The back of deflation has been broken by the Bank of Japan. So Japan is a market that’s under owned and relatively inexpensive. There is going to be a positive re-rating, not just in terms of Japan’s GDP growth rate. There are also nascent signs of an equity culture being developed that reminds me a lot of what happened in the U.S. in the U.S. in the early 1980s.

 

end

 

the fraud of rehypothecation of gold explains beautifully what is going on in this arena..

As for the GLD and SLV, both metals can leave from either these three methods:

1. swapping of metal for dollars

2. rehypothecation of existing gold/silver which may or many not have the precious metals leave inventory

3 dealers accumulate 100,000 shares and tender for metal.

this is why the real inventory of the GLD/SLV is a lot lower than recorded by the crooks.

(Charles Hugh Smith)

The Rehypothecation Of Gold, And Why It Matters

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Claiming to own X quantity of gold is one thing, and reporting how many times the gold has been pledged as collateral is another.

When correspondent Scott A. Batten offered to write an explanation of the rehypothecation of gold and why it matters, I quickly accepted. Like many others, I have breezed over the word rehypothecation with the basic understanding that it means assets pledged by counterparties (such as the infamous copper stored in Chinese warehouses) are reused as collateral/repledged–in effect, the same assets are pledged as collateral multiple times.
But beyond this, I have not had a clear understanding of how the rehypothecation of gold reserves threatens the whole shaky edifice of Infinite Greed, oops, I mean neoliberal capital markets.
Here is Scott’s commentary:
When introducing a new concept, it is best to start with the definition of the words to be used. In this case, the discussion of rehypothecation and how it places the world at risk with the fun and games played in the stock market.
Rehypothecation:
Rehypothecation occurs when your broker, to whom you have hypothecated — or pledged — securities as collateral for a margin loan, pledges those same securities to a bank or other lender to secure a loan to cover the firm’s exposure to potential margin account losses.
When you open a margin account, you typically sign a general account agreement with your broker, in which you authorize your broker to rehypothecate.
Now, let’s put this into easy to understand language. Let’s say that you have ten dollars. You take it to the bank to let them “borrow” it, while paying you interest. What you have done, in reality, is given them your money to use as they see fit, while giving you a small percentage of the gains that they will earn. A bank would loan the money to a home buyer or perhaps a small business. At the very least, they can lend all the money in excess of their requirement to hold some cash as reserves–say 10% for ease of math.
They now have nine dollars to invest. Their last resort is to offer it to another bank for that bank to “hold”, because that bank doesn’t have enough money to meet its required reserves. Seems simple enough, right?
Welcome to the games bankers play to make money. Now that this simple format is in place, let’s move to where the serious dangers lie.
Precious Metals:
During World War II, many foreign countries feared that their gold reserves, which at the time backed their paper money, might be taken by an enemy and in 1939, the good old USA was a very neutral country, like Switzerland, only there was a much better deterrent than the Alps– the Atlantic Ocean. So, many countries–England, France, and others–sent us their gold bars to be stored alongside ours in Fort Knox. Later, after the war was over, we convinced them that it was fine to leave it there and in fact, with the Cold War starting other countries joined in, including Germany.
Now, what good is a pile of gold sitting in a fort going to do? It costs a lot to protect it, and the US was paying a small sum in interest, while getting a smaller sum back in “protection fees”. So, the Federal Reserve had a wonderful idea, at least in their minds.
Since we have this gold, let’s issue paper on that gold as though it was ours, after all it is sitting in Fort Knox, and earn a bit of money on the side. So long as the Cold War lasted, the gold certainly wasn’t going anywhere. Here is where the trouble began. It was pretty small potatoes for a good while, until we went off the gold standard in 1971 during the Nixon Administration. What good is having a precious metal to back fiat currency, when a promise is just as good? Enter the danger zone.
Now, the gold in Fort Knox isn’t doing anything. So, what to do? Well, each bar of gold has a unique mark on it to say who owns it. The Cold War is still raging, so no one is going to ask for it back anytime soon. Let’s melt down some of that gold, just a small percentage of it, and sell it off as bullion. Gold is high and the foreign countries won’t ask for it all, so let’s skim a bit here and there. No one will know, and we can make money.
Then debts started to accrue, so they got brazen and started melting bars and reselling bars as their own gold, because they don’t want to use their own gold, when German gold is just the same, except for that little mark. Erase the mark and put your own on it and sell it as yours, using your gold as the “backer” in case Germany asks for some of it back.
Well, it wasn’t long until greed set in. Those gold bars that were sold to say, China or Japan, were resold to Austria or Iraq. Much like the bundling and reselling of home loans in the 1990’s, soon the German melted gold was in seven different countries with seven different marks, but no German mark upon them remained. This still wasn’t the breaking point though, after all there is still plenty of Gold in Fort Knox to cover what is owed to them.
I don’t know who’s idea it was, but it was a bad idea. They decided that they could sell paper promises of gold being held in the vaults. The last number I saw was 140%. Which means that if they have 100 pounds of gold, they can sell paper as though they have 140 pounds of gold. Now, they can also sell that gold outright as well. So, it’s possible that they could sell 140 pounds of paper gold and sell a portion of the physical gold. too.
Confused yet? Here is where we stand today. No one knows how much gold is really in Fort Knox. We only know what they say is in Fort Knox. The same is likely true for the Federal Reserve and possibly the major banks; after all, if the Fed starts demanding to know what’s in those banks, they might have to show theirs too. So, let’s say that the economy starts to really go south around the world. As you know from the news, Germany asked to see their gold at Fort Knox and were denied, so they asked for their gold back. Smart move on Germany’s part in my mind. Answer from the Fed, we will get it to you sometime in the near future. This wasn’t challenged by Germany.
Why? Rehypothecation. Germany knows that they have been doing the same thing with gold that we have. It’s been sold to multiple people at the same time, under the theory that not everyone will want it at the same time, so we can just move it around as needed.
This game of musical golden chairs works fine, until the musical economy stops. When countries start to rack up debt and desire to sell their own gold to pay the bill, and they can’t get it, they get nervous. Now, if the economy is going south and the price of gold is heading up because of fear, those people holding paper gold in the form of futures or just deposit promises begin to sell off for profit or out of financial need. So long as it’s a trickle, no problem, but if it becomes a torrent….
Remember the 140% rule? Well, what if the Federal Reserve only kept 60% of the 100% that the paper gold was written on? Now there is an 80% shortage. Someone is about to have their musical golden chair pulled out from under them. They will get paid, BUT that payment will come as fiat currency. As the golden parachute deflates, how good is fiat currency? This is why there are so many on the fringe demanding to see the gold reserves and others are saying gold will hit $5,000 an ounce or higher. It is theoretically possible that for each gold promise, that it is backed by 1/5 or less of physical gold. No one knows, because no one can audit the physical gold.
China is getting ready to release their gold reserves. That is, they will do like the Fed and say how much they have. We cannot call them on their real reserves, because then they can do the same to us. Now, if all the gold is still in Fort Knox and the Federal Reserve, then the US can call for a real accounting and show ours as well.
However, if we don’t and China does, and calls for the US to do the same, then a lot of fear enters the market. There is a reason that people say “never own paper metals.” This is that reason. You might get the value of that gold, but it will be in fiat currency and if things are crumbling then fiat promises become flat losses.
Thank you, Scott, for the explanation. It’s a funny thing about financial games; whatever the Mainstream Financial Media mocks as conspiracy theories often later turn out to be accurate.
I do not claim any expertise in the gold/paper gold markets, but it’s clear that claiming to own X quantity of gold is one thing, and reporting how many times the gold has been pledged as collateral is another. In a transparent financial system, the citizens of the U.S. would be invited to tour Fort Knox (in small, secure groups, of course) and count the nation’s gold directly. What’s the harm in showing off the gold to anyone willing to go through security?
Why keep the nation’s gold reserves so mysteriously secret? What’s the point in being so cagey about it? Maybe rehypothecation isn’t the reason for the secrecy; then what is? Fear of precisely what? Isn’t gold supposed to be a foolish relic? What’s the danger in letting people look at the foolish relic and count the bars and note the serial numbers on the bars? What’s the risk in that?

I propose turning Fort Knox into a profitable tourist attraction. If gold is just a foolish relic, then charge $50 a person to wander around “our” gold. It’s not like anyone can slip a heavy bar into their purse or pocket without being detected. Put it behind bulletproof glass if you want. What’s the risk?

end

https://www.jsmineset.com/2020/01/21/everything-but-commodities-is-in-a-bubble/

Everything But Commodities Is In A Bubble!

Great and Wonderful Tuesday Morning Folks,

      Gold is trading at $1,557.20, down $3.10 after dipping down to $1,551.80 with the high at $1,568.80. Silver is following along with its trade down 7.3 cents at $18.00 recovering from a low of $17.92 with the high to beat at $18.155. The US Dollar is also trading lower with its value pegged at 97.26 down 9.9 points after hitting a low of 97.225 with the high way up at 97.42. Of course, all of this already happened before 5 am pst, the Comex open, the London close, and after another weekend of peace and quiet regardless of the media’s attempt to stir up hate against law abiding gun owners.

      Our emerging markets currency watch is all over the place today since we had a holiday and nobody else did. For instance, Gold under the Venezuelan Bolivar is showing a loss of 15.98 with the current trade at 15,552.54 Bolivar with Silver 179.775 Bolivar showing a reduction of 0.949. Gold, under the Argentine Peso, now has a price of 93,437.04 Peso’s proving a gain of 80.11 with Silver at 1,079.98 A-Peso’s showing a loss of 3.69. In Turkey, Gold’s value is now priced at 9,240.52 Lira showing a gain of 75.03 with Silver at 106.813 showing a 0.401 T-Lira gain.

      January Silver Delivery Demands are showing some intrigue as the count increased from 52 to 73 fully paid for 5,000-ounce contracts last Friday and with zero trading range and volume up on the board so far this morning. Friday’s additions had no prices posted on the board as well, so if we’re to use Comex Logic, a spread trade was either entered into or exited out of to create this No-Price-Demand, because (as Comex reps claims) trades with no price are spreads and spread prices are not necessary. This is where we have the biggest problem at the Comex, were these no-price-trades an additional 73 to be added or?

      Silver’s Overall Open Interest is now at 236,210 Overnighters showing an additional 783 Obligations had to be added in order to stay the price with only 7,986 more pieces of paper away from making a new life of contract high in paper, not price. Gold’s Open Interest is now at 794,699 Overnighters proving a gain of 608 since Friday’s numbers showing what paper can do to the fair price mechanism that used to be in our markets.

      Our Resolute Buyer came in and did his thing over the last 2 trading days. We’re still at odds with the Open Interest in both precious metals, at the same time the Federal Reserve is pumping out cash because there seems to be none in liquid form, unless they start clearing Treasuries. How much longer we have to go, will be defined by those that are required to locate product at these prices, as they find it more and more difficult to do so. Especially if the Resolute is a manufacturer with a constant and continual demand so they too, can stay in business.

      Bill Holter’s latest article points to the issues everyone, under the US Dollar, has right now even though they don’t know it. Everything but Commodities is in a bubble! When that corner turns, it won’t be pretty at all. In fact, food, energy, and clothing prices, are all super cheap compared to the things one doesn’t need to survive. This turn will occur when the Dollar goes south.

      We hope you are prepared. Hang on tight to the real and fear not. Paper is worthless, precious metals are the opposite. Enjoy the day, keep a positive thought in the head and a smile on your face, and as always …

Stay Strong!

JJohnson

end

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 MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/7 AM EST

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 6.9040/ GETTING VERY DANGEROUSLY CLOSE TO 7:1

//OFFSHORE YUAN:  6.9079   /shanghai bourse CLOSED DOWN 43.64 POINTS OR 1.41%

HANG SANG CLOSED DOWN 810.58 POINTS OR 2.81%

 

2. Nikkei closed DOWN 218.93 POINTS OR 0.91%

 

 

 

 

3. Europe stocks OPENED ALL RED/

 

 

 

USA dollar index DOWN TO 97.53/Euro FALLS TO 1.1163

3b Japan 10 year bond yield: FALLS TO. +.01/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.05/ 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:: 57.24 and Brent: 64.15

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO -.22%/Italian 10 yr bond yield UP to 1.39% /SPAIN 10 YR BOND YIELD UP TO 0.45%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 1.61: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 1.39

3k Gold at $1556.90 silver at: 18.00   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 22/100 in roubles/dollar) 61.82

3m oil into the 57 dollar handle for WTI and 64 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.05 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 .9676 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0745 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 FALLING to 0.22%

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

4. USA 10 year treasury bond at 1.80% early this morning. Thirty year rate at 2.26%

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

6.  TURKISH LIRA:  UP  TO 5.9329..

Monday

Futures Flat With US Closed For Holiday; Nat Gas Craters

With the US on holiday celebrating MLK Jr. day, volumes around the globe are abysmal and sentiment has seen a modest drift even if the the general market tone has remained upbeat after the signing last week of the US/China Phase 1 trade deal, which helped push Asian shares to 20 months high this morning after US equities last week hit another all-time high on Friday.

US cash market may be closed, but US equity futures remained open and drifted lower as investors awaited the first full week of corporate earnings and some key central bank meetings this week. Crude oil first rose following supply disruptions in Libya and Iraq, but then faded most of its overnight gains.

European stocks were modestly in the red after striking a record closing high in the previous session, as investors paused before launching into a week packed with economic data and the European Central Bank’s first policy meeting of the year. The pan-European STOXX 600 index traded down as much as 0.3% before recovering much of its losses, after gaining nearly 1% on Friday on optimism around U.S.-EU trade talks to address long-standing issues such as a French digital tax and aircraft subsidies.

Among individual movers, Germany’s diagnostic company Qiagen rose 4% to the top of the STOXX 600 index after a report the firm was talking to an interested party about a possible acquisition, while British shopping center operator Intu Properties tumbled 7.5% after saying it was targeting an equity raise by the end of February to tackle debt. Also in the UK, tonic water maker Fevertree Drinks Plc hit its lowest level in over two years as it said annual revenue growth of 10% would be below its expectations, hurt by subdued Christmas trading in Britain. The company’s shares were on track for their worst session ever.

The benchmark European index has risen about 2% in January, as investors bet on faster global growth amid improving economic indicators and cooling U.S.-China trade tensions. For the week, all eyes will be on PMI readings from the euro zone, after a recent Reuters poll showed economists expected a slowdown in the bloc to have bottomed out in 2019.

“Markets increasingly think that we have seen the bottom regarding the industry so if the PMIs would surprise on the downside, that would be a risk to market sentiment,” said Teeuwe Mevissen, senior market economist at Rabobank.

Traders will also look to comments from ECB Chief Christine Lagarde on inflation and economic growth in 2020 at the central bank’s first policy meeting for the year on Thursday, where the bank is expected to keep the deposit rate unchanged after cutting it in September for the first time since 2016. “The ECB rendezvous will likely be the most interesting one as the new president launches the central bank’s second strategic review in the euro’s two decade history,” said Hussein Sayed, chief market strategist at FXTM.

Earlier in the session, Asia shares pared initial gains as Philippines, Hong Kong and Indian stocks fell with the MSCI Asia Pac Index starting Monday in the green before erasing most of the gains in the afternoon. The Philippines was the region’s worst-performing, with its benchmark index closing at the lowest level since Oct. 3. Hong Kong shares extended declines, as casinos including Sands China Ltd and Galaxy Entertainment Group Ltd slumped amid growing concern over the risk of China’s corona-virus outbreak on travel ahead of the lunar new year holidays. India’s Sensex snapped two days of gains. South Korea’s Kospi index rallied, helped by battery makers after Hyundai Motor said it’s considering cooperating with various companies to secure a stable supply of batteries. Japan’s Topix climbed to a one-month high.

“We are entering 2020 on a more stable footing with economies globally stabilizing and looking like they’re turning up, and the phase one trade deal,” UBS fixed income strategist Anne Anderson told Bloomberg TV in Sydney. “So it’s a bit more positive with regard to the economic fundamentals.”

In rates, US cash Treasuries are closed for the MLK holiday; Germany’s 10-year yield gained less than one basis point to -0.21%, while Britain’s 10-year yield advanced less than one basis point to 0.636% and Japan’s 10-year yield climbed one basis point to 0.01%.

In FX, trading was likewise subdued, with the Bloomberg Dollar Spot Index up 0.1%, while the euro was little changed at $1.1087 ahead of this week’s ECB meeting. The British pound sank 0.2% to $1.2986 amid rising bets on imminent BOE rate cuts. The onshore yuan decreased 0.2% to 6.8715 per dollar, while the Japanese yen was little changed at 110.18 per dollar.

While equities movers were few and far between, the big overnight action was in commodities, as Brent jumped back above $65 a barrel as unrest hit key production regions: Iraq temporarily stopped output at an oil field on Sunday, while Libyan production almost ground to a halt after armed forces shut down a pipeline. However, much of the initial gains were faded.

Another major mover was nat gas futures, which were briefly halted at the start of trading, when $2.00 stops were hit for the first time since May 2016 amid growing fears of a massive inventory glut.

Elsewhere in commodities, iron ore decreased 0.4% to $94.11 per metric ton. Gold gained 0.2% to $1,559.62 an ounce.

With geopolitics on the backburner for now, investors now turn their attention to the Trump impeachment drama set to begin this week, and to corporate earnings after average results from the biggest banks on Wall Street.  Companies including Netflix, IBM, UBS, Procter & Gamble and Hyundai will post results. Key central bank meetings in Europe and Japan are also on the agenda. The world’s biggest billionaire boondoggle also begins: the World Economic Forum, the annual gathering of “global leaders in politics, business and culture”, opens in Davos, Switzerland.

TUESDAY

“I’m Not An Expert On Pandemics But…”: Global Stocks Slide, Hong Kong Plunges On Coronavirus Fears

The global risk off wave that started late on Monday as the full extent of the Chinese coronavirus scare became apparent to traders, accelerated overnight and global shares took a beating on Tuesday, wiping out all gains made at the start of the week as US equity futures, Asian stocks and European equities all slumped the red.

Authorities in China confirmed that a new virus could be spread through human contact, reporting 15 medical staff had been infected and a fourth person had died. Safe-haven bonds and the yen gained as investors were reminded of the economic damage done by the SARS virus in 2002-2003, particularly given the threat of contagion as hundreds of millions travel for the Lunar New Year holidays.

I’m not an expert in the pandemics, but you can look at previous examples like the SARS outbreak which also originated from Asia,” said Cristian Maggio, Head of Emerging Markets Strategy at TD Securities in London.  Noting that China had initially downplayed the full extent of the SARS outbreak, he said “I think the market might be fearing something similar.”

The mood swing saw MSCI’s All-Country World Index slip 0.4%, wiping out gains made at the start of the week on Monday. Asian markets were hit particularly hard, with Hong Kong – which suffered badly during the SARS outbreak – stocks tumbling 2.8% following a rating downgrade and as the coronavirus panic was seen impacting real estate, casino and car stocks, and with Chinese New Year coming up the situation could get even worse. Indeed, the coronavirus outbreak from central China entered a new phase of severity as multiple medical workers were reported to have been infected. Four people have died.

For those who are still unfamiliar, an unknown virus started small in Wuhan, China, back in mid-December 2019 with the Chinese health authorities later saying that the virus was related to SARS. Initial expectations were muted and human-to-human transmission was not presumed, but yesterday Chinese authorities announced that human-to-human transmission had taken place between patient and health worker. In addition the number of infected people was on rise. The reaction function has been prompt with Hang Seng futures down 2.8% in today’s session led by real estate, casino and car stocks. While we don’t know the direction in equities from here related to the coronavirus, Rabobank’s Peter Garnry notes that there are many unknowns and that the initial reaction often fails to discount the true extent and warns that “short-term this could get much worse for Asian equities as the Chinese New Year means that millions of people will be traveling potentially spreading the virus fast over large areas.”

一叶一追寻@RaynardToddnay1

【令人恐惧的一句话】我刚从武汉回来!🙏🙏

Embedded video

Markets, which for weeks ignored any geopolitical developments, were duly “shocked” to catch up to the newsflow out of China, and Asian stocks extended declines as risk-off sentiment dominated amid worries about China’s spreading coronavirus. The MSCI Asia Pacific Index dropped the most in two weeks, with three-fourths of its stocks trading in the red. As noted above, Hong Kong was the worst-performing market in the region, as its benchmark Hang Seng Index posted its worst decline in five months. Elsewhere, the Shanghai Composite Index sank the most since November, and Japan’s Topix completely erased Monday’s advance. “Safe-haven and defensive sectors might outperform the riskier assets in the days to come,” said Margaret Yang Yan, a market analyst at CMC Markets Singapore Pte. “Consumer discretionary, hospitality, retail, aviation and entertainment sectors are likely to suffer from a reduced number of social activities and outings.”

The chill in Asia carried over to European markets, where shares of luxury goods makers – which have large exposure to China – were among the biggest fallers. The French CAC 40 lagged peers, as luxury names weigh amid ongoing concern that the China virus will disrupt travel and spending. Sector-wise, mining stocks, household and personal goods, oil and banking names lead losses, with all Eurostoxx 600 sectors posting declines. Despite an initial dip, haven assets continue to be sought after.

Among the viral din, markets ignored the best German ZEW Economic Sentiment print in almost five years, since 2015, which ironically enough was just 5 months after the worst ZEW print in 8 years.

As stocks slumped, risk havens were in demand, and 10Y yields dropped below 1.80% again, while Germany’s 10-year government bond yield touched one-week lows. Bund, Treasury and Gilt curves all bull flattened and peripheral spreads widened to core with Italy the weakest link.

Investors had already been guarded after the International Monetary Fund trimmed its global growth forecasts, mostly due to a surprisingly sharp slowdown in India and other emerging markets, although there was some relief as U.S. President Donald Trump and French President Emmanuel Macron seemed to have struck a truce over a proposed digital tax. The two agreed to hold off on a potential tariffs war until the end of the year.

Trump also spoke at the World Economic Forum in Davos on Tuesday, with trade and tariffs on the agenda among more self-congratulatory remarks. In a tweet late on Monday, Trump said he would be bringing “additional Hundreds of Billions of Dollars back to the United States of America! We are now NUMBER ONE in the Universe, by FAR!!”

Also overnight the Bank of Japan issued its latest policy statement, which modestly lifted forecasts for economic growth. As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%, by a 7-2 vote. Japan’s yen picked up a bid on the safe-haven move and the dollar dipped to 109.93 from an early 110.17. It also gained on the euro, leaving the single currency lower to the dollar at $1.1090.

Elsewhere in FX, the dollar rose alongside haven bids and the yuan dropped as investors assessed the implications of a deadly virus in China ahead of the Lunar New Year holidays. AUD was the weakest on the G-10 scoreboard, AUDUSD finding support around its 100DMA as the Australian dollar took a knock from the flu worries since it attracts large numbers of Chinese tourists, who tend to be big spenders over the Lunar New Year holidays. Australia said it would step up screening of some flights from Wuhan. The Chinese yuan, predictably, tumbled and suffered one of its worst sessions since August as USDCNH rose as high as 6.9128.

In commodities, spot gold hit a 2-week high of $1,568.35 per ounce, but traded 0.2% lower in early deals in London. Oil prices slid nearly 1%, having earlier gained on the risk of supply disruption in Libya.Brent crude futures fell 1% to $64.60 a barrel, while U.S. crude fell 0.92% to $58.09 a barrel.

To the day ahead now which is a quiet one for data, with no releases of note in the US; earnings highlights include Netflix, IBM, Halliburton, United Airlines and UBS.

Market Snapshot

  • S&P 500 futures down 0.4% to 3,311.75
  • STOXX Europe 600 down 0.7% to 421.08
  • MXAP down 1% to 172.70
  • MXAPJ down 1.4% to 563.53
  • Nikkei down 0.9% to 23,864.56
  • Topix down 0.5% to 1,734.97
  • Hang Seng Index down 2.8% to 27,985.33
  • Shanghai Composite down 1.4% to 3,052.14
  • Sensex down 0.4% to 41,367.74
  • Australia S&P/ASX 200 down 0.2% to 7,066.35
  • Kospi down 1% to 2,239.69
  • German 10Y yield fell 1.6 bps to -0.234%
  • Euro down 0.06% to $1.1088
  • Italian 10Y yield fell 2.2 bps to 1.184%
  • Spanish 10Y yield fell 2.1 bps to 0.424%
  • Brent futures down 1.2% to $64.41/bbl
  • Gold spot down 0.3% to $1,555.85
  • U.S. Dollar Index little changed at 97.62

Top Overnight News from Bloomberg

  • Six people have died in China’s virus outbreak and more than 200 have been infected, including fifteen medical professionals. Health-care workers contracting the illness indicates that it is more easily transmitted than previously thought. That puts the disease — part of the coronavirus family — on a higher risk level, reminiscent of the Severe Acute Respiratory Syndrome, or SARS, pandemic in Asia 17 years ago that killed 800 people.
  • Reports from BOE agents — a cross-country network that holds confidential conversations with businesses and community organizations — could be key for officials trying to judge whether economic sentiment has rebounded since December’s general election
  • The Bank of Japan left rates unchanged Tuesday and painted a brighter picture of the economic outlook, offering a further indication that the likelihood of additional stimulus has receded
  • Presidents Emmanuel Macron and Donald Trump agreed to a truce in their dispute over digital taxes that will mean neither France nor the U.S. will impose punitive tariffs this year, a French diplomat said
  • The International Monetary Fund predicted the world economy will strengthen in 2020, albeit at a slightly weaker pace than previously anticipated amid threats related to trade and tensions in the Middle East
  • Oil edged lower as plentiful global supplies offset the loss of exports from Libya, while Europe considered a military mission to help enforce an arms embargo and a potential cease-fire in the OPEC producer
  • Senate Majority Leader Mitch McConnell plans to give House impeachment managers just two days to prosecute their case against President Donald Trump — a move that accelerates the timetable for a trial Republicans intend to end in a quick acquittal
  • A panel of the Italian Senate voted to allow the start of prosecution of League party chief Matteo Salvini for refusing to allow stranded migrants to dock when he was interior minister, Ansa news agency reported
  • President Vladimir Putin is likely to demote the man seen as the architect of the tight-budget policies that have made Russian bonds an investor favorite, fueling fears the Kremlin is planning a spending spree

Asian equity markets weakened across the board following a non-existent handover from their peers on Wall St, while further reports of coronavirus cases added to the subdued tone. ASX 200 (-0.2%) pulled back from record highs amid broad sector weakness and with BHP pressured after quarterly iron ore production fell short of analyst estimates, while Nikkei 225 (-0.9%) retreated below 24k as Japanese exporters suffered from safe-haven flows into the domestic currency. Elsewhere, Hang Seng (-2.8%) and Shanghai Comp. (-1.4%) also declined with the former reeling after Moody’s downgraded Hong Kong’s sovereign rating by 1 notch to Aa3, and amid heightened concerns surrounding the ongoing coronavirus outbreak which has spread to more Chinese cities with 224 cases confirmed so far resulting to 4 deaths. Finally, 10yr JGBs rose back above the 152.00 level as the risk averse tone spurred similar strength in T-notes, while prices largely ignored the BoJ policy announcement in which the central bank kept all policy settings unchanged as widely expected and reaffirmed its forward guidance but suggested that overseas risks somewhat eased.

Top Asian News

  • BOJ Raises Growth Forecast, Maintains Key Policy Settings
  • China Sentences Ex-Interpol Chief Meng to 13.5 Years in Prison
  • Saudi Arabia Returns to Eurobond Market as Gulf Tensions Ease
  • Toshiba Machine Vows to Battle Activist With Poison Pill

European equities post losses across the board [Eurostoxx 50 -0.8%] following on from a similar APAC lead, with subdued sentiment also attributed to the ramifications of the spreading coronavirus, with Taiwan now the latest country to report its first case. UK’s FTSE 100 (-1.2%) lags its peers amid unfavourable currency effects induced by the UK Labour Market Report. Meanwhile, the SMI’s losses are somewhat cushioned by earnings from Lonza (+4.0%) – providing some support to the Swiss healthcare names which in total accounts for 37.5% of the index. Sectors are all in the red with defensives lower to a lesser extent when compared to cyclicals. Consumer discretionary names are hit on the back of dampening demand expectations on the back of the China virus outbreak, with LVMH (-2.7%), Kering (-3.7%), Swatch (-2.5%) and Richemont (-3.4%) among the worst hit. In terms of other individual movers, UBS (-5.0%) shares fell despite topping net expectations and announcing a share buyback alongside a sale of its stake in UBS Fondcenter – amid lower 2022 CET1– forecast at 12-15%, down from 2021’s 17%. On the flip side, Hugo Boss (+5.6%) shares rose to the top of the Stoxx 600 after earnings topped forecasts, with the company noting that FY19 targets were achieved.

Top European News

  • Lagarde Prepares to Modernize ECB With a Plan for the 2020s
  • BP’s New Generation Takes Control as CFO Announces Retirement
  • U.K.’s Javid Says He Wants Comprehensive EU Free-Trade Agreement
  • EU Financial Tax Faces New Trouble as Austria Threatens to Quit

In FX, GBP/JPY/EUR/CHF – The Pound has regained some poise thanks to the latest UK jobs and earnings report that beat consensus almost across the board and came with a healthy revision to the previous claimant count in contrast to the recent run of sub-forecast/BoE rate cut supportive macro releases. Cable has reclaimed 1.3000+ status after flirting with 1.2955 early January lows only yesterday and Eur/Gbp is eyeing 0.8500 from 0.8550+ at one stage on Monday, even though the Euro has also gleaned some traction via an encouraging German/Eurozone ZEW survey to retest 1.1100 and offers above vs the Dollar. Meanwhile, the Yen is back in favour and over 110.00 after another dead rubber BoJ policy meeting as the YUAN pares more gains amidst the spread of China’s coronavirus that has claimed more lives and reached Australia, with safe-haven demand also returning to the Franc within a 0.9668-89 range.

  • AUD/CAD/NZD/NOK – All weaker against their US counterpart, and especially the Aussie given closer links to China and the reported case of the potentially fatal illness in Brisbane noted above. Aud/Usd has retreated further towards sub-0.6850 troughs not seen since mid-December (0.6849 and 0.6838) and is only just holding above the 100 DMA (0.6844) ahead of Thursday’s labour data that forms one of the last major inputs for the RBA next month. Similarly, the Loonie and Kiwi are trading defensively into Canadian manufacturing sales and the NZ GDT auction, with the latter also wary about Q4 CPI in 2 days time and its implications for the RBNZ in February. Usd/Cad is meandering between 1.3044-77, as Nzd/Usd straddles 0.6600 and Aud/Nzd slips back below 1.0400. Elsewhere, the Norwegian Crown is underperforming against the backdrop of receding oil prices and pre-Norges Bank caution in wake of a marked downturn in industrial sentiment, with Eur/Nok up above 9.9400 at the peak and through decent 9.9300 option expiry interest (680 mn).
  • USD – The DXY has drifted back down from MLK day peaks largely due to the aforementioned recoveries in G10 currency peers, like Sterling and the Euro on positive fundamentals and the Yen and Franc due to risk-off positioning/hedging. The index is pivoting 97.500 after peering above key chart levels yesterday, but not sustaining bullish momentum.
  • EM – Although the Greenback has conceded ground to several major rivals, risk aversion is keeping regional currencies suppressed, with the Rand extending declines towards it 200 DMA (14.6000) before clawing back amidst more SAA flight cancellations to cut costs, while the Lira fell below 5.9300 after remarks from Turkey’s Economy Minister expressing a desire for a more competitive Try.

In commodities, commodities are lower on the day, with the energy market dampened more-so on sentiment – with the outbreak of the coronavirus playing a part. Brent Mar’20 futures reside just under USD 64.50/bbl, having taken out its 50 DMA at ~USD 64.50/bbl ahead of the 200 DMA at USD 64/bbl. Meanwhile, WTI front-month futures dipped below the USD 58/bbl mark with eyes on its 200 DMA at USD 57.60/bbl and 100 DMA at USD 57.25/bbl. Elsewhere, spot gold gravitates back to 1550/oz as a firmer USD weighs on the precious metal. Finally, base metals declined amid the aforementioned negative sentiment – with copper prices diving from around USD 2.8350/lb to sub-2.80/lb levels.

US Event Calendar

  • Nothing major scheduled

DB’s Jim Ried, live from Davos, concludes the overnight wrap

Morning from Davos and the highest city in Europe. The good news is that the sun has been shining and that my apartment is right next to the golf course. So after I press send this morning I’ll be off to play a quick 9 before breakfast. Oh… just been told it’s under 2 meters of snow. Shame! A reminder that DB will be talking all things growth related (especially the side effects and the need for sustainability) here at Davos and our piece we published ahead of this can be found here.

In terms of what’s on in Davos today, the highlight will be an early address from Mr Trump (11am CET) which will no doubt attract plenty of headlines. Apparently for security, snippers are on the rooftop so I’ll be wearing my bullet proof bobble hat. Away from Mr Trump, Greta Thunberg’s lunchtime panel will attract interest. Later BoE Governor Carney will be speaking on a panel which may also be interesting ahead of a delicate interest rate decision next week and the U.K. leaving the EU a few days later. He is going to be the climate finance adviser to the U.K. government ahead of the COP 26 summit in Glasgow in November so he may have things to say on that, especially given the focus in Davos this year.

Ahead of the shindig, the Bank of International Settlements published an interesting paper saying that climate change threatens to provoke “green swan” events that could trigger a systemic financial crisis unless authorities act against such risks. The paper said that “traditional approaches to risk management consisting of extrapolating historical data and on assumptions of normal distributions are largely irrelevant to assess future climate-related risks” while adding that green swans are different from black swans because there is some certainty that climate change risks will one day materialise, which could endanger humanity more than financial crises, and they threaten even more complex and unpredictable chain reactions. Whether you agree with this or not such reports and views are only going to grow over time. As we said last week, this will be the topic of our age. Meanwhile, the Bank of France Governor Francois Villeroy de Galhau said in an introduction to the paper that “in order to navigate these troubled waters, more holistic perspectives become essential,” and advocated two solutions which the ECB could discuss in its upcoming strategy review: integrating climate change in all economic and forecasting models, and overhauling the collateral framework to reflect climate-related risks. The ECB President Lagarde is expected to announce the strategic policy review of monetary policy at its meeting on Thursday.

Also ahead of Davos the IMF trimmed its global growth forecast for 2020 to 3.3% versus a forecast of 3.4% made back in October. It also cut the 2021 forecast from 3.6% to 3.4% although both forecasts would mark an improvement on the 2.9% growth achieved last year. The report did highlight that risks are now “less skewed” but the list of downside risks still includes geopolitical tensions, most notably between the US and Iran, as well as intensifying social unrest, trade relations worsening and deepening economic frictions.

A rare 2020 risk off move is dominating Asia this morning with equities down while gold (+0.34%) and the Japanese yen (+0.19%) are up. The Nikkei (-0.87%), Hang Seng (-2.30%), Shanghai Comp (-1.11%) and Kospi (-0.91%) are all lower. Impacting sentiment is the outbreak of a deadly virus which originated in central China and entered a new phase of severity as evidence has shown that it can be transmitted by humans. Also, as the Lunar New Year holidays approach there is a growing concern amongst market participants that China won’t be able to control the spread of the virus as its citizen travel within and outside the country. There are already 217 confirmed cases of the coronavirus in China with 7 more suspected. Additional cases have already been detected in Japan and Thailand. In addition, the Hang Seng is leading the declines as Moody’s downgraded the country’s long term rating by one notch to Aa3 from Aa2, with a “stable” outlook citing that “The absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody’s had previously assessed.” As for Fx, the onshore Chinese yuan is down -0.37% to 6.8925 and briefly went over the 6.9 mark. Elsewhere, futures on the S&P 500 are down -0.40% after yesterday’s holiday and yields on 10y USTs are down -2.9bps this morning.

This morning we’ve also had the BoJ meeting where the central bank kept its monetary policy toolkit unchanged and raised the growth projections for FY 2020 (+0.9% yoy from +0.7% yoy earlier) and FY 2021 (+1.1% yoy from +1.0% yoy) on the back of the government’s earlier announced stimulus. Meanwhile the inflation projections for both FY 2020 and FY 2021 were revised down by one tenth to +1.0% yoy and +1.4% yoy respectively. On risks, the BoJ said that even as overseas risks have reduced somewhat they still remain significant and reaffirmed that it wouldn’t hesitate to take additional easing action if risks increased.

With US markets shut, yesterday was always likely to be a bit of slow moving day. The majority of European equity markets posted small losses on well below average volumes, with the STOXX 600 in particular ending -0.14%. The CAC (-0.36%), IBEX (-0.23%) and FTSE MIB (-0.57%) also closed lower although the DAX (+0.17%) did manage to stay onside, just. The FTSE 100 also retreated -0.30% as Sterling hovered just below $1.30 following Chancellor Javid’s comments over the weekend that the U.K. would not seek alignment with the EU in many areas. Bond markets weren’t much more exciting with yields a shade lower. Indeed 10y Bunds ended at -0.221% and -0.4bps on the day. Yields have essentially moved sideways for four days now. Credit was also slightly weaker – iTraxx Crossover 1bp wider – while in commodities Oil swung around with Brent crude touching as high as $66.00/bbl overnight before dropping back towards $65.00/bbl during the European session. This morning it’s down -0.51% to $64.87.

In other news, the French and the US agreed a ceasefire over digital taxation and neither side will impose tariffs on each other this year as a result. Another Trump agreement that will take us past the 2020 election. Maybe this will continue to be a theme where he postpones battles and is interesting in light on the ongoing US/EU trade tensions. On tax the hope will be that the OECD can come up with a global solution to the global taxation issue. This will be an interesting story this year.

Finally, it’s worth highlighting that at a company level yesterday CNBC reported that Boeing had secured borrowing of at least $6bn from banks and is in further talks about borrowing $10bn in total. This of course follows two fatal 737 Max crashes and very weak orders data last week which was the worst in decades. The stock price has also failed to get a bump from the US/China trade deal having declined another -1.75% last week.

To the day ahead now which is a quiet one for data. With no releases of note in the US the focus will be firstly on the November and December labour market data in the UK. With the market increasingly pricing in a BoE rate cut, the consensus expects no change in the unemployment rate of 3.8% and earnings to dip to 3.4%. Following that we’ll get the January ZEW survey in Germany which is expected to show further improvement. Finally, earnings highlights include Netflix, IBM and UBS.

END

3A/ASIAN AFFAIRS

I)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED DOWN 53.64 POINTS OR 1.41%  //Hang Sang CLOSED DOWN 810.58 POINTS OR 2,81%   /The Nikkei closed DOWN 218.93 POINTS OR 0.91%//Australia’s all ordinaires CLOSED DOWN .22%

/Chinese yuan (ONSHORE) closed DOWN  at 6.9040 /Oil UP TO 57.24 dollars per barrel for WTI and 64.15 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED DOWN // LAST AT 6.9040 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.9079 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 ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

3 a./NORTH KOREA/ SOUTH KOREA

NORTH KOREA

Now it is North Korea that is threatening to endits moratorium on missile testing and nuclear enrichment

(zerohedge)

North Korea Ends Moratorium On Missile Tests, Nuclear Enrichment

After warning the US about the possibility of a return to the frosty relations of previous administrations, North Korean leader Kim Jong Un is once again wheedling the Trump Administration by threatening to re-start the country’s ICBM tests.

On Tuesday, a senior NK government official warned that the US had ignored his year-end deadline for nuclear talks. And because of this lack of progress, Kim no longer feels bound by his commitments, including his promise to halt nuclear testing and suspend its ICBM program.

Talks with North Korea stalled after last February’s failed summit, and have apparently made little progress during the intervening months. Late last year, NK fired off several short-range missiles, unnerving its neighbors in South Korea and Japan, though President Trump quickly declared that the missile launches didn’t violate North Korea’s truce with the US.

“We found no reason to be unilaterally bound any longer by the commitment that the other party fails to honor,” said Ju Yong Chol, a counselor at North Korea’s mission to the United Nations in Geneva. Ju made these remarks during a UN-backed conference on disarmament.

To be sure, the talks with NK were likely doomed to fail from the beginning. Washington has insisted that no economic sanctions would be lifted until NK completes the disposal of its nuclear arsenal, while NK has demanded that the two sides agree to a schedule whereby sanctions would be gradually lifted in exchange for NK taking steps toward disarmament.

Speaking as the envoy from the DPRK, Ju accused the US of imposing “the most brutal and inhuman sanctions,” before warning that “If the US persists in such hostile policy toward the DPRK there will never be the denuclearization of the Korean peninsula.”

From Reuters:

“If the United States tries to enforce unilateral demands and persists in imposing sanctions, North Korea may be compelled to seek a new path,” Ju added.

To be sure, this isn’t the first time NK has threatened to walk away from the table.

It’s worth noting that the renewal of North Korea’s belligerent stance comes just one day after Kim appointed a new foreign minister to succeed Ri Yong Ho, a North Korean official who became one of the country’s most recognizable figures by representing NK in talks with the US, and at the UN. In his place, Kim has installed a former defense commander with little diplomatic experience, once again spotlighting the regime’s reliance on a small group of loyalists, while also potentially signalling a return to the country’s belligerent attitude when it comes to its defense and nuclear programs, Reuters reports.

Fortunately, the US military has been keeping close tabs on North Korea. On Friday, the Pentagon’s No. 2 general warned that NK was scrambling to build new missiles now that diplomatic efforts with the US have effectively collapsed.

So now both Iran and North Korea are rejecting prior promises to limit or end their enrichment of uranium.

Expect missiles to fly in the not-too-distant future. Fortunately, with so much else going on, we imagine markets will ignore the threat of nuclear war, just like they did last time around.

END

b) REPORT ON JAPAN

 

3 C CHINA

CHINA

The new deadly coronavirus outbreak is now spreading to other countries. We must be very mindful of this

(zerohedge)

China Coronavirus Outbreak Spreads; Hundreds Infected As Human-To-Human Transmission Confirmed

Health officials in Wuhan, China reported 139 new cases of a new mystery virus over the weekend, now rapidly spreading to other provinces and surrounding countries, reported CNN.

As of Monday morning, three people have died from the pneumonia-like illness, and globally there have been more than 200 reported cases, noted Reuters.

Beijing confirmed two cases of coronavirus Monday, while Guangdong health officials reported one case in Shenzhen – these are the first reports that the virus is quickly spreading from Wuhan, the epicenter.

On Sunday, the World Health Organization (WHO) said the virus originated from a seafood/meat market in Wuhan, has likely spread through human-to-human transmission.

“It is clear that there is at least some human-to-human transmission from the evidence we have, but we don’t have clear evidence that shows the virus has acquired the capacity to transmit among humans easily,” said Takeshi Kasai, the WHO’s regional director for the western pacific, in an interview with Bloomberg TV on Monday. “We need more information to analyze that.”

There are significant concerns about a broader regional outbreak, reports Sunday warned the virus was detected outside China – two in Thailand and one in Japan.

The South Korean Centers for Disease Control and Prevention (SKCDC) confirmed Monday that a 35-year-old woman arriving at Incheon International Airport from Wuhan tested positive for coronavirus.

“She was immediately separated for treatment in quarantine at a state-designated hospital,” the SKCDC said.

China’s National Health Commission confirmed Monday that the virus has occurred via human-to-human transmission. This has worried officials in the country and in surrounding countries ahead of the Lunar New Year holiday, in which millions of Chinese tourists are expected to travel across the region, could lead to a widespread outbreak of the virus.

More than 7 million Chinese traveled overseas last year during the holiday season.

“I believe Chinese tourists will bring the virus to many other countries in Asia in the coming days, due to their overseas travels during the Lunar New Year holiday,” Professor David Hui Shu-Cheong, a respiratory expert at the Chinese University of Hong Kong, told CNN Monday.

Neil Ferguson of Imperial College London warned late last week that upwards of 1,700 in Wuhan had been infected with the virus.

Airports in Singapore and Hong Kong have been screening passengers from Wuhan, while three US airports (San Francisco, Los Angeles, and New York) announced similar measures last week.

Investors on Monday dumped Chinese airline and casino stocks over fears a widespread outbreak of the virus could lead to lower holiday traffic.

Air China plunged 7.5% in Hong Kong to a one-month low, and China Southern Airlines and China Eastern Airlines were both down at least 3%.

Macau gaming stocks dropped by 4%, the most since last August, with SJM Holdings down 5.6% and Sands China -5%.

Shares of duty-free store operator Dufry fell nearly 7% on Monday over concerns the spread of the virus could lead to decreased air travel.

Mandy Jia, an analyst at SWS, told Bloomberg that investors sold casino stocks because the outbreak of the virus could lead to depressed holiday traffic.

If China and other Asian countries fail to control the spread of the virus during the upcoming holiday season, and a broader outbreak is seen, this could be a risk-off event for global equity markets.

end

CHINA

Xi warns party officials not to cover up the proliferation of the coronavirus.

(zeorhedge)

Xi warns Party Officials: Anyone Who Covers Up Coronavirus Will Be “Nailed To Pillar Of Shame”

Now that the Chinese government has finally confirmed that the coronavirus outbreak that originated in Wuhan can be spread between humans, international investors are grappling with the worst-case scenario: Another global SARS-like outbreak that could leave hundreds dead around the world.

As millions of Chinese prepare to travel for the Chinese New Year holiday on Saturday, deaths are piling up at a steady but alarming rate from the virus, which claimed its sixth victim on Monday, according to the mayor of Wuhan, the central-Chinese city where the virus was initially detected, before spreading to Shanghai, Beijing and elsewhere around the country.

As of Tuesday morning in the US, nearly 300 cases of the coronavirus have been confirmed, according to Reuters.

As the Communist Party leaders panic, an edict has been handed down from Beijing warning local officials that, when it comes to this virus, the usual corruption, fraud and dissembling endemic to China’s political system will not be tolerated.

According to the South China Morning Post, Beijing on Tuesday warned party functionaries not to lie about the spread of the coronavirus, warning that anyone caught withholding information would be severely punished and “nailed on the pillar of shame for eternity.”

Chang An Jian, the official social media account of the Central Political and Legal Affairs Commission – Beijing’s top political body responsible for law and order – ran a commentary on Tuesday telling cadres not to forget the painful lessons of Sars and to ensure timely reporting of the current situation.

More than 700 people were killed around the world by the severe acute respiratory syndrome outbreak in 2002-03, which originated in China.

“Anyone who puts the face of politicians before the interests of the people will be the sinner of a millennium to the party and the people,” the commentary read.

“Anyone who deliberately delays and hides the reporting of [virus] cases out of his or her own self-interest will be nailed on the pillar of shame for eternity,” it added.

The official party edict came straight from President Xi Jinping himself. Xi said on Monday that the virus must be “resolutely contained,” and that the Party must make “the safety of people’s lives and their physical health” the top priority. It stressed that transparency remained the best defense against rumors and public panic.

It might sound strange coming from Xi, considering that the Communist Party is one of the least transparent ruling parties in the world, and Chinese media is constantly subjected to government-mandated manipulation, but the president insisted that “transparency” is the best way forward.

“Only by making information public can [we] reduce [public] fear,” it said. “People don’t live in a vacuum and [we] will only provide a breeding ground for rumours to grow if we keep them in the dark and strip them of their right to [know] the truth.”

Beijing has already learned hard lessons about the coronavirus family’s potential for devastation (SARS killed some 800 people around the world). Ultimately, the biggest threat to the regime’s credibility would be failing to contain the controllable natural disaster.

“Deceiving ourselves will only make the epidemic worse. It will turn a controllable natural disaster into an extremely costly man-made disaster,” the commentary said.

In what appears to be a PR stunt meant to calm the public, Beijing said it had appointed Dr Zhong Nanshan, the same doctor who led the fight against SARS 17 years ago, to lead the charge against the virus that originated in Wuhan.

Still, the virus, which was first detected in December before being officially identified earlier this month, appears to be spreading rapidly. Chinese provinces reported a combined 77 new cases of the virus to the National Health Commission on Jan. 20, according to the government.

As the Chinese New Year holiday travel season begins, the international community has finally taken notice: As we noted last night, fears about a repeat of the SARS disaster ushered in a risk-off mood in markets around the world, with equities in Asia and Europe sinking into the red, and stock futures indicating a lower open in the US.

Airports in the US and Australia have already implemented screening practices for the virus. For investors hoping to capitalize on disaster, one WSJ reporter highlighted a ‘predictable’ pair trade: shorting Chinese transport stocks while buying healthcare stocks.

Mike Bird

@Birdyword

I can hardly crow here since I didn’t think of it, but it’s interesting to think how predictable this trade should have been, given the broad view that the Chinese govt was almost certainly lying about the extent of the contagion.

Mike Bird

@Birdyword

Coronavirus impact in Chinese markets: short transport stocks, long healthcare stocks

View image on Twitter

Though Trump Administration officials are already trying to jawbone it higher. Unfortunately, a handful of positive trade headlines simply can’t compare to hysteria surrounding the possibility of a deadly global plague-like pandemic.

Especially as more videos like this one appear on social media.

Hipster@Hipster_Trader

Surreal video out of China

Embedded video

END

4/EUROPEAN AFFAIRS

Europe/USA/China

A super commentary from Daniel Lacalle as he explains how Europe is the big loser in the new trade agreement between China and the uSA.

The agreement with China is only phase one and they must now deal with phase 2 which will be most difficult.  Europe is set to introduce a digital tax on USA giants which will annoy Trump to now end.  Europe also has mountains of  hurdles for agricultural operations to sell to the EU.

Expect a trade war to begin with Europe and the uSA shortly.

(Daniel Lacalle)

The EU Is The Biggest Loser From US-China Agreement

Authored by Daniel Lacalle via DLacalle.com,

Market participants’ excess of optimism with the trade agreement between the United States and China is clearly exaggerated, once we have the details.

Both the United States and China’s economy have suffered a mild impact from trade disputes. The United States saw a mild slowdown in growth but did not suffer inflationary pressures from the tariffs, while its trade deficit shrunk reduced to the lowest level in 17 months and unemployment is at a minimum of 50 years. In the case of China, the growth of the economy (even adjusted for inflated data) was less affected by the trade war than many feared. Although its exports grew much less than expected, it has been able to increase them somewhat, 0.5% in 2019.

In the trade dispute, it is clear that China has been comparatively worse off. The country had to make an urgent devaluation of the yuan, bail out dozens of domestic entities and their total foreign currency reserves remained flat, barely covering their credit commitments … But, at the same time, China’s trade surplus increased by 25% even if it was mainly due to lower imports.

China has shown an acceptable relative strength but its Achilles heel remains its shortage of dollars. Its apparent huge reserves of 3 billion are not operational due to its growing foreign currency debt.

China FX debt

The so-called trade war has had a relative impact on the two giants, showing that tariffs were only a tactic to negotiate, that is why they have lasted so little. Almost no one doubts that the effects could have been much greater if these tariffs were maintained.

Of course, the trade war has been widely used as an excuse to justify the effects of global debt saturation and overcapacity. Now it will no longer be valid as a wild card.

This entire negotiation process has led to a “phase one” agreement which raises many questions. Is it enough? Are the details clear enough to put it into practice? How will it be accomplished without rising idle inventories? Can China increase its US imports so much with its growing shortage of dollars? What is the impact on the rest of the world?

That is the key.

The agreement between China and the United States is actually more similar to a global zero-sum game.

China has committed to buying an additional $200 billion in US goods between 2020 and 2021 … a figure will come from lower purchases from others. The figure is not small since China’s total trade surplus is 421.5 billion. That is, it accounts for almost 23% of the annual trade surplus divided into two years.

Why is it probably a zero-sum game? China will acquire more United States goods with the following breakdown: $32.9 billion in the manufacturing and industrial sector, $18.5 in energy, $12.8 billion in services and $12.5 billion in agricultural goods in 2020, rising to $44.8, $33.9, $25.1 and $19.5 billion respectively in 2021.

All that increase benefits the United States but there is no evidence that China is currently importing less than it needs, quite the opposite, as shown by its inventory levels. Therefore, China will likely import more from the United States and less from other countries.

How does it affect the European Union?

The European Union is the first or second in market share of total Chinese imports in various sectors. According to Morgan Stanley, the most affected sectors would be agriculture (11% of the total China imports, only surpassed by Brazil, which will also be negatively affected by the agreement), chemicals (25%), precision instruments (19%), transport equipment (50%), machinery and electrical equipment (11%, behind Taiwan, Korea, and Japan).

 

It is important to warn of the low impact on global growth of this agreement and on the negative collateral damage to other countries. There are risks for countries that are very dependent on energy exports. Brazil, Qatar, and Australia are the most affected by the agreement on energy imports, but also on other sectors. The impact on world GDP could be null. What is penalizing global growth and trade is more debt saturation and excess capacity than the so-called trade war which is also negative but not as important as structural problems in the global economy.

The second phase of the agreement will be the most complex. The first phase is basically a set of minimum agreements that include few real commitments regarding China’s capital controls, legal security, and respect for intellectual property. The second phase will focus on the most relevant aspects of the trade relationship between the US and China, including industry relocation, capital movements, and cross-subsidies. However, bringing China’s trade surplus with the US to zero is virtually impossible and, in my opinion, unnecessary.

So far, the evidence shows that the weakest link in the China-US deal negotiations was the European Union. China and the Us will probably benefit from the deal at the expense of lower trade with a European Union that has been unable to defend its position.

The US is already in negotiations with the European Union on the projected “digital tax” which hides an undercover tariff on US- tech giants, and barriers to traded agricultural products and the auto sector remain. The US-China deal may unveil the numerous barriers to free trade disguised under the thousands of pages of EU regulations.

Let us not forget that we are facing a negotiation with the EU as the largest client with its suppliers. The process will be slow, perhaps complicated, but a negotiation nonetheless. The so-called trade war with China has only lasted a few months. The next stop is in the European Union.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

IRAN/GLOBE

Iran is angry as they now threaten to withdraw form the big 1970 non Proliferation treaty. This will no doubt cause the uN to again sanction Iran.

(zerohedge)

 

Iran Now Threatening Withdraw From Landmark 1970 Non-Proliferation Treaty

With the 2015 Iran nuclear deal now unraveling given the move by the UK, Germany, and France to trigger the dispute resolution mechanism which will ultimately lead to the next step of EU nations filing complaint with the UN Security Council that Iran is in violation, Iran’s participation in yet another historic treaty is on the chopping block.

Iran is now threatening to withdraw from the landmark Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which since taking effect in 1970 (after initiating in 1968) is recognized as the only binding international treaty whose objective is to prevent the spread of nuclear weapons and weapons technology, while promoting peaceful use of nuclear energy.

Iran’s Foreign Minister Javad Zarif announced to Iranian lawmakers Monday“If Europeans continue their untenable conduct or send Iran’s nuclear case to the United Nations Security Council, we will withdraw from the N.P.T.,” according to state media.

 

File image: Iranian ballistic missile on display.

Prior to Zarif’s statement Foreign Ministry spokesman Abbas Mousavi vowed that Iran is planning “one last step” in drawing down its commitment to the JCPOA which is to ultimately have “more effective consequences”. Many have taken this to mean the Obama-brokered deal is now all but dead, especially following the Jan.6 declaration in the wake of the Qassem Soleimani killing that Iran no longer accepts limits on uranium enrichment.

In a televised address to the nation last Thursday President Hassan Rouhani Rouhani reaffirmed that “no restrictions on nuclear energy” remain and that Iran is “better off in terms of nuclear power.” He claimed further that:

We are enriching more uranium [than] before the deal was reached… Pressure has increased on Iran but we continue to progress.”

 

But he also left an opening for dialogue, emphasizing that the process remains reversible at this point, but only if Europe takes specific immediate action to allow the Islamic Republic to export its oil.

Adding fuel to the fire, British Prime Minister Boris Johnson had responded to last week’s development’s by suggesting a new deal brokered with the Trump administration: “If we’re going to get rid of it, let’s replace it and let’s replace it with the Trump deal.”

This reportedly infuriated leaders in Tehran, who’ve repeatedly rebuffed past White House suggestions to scrap the 2015 deal altogether and start afresh with direct talks.

END

IRAQ

A good look at the situation inside Iraq right now.  With the USA threatening to pull out, that might give ISIS the strength to attack the oil fields in Kirkuk again

(OilPrice.com)

Could ISIS Take Control Over Iraq’s Largest Oil Field?

Via OilPrice.com,

As always, it’s the fear of sanctions that provides the leverage Trump seeks in this cat-and-mouse game with Iran. And this time, the leverage is over Iraq, which would like to see both American and Iranian forces out of the country, for obvious reasons.

There is nothing ISIS would love more than this. 

It would also devastate Iraq because the sanctions threatened would include blocking access to Iraq’s U.S.-based account where all the oil revenues are kept. That threat stands if Iraq moves to kick U.S. forces out of the country.

That would mean victory for Iran (temporarily). Kicking out Iranian forces is not nearly as simple because the line between state and non-state actors is blurred, at best.

A few weeks ago, a U.S. drawdown of military forces in Iraq was already expected, but that now seems unlikely because of the implications.

The very military base that Iran attacked following the assassination of General Soleimani was already preparing for a drawdown.

In addition to the threat of sanctions on oil money, a U.S. withdrawal would likely open the door for an ISIS return.

What Iraqis Want

There is no consensus on this question, other than the fact that no one wants Iraq to be the proxy battleground between the United States and Iran.

It’s a fair point, and Iraqis have had a very difficult time enjoying anything close to sovereignty since the fall of Saddam Hussein.

While the Iraqi parliament has voted for U.S. troops to leave, they do not represent a unified voice. The Sunni elements of parliament did not participate in the vote. Neither did the Iraqi Kurds. 

Shia factions in Iraq are, of course, pushing for a U.S. withdrawal, but the Sunnis and Kurds see this as a dangerous opportunity for pro-Iranian Shia factions to take even more control of the central government in Baghdad.

They don’t necessarily want a huge U.S. troop presence, but they are more fearful of a complete withdrawal that would leave them over-exposed to pro-Iranian forces. They also aren’t interested in being very loud about this fear.

In this atmosphere, there is already talk in certain Sunni circles of carving Iraq up to create yet another autonomous region such as that governed by the Kurdistan Regional Government (KRG) in the north of Iraq.

A Sunni-dominated region would include Anbar, Saladin, Nineveh and Diyala provinces, and would leave all of Basra’s oil to pro-Iranian factions.

Already, Sunni leaders are mentioning this as an option, pointing to what they call the “successful” example of the Kurdistan region. 

The disintegration of Iraq was already progressing prior to the latest showdown between Iran and the United States. The country has been teetering over the edge of anarchy since 2003, when a single party (the Baath Party) was destroyed and Iraq became “governed” by multiple parties with even more fractious factions and a weak military that pro-Iranian Shia militias found easy to influence.

But this is far from just a sectarian conflict.  

The mass protests that were already threatening Iraq’s fragile stability were Shi’ite-versus-Shi’ite. The Sunnis were not involved, nor the Kurds. They were just watching things unfold, warily.

One of the biggest mistakes the casual Western news reader makes is accepting a black-and-white narrative when it comes to Iraq. There is a very distinct group of Shi’ites that has a nationalist bent and is militantly against Iranian influence in an independent Iraq. This was a genuine uprising against highly corrupt and ineffective state institutions.

Then there is a second group of pro-Iranian Shi’ites who have been brutally putting down the popular uprising. This group exists in order to maintain Iran’s influence.

The problem now, for the U.S., is that the confrontation between the U.S. and Iran on Iraqi soil is more likely to bring these two groups together than it is to pull them further apart, which would have been a real threat to Iranian influence in Iraq.

Indeed, both Shia groups are calling for a U.S. withdrawal.

In this territory, you have to pick your evil, and for some time it’s been pro-Iranian forces and pro-U.S. forces against ISIS.

That’s not going to happen anymore, to the great delight of the Islamic State.

In 2011, a U.S. troop withdrawal from Iraq sent an open invitation to ISIS. In 2020, it will do the same.

The Biggest Threat to Iraqi Oil

For oil prices, the only real benefit to the Iran-Iraq conflict at this point is that Iraq is at a bit of a standstill when it comes to developing new projects, though its existing production will not be affected by any evacuation of U.S. oil workers, which has been minimal so far.

 

Since Iraq is already OPEC’s biggest over-producer, this is a bit of a balm on compliance.

But the biggest threat to Iraqi oil in recent months has been Shia protesters fed up with a corrupt government. No one else is willing to touch the oil.

The biggest immediate threat is not Basra oil–it’s Kirkuk oil. 

A U.S. troop withdrawal could easily relaunch a sectarian civil war in Iraq, and Kirkuk would be the first to fall.

Kirkuk is in northern Iraq, but outside the official territory of the Kurdistan Regional Government (KRG).

It’s also one of ISIS’ key stomping grounds, and the only reason they have been kept from taking over this region entirely is the effort of a U.S.-led international anti-ISIS coalition, in which Kurdish Peshmerga forces played an integral role since 2014.

A withdrawal of U.S. troops at this point will ensure a return of ISIS, and a sectarian conflict is exactly what the Islamic State is hoping for.

At an attack on the K-1 base just in northwest Kirkuk in December launched the latest round in the Iran-U.S. proxy war in Iraq.

Prior to that, ISIS had already started escalating attacks on this base, with ISIS seeing a window of opportunity in an American shift to defense against Iran and Hezbollah in Iraq. We’re already seeing the uptick in ISIS attacks–and the focus is definitively Kirkuk.

Coalition forces may have won the Battle of Kirkuk in 2016, but ISIS is still there. 

Basra oil is safe, for now. The biggest threat is to Kirkuk’s 9 billion barrels. This is where the next round of this conflict starts, and it will be ISIS that ultimately wins any ‘proxy’ war. 

end

LIBYA/EUROPE/TURKEY

General Hafter who is head of the lNA (and USA backed) controls all of the Libyan oil.  He has now blocked all oil exports one day before the Berlin conference

(zerohedge)

Haftar Blocks All Libyan Oil Exports Day Before Berlin Peace Conference

Given Libyan commander Khalifa Haftar has over the past two years captured the majority of the oil and gas rich country’s energy producing regions, he’s now playing his biggest card yet to leverage international peace talks in his favor amid a final push for his Libyan National Army (LNA) forces to take Tripoli.

Bloomberg reports Saturday that the Benghazi-based ‘rebel’ general has now “blocked oil exports at ports under his control, slashing output by more than half and posing a potential setback for an international conference on Sunday that aims to broker an end to a civil war in the OPEC nation.”

 

Image source: AP via Oilandgaspeople.com

The major talks Sunday are due to be held in Berlin, and a who’s who of external backers of each side of the conflict will be in attendance, including Putin, Erdogan, France’s Macron, and UK Prime Minister Boris Johnson, as well as the Italian prime minister and US Secretary of State Mike Pompeo.

 

The Berlin conference comes after a failed deal to establish a ceasefire in Moscow earlier in the week, when Haftar left the city after the head of the UN-backed Government of National Accord (GNA) in Tripoli, Fayez al-Sarraj, actually signed the agreement. Haftar also reportedly secretly scuttled to different Mediterranean capitals, including Athens, in a bid to gain recognition as legitimate leader on the ground.

Haftar’s drastic move to block oil exports is likely aimed at torpedoing the Berlin meeting before it even starts, given he’s proven intransigent in the face of international pressure for him to halt the ongoing Tripoli offensive — even during the talks hosted by one of his key political backers Vladimir Putin.

Libya’s National Oil Corp. (NOC) has now declared Force Majeure, per Bloomberg:

As a result of the blockage of ports in the central and eastern parts of the country, oil output will fall by about 800,000 barrels a day, costing $55 million daily, the National Oil Corp. said in a statement on Saturday. The NOC declared Force Majeure, which can allow Libya, which holds Africa’s largest-proven oil reserves, to legally suspend delivery contracts.

The stoppage also has military implications on the ground, given the GNA’s national army relies on the country’s oil revenue to purchase weapons via Tripoli’s central bank. The NOC has placed sole blame on Haftar for the shutdown, while the LNA has claimed to be listening to the demands of “the people”.

 

GNA’s Fayez Al-Sarraj (left) and Gen. Khalifa Haftar, via the AFP.

Speaking to Bloomberg, European Council on Foreign Relations top official Arturo Varvelli acknowledged the action as bold ploy by Haftar to control Berlin discussions before they commence. “It could be counterproductive as it could make the Europeans, who are the largest consumers of Libyan oil, very upset,” he said.

And S&P Global Platts warns the country’s oil sector could enter a “tailspin”:

Libya’s oil sector could go into a tailspin with two-thirds of its total crude oil production of around 1.20 million b/d at risk after its key oil ports were suspended Saturday by the Libyan National Army…

There’s huge potential for fireworks at the conference itself, given international heavyweights on either side of the conflict will be represented.

 

Turkey’s Erdogan has recently ordered troops to prop up the Tripoli government, not to mention Turkish drones and military hardware which have for months already been active in defense of the capital against pro-Haftar forces.

Oil exports make up over 90% of Libya’s national revenue and as the below 2019 Stratfor map demonstrates, Haftar has long held the majority of the nation’s oil fields.

Russia, for its part, is believed to have hundreds of mercenaries from the Wagner Group embedded within Haftar’s forces. And complicating matters in the emerging proxy war, Egypt, the Saudis, and UAE (and most recently the Trump White House, apparently) also back Haftar, while Italy, Turkey, and other UN member nations back the GNA’s Sarraj.

Meanwhile, Haftar has vowed repeatedly to not give up until he has control of the Libyan capital, despite fighting for months staying at a relative stalemate. So the Berlin conference outcome is not looking good before it even starts.

end

TURKEY/EU

 

Turkey is continually getting itself into hot water as they engage in a massive incursion into the drilling area on that massive gas/oil find. Now in a leaked letter, the EU is threatening to cut off aid to Turkey in a their “pre accession to the EU.  They still have not cut aid to Turkey for housing Syrian migrants.

(zerohedge)

Leaked EU Letter Sparks Row Over Turkey Aid Cuts Linked To Gas Drilling Off Cyprus

The European Union is eyeing long promised punitive measures against Turkey for its illegal military incursion into northern Syria, as well as its unauthorized natural gas drilling off Cyprus’ coast.

Germany’s Deutsche Welle reported on Saturday the EU has moved to cut pre-accession aid to Turkey by 75%, citing a letter sent to the European Parliament by the EU foreign affairs commissioner. The Instrument for ‘Pre-Accession Assistance’ (IPA) is offered in support of reforms in countries in the process of joining the EU, despite previously planned ‘fast-tracked’ talks for Turkey to join the European bloc stalling significantly after 2016. However, the EU quickly distanced itself the report, which appears to have originated with a leaked draft EU letter:

An EU spokesman on Sunday denied media reports from the previous day that claimed the bloc had agreed to massive new cuts to pre-accession aid to Turkey.

Germany’s Funke Media Group had said it saw a letter from the bloc’s top diplomat, Josep Borrell, announcing a 75% cut to the funds Ankara receives as a prospective EU member via the “Instrument for Pre-Accession Assistance (IPA).” — DW

It appears the letter was leaked to or seen by the media prematurely, and now EU officials are scrambling to deny it.

Europe has also of late been concerned over President Recep Tayyip Erdogan’s growing authoritarianism and control over various branches and institutions of Turkey’s government, especially since putting down the 2016 Turkish coup d’état attempt which resulted in him and his supporters emerging stronger than ever.

“Turkey will now only receive €168 million ($186 million), of which €150 million will be spent on strengthening democracy and rule of law,” the original disputed Deutsche Welle report said of potential measures, threatening an aid package which is supposed to be over twice the size.

EU foreign affairs commissioner Borrell’s apparently leaked letter indicated the potential slash in funds are directly related to Turkey’s Syria operations against the Kurds and incursions into Cyprus’ Exclusive Economic Zone. This follows the European Commission announcing sanctions in November to target “individuals or entities responsible for, or involved in, unauthorized drilling activities of hydrocarbons in the Eastern Mediterranean.”

Over the past year, Turkish authorities have been brazen in publicizing their territorial claims and actions backing them in the eastern Mediterranean, even as EU leaders have slammed the now nine months-long exploration and drilling expansion in solidarity with Cypriot condemnations. Starting last summer two exploration and drilling ships — the Yavuz and the Fatih  had been deployed a mere 42 miles off the west coast of Cyprus,accompanied also by military vessels and on occasion aircraft.

But as DW reports further, this latest proposed looming and now disputed cut in pre-accession aid will not effect the billions promised to Turkey in the wake of the 2015 to 2016 peak of the refugee crisis:

The cut in aid, however, doesn’t affect the €3.5 billion offered to Turkey as part of a larger EU deal to prevent refugees from reaching European shores.

The EU has already warned Turkey of possible repercussions over illegal gas drilling off the coast of Cyprus

 

However, the EU has signaled it could be a first step in more punitive measures to come.

Turkey has long claimed it’s drilling within its territorial rights, based on its lone claim to the so-called Turkish Republic of Northern Cyprus (since 1974), which supposedly allows Ankara to share revenues from Cypriot gas exploration.

Ultimately, Turkey has laid claim to a waters extending a whopping 200 miles from its coast, brazenly asserting ownership over a swathe of the Mediterranean that even cuts into Greece’s exclusive economic zone.

END

TURKEY/LIBYA/SYRIA

Thousands of Turkish mercenary fighters have now flooded into Libya as the Berlin talks begin. Turkey is trying to defend the Libyan airport

(zerohedge/South Front)

Thousands Of Turkish Proxy Fighters Flood Into Libya Amid Berlin Peace Talks

Submitted by South Front,

Turkey is increasing its military involvement in the Libyan conflict.

After officially sending its” military advisers “and officers to support the Tripoli-based Government of National Accord (GNA), Turkey set up air defense systems near Mitiga Airport. The airport hosts warplanes of the GNA Air Force, and Turkish-supplied Bayraktar TB2 combat drones. According to photos and videos available online, the deployed Turkish systems included the MIM-23 Hawk, the ACV-30 Korkut SPAAG, and the AN/MPQ-64 Sentinel 3D radar.

Since the start of the advance of the Libyan National Army (LNA) led by Field Marshal Khalifa Haftar on Tripoli in April 2019, Mitiga Airport repeatedly became a target of airstrikes. These strikes led to notable losses in GNA military aircraft. The Turkish move is apparently aimed at securing operations from Mitiga Airport. Despite this, the facility still remains too close to the frontline and thus any aircraft deployed there remains in a constant danger.

Meanwhile, the number of members of Turkish-backed Syrian militant groups deployed in Libya reportedly grew to 2,400. According to reports, 1,700 more Syrian fighters are now passing training in military camps in Turkey before being deployed to fight on the side of the GNA. The total number of Turkish proxies in Libya remains unconfirmed. However, photos and videos appearing online indicate that hundreds of Turkish-backed fighters arrive Libya via planes on a regular basis.

On January 18, the Benghazi-based government allied with the LNA blocked oil exports at ports under his control, slashing output by more than a half. According to Libya’s National Oil Corp., oil output will fall by about 800,000 barrels a day, costing $55 million daily. The corporation declared Force Majeure, which can allow Libya, which holds Africa’s largest-proven oil reserves, to legally suspend delivery contracts. The LNA says that the ports were closed in response to ‘demands of the Libyan nation’ that stands against the GNA-requested Turkish intervention.

The move came ahead the Berlin conference demonstrated to international players the LNA readiness to provide own course regardless the possible cost. The conference took place on January 19 involving top delegations from the GNA, the LNA, as well as global and regional players, including the USA, Turkey, the UAE, Egypt, Russia, France, Italy and Germany.

The participants of the Berlin conference declared their support the ceasefire between the GNA, the LNA, declared their commitment to a political solution of the conflict. German Chancellor Angela Merkel said that the warring sides in Libya’s conflict agreed to respect an arms embargo and not to provide the varying sides with military support. The representatives of the Libyan conflict agreed to form a five-by-five military commission that should work on resolving the existing tensions. The document on Libya will have to be approved by the UN Security Council. This makes the Libyan peace process dependent on other geopolitical issues.

On top of that, the unconditional ceasefire goes against interests of the LNA, which has an upper hand in an open military confrontation with the GNA. Haftar may regret that he agreed to participate in the Berlin negotiations format, where he faced a joint pressure from Western powers involved in the conflict.

6.Global Issues

You must always read Von Greyerz: he is now ready for a stock market crash. He advises that you should get  a private gold storage facility.

(Egon von Greyerz)

Egon von Greyerz: STOCK MARKET READY TO CRASH, IT COULD HAPPEN AT ANY TIME

We will soon see how it all unwinds…

by Egon von Greyerz of Gold Switzerland

This week I will discuss Fed bubbles and a potential imminent major market event, including an extremely important chart and also the safest private gold vault in the world. But first, last week was overshadowed by Iraq and Iran, which again has reminded us of terrorism in various forms.

Terrorism is not just an act of violence. Cyber attacks can have devastating effects like paralysing air traffic or making all your digital assets disappear.

The killing of the Iranian General Soleimani reminds us all how near the world is to a nuclear war. The shooting down of a Ukrainian passenger plane “by mistake” in Tehran also tells us how easy it is for a country to press the wrong button. If that happens to be a nuclear button, the consequences would be catastrophic.

FINANCIAL CYBER TERRORISM – A MAJOR RISK

Most of us have no influence over wars or terrorist attacks and therefore we only have limited means to protect ourselves from these events. But a terrorist event that we are all exposed to on a daily basis is financial cyber terrorism.

Most financial assets today are digital. Whether you have a bank account, stocks, bonds or any other financial asset, all you have is a digital entry. In 2018 in the UK financial companies saw a fivefold increase, compared to 2017, in data breaches or cyber attacks.

Just in April 2018, seven UK retail banks, including Santander, Royal Bank of Scotland, Barclays and Tesco Bank, had to limit or shut down their systems after sustained attacks. Losses are major and the cost to repair the systems are substantial.

And it will get worse. Executives at leading UK banks and payment companies say that they are under constant fire from attackers.

For most investors this is a risk area that virtually nobody understands or worries about. Just imagine, a major cyber attack can wipe out your assets totally or at least make them disappear for a very long time before the total position of the bank can be reconstructed.

In our company, we worry about risk on a daily basis. We worry about market risk, financial and economic risk and security risk including cyber attacks. Investors who keep the majority of their assets in the financial system are not protected properly against these risks. Any one of these risks can totally wipe out your paper fortune.

YOUR BEST RISK INSURANCE – PHYSICAL GOLD

This is why it is absolutely essential to keep an important part of your wealth in a form and place that protects you from risks that can bankrupt you. We spent quite some time analysing these risks already over 20 years ago. The consequence of our analysis was that physical gold stored outside the financial system was the best insurance against financial risk, including currency debasement.

THE BIGGEST AND SAFEST PRIVATE GOLD VAULT IN THE WORLD

But it isn’t enough just to buy gold and store it outside the banking system. The gold must be stored in the safest vaults in the world and in the safest jurisdictions. For example we offer our clients the largest and safest private gold vault in the world, based in the Swiss Alps. The vault is nuclear bomb proof as well as earthquake and gas attack proof. This short video clip gives a small taste:

AVOID ONLINE TRADING & EMAILS

For a major wealth preservation asset like physical gold and silver, we are opposed to online trading platforms. These might be fine for smaller amounts but not for core capital. Online trading is an unacceptable risk when major amounts of wealth are involved. Human intervention and knowledge of the client is critical to protect against fraud and cyber attacks.

For communication with clients internet and emails are not safe and should therefore be avoided. We use a messaging platform via secure servers in the Swiss Alps. This avoids emails being intercepted.

DATA MUST BE EMP PROTECTED

To protect against cyber security, we keep all company and client data on very secure proprietary servers in the Swiss Alps. All data is backed up in a different mountain which also has EMP (electro magnetic pulse) protection. EMP attacks can destroy all computer data and most companies are not protected against such attacks since this is very costly.

The risks and the protection discussed above are absolutely critical when you store important amounts of your wealth and data. Very few companies and investors take these risks seriously. That is a very grave error.

THE FED IS FOREVER BLOWING BUBBLES

The unwinding of the Fed’s balance sheet from the peak at around $4.5 trillion to $3.75 trillion low took place gradually over a two year period. Then, Bang in early September 2019 all hell broke loose and the fed started pumping major funds into the banking system. One Fed governor called it plumbing but few realised that the Fed was in the process of saving a financial system that is leaking like a sieve.

There are currently major problems in the financial system although no central banker dares to admit it. A financial system resting on quicksand is unlikely to ever get pulled out of the mess it is in. And to stop the system from sinking into oblivion, QE or more correctly, unlimited money printing is the only remedy that the central bankers know. But all the printing does is to fill the hole with more quicksand which will guarantee that the financial system sinks into the abyss.

THE SYSTEM NEEDS EVER RISING LIQUIDITY INJECTIONS

It must be obvious even to the bankers that adding more quicksand will only weaken the system further as you can’t solve a problem by the same means that created it in the first place. But they have no other solution. Turning off the money spigots would lead to instant collapse of the system as well as of stock and bond markets.

The banking system was ready to collapse in 2006 when global debt was $125 trillion. A massive infusion of more quicksand, in the form of worthless paper money, gave the impression that the system was saved. At the end of 2006 the four central major banks, Fed, ECB, PBOC and BOJ had total assets of $5 trillion. Today they are at $20 trillion and rising. Both the US, the Eurozone and China have started to expand their balance sheets in the last few months. Japan will certainly follow suit. The leverage effect of central bank liquidity has had the consequence of doubling global debt since 2006 to $260 trillion.

DERIVATIVES – A NUCLEAR WEAPON

The explosion of global debt has increased risk exponentially but that is not the biggest problem. The real time bomb is the derivative market. The BIS in Basel and the banks are most probably misreporting the total derivative position which we estimate to be $1.5 quadrillion and maybe over $2 quadrillion. When the real pressure in the system starts, there will be no liquidity in the derivative market and therefore most of these nuclear instruments of self-destruction will be worth nothing. At that point QE could reach the quadrillions as hyperinflation ravages and paper money goes to ZERO.

The banks with the biggest derivative positions are Deutsche, JP Morgan, Citigroup and Goldman Sachs. Together their official position is just below $200 trillion. The real position is probably much higher. We will know when the crisis starts.

FED QE – MANNA FROM HEAVEN FOR STOCK INVESTORS

The $425 billion expansion of the Fed’s balance sheet since QE started in Sep 2019 has been like manna from heaven for stock investors. The Dow has gained over 3,000 points since then. This is the perfect scenario for Trump and his reelection. But he has many other problems to deal with.

As long as global liquidity increases and markets believe that the additional money is actually worth something, stocks can continue their surge.

STOCKS IN FINAL STAGE OF UBER-EUPHORIA

But all that is needed in overvalued markets is a break of confidence. And with the 3 dozen global risks that I outlined in last week’s article. The market is now in the final stage of uber-euphoria with prices going up whilst profits are stagnating as the graph below shows.

40% OF US COMPANIES ARE LOSING MONEY

If we look at the detailed picture it is a lot worse than the picture above shows. Almost 40% of US companies lost money in the last 12 months as the Wall Street Journal just reported. That is a remarkably high percentage and the highest since the late 1990s.

THE DOW IS READY TO CRASH

And if we look at the technical picture, recent highs in stocks are not confirmed by technical indicators. The quarterly chart of the Dow below shows bearish divergence between price and the Relative Strength Index. That is a very bearish signal that eventually will end in a market crash.

There are a number of different technical indicators including our proprietary cycle model that points to a top being imminent. It could all happen at any time. How it all unwinds we will soon see. It could start with a slow decline which accelerates down gradually or technically we could have a crash in the next couple of weeks.

As usual we will only know afterwards. What we do know though is that fundamental and technical risks are at an extreme. So anyone who is heavily exposed to the general stock market should consider protecting or reducing his position substantially. Because when the bear market starts it will shock everyone by its relentless decline. Most investors will either stay invested like Alfred or buy the dips and be totally slaughtered.

DOW/GOLD RATIO INDICATES TROUBLE AHEAD FOR THE WORLD

Finally let’s look at the most important chart that tells us the future of the world, stocks and gold. It is the Dow/Gold ratio. This ratio was at 1 in 1980 which means both the Dow and gold were at the same price which was 850. In 1999 the index reached 44. (See chart below) We then saw a decline to 5 in 2011. The ratio has now finished a 9 year correction from the 2011 low. As the chart shows the MACD (Moving Average Convergence/Divergence) turned at the end of 2019. This is an extremely important indicator and tells us that stocks are starting a collapse against gold. The initial target is 1, a 95% fall from today, but I am quite certain that the final level will be well below that.

Investors who take heed of the chart above are likely to preserve their wealth as long as they hold physical gold outside the financial system. And for the ones that don’t, the years ahead will destroy your paper wealth in money, stocks, bonds and other securities.

Egon von Greyerz
Founder and Managing Partner
Matterhorn Asset Management
Zurich, Switzerland
Phone: +41 44 213 62 45

END

THE GLOBAL ECONOMY

The Baltic Dry Index continues to collapse signalling that global growth has come to a halt. The iMF has just slashed global GDP growth

(zerohedge)

Baltic Dry Continues Epic Plunge As IMF Slashes Global GDP Forecast

The Baltic Exchange’s main sea freight index hit a nine-month low on Monday, dragged down by falling rates of capesize and panamax segments as world trade continues to slump.

The Baltic Dry Index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities across the world, dropped 25 points, or 3.3%, to 729 (according to Refinitiv data), the lowest level since April 2019:

  • The capesize index .BACI dropped 119 points, or 16.7%, to 593 – its lowest since April 23.The index registered its 27th straight session of losses, and also its largest daily percentage loss since early April.
  • Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes including iron ore and coal, fell $592 to $7,760.
  • The panamax index .BPNI lost 4 points, or 0.5%, to 866.
  • Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, declined $39 to $7,791.
  • The supramax index .BSIS remained unchanged at 560 points.

Joakim Hannisdahl@JHannisdahl

Baltic Dry Index Falls 3.32% to 729 in London
•Capesize -7.09% to $7,760
•Panamax -0.6% to $6,455
•Supramax 58k tons 0.0% to $6,156
•Handysize -0.47% to $4,836

View image on Twitter

We’ve noted how the “front-loading” effect ahead of tariff deadlines ended in late 3Q19 when the first signs of a trade resolution emerged between the U.S. and China.

In the last four months, the Baltic index has crashed 70%, the most since 2008, and has confirmed our slowbalisation thoughts.

The chart below makes clear that the spike in shipping rates was a one-off event spurred by importers front-running tariffs in 2019, now that is over, shipping rates are plunging as a manufacturing recession in the U.S. deepens and across the world.

And it was no surprise to us Monday that the IMF slashed the global economic outlook for 2019 to 2.9% in October, the lowest since the financial crisis, and warned that global trade growth is “close to a standstill.”

The Baltic Dry Index is seen as a leading indicator that provides a clear view of the global demand for commodities and raw materials.

 

The IMF also downgraded its forecast for global GDP for 2020 and 2021, its sixth straight reduction, although in a sliver of optimism, global GDP in 2020 is now expected to post a modest rebound from 2.9% to 3.3%, (down from 3.4% in October) and to 3.4% in 2021 (down from 3.6%) as the IMF says “there are now tentative signs that global growth may be stabilizing, though at subdued levels.”

However, the IMF warned that there are “few signs of turning points are yet visible in global macroeconomic data.”

end

Switzerland

Negative interest rates are killing European banks.  UBS tumbles big time as they miss key targets..investors are pulling their money out of the largest Swiss Bank

(zerohedge)

UBS Tumbles After Biggest Swiss Bank Misses Key Targets As Investors Pull Money

The rift between the US (where rates are still positive) and European banks (where rates have never been more negative) continues to grow.

While US banks have so far reported mostly better than expected results for Q4, the same can not be said for Europe, where UBS shares are down 5% as the bank misses fiscal year profitability and cost targets in addition to trimming its mid-term goals. As Saxobank notes, “UBS has been hit by wealth management outflows, negative rates and poor performance in its investment banking division” and notes that “this obviously sends a warning to investors if they thought overweight European banks was a good idea.” To be sure, negative rates will continue to haunt European banks until the ECB changes its mind on negative rates.

It’s not just NIRP though: the great conundrum of 2019 struck again, because even as stocks hit all time highs, the largest Swiss bank missed key targets for 2019 as investors pulled money late in the year when stocks were soaring, underscoring the challenge for new wealth management co-head Iqbal Khan as he seeks to turn around its most important business.

As Bloomberg reports, the Swiss bank failed to meet several metrics set during a revamp of its goals just over a year ago, highlighting mounting headwinds for European lenders while U.S. rivals post record profits. The downgrades were across the board – on profit, cost efficiency and dividend growth – while the private bank unexpectedly saw $4.7 billion of outflows last quarter.

The lower targets, and higher outflows overshadowed a strong finish to the year in which the bank posted better than expected net income and investment banking results while boosting its core financial strength. UBS also gave a moderately positive outlook for the first quarter, saying client activity is picking up and the favorable credit environment and partial resolution of trade disputes should help mitigate slowing global economic growth.

Here are the key numbers and new targets from UBS’s results:

  • Wealth management outflows of $4.7 billion driven by Americas
  • Return on CET1 capital of 12.4% in 2019 below 15% target.
  • Now targeting CET1 capital metric at 12%-15% to 2020-2022
  • Adjusted cost-to-income ratio of 78.9% missed target of 77%
  • Now targeting cost-to-income metric at 75%-78%
  • 1 cent a share dividend rise going forward; had sought mid-to-high single digit percent
  • $722 million net income beats company compiled estimate of $682 million

The downgrades marked a reversal for CEO Sergio Ermotti after he restructure goals in Oct. 2018 under pressure from investors. To help restore the bank’s edge and strengthen the bench of potential CEO successors, Ermotti in in October brought in Khan from Credit Suisse. The new executive is cutting jobs, speeding up decision making and giving more autonomy to the regions in an effort to revive the wealth business.

UBS joins other European bank giants such as Credit Suisse and Deutsche Bank in dialing back its ambitions in an era of negative rates, investor caution and escalating trade tensions. Last month the largest German bank warned that its mid-term profitability goal now appears to be “more ambitious,” and it will rely more on volatile investment banking to reach its revenue target; it also slashed banker bonuses by up to 30%, while Italy’s UniCredit SpA is cutting 8,000 jobs as part of its new multi-year plan to boost returns in the face of limited growth prospects.

UBS shares declined as much as 5.9%, the biggest one-day drop since May.

end
LOCUSTS  EARTHQUAKES AND STRANGE WEATHER PATTERNS
Swarms of locusts plague India and Africa destroying crops. Earthquakes occur in diverse places and strange weather like extreme cold temperatures in Alberta which experienced temperatures colder than on Mars.  We also witnessed huge amt of snow in Newfoundland.
strange events
(courtesy Michael Snyder)

A Plague Of Locusts, Earthquakes In Diverse Places, And Weather That’s Gone Completely Nuts

Authored by Michael Snyder via TheMostImportantNews.com,

It is almost as if someone flipped some sort of a switch as 2020 began, because we have been seeing really weird things happen all over the globe so far this year.

Later in this article I want to talk about the large earthquakes and strange weather events that we have seen over the past few days, but first I want to discuss the massive armies of locusts that are voraciously eating crops in Asia and in Africa. Right now, a “deadly invasion by millions and millions of locusts” in India is absolutely devastating farm after farm, and the media in India is calling this locust invasion “the worst in over six decades”

 

Parts of Gujarat and Rajasthan are in the midst of a deadly invasion by millions and millions of locusts, leaving the farmers there in distress. The invasion which began in October is said to be the worst in over six decades.

According to reports, crops of some 3.6 lakh hectares in 10 districts as western Rajasthan have been damaged by the locusts so far. The Locust Warning Organization (LWO) said that the current wave of attack was by Pink locusts which are flying in from Pakistan.

As bad as things are in India, the truth is that they are even worse in Africa.

According to the UN, the desert locusts that have been ravaging fields in Ethiopia and Somalia are now pouring into Kenya…

The UN has warned of a “significant and extremely dangerous” escalation in the number of desert locusts descending on Kenya, as the government strives to contain the threat before it reaches the country’s food-producing regions.

The tropical grasshoppers have been wreaking havoc on Kenya’s neighbours to the north and east, devouring tens of thousands of hectares of crops in Ethiopia and Somalia since last June.

Here in the United States, we tend to think of a “swarm” as a few hundred insects.

But over in Africa, these “swarms” can literally take over an entire section of a country. For example, the FAO says that one of the locust swarms in Kenya “measured 2,400 sq km”

Each square kilometre of locusts in a swarm can eat as much in a day as 35,000 people, according to the FAO. One locust swarm seen in Kenya measured 2,400 sq km.

“There is an unprecedented threat to food security and livelihoods” across the Horn of Africa, the FAO said.

I can’t even imagine what a 2,400 square kilometer locust army would look like, but I think that it is fair to say that it qualifies as a “plague of locusts”.

Meanwhile, earthquakes continue to pop up in unusual places.

For example, ABC News is reporting that a magnitude 4.5 quake hit Kansas on Sunday…

The U.S. Geological Survey said a magnitude 4.5 earthquake struck about 2 miles (3 kilometers) southwest of Hutchinson shortly after 1 p.m. The service had initially reported that it was a magnitude 4.4 earthquake, but later upgraded it.

And this earthquake comes just a few months after there was a very suspicious swarm of 17 earthquakes in that same area of central Kansas

The earthquake struck as the Kansas Corporation Commission investigates the cause of a swarm of 17 earthquakes in five days in August the same area of central Kansas. The regulatory agency’s investigation is focused on the underground disposal of oilfield waste that’s been blamed for quakes elsewhere in southern Kansas.

On the other side of the globe, a very strong magnitude 6.0 earthquake hit Indonesia this weekend

A strong inland earthquake has struck Indonesia’s easternmost Papua province, but there were no immediate reports of major damage or casualties.

The U.S. Geological Survey says the magnitude 6.0 quake was centered 141 kilometers west of Abepura, a city at a depth of 33.6 kilometers.

But these days large earthquakes are happening so frequently that they barely make a blip in the news. A similarly large earthquake just hit China, but hardly anyone in the U.S. even knows that it happened…

According to reports, A powerful magnitude 6.4 earthquake has struck in Jiashi County of northwest China’s autonomous Xinjiang. The earthquake was reported to have a depth of 165m and took place at 9:21 pm local time.

Witnesses say the shaking was felt in the cities of Kashgar and Artux. At this time there are no reports of fatalities or damage. This is the third earthquake that has struck in Southern Xinjiang, China in the past 47 hours.

That quake in China was later downgraded to a magnitude 6.0 event, but that is still very significant.

In some parts of the planet, the shaking simply does not stop. Over in the Philippines, there have been more than 400 earthquakes associated with the eruption of Taal volcano since last Sunday

Since Sunday, a staggering 466 earthquakes have been recorded, and experts warn more eruptions may still come.

Of those quakes, 156 were recorded as being intensity one to four.

Phivolcs Volcano Monitoring and Eruption Prediction Division chief Mariton Bornas said: “For volcanic earthquakes, that is strong.”

And as I have written about previously, more than 1,000 earthquakes have shaken Puerto Rico in recent weeks. Many residents continue to sleep outside because they are deathly afraid that their homes will collapse on top of them while they are sleeping if another big quake suddenly strikes.

On top of everything else, global weather patterns continue to go haywire.

In Alberta, the weather has actually been colder than it has been on Mars

The highest temperature recorded on the red planet Wednesday morning was -17 C, according to NASA, which was still a few degrees above Alberta, where the warmest temperature recorded was –21.2 C, at Nakiska Ridge in Kananaskis Country.

In Calgary, it reached a low of –31.2 C early Wednesday, according to Environment Canada, while in Edmonton the mercury dipped to –34 C.

And along with Mars, Alberta was colder than a number of other well-known spots, like Siberia, which sat at –11 C Wednesday morning, and Nuuk, Greenland, where it was –12 C.

And in Newfoundland, a devastating blizzard packing wind speeds of up to 98 mph dumped an all-time record 30 inches of snow on St. John’s…

Premier Dwight Ball said he had asked for the federal government’s assistance, including mobilizing the armed forces, after the blizzard battered eastern Newfoundland.

Rob Carroll, a meteorologist with Environment Canada, said St. John’s had experienced a one-day snowfall of 76.2 centimeters (30 inches), breaking the previous record of 68.4 centimeters (27 inches) on April 5, 1999.

On an almost daily basis, we are seeing natural disasters happen that are unlike anything we have ever seen before, and what we have witnessed so far is just the beginning.

Despite all of our advanced technology, we remain exceedingly dependent on the natural environment that surrounds us, and that natural environment is becoming increasingly unstable.

We are truly entering uncharted territory, and most people cannot even imagine the great challenges that lie ahead for all of us.

end

 

7. OIL ISSUES

 

8 EMERGING MARKET ISSUES

 

 

 

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

Euro/USA 1.1164 DOWN .0017 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /MIXED

 

 

USA/JAPAN YEN 110.05 DOWN 0.121 (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…

GBP/USA 1.3060  UP   0.0056  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO JAN 31/2020//

USA/CAN 1.3061 DOWN .0010 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  TUESDAY morning in Europe, the Euro FELL BY 17 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1164 Last night Shanghai COMPOSITE CLOSED DOWN 43.64 POINTS OR 1.41% 

 

//Hang Sang CLOSED DOWN 810.58 POINTS OR 2.81%

/AUSTRALIA CLOSED DOWN 0,22%// EUROPEAN BOURSES ALL RED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL RED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 810.58 POINTS OR 2.81%

 

 

/SHANGHAI CLOSED DOWN 43.64 POINTS OR 1.41%

 

Australia BOURSE CLOSED DOWN. 22% 

 

 

Nikkei (Japan) CLOSED DOWN 218.95 POINTS OR 0.91%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1557.15

silver:$18.00-

Early TUESDAY morning USA 10 year bond yield: 1.80% !!! DOWN 2 IN POINTS from FRIDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 2.26 DOWN 2  IN BASIS POINTS from FRIDAY night.

USA dollar index early TUESDAY morning: 97.53 DOWN 8 CENT(S) from  FRIDAY’s close.

This ends early morning numbers TUESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx6

And now your closing TUESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond .yield: 0.47% DOWN 2 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: +.01%  DOWN 0   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.42%//UP 2 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:1,37 UP 2 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 95 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: FALLS TO –.25% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 1.62% 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 TUESDAY

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

Euro/USA 1.1095  UP     .0009 or 9 basis points

USA/Japan: 109.93 DOWN .235 OR YEN UP 24 basis points/

Great Britain/USA 1.3043 UP .0039 POUND UP 39  BASIS POINTS)

Canadian dollar DOWN 23 basis points to 1.3069

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY: AT 6.8995    ON SHORE  (DOWN)..

 

THE USA/YUAN OFFSHORE:  6.9066  (YUAN DOWN)..

 

TURKISH LIRA:  5.9366 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

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

 

Your closing 10 yr US bond yield DOWN 5 IN basis points from FRIDAY at 1.78 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.24 DOWN 4 in basis points on the day

Your closing USA dollar index, 97.57 DOWN 4  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 TUESDAY: 12:00 PM

London: CLOSED DOWN 40.74  0.53%

German Dax :  CLOSED UP 6.93 POINTS OR .05%

 

Paris Cac CLOSED DOWN 32.55 POINTS 0.54%

Spain IBEX CLOSED DOWN 47.50 POINTS or 0.49%

Italian MIB: CLOSED DOWN 157.17 POINTS OR 0.65%

 

 

 

 

 

WTI Oil price; 53.29 12:00  PM  EST

Brent Oil: 64.70 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    61.80  THE CROSS LOWER BY 0.20 RUBLES/DOLLAR (RUBLE HIGHER BY 20 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.25 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 :  58.34//

 

 

BRENT :  64.51

USA 10 YR BOND YIELD: … ..1.77 DOWN 5 BASIS POINTS….

 

 

 

USA 30 YR BOND YIELD: 2.23..DOWN 4 BASIS POINTS…

 

 

 

 

 

EURO/USA 1.1088 ( UP 8   BASIS POINTS)

USA/JAPANESE YEN:109.82 DOWN .357 (YEN UP 36 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 97.56 DOWN 4 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.3044 UP 40  POINTS

 

the Turkish lira close: 5.9347

 

 

the Russian rouble 61.88   DOWN 0.28 Roubles against the uSA dollar.( DOWN 28 BASIS POINTS)

Canadian dollar:  1.3077 DOWN 32 BASIS pts

USA/CHINESE YUAN (CNY) :  6.8995  (ONSHORE)/

 

 

USA/CHINESE YUAN(CNH): 6.9093 (OFFSHORE)

 

German 10 yr bond yield at 5 pm: ,-0.25%

 

The Dow closed DOWN 149.82 POINTS OR 0.51%

 

NASDAQ closed DOWN 18.14 POINTS OR 0.19%

 


VOLATILITY INDEX:  12.86 CLOSED UP .76

LIBOR 3 MONTH DURATION: 1.802%//libor dropping like a stone

 

USA trading today in Graph Form

Global Stocks Sink On Wuhan Worries, Bonds Bid Back To 2020 Highs

“My name is Coronavirus… and I remember everything”

AsiaPac stocks were not pretty overnight as Coronavirus contagion fears spread (Hong Kong was worst)…

Source: Bloomberg

European markets were punished out of the gate also on the same fears, but DAX managed to get back to close extremely minimally higher…

Source: Bloomberg

US markets were red, despite the machines best efforts to BTFD. Between Boeing’s delay effects and Coronavirus headlines, Transports were hit hardest…

 

Boeing knocked 100-plus points off the Dow…

 

While the broader market – and travel, lodging, and gaming stocks – were all hit hard on the coronavirus headlines…

Source: Bloomberg

…flu-shot makers soared with NNVC up over 300% at one point…

Source: Bloomberg

Defensives dominated trading today as Cyclicals sank…

Source: Bloomberg

Momo continues to soar in 2020…

Source: Bloomberg

Bonds and stocks remain dramatically decoupled on the year…

Source: Bloomberg

Treasury yields were down hard today with the long-end outperforming…

Source: Bloomberg

30Y Yields tumbled back near Soleimani is dead headline spike lows…

Source: Bloomberg

Long Bond Futs prices are back at their highest since early December…

The yield curve flattened back towards 2020 lows…

Source: Bloomberg

The Dollar legged higher during the US session, holding its gains on the week…

Source: Bloomberg

Yuan tumbled overnight…

Source: Bloomberg

Cryptos were flat-ish for the second day in a row…

Source: Bloomberg

Commodities were all broadly lower today with copper leading the way lower (China growth proxy), but Silver was hit for no good reason…

 

Source: Bloomberg

Palladium plunged around 6% today, its biggest daily drop since March 2019…

Source: Bloomberg

Gold bounced back higher after testing below $1550..

Finally, we note that there are some notable anomalies in the VIX term structure that could become problematic in the last few days. As contracts expire tomorrow, so the very steep term structure (fueling lots of short-vol-tilted carry trades) will flatten…

Source: Bloomberg

And thanks to the Super Tuesday risks, could lead to problems for those expecting the curve to roll-down faster…

Source: Bloomberg

A “potential unclenching” in the U.S. benchmark equity index may await if these options aren’t rolled, Nomura Securities strategist Charlie McElligott said.

But of course, there’s still a little further to run before this shitshow all falls apart…

Source: Bloomberg

END

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

MARKET TRADING//USA

a)Market trading/LAST NIGHT/USA

Stocks, Bond Yields Tumble As Fears Over Coronavirus Outbreak Spread

Dow futures are down over 100 points, AsiaPac equity markets are down harder, and Treasuries are well bid along with gold after a Chinese officials confirmed the coronavirus can be spread by human-to-human contact, and the deadly disease is spreading to other asian nations.

“Now we can say it is certain that it is a human-to-human transmission phenomenon,” Zhong Nanshan, a scientist who is leading a government-appointed expert panel on the outbreak, said in an interview on state-run television on Monday.

As The New York Times reports, cases have been reported outside China.

The authorities in Thailand detected the new coronavirus last week in two Chinese women who had flown from Wuhan to Bangkok on separate trips. The government said the women, aged 74 and 61, were in good condition.

In Japan, a Chinese man who returned from Wuhan on Jan. 6 was also confirmed to have the disease. He was discharged after five days in a hospital.

South Korea confirmed its first case of the coronavirus on Monday in a 35-year-old Chinese woman from Wuhan who arrived on Sunday at Incheon International Airport, which serves Seoul.

The woman was found with a fever, muscle pain and other symptoms while going through customs and was immediately quarantined for tests, said Jung Eun-kyeong, director of the Korea Centers for Disease Control and Prevention.

The woman was traveling with five other people intending to spend the Lunar New Year holidays in South Korea and Japan, Ms. Jung said. South Korean officials were running tests on anyone believed to have come in contact with the woman in the plane, she said.

Hipster@Hipster_Trader

Surreal video out of China

Embedded video

And fear of a SARS 2.0 outbreak have sparked risk-off trades in early Asia trading.

“There are now sufficient cases that it’s not going to die out by chance,” said Neil Ferguson, a public health expert at Imperial College London who has studied the new virus.

“The real question now is, how efficiently can this virus spread from person to person?”

Hong Kong’s Hang Seng is down notably…

As are US futures…

Bonds are bid…

Along with gold…

China’s leader, Xi Jinping, said on Monday that the outbreak “must be taken seriously” and that every possible measure should be taken to contain it, according to the state broadcaster CCTV.

end

b)MARKET TRADING/USA/AFTERNOON

ii)Market data/USA

iii) Important USA Economic Stories

Kudlow now states that the Fed’s T Bill purchases are “basically’ QE

(zerohedge)

Kudlow: Fed’s T-Bill Purchases Are “Basically” QE

Back in October, when the Fed restarted permanent open market operations in the form of $60BN in T-Bills purchases each month, Powell scrambled to convince the market that his panicked effort to inject reserves into banks (such as JPMorgan which single-handedly triggered the repo crisis) so that trillions in levered hedge fund pair trades did not collapse on themselves once their repo funding was pulled, he said “growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis” and just to make sure there was no confusion, added “This is not QE. In no sense is this QE.”

Ever since then, anyone who was ideologically aligned with the Fed (i.e., a wealth-redistributionist, either for the people or the big banks, and in some confused cases, both), would blindly parrot Powell’s mantra, even though as we and others admitted “The Fed’s “NOT QE” Is Indeed QE… And Could Lead To Financial Collapse.”

This semantic insanity, of refusing to expose the money-printing emperor as naked, peaked last week when arguably the most intellectually-challenged Fed member, Neel Kashkari (who lacks a formal economic education and yet whose earnest desire to replace Powell has not been lost on anyone), under pressure from a barrage of media, strategists, traders, even his own Fed peers and anyone who is still capable of independent thought finally admitting that “NOT QE” is in fact “QE”,  exploded and tweeted:

QE conspiracists can say this is all about balance sheet growth. Someone explain how swapping one short term risk free instrument (reserves) for another short term risk free instrument (t-bills) leads to equity repricing. I don’t see it.

 

Neel Kashkari

@neelkashkari

QE conspiracists can say this is all about balance sheet growth. Someone explain how swapping one short term risk free instrument (reserves) for another short term risk free instrument (t-bills) leads to equity repricing. I don’t see it. /end

 

Well, we saw it, and we explained to Neel exactly how the Fed’s QE4, i.e., swapping of cash for T-Bills, leads to equity repricing. Alas, we doubt that for Neel even a clear, reasoned explanation carries any weight, and as such we are confident he would merely add us to the ranks of “QE conspiracists”, we wonder how he would respond to a striking admission from none other than Trump’s top economist, Larry Kudlow, who earlier today spoke at Davos and confirmed that the emperor was, indeed, naked, to wit:

KUDLOW: FED’S T-BILL PURCHASES ARE “BASICALLY” QE

Once again, consider that just three months ago Powell vowed that “this is not QE. In no sense is this QE.” 

 

Turns out it was QE after all.

While we are confident that this will simply make Kudlow a honorary member of the “QE conspiracist” club, at this point we simply refuse to give a shit about anything Kashkari – who we are now convinced is simply a “legacy” Fed hire in exchange for Neel’s “contribution” to bailing out his former employer (as a reminder, it was Kashkari who pulled the $700BN TARP number bailout out of thin air) – has said or will say, and instead will lay out the following three observations, now that even Kudlow has admitted “NOT QE” is in fact “QE 4”:

  1. The market highs are all an artificial byproduct of massive liquidity injections:
  2. The US economy was on the edge of a recession, and only QE prevented it from careening over the edge
  3. The Fed now appears to be directly managed by the White House, and whatever Trump wants (such as “some quantitative easing“), Trump gets.

Everything else, alongside fundamental market analysis, is now simply noise.

end

iv) Swamp commentaries)

Dershowitz: the GAO is wrong on its interpretation of whether Trump had the right to withhold Ukraine funds. He explains why..

 

(Alan Dershowitz)

GAO Is Wrong – Dershowitz Confirms Trump Had Right To Withhold Ukraine Funds

Authored by Alan Dershowtiz via The Gatestone Institute,

U.S. Government Accountability Office (GAO) has gotten the constitutional law exactly backwards. It said that the “faithful execution of the law” – the Impoundment Control Act- “does not permit the president to substitute his own policy priorities for those congress has enacted into law .”

Yes, it does – when it comes to foreign policy.

The Constitution allocates to the president sole authority over foreign policy (short of declaring war or signing a treaty). It does not permit Congress to substitute its foreign policy preferences for those of the president.

To the extent that the statute at issue constrains the power of the president to conduct foreign policy, it is unconstitutional.

Consider the following hypothetical situation: Congress allocates funds to Cuba (or Iran or Venezuela). The president says that is inconsistent with his foreign policy and refuses to release the funds. Surely the president would be within his constitutional authority. Or consider the actual situation that former President Barack Obama created when he unilaterally made the Iran deal and sent that enemy of America billions of dollars without congressional approval. I do not recall the GAO complaining about that presidential decision, despite the reality that the Iran deal was, in effect, a treaty that should require senate approval that was never given.

Whatever one may think about the substantive merits of what President Donald Trump did or did not do with regard to the Ukrainian money— which was eventually sent without strings —he certainly had the authority to delay sending the funds. The GAO was simply wrong in alleging that he violated the law, which includes the Constitution, by doing so.

To be sure, the statute requires notification to Congress, but if such notification significantly delays the president from implementing his foreign policy at a time of his choice, that too would raise serious constitutional issues.

Why then would a nonpartisan agency get it so wrong as a matter of constitutional law.

There are two obvious answers:

  1. In the age of Trump there is no such thing as nonpartisan. The political world is largely divided into people who hate and people who love President Trump. This is as true of long term civil servants as it is of partisan politicians. We have seen this with regard to the FBI, the CIA, the Fed and other government agencies that are supposed to be nonpartisan. There are of course exceptions such as the inspector general of the Department of Justice who seems genuinely non-partisan. But most civil servants share the nationwide trend of picking sides. The GAO does not seem immune to this divisiveness.
  2. Even if the GAO were non-partisan in the sense of preferring one political party over the other, it is partial to Congress over the president. The GAO is a congressional body. It is part of the legislative, not executive, branch. As such, it favors congressional prerogatives over executive power. It is not surprising therefore that it would elevate the authority of Congress to enact legislation over that of the president to conduct foreign policy.

In any event, even if the GAO were correct in its legal conclusion — which it is not— the alleged violation would be neither a crime nor an impeachable offense. It would be a civil violation subject to a civil remedy, as were the numerous violations alleged by the GAO with regard to other presidents. Those alleged violations were barely noted by the media. But in the hyper-partisan impeachment atmosphere, this report received breathless “breaking news” coverage and a demand for inclusion among the articles of impeachment.

If Congress and its GAO truly believe that President Trump violated the law, let them go to court and seek the civil remedy provided by the law. But let us not continue to water down the constitutional criteria for impeachment by including highly questionable, and on my view wrongheaded, views about violations of an unconstitutional civil law.

end

An important read..

McConnell may have a “kill switch” which will shut down the impeachment trial if Democrats get wild

(zerohedge)

McConnell “Kill Switch” Rule Will Shut Down Impeachment If Dems Get Wild

Unfortunately for Senate Majority Leader Mitch McConnell, too many moderate Republicans have sided with Democrats in insisting that the impeachment trial proceed. If the shoe was on the other foot, and McConnell was able to win over more conservative and moderate Democrats, President Trump’s legal team would be able to easily win a vote to dismiss at the outset of the trial, effectively ending it before it could really begin.

But partisan rancor aimed at the president and his allies in Congress remains at an all-time high. Even as Democrats bash the president for allegedly putting politics above doing what’s right for the country, they are proceeding with the impeachment charade, despite being doomed from the start.

After a frenetic holiday weekend of dealmaking, McConnell is apparently nearly finished drafting the rules of engagement for the impeachment trial.

According to a leak that was picked up by Axios and Brietbart, among others, McConnell is still planning to include a “kill switch” in the impeachment trial rules that would allow the president’s legal team to call for a dismissal if Democrats try to violate the rules or engage in any “shenanigans.”

The provision will allow Trump’s team to quickly push for a summary judgment or dismissal at any time. It comes after some Senators tried – and failed – to change the Senate rules to dismiss the charges because of Pelosi’s decision to delay transferring the articles of impeachment.

According to Breitbart, if McConnell succeeds in including the kill switch, he will have outmaneuvered Democrats and proved once again that he’s a better leader than Pelosi. Even though a few moderates tentatively sided with the Democrats and insisted there should be a trial, Republicans still have the upper hand – because the minute the Dems start to push the envelope, the moderate Republicans will return to vote with McConnell to dismiss.

The Republican leadership and President Trump himself have assented – and at times even welcomed – a trial. At this point, the American people have already seen the transcript of Trump’s July call with his Ukrainian counterpart, they’ve been told that the aid was eventually released, and even heard it from Zelensky himself that there was no quid pro quo involving opening an investigation into the Bidens.

And now, if the Dems try to do something extreme like include even more alleged “bombshells” from Lev Parnas or anyone else outside the framework for the trial, McConnell will be able to shut them down.

“If Schiff or the Democrats try anything untoward like they did in the House, the president and the Senate have the option to shut the whole thing down and blow it all up on them. That means Republicans hold the upper hand, and should things get crazy—while there are not currently enough votes to dismiss the trial or outright off the bat acquit Trump—after Democrat partisan gamesmanship there likely would be enough votes to dismiss the whole thing.”

Meanwhile, as the two sides battle over whether witnesses will be called, at least one of the lawyers who will be pleading Trump’s case to the Senate – Harvard’s Alan Dershowitz – told the Hill that he plans to argue that the articles of impeachment are invalid because they don’t include truly impeachable offenses, which would justify a Senate vote to end the matter.

The Hill

@thehill

Alan Dershowitz: “If my argument succeeds, there’s no need for witnesses.”

Embedded video

But will Democrats see it that way? We’re not so sure.

So far, at least, the Dems and their supporters in the press have tried to imbue the proceedings with a dramatic flair. The media lapped it up when Cheryl Johnson, a black woman and the clerk of the House, delivered the articles of impeachment against President Trump on Martin Luther King Jr.’s real birthday.

Tiffany Cross

@TiffanyDCross

A Black woman is delivering the articles of impeachment. For the white supremacist president. That’s all.

Most of these reports neglected to point out that the entire impeachment process will mostly be managed by Adam Schiff and Jerry Nadler, two old white men.

At least if McConnell has his way, the Dems will mostly be limited to transparent and ham-fisted melodrama. There’s plenty of evidence that the public’s perception of the president has been very little affected by the whole circus. If anything, the Dems excoriations of the president and his team have soured the public against them.

Even though Democratic strategists bet the farm that impeachment would help them defeat Trump in 2020.

end
This is an important read as it outlines the dilemma facing Roberts as he becomes the judge in the impeachment trial. If he casts the deciding vote in case of a tie, he will no doubt have to recuse himself from a potential Supreme Court hearing on say Bolton whether there is Presidential executive privilege or not.
(zerohedge)

Chief Justice Roberts Roped Into Battle Over Impeachment Witnesses

As the Senate prepares to begin the President Trump’s impeachment trial on Tuesday, Chief Justice John Roberts faces pressure from both sides over the issue of witnesses.

Roberts, who was officially sworn in for his role on Thursday, has offered no clues as to how he will approach the situation – which is particularly relevant in the event of a tie-breaking vote. Of note, some Republicans have argued that Roberts should not be able to break a tie on this issue.

Sen. Lisa Murkowski (R-Alaska) told The Hill she has received briefing materials from former senators who participated in the 1999 Clinton trial arguing Roberts should not be able to break a tie.

So far, she is still thinking about what his role should be.

It’s my understanding that if it’s a tie, it fails,” she said, summarizing the briefing paper.

Sen. Richard Shelby (R-Ala.) said it would be odd for the chief justice to decide procedural questions that have become very politicized in recent weeks.

“This is a Senate procedure,” he said. “In a committee, if you have a tie vote you don’t prevail. And that’s what would happen here, I would think.” –The Hill

Sen. Dianne Feinstein (D-CA) argued that Roberts should be able to break a 50-50 tie on a major procedural question, such as key witnesses.

“It seems to me it should,” she said. “Tie vote is essentially a no on whatever the issue is. I’m not sure in this kind of situation that the body wants to sustain immobility, that you can’t move out of it. So something ought to break a tie.”

Democrats have argued that a trial wouldn’t be fair without witnesses – just not Hunter or Joe Biden, or Rudy Giuliani, or former Ukrainian prosecutors, or anyone else at the heart of Ukrainegate.

Republicans have suggested that if Roberts rules on witnesses, he will be required to recuse himself from any Supreme Court decisions related to Trump invoking executive privilege over potential witnesses John Bolton and acting White House chief of staff Mick Mulvaney – who oversaw a pause in US aid to Ukraine as the head of the Office of Management and Budget (OMB).

“I don’t know how you have a serious trial unless you hear from witnesses who know in fact what the facts are, what happened,” said Sen. Bernie Sanders (I-VT), adding “I think it would be appropriate for the chief justice to do what I think should be done, and that is to allow witnesses to testify.”

While Roberts is expected to refer major disputes over trial procedures to the entire Senate for a vote, some Democrats hope he will make his own rulings on what they say are basic questions of fair jurisprudence.

Democrats argue that holding a trial but blocking the consideration of relevant witness testimony and document review would fall well short of what’s considered a fair trial in any court of law.

“We’ve been working to get an agreement with Republicans about the relevant witnesses for the trial and relevant documents and we’re continuing that effort,” said Sen. Chris Van Hollen (D-Md.). “Those types of questions will have to be considered as the trial proceeds.” –The Hill

Senate Minority Leader Chuck Schumer (D-NY) has demanded four witnesses; Bolton, Mulvaney, senior WH adviser Robert Blair, and senior OMB official Michael Duffey.

Every Senate impeachment trial in our history, all 15 that were brought to completion, featured witnesses. Every single one,” said Schumer on Thursday. “The precedent in impeachment trials in the Senate is to have witnesses. To have no witnesses would be a dramatic break with precedent.”

Schumer is also seeking to subpoena three sets of documents. He wants memos and emails related to efforts to pressure Ukraine to announce certain political investigations; documents related to the decision at the White House to withhold a meeting with the newly elected Ukrainian president; and communication touching the decision to withhold $391 million in military assistance to Ukraine. –The Hill

Republicans expect Trump to invoke executive privilege to block the four witnesses – which is where it may get sticky for Roberts.

“The chief justice is supposed to preside, not make decisions for the Senate,” said a senior Senate GOP aide, via The Hill.

It would be a conundrum for the chief justice,” the aide added. “Let’s say [Roberts] says, ‘I’m going to break the tie,’ and John Bolton has to testify. Wouldn’t he have to recuse himself when the Supreme Court gets the question as to whether executive privilege applies?”

According to the aide, it “would be an unprecedented interference [of] the third branch into the first branch.”

Meanwhile, two Republican Senators have indicated that they will likely vote in favor of calling witnesses; Mitt Romney of Utah and Susan Collins of Maine.

Murkowski said she’s “curious” to hear what Bolton has to say but has offered no clue on how she’ll vote.

end
McConnell gives the Democrats just two days to present their case in the impeachment trial in the Senate.  Naturally the Democrats are fuming and claiming the trial is rigged..what foods..
(zerohedge)

McConnell Gives Democrats Just Two Days For Trump Impeachment Trial In Senate

House impeachment managers will have just two days to prosecute their case against President Donald Trump according to a resolution circulated by Senate Majority Leader Mitch McConnell, in a move meant to accelerates the timetable for a trial Republicans intend to end in a speedy acquittal. President Trump’s team will also have two days to present their arguments and then senators will have a chance to ask questions and consider subpoenas of witnesses.

Ben Siegel

@benyc

Here’s the @senatemajldr resolution outlining how the impeachment trial will proceed:

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

According to The Hill, both sides will have 24 hours to make their first round of arguments, the same amount of time House impeachment managers and Bill Clinton’s lawyers received in 1999, but it limits them to just two days each, instead of the three allowed in Bill Clinton’s impeachment trial more than 20 years ago.  A Senate GOP leadership aide noted that prosecutors in the Clinton trial didn’t use all of their allotted time and finished their opening arguments within three days.

The resolution does not require additional witnesses to be subpoenaed, much to the anger of Democrats, and does not allow House prosecutors to admit evidence into the Senate trial record until after the opening arguments are heard. The rules would also allow the president’s team to seek a quick dismissal of the charges, though many Republican senators have said they should at least hear the case.

In response, the top Senate Democrat, Charles Schumer quickly pushed back and vowed to force votes on amendments. “Sen. McConnell’s resolution is nothing short of a national disgrace,” Schumer said in a statement Monday afternoon, further accusing McConnell of casting aside public statements that he would use the same rules as under the Clinton trial, adding that the majority leader is clearly “hell-bent on making it much more difficult to get witnesses and documents and intent on rushing the trial through.”

Chuck Schumer

@SenSchumer

After reading his resolution, it’s clear Sen. McConnell is hell-bent on making it much more difficult to get witnesses & documents and intent on rushing the trial through

On something as important as impeachment—Sen. McConnell’s resolution is nothing short of a national disgrace

Senate Democratic Leader Chuck Schumer released this statement in response to Senator McConnell’s Senate impeachment trial resolution proposal.

Schumer also said in a statement Monday evening that he will offer amendments to alter “the many flaws” in a “deeply unfair proposal,” as well as to subpoena further witnesses and documents.

The resolution also includes language favored by Sen. Susan Collins (R-Maine) and other GOP moderates requiring a debate and vote on subpoenaing new witnesses and documents.

Republican Senator Lamar Alexander, who worked with McConnell and Collins to modify the resolution, said it “guarantees a vote on whether we need additional evidence at the appropriate time.”

Schumer argues that forcing House managers to cram their opening arguments into a two-day window will force them to present on the Senate floor well into the evening and possibly past midnight.

“McConnell’s resolution stipulates that key facts be delivered in the wee hours of the night simply because he doesn’t want the American people to hear them,” Schumer said.

According to the resolution, House managers will be allowed to begin their arguments 1 p.m. Wednesday.

In response, a Senate GOP leadership aide told the Hill that in 1999, the House prosecutors and the president’s defense team each used fewer than 12 hours over a three-day period. “This resolution provides the same time but more structure for the arguments,” the aide said. The resolution also provides 16 hours for senators to ask questions.

In another departure from the 1999 organizing resolution, McConnell’s measure does not allow evidence from the House impeachment inquiry to be entered into the Senate trial record until after the question of additional witnesses and documents receives consideration. McConnell reportedly did this in response to Trump’s lawyers not having the opportunity to cross-examine witnesses at the House hearings.

“The White House was denied due process throughout the 12 weeks of partisan House proceedings,” the source said.

Additionally, according to McConnell’s resolution if the Senate votes at the end of phase one against subpoenaing witnesses, then it will not be possible to consider additional motions on specific witnesses. Democrats have said they want to subpoena former national security adviser John Bolton, acting White House chief of staff Mick Mulvaney, senior White House adviser Robert Blair and senior Office of Management Budget official Michael Duffey.

The Senate will vote on the resolution Tuesday.

Schumer called on moderate Republican colleagues to reconsider McConnell’s aggressive timeline: “Any senator that votes for the McConnell resolution will be voting to hide information and evidence,” he said in his statement.

 

“I will be offering amendments to address the many flaws in this deeply unfair proposal and to subpoena the witnesses and documents we have requested,” he added.

* * *

The White House immediately backed McConnell’s rules, but didn’t indicate whether it would press a quick vote on a motion to dismiss.

“Protecting the president’s rights to offer pretrial motions was critical for us to support the package, and we’re very gratified with the resolution,” said Eric Ueland, the White House’s liaison to Congress. “I’m not going to talk about trial strategy publicly.”

“It makes sense” to file a motion to dismiss because in every criminal case where there is no wrongdoing, you should try and get a dismissal, Alan Dershowitz, a member of Trump’s defense team, said in an interview Monday evening.

Earlier on Monday, the White House and impeachment managers from the House of Representatives released a pair of filings where both sides argued that constitutional separation of powers is at stake in the trial.

The president’s 171-page filing contends that the House failed to prove that the president explicitly linked aid for Ukraine to an investigation Trump sought into political rival and former Vice President Joe Biden. And the president’s lawyers argued that the Senate should swiftly reject the impeachment articles.

end

This is a good one:  Sidney Powell, Flynn’s lawyer claims that Flynn never lied and now she has an eyewitness to the event: Joe Pientka, the FBI agent that was with Strzok

(Peter Svav/EpochTimes)

 

Flynn’s Lawyer: FBI Agents Wrote Flynn Didn’t Lie, We Have Eyewitness

Authored by Peter Svab via TheEpochTimes.com,

Sidney Powell, lawyer to Lt. Gen. Michael Flynn, said the FBI excluded crucial information from a report on their interview of her client. The report, an FBI 302 form, was used to charge Flynn with lying to the FBI, but the original draft of the 302 stated that Flynn was honest with the FBI agents, according to a witness who saw the draft, said Powell.

Flynn, former head of the Defense Intelligence Agency and former national security adviser to President Donald Trump, pleaded guilty on Dec. 1, 2017, to one count of lying to FBI agents during a Jan. 24, 2017, interview.

 

A 302 report summarizing the interview was supposed to be filed within five days. But the earliest draft Flynn’s lawyers were provided was from Feb. 10, 2017 – more than two weeks after the interview.

Powell, who took over Flynn’s defense in June 2019, has for months asserted that an earlier 302 must exist. Prosecutors have said they don’t have it, stopping short of asserting that it doesn’t exist.

In an Oct. 24, 2019, court filing (pdf), Powell rejected the suggestion that the 302 draft was “missing,” saying neither the bureau nor its digital document system “loses the most important of its reports that is supposed to support the federal felony of the President’s National Security Adviser.”

On Jan. 16, Powell disclosed that she has a witness who could attest to what was in the original draft.

“I’ve now found a witness who says the original 302 did in fact say that Flynn was honest with the agents and did not lie,” she told Larry O’Connor on his WMAL radio show.

“So for somebody to delete that from the 302 is just beyond outrageous.”

She wouldn’t elaborate much further when asked by The Epoch Times.

“Can’t say more about witness but yes, person saw it,” she said via email.

Withdrawing Plea

Flynn was expected to receive a light sentence because of cooperation with the government on two investigations—one led by then-special counsel Robert Mueller and the other in the Eastern District of Virginia against Flynn’s former business partner, Bijan Rafiekian.

In a Jan. 7 sentencing memo (pdf), however, prosecutors asked for up to six months in prison for Flynn, saying he pulled back his cooperation in the Rafiekian case last year.

In response to the memo, Flynn asked the court on Jan. 14 (pdf) to allow him to withdraw his original plea, saying the prosecutors violated the terms of the agreement.

Rafiekian was charged with acting as an unregistered foreign agent based on a job that Flynn’s now-defunct consultancy, Flynn Intel Group (FIG), did for Turkish businessman Kamil Ekim Alptekin.

Flynn wasn’t charged in that case and Rafiekian was ultimately acquitted due to insufficient evidence.

In June 2019, after Flynn fired his original lawyers and hired a new legal team led by Powell, prosecutors asked Flynn to testify that he signed FIG’s lobbying forms knowing there were lies in them. He refused, saying he only learned there was something wrong with the registration in retrospect.

That angered the lead prosecutor, Brandon Van Grack, notes from a June 27, 2019, conference call indicate.

 

Powell said that ever since then, the prosecutors’ behavior has been “retaliatory, vindictive, and in bad faith” because Flynn refused to lie.

In a Jan. 16 court filing (pdf), she disclosed documents that, in her view, indicate the prosecutors knew they were asking for a false statement.

She previously asked Judge Emmet Sullivan to order the government to hand over a plethora of documents she said were exculpatory to Flynn. She said the case should be dismissed for government misconduct, including for withholding the documents. Sullivan denied the request.

Top Brass Witnesses

Powell said in the WMAL radio interview that if Sullivan allows the plea withdrawal and the case goes to trial, she will call witnesses including former FBI Director James Comey, his former deputy, Andrew McCabe, former Director of National Intelligence James Clapper, former FBI Deputy Assistant Director Peter Strzok, and the “agent who cannot be named,” referring to Special Agent Joe Pientka.

It was Strzok and Pientka who interviewed Flynn, while Comey and McCabe were involved in planning the interview. Powell previously requested Clapper’s phone records to “confirm” whether he communicated with Washington Post columnist David Ignatius, “especially on January 10, 2017, when Clapper told Ignatius in words to the effect of ‘take the kill shot on Flynn,’” she said.

Ignatius and Van Grack, the leading prosecutor in the Flynn case, didn’t immediately respond to requests for comment. An FBI spokesman declined to comment. An attempt to reach Clapper for comment was unsuccessful.

end

Stefan Halper used her to gain a liaison with Flynn.  She claims she will expose the Russian hoax origins and we have no doubt that she could.

(Sara Carter)

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

END

Let us close out tonight with one of my favourite economists: Rob Kirby talking to Greg Hunter

(Rob Kirby/Greg Hunter

Fed Prints Money or Financial System Implodes – Rob Kirby

By Greg Hunter On January 19, 2020

Macroeconomic analyst Rob Kirby can sum up the massive Fed money printing it is doing each and every day. Kirby explains, “We are on a vertical curve where money has to be added to the system. . . . The Federal Reserve knew this would occur at some point 20 years ago. This is why they had to create a slush fund, which has grown into a very large pile of dung heap money. What’s being reported to us on a daily basis in terms of the ‘add’ from the repo activity is just the publicly acknowledged addition of money. The “missing” $21 trillion is in play, also, and it’s being added to the system to keep the system from crapping out and imploding. We are, without a doubt, on a vertical growth curve of money.”

To hide what is going, on the Fed is going to extraordinary measures to suppress the precious metals market to not allow growth in price that would reflect massive money printing globally. Kirby says, “The stench of criminality and collusion wafts over the COMEX now like a veil of evil. What they have turned our capital markets into with price suppression, so they can maintain the air of legitimacy and value to the dollar, is going off the charts.”

If money is being printed, aren’t interest rates going to spike? Kirby contends, “The reality is we should have had an interest rate spike already because there is no demand for increasing amounts of U.S. debt.  With the amount of debt that is now outstanding, if interest rates were to spike, the first dead body would be the U.S. government itself. The U.S. government would not be able to fund itself, and the jig would be up on the dollar. We are told the dollar is strong, but the reality is the dollar is not strong at all.”

President Trump, at some point, is going to have to deal with this debt problem and bankruptcy of America. Kirby says this is why the elite are working so hard to get rid of President Trump. Kirby contends, “They want to get rid of him because they can’t control him. If the system is going to blow up, they want a person in charge that they have control of. They do not have control of Donald Trump. . . . He is still his own man, and he knows the difference between right and wrong. . . . They are afraid that he might point the finger at the true culprits of the breakdown that is coming. That’s why they want him out.”

Join Greg Hunter as he goes One-on-One with Rob Kirby of KirbyAnalytics.com.

-END-

Well that is all for today

I will see you Friday night.

 

 

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