Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1204.00 down $3.70 (comex closing time)
Silver: $16.26 down 15 cents (comex closing time)
In the access market 5:15 pm
Gold $1203.70
silver $16.28
Today, in Greece as we warned your yesterday, the government is seizing the pension accounts in order to pay the IMF bill. I believe that they learned those skills from the Americans.
The Russians are threatening NATO not to arm the Ukrainians in their battle with the rebels. If they do, then Russia will intercede.
Today the Ukraine raised interest rates to 30% in order to stem the fall in the value of the hyrvnia.
The Israeli Prime Minister arrived in Washington to speak to congress on the threat of Iran. While this was going on, the USA was having discussions with the Iranians on their nuclear ambitions. They were also preparing to retake the Iraqi city of Tikrit from ISIS.
We have these and many other stories to bring your way.
However first..your data from gold and silver trading together with data from the comex…
Gold/silver trading: see kitco charts on right side of the commentary.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today had a poor delivery day, registering 1 notices served for 100 oz. Silver comex registered 200 notices for 1,000,000 oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 260.08 tonnes for a loss of 43 tonnes over that period.
In silver, the open interest rose by 2348 contracts even though Monday’s silver price was down by 11 cents. The total silver OI continues still remains relatively high with today’s reading at 162,740 contracts. The front month of March contracted by 156 contracts.
We had 200 notices served upon for 1,000,000 oz.
In gold we had a good rise in OI as gold was up by $4.90 yesterday. The total comex gold OI rests tonight at 405,027 for a gain of 3,338 contracts. Today, surprisingly we again had only 1 notice served upon for 100 oz.
Today, we had another huge withdrawal of 2.69 tonnes of gold inventory at the GLD/Inventory now at 760.80 tonnes
In silver, /SLV we had a small deposit of 328,000 oz of silver into the SLV/Inventory 326.118 million oz
We have a few important stories to bring to your attention today…
Let’s head immediately to see the major data points for today
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest rose by 3,338 contracts today from 401,689 up to 405,027 as gold was up by $4.90 yesterday (at the comex close). We are now in the contract month of March which saw it’s OI fall by 39 contracts down to 163. We had 0 notices filed on yesterday so we lost 39 contracts or an additional 3900 oz will not stand for delivery in March. The next big active delivery month is April and here the OI rose by 1,143 contracts up to 260,824. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 92,563. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 147,377 contracts even with mucho help from the HFT boys. Today we had 1 notices filed for 100 oz.
And now for the wild silver comex results. Silver OI rose by 2348 contracts from 160,392 up to 162,740 with silver down by11 cents with respect to Monday’s trading. We are now in the active contract month of March and here the OI fell by 156 contracts down to 1,383. We had 141 contracts served yesterday. Thus we lost 15 contracts or 75,000 oz will not stand. The estimated volume today was poor at 24,701 contracts (just comex sales during regular business hours. The confirmed volume yesterday was fair (regular plus access market) at 30,,152 contracts. We had 200 notices filed for 1,000,000 oz today.
March initial standings
March 3.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
102.71 oz (Scotia)
Withdrawals from Customer Inventory in oz
128.60 4 kilobars (Manfra)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
64,300.000 (Scotia)2,000 kilobars
No of oz served (contracts) today
1 contracts (100 oz)
No of oz to be served (notices)
162 contracts (16,200 oz)
Total monthly oz gold served (contracts) so far this month
1 contracts(100 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
Total accumulative withdrawal of gold from the Customer inventory this month
16,590.00 oz
Today, we had 1 dealer transactions
we had 1 dealer withdrawal:
i) Out of Scotia: 102.71 oz
total dealer withdrawal: 102.71 oz
we had 0 dealer deposits:
we had 1 customer withdrawals
i) Out of Manfra: 4 kilobar or 128.60 oz
total customer withdrawal: 128.60 oz
we had 1 customer deposit: (and the farce continues)
i) Into Scotia: 64,300.000 oz (2,000 kilobars)
total customer deposits; 64,300.000 oz
We had 0 adjustment
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account.
To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (1) x 100 oz or 100 oz , to which we add the difference between the open interest for the front month of March (163) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the March contract month:
No of notices served so far (1) x 100 oz or ounces + {OI for the front month (163) – the number of notices served upon today (1) x 100 oz} = 16,200 oz or .5038 tonnes
we lost 3900 oz of gold that will not stand in this March contract month.
Total dealer inventory: 814,793,315 oz or 25.34 tonnes
Total gold inventory (dealer and customer) = 8.385 million oz. (260.08) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 43 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
March silver initial standings
March 3 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
31,129.15 oz (Brinks, HSBC)
Deposits to the Dealer Inventory
38,145.200 oz CNT
Deposits to the Customer Inventory
622,157.530 oz (Brinks)
No of oz served (contracts)
200 contracts (1,000,000 oz)
No of oz to be served (notices)
1183 contracts (5,915,000)
Total monthly oz silver served (contracts)
1593 contracts (7,965,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
313,628.9 oz
Today, we had 1 deposit into the dealer account:
i) Into CNT: 38,145.200 oz
total dealer deposit: 38,145.200 oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 1 customer deposit:
i) Into Brinks: 622,158.530 oz
total customer deposit: 622,157.530 oz
We had 2 customer withdrawals:
i) Out of Brinks; 30,015.65 oz
ii) Out of HSBC: 1,113.50 oz
total customer withdrawal: 31,129.15 oz
we had 0 adjustment
Total dealer inventory: 68.850 million oz
Total of all silver inventory (dealer and customer) 177.79 million oz
.
The total number of notices filed today is represented by 200 contracts for 1,000,000 oz. To calculate the number of silver ounces that will stand for delivery in March, we take the total number of notices filed for the month so far at (1593) x 5,000 oz = 7,965,000 oz to which we add the difference between the open interest for the front month of March (1383) and the number of notices served upon today (200) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the March contract month:
1593 (notices served so far) + { OI for front month of March (1383) -number of notices served upon today (200} x 5000 oz = 13,880,000 oz standing for the March contract month.
we lost 3 contracts or 1,755,000 oz will not stand for delivery in March.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
March 3 we had another 2.69 tonnes of gold withdrawn from the GLD. Inventory is now 760.80 tonnes.
March 2 we had 7.76 tonnes of withdrawal from the GLD today and this physical gold landed in Shanghai/Inventory 763.49 tonnes
feb 27.2015 no change in gold inventory at the GLD/Inventory at 771.25 tonnes
Feb 26. no change in gold inventory at the GLD/Inventory at 771.25 tonnes
Feb 25. no change in gold inventory at the GLD/Inventory at 771.25 tonnes
Feb 24.2015: no change in gold inventory at the GLD/Inventory at 771.25 tonnes
Feb 23.2015: no change in gold inventory at the GLD/Inventory at 771.25 tonnes
Feb 20/we had another good addition of 1.79 tonnes of gold into the GLD. Inventory 771.25 tonnes
Feb 19/ a huge addition of 1.5 tonnes of gold into the GLD/Inventory 769.46
Feb 18/ a small withdrawal of .3 tonnes/no doubt to pay for fees/Inventory 767.96 tonnes
Feb 17/no changes in gold inventory at the GLD/Inventory 768.26 tonnes
March 3/2015 / we had another huge withdrawal of 2.69 tonnes of gold inventory at the GLD/ no doubt we had physical gold leaves London’s shores and head over to Shanghai.
inventory: 760.80 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 760.80 tonnes.
end
And now for silver (SLV):
March 3 a small deposit of 328,000 oz of silver into the SLV/Inventory at 726.118 million oz.
March 2/ no change in silver inventory tonight; 725.734 million oz
Feb 27.2015 no change in silver inventory tonight: 725.734 million oz
Feb 26. no change in silver inventory at the SLV/Inventory at 725.734 million oz
Feb 25. no changes in silver inventory/SLV inventory at 725.734 million oz
Feb 24.we had an addition of 1.435 million oz of silver to the SLV/SLV inventory at 725.734 million oz
Feb 23 no change in silver inventory/324.299 million oz
Feb 20 no change in silver inventory/324.299 million oz
Fen 19/ we had a huge addition of 4.082 million oz of silver into the SLV/Inventory 324.299 million oz
Feb 18.2015/ no change in silver inventory at the SLV/Inventory at 320.327 million oz
Feb 17 no changes in silver inventory at the SLV/Inventory at 320.327 million oz
March 3/2015 a small addition of 328,000 oz of silver into the SLV/SLV inventory registers: 326.118 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 7.6% percent to NAV in usa funds and Negative 7.4% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.7%
Percentage of fund in silver:37.9%
cash .4%
( March 3/2015)
Sprott gold fund finally rising in NAV
Sprott NAV not available at press time/I will adjust later tonight.
2. Sprott silver fund (PSLV): Premium to NAV falls to + 3.03%!!!!! NAV (March 3/2015)
3. Sprott gold fund (PHYS): premium to NAV rises to +.35% to NAV(March 3 /2015)
Note: Sprott silver trust back into positive territory at +3.03%.
Sprott physical gold trust is back into positive territory at +.35%
Central fund of Canada’s is still in jail.
end
And now for your more important physical gold/silver stories:
Gold and silver trading early this morning
(courtesy Mark O’Byrne)
Bondholders “Bailed In” In Austria – EU Bondholders Today, U.S. Depositors Tomorrow?
By Mark O’Byrne March 3, 2015 No Comments
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- Auditors find €7.6 billion hole in Austria’s “bad bank”, Heta Asset Resolution AG
- Austria’s government says it will not give Heta “a single euro”
- Emergency legislation passed last month means bondholders to be bailed in
- Risk of contagion high as other banks may hold Heta bonds
- “Bail-in is now the rule” – EU Finance Minister Noonan
- Austrian bondholders today … international depositors tomorrow …
There are signs that the debt induced banking-crisis which rocked the global economy in 2008 – only to be postponed with vast infusions of new unpayable debt courtesy of the taxpayer – may be set to resume.
Bondholders are feeling the painful impact of the EU’s new bank resolution regime and bank bail-ins for the first time after the Austrian government said it would pour no more money into its ‘bad bank’, triggering a fall of nearly 30 per cent in the value of some bonds.
Austria’s Financial Market Authority (FMA) has discovered a €7.6 billion capital shortfall on the balance sheet of Heta Asset Resolution AG, the “bad bank” that was formed from the remnants of failed lender Hypo Alpe Adria.
The Austrian government – who have heretofore plied Heta with €5.5 billion – held an emergency meeting to discuss the development. They concluded that they would not hand over “a single euro” to the bad bank.
Instead they have opted to use new legislation based on the EU’s Bank Recovery and Resolution Directive (BRRD). The legislation was, coincidentally, enacted in Austria last month despite the fact that other European countries are not due to ratify the directive until early next year.
The BRRD paves the way for bail-ins of bond-holders and bank deposits over a certain amount. Heta does not have depositors and so it is bond-holders who will incur the losses.
Bloomberg reports that among Heta’s bondholders are Deutsche Bank and UBS and Pacific Investment Management Co. (PIMCO). Whether these institutions are strong enough to absorb their losses remains to be seen.
We will begin to get an idea during the course of this month as Bloomberg reports:
“More than 9.8 billion euros worth of debt is affected, including senior notes worth 450 million due on March 6 and 500 million on March 20.”
If Deutsche Bank or UBS were to be significantly affected by the demise of Heta, we may see a renewed banking crisis and contagion concerns would reemerge.
While the bail-in at Heta will only have immediate consequences for bond-holders, it is important to realise that the BRRD includes provisions for the confiscation of deposits of over a certain amount.
“Bail-in is now the rule” as Irish finance Minister Michael Noonan warned in June 2013. Noonan admitted that the move to not maintain deposits as sacrosanct was a “revolutionary move.” That it was and yet investors and depositors remain blissfully unaware of the risks of bail-ins both to their own deposits but also to the wider financial system and economy.
Bail-ins are now the rule globally and this is the case in practice and is no is longer simply a theoretical talking-point. That the Austrian government rushed ahead in ratifying the directive last month suggests that there are rumblings beneath the surface and other governments could quickly follow suit.
Indeed, we expect other European countries, the UK, U.S., Canada, Australia and most western financial regulators and authorities to follow suit. If this does indeed transpire it should be seen as a warning sign for bond-holders and indeed depositors to take precautionary measures as soon as possible.
Should a resurgence of the global banking crisis occur it is likely to be worse than last time as the liabilities in the banks are much greater and the many large sovereign nations are in effect insolvent.
With interest rates at or below zero percent and many major central banks still engaging in QE, central banks have very few monetary tricks up their sleeves. they have pulled rabbits out of hats one too many times.
We urge readers to diversify deposit holdings and acquire allocated gold and silver held outside of the banking system to protect their wealth during the next phase of the banking crisis.
Austrian bondholders today … international depositors tomorrow …
Download Protecting Your Savings In The Coming Bail-In Era (11 pages)
Download From Bail-Outs To Bail-Ins: Risks and Ramifications – Includes 60 Safest Banks In World (51 pages)
MARKET UPDATE
Today’s AM fix was USD 1,207.75, EUR 1,081.20 and GBP 786.14 per ounce.
Yesterday’s AM fix was USD 1,216.75, EUR 1,084.93 and GBP 789.48 per ounce.
Gold fell 0.46% percent or $5.60 and closed at $1,205.50an ounce yesterday, while silver slipped 1.21% or $0.20 to $16.37 an ounce.
Gold in Singapore edged up at the end of trading on Tuesday, after bouncing back from a dip below $1,200 an ounce, as the U.S. dollar retreated from an 11-year peak against a basket of currencies.
Spot gold was up 0.2 percent at $1,209.60 an ounce towards the end of trading in Singapore after it dipped to a session low of $1,194.90.
The trend of rising gold and silver prices in Asian trade and falling prices in European and U.S. trading continues.
Is this further evidence of manipulation? Many analysts increasingly think so.
Seven out of seventeen of the Fed’s members have now said they want the option of an interest rate hike in June on the table, or have lobbied for an earlier increase – in expectation that inflation and wages will jump higher.
In late morning trading in London, gold for immediate delivery is trading at $1,207.71 up 0.07 percent. Silver is trading at $16.39 down 0.15 percent while palladium is at $1,183.80 or down 0.28 percent.
Barclays noted in its 2014 annual report that it has been providing information for an investigation into precious metals by the U.S. Department of Justice (DoJ). The Wall Street Journal reported in an article last week that the DoJ and the Commodity Futures Trading Commission (CFTC) are investigating at least 10 major banks for possible rigging of the precious metals markets.
The banks involved in producing the fixes for global gold, silver, platinum and palladium benchmarks, said last year they would no longer administer the standards.
A new silver benchmark is operated by CME Group and Thomson Reuters, while the London Metal Exchange produces platinum and palladium benchmarks. The Intercontinental Exchange (ICE) will manage a new gold benchmark beginning March 20th.
Breaking News and Updates Here
end
Peter Boehringer discusses the gold repatriation movement:
(courtesy Chris Powell)
Gold repatriation movement is far broader than generally understood
Submitted by cpowell on Tue, 2015-03-03 03:27. Section: Daily Dispatches
10:27p ET Monday, March 2, 2015
Dear Friend of GATA and Gold:
Peter Boehringer, leader of the gold repatriation movement in Germany, remarks in an interview with the SGT Report that many more countries are trying to repatriate their foreign-vaulted gold than is generally understood. In the interview Boehringer describes those movements as well as Germany’s. The interview is a half-hour long and can be heard at the SGT Report’s Internet site here:
http://sgtreport.com/2015/03/gone-gold-the-powerful-story-of-repatriatio…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
As many of you know, Gold was bombed early last night at 8 pm. Gold fell to $1195 with silver falling in sympathy.(down 40 cents)
Dave Kranzler explains;
(courtesy Dave Kranzler/IRD)
What Happened To Gold And Silver Last Night?
March 3, 2015Financial Markets, Gold, Market Manipulation, Precious MetalsComex, LBMA, silver, silver eagles
The western Central Banks – especially the Fed – manipulate ALL markets ALL the time. – Off the record conversation I had recently with a very high profile market professional
At the open of the CME Globex computerized paper gold/silver system (6 p.m. EST) last night gold and silver looked like they were on an elevator at the top of the Empire State Building that had the cable cut. No news. Now event triggers. Of course, and this no exaggeration, silver gets hit at the open of Globex 99% of the time. Click to englarge:
Silver was smashed for 40 cents and gold for over $13 in less than hour on incredibly high volume for that time of the trading day. Then they abruptly reversed course and shot straight up, again on no news/events. Australia’s CB was expected to cut rates but did not.
Of course, we’ll never know for sure unless we were given access to the Fed’s private emails – something for which the Fed is spending millions lobbying Congress to prevent. Hillary Clinton could only be so lucky.
The best explanation comes from John Brimelow in his Gold Jottings report:
This evening just after the 8PM Shanghai open massive selling hit GLOBEX gold, slashing $12 off gold in less than an hour and producing a low in April of $1,194.60 (down $13.60) about 9-10PM. Then, just as abruptly, the loss was erased with April making a session high of $1,210.50 (up $1.30) about 11PM. Some 30,000 lots were involved
Perhaps the early Asian selling effort was intended to run stops. Instead it apparently uncovered serious demand.
The truth is, we’ll never know exactly what happened but I would bet my life that the Central Banks were responsible. The Fed and the Bank of England have kept a tight lid on the metals for over a year now. Interestingly, the metals are now higher than they were before the mob hit occurred.
In my humble opinion, the Central Banks have reached their limit on their ability to hammer the metals any lower. The physical demand from Asia/Russia/U.S. silver eagle buyers is just too immense in relation to the supply of above-ground gold/silver that is still available to support the paper gold/silver fraud. And the economic and geopolitical news gets worse by the hour. I stand by my call that silver will be the best performing asset in 2015.
end
India on tap to import at least 100 tonnes of gold in March. That would be equivalent to 100% of annual global demand ex Russia ex China.
(courtesy IRD/Bloomberg/Dave Kranzler)
India Expected To Import At Least 100 Tonnes Of Gold In March
March 3, 2015Financial Markets, Gold, Precious MetalsComex, fractional gold,gold coins, gold jewelry, LMBA
Unofficially India imported about 25 tonnes in February, as buyers waited to see if the Government would reduce the 10% import duty imposed by the previous Government in July 2013. But Bloomberg is reporting that “snap-back” demand could boost India’s imports to 100 tonnes in March as India heads into another festival season – Bloomberg link.
As John Brimelow of JB’s Gold Jottings avers:
India in November demonstrated an ability to import prodigious quantities of gold legally even with duty at an effective 10.3%. This could happen again with weak world gold or, just as possible, a strong rupee. For the immediate future the question is if Indian demand really was inhibited by the prospect of lower duty…
That last sentence references the fact that including smuggled gold, it’s not clear if the 10% import duty actually reduced the amount of gold that entered India either officially or “unofficially.” Of course, the World Gold Council will only use the official numbers and will completely disregard any reference to smuggled gold.
Meanwhile India announced plans to try and monetize India’s gold stock by introducing gold deposit accounts that would pay interest on gold deposited into the accounts and by introducing a “sovereign gold bond” which would be gold-backed bonds that pay interest and would be redeemable in cash. It’s my view that this “monetization” scheme will be fail miserably, as Indians – more than any other culture – demand gold that is delivered to their possession in the form of coins and jewelry.
I really can’t figure out the motive of the Indian Government in introducing this “monetization” idea other than, despite being a BRICS member, India’s Government occasionally plays the role of a lap-dog to the U.S. and England. The Bank of England and the Fed have been aggressively pushing a fractional gold system on India for quite some now. Clearly the west desperate to divert as much global capital as possible away from buying deliverable physical gold and into paper gold derivatives. This plan in India will be a colossal failure.
end
The crooks are getting ready for another smash on gold/silver with the jobs report on Friday:
(courtesy Turd Ferguson/GATA)
TF Metals Report: Get ready for the Friday jobs report smashing for gold
Submitted by cpowell on Tue, 2015-03-03 17:19. Section: Daily Dispatches
12:19p ET Tuesday, March 3, 2015
Dear Friend of GATA and Gold:
The TF Metals Report’s Turd Ferguson writes today that the Comex gold futures market rigging operation seems to be setting up for another smashing of the gold price upon this Friday’s release of the U.S. jobs report. Meanwhile, Ferguson adds, the pattern of rising prices in Asia followed by smashes down in London and New York — a pattern perhaps first noted years ago by GATA’s late board member Adrian Douglas — continues. Ferguson’s commentary is posted at the TF Metals Report here:
http://www.tfmetalsreport.com/blog/6658/ssdw
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
For your interest…
(courtesy GATA/Chris Powell)
Back in 2012 Brodsky and Quaintance suspected worldwide gold redistribution
Submitted by cpowell on Tue, 2015-03-03 17:40. Section: Daily Dispatches
1:07p ET Tuesday, March 3, 2015
Dear Friend of GATA and Gold:
Recent assertions by fund manager and geopolitical analyst James G. Rickards that the United States and China are cooperating in suppressing the gold price so that China more easily may obtain enough metal to hedge its grotesque foreign exchange surplus in dollars are not necessarily the first ones along those lines.
As Rickards has held U.S. Defense Department security clearance and was the lawyer for Long-Term Capital Management during the rescue arranged by the Federal Reserve in 1998, he is always worth the closest attention and surely knows more than he can tell without breaching some confidence or even risking assassination.
But the first suggestion that central banks were working surreptitiously to redistribute the world’s gold among governments as the transition to some sort of worldwide currency revaluation may have been made by our friends the economists and fund managers Paul Brodsky and Lee Quaintance, then of QB Asset Management, now of Kopernik Global Investors, whose dissertation on the issue was published in May 2012 and publicized by GATA.
Brodsky and Quaintance speculated that central banks actually want the gold price up — way up — at least in the long term. They wrote:
“The key to a successful transition is a credible monetary reset. Gold is the default collateral for money because it has a long and established precedent in this role. All that would be needed would be a fairly equitable distribution of gold among global monetary authorities (taking place now?), and an agreed-upon exchange rate vis-a-vis baseless paper. It would have to be an exchange rate at which central banks could successfully monetize assets by tendering for physical gold with newly manufactured paper money, an exchange rate high enough to attract enough gold to cover unreserved credit held in the banking system. It’s a high figure.
“The relative cost of holding physical gold today is minimal (above-ground bullion or in-ground bullion through mining shares) against the negative real returns offered by the preponderance of financial assets in float. We suggest that one keep identities straight; invest with central banks, not against them; and consider the hollow rhetoric of the establishment that may temporarily suppress its paper price a ‘gift.’ They are working for physical gold holders, not against them.”
Brodsky and Quaintance did not speculate as to the lifespans of the physical gold holders for whom central banks are working. (Five years? Ten? Fifty? A hundred?) Nor did they make a judgment about the vast deception and cheating such policy by central banks would entail, nor wonder why the planet should be governed so comprehensively by such secretive and undemocratic institutions, the bigger issues behind the gold price suppression scheme. But the Brodsky and Quaintance study remains compelling and can be found here:
http://www.gata.org/node/11373
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Good information of where Fort Knox’s gold came from;
(courtesy Koos Jansen)
Koos Jansen: Where did the gold in Fort Knox come from?
Submitted by cpowell on Tue, 2015-03-03 16:51. Section: Daily Dispatches
11:50a ET Tuesday, March 3, 2015
Dear Friend of GATA and Gold:
The impression that most of the gold in the U.S. gold reserve stored at Fort Knox originated with coin melt following the U.S. government’s confiscating of privately held monetary gold in 1933 is wrong, gold researcher and GATA consultant Koos Jansen writes today. His commentary is headlined “Where Did the Gold In Fort Knox Come From? Part I” and it’s posted at Bullion Star here:
https://www.bullionstar.com/blogs/koos-jansen/gold-fort-knox-come-part-o…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Tonight Bill Holter discusses the ramifications of the decision by European bureaucrats to use bail ins in order to solve their banking dilemma.
(courtesy Bill Holter/Miles Franklin)
Choosing your poison!
The revelation over this past weekend by Hypo Alpe-Adria has been called by some as Austria’s “Lehman moment”. This may very well be on a micro scale, I believe it to be the Credit-Anstalt moment on a macro scale. If you recall history, Austrian bank Credit-Anstalt was the first domino to fall in 1931 which spread across the globe and tipped the banking system into default mode.
There are many similarities to the world today as compared to that world of 1931. Debt had become prevalent leading into the stock market panics of 1929. Margin debt had exploded and caught many offside just as it did in 2007-2009. The more recent episode had even more leverage via the use of derivatives, I point this out because the “leverage ratios” are far higher today than they were 80 years ago.
The world was also in the midst of currency wars. Back in the 1930’s, the global economy had slowed (just as it has today) and consumption was not keeping up with production. This same anomaly exists today in the zones (think China and Asia) where production has been moved to lower costs. What happened in the 1930’s was considered a time of “beggar thy neighbor”. Countries purposely weakened their own currencies in order to undercut the sales price of goods produced by other countries. This morphed into trade wars and ultimately WW II. Other similarities were the fact that after 1929, unemployment rose, economic activity slowed and the financial sector was being squeezed with weakening and defaulting loans. Current day by no means is a carbon copy to where it was back in 1931, but there is a definite “rhyme” to it.
So, what exactly does the current “Hypo moment” mean? For one thing, it means that nothing was really fixed from the last episode. If “things” were good and getting better, how could a bank which was recapitalized (at the bottom) …fall even further? The answer of course is the economy and financial systems are not “better”. As I have tried to write all along, the problems were glossed over and dead bodies swept under the rug. Hypo, is simply the tip of the iceberg and a harbinger of more, similar things to come.
I would be remiss if I did not mention one major difference between the 1930’s, the days of Lehman collapsing …and now. The most dangerous “cure” undertaken in 2008 and onward is governments and their central banks putting their own balance sheets on the line. You see, this did not happen in the 1930’s, if a bank went bad …it went under. Yes, captains of industry did make efforts to save things but the federal government largely stayed out of it. Not so today. Almost nothing was allowed to go under up and until Lehman was “allowed” to fail. No one (very few) dreamed how quickly and completely credit dried up after Lehman failed. THIS is the reason nothing else was allowed to fail afterward, fear of a domino effect taking everything with it.
Last year, the U.S., Europe, Britain, Canada and others all figured out they could not go another round of bailouts. It is not that they had a come to Jesus moment and decided to let losers, lose. No, these governments ALL figured out the simple math they could no longer AFFORD to bailout insolvent institutions, especially the behemoths. This is why the legislation of “bail ins” came forth. But, there is still a big problem with governments allowing market forces to cleanse bad debt and bad banks … the size and scope of the losses involved!
I am not just talking about the size of the losses although this is certainly important. No, I am speaking of the “number” of losses and what “investors” will then decide to do. Allowing bail ins to occur will mobilize investors in a hurry. Once people figure out they are creditors of their bank, they will begin to move. Even though the bail in laws were passed last year, publicized and known about …no one cared because it hadn’t happened to anyone. This will now most likely change with Hypo and people will see a real case of real losses!
A move to “safety” is what we should begin to see shortly. The previous moves had been that of moving to yield because very little was available. Safety, or “risk” did not matter because no one was ever allowed to lose. This of course has changed with the Hypo moment. If made to wager, the Hypo moment may be very much like the Lehman moment in that it may be the last insolvency allowed. This is a very hard one to call because both choices lead to the very same “death” though by different means. We can go the route of bail ins where depositors are spooked into bank runs all over the world …or, resume more bailouts and fund them with QE.
In reality, the original questions back in 2008-09 have not been answered nor really even addressed. Nothing has been fixed, nothing has improved and truth is, nothing has changed. The question, or more to the point the reality of “inflate or die” is still there. Though we watched this fade into the background by the “inflations” of the various and global QE undertakings, the choice must be again made …inflate (again) or die… which poison will be chosen?!
This is a very interesting crossroads because given the choice, inflation will be chosen and thus further currency debasement and destruction. The problem is deflation continues to gnaw away at bank “assets”, Hypo being the first admission. If there are losses taken and “creditors” made to pay, masses will decide they do not want to be in “creditor status”. Bank runs will (and the sale of all sorts of financial credits) follow. The global banking system will become unfunded so to speak in very rapid fashion. All this boils down to is one very simple choice, “choosing your poison”. The only question remaining is whether the choice is allowed or do market forces rule and decide for the central bankers?
What does this mean to you? It means you need to decide whether you want to be a creditor, or whether you want to be an asset holder. Currencies, and the institutions that “hold them” for you will be weakened and “run”. Your obvious alternative is to become your own bank …holding real money that cannot default. The key to this game is not to be defaulted upon. The only way to do this is by having no counterparty risk to your account nor your currency. Gold in hand is your obvious solution, this decision will be obvious very soon. Regards, Bill Holter
end
And now for the important paper stories for today:
Early Tuesday morning trading from Europe/Asia
1. Stocks mostly lower on major Asian bourses / the yen rises to 119.85
1b Chinese yuan vs USA dollar/ yuan weakens to 6.2740
2 Nikkei down 11.72 or 0.06%
3. Europe stocks mostly lower // USA dollar index down to 95.55/
3b Japan 10 year yield huge rises to .38%/ (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.85/everybody watching the huge support levels of 117.20 and that level acting as a catapult for the markets.
3c Nikkei still above 17,000/
3e The USA/Yen rate still below the 120 barrier this morning/
3fOil: WTI 50.35 Brent: 60.98 /all eyes are focusing on oil prices. This should cause major defaults as derivatives blow up.
3g/ Gold up /yen up;
3h/ Japan is to buy the equivalent of 108 billion usa dollars worth of bonds per MONTH or $1.3 trillion
Japan’s GDP equals 5 trillion usa/thus bond purchases of 26% of GDP
3i 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 (see Von Greyerz)
3j Oil up this morning for WTI and Brent
3k The Central Bank of Australia keeps rates unchanged/notes that China (the main engine of growth for Australia) is slowing down
3l Greek 10 year bond yield :9.77% (up 25 basis points in yield)
3m Gold at $1209.70 dollars/ Silver: $16.51
3n USA vs Russian rouble: ( Russian rouble par per rouble / dollar in value) 62.18!!!!!!.
3 0 oil into the 50 dollar handle for WTI and 61 handle for Brent
3p Japan may stop easing as real wage rates seem to be rising
3Q SNB (Swiss National Bank) still intervening again driving down the SF/window dressing/Swiss rumours of intervention to keep the soft peg at 1.05 Swiss Francs/euro and major support for the Euro.
3r USA justice department investigating 10 major USA banks in the manipulation of gold and silver pricing
3s European QE may have blown a 92 billion euro hole in defined pension plans throughout Europe
3t there is now talk on a 30 to 50 billion euro 3rd bailout for Greece
4. USA 10 yr treasury bond at 2.10% early this morning. Thirty year rate well below 3% (2.70%!!!!)/yield curve flattens/foreshadowing recession
5. Details: Ransquawk, Bloomberg/Deutsche bank Jim Reid
Market Wrap: Futures Decline; Treasurys Weak On Actavis Mega-Deal, Dollar At 12 Year High
With little newsflow out of Europe, and just as little on deck out of the US (just NY ISM and auto sales later today), the main overnight events were out of Asia where first the RBA decided to leave rates unchanged (despite the majority calling for a rate cut) when as Bloomberg’s Richard Breslow noted, in the RBA communique the central bank “changed their reference to China from “China’s growth was in line with expectations” to “China’s growth will slow a little from last year’s outcome.” Whatever may be happening with China, one thing is clear – either the RBA announcement was leaked a minute early, or HFT algos took a huge gamble and soared higher up to a minute earlier (more shortly).
Speaking of China, the rate-cut euphoria lasted just one day, and after a feeble 0.8% bounce on Monday, the SHCOMP was down 2.2% this morning over fears the PBOC is doing too little, too late to halt what is now perceived by many as a massive “tightening” capital flight out of China. Finally, Japan made the newsflow, after it JGBs continued to slide following a weak auction, fears that the BOJ is done easing after Abe advisor Etsuro Honda warned against overheating, and after the biggest jump in base pay in over a decade led some to think the BOJ may soon have to halt easing altogether, especially if real wages proceed to rise.
Another notable development is the ongoing weakness in US rates even as the ECB-buying backstop has made selling of rates in Europe virtually illegal. The weakness in the US 10Y however can be almost entirely attributed to the “mammoth” Actavis-Allergan issue, which is now said to be more than 4x oversubscribed, with nearly $90 billion in orders for just over $20 billion in paper. The result is weakness for matched Treasurys due to rate locks: as InTouch David Fuller’s writes watch for “late rate lock unwinds into/out of pricing” though it depends on how big rate lock was Feb. 26 and “whether end-users buy it outright or vs USTs.” Once this latest mega issue is absorbed expect the convergence trade to resume.
Wrapping up the key moves, the dollar index rose modestly to 95.53 this morning, hitting the highest since 2003, as further easing pressure builds on banks around the world as the US marches along to what is seen by many as a de minimus rate hike come hell, high water, or any economic data whatsoever.
European equities currently reside in modest positive territory in what has been yet another session so far which has been relatively void of pertinent newsflow from the Eurozone. On a sector specific basis, financial names have been placed under some minor pressure in the wake of Barclay’s (-2.8%) pre-market report whereby the Co. increased their provisions for the FX probe by GBP 500mln and said they could not be certain over whether they would need to set aside further provisions. From a fixed income perspective, Bunds initially saw a subdued first half of the session in tandem with the rangebound performance seen across European equities with participants still monitoring the ongoing negotiations between Greece and their Eurozone counterparts with European Commission President Juncker suggesting that a third bailout for Greece has not been discussed. Heading into the North American crossover, Bunds and USTs saw a modest downtick with volumes in the Bund rolling from the March contract to June, while Finland has also opened books on its EUR 3bln 2031 offering. Additionally, Actavis’ mammoth nine-part offering is expected to be priced today, with the size of the issuance expected to be in excess of USD 22bln. Note, this placed downward pressure on USTs heading into the close yesterday.
In FX markets, AUD has managed to hold onto its gains seen overnight after the RBA unexpectedly left its Cash Rate Target steady at 2.25%. Nonetheless, the central bank also signalled further easing by saying it may be appropriate over the period ahead, which capped further AUD gains. Elsewhere, USD-index has recovered off its worst levels amid no fundamental news, although USD/JPY remains in negative territory following comments from Japanese PM Advisor Honda who also said current USD/JPY levels are a kind of an upper limit in the exchange rate’s comfort zone. GBP was granted a brief spell of reprieve following the latest UK construction PMI reading which exceeded expectations (60.1 vs. Exp. 59.1), however, GBP remains relatively unchanged against the Greenback.
In the commodity complex, spot gold resides in modest positive territory, reversing some of the losses seen during yesterday’s session alongside the strength in US equities. Elsewhere, Copper prices pulled further back from their 7-week highs as Chinese risk sentiment was dampened on IPO concerns after China’s securities regulator approved 24 IPO’s which could lock up a record value of CNY 3trl. In energy markets, both Brent and WTI crude futures trade in the green ahead of the after-market API inventory release with energy newsflow overall relatively light.
In summary: European shares remain higher, though off intraday highs, with the food & beverage and personal & household sectors outperforming and financial services, banks underperforming. RBA leaves rates unchanged, Australian dollar rises. Swiss economy grew faster than forecast before franc cap removal. The French and Italian markets are the best-performing larger bourses, Swedish the worst. The euro is weaker against the dollar. Japanese 10yr bond yields rise; French yields increase. Commodities gain, with natural gas, copper underperforming and Brent crude outperforming. U.S. ISM New York, vehicle sales, IBD/TIPP economic optimism, due later.
Market Wrap
S&P 500 futures down 0.1% to 2112.5
Stoxx 600 up 0.2% to 392.2
US 10Yr yield up 2bps to 2.1%
German 10Yr yield up 1bps to 0.37%
MSCI Asia Pacific up 0.1% to 146.3
Gold spot up 0.1% to $1208.2/oz
56% of Stoxx 600 members gain, 42% decline
Eurostoxx 50 +0.2%, FTSE 100 +0.1%, CAC 40 +0.3%, DAX +0.2%, IBEX -0.1%, FTSEMIB +0.2%, SMI -0.1%
Asian stocks little changed with the Sensex outperforming and the Shanghai Composite underperforming.
MSCI Asia Pacific up 0.1% to 146.3
Nikkei 225 down 0.1%, Hang Seng down 0.7%, Kospi up 0.2%, S