Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1160.10 down $6.30 (comex closing time)
Silver: $15.61 down 14 cents (comex closing time)
In the access market 5:15 pm
Gold $1161.60
silver $15.62
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 0 notices served for nil oz. Silver comex registered 41 notices for 205,000 oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 254.52 tonnes for a loss of 48.5 tonnes over that period. Lately the removals have been rising!
In silver, the open interest rose by an astonishing 1,396 contracts even though yesterday’s silver price was down 3 cents. The total silver OI continues to remain relatively high with today’s reading at 167,631 contracts. The front month of March contracted by 16 contracts.
We had 41 notices served upon for 205,000 oz.
In gold we had a fall in OI despite the fact that gold was up by $2.30 yesterday. The total comex gold OI rests tonight at 413,701 for a loss of 1,669 contracts. Today, surprisingly we again had only 0 notices served upon for nil oz.
Today, we had no report on the GLD/Inventory rests at 753.04 tonnes
In silver, /SLV we had no change in inventory at the SLV/Inventory, remaining at 327.332 million oz
We have a few important stories to bring to your attention today…
1. The Greece affair.
It looks like the Troika are going to set foot on Greek soil. Greece also having problems with obtaining imported goods due to non payment
(zero hedge)
2. China set to introduce their SWIFT system by September putting a huge dagger into the heart of the USA dollar.(zero hedge/Reuters)
3. Venezuela is now considered by the USA as a security risk. They are also going to fingerprint you when purchasing goods at the grocery store. (zero hedge)
4. 100 tanks are rolling into Latvia. The Russian foreign minister states that there will be consequences.(zero hedge)
5. The Ukraine needs to get the west to agree to a 15.4 billion haircut in order to receive funds from the IMF (Reuters)
we have these and other stories for you tonight.
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 fell by a small margin of 1,669 contracts today from 415,370 down to 413,701 even though gold was up by $2.30 yesterday (at the comex close). We are now in the contract month of March which saw it’s OI lower by 31 contracts down to 117. We had 0 notices filed on yesterday so we lost 31 gold contract or an additional 3100 oz will not stand for delivery in this delivery month of March. The next big active delivery month is April and here the OI fell by 12,515 contracts down to 239,160. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 135,933. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 147,647 contracts with mucho help from the HFT boys. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI rose by a huge 1396 contracts from 166,235 up to 167,631 with silver down by 3 cents with respect to yesterday’s trading. We are now in the active contract month of March and here the OI fell by 16 contracts down to 935. We had 17 contracts served upon yesterday. Thus we gained 1 contract or an additional 5,000 oz will stand in this March delivery month. The estimated volume today was poor at 16,850 contracts (just comex sales during regular business hours. The confirmed volume on yesterday (regular plus access market) came in at 27,645 contracts which is fair in volume. We had 41 notices filed for 205,000 oz today.
March initial standings
March 10.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
96,450.000 oz /3000 kilobars (Scotia)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
16,075.000 oz /500 kilobars(JPMorgan/)
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
117 contracts (11,700 oz)
Total monthly oz gold served (contracts) so far this month
5 contracts(500 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
114,790.651 oz
Total accumulative withdrawal of gold from the Customer inventory this month
246,606.5 oz
Today, we had 0 dealer transactions
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 1 customer withdrawals (and the farce continues)
i) Out of Scotia: 96,450.000 oz (3000 kilobars)
total customer withdrawal: 96,450.000 oz
we had 1 customer deposits:
i) Into JPMorgan: 16,075.000 oz (500 kilobars)
total customer deposits; 16,075.000 oz
We had 0 adjustments
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 0 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 (5) x 100 oz or 500 oz , to which we add the difference between the open interest for the front month of March (117) and the number of notices served upon today (0) 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 (5) x 100 oz or ounces + {OI for the front month (117) – the number of notices served upon today (0) x 100 oz} = 12,200 oz or .3794 tonnes
we lost 3,1oo gold ounces standing in this March contract month.
Total dealer inventory: 656,644.474 oz or 20.424 tonnes
Total gold inventory (dealer and customer) = 8.182 million oz. (254.52) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 48.5 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 10 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
593,470.199 oz (Delaware,Scotia)
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
nil oz
No of oz served (contracts)
41 contracts (205,000 oz)
No of oz to be served (notices)
894 contracts (4,470,000)
Total monthly oz silver served (contracts)
1731 contracts (8,655,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
2,233,478.9 oz
Today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 0 customer deposits:
total customer deposit: nil oz
We had two customer withdrawals:
i) Out of Delaware: 533,211.929 oz
ii) Out of Scotia: 60,258.27 oz
total withdrawals; 593,470.199 oz
we had 1 adjustment
i) out of Delaware: 9,457.200 oz was adjusted out of the customer and this landed into the dealer account of Delaware;
Total dealer inventory: 68.864 million oz
Total of all silver inventory (dealer and customer) 177.442 million oz
.
The total number of notices filed today is represented by 41 contracts for 205,000 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 (1731) x 5,000 oz = 8,655,000 oz to which we add the difference between the open interest for the front month of March (935) and the number of notices served upon today (41) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the March contract month:
1731 (notices served so far) + { OI for front month of March( 935) -number of notices served upon today (41} x 5000 oz = 13,125,000 oz standing for the March contract month.
we gained 1 contracts or an additional 5,000 oz will 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 10 no report on the GLD tonight/computer down/inventory remains 753.04 tonnes
March 9/ we had another huge withdrawal of 3.38 tonnes of gold from the GLD, no doubt heading for Shanghai/Inventory 753.04 tonnes
March 6/we had a huge withdrawal of 4.48 tonnes of gold from the GLD/inventory rests tonight at 756.32/Also HSBC is getting out of the gold business in London and is giving up all of its 7 vaults.
March 5 no change in gold inventory at the GLD/760.80 tonnnes
March 4/ no change/inventory 760.80 tonnes
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
March 10/2015 / no report on the GLD tonight
inventory: 753.04 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 : 753.04 tonnes.
end
And now for silver (SLV):
March 10/ no change in silver inventory/327.332 million oz
March 9/ no change in silver inventory at the SLV/327.332 million oz
March 6: huge addition of 1.34 million oz of silver into the SLV/Inventory 727.332 million oz
March 5 no change in inventory/725.992 million oz
March 4 a slight reduction of 126,000 oz of silver/SLV inventory at 725.992 (probably to pay for fees)
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
March 10/2015 no change in silver inventory at the SLV/ SLV inventory rests tonight at 327.332 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 9.1% percent to NAV in usa funds and Negative 8.7% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.6%
Percentage of fund in silver:38.0%
cash .4%
( March 10/2015)
Sprott gold fund finally rising in NAV
2. Sprott silver fund (PSLV): Premium to NAV falls to + 1.96%!!!!! NAV (March 10/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to -.28% to NAV(March 10 /2015)
Note: Sprott silver trust back into positive territory at +2.03%.
Sprott physical gold trust is back into negative territory at -.28%
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
Mark O’Byrne talks about a possible British exit from the Euro:
(courtesy Mark O’Byrne)
‘BREXIT’ Poses Risks To Sterling Assets – UK Stocks and London Property
By Mark O’Byrne March 10, 2015 0 Comments
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Political uncertainty beginning to impact bond and property markets
UK bonds and stocks at all time record highs and ‘bubbly’
FTSE looks overvalued and ripe for sharp correction
“Air of caution in the run-up to the general election” hits London property
City of London has most to lose from Brexit
Brexit may isolate UK – “North Korea option” – or lead to strong, independent UK, like Hong Kong
Real diversification remains only “free lunch”
With all the focus on Grexit in recent weeks, investors have not paid much attention to the risk posed by ‘Brexit’ or the possibility of the UK leaving the European Union.
This is the case in currency and stock markets with the FTSE and sterling remaining buoyant despite obvious risks. Indeed, gilts remain close to all time record highs – in part due to QE.
The FTSE 100’s successive new record highs in recent weeks despite the deteriorating global economic backdrop has echoes of previous bubbles. We all know how those ended – see chart below.
That may be beginning to change as U.K. two-year government bonds posted the longest run of weekly declines in eight months today. Ten year gilt yields reached the highest level in almost three months last Friday.
The fall in gilt prices is being attributed to concerns about rising interest rates. It is likely that some of the weakness could be related to election and ‘Brexit’ risk.
Political risk has already been cited as a reason for a slowdown in the London housing market with RICS UK citing a number of “challenges” facing the London housing market including “an air of caution in the run-up to the general election”.
Cameron has promised that a referendum will be held before 2017 if he is re-elected. Pre-election jitters are showing in option prices ahead of May’s poll. This week the maturity of the three-month rolling sterling-dollar option passed the election date, and implied volatility jumped sharply according to the FT:
“Equity options are priced for a move in the FTSE 100 the day after the vote, up or down, of close to 4 per cent, up from 1.5 per cent at the start of the year, according to Kokou Agbo-Bloua at Société Générale.
Derivative traders anticipate more volatility than usual because the outcome of the election is more uncertain than usual. No party is likely to have a majority, and a coalition will probably be harder to put together than in 2010, when politicians were under intense pressure amid a weak economy and jumpy markets. Psephologists expect a minority government, risking another election not too long afterwards and adding to policy uncertainty.”
In a sign investors are expecting a close-run election, a gauge of the volatility of the sterling over the next six months rose to a two and a half year high in February.
SocGen analysts said in a report last week that an exit from the EU might trigger a 20% decline in the FTSE 100 by the end of 2017.
A report from the Open Europe Study suggests that Europe would be less inclined to negotiate favourable agreements pertaining to the financial services sector in Britain because it runs a large trade surplus with the EU.
Financial services sectors in the EU would therefore have little incentive to grant advantageous terms to their British rivals. The report also refers to the European Parliament’s alleged hostility to the UK’s financial sector as a possible motivation to restrict Britain’s access to the single market.
“Post-Brexit the centre of gravity within the EU may shift towards a tougher regulatory regime for accessing the single market. The European parliament’s hostility to Anglo-Saxon finance could prove a major stumbling block.”
The Financial Times ran an interesting piece yesterday attempting to dissect the implications of a “Brexit” as presented by both sides of the debate.
The FT concluded that it is impossible to agree with either side’s analysis as both sides assume the outcome of negotiations that have not taken place.
We would add that they ignore the instability that the very act of Britain voting to leave the EU would create, and the impact such instability would have on negotiations. This is especially the case given the very fragile state of the European Union at this time – economically and indeed politically.
Advocates of a “Brexit” envisage a Britain like Hong Kong, strong but independent of Europe’s burdensome regulation and directives and somewhat imperial super state ambitions.
Those opposed to it, like Gordon Brown, have suggested it would leave Britain isolated. Brown went so far as to alarmistly describe it as the “North Korea option”. Open Europe do not regard either outcome as credible.
The uncertainty surrounding a possible “Brexit” will likely take a toll on sterling itself and sterling denominated assets such as property, equities and gilts.
Political risk now clouds the outlook for the UK and sterling assets. Investors and markets do not like uncertainty. UK investors seeking to hedge these political risks should consider an allocation to safe haven gold.
In life and in finance, there are very few “free lunches.” However, investors today continue to be able to avail of the only free lunch in finance and investing which is diversification.Having all your eggs in sterling or any other currency basket is imprudent and diversification remains key in order to protect and preserve wealth in the uncertain times of today.
Updates and Award Winning Research Here
MARKET UPDATE
Today’s AM fix was USD 1,161.00, EUR 1,079.40 and GBP 770.41 per ounce.
Yesterday’s AM fix was USD 1,173.75, EUR 1,077.97 and GBP 776.86 per ounce.
Gold rose 0.1% percent or $1.20 and closed at $1,166.90 an ounce yesterday, while silver slipped 0.5% or $0.08 to $15.79 an ounce.
Gold hit a three month low in Asian trading as a strong U.S. dollar and expectations of a June U.S. interest rate hike keep gold under pressure.
Technical analysts are predicting the next support level for gold at $1,150 per ounce.
Tomorrow the Greek saga may take centre stage again as delegates from the European Commission, IMF, ECB – known as the Troika, and Greece will meet to discuss economic reforms.
Dutch finance minister & ESM president, Jeroen Dijsselbloem, said, “Greece won’t get any more cash from its 240 billion-euro ($258 billion) rescue program until its official creditors are satisfied that Tsipras is committed to all the economic fixes needed to meet its conditions.”
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, saw the bearish trend continue as holdings fell 0.43 percent to 753.04 tonnes on Monday, their lowest in more than a month.
Gold near end of day trading in Singapore was $1,161.65 per ounce. In late morning trading in London, spot gold was $1,162.08 down 0.38 percent. Silver was $15.73 or unchanged, while platinum was $1,137.40 off 0.72 percent.
Gold’s weakness in recent days is very much a function of dollar strength versus the euro and importantly gold has remained firm in euros.
HOW TO STORE GOLD BULLION – 7 KEY MUST HAVES
end
a must read…
(courtesy Kosares/GATA)
Mike Kosares: Will the Shanghai fix fix the gold market?
Submitted by cpowell on Mon, 2015-03-09 21:53. Section: Daily Dispatches
5:50p ET Monday, March 9, 2015
Dear Friend of GATA and Gold:
China’s new involvement in the London gold market and its opening of a physical gold exchange in Shanghai may be meant less to bust the Western paper gold racket than to facilitate the flow of Western gold to Asia that is already underway, USAGold proprietor Michael Kosares writes today.
“I see China’s latest forays in the international gold market as an attempt to fuse with and influence the current market structure rather than circumvent or supersede it,” Kosares writes. “China, in my view, seeks synthesis, not antithesis, and though some might be disappointed in the strategy, I see it as bracing for gold’s future and even more bullish for gold in the long run than a policy of confrontation. By taking its seat at the gold-pricing table, China inadvertently will act as a proxy for gold coin and bullion owners all over the world.”
Kosares’ commentary is headlined “Will the Shanghai Fix Fix the Gold Market?” and it’s posted at USAGold here:
http://www.usagold.com/cpmforum/2015/03/09/will-the-shanghai-fix-fix-the…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
James Turk provides interesting graphs and he even hints it is possible that the Euro can precede the yen into the graveyard:
(courtesy James Turk/Kingworldnews/Eric King/GATA)
Euro may beat yen to fiat currency graveyard, Turk tells KWN
Submitted by cpowell on Mon, 2015-03-09 22:21. Section: Daily Dispatches
6:21p ET Monday, 9, 2015
Dear Friend of GATA and Gold:
GoldMoney founder and GATA consultant James Turk tells King World News today that gold is actually doing pretty well this year in terms other than those of the U.S. dollar and that the euro may beat the yen to the fiat currency graveyard. Turk’s interview is excerpted at the KWN blog here:
http://kingworldnews.com/big-picture-currency-wars-continue-rage-means-g…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Finance and Liberty discuss gold and gold manipulation with Bill Murphy of GATA
(courtesy Bill Murphy/GATA/Finance and Liberty)
Finance and Liberty interviews GATA Chairman Murphy
Submitted by cpowell on Tue, 2015-03-10 03:35. Section: Daily Dispatches
11:35p ET Monday, March 9, 2015
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy was interviewed today by Elijah Johnson of Finance and Liberty about the increasingly heavy-handed suppression of gold and silver prices on the New York Commodities Exchange. The interview is 17 minutes long and can be heard at You Tube here:
https://www.youtube.com/watch?v=CLcqMjS03_8
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
This hurts!!
The actions by the crooked bankers causes this company to go under”
(courtesy zero hedge)
Allied Nevada Gold Files For Bankruptcy Protection
Just as in the case of oil currently, the problem with gold (and countless other commodities) trading where it does, is that as we have shown repeatedly on previous occasions, it is at or below the marginal production cost of various gold producers.
And with miners losing money on every incremental ounce (or barrell) they pull out of the ground, there is only so much capital they can burn before they have not choice but to file for bankruptcy. Which is precisely what happened to Allied Nevada Gold, the operator of the gaming state’s Hycroft mine, which earlier today filed for bankruptcy in Delaware.
The company blamed its deteriorating financial condition on the drop in gold and silver prices in recent years, an overleveraged capital structure, delays in a key expansion project, and currency swap exposure.
Yes, this is that Allied Nevada whose stock price traded as high as $45 when gold hit its all time high of over $1,900 hours before the SNB imposed its first, and now failed, currency floor which translated into a market cap of just about $4.5 billion.
It was trading at under a $1, and since the company is now bankrupt, the equity is most likely worthless as the creditors take over the equity.
The company, incorporated in Delaware in 2006, owns more than 50 Nevada properties acquired in a merger, as well as interests in what it calls some of state’s “most prolific gold-producing trends.”
As Bloomberg reports, Allied Nevada said it reached an agreement with a group of bondholders on a $78 million debtor-in-possession credit facility that will allow it to keep operating while its debts are restructured.
The miner has struggled with operational setbacks at Hycroft, most recently when a chalky substance slowed production and forced Allied Nevada to lower its annual gold and silver sales forecasts.
The Reno, Nevada-based company has also contended with plunging gold prices. The metal dropped 28 percent in 2013, the first annual decline in 13 years, and declined 1.4 percent last year.
With just $1.3 million of cash at the end of November, the company sold stock for $1 with warrants in December to raise $21.5 million. Debt crept up to $567.9 million by Nov. 30, including $48.0 million in cash borrowings under a loan. Completing a mill that it needs to recover more metals would cost almost $1.4 billion, according to a December regulatory filing.
In a normal world, in which supply and demand would be reflected in the price, a bankruptcy such as this one, which guarantees the mothballing of Allied’s operations indefinitely and perhaps forever, the resulting decline in supply on the margin would mean an increase in prices. However, in a world in which physical supply and demand are irrelevant (and in the case of the biggest source of demand, outright misrepresented), the only thing that matters for pricing is how much paper gold will be created/destroyed via GLD and other ETFs, and/or how many Gold futures contracts the BIS trading desk in Basel will sell (not buy) in any given day.
In any event, while hardly having an impact on the gold price, this latest bankruptcy merely brings us one day closer to what we write in December of last year, namely that peak physical gold has arrived, and that going forward, producers will have no choice but to reduce their gold output.
One other thing: sooner or later, just like with oil and every other commodity, physical supply will catch up with physical demand, bypassing the great black box that is paper/synthetic/derivative trading of gold. And the more such miners go belly up, the faster this moment will finally arrive.
end
Bill Holter tackles the difficult topic of John Exter’s pyramid.
A very important concept for you to grasp
(courtesy Bill Holter/Miles Franklin)
“Trust” and John Exter’s pyramid
I hesitated yesterday to write about HSBC allegedly deciding to close their London Gold vaults because as of yet, we still do not have public confirmation. As you know by now, Andrew Maguire made the allegation and Ned Naylor-Leyland tweeted several times over the weekend. Gerald Celente followed with King World News and also made comments. It is not my intention to be long winded on this subject because even if true, it is only a small chapter in John Exter’s debt pyramid theory which is what I would like to talk about today. Specifically, the role of gold and “why”. If true, it would however be a very important clue signaling something has changed in the London gold market.
Briefly, if Andrew’s HSBC news is true, more questions are raised than are answered. As for the several theories I have heard, some believe the short notice of only two months would be a way for HSBC to cash settle some customers and obtain some gold. It is believed in this manner, HSBC might be able to cover some of a short gold position. I find several problems with this whole thing. First, wouldn’t some of the customers have paid storage (in advance) for positions being held? Could HSBC just break a contract on their own? Could HSBC really tell GLD they have only two months to move their metal? If I were a director of GLD, my fiduciary responsibility would point me toward engaging lawyers to put a retraining order to buy enough time to ensure an orderly and safe transfer. My next thought would certainly be that of a complete audit!
Another thought of mine is this, why is there no other information on this anywhere to be found? So Andrew Maguire and some of his clients received letters, are they real? The shorts would love nothing better than to discredit Andrew and any other bloggers who write about the alleged HSBC move if it turns out to be false. Is it possible Andrew is being set up? …Along with the rest of the gold blogging world? I believe Andrew to be very thorough in what he does and give him the benefit of the doubt in my own mind. Maybe I am just paranoid but I hate to hear things like this without any other confirmation and particularly nothing from HSBC itself. I will say this, the more time passes without some sort of confirmation of Andrew’s allegations, the more I am inclined not to believe them. Enough said for now and until we have some hard data to look at.
Our topic for today is John Exter’s inverted pyramid which is displayed below.
As you can see, John Exter believed the “foundation” of all things financial rested upon a small foundation of gold. I say “small” because of gold’s rarity in relation to everything else financial and freely created by man’s mechanism. I don’t want to make this an exercise in explaining the pyramid in a primer form. Let me just say I agree with it and believe as you go further up the pyramid (and further away from gold), the asset classes have more and more risk. The further up the pyramid you go, there is more “leverage” involved as each product is “derived” from something which is ultimately derived from “money” itself.
Since 1971, The U.S., followed by governments of most of the rest of the world have wanted us to believe that gold is not money. They have “taught us” that what they print (currency) is money. This is not so and I won’t spend the time here as I’ve covered this many times before. Suffice it to say, the BRICS nations led by China fully understand and believe gold in fact is money as proven by their massive imports of gold.
We will specifically concentrate on the gold triangle at the bottom in this exercise with the assumption you understand the gold “foundation” is what everything financial is “derived” from. If this is so then there is one very basic truth which MUST apply, the rule of law. Why is this? The rule of law applies to gold for several reasons. First and most obvious is ownership, true ownership. Secondly, the law of weights and measures. An ounce, a kilo, a ton or any other measure must be fixed and of course at a specific purity level.
Cutting to the chase, the gold must be where it is supposed to be, in the correct quantities and purity. If it is not, the rule of law is broken and with it will follow a “natural law” being broken called “confidence”. Think about it, even the dullest knife would understand what it would mean if there was an audit of Fort Knox and it turned out all the gold was gone. THIS is what the entire “game” has been about literally since 1971 (and even before)! The Fed and other central banks have done anything and everything in their powers to make gold “look” weak because it is THE competitor to their paper notes, their electronic digits and thus their “power”. For what possible reason would the Federal Reserve NOT have to suppress the price of gold? The answer is none whatsoever!
Following this through, if you are an owner of gold or silver then you probably spent this past weekend in poor spirits because the metals were monkey hammered on Friday. Again, more COMEX contracts hit the market in a few short hours to force price down …than there is total available gold to actually deliver. Did real holders of real gold all of a sudden decide to collectively panic and sell? No, the price was forced down in a psychological operation to scare people away from buying the real metal. One lame explanation given was the Fed will have to raise rates. I will comment tomorrow on the boogeyman of “rising interest rates”. Rising rates it is said will be the death knell for gold and silver because they don’t pay any interest. I will graphically and mathematically show you the U.S. Treasury will bankrupt itself should the Fed EVER decide to raise interest rates. They simply cannot do it!
Getting back to the pyramid, what do you believe will happen to everything above the gold base if the gold really is not where it is supposed to be? When answering this question in your mind, please remember that everything and I do mean EVERYTHING is based on “trust”. You trust that when you put your paycheck into a bank this week, it will still be there next week and your bank will be open for you to retrieve or use the money. You trust that when you accept dollars or euros, yen or pounds for your goods or labor, someone will accept them as payment for something else. It’s ALL about trust or confidence and nothing else, which is the “why” part to having a rule of law. A rule of law MUST be followed, adhered to and enforced (for everyone) in order to retain any confidence.
Let’s begin to wrap up with the statement “all roads lead to gold”. I say this because if you look back through history, every single one of man’s “experiments” with money have failed leaving gold as the ultimate money. “Ultimate” meaning last, final or best. Think back to the tulip craze in Holland. These tulips did have at least “some” value as they were pretty and needed to be grown which took some time. How much time is needed for the Fed to create $1 trillion? A hint might be found in the $16 trillion they created overnight and lent all over the world in late 2008 which was not even discovered until a periphery audit of the Fed in 2010! Creating new dollars takes zero time, zero capital, zero labor and in reality is FREE. I hate to point out the obvious but “free” meaning no real cost can also be equated to no real value.
In today’s world, perceived “money” and credit are interchangeable, they are one and the same. In fact, the world has gone so upside down as to believe the more debt one has, the wealthier they are! This is not so, never was and never will be. The potential discovery of empty gold vaults is what steers Western finance and has done so since 1971. The perception of weak gold prices and abundant holdings has been paramount. The realization or truth of empty gold vaults cannot be allowed to happen or confidence in currency will evaporate. China knows this, Russia knows this as do many other nations which is why they have all accelerated their purchases and imports. They are not relying on “the rule of law” being ironclad. They are importing real metal and will not accept “receipts” in lieu of metal.
Even Western central banks like Germany, Belgium, Holland and Austria are no longer so “trusting” of London or New York. Why is this? For one thing, they can do the math of how much gold is being produced versus how much gold is being shipped. They are acting by importing and repatriating because they do not want to “hope” the excess gold is not coming from their stash …because they know it is coming from somewhere it is not supposed to be! And folks, this is it in a nutshell. Gold is moving Eastward to the BRICS and other nations in amounts that do not make any mathematical sense unless the rule of law is being secretly and clearly broken. What do you think? Will gold “remaining” in the West be scarce or plentiful when the truth comes out? If you understand Exter’s pyramid, this is a very valid and all important question! As with any house or structure, the foundation to Exter’s pyramid is more important than anything else and for good reason…”they” want you to believe it is meaningless. Regards, Bill Holter
end
And now for the important paper stories for today:
Early Tuesday morning trading from Europe/Asia
1. Stocks lower on major Chinese bourses/ / the yen slightly rises to 121.36
1b Chinese yuan vs USA dollar/ yuan strengthens to 6.2623
2 Nikkei down 125.44 or 0.67%
3. Europe stocks all down // USA dollar index up to 98.35/
3b Japan 10 year yield .45%/ (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 121.35/everybody watching the huge support levels of 117.20 and that level acting as a catapult for the markets. the Japanese yield at .45% becoming very ominous
3c Nikkei still above 17,000/
3e The USA/Yen rate now above the 121 barrier this morning/
3fOil: WTI 49.52 Brent: 57.71 /all eyes are focusing on oil prices. This should cause major defaults as derivatives blow up.
3g/ Gold slightly down /yen slightly 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 down this morning for WTI and for Brent
3k European bond buying pushes yields lower on all fronts in the EMU
Except Greece which sees its 2 year rate rise to almost 16% /Greek stocks up by less than 1%/expect huge bank runs on Greek banks
3l Greek 10 year bond yield :10.04% (up 60 basis points in yield)
3m Gold at $1167.60 dollars/ Silver: $15.80
3n USA vs Russian rouble: ( Russian rouble down 3/4 rouble / dollar in value) 61.22!!!!!!.
3 0 oil into the 49 dollar handle for WTI and 57 handle for Brent
3p higher foreign deposits into China sees risk of outflows and a currency depreciation can spell financial disaster for the rest of the world.
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.
Rumours SNB may cut rates to negative 1.5%
3r Britain’s Serious fraud squad investigating the Bank of England/
3s the 7 year German bund is now in negative territory/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure (see passage below)
3t Talks with Greece to start tomorrow/does not look good
4. USA 10 yr treasury bond at 2.17% early this morning. Thirty year rate well below 3% (2.77%!!!!)/yield curve flattens/foreshadowing recession
5. Details: Ransquawk, Bloomberg/Deutsche bank Jim Reid
Futures Sell Off As Soaring Dollar Weighs On Risk, European Yields Slide To Fresh Record Lows
As noted earlier, starting early with the overnight sessionthere was already some serious fireworks in Asia, when first the USDJPY soared then tumbled, pushing the Nikkei lower some 0.7% with it, driven entirely by the surge in Dollar which rose to a fresh 12 year high overnight after gaining as much as 0.59%, in an extension of Friday’s post-NFP gains. Additionally, the EUR/USD slipped below 1.0800 to touch its lowest level since Sept’03 while USD/JPY rose above 122.00 for the first time since Jul’07, after breaching long-term resistance at 121.85. However, in recent trade the USDJPY has seen a straight line sell-off which in turn has sent US equity futures sliding, and the ES down about 14 points as of this moment. Meanwhile, the frontrunning of the ECB continues, with German 10 Year yields sliding -3bps to 0.281%, the lowest in series history. Also touching fresh record lows were Austrian, Belgian, Dutch, Finnish, Irish, Italian, Spanish 10 Year rates.
The problem for Europe everyone is that most are focusing primarily on the German curve, where the 7 Year just went negative as well. SocGen believes that with German bonds up to Oct. 2018 maturity already trading below the ECB’s deposit rate, making them ineligible for purchases under QE, Bundesbank may struggle to meet its quotas under the scheme. It adds that the outstanding sizes are large in shorter maturity bonds so not being able to buy these makes it difficult to see how Germany’s central bank is going to get its share of the program done. SocGen’s conclusion is that the ECB program will fall short of its €1.14 trillion purchase objective, or in other words Q€ will be a failure.
And while markets stage a mini turmoil session, in the background Greece has almost entered the endgame following yesterday’s European finance ministers’ announcement that aid time and money are running out with Greece still to make good on its bailout commitments; talks with creditors are due to start tomorrow alongside technical monitoring in Athens.Draghi told Greek officials they face a critical situation and must let euro-area representatives return to Athens if they are ever going to obtain more aid. And thenGerman CDU lawmaker Fuchs, speaking on Bloomberg TV, said Greece not fulfilling its obligations currently and a Greek exit could be managed. In other words, the Syriza government has two choices: run out of money and face a civil war, or allow the hated Troika inspectors who are about to impose even more “austerity” on the Greek people, and be swept from power. Expect the epic fall from Grace of the Tsipras government to soon be a Harvard case study on (mis)managing pre-election expectations.
Asian equities fell after paring earlier gains following a positive Wall Street close, as the USD surged to fresh decade highs ahead of next week’s FOMC rate decision. Nikkei 225 (-0.7%) led the way with losses as the index decoupled from moves in the JPY, with the currency falling to multi-year lows against USD. Hang Seng (-0.9%) fell to a 7-week low weighed on by casino stocks, while the Shanghai Comp (-0.5%) saw some mild profit-taking after finishing yesterday’s session up 2%. Sentiment was further dented by Chinese PPI data which fell for a 36th consecutive month (Y/Y -4.8% vs. Exp. -4.3% (Prev. -4.3%). JGBs pared their earlier advance following the results of today’s JPY 400bln enhanced liquidity auction for old 20s, 30s and 40s, which saw the lowest b/c since December 2013.
European equities have traded lower since the open in sympathy with their Asian counterparts, although price action for stocks has been swayed more by notable underperformance in energy and basic material names as the USD-index weighs on the commodity complex. This has provided a bulk of the direction across equities thus far with the European session currently void of much in the way of macro newsflow. In fixed income markets, Bunds have continued the trend seen since yesterday with German paper continuing to be supported by the beginning of the ECB’s bond-buying programme, while other European paper has printed further record-low yields. Additionally, the German 5s/30s curve is the flattest since 2008 and therefore seeing a continued flattening of the German curve since last week’s ECB press conference were Draghi revealed the central bank would not buy bonds with a yield below -0.2%; a threshold which the German Schatz currently resides outside of. However, analysts at IFR note talk that the size of purchases today has fallen from the amount seen yesterday
QCOM to buyback USD 10bln (program now at USD 15bln) and boosts quarterly dividend by 14% to USD 0.48/shr from USD 0.42 vs. Exp. USD 0.47. (BBG) Verisk Analytics (VRSK) are to purchase Wood MacKenzie for GBP 1.850bln. (BBG) Fed’s Fisher (Non-Voter, Hawk) said the Fed may have to raise rates sharply if lift-off is postponed. Fisher repeated his preference is to hike rates early and gradually, adding that he trusts Fed Chair Yellen will not wait too long to raise rates. (RTRS/BBG) As a guide, Fisher is due to retire from his role as Dallas Fed President on 19th March.
In FX, the main mover so far has been the USD-index which surged to a fresh 12yr high overnight after gaining as much as 0.59%, in an extension of Friday’s post-NFP gains. Consequently, EUR/USD slipped below 1.0800 to touch its lowest level since Sept’03 while USD/JPY rose above 122.00 for the first time since Jul’07, after breaching long-term resistance at 121.85 (Dec 7th high). Overnight, poor business confidence data weighed on AUD, while NZD briefly saw an aggressive sell-off amid reports of a threat to contaminate infant milk formula with pest-control poison 1080. The NZ police later established there was no sign of contamination which provided some reprieve for the currency.
In Commodities, the main source of direction has stemmed from the broadly stronger USD with bearish sentiment for energy prices also stemming from comments from the Kuwaiti OPEC governor who said he expects OPEC to roll over current policy at the next meeting on June 5th. Furthermore, tomorrow’s DoE inventories are expected to reveal a build of 4.75mln bbls. In metals markets, both spot gold and silver have been weighed on by the USD, while iron prices overnight remained near record lows amid ongoing concerns of weakness in China’s steel industry and mixed data from China where consumer prices beat estimates but producer prices declined for a 36th consecutive month.
Brent decline is longest losing streak in almost 3 months; slumps below $58 for first time since Feb. 19 to near bottom of range since mid-Feb as Iran nuclear talks gain momentum and dollar gains. WTI below $50; EIA inventory data tmrw, Bloomberg survey median est. to show build. April Brent -55c at $57.98 as of 9:04am London, day range $57.89-$58.72; WTI -36c at $49.64, range $49.62-$50.36; volume -44%; WTI 1st-2nd mo. contango stable at -$1.63; settled yday at – $1.66, smallest since Feb. 24; WTI-Brent shrinks to -$8.31; settled at -$8.53, narrowest since Feb. 19
In Summary: European shares trade mixed with the real estate and travel & leisure sectors outperforming and oil & gas, basic resources underperforming. Central banks said to be buying German 5-year notes on day 2 of European QE. Euro continues decline against dollar. China Feb. CPI rise above estimates. Greece to resume talks with its creditors in Brussels on Wednesday. The Swiss and Dutch markets are the best-performing larger bourses, Spanish the worst. The euro is weaker against the dollar. German 10yr bond yields fall; Japanese yields increase. Commodities decline, with copper, nickel underperforming and natural gas outperforming. U.S. wholesale inventories, small business optimism, JOLT job openings due later.
Market Wrap
S&P 500 futures down 0.4% to 2068.8
Stoxx 600 up 0.1% to 393.6
US 10Yr yield up 0bps to 2.19%
German 10Yr yield down 3bps to 0.29%
MSCI Asia Pacific down 1.1% to 142.4
Gold spot down 0.7% to $1158.7/oz
Eurostoxx 50 -0.4%, FTSE 100 -0.2%, CAC 40 -0.2%, DAX -0.3%, IBEX -0.6%, FTSEMIB -0.3%, SMI +0.4%
MSCI Asia Pacific down 1.1% to 142.4
Nikkei 225 down 0.7%, Hang Seng down 0.9%, Kospi down 0.4%, Shanghai Composite down 0.5%, ASX up 0%, Sensex down 0.8%
Euro down 0.83% to $1.0762
Dollar Index up 0.76% to 98.33
Italian 10Yr yield down 5bps to 1.23%
Spanish 10Yr yield down 3bps to 1.24%
French 10Yr yield down 3bps to 0.57%
S&P GSCI Index down 0.6% to 408.1
Brent Futures down 1.2% to $57.9/bbl, WTI Futures down 0.8% to $49.6/bbl
LME 3m Copper down 1.7% to $5775/MT
LME 3m Nickel down 1.6% to $14270/MT
Wheat futures down 0.8% to 486 USd/bu
Bulletin Headline Summary from RanSquawk and Bloomberg
The USD-index has been the main-mover so far, pushing EUR/USD below 1.0800 and USD/JPY below 122.00 in an extension of the move seen since last week’s NFP report
The stronger USD has weighed on the commodity complex, causing underperformance in energy and material-related stocks in Europe
Looking ahead, ECB’s Nowotny, BoE’s Carney and McCafferty are all due on the speaker slate
Treasuries gain, following euro-area sovereigns, before week’s auctions begin with $24b 3Y notes; WI yield 1.125%, highest since April 2011.
Euro-area national central banks were said to have bought government bonds, including German debt that trades with a negative yield, in the second day of QE
European finance ministers said time and money are running out with Greece still to make good on its bailout commitments; talks with creditors are due to start tomorrow alongside technical monitoring in Athens
Draghi told Greek officials they face a critical situation and must let euro-area representatives return to Athens if they are ever going to obtain more aid, according to two European officials
German CDU lawmaker Fuchs, speaking on Bloomberg TV, said Greece not fulfilling its obligations currently and a Greek exit could be managed
China’s consumer prices rose 1.4% in February, faster than economists forecast, after the central bank stepped up policy easing and the Lunar New Year holiday pushed up food and transport costs
New Zealand police said they are investigating a threat to poison infant formula, putting the reputation of the world’s biggest dairy exporting nation at risk and sending the local currency lower
Credit Suisse Group AG named Prudential Plc’s Tidjane Thiam to replace Brady Dougan as CEO as the bank grapples with declining profitability at the securities unit and weakened capital
Sovereign 10Y yields mostly lower. Asia