Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1209.80 down $3.80 (comex closing time)
Silver: $16.67 up 8 cents (comex closing time)
In the access market 5:15 pm
Gold $1204.50
Silver: $16.55
Gold/silver trading: see kitco charts on the right side of the commentary.
Yesterday was options expiry on the comex. On Thursday we will have options expiry on the LBMA in London and on the OTC market as well. It was no surprise at all to see the bankers try and whack gold and silver. Their attempt today was quite feeble.
Following is a brief outline on gold and silver comex figures for today:
At the gold comex today, we had a good delivery day, registering 12 notices served for 1200 oz. Silver comex filed with 50 notices for 250,000 oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 241.27 tonnes for a loss of 62 tonnes over that period. Lately the removals have been rising!
In silver, the open interest fell by 6461 contracts despite the fact that Monday’s silver price was up by 20 cents. It sure looks like we had some short covering by the crooked bankers. Also lately it is the custom for OI to liquidate somewhat once we get into an active delivery month. The total silver OI continues to remain extremely high with today’s reading at 179,411 contracts maintaining itself at multi-year highs. The front April month is now off the board. We are now at multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end. The COT report on Friday in silver showed the commercials going long in silver in a big way and the large specs going short. Is a short squeeze coming?
In silver had 50 notices served upon for 250,000 oz.
In gold, the total comex gold OI rests tonight at 403,563 for a loss of 1,,55 contracts despite the fact that gold was up by $10.70 yesterday. We had 12 notices served upon for 1200 oz.
Today, we no change in gold inventory at the GLD/ Gold Inventory rests at 739.06 tonnes.
In silver, / /we had a huge loss of 23.963 million oz of silver inventory to the SLV/ and thus the inventory tonight is 327.673 million oz
We have a few important stories to bring to your attention today…
1. Today we had the open interest in silver fall by 6461 contracts despite the rise in price yesterday (20 cents). The OI for gold fell by 1,155 contracts down to 403,563 contracts despite the fact that the price of gold was up by $10.70 yesterday. GLD remained constant but SLV lost close to 3.0 million oz
(report Harvey)
2,One important commentaries on Greece today:
Last week, we reported that sovereign Greece will raid the pension fund as well as municipality funds as they hope to garner around 2.5 billion euros. Payroll for federal employees is on Thursday. On Tuesday we were told that at most there is only 500 million euros that was available to be transferred and then late in the day, the municipalities voted to not send the money over. Yesterday we were told that Greece is short by 500 million euros in their quest to pay salaries and pensioners on Thursday. With the hope that the EU will release some of the 7.2 billion euros promised from the last bailout, Greece hopes to pass some Troika friendly reforms e.g. a single 18% VAT across the board (except medicine). Today, news broke that we had huge runs on the Greek banks which necessitated another 1.4 million euro increase of ELA. The total amount in the Greek banking system drops to 138 billion euros/an all time low.
(zero hedge)
3. USA first quarter GDP officially falls to .2% even with an extremely high inventory levels.
(zero hedge/Dave Kranzler/ IRD)
4. FOMC statements: still dovish.
(the Fed/zero hedge)
5. Bill Holter’s address to us today.
(Bill Holter/Miles Franklin)
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 1,155 contracts from 404,718 down to 403,563 despite the fact that gold was up by $10.70 yesterday (at the comex close). We are off the active delivery month of April as we enter May. Thus our next non active delivery month is May and here the OI fell by 34 contracts down to 239. The next big active delivery contract month is June and here the OI fell by 1,691 contracts down to 258,766. June is the second biggest delivery month on the comex gold calendar. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 139,926. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 164,803 contracts. Today we had 12 notices filed for 1200 oz.
And now for the wild silver comex results. Silver OI fell by 6461 contracts from 185,872 down to 179,411 despite the fact that the price of silver was up in price by 20 cents, with respect to yesterday’s trading. Somebody big is willing to take on JPMorgan.We must have had some guys leaving the silver arena as they did not like what they saw. We also witness the OI contracting once an active delivery month is upon us whether it is silver or gold. We are off the non active delivery month of April as we head into the active delivery month of May. In our May delivery month the OI fell by 14,280 contracts down to 9,081. We have 1 trading day left before first day notice on Thursday, April 30.2015. The estimated volume today was good at 72,812 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 115,799 contracts which is excellent in volume except we had many rollovers. We had 50 notices filed for 250,000 oz today.
April final standings
April 29.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
64.30 oz (Manfra)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
11,252.500 oz Brinks350 Kilobars
No of oz served (contracts) today
12 contracts (1200 oz)
No of oz to be served (notices)
0 contracts(nil) oz
Total monthly oz gold served (contracts) so far this month
2801 contracts(280,100 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
oz
Total accumulative withdrawal of gold from the Customer inventory this month
573,702.1 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 1 customer withdrawals
i) Out of Manfra: 64.30 oz (2 kilobars)
total customer withdrawal: 64.30 oz
we had 1 customer deposit
i) Into Brinks: 11,252.500 oz (350 kilobars)
total customer deposit: 11,252,500 oz
We had 0 adjustment:
Today, 0 notices was issued from JPMorgan dealer account and 9 notices were issued from their client or customer account. The total of all issuance by all participants equates to 12 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 3 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 (2801) x 100 oz or 280.100 oz , to which we add the difference between the open interest for the front month of April (12) and the number of notices served upon today (12) x 100 oz equals the number of ounces standing.
Thus the final standings for gold for the April contract month:
No of notices served so far (2801) x 100 oz or ounces + {OI for the front month (12) – the number of notices served upon today (12) x 100 oz which equal 280,100 oz or 8.712 tonnes of gold.
we neither lost nor gained any gold contracts that will stand for delivery in this April contract month.
This has been the lowest amount of gold ounces standing in an active month in quite some time.
Total dealer inventory: 603,795.373 or 18.78 tonnes
Total gold inventory (dealer and customer) = 7,756,890.161 oz. (241.27) tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 241.27 tonnes for a loss of 62 tonnes over that period. Lately the removals have been rising!
end
And now for silver
April silver initial standings
April 29 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
48,300.464 oz (Delaware,Scotia)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
nil
No of oz served (contracts)
50 contracts 250,000 oz)
No of oz to be served (notices)
0 contracts (nil oz)
Total monthly oz silver served (contracts)
616 contracts (3,080,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
884,245.2 oz
Total accumulative withdrawal of silver from the Customer inventory this month
11,484,461.5 oz
Today, we had 0 deposits 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 deposits: nil oz
We had 2 customer withdrawals:
i) Out of Delaware: 18,244.004 oz
ii) Out of Scotia; 30,056.46 oz
total withdrawals; 48,300.464 oz
we had 0 adjustments:
Total dealer inventory: 62.635 million oz
Total of all silver inventory (dealer and customer) 175.312 million oz
.
The total number of notices filed today is represented by 50 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in April, we take the total number of notices filed for the month so far at (601) x 5,000 oz = 3,080,000 oz to which we add the difference between the open interest for the front month of April (50) and the number of notices served upon today (50) x 5000 oz equals the number of ounces standing.
Thus the final standings for silver for the April contract month:
601 (notices served so far) + { OI for front month of April(50) -number of notices served upon today (50} x 5000 oz =3,080 ,000 oz standing for the April contract month.
we gained another 250,000 additional silver ounces that will stand for delivery in this April contract month.
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:
April 29/no change in gold inventory/739.06 tonnes of gold at the GLD
April 28/ no change in inventory/739.06 tonnes of gold at the GLD
April 27. we lost 3.29 tonnes of gold inventory at the GLD/Inventory rests tonight at 739.06 tonnes
April 24. no changes in gold inventory at the GLD/Inventory at 742.35 tonnes
April 23. no changes in gold inventory at the GLD/inventory at 742.35 tonnes
April 22. no changes in gold inventory at the GLD/inventory at 742.35 tonnes
April 21.2015: a huge addition of 3.26 tonnes of gold inventory at the GLD/Inventory rests at 742.35 tonnes
April 20.2015: no change in gold inventory at the GLD/Inventory rests at 739.06 tonnes
April 17.2015/ we had a huge addition of 3.01 tonnes of gold inventory at the GLD. It looks like the raids at the GLD have stopped.
April 16.2015: no change in inventory at the GLD/total inventory at 736.08 tonnes
April 15/ a huge addition of 1.79 tonnes of gold inventory added to the GLD/ Inventory tonight at 736.08 tonnes
April 14/ no change in gold inventory at the GLD/Inventory rests at 734.29 tonnes
April 13.2015: we had a withdrawal of 1.75 tonnes of GLD/Inventory at 734.29 tonnes
April 29/2015 / we had no change in tonnage of gold inventory at the GLD/Inventory stands at 739.06 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 : 739.06 tonnes.
end
And now for silver (SLV):
April 29/ we lost 2.963 million oz of silver inventory from the SLV/inventory tonight 327.673 million oz
April 28/another huge addition of 1.434 million oz to the SLV/Inventory stands tonight at 330.636 million oz
April 27.we had a huge addition of 2.976 million oz to the SLV/Inventory stands tonight at 329.202 million oz
April 24/ we had a small withdrawal of 88,000 oz of silver at the SLV/326.226 million oz
April 23.no changes in silver inventory at the SLV/326.334 million oz of inventory
April 22/no changes in silver inventory at the SLV/326.334 million oz of inventory
April 21.2015/we had another huge addition of 1.434 million oz of silver into the SLV
April 20/ no change in silver inventory tonight/SLV 324.900 million oz.
April 17.2015: no change in silver inventory tonight at the SLV.324.900 million oz
April 16.2015: no change in silver inventory tonight at the SLV/324.900 million oz
April 15.2015: no change in silver inventory tonight at the SLV/324.900 million oz is the inventory tonight.
April 29/2015 we had a huge loss (withdrawal) in inventory at the SLV (2.963 million oz / inventory rests at 327.673 million
end
And now for our premiums to NAV for the funds I follow:
Central fund of Canada data not available today/
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 6.8% percent to NAV in usa funds and Negative 6.2% to NAV for Cdn funds!!!!!!! (and they are being taken over by Sprott???)
Percentage of fund in gold 61.5%
Percentage of fund in silver:38.1%
cash .4%
( April 29/2015)
Sprott gold fund finally rising in NAV (not available tonight/website down)
2. Sprott silver fund (PSLV): Premium to NAV rises to + 0.90%!!!!! NAV (April 28/2015)
3. Sprott gold fund (PHYS): premium to NAV falls to -.31% to NAV(April 28/2015
Note: Sprott silver trust back into positive territory at +0.90%.
Sprott physical gold trust is back into negative territory at -.31%
Central fund of Canada’s is still in jail.
end
Your major physical gold stories for this morning.
Gold trading early this morning:
(courtesy Mark O’Byrne)
Europe’s Largest Airline Falls Prey to $5 Million Cyber-Theft
By Mark O’Byrne April 29, 2015 0 Comments
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– Europe’s largest airline says $5 million (€4.5m) taken from bank accounts
– Ryanair confirms hackers stole via Chinese bank
– Cash siphoned from one of its bank accounts
– Hackers transfer $5 million from a Ryanair dollar account to Chinese bank
– Highlights growing risks of cyber crime and lack of protection
– Cyberattacks as the “New Cold War” and risk to all our wealth
– Cash no longer king – deposits more risky due to cyber crime
Europe’s largest airliner in terms of passengers, Ryanair, has had $5 million siphoned from one of its bank accounts. It is alleged that Ryanair were hacked by cyber criminals and had the cash illegally transferred to a bank account in China.
Cyber thieves managed to initiate a single fraudulent transaction using a Chinese bank when stealing the money from the airline, according to reports. The hacked account held dollars which the Irish company uses for fuel purchases.
In a statement Ryanair said the following:
“The airline has been working with its banks and the relevant authorities and understands that the funds – less than $5 million – have now been frozen.”
“The airline expects these funds to be repaid shortly, and has taken steps to ensure that this type of transfer cannot recur.”
Although the sum stolen was relatively small in corporate terms and appears to have been tracked and frozen quite quickly, the incident – yet again – highlights the threat posed by cybercrime to today’s banking and financial systems.
Legislation to deter cyber theft is only as effective as the means to enforce it. It is a relatively new phenomenon that a theft could be committed without the thief having to set foot in the jurisdiction from where the asset is stolen.
If the perpetrators are above the law or reside in a different jurisdiction legislation is not an effective deterrent.
In February, we covered how Moscow based cyber security firm Kaspersky Lab had uncovered the operations of an international group of cyber criminals who stole up to $1 billion from “over 100 banking and financial institutions in 30 different countries across the world”.
To date, there appears to have been no progress in identifying the hackers demonstrating the comfort and impunity with which very savvy cyber-thieves can operate.
Guy Haselmann from Scotiabank has described cyber attacks as the “New Cold War.” In his piece “The Invisible Enemy” he refers to President Obama’s recent State of the Union address where he described “foreign cyber-threats as a ‘national emergency’.”
Obama said that the “if the US government does not improve cyber defenses, we leave our nation and our economy vulnerable”.
Haselmann goes on to suggest that warfare ideology has moved from the insane doctrine of Mutually Assured Destruction (MAD) through nuclear weaponry to “Multilateral Unconstrained Disruption” – MUD.
“This unrestricted warfare”, he says, “is meant to disrupt societal functioning; to ‘poison’ information to elevate distrust of all computer information.”
That governments are involved in this type of warfare is beyond dispute. We previously covered how a broad spectrum of countries had perpetrated cyber-attacks against their rivals.
The outcomes of such attacks, while not on a par with a nuclear holocaust, should not be taken lightly. It is believed that the deployment of the stuxnet virus by the U.S. and Israel against an Iranian nuclear facility almost caused a major environmental catastrophe.
Trojan malware, apparently of Russian origin, was found in on Nasdaq’s central servers which was capable, according to the NSA, of “wiping out the entire exchange”. The knock-on effects of such an action would likely have led to stock market crashes, recession and possibly depressions and social upheaval across the world.
The new cold war may indeed be one of cyber-warfare. If so we can expect an escalation of such attacks should relations between Washington and NATO and Russia, Iran and other Middle Eastern nations deteriorate further.
The fact that cyber theft can occur demonstrates the abstract nature of modern currency. By manipulating digits on a computer screen and through hacking, wealth can be transferred from one part of the world to another and from one bank account to another.
The means to acquire goods and services is now almost entirely determined by an intangible and virtual medium of exchange. This renders cash little better than crypto currency, although in theory crypto currency should not and cannot be printed and electronically created with reckless abandon as is happening to the dollar, euro, pound and other paper and electronic currencies today.
The risks posed by cyber-crime, cyber-warfare and cyber-terrorism to this type of monetary system should not be underestimated.
If the system were to become severely compromised or even collapse – through cyber-attacks or any of the myriad risks to the system that exist today – it is highly likely that in the ensuing panic gold and silver buying, prices would surge to levels never seen before.
That would see gold and silver rise well above the inflation adjusted record highs or real record highs above $2,500 per ounce and $150 per ounce.
Owning physical gold in segregated, allocated accounts is essential financial insurance to protect wealth today.
Important Guide: 7 Key Gold Storage Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,204.80, EUR 1,095.45 and GBP 783.99 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,201.40, EUR 1,100.56 and GBP 788.17 per ounce.
Gold climbed 0.82 percent or $9.80 and closed at $1,212.20 an ounce yesterday, while silver rose 1.4 percent or $0.23 closing at $16.61 an ounce.
In Asia overnight, Singapore gold prices ticker marginally lower and hovered at $1,209 an ounce near the end of day trading after gaining almost 3 percent the two previous trading sessions. Gold eked out small gains this morning to trade to its highest price in three weeks as a weak U.S. data and a weak dollar have lowered expectations for a U.S. interest rate hike in June.
Today’s focus will primarily be on the U.S. Federal Open Market Committee statement at 1900 GMT and the U.S. GDP data out earlier at 1330 GMT.
Most analysts are expecting a dovish statement from the Fed especially if the GDP data published today is weak. A softer dollar will should help the yellow metal’s safe haven appeal and boost prices.
China’s gold bullion imports from Hong Kong fell this March to its lowest level in seven months. Q1 saw a 9 percent fall in Chinese physical gold buying cited an industry report. Although demand as seen on the Shanghai Gold Exchange withdrawals remains near record highs.
Iran and the U.S. Navy appear poised for a battle that could degenerate into another theatre of war in the Middle East.
Yesterday, a cargo ship was shot at, boarded and confiscated by Iranian naval forces and taken to the Persian Gulf port of Bandar Abbas, on the Strait of Hormuz. 34 sailors on board the vessel are American, although U.S. officials later said that the ship, bearing the flag of the Marshall Islands, has no American sailors on board.
Iran’s FARS news agency said the vessel had been detained “for trespassing in Iran’s territorial waters.” The Pentagon said the action was “provocative.”
Some 17 million barrels per day – about 30 percent of all seaborne-traded oil – passed through the Straits of Hormuz in 2013, according to the US Energy Information Administration.
Just last week, the president directed the USS Theodore Roosevelt to the Gulf of Aden to “ensure the freedom of navigation” through its strait, US officials said, as Iranian ships approached Yemen’s shores.
Geopolitical risk remains underestimated by markets. There are a number of geopolitical Black Swans out there – from the Ukraine to the Middle East which could flare up and be the catalyst for the next stage of gold’s bull market.
Gold in late morning trading in London is down 0.53 percent at $1,205.28 an ounce. Silver is off 0.83 percent at $16.46 an ounce while platinum has dipped 0.32 percent at $1,151.49 an ounce.
end
For now, India brushes off concerns over gold import spike
Submitted by cpowell on Wed, 2015-04-29 12:27. Section: Daily Dispatches
By Suvashree Choudhury and Meenakshi Sharma
Reuters
Wednesday, April 29, 2015
MUMBAI, India — Weak oil and commodity prices are offsetting concerns at India’s central bank over the impact of a spike in gold imports on the broader economy, officials say, even as the industry forecasts another three months of strong buying.
A more sustained increase in bullion imports after June, however, could cause concern, a policymaker said.
While “we have the comfort from low oil prices, there is a large cushion and we don’t need to be very concerned about the gold imports numbers,” said one senior official involved in policy decisions, who declined to be named. Concern would kick in if imports stay at or over 100 tonnes a month after June, he said. …
… For the remainder of the report:
http://in.reuters.com/article/2015/04/29/india-gold-imports-idINKBN0NK0R…
end
(courtesy Bill Holter/Miles Franklin)
The money has to go somewhere …
The following chart from the Federal Reserve’s own data pretty much sums up America
The rate of home ownership and the labor participation rate peaked about 10-15 years ago and it’s been downhill since. Do you have any wonder after looking at this chart why if it “feels” different now? Yes the stock market is up, but could that be a function of all the funny money pumped into the system since 2008? Pumping money into the system was in response to the “peaking” of America, the money (inflation) had to go somewhere, we see the “somewhere” currently as the equity markets.
In my opinion, the housing market which was used as an ATM machine by so many going into 2007 had to give way (as pricing outstretched the ability to carry) and has only tread water back to earlier levels. Interest rates have been zeroed out which has allowed stagnant and even lower incomes to carry more debt. The obvious problem is employment, or the lack of. Jobs, real and good jobs are simply no longer available and not being generated by creating thin air money. If the real economy had jobs available, “it” wouldn’t feel as bad as it does and the rolling social unrest we have been experiencing might not have happened.
Capital “rolls” from sector to sector, it always has and always will. Too much “capital” results in a bubble (or bubbles plural). China’s real estate market qualifies as one of these bubbles in the bursting phase http://www.ibtimes.com/record-fall-property-prices-brings-more-bad-news-chinas-slumping-real-estate-market-1850704 . Their stock market is working on another … for the ages. Last week alone China saw over 4 MILLION new brokerage accounts opened, …while margin debt is escaping the stratosphere! Chinese bubble mania is no different than any before it (except maybe in scope) and as all before it will eventually burst wide open. Why does this even matter? This is important because once it does burst, the money has to go “somewhere”. If you don’t believe China has a manic stock market, the following chart shows how many NEW accounts are being opened, is this a mania?
(Bloomberg/Zerohedge)
…or this?
My point? Quite simply I believe logical and obvious …these Chinese shareholders will soon panic out and look for a new haven, probably a “safe haven”. Hundreds of millions will be looking for a safe place to hide. Will they “default” (pun intended) and run into U.S. Treasuries? Jack Lew can hope but I highly doubt it. Or will they rather choose something more familiar, like gold?
Let me point out the obvious, the Chinese population already has an affinity for gold, this is indisputable. Ask yourself some very basic mathematical questions, like how many Chinese equity investors are there? 100 million? 200 million? More? What kind of balances do they carry in their accounts? The equivalent of $1,000? More? I know you can see where I am going here! What if 50 or 100 million investors with just $1,000 in their accounts were “panicked” into gold? Could the market absorb this? Or would the fractional reserve nature of the gold market be cracked open like a watermelon? I might remind you, the world produces only 80 million gold ounces per year, where will the metal come from?
Before you go off on me and say I am going “pie in the sky”, why does this thought process not make sense? Is my number of possible investors at 50-100 million people too high? Or the account size too high at $1,000? And ask yourself this, if there were a bevy of Chinese retail investors to flood the gold market, might the rising price and scarce availability prompt others around the world to do the same? Do you see? A burst equity bubble in China has the very real ability break the fractional reserve nature of the West’s gold market because the money has nowhere else to go! Gold is the final destination, a familiar and comfortable one at that for the Chinese. Everyday Chinese investors can break it by exposing the flaw of miniscule and fractionally reserved inventory. Please don’t tell me “the Chinese will not buy from COMEX nor LBMA” because the demand will find its way to WHEREVER ANY gold is available, and very fast! What would that do to the “face” of Western finance? Will the West not then be exposed as a fraud if they can no longer meet demand?
Will China be blamed for blowing the lid off the game? Did a sovereign country “do it” or did it just happen by a stampede of “uncontrollably panicked” investors? Could China or Russia or anyone else be blamed for busting the market purposely? Much pain and loss will occur amongst Chinese speculators, I am sure the leadership of China already knows this. They also know the money has to go somewhere and the “somewhere” will expose the very heart of Western fraud. I would think a response of “oops, sorry, but we didn’t do it” might be all that is heard! Regards, Bill Holter
end
Early morning trading from Asia and Europe last night:
1. Stocks lower on major Chinese bourses as bubblemania is the name of the game in Shanghai (down) but Hong Kong up /Japan bourse closed /yen falls to 119.27/Shanghai to allow short selling to stop their bubble/China then cuts RRR by 1% and Chinese authorities sooth fears that they want to prick that huge bubble.
1b Chinese yuan vs USA dollar/yuan strengthens to 6.2000
2 Nikkei closed
3. Europe stocks all down/USA dollar index down to 96.00/Euro rises to 1.0998/
3b Japan 10 year bond yield .30% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.27/
3c Nikkei still above 20,000
3d USA/Yen rate now well below the 120 barrier this morning
3e WTI 56.77 Brent 64.56
3f Gold down/Yen down
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil down for WTI and down for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund rises to 17.0 basis points. German bunds in negative yields from 6 years out.
Except Greece which sees its 2 year rate rises quite a bit to 21.43%/Greek stocks down .30%/ still expect continual bank runs on Greek banks.
3j Greek 10 year bond yield: 11.08% (down 70 in basis point in yield)
3k Gold at 1208.00 dollars/silver $16.48
3l USA vs Russian rouble; (Russian rouble up 1/2 rouble/dollar in value) 51.47 , the rouble is still the best acting currency this year!!
3m oil into the 56 dollar handle for WTI and 64 handle for Brent/Saudi Arabia increases production to drive out competition.
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/China may be forced to do QE!! (last Monday they lowered its RRR it is effectively doing QE)
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 95.29 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0479 well below the floor set by the Swiss Finance Minister.
3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering
3r the 6 year German bund remains in negative territory with the 10 year close to negativity at +.17/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.
3s Last week the ECB increased the ELA to Greece by another large 1.5 billion euros.Today they increased it again by 1.4 billion euros. The new maximum is 76.9 billion euros. The ELA is used to replace depositors fleeing the Greek banking system. The bank runs are increasing exponentially. The ECB is contemplating cutting off the ELA which would be a death sentence to Greece and they are as well considering a 50% haircut to all Greek sovereign collateral which will totally wipe out the entire Gr. banking and financial sector.
3t Greece informally asked the IMF to delay its payment for May 1 and they refused.
3 u. With the big meeting in Riga a failure on Friday,sheer anger developed between the Finance Ministers and the Greek contingent. There was no substance in the meetings to suggest that Greece was going to reform. Greece will not reform its public pensions.
If the ECB cuts off Greece’s ELA they would have very little money left to function.
4. USA 10 year treasury bond at 2.01% early this morning. Thirty year rate well below 3% at 2.72%/yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy zero hedge/Jim Reid Deutsche bank)
Futures Flat On FOMC, GDP Day; Bunds Battered After Euro Loans Post First Increase In Three Years
Today we get a two-for-one algo kneejerk special, first with the Q1 GDP release due out at 8:30 am which will confirm that for the second year in a row the US economy barely grew (or maybe contracted depending on the Obamacare contribution) in the first quarter, followed by the last pre-June FOMC statement, in which we will find out whether Janet Yellen and her entourage of central planning academics will blame the recent weakness on the weather and West Coast port strikes and proceed with their plan of hiking rates in June (or September, though unclear which year), just so they can push the economy into a full blown recession and launch QE4.
This is how Deutsche Bank previews today’s macroeconomic twofer:
By tonight we should have a lot more to talk about with regards to the US economy and the Fed as we see the first estimate of Q1 GDP and the FOMC conclusion. As we discussed earlier in the week the consensus for growth is 1% with DB now at 0.7% and the Atlanta Fed GDPNow at 0.1%. While we think some of the likely weakness is temporary we still believe that the US will continue to struggle to get close to its former trend rate of growth as far as the eye can see. That’s partly due to sympathy with secular stagnation views and partly due to global weakness combined with a stronger dollar in a beggar thy neighbour world. We don’t think the Fed shares this view so the FOMC statement (no press conference) will be interesting as to how much they put recent weakness down to transitory factors. DB’s Peter Hooper expects that the Fed will leave the door open for a June hike but sound balanced enough to leave market expectations for a rate hike by December (with high probability) if not September in place. However our read on this is that it leaves plenty of the time for the data to go either way so although we’ll learn a lot about their thoughts on the recent weakness, the reality is that data will blow everything out of the water over the coming months.
Speaking of more QE, while hardly noticed in the US, overnight the Bank of Thailand shot a few rounds in the global currency war when it cut rates unexpectedly from 1.75% to 1.50%, followed by the Swedish Riksbank, which kept rates on hold at a negative 0.25%, however boosted its own QE by SEK40-50 billion as yet another bank tries to outpace its competitors in the race to the currency devaluation bottom.
Also overnight we got a German Bund auction which was once again technically an “uncovered” failure with just €3.65 billion in bids for a €4 billion issue, not helped when stops were tripped to the downside earlier, blowing out by a whopping 8 bps, and touching as much as 0.24% following news yesterday that Gundlach was joining Gross in shorting the German Treasury.
But perhaps the biggest catalyst for the selloff in the government complex as well as the jump in the EURUSD above 1.10 for the first time in three weeks is that for the first time in three years, lending by Euro-area banks to companies and households rose, which according to Bloomberg is “a sign that record monetary stimulus is finally reaching the economy.”
From Bloomberg:
Bank lending increased 0.1 percent in March from a year earlier, the ECB said in a statement on Wednesday. Loans had posted annual declines in every month since May 2012. Lending climbed 0.2 percent from February.
“With its more aggressive stance, the ECB is finally bringing the euro zone back to at least trend growth,” said Holger Schmieding, chief economist at Berenberg Bank in London. “Money and credit point to a firming business cycle.”
Of course, while one can be skeptical about these numbers and ask just how many of the trillions in NPLs had to be netted out of the calculation, the risk for the liquidity addicts is that loan creation will surge in the coming months and thus force the ECB to halt QE prematurely. As a reminder, commercial bank loan creation has been the all critical missing link from the European recovery.
Then again, Europe did “represent” a loan recovery in early 2012 before the latest credit dead cat bounce faded just as fast.
Back to markets, where we saw Asian stocks trade mostly lower following a mixed Wall Street close, which saw the NASDAQ 100 underperform after Twitter’s poor earnings release, dampening sentiment across Asian tech names. Shanghai Comp (-0.01%) and Hang Seng (-0.15%) fell and are