Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1143.80 down $3.40 (comex closing time)
Silver $14.96 down 7 cents.
In the access market 5:15 pm
Gold $1145.17
Silver: $15.02
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a poor delivery day, registering 0 notices for nil ounces . Silver saw 10 notices filed for 50,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 245.00 tonnes for a loss of 58 tonnes over that period.
In silver, the open interest rose by a huge 1258 contracts despite the fact that yesterday’s price was down by 16 cents. The total silver OI continues to remain extremely high, with today’s reading at 186,974 contracts now at decade highs despite a record low price. In ounces, the OI is represented by .935 billion oz or 132% of annual global silver production (ex Russia ex China). 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 as they continue to raid as basically they have no other alternative. Today again, we had banker shortcovering.
In silver we had 10 notices served upon for 50,000 oz.
In gold, the total comex gold OI rests tonight at 470,720 for a gain of 8,036 contracts despite the fact that gold was down $6.10 yesterday. We had 0 notices filed for nil oz today.
We lost 1.19 tonnes of gold tonnage at the GLD / thus the inventory rests tonight at 707.88 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. I am sure that 700 tonnes is the rock bottom inventory in gold. Anything below this level is just paper and the bankers know that they cannot retrieve “paper gold” to send it onwards to China . In silver, we had no change in inventory at the SLV / Inventory now rests at 327.593 million oz.
We have a few important stories to bring to your attention today…
1. Today, we had the open interest in silver rise by a huge 1,258 contracts to 186,974 despite the fact that silver was down by 16 cents yesterday. We again must have had some shortcovering by the bankers as they feared something was brewing in the silver arena but it was to no avail. The OI for gold rose by another 8,036 contracts up to 470,720 contracts as the price of gold was down by $6.10 yesterday. Something big is going on behind the scenes as both silver and gold are being accumulated.
(report Harvey)
2 Today, 10 important commentaries on Greece
(zero hedge, Bloomberg/Reuters/)
3. Two big stories on oil today
(zero hedge)
4. Gold trading overnight
(Goldcore/Mark O’Byrne/)
(zero hedge)
5 Trading of equities/ New York
(zero hedge)
6 USA stories: Poor Philly Mfg index
7. Dave Kranzler IRD discusses the huge increase in gold OI
(Dave Kranzler/IRD)
Here are today’s comex results:
The total gold comex open interest rose by 8,036 contracts from 462,664 up to 470,720 despite gold being down $6.10 in price yesterday (at the comex close). We are now in the next contract month of July and here the OI rose by zero contracts to 158 contracts. We had 0 notices filed yesterday and thus we gained 0 contracts or an additional nil ounces will stand in this non active delivery month of July. The next big delivery month is August and here the OI increased by 1,043 contracts up to 236,104. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 156,378. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was poor at 175,709 contracts. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI rose by a huge 1258 contracts from 185,716 up to 186,974 despite the fact that the price of silver was down by 16 cents in price with respect to yesterday’s trading and now in total sympathy with gold. We continue to have our bankers pulling their hair out with respect to the continued high silver OI as the world senses something is brewing in the silver (and gold ) arena. The next delivery month is July and here the OI rose by 9 contracts up to 126. We had 1 notice served upon yesterday and thus we gained 10 contracts or an additional 50,000 ounces of silver will stand for delivery in this active month of July. This is the first time in quite some time that we have not lost any silver ounces standing immediately after first day notice. The August contract month saw it’s OI rise by 2 contracts up to 175. The next major active delivery month is September and here the OI rose by 892 contracts to 127,681. The estimated volume today was poor at 34,674 contracts (just comex sales during regular business hours). The confirmed volume yesterday (regular plus access market) came in at 38,437 contracts which is fair in volume. We had 10 notices filed for 50,000 oz.
July initial standing
July 16.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
203.60 oz (Scotia)
Withdrawals from Customer Inventory in oz
1,607.50 oz (Scotia) 50 kilobars
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
199.946 (HSBC)
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
158 contracts 15,800 oz
Total monthly oz gold served (contracts) so far this month
412 contracts(41,200 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
203.60 oz
Total accumulative withdrawal of gold from the Customer inventory this month
223,805.9 oz
Today, we had 1 dealer transaction
we had one dealer withdrawals
i) Out of Scotia: 203.60 oz
total Dealer withdrawals: 203.60 oz
we had 0 dealer deposits
total dealer deposit: zero
we had 1 customer withdrawal
i) out of Scotia: 1607.500 oz (50 kilobars)
total customer withdrawal: 1607.500 oz
We had 1 customer deposit:
i) Into HSBC:
199.946 oz
Total customer deposit: 199.946 ounces
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 July contract month, we take the total number of notices filed so far for the month (412) x 100 oz or 41,200 oz , to which we add the difference between the open interest for the front month of July (158) 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 July contract month:
No of notices served so far (412) x 100 oz or ounces + {OI for the front month (158) – the number of notices served upon today (0) x 100 oz which equals 57,000 oz standing so far in this month of July (1.7729 tonnes of gold).
we gained 100 additional gold ounces standing in this non active delivery month of July..
Total dealer inventory 482,778.738 or 15.016 tonnes
Total gold inventory (dealer and customer) = 7,876,795.388 oz or 245.00 tonnes
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.00 tonnes for a loss of 58 tonnes over that period.
end
And now for silver
July silver initial standings
July 16 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil
Withdrawals from Customer Inventory
595,780.767 oz (CNT, Delaware)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
nil
No of oz served (contracts)
10 contract (50,000 oz)
No of oz to be served (notices)
116 contracts (580,000 oz)
Total monthly oz silver served (contracts)
3277 contracts (16,385,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
nil
Total accumulative withdrawal of silver from the Customer inventory this month
6,383,162.0 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 deposit: nil oz
We had 2 customer withdrawals:
i)Out of CNT: 587,971.37 oz
ii) Out of Delaware: 7809.397 oz
total withdrawals from customer: 595,780.767 oz
we had 0 adjustments
Total dealer inventory: 58.96 million oz
Total of all silver inventory (dealer and customer) 178.408 million oz
The total number of notices filed today for the July contract month is represented by 10 contracts for 50,000 oz. To calculate the number of silver ounces that will stand for delivery in July, we take the total number of notices filed for the month so far at (3277) x 5,000 oz = 16,385,000 oz to which we add the difference between the open interest for the front month of July (126) and the number of notices served upon today (10) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the July contract month:
3277 (notices served so far) + { OI for front month of July (126) -number of notices served upon today (10} x 5000 oz ,= 16,965,000 oz of silver standing for the July contract month.
We gained 50,000 ounces standing in this active delivery month of July. .
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.comorhttp://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:
July 16./we lost 1.19 tonnes of gold tonight/Inventory rests at 707.88 tonnes
July 15/no change in inventory/gold inventory rests tonight at 709.07 tonnes.
July 14.2015:no change in inventory/gold inventory rests at 709.07 tonnes
July 13.2015: a big inventory gain of 1.49 tonnes/Inventory rests tonight at 709.07 tonnes
July 10/ we had a big withdrawal of 2.07 tonnes of gold from the GLD/Inventory rests this weekend at 707.58 tonnes
July 9/ no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 8/no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 7/ no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 6/no change in gold inventory at the GLD/Inventory at 709.65 tonnes
July 2/we had a huge withdrawal of inventory to the tune of 1.79 tonnes/rests tonight at 709.65 tonnes
July 1.2015; no change in inventory/rests tonight at 711.44 tonnes
June 30/no change in inventory/rests tonight at 711.44 tonnes
June 29/no change in inventory/rests tonight at 711.44 tonnes
June 26./it did not take our bankers long to raid the GLD. Yesterday they added 6.86 tonnes and today, 1.75 tonnes of that was withdrawn/Inventory tonight rests at 711.44 tonnes.
June 25/a huge addition of 6.86 tones of inventory at the GLD/Inventory rests tonight at 713..23 tonnes
July 16 GLD : 707.88 tonnes
end
And now for silver (SLV)
July 16./no change in silver inventory/rests tonight at 327.593 million oz
July 15./no change in silver inventory/rests tonight at 327.593 million oz/
July 14.2015: no change in silver inventory/rests tonight at 327.593 million oz.
July 13./an inventory gain of 1.051 million oz/Inventory rests at 327.593 million oz
july 10/no change in silver inventory at the SLV tonight/inventory 326.542 million oz/
July 9/ a huge increase in inventory at the SLV of 1.337 million oz. Inventory rests tonight at 326.542 million oz
July 8/no change in inventory at the SLV/rests at 325.205
July 7/no change in inventory at the SLV/rests at 325.205 tonnes
July 6/we have a slight inventory withdrawal which no doubt paid fees. we lost 137,000 oz/Inventory rests tonight at 325.205 million oz
July 2/ no change in inventory at the SLV/rests tonight at 325.342 million oz
July 1/ we had an addition of 1,624,000 oz into the SLV inventory/rests tonight at 325.342 million oz
June 30/we lost another 621,000 oz of silver from the SLV/Inventory rests at 323.718 oz (somebody must be in great need of physical silver)
June 29/ a monstrous loss of 4.777 million oz of silver from the SLV/Inventory rests tonight at 324.339 million oz
June 26/today we had another addition of 198,000 of silver/Inventory rests at 329.116 million oz
July 16/2015: tonight inventory rests at 327.593 million oz
end
And now for our premiums to NAV for the funds I follow:
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 9.9 percent to NAV usa funds and Negative 10.00% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 62.2%
Percentage of fund in silver:37.6%
cash .4%
( July 16/2015)
2. Sprott silver fund (PSLV): Premium to NAV rises to 2.21%!!!! NAV (July 16/2015) (silver must be in short supply)
3. Sprott gold fund (PHYS): premium to NAV rises to – .66% toNAV(July 16/2015
Note: Sprott silver trust back into positive territory at 2.21%
Sprott physical gold trust is back into negative territory at -.66%
Central fund of Canada’s is still in jail.
Sprott formally launches its offer for Central Trust gold and Silver Bullion trust:
SII.CN Sprott formally launches previously announced offers to CentralGoldTrust (GTU.UT.CN) and Silver Bullion Trust (SBT.UT.CN) unitholders (C$2.64)
Sprott Asset Management has formally commenced its offers to acquire all of the outstanding units of Central GoldTrust and Silver Bullion Trust, respectively, on a NAV to NAV exchange basis.
Note company announced its intent to make the offer on 23-Apr-15 Based on the NAV per unit of Sprott Physical Gold Trust $9.98 and Central GoldTrust $44.36 on 22-May, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
Based on the NAV per unit of Sprott Physical Silver Trust $6.66 and Silver Bullion Trust $10.00 on 22-May, a unitholder would receive 1.50 Sprott Physical Silver Trust units for each Silver Bullion Trust unit tendered in the Offer.
* * * * *
end
And now for your overnight trading in gold and silver plus stories
on gold and silver issues:
(courtesy/Mark O’Byrne/Goldcore)
‘Plan B’ Needed As Euro One Recession Away From Implosion – David McWilliams
By Mark O’ByrneJuly 16, 20150 Comments
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– Euro is one recession away from implosion – David McWilliams
– Mismanagement of euro “both laughable and terrifying”
– “When economic negotiations stop making economic sense, you should begin to question the motives of the EU”
– Germany is out of control
– Successful British exit will be model for other countries
– Euro membership is now conditional
– “Countries that don’t play ball with Germany will see their banking system used against their democratically elected politicians”
– Investors and savers need “PLAN B”
Europe’s next recession will “kill the euro” according to economist, writer and journalist David McWilliams.
David McWilliams at Ireland’s Banking Inquiry
McWilliams, who is among the best economics commentators from the only Anglophone nation in the euro – Ireland, warns that we only have a few months to plan an alternative to the disastrous consequences on peripheral nations of what he sees as German hegemony.
He describes the mismanagement of the euro currency as “both laughable and terrifying”.
Marathon negotiation sessions are not conducive to clear headed, rational decision making on the future of a nation or the eurozone. Indeed, it smacks of coercion.
He lambasts the suggestion offered that Greece could have a “temporary euro”, adding, “If the board and management of a public company dealt with problems like this, the share price would collapse. There is quite simply no corporate governance within the euro”.
David McWilliams believes that Germany is out control. France is no longer strong enough to offer a counterweight and Britain is happy to allow the circus to continue as they focus on potentially getting out of the EU.
He describes last weekends negotiations in Brussels as a “teutonic kangaroo court”. Should Britain successfully navigate its way out of the EU, other countries will likely follow rather than exist as provinces of Germany.
Norway and Switzerland have coped just as well from the outside as their EU neighbours.
He makes the obvious, though seldom heard assertion that “when economic negotiations stop making economic sense, you should begin to question the motives of the EU”.
Pointing to the plundering of Greek state assets to pay off creditors whilst forcing further austerity on the Greek people. Each previous round of austerity has caused the economy to contract further – thus forcing Greece into a debt trap from which it cannot escape. We believe this is a crucial point.
While Germany have played a major role it in the subjugation of Greece it is worth asking who truly benefits from economic negotiations that have stopped making economic sense.
Could it be the large banks who, following a similar model imposed on countries in Latin America, Southeast Asia and Africa since the 1970’s, continue to extract wealth from the poorest people on earth? Has not almost every development in the EU in the past ten years served to consolidate the power of financial institutions at the expense of the citizenry?
McWilliams highlights the dramatic u-turn in policy where membership of the EU is now conditional.
When Mario Draghi initiated the “whatever-it-takes” mass purchase of bonds of peripheral nations the message was clear – the euro is forever. Now, however, countries must bend to Germany’s demands which are the demands of politicians who want to keep their electorate happy if they are to be re-elected.
“Countries that don’t play ball with Germany will see their banking system used against their democratically elected politicians. The banking system is the soft underbelly and the Germans are prepared to orchestrate bank runs in member states to get their way. This is not only new, it is outrageous.”
McWilliams writes that Irish policy makers need to focus on a Plan B and indeed all governments in the EU are likely considering a ‘Plan B’. Indeed, we know the pragmatic Germans have done.
For example, if and when Germany’s economy overheats and rates need to rise, they will rise regardless of the capacity of the heavily indebted peripheral nations to deal with such rises. Mortgage holders in Ireland and throughout the EU would be crucified if the ECB rate moved anywhere near the historical norm of around 6%.
We share McWilliam’s lack of faith in the current political establishment, who McWilliams describes as Pharisees, to do anything of the sort. We advise clients and readers to make their own ‘Plan B’ – an investment and savings ‘Plan B’.
Reduce exposure to debt and risk assets and protect against a collapse of the euro by diversifying internationally and owning physical gold and silver bullion in the safest vaults in the safest jurisdictions in the world.
GoldCore has partnered with Global Macro 360 to offer GoldCore readers a discounted 6 month or yearly subscription membership to David McWilliam’s daily market insights. Follow Global Macro 360 for more in depth economic analysis on the global macro economy, including the gold price.
Click Here for your discounted subscription to Global Macro 360
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,145.10, EUR 1,050.12 and GBP 732.79 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,154.75, EUR 1,047.58 and GBP 739.09 per ounce.
Gold in EUR – 5 Year
Yesterday, gold fell $5.90 to $1,149.30 an ounce and silver slipped $0.27 to $15.11 an ounce. Gold in Singapore for immediate delivery traded marginally lower as did gold bullion in Switzerland – dipping to below $1,144/oz.
The short term trend remains lower. Gold looks set for one last sell off and capitulation and the move lower yesterday and today may signal the start of that phase.
Good physical supply demand fundamentals and a very supportive macroeconomic backdrop are being ignored and the momentum driven and increasingly computer driven futures market is dominating and pushing prices lower again.
Concerns about a Fed interest rate increase are also weighing on the market. Although to an extent we would be surprised if that was not already priced into the gold market – as it has been very well flagged at this stage.
Silver for immediate delivery was 0.4 percent lower at $15.06 an ounce, dropping for a fourth day. Spot platinum fell 1.4 percent to $1,007.51 an ounce, while palladium fell 1 percent to $630.95 an ounce.
Breaking News and Research Here
end
(courtesy Dave Kranzler/IRD)
Dave Kranzler continues with yesterday’s theme on the huge rise in the gold OI at the comex:
Comex Paper Gold Open Interest Continues Its Vertical Ascent
July 16, 2015Financial Markets, Gold, Market Manipulation, Precious MetalsComex, fiat money bubble, FOMC, gold futures, LBMA, Ponzi scheme, stock bubble, The Fed
From sublime to ridiculousness there is only one step. – Napoleon
The Fed is nothing but a mafia organization that took control of the United States starting in 1913 (Rory Hall, The Daily Coin). In sheer defiance of all free market principles, the paper gold open interest on the Comex continues to move inversely to the price.
Yesterday the open interest in fraudulent paper gold futures open interest spiked up another 8,056 contracts to 470,720 contracts. This added another 800,560 – 372 tonnes – ounces of paper gold to the Comex open interest, while the amount of gold “received” into Comex vaults increased by only 35,107 ozs.
Click image to enlarge:
Recall that Germany is trying to get back just 300 tonnes of gold from the Fed but has to wait seven years for this to happen. But the Fed, through its agent bullion banks, can create more than 300 tonnes of paper gold in just one day (remember Bernanke’s magical electronic printing press). Why won’t Germany just agree to hold paper gold? Based on the business activity of the Comex, paper gold is perfect substitute for real gold. Angela? Wolfgang? Jens (Weidmann, head of the Bundesbank)?
The amount of fraudulent paper gold created by the banks yesterday is 165% of the total amount of gold that is being reported as “registered,” or available to be delivered. No other commodity in the history of the world is allowed to operate with kind of paper to physical ratio.
The entire U.S. financial and economic system is nothing but one enormous fraudulent Ponzi scheme enabled by the complete takeover of the U.S. Government by corporate and banking interests (see this podcast with John Titus on the Shadow of Truth for direct proof of my assertion). The Comex is ultimate symbol of complete fraud and corruption that has completely engulfed the system.
Historically the level of open interest in gold and the price of gold have been highly correlated. The last time the paper gold futures interest was as high as it is now was November 27, 2012. The price of gold was $1741 per ounce.
The only conclusion that can be drawn is that the Federal Reserve, likely on orders from the BIS, is going to try and suffocate the price of gold. The unintended consequence is the enormous drainage of gold from western vaults into the eastern hemisphere. I suspect the bullion banks themselves are on the receiving end of that gold.
At some point the Comex itself will suffocate under the weight of paper gold. The elitists will conjure some event of force majeure and the Comex will exercise its right to settle the paper with more paper, i.e. U.S. dollars. At that point they may as well use drachmas…
Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’ – “Ayn Rand, Atlas Shrugged”
end
(courtesy GATA)
Connecticut Public Radio program on gold includes GATA secretary
Submitted by cpowell on Thu, 2015-07-16 01:01. Section: Daily Dispatches
9p ET Wednesday, July 15, 2015
Dear Friend of GATA and Gold:
Connecticut Public Radio’s Colin McEnroe Show today discussed gold for 49 minutes, the participants including Matthew Hart, author of “Gold: The Race for the World’s Most Seductive Metal”; Kim Fisher, president and CEO of Mel Fisher’s Treasures in Key West, Florida, the company that located and salvaged the Spanish treasure ship Atocha; and your secretary/treasurer, who argued that gold is important now mainly as the primary target of central bank market rigging.
The program, introduced with a parody of doomsday-style advertising for gold bullion sales, can be heard at Connecticut Public Radio’s Internet site here:
http://wnpr.org/post/allure-gold-throughout-history-and-modern-age
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Turd Ferguson/Craig Hemke/TF Metals/GATA)
TF Metals Report: Another Comex oddity
Submitted by cpowell on Wed, 2015-07-15 20:32. Section: Daily Dispatches
4:30p ET Wednesday, July 15, 2015
Dear Friend of GATA and Gold:
The TF Metals Report’s Turd Ferguson today describes indications of surprisingly strong delivery claims for silver contracts on the New York Commodities Exchange, possibly an indication of tightness in supply. His commentary is headlined “Another Comex Oddity” and it’s posted at the TF Metals Report here:
http://www.tfmetalsreport.com/blog/7000/another-comex-oddity
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy Simon Black/SovereignMan.com)
Debt Is The Barbarous Relic! Not Gold
Submitted by Simon Black via SovereignMan.com,
“The first form of culture,” wrote historian Will Durant, “is agriculture.”
And he was right. When human beings discovered 10,000 years ago that the soil would provide more food than they could possibly eat, this changed everything.
For the first time ever, early humans could actually work WITH nature and reliably control their food production.
They were no longer dependent on unpredictable wildlife or the dangers of the hunt.
Nor were they resigned to devouring an entire beast in one sitting, only to end up right back where they started– in search of their next meal.
Agriculture gave them the opportunity to produce far more than they could consume. And to easily save the surplus for a later time.
To save like this is completely natural. And by that I mean saving is part of nature.
Dogs bury their bones. Squirrels hoard nuts. Even plants set aside some excess solar energy for a rainy day by producing and storing sugar.
For us humans, agriculture was our earliest form of savings. And it was the key ingredient to civilization.
With a vast pool of food savings at his disposal, early man could put down roots and build societies without having to worry about where the next meal would come from.
It was this sense of savings that formed the dividing line between primitive man and civilized man.
This reminds me of that old criticism about gold being a “barbarous relic”.
John Maynard Keynes first coined the term when he denounced the gold standard, and Paul Krugman has echoed this sentiment in our own time.
Both men are champions of government spending and the inexhaustible creation of paper money.
It’s a curious statement, though, given that gold is an acknowledged form of savings.
Even governments and central banks around the world continue to hold gold as part of their official reserves.
Owning gold is saving, which by definition is civilized, i.e. NOT barbarous.
Debt, on the other hand, is the exact opposite. It is a lack of savings that shows a complete disregard for the future.
It is the modern equivalent of gorging on some wild beast with no thought to tomorrow’s meal… or in this case, no thought of tomorrow’s generation.
Debt is the barbarous relic. Not gold.
And governments are up to their eyeballs in it, continuing to engage in this primitive, uncivilized behavior with wanton abandon.
Don’t expect them to change their ways.
Our society awards our most respected prizes for intellectual achievement to faux-scientists who encourage these barbarous acts.
They create complex mathematical models, ‘proving’ why our Neanderthal governments should print more money, borrow more debt, and stage fake alien invasions to boost the economy.
No doubt future anthropologists will find this to be a curious and savage system.
And now your overnight trading in bourses, currencies, and interest rates from Europe and Asia:
1 Chinese yuan vs USA dollar/yuan weakens to 6.2094/Shanghai bourse green and Hang Sang: green
2 Nikkei closed up by 136.79 points or 0.67%
3. Europe stocks all in the green /USA dollar index up to 97.55/Euro down to 1.0894
3b Japan 10 year bond yield: falls to 44% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 124.01
3c Nikkei still just above 20,000
3d USA/Yen rate now just above the 124 barrier this morning
3e WTI 51.73 and Brent: 57.63
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 up for WTI and up for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund falls to .82 per cent. German bunds in negative yields from 4 years out.
Except Greece which sees its 2 year rate falls to 26.77%/Greek stocks this morning: stock exchange closed again/ still expect continual bank runs on Greek banks /Greek default to the IMF in full force/
3j Greek 10 year bond yield falls to: 12.30%
3k Gold at 1144.00 dollars/silver $14.98
3l USA vs Russian rouble; (Russian rouble par in roubles/dollar in value) 56.95,
3m oil into the 51 dollar handle for WTI and 57 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!!
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9567 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0422 well below the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p Britain’s serious fraud squad investigating the Bank of England/
3r the 4 year German bund remains in negative territory with the 10 year moving closer to negativity at +.82%
3s The ELA is still frozen today at 88.6 billion euros. The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Greece votes and agrees to more austerity even though 79% of the populace are against.
4. USA 10 year treasury bond at 2.44% early this morning. Thirty year rate above 3% at 3.15% / yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Global Stocks Jump After Greeks Vote Themselves Into Even More Austerity
And so the 2015 season of the Greek drama is coming to a close following last night’s vote in Greek parliament to vote the country into even more austerity than was the case before Syriza was voted into power with promises of removing all austerity, even with Europe – which formally admits Greece is unsustainable in its current debt configuration – now terminally split on how to proceed, with Germany’s finmin still calling for a “temporary Grexit”, the IMF demanding massive debt haircuts, while the rest of Europe (and not so happy if one is Finnish or Dutch) just happy to kick the can for the third time.
The following tweet probably best captures the surreal nature of the “deal”:
Which means that nothing is really fixed, Greece will remain a pass-through vehicle for the Troika to pay into so it can repay itself, while the Greek economy continues to disintegrate, and this whole theater will repeat itself in X months, just with a different set of players.
For, stocks, however kicking the can is the best possible news as it means even more debt will be layered, which will force the ECB to keep rates at zero and/or negative for longer, and nowhere is this seen better than in European equities, currently at 6 week highs, and US futures, both of which are surging this morning with Europe in the green across the board: Eurostoxx 50 +1.2%, FTSE 100 +0.5%, CAC 40 +1.4%, DAX +1.5%, IBEX +1.3%, FTSEMIB +1.2%, SMI +1%.
European equities trade in the green (Euro Stoxx: +1.5%) as exporters outperform amid the weaker EUR. In company specific news, Bloomberg sources suggest Volkswagen’s (+2.4%) Audi abandoned their plans to sell 600,000 cars in China this year, seeing an immediate fall of 2.5% before paring much of this move due to the aforementioned EUR weakness and after data showed European car sales had their biggest jump in five and a half years.
Asian equities rose after the Greek parliament voted to pass the preliminary bailout reforms. Consequently, ASX 200 (+0.6%) extended its relief rally led by gains in financials . Nikkei 225 (+0.7%) was led by exporters benefitting from JPY weakness, coupled with positive sentiment in the region. Chinese stocks initially opened lower as margin debt trading fell for the first time this week, while the PBoC conducted its first net weekly drain since April, however prices recovered in continuation of the recent volatility seen in Chinese stock markets. JGB’s rose following a well-received 5-yr JGB auction which printed a higher than prior b/c.
Fixed income markets trade in modest negative territory amid the strength in equities, while Bunds underperform as France auctioned EUR 8bIn worth of bonds and Spain auctioned EUR 6.4bIn of bonds, with all bid/covers lower than previous.
Today sees a number of high profile earnings including Goldman Sachs, Citigroup and Google.
The EUR, which was kept afloat as a result of carry-trade unwinds and ECB support during the Greek drama, has seen weakness throughout the European morning to see EUR/USD reside at 6 week lows and briefly breaking below 1.0900 while EUR/GBP fell to fresh 8 year lows. This comes in the wake of yesterday’s Greek parliamentary vote, seeing the deal with creditors pass, to now be voted on by other Eurozone parliaments.
Naturally, sentiment this morning has been relatively bullish with regards to Greece despite Bloomberg sources suggesting that the ECB has not given a decision on emergency aid for Greek banks but favour seeing the cap remain on hold, with the sources also suggesting that Greece requested increase in ELA of EUR 1.5bIn. This comes as Bloomberg sources later noted that the Eurozone has provisionally agreed to a EUR 7bIn bridge loan for Greece, with Finland, who are traditionally against the idea of providing Greece more capital set to approve Greek bailout talks.
EUR weakness also comes after recent hawkish comments from both the Fed and BoE, with the ECB rate decision scheduled for later today with President Draghi due to give his press conference shortly after, while Eurozone CPI data today was in line with expectations.
Elsewhere, USD/JPY trades in close proximity to a large option expiry at today’s NY cut at 124.00 (USD 1.3bIn), with USD index heading into the North American crossover at trading near its highs (+0.2%) . Asian hours saw NZD underperform as participants reacted to the latest Fonterra GlobalDairyTrade auction, where prices declined to 6-year lows and New Zealand CPI printed softer than expected (0.4% vs. Exp. 0.5%), which allows further scope for the RBNZ to cut rates.
The metals complex has seen weakness today amid USD strength and concerns mounting regarding the Chinese economy , demonstrated most recently by Audi withdrawing their planned targets of selling 600,000 cars in the country. Platinum is the underperformer after breaking to fresh lows and trading at its lowest level since February 2009, with palladium at its lowest level since 2012. Energy markets saw WTI Aug’15 futures break above the USD 52.00 handle after yesterday saw bearish sentiment and analysts at Bank of America say that there is a possibility that Iran could increase oil production to 700K bpd next year after sanctions have been lifted.
Looking ahead, as well as ECB’s Draghi, today sees a continuation of Fed’s Yellen’s semi-annual testimony to congress and comments from BoE’s Carney as well as US weekly jobs data and Philadelphia Fed business outlook.
In summary: European shares remain higher with the autos and industrial sectors outperforming and oil & gas, utilities underperforming. EU said to agree in principle to EU7b Greece bridge loan after Greek government votes to approve bailout deal. European car sales rise in June in biggest gain in 5 1/2 years. New Zealand dollar falls to 6-year low. Puerto Rico says it failed to send money for bond payments. The Swedish and German markets are the best-performing larger bourses, U.K. the worst. The euro is weaker against the dollar. Greek 10yr bond yields fall; German yields increase. Commodities gain, with silver, gold underperforming and Brent crude outperforming. U.S. jobless claims, continuing claims, Bloomberg consumer comfort, net TIC flows, Bloomberg economic expectations, Philadelphia Fed index, NAHB housing market index due later.
Market Wrap
S&P 500 futures up 0.3% to 2111.3
Stoxx 600 up 1.3% to 405.3
US 10Yr yield up 3bps to 2.39%
German 10Yr yield up 3bps to 0.86%
MSCI Asia Pacific up 0.6% to 144.3
Gold spot down 0.4% to $1145/oz
Eurostoxx 50 +1.2%, FTSE 100 +0.5%, CAC 40 +1.4%, DAX +1.5%, IBEX +1.3%, FTSEMIB +1.2%, SMI +1%
Asian stocks rise with the Sensex outperforming and the Hang Seng underperforming; MSCI Asia Pacific up 0.6% to 144.3
Nikkei 225 up 0.7%, Hang Seng up 0.4%, Kospi up 0.7%, Shanghai Composite up 0.5%, ASX up 0.6%, Sensex up 0.9%
Euro down 0.53% to $1.0892
Dollar Index up 0.37% to 97.53
Italian 10Yr yield up 0bps to 2.01%
Spanish 10Yr yield down 0bps to 2.01%
French 10Yr yield up 2bps to 1.16%
S&P GSCI Index up 0.3% to 409
Brent Futures up 1% to $57.6/bbl, WTI Futures up 0.7% to $51.8/bbl
LME 3m Copper up 0.3% to $5550/MT
LME 3m Nickel up 0.7% to $11555/MT
Wheat futures down 0.3% to 565.3 USd/bu
Bulletin Headline Summary from Bloomberg and RanSquawk
EUR has seen weakness throughout the European morning to see EUR/USD reside at 6 week lows and briefly breaking below 1.0900 while EUR/GBP fell to fresh 8 year lows.
European equities trade in the green as exporters outperform amid the weaker EUR
Today sees the ECB rate decision, followed by Draghi’s press conference, the second half of Fed’s Yellen’s semi-annual testimony to congress and comments from BoE’s Carney, US weekly jobs data and Philadelphia Fed business outlook
Treasuries fall after Greek parliament last night passed new austerity measures, as euro-area finance ministers said to agree in principle to extend EU7b bridge loan to Greece.
Loan will come from EFSM and is due to be announced on Friday once national parliaments have voted on the bailout deal, according to an official who asked not to be named because the conversations were private
Tsipras will have to rebuild his government after more than a quarter of his own lawmakers rebelled against a bailout that he accepted to keep the country in the euro
Germany’s Schaeuble told Greece the only way it’ll get a debt reduction is to leave the euro and cast doubt on the country’s ability to even complete negotiations on a third bailout
ECB likely to keep ELA to Greek lenders on hold at current EU88.6b level on Thursday, people familiar with the discussions said, as political talks over the country’s bailout continue
ECB announces rate decision today at 7:45am, with Draghi press conference to follow at 8:30am; here are five things to listen for from Mario Draghi
Puerto Rico said one of its agencies didn’t provide funds needed to cover debt payments as the cash-strapped commonwealth reels from an escalating fiscal crisis
China’s frenzied stock market boom — which soured in second half of June — helped drive a surge in financial sector growth that underpinned the economy’s better-than-expected GDP
Sovereign 10Y bond yields mostly higher. Asian, European stocks gain, U.S. equity-index futures gain. Crude oil and copper higher, gold falls
DB’s Jim Reid completes the overnight summary
Yesterday saw one of the more tame semi-annual testimonies (vs expectations) from a Fed chair that I can remember. It was pretty consistent with her comments earlier in the month with the key message being that if the economy performs as they expect they’ll likely raise rates this year but that the future path of hikes will be gradual, especially if they act sooner. The trillion dollar question is whether the data will get them over the line. I personally still think a 2015 hike is unlikely but one has to respect the repeated rhetoric on the desire for a 2015 hike from the Fed themselves. It wouldn’t take much for them to pull the trigger. Whatever they do it’s probably useful for them to keep highlighting the potential for a 2015 lift-off to ensure risk premium stays in the market thus skimming the froth off various areas of the market. So its unlikely that their rhetoric will change much over the summer.
As well as reiterating that all meetings remain live, Yellen also said that policy will remain ‘highly accommodative for quite some time’ and that the she would be willing to hold a press briefing should liftoff occur at a meeting with no scheduled press conference (October and January for example). With regards to references of Greece and China, there was very little on the whole. Yellen acknowledged the concerns around both but did not appear overly concerned in terms of the impact on the US economy. Price action largely reflected the overall tame nature of the testimony. The Dollar did firm with the DXY ending +0.51% while 10y Treasuries initially spiked a modest 2.5bps higher, only then to change tact and march lower into the close with yields eventually finishing 4.9bps lower at 2.353%. In terms of Fed Funds contracts, the Dec15 contract was unchanged at 0.285%, Dec16 3bps lower at 0.965% and Dec17 4.5bps lower at 1.650% with Bloomberg reporting that futures markets are showing a 33% chance the Fed will raise rates in September and a 65% chance by December, up from 31% and down from 66% respectively on Tuesday. So little reaction on the whole. Both the S&P 500 (-0.07%) and Dow (-0.02%) sold off into the close meanwhile as energy stocks in particular dragged the market down after WTI (-3.07%) and Brent (-2.50%) dropped on the latest rising US supply data.
In fact it was a fairly busy day for Fedspeak yesterday. As well as Fed Chair Yellen, we also heard from San Francisc