Saturday, February 23, 2019

The Time to Buy Gold Is Now

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by Justin Spittler, Casey Research:

It finally happened.

On Monday, the price of gold topped $1,300 for the first time since November.

But gold didn’t just inch past $1,300. It blew past it.

Just look at the chart below. You can see that gold jumped from $1,298 to $1,315—a 1.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} gain.

Since Monday, gold has held steadily above $1,300.

This is a big deal, and not just because $1,300 is a big round number.

• Gold tried to top $1,300 three other times this year…

It failed each time it got close. Just look at this chart.

You can clearly see that $1,300 acted as a key resistance level. It prevented gold from rallying.

But it won’t anymore. That ceiling has been breached.

This is a major victory for gold bulls. But it’s not the only reason to like gold.

• A perfect storm has hit the gold market…

North Korea is launching missiles at Japan.

Donald Trump is threatening to shut down the government to pay for the wall.

And Hurricane Harvey has rocked Houston, America’s fourth largest city. Some estimates say the storm did more than $100 billion in damage. Now, the federal government will likely shell out billions of dollars in aid, and that means sinking deeper and deeper into debt.

Long story short: investors have plenty to be nervous about right now. And that’s good for gold.

You see, gold has survived every financial crisis imaginable. It’s the ultimate safe-haven asset. This is why every investor should own a little gold. (We recommend having 10-15{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of your money in gold at all times.)

But here’s the thing. Not everyone owns gold as a chaos hedge. Some people buy it for quick profits. They trade it.

And Monday’s big breakout could be the buy signal that many traders have been waiting on.

That’s because $1,300 was a key psychological level. It was keeping a lot of investors from buying gold.

But that resistance has been broken. And that means a lot of people who were on the fence about gold could become new buyers.

Read More @ CaseyResearch.com

A Decade of Central Bank Collusion and Counting

by Nomi Prins, Daily Reckoning:

Since late 2007, the Federal Reserve has embarked on grand-scale collusion with other G-7 central banks to manufacture a massive amount of money. The scope and degree of this collusion are historically unprecedented and by admission of the perpetrators, unconventional in approach, and – depending on the speech – ineffective.

Central bank efforts to provide liquidity to the private banking system have been delivered amidst a plethora of grandiose phrases like “unlimited” and “by all means necessary.” Central bankers have played a game with no defined goalposts, no clock rundown, no max scores, and no true end in sight.

At the Fed’s instigation, central bankers built policy on the fly. Their science experiment morphed into something even Dr. Frankenstein couldn’t have imagined. Confidence in the Fed and the U.S. dollar (as well as in other major central banks globally) has dropped considerably, even as this exercise remains in motion, and even though central bankers have tactiltly admitted that their money creation scheme was largely a bust, though not in any one official statement.

Cracks in the Facade

On July 31, 2017, Stanley Fischer, vice chairman of the Fed, delivered a speech in Rio de Janeiro, Brazil. There, he addressed the phenomenon of low interest rates worldwide.

Fischer admitted that “the effects of quantitative easing in the United States and abroad” are suppressing rates. He also said there was “a heightened demand for safe assets affecting yields on advanced-economy government securities.” (Actually, there’s been heighted demand for junky assets, as well, which has manifested in a bi-polarity of saver vs. speculator preference.) What Fischer meant was that investors are realizing that low rates since 2008 haven’t fueled real growth, just asset bubbles.

Remember, Fischer is the Fed’s No. 2 man. He was also a professor to former Fed Chair Ben Bernanke and current European Central Bank President Mario Draghi. Both have considered him to be a major influence in their economic outlook.

The “Big Three” central banks — the Fed, the European Central Bank and the Bank of Japan — have collectively held rates at a zero percent on average since the global financial crisis began. For nearly a decade, central banks have been batting about tens of trillions of dollars to do so.

They have fueled bubbles. They have amassed assets on their books worth nearly $14 trillion. That’s money not serving any productive, real-economy purpose – because it happens to be in lock-down.

In his speech, Fischer channeled Bernanke, Yellen and other major central bank leaders who, having been so enthusiastic about the possibilities, later intimated that low rates and massive asset buying and/or holding programs alone aren’t enough to stimulate economic growth. Which begs the question, why they’ve continued for so long.

As this policy was propagated by the Fed, Fischer essentially admitted that the Fed caused low interest rates globally while failing to achieve the growth it promised.

With a decade of failed policy experiments behind us, why should we have faith that the Fed — or any other central bank — has any clue about what to do next? The answer is simple. We shouldn’t.

As Fischer went on to tell the Financial Times on August 15, 2017:

“It took almost 80 years after 1930 to have another financial crisis that could have been of that magnitude. And now after 10 years everybody wants to go back to a status quo before the great financial crisis. And I find that really, extremely dangerous and extremely shortsighted. One can understand the political dynamics of this but one cannot understand why grown, intelligent people reach the conclusion that [you should] get rid of all the things you have put in place in the last 10 years.”

In other words, why should we hope that a 10-year global “solution” to instill long-term financial stability and economic growth, even as it’s been repeatedly touted as such, should do what central bankers said it will? The answer again is, we shouldn’t.

The Central Bank Winners and Losers

Since the global financial crisis, the biggest G7 winners have been the Big Six US banks that profited from access to cheap money. They benefitted from central bank purchases of their securities that exaggerated the value of the remaining securities on their books. They used “printed” or electronically crafted money to stockpile cash and fund buybacks of their own shares and pay themselves dividends on those shares. By producing and distributing artificial money, central bankers distorted reality in global markets. Multi-national banks were co-conspirators in that maneuver.

After the Big Six banks passed their latest round of stress tests, they began buying even more of their own shares back. The move elevated their stock prices further. The largest U.S. bank, JP Morgan Chase, announced its most ambitious program to buy back its own shares since the 2008 crisis, $19.4 billion worth. Citigroup followed suit with a $15.6 billion buy-bank plan.

The Fed’s all-clear was just another version of quantitative easing (QE) for banks. Instead of buying bonds via QE programs, the Fed greenlighted banks to further speculate in their own stocks, creating more artificiality in the level of the stock market. In all, US banks have disclosed plans to buy back $92.8 billion of their own stock to say thank you to the Fed for the “A.” That was piling on to their existing trend; according to S&P Dow Jones Indices, “Stock repurchases by financial companies in the S&P 500 rose 10.2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in the first quarter [of 2017] and accounted for 22.2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of all buybacks.”

More ominous than that was another clear sign that a decade of money-conjuring collusion helped the same banks that caused the last crisis. Proof came in the form of a letter to the U.S. Senate banking committee from Thomas Hoenig, the vice-chairman of the U.S. Federal Deposit Insurance Corp. (FDIC), the government agency in charge of guaranteeing people’s deposits. He wrote that in 2017, U.S. banks used 99{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of their netearnings toward purchases of their own stock and paying dividends to shareholders (including themselves).

They thus legally manipulated markets in plain sight by pushing their own share prices up with cheap money availed to them by the central bank that is supposed to regulate them.

As of this year, global debt levels stood at 325{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} GDP, or about $217 trillion. The $14 trillion of assets the G-3 central banks held on their books is equivalent to a staggering 17{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of all global GDP. The European Central Bank (ECB), Bank of Japan (BOJ) and Bank of England are still buying collectively $200 billion worth of assets per month.

In the wake of that buying, noncash instruments — crypto currencies and hard assets like gold, unrelated to the main G-7 monetary system — have become increasingly attractive on the fear that in another major downturn or crisis, central banks and private banks will retract cash and liquidity from their customers.

In that likely event, banks will protect themselves and turn to governments and central banks again. In the absence of some sort of outside central bank benchmark, like a modern gold standard or use of currency basket benchmarks like the IMF’s Special Drawing Rights (SDR), currency wars will continue to be fought.

With rates hovering between zero and negative in some countries, there would be little to no room to maneuver in the face of another crisis. Thus — another thing has become increasingly clear: Central bankers have demonstrated gross negligence regarding the consequences of their monetarily omnipotent actions.

If rates were to rise higher in the US (and I don’t think we’re in for more than another 25 basis points, this year which is under last year’s Fed forecast) so would the cost of servicing that debt. That would hurt companies domestically and abroad, iinduce more defaults and a rush by the banks involved in derivatives associated with that debt to concoct more toxic assets. The vicious cycle of central bank bailouts would reverberate again.

Savers and pensioners are getting close to no interest on their nest eggs. Depositors are paying banks to house their money through fees that offset negligible interest. Small businesses have to jump through hoops to get loans for expansion purposes. Wages are stagnant. Ultimately, big banks had played the system — and us — again, this time with central banks helping to fund them. The threat of an even larger collapse looms as stock markets and global debt have been propelled higher.

As we approach the ninth anniversary of the collapse of one of my former employers, Lehman Brothers, and the 10th anniversary of the beginning of central bank collusion into the financial crisis, there has been – no change – in global G7 central bank monetary policy.

Jackson Hole offered a different spin on the same old verbiage, indicating that a bit of nipping here, means a lot of tucking somewhere else. Janet Yellen took what could be her last hoorah to craft her legacy as potential Fed Chair nominee and current Trump National Economic Council Director, Gary Cohn, awaits his possible turn. And if it’s not him, it’ll remain her, or someone else that will perpetuate more of the same policies.

Read More @ DailyReckoning.com

Why Has Silver Been Suppressed? – Jeff Nielson

by Jeff Nielson, Sprott Money:

Many previous commentaries have described and discussed the various ways in which the silver market has been manipulated in the past and is being manipulated today. What has been explained in years past, but missing from recent editions, are the reasons for the serial manipulation of the silver market.

Before getting into the basis for this systemic market crime, it is necessary to briefly identify this manipulation for the sake of newer readers. The parameters could not be more obvious.

Silver is money. Legal tender silver coins are still produced in the national mints of numerous nations – and these mints often struggle to keep the market supplied. Silver is jewelry. In many parts of the world silver jewelry continues to be widely fabricated, and even at its reduced/suppressed price, silver jewelry remains present in our societies.

Nothing has changed there. But over the past century, numerous important industrial uses have also emerged for silver. It is even more valuable today. Now look at the silver/gold price ratio . For over 4,000 years; this price ratio has gravitated around 15:1, virtually identical to the supply ratio between the two metals (17:1).

Despite being more valuable than ever, in the 1980’s and 1990’s the price of silver was driven to a 600-year low in real dollars. The silver/gold price ratio was driven to extremes as great as 100:1. Total perversion of market fundamentals.

This bankrupted more than 90{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the world’s silver mines and drove the silver market into a permanent supply deficit . The silver industry has never recovered because it has never been allowed to recover.

Why?

Why has the banking crime syndicate (the One Bank) found it necessary to not merely attack the silver sector, but to practically destroy it? Knowledgeable precious metals investors can supply part of the answer here.

Because precious metals are money; silver and gold function as the monetary equivalent of canaries in the coal mine. The supply of gold and silver money is practically flat. Thus when the bankers significantly inflate the supplies of their paper currencies (which they are always doing) the price of gold and silver must rise to reflect this relative change in supply.

A numerical example will illustrate this fundamental monetary principle: the Bernanke Helicopter Drop.

Between 2009 and the end of 2013, B.S. Bernanke ultimately quintupled the supply of U.S. dollars, from a monetary base of $800 billion up to $4 trillion. Thus denominated in U.S. dollars, the price of gold and silver had to also quintuple to reflect this supply increase. That then becomes the new base price for these monetary metals .

The prices of silver and gold were never allowed to quintuple, if you discount the fact that the price of silver was torpedoed by 60{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} immediately before Bernanke began his money-printing binge. Since that time, the supply of U.S. dollars has never decreased.

Yet despite the fact that silver and gold were never allowed to rise as far as monetary fundamentals dictated, the price of silver has since been driven down 70{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from its temporary high and the price of gold has been driven down nearly 40{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from its temporary high. More total perversion of market fundamentals.

However, this is only one reason that the silver market is subjected to an even greater degree of permanent price suppression from the Big Bank crime syndicate than the gold market. As an example of this oppressive manipulation, the permanent short position in the silver market (held by just four Big Banks) is roughly 4,000{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} larger than the short position in the crude oil market, in proportionate terms. Totally illegal.

The reason why the banking crime syndicate has a pathological hatred (fear?) toward silver is because silver is more than money. Silver is the People’s Money .

The banking crime syndicate manipulates precious metals in general terms in order to hide its relentless, reckless inflation (and dilution) of our paper fiat currencies. But why is the One Bank constantly inflating the supply of these paper currencies in the first place?

Bernanke’s predecessor, Alan Greenspan, explained the Big Crime of the Big Banks, in a quote now familiar to regular readers.

In the absence of the gold standard, there is no way to prevent the confiscation of savings through inflation.

– Alan Greenspan , 1966

When Greenspan uses the verb “confiscate”, he means “steal”. And when he uses the noun “savings”, he means our wealth. The banking crime syndicate inflates the supply of our paper currencies in order to steal our wealth.

But Greenspan’s warning is not entirely accurate. There is a way to prevent the bankers from stealing our wealth with their money-printing, even in the absence of the gold standard. Understanding this requires understanding how the theft takes place.

Dilution.

Read More @ SprottMoney.com

GOLD FALLS BY $5.00 DOWN TO $1308.50/SILVER DOWN ONLY ONE CENT

by Harvey Organ, Harvey Organ Blog:

GLD ADDS ANOTHER 2.08 TONNES OF GOLD/GIANT CHEMICAL FACTORY READY TO EXPLODE IN CROSBY TEXAS/HURRICANE HARVEY MAKES A 2ND RUN AT LANDFALL TRAVELLING UP LOUISIANA

GOLD: $1308.50  DOWN $5.00

Silver: $17.44  DOWN 1 CENT(S)

Closing access prices:

Gold $1309.00

silver: $17.43

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1318.53 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1312.35

PREMIUM FIRST FIX:  $6.17

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SECOND SHANGHAI GOLD FIX: $1312.31

NY GOLD PRICE AT THE EXACT SAME TIME: $1307.95

Premium of Shanghai 2nd fix/NY:$4.36

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LONDON FIRST GOLD FIX:  5:30 am est  $1310.60

NY PRICING AT THE EXACT SAME TIME: $1310.80

LONDON SECOND GOLD FIX  10 AM: $1308.50

NY PRICING AT THE EXACT SAME TIME. 1307.00  ???

For comex gold:

AUGUST/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 444 NOTICE(S) FOR  44,400  OZ.

TOTAL NOTICES SO FAR: 5245 FOR 524,500 OZ  (16.314 TONNES)

For silver:

AUGUST

 

 1 NOTICES FILED TODAY FOR

 

5,000  OZ/

Total number of notices filed so far this month: 1249 for 6,245,000 oz

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end

As I expected, the criminal bankers tried their best to keep gold and silver from rising so as to pocket underwritten options.  However they did not succeed in lowering the price of gold to $1300.00 and $17.25 silver where the bulk of options were underwritten. London based gold/silver options have an expiry tomorrow morning at around 10 -11 am.  After that we should see our precious metals rise.

 

 

Let us have a look at the data for today

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In silver, the total open interest FELL BY AN APPRECIABLE 7235 contracts from 188,145 DOWN TO 182,823 DESPITE THE NO GAIN IN PRICE THAT SILVER UNDERTOOK WITH  YESTERDAY’S TRADING (UP 0 CENTS).HOWEVER WHEN YOU COMPARE WITH THE INCREASE IN GOLD OI YOU CAN BE COMFORTED THAT THE BANKS ARE STILL QUITE RETICENT TO SUPPLY ANY PAPER. NO DOUBT THAT WE LOST SOME SEPT. COMEX SILVER LONGS TO SEPT. EFP’S (IN EXCESS OF 7300 EFP’S). HOWEVER THE CONTRACTION IN OPEN INTEREST IS CERTAINLY NOT AS GREAT AS GOLD ONCE WE HIT FIRST DAY NOTICE (OR THE DAY BEFORE) OF AN ACTIVE DELIVERY MONTH. AS SOON AS SILVER BROKE RESISTANCE AT $17.25 AND THUS THE NEW SUPPORT LEVEL, NEWBIE LONGS POURED ON THE JUICE WITH RECKLESS ABANDON AS THEY ENTERED THE SILVER ARENA.  SEPT PLAYERS MOVED TO EFP’S BUT THE OBLIGATION TO DELIVER STILL RESTS WITH THEM BUT ON A DIFFERENT EXCHANGE (AND THEY RECEIVED A FIAT REWARD FOR THEIR EFFORT).  THE LOSS IN OI TO EFP’S WAS GREATER THAN NEWBIE SPEC LONGS ENTERING THE SILVER ARENA. 

RESULT: A HIGH DROP IN OI COMEX (OPPOSITE TO GOLD) WITH A ZERO PRICE INCREASE AND A FAIR SIZED GAIN IN SEPT EFP’S DELIVERABLE SILVER i.e.LONDON FORWARDS

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.917 BILLION TO BE EXACT or 131{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 1 NOTICE(S) FOR 5,000OZ OF SILVER

In gold, the open interest ROSE BY  1372 CONTRACTS WITH THE  RISE  in price of gold ($3.95 GAIN YESTERDAY). The new OI for the gold complex rests at 538,875.

AS IN SILVER, THE GEOPOLITICAL LANDSCAPE WITH TRUMP THREATENING TO CLOSE GOVERNMENT IF HE DID NOT GET HIS WALL , THE DOVISH SPEECHES BY BOTH DRAGHI AND YELLEN ON FRIDAY AT JACKSON HOLE, THE HOUSTON FLOODING & NORTH KOREA FIRING MORE MISSILES CAUSED A HUGE NUMBER OF NEWBIE SPECS TO AGAIN ENTER THE GOLD ARENA WITH THE COMMERCIALS SUPPLYING THE NECESSARY PAPER LIKE DRUNKEN SAILORS. ONCE 1300 DOLLAR GOLD WAS PIERCED, MORE NEWBIE LONGS CAME EMBOLDENED CONTINUING THEIR QUEST OF TAKING ON THE BANKERS WHO RECIPROCATED IN KIND WITH THE PAPER. SOME OLD SPECS LEFT FOR A PROFIT WITH THE GOOD SIZED RISE IN PRICE. YESTERDAY AFTERNOON GOLD WAS HIT IN THE ACCESS MARKET TO WHICH IT RECOVERED BY 2 AM.  THE BANKERS WHACKED AGAIN AND TRUE TO FORM GOLD RECOVERED IN PRICE AGAIN BY 7 AM TO WHICH ANOTHER RAID WAS INITIATED ALL TO CAUSE UNDERWRITTEN OPTION CONTRACTS TO EXPIRE WORTHLESS.  THE BANKS ARE CROOKS AND RECEIVE HELP FROM OUR REGULATORS.

Result: A FAIR SIZED GAIN IN OI WITH THE RISE IN PRICE IN GOLD AND RESISTANCE/NEW SUPPORT LEVELS HOLDING AT $1300 GOLD.

we had: 444 notice(s) filed upon for 44,400 oz of gold.

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

GLD:

Tonight , we had another big  change in gold inventory: a deposit of 2.07 tonnes into the GLD inventory.  I doubt very much if this is physical gold/probably a paper gold entry:

Inventory rests tonight: 816.43 tonnes

IN THE LAST 33 TRADING DAYS: GLD SHEDS 20.54 TONNES YET GOLD IS HIGHER BY $76.25 .

SLV

Today:  WE HAD NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 333.178 MILLION OZ

 

end

.

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

1. Today, we had the open interest in silver FELL BY 7235 contracts from 188,145 DOWN TO 182,823 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH YESTERDAY’S 0 CENT GAIN IN TRADING. SILVER RESPONDED TO 1) THE GEOPOLITICAL CLIMATE WHEREBY TRUMP THREATENED TO SHUT DOWN GOVERNMENT UNLESS HE GOT HIS WALL , 2) THE TWO DOVISH SPEECHES BY YELLEN 3) NORTH KOREA FIRING MORE MISSILES,4) THE HOUSTON FLOODING AND 5 THE PIERCING OF THE HUGE RESISTANCE LEVEL OF $17.25 WHICH NOW BECOMES THE NEW SUPPORT LEVEL. WE NO DOUBT HAD IN EXCESS OF 7300 LONG SEPT. SILVER PLAYERS TENDERING THEIR LONGS FOR SEPT. EFP’S (BUT THAT OBLIGATION STILL RESTS WITH THE BANKERS BUT ON A DIFFERENT EXCHANGE LONDON). NEWBIE LONGS ENTERED THE ARENA WHEN THEY SAW ANOTHER FAILED RAID ATTEMPT. HOWEVER THE GAIN IN NEWBIE LONGS WAS FAR LESS THAN THOSE PAPER PLAYERS EXITING FOR EFP’S. THE BANKERS CONTINUE TO BE RETICENT IN SUPPLYING THE SHORT PAPER. ANOTHER RAID WAS ORCHESTRATED TO CAUSE UNDERWRITTEN OPTIONS CONTRACTS TO EXPIRE WORTHLESS.

RESULT:  A LOWER OI AT THE COMEX, IN CONTRAST TO GOLD) WITH A ZERO PRICE INCREASE AND AN HUGE 7300+ GAIN IN SEPT EFP’S.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 1.60 POINTS OR 0.05{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}   / /Hang Sang CLOSED UP 329.60 POINTS OR 1.19{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/ The Nikkei closed UP 143.99 POINTS OR 0.74{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Australia’s all ordinaires CLOSED UP 0.01{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Chinese yuan (ONSHORE) closed UP at 6.5920/Oil DOWN to 46.17 dollars per barrel for WTI and 51.76 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN. Offshore yuan trades  6.5933 yuan to the dollar vs 6.5920 for onshore yuan. NOW THE OFFSHORE MOVED SLIGHTLY WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN MUCH STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS  HAPPY TODAY

Read More @ HarveyOrganBlog.com

Score Tied at Halftime but Gold & Silver MUST STEP-UP THEIR GAME

from SilverDoctors.com

The fundamental news is all over the place this week. On the one hand, we have Hurricane Harvey coverage 24/7. On the other hand, we have North Korea and everything else. This week everything else does not include the sharp political, racial and social divides that are wreaking havoc in the streets on America. We speculated this would be the case last Friday.

Either way one looks at the fundamental news on the week, none of it is good. Lives and property are ruined out west, and tensions are heating up in the far East. If the fundamental news was not bad enough, it is about to get even trickier. On the economic calendar, we have the ADP Employment Report, the first revision of Q2 GDP, and the EIA Petroleum Status Report. Rest assured all eyes will be on the petroleum report today as analysts are all offering their $.02.

The rest of the week is full of data releases as well. Friday is September 1st, so we are getting the earliest release of a Nonfarms Payroll Report as possible. If the fundamentals have moved the markets so far, they will move them even more as this data is released. While we will not see the effects of Harvey on employment until at least next month, how the disaster affects the employment situation in the US is just as significant as how it affects oil. One could even argue this is more important, because with oil we are discussing a commodity, but with employment, we are talking about people.

Also stated last Friday, we posed the question if Harvey was the black swan the analysts have been up early every morning bird-watching for? Seeing as how Harvey is still doing damage, and the fact that damage assessment hasn’t even started, it looks more and more with every passing day that it is, and if this is the case, it would be more like a flock of black swans in a flyover more than one single bird swooping in.

Since Texas is Oil Country, let’s start with crude. We can throw copper in for good measure. We are going to take it way back this week and throw up a 3-year, weekly chart:

Since the end of 2014 crude oil has gone nowhere. It has been drawing out a long, multi-year bottom and it looks like it is finally turning up, based on the performance of other commodities. If this is the case, and if the new bull run in commodities has begun, crude needs to catch up to copper, and we could be staring down much higher oil prices as the weeks play out.

Copper is on a tear. Most do not believe in the start of a new bull market, though trying to fight it could be costly. It is hard to find a nicer, rounded bottom (on a chart) than on copper. It almost has a reverse head-n-shoulders forming on the weekly. Copper is right up at 3-year highs going back to September, 2014. If the bull run in copper is not the case, copper would fall down to crude on the cart above, however, does anybody really think crude is going back to $26? Especially considering dollar weakness all year?

Speaking of the dollar:

On the daily we can see that the US dollar and the Japanese yen are severely decoupled. If USD/JPY falls on the chart, that means the Japanese yen is strengthening against the dollar. Do dollar bulls really think the dollar is about to turn the corner and strengthen? We have a debt ceiling to look forward to, and now, how many hundreds of billions in federal aid is going to be borrowed to pay for Harvey damages? Well, apparently Goldman Sachs thinks it is going to turn. So we know there is at least one dollar bull left. Just be careful. He could be a wolf in sheep’s clothing looking to sell dollar with nobody wanting to buy them.

Our stellar performer in the precious metals is our good friend Palladium:

Palladium has a very nice, round bottom of its own too. Palladium is back at 3-year highs. Hmmm. Kinda makes you wonder doesn’t it? Copper is at 3-year highs, palladium is at 3-year highs, the dollar has been falling all year, but still, nobody is ready to call the turn in gold, silver or copper.

It would be fun to throw a trick question out there and ask an analyst if palladium is in a new bull market. If the answer is “yes”, that would be admittance of a new precious metals bull market, because palladium is a precious metal, and it would also be admittance of a new base metals/commodities bull market, because palladium is also an industrial metal. Write that question down on a 3×5″ note-card and put in in the back pocket for later.

GOING FOR GOLD!

We are all pleased with the performance of the yellow metal in the month of August. You can rest assured, however, there are forces at work trying to make sure gold does not put in a weekly but more importantly a Monthly close above $1300.

TODAY AND TOMORROW MIGHT BE GUT-WRENCHING.

The is also this nasty little issue to deal with all the way from $1310 to $1350. Last Friday we said gold needs to break-out BIG-TIME. This is as true going in to the rest of the week as it was back then. What we really need is to bust through $1350 very heavy-handily, but we must not count ourselves in the clear just yet. Gold is still trying to tread water above $1300 on the week. There are many things that could happen over the next three trading days, so we all really need to keep a solid head on our shoulders and not get too far in front of our skis. We’ve been let down so many times this year, or pushed down, however you want to call it, but that does not mean we are not confident

Read More @ SilverDoctors.com

DEATH OF THE U.S. DOLLAR RESERVE CURRENCY… Picking Up Speed

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by Steve St. Angelo, SRSrocco:

The Death of the U.S. Dollar as the world’s reserve currency will have a profoundly negative impact on the lives of most Americans.  Unfortunately, 99{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the population has no clue.  The only reason 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of U.S. citizens understand what is going on, is because the Mainstream media and financial networks have distorted the truth and the reality of our present situation.

What happened in the markets today was a perfect example.  Zerohedge published an article today titled,  ‘Traders’ Panic-Buy Stocks, Shrug Off Nuclear Armaggedon, Debt Ceiling, & Biblical Flood Fears, and stating the following:

For a few brief hours overnight – until the bell rang at 0930ET on the NYSE – investors were anxious about North Korea’s most provocative yet missile launch, the terrible flooding disaster in Texas, and lest we forget, the looming debt ceiling debacle. But all of that was instantly forgotten as the machines took control and lifted stocks higher practically all day on a sea of USDJPY-ignited momentum.

Looking at the chart above, we can see that when fear came into the markets during the North Korea missile incident and then the opening of the European markets (shown in the two red boxes), the Dow Jones Index fell as well as the USDJPY, while gold and the U.S. Treasurys increased.

However, after the U.S. markets opened, MAGICALLY everything reversed because the nuclear threat with N. Korea, Biblical flooding in Texas and the upcoming debt ceiling issue no longer mattered.  Those of us in the Alternative Media find this quite hilarious that nothing negatively impacts the financial markets anymore.  Some have laughed while saying, “If a nuclear bomb had taken out New York City, the stock market would probably go up.”  While I doubt that would happen, it is becoming a real joke to watch the financial markets today.

I wrote about the insanity in the markets today and how it has negatively impacted the value of the precious metals in my recent article, The Reason Why Gold & Silver Have Frustrated Investors Since 2011.  In the article I posted the chart below, by a Deutsche Bank analyst Aleksandar Kocic, on why the Markets Broke In 2012:

The description of the indicator above may be a bit difficult to understand so that I will simplify it.  The BLUE LINE represents the “Economic Uncertainty Policy” (EPU index) shown by the frequency of articles in ten leading US newspapers that contain three of the target terms: economy, uncertainty; and one or more of Congress, deficit, Federal Reserve, legislation, regulation or White House in the mainstream media.  The BLACK LINE is the VIX index, the volatility index (S&P 500).  Economic uncertainty printed in articles in the Mainstream Media should correspond with the volatility indicator of the markets (the VIX).

And, this is what precisely took place from 1996 to 2011.  The blue and black lines moved up and down in tandem.  However, after 2011, something changed.  According to Kocic:

Intuitively, when VIX is in tune with EPU, the market is acknowledging the levels of risk through the prices. However, when VIX is low and EPU high, markets are complacent – they are underpricing risk.

After 2011, the two measures of risk decouple with VIX consistently low despite growing uncertainty. The breakdown is structural, and it is visible across all market sectors, not only equities.

What Kocic is saying is that the market has become highly complacent and is severely underpricing risk.

Read More @ SRSrocco.com

Weird Things Are Happening With Gold

by Jim Rickards, Daily Reckoning:

Last week featured two unusual stories on gold — one strange and the other truly weird. These stories explain why gold is not just money but is the most politicized form of money.

They show that while politicians publicly disparage gold, they quietly pay close attention to it.

The first strange gold story involves Germany…

The Deutsche Bundesbank, the central bank of Germany, announced that it had completed the repatriation of gold to Frankfurt from foreign vaults.

The German story is the completion of a process that began in 2013. That’s when the Deutsche Bundesbank first requested a return of some of the German gold from vaults in Paris, in London and at the Federal Reserve Bank of New York.

Those gold transfers have now been completed.

This is a topic I first raised in the introduction to Currency Wars in 2011. I suggested that in extremis, the U.S. might freeze or confiscate foreign gold stored on U.S. soil using powers under the International Emergency Economic Powers Act, the Trading With the Enemy Act or the USA Patriot Act.

This then became a political issue in Europe with agitation for repatriation in the Netherlands, Germany and Austria. Europeans wanted to get gold out of the U.S. and safely back to their own national vaults. The German transfer was completed ahead of schedule; the original completion date was 2020.

But the German central bank does not actually want the gold back because there is no well-developed gold-leasing market in Frankfurt and no experience leasing gold under German law.

German gold in New York or London was available for leasing under New York or U.K. law as part of global price-manipulation schemes. Moving gold to Frankfurt reduces the floating supply available for leasing, making it more difficult to keep the manipulation going.

Why did Germany do it?

The driving force both in 2013 (date of announcement) and 2017 (date of completion) is that both years are election years in Germany. Angela Merkel’s position as chancellor of Germany is up for a vote on Sept. 24, 2017. She may need a coalition to stay in power, and there’s a small nationalist party in Germany that agitates for gold repatriation.

Merkel stage-managed this gold repatriation with the Deutsche Bundesbank both in 2013 and this week to appease that small nationalist party and keep them in the coalition. That’s why the repatriation was completed three years early. She needs the votes now.

The truly weird gold story comes from the United States…

Secretary of the Treasury Steve Mnuchin and Senate Majority Leader Mitch McConnell just paid a visit to Fort Knox to see the U.S. gold supply. Mnuchin is only the third Treasury secretary in history ever to visit Fort Knox and this was the first official visit from Washington, D.C., since 1974.

The U.S. government likes to ignore gold and not draw attention to it. Official visits to Fort Knox give gold some monetary credence that central banks would prefer it does not have.

Why an impromptu visit by Mnuchin and McConnell? Why now?

The answer may lie in the fact that the Treasury is running out of cash and could be broke by Sept. 29 if Congress does not increase the debt ceiling by then.

But the Treasury could get $355 billion in cash from thin air without increasing the debt simply by revaluing U.S. gold to a market price. (U.S. gold is currently officially valued at $42.22 per ounce on the Treasury’s books versus a market price of $1,285 per ounce.)

Once the Treasury revalues the gold, the Treasury can issue new “gold certificates” to the Fed and demand newly printed money in the Treasury’s account under the Gold Reserve Act of 1934. Since this money comes from gold revaluation, it does not increase the national debt and no debt ceiling legislation is required.

Read More @ DailyReckoning.com

Total G-3 Central Bank Control

by Turd Ferguson, TF Metals:

There’s a lot of amazement and wonder at how the “stock market” can be up today with the devastating news out of Texas and the latest North Korean missile launch. Longtime readers of TFMR know exactly how this market levitation is accomplished so this post is designed as a public service in order to better educate and inform everyone else.

Let’s just keep it simple…

In 2017…and, actually, since 2008…the “markets” don’t actually exist. Oh sure, there are trades and prices but in terms of what the markets were 20 years ago?…those days are long gone. Instead, what we have now is total HFT domination. Over 90{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of all volume on the NYSE and NASDAQ is now done through HFT machines that swap positions back and forth. This is common knowledge and if you and I know this, then you can be assured that The Fed, The ECB and the BoJ (known henceforth as the G-3) know this, too.

To that end, since the G-3 are dedicated to market stability and the wealth effect, these central banks clearly seek to influence the direction of the equity markets by influencing the two key drivers of the HFT machines. And what are these drivers? The currency pair of USDJPY and the volatility index known as the VIX. Simply stated, if your wish is to drive “the stock market” higher, all you need to do is buy the USDJPY while at the same time selling the VIX. It truly is that simple.

To that end, daily observation of trading patterns allows us to observe a clear and obvious, algo-driven program in the all-important USDJPY. Because of the sheer size of the forex market (up to $7T/day), any algorithm put in place to manage this pair could only come from pockets deep enough to make it happen….namely, the G-3.

And what does this computer-based, G-3 buying program look like. Again, in the simplest terms, this program sets up a USDJPY floor at some pre-determined or even random level. Once a bounce is initiated, a buy program then follows after the pair have come back down to a newly-discovered double bottom. For today (Tuesday, the 29th), it looked like this:

Read More @ TFMetals.com