Saturday, October 31, 2020

Shelter From The Storm

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by Gary Christianson, Miles Franklin:

“I bargained for salvation and she gave me a lethal dose.”

What Storm? Why do we need shelter?

  • The stock market hit all-time highs in January, corrected, and might rally to new highs… or maybe not… See below.
  • Official unemployment is low if you believe the statistics and ignore the millions excluded from the calculations.
  • Inflation, according to official numbers, is low. New cars may have doubled in price in the last 20 years but hedonic adjustments have “massaged” the official inflation on cars to nearly zero. Again, if you believe the numbers… The Chapwood index is more believable.
  • People buy food and prescription drugs, pay rent and make house payments. They know prices increase more than shown in the “massaged” inflation statistics.

The coming storm involves a combination of:

a)The end of the 35 year bond bull market. Rates are going higher. See below.

b) The end of the stock market rally. This rally has persisted for a long time. Valuations are sky-high, margin debt is extreme, and complacency is overwhelming. See below.

c) Mind-numbing global debt that can’t and won’t be repaid. Name any central banker or three members of congress who want to reduce the debt and balance the budget. Right! Behind door number one lives the default dragon. The inflation monster is anxious to escape from behind door number two. Both are lethal.

d) Governments and central banks will delay, extend and pretend until they open one of those two doors. Expect distractions, diversions, war, more QE, benign statistics, media hype and happy talk.

A storm is coming! We need shelter. Silver bullion, not the paper stuff, provides financial shelter, is real and will not evaporate like most digital “assets” during the storm.

  • Stock market capital can disappear in a correction or crash. John P. Hussman, Ph.D. expects an eventual loss of over 65% in the S&P 500 Index. His analysis is far more real than the happy talk from government statisticians and mainstream media.
  • Bonds entered a bear market (ten year yield bottomed in mid-2016) and losses could be staggering. How well are Puerto Rico bonds holding their value? Does your bond fund own 100 year bonds issued by Argentina? The U.S. will add over a trillion dollars to its unpayable debt every year going forward. When happens when the music stops?
  • Wall Street expects financial salvation from central bank printing, borrowing inexpensive currency units, and ever-increasing debt.

“I bargained for salvation and she gave me a lethal dose.”

  • Has the world received a lethal dose of central bank currency printing? How much government debt is a lethal dose?

Yes, a storm is coming! Do your own due diligence, but consider:

  • When paper (over-valued stocks, too many printed currency units, and sovereign debt issued by insolvent governments)becomes less trustworthy, shift from paper promises to real assets. Silver, gold, platinum and real estate come to mind.
  • When the monthly Relative Strength Index (14 period RSI) for the DOW hit a 116 year high in January 2018 it warned the DOW had moved too far and too fast. Tops take time to form, but markets always correct from both lows and highs. Do you feel lucky?
  • Silver is one of the most under-valued assets still available for purchase. Many tech stocks are among the most over-valued paper assets on the planet. Silver looks good. See below.
  • Sovereign debt is rising. Global debt exceeds $230 trillion. Official U.S. (on-the-books) national debt is approaching $21 trillion. The debt bubble will not blow up next week, but one day the default dragon or the inflation monster will emerge and the financial storm will intensify. We need shelter from that storm.

THOUGHTS FROM OTHERS:

John Rubino: “Unintended Consequences

“What’s wrong with deficit-led growth pushing up interest rates a bit? History, for one thing. Note how a rising Fed Funds rate preceded every recession in living memory.”

Zerohedge: “Trump Warns World

“After unveiling the ‘heaviest sanctions ever imposed on a country before’ against North Korea earlier in the day, President Trump told the gathered media that the US will go to ‘Phase 2’ if those sanctions do not have the desired effects of denuclearizing the Korean peninsula.”

From Brandon Smith:  “Central Banks Will Let the Next Crash Happen

“The Federal Reserve is going to let the market crumble in 2018. They are going to continue raising interest rates and reducing their balance sheet faster than originally expected.”

From Chris Martenson:  “The Worst Threat

“When it comes to repaying the current global debt levels of 310% of GDP, we can confidently predict that such a debt load can never be repaid. They can only try to roll it over as long as they can – which can’t go on much longer without real consequence. Mounting losses are certain at this point.”

“… the central banks have set the stage for an enormously dangerous and disruptive market crash.”

From Alasdair Macleod: “When Will the Next Credit Crisis Occur?”

“… we will be lucky if the next credit crisis … does not strike before the year-end.”

From Jim Rickards: “A New Bull Market in Gold has Begun” from Strategic Intelligence February 2018.

“Russia and China do own a lot of gold, but they want to buy a lot more. Both countries want gold prices to be well behaved and for gold markets to be orderly until they are much further along in their gold buying programs.

Once China and Russia have all the gold they want, all bets are off and they may very well favor a skyrocketing price to undermine confidence in the U.S. dollar.”

From David Stockman:  “This Time is Completely Different…

“… the current business expansion at 104 months is over and done for all practical purposes. The post-1950 average is just 61 months and the historic record is 119 months under the far more propitious circumstances of the 1990s.”

From David H. Smith: “One Belt, One Road, One Direction for Precious Metals

“While western investors are enamored with the stock markets, there are two billion people in the east that view gold differently and are gladly taking it off our hands at lower prices.”

Read More @ MilesFranklin.com

RAID ON GOLD AND SILVER DUE TO OPTIONS EXPIRY

by Harvey Organ, Harvey Organ Blog:

GOLD DOWN $13.80/SILVER DOWN 17 CENTS/ATLANTA FED SURPRISES EVERYONE BY LOWERING ITS ESTIMATE OF FIRST QUARTER GDP TO 2.6%/MORE SWAMP STORIES

GOLD: $1317.40 down $13.80

Silver: $16.43 down 17 cents

Closing access prices:

Gold $1318.60

silver: $16.43

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: $1342.38 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1334.10

PREMIUM FIRST FIX: $8.28

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SECOND SHANGHAI GOLD FIX: $1341.75

NY GOLD PRICE AT THE EXACT SAME TIME: $1332.70

discount of Shanghai 2nd fix/NY:$8.05

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LONDON FIRST GOLD FIX: 5:30 am est $1332.75

NY PRICING AT THE EXACT SAME TIME: $1333.70

LONDON SECOND GOLD FIX 10 AM: $1325.75

NY PRICING AT THE EXACT SAME TIME. $1326.45

For comex gold:

FEBRUARY/

NUMBER OF NOTICES FILED TODAY FOR FEBRUARY CONTRACT: 124 NOTICE(S) FOR 12400 OZ.

TOTAL NOTICES SO FAR:2749 FOR 274900 OZ (8.5505 TONNES),

For silver:

FEBRUARY

0 NOTICE(S) FILED TODAY FOR

NIL OZ/

Total number of notices filed so far this month: 407 for 2,035,000 oz

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Bitcoin: BID $10,658/OFFER $10,728: up $378(morning)

Bitcoin: BID/ $10,750/offer $10,820: UP $471  (CLOSING/5 PM)

 

end

We are now entering options expiry week for the big gold and silver contracts for the LBMA/OTC contracts. Comex options expired on Friday.

AS FOR THE DATA TODAY, THE GOLD NUMBERS ARE FINAL

THE TOTAL SILVER OI NUMBERS ARE ACCURATE AND FINAL

BUT ALL OTHER SILVER NUMBERS ARE JUST PRELIMINARY

I WILL TRY AND UPDATE THEM AS SOON AS THE CROOKS FUDGE THE DATA PROPERLY.

H

Let us have a look at the data for today\

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In silver, the total open interest FELL BY A CONSIDERABLE SIZED 4438 contracts from 196,437  FALLING TO 191,999 DESPITE  YESTERDAY’S 8 CENT GAIN IN SILVER PRICING.  WE HAD CONSIDERABLE COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  872 EFP’S FOR MARCH AND AND 336 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 1208 CONTRACTS.  WITH THE TRANSFER OF 1208 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. THE 1208 CONTRACTS TRANSLATES INTO 6.04 MILLION OZ DESPITE  WITH THE CONTINUAL DROP IN OPEN INTEREST IN SILVER AT THE COMEX.

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF FEBRUARY:

46,340 CONTRACTS (FOR 19 TRADING DAYS TOTAL 46,340 CONTRACTS OR 231.770 MILLION OZ: AVERAGE PER DAY: 2438 CONTRACTS OR 12.194 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  231.770 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 33.10% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  480.23 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

RESULT: A CONSIDERABLE SIZED LOSS IN OI SILVER COMEX DESPITE THE 8 CENT GAIN IN SILVER PRICE.  WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 1208 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER . FROM THE CME DATA 1208 EFP’S  FOR  MONTHS MARCH AND MAY WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE LOST  3230 OI CONTRACTS i.e. 1208 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 4438 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE RISE IN PRICE OF SILVER OF 8 CENTS AND A CLOSING PRICE OF $16.60 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A FAIR AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.9635 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER

In gold, the open interest  ROSE BY A HUGE 6011 CONTRACTS RISING TO 532,649 DESPITE THE SMALL RISE IN PRICE OF GOLD WITH RESPECT TO YESTERDAY’S TRADING ($2.40). HOWEVER, IN ANOTHER DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR MONDAYAND IT TOTALED AN GOOD SIZED  7855 CONTRACTS OF WHICH  APRIL SAW THE ISSUANCE OF 7855 CONTRACTS AND  JUNE SAW THE ISSUANCE OF 0 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.    The new OI for the gold complex rests at 532,649. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR FEBRUARY COMEX. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE A GAIN OF 13,866  CONTRACTS: 6011 OI CONTRACTS INCREASED AT THE COMEXAND A GOOD SIZED  7855 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.(13,742 oi gain in CONTRACTS EQUATES TO 43.12TONNES)

YESTERDAY, WE HAD 2651 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEBRUARY STARTING WITH FIRST DAY NOTICE: 195,225 CONTRACTS OR 19,522,500  OZ OR 607.23 TONNES (19 TRADING DAYS AND THUS AVERAGING: 10,275EFP CONTRACTS PER TRADING DAY OR 1,027,500 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 19 TRADING DAYS: IN  TONNES: 607.23 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2200 TONNES

THUS EFP TRANSFERS REPRESENTS 607.23/2200 x 100% TONNES =  27.60% OF GLOBAL ANNUAL PRODUCTION SO FAR IN FEBRUARY ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  1240.61 TONNES

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22  TONNES

Result: A  STRONG SIZED INCREASE IN OI AT THE COMEX DESPITE THE SMALL RISE IN PRICE IN GOLD TRADING YESTERDAY ($2.40).  HOWEVER, WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 7855 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 7855 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 13,866 contracts ON THE TWO EXCHANGES:

7855 CONTRACTS MOVE TO LONDON AND  6011 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 43.12 TONNES).

we had: 124 notice(s) filed upon for 12400 oz of gold.

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

GLD

WITH GOLD DOWN $13.80 : NO CHANGES IN GOLD INVENTORY AT THE GLD OF GOLD INTO THE GLD

Inventory rests tonight: 831.03 tonnes.

SLV/

WITH SILVER DOWN 17 CENTs TODAY: 

NO CHANGES IN SILVER INVENTORY AT THE SLV

/INVENTORY RESTS AT 316.590 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 4438  contracts from 196,437 DOWN TO 191,999 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH THE RISE  IN PRICE OF SILVER  (8 CENT WITH RESPECT TO  YESTERDAY’S TRADING).  OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 872 PRIVATE EFP’S FOR MARCH AND 336 EFP CONTRACTS OR MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS .  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI LOSS AT THE COMEX OF  4438 CONTRACTS TO THE 1208 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A  LOSS OF 3230  OPEN INTEREST CONTRACTS .  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN FEBRUARY (SEE BELOW). THE NET LOSS TODAY IN OZ ON THE TWO EXCHANGES:  16.150 MILLION OZ!!!

RESULT: A CONSIDERABLE SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE  RISE OF 8 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING ). BUT WE ALSO HAD ANOTHER GOOD 1208 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR FEBRUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(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 MORNING/MONDAY NIGHT: Shanghai closed DOWN 37.51 POINTS OR 1.13% /Hang Sang CLOSED DOWN 229.94 POINTS OR 0.73% / The Nikkei closed DOWN 236.23 POINTS OR 1.07%/Australia’s all ordinaires CLOSED UP 0.21%/Chinese yuan (ONSHORE) closed UP at 6.3120/Oil UP to 63.61 dollars per barrel for WTI and 67.25 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED  .   ONSHORE YUAN CLOSED UP AT 6.3120 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3030 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR AND ALL OTHER CURRENCIES. CHINA IS NOT  HAPPY TODAY (STRONGER CURRENCY BUT WEAKER MARKETS) 

Read More @ HarveyOrganBlog.com

Danielle Park – Fed Speaks Loudly and Carries a Small Stick

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by Kerry Lutz, Financial Survival Network:

Danielle Park observes that Fed chairmen/chairwomen will come and go but the Fed is the Fed. That’s why the real underlying policy has not changed with Yellen’s replacement by Powell. And it won’t change. The small stick is getting ever smaller, namely interest rate manipulation and money printing. The bubbles will keep on coming, whether it’s Bitcoin or the stock market. Promises that were made cannot be kept, whether it’s pensions or social security or medicare. A surefire prescription for chaos.

Click HERE to listen

Read More @ FinancialSurvivalNetwork.com

Warren Buffett isn’t buying. Why should anyone else?

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by Simon Black, Sovereign Man:

Over the weekend on Saturday morning, amid its usual fanfare and attention, Warren Buffett’s company Berkshire Hathaway released its annual report to the public.

This is a pretty big deal each year. Investors and financial reporters typically wait with baited breath to hear what the Oracle himself has to say in his legendary annual letter.

Buffett’s topics in previous letters have covered a lot of ground– the state of the US economy, value investing education, why Wall Street is so deeply flawed, commentary on financial markets, etc.

This year’s letter was, as usual, quite interesting… but primarily because of what Buffett said about his own business.

Berkshire Hathaway is an enormous enterprise; it’s essentially a $500 billion holding company that owns dozens of smaller businesses, all of which collectively generate tens of billions in free cash flow.

Buffett’s primary mission is to acquire more businesses and expand Berkshire’s portfolio… and then ensure that each of those subsidiaries has top quality management to grow the cashflow.

And that’s what was so interesting about this year’s letter: Buffett couldn’t really do his job.

According to Warren Buffett himself:

In our search for new stand-alone businesses, the key qualities we seek are durable competitive strengths; able and high-grade management; good returns on the net tangible assets required to operate the business; opportunities for internal growth at attractive returns; and, finally, a sensible purchase price.

That last requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high.

Now, consider that Berkshire Hathaway’s cash pile rose to an astonishing $116 billion at the end of 2017.

With that much money on hand, very few companies are out of Buffett’s reach.

Specifically, $116 billion would have been enough money to acquire any one of 465 out of the 500 largest companies in the United States– including Nike, Starbucks, UPS, Netflix, and Ford.

Even more, Buffett had enough cash to collectively acquire a full TWENTY FIVE of the smallest companies in the S&P 500 (including AutoNation, Staples, Bed Bath & Beyond) and still have several billion dollars left over.

But he didn’t.

Even though one of his key roles is to acquire businesses and bring them into the Berkshire Hathaway tent, he didn’t acquire a single one of those companies.

Why? Because they’re ALL overpriced.

Read that quote again: “[P]rices for decent, but far from spectacular, businesses hit an all-time high.

He went on to write, “Indeed, price seemed almost irrelevant to an army of optimistic purchasers.

Investors are essentially paying record prices for shares of businesses that aren’t even all that great.

Now, Buffett didn’t specifically advise people to avoid stocks. But actions speak louder than words. And Buffet’s not buying.

Think about that: one of the richest guys in the world– one of the most successful investors in history– thinks assets are too expensive to buy.

People don’t tend to get rich (or stay that way) by buying mediocre assets at all-time highs.

The time to buy is when prices crash… when the highest quality assets can be acquired for peanuts.

And as sure as night follows day, prices will decline. Asset prices always move in boom/bust cycles.

As Buffett himself wrote in the annual report,

In the next 53 years our shares (and others) will experience declines resembling those in the table. No one can tell you when these will happen. The light can at any time go from green to red without pausing at yellow.

He knows there will always be periods of panic and fear when asset prices crash. But “[w]hen major declines occur, however, they offer extraordinary opportunities. . .”

Taking advantage of these opportunities requires having sufficient ammunition. Namely, cash.

If you want to be able to acquire the highest quality assets when prices crash, you have to be liquid. You can’t have your wealth tied up in illiquid assets whose prices have just crashed.

This is another area where Buffett’s actions speak louder than words.

Over the course of 2017, he increased Berkshire Hathaway’s cash position to $116 billion– a whopping 35% increase over the previous year.

Put these two observations together: Buffett’s NOT buying… and he’s greatly increasing his cash position.

Read More @ SovereignMan.com

The Secret Force Behind Today’s Rigged Markets

by Nomi Prins, Daily Reckoning:

Markets were up again big today and volatility was down. But we haven’t seen the last of rising volatility, nor of the central banks’ attempts to thwart it.

This week, new Fed Chair Jerome Powell will be giving his first congressional testimony, and you can be sure that markets are waiting on his words with bated breath.

Before his testimony, the Fed will be releasing its Monetary Policy Report, which will also give an indication to the direction of Fed policy.

Because these will be his first official comments as Fed chair, Powell will want to both make a personal mark and make sure markets don’t panic over his remarks.

I believe he will temper his comments to neutralize any negative market impact the report could have.

Wall Street wants to hear that Powell’s not going to aggressively hike rates. The risk is that, as an article from CNBC reports, “Powell may not clarify anything,” in which case, “traders could be stuck with the same dilemma that shook stocks and sent bond yields spiking [last] Wednesday after the release of the minutes from the Fed’s January meeting.”

I think Powell will sound as dovish as he can to avoid that outcome. So even if he confirms rate hikes will be executed at the already forecast pace of three rates this year, he won’t indicate there could be more, which should keep markets calmer and bullish.

In other words, I don’t believe that Powell will implement dramatically different monetary policy from his predecessors Janet Yellen or Ben Bernanke. The Fed will do whatever the markets need.

Banks have grown accustomed to what I call “dark money” and don’t want Powell to rock the boat.

What is dark money?

Dark money basically means money coming from central banks. In essence, central banks “print” money or electronically fabricate money by buying bonds or stocks. They use other tools like adjusting interest rate policy and currency agreements with other central banks to pump liquidity into the financial system.

That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions, affecting different financial assets in different ways.

These dark money flows stretch around the world according to a pattern of power, influence and of course, wealth for select groups.

Dark money is the No. 1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles.

Because of dark money provided by central banks, corporations have been piling on debt like arsonists hoarding lighters before a fire. They have used that debt either to service old debt or to buy their own stocks. That move artificially elevates their share values and in turn makes more bond investors relish buying their debt.

Needless to say, that’s not free market economics.

Read More @ DailyReckoning.com

GOLDILOCKS IS DEAD

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by Jim Quinn, The Burning Platform:

“Once you strip out the effects of the debt binge, the artificial stimulus via currency depreciation, and the fabled ‘wealth effect’ from the equity market runup, real GDP growth stripped-down to its core was the grand total of 0.7% last year. Potemkin would be proud.” – David Rosenberg

It appears every president finds the religion of false economic narrative once they ascend to power. Trump never stops babbling and tweeting about the fantastic economy and raging jobs market since his election. He has embraced the stock market bubble as proof of his brilliant leadership, rather than the tens of trillions in debt propping up the most overvalued market in world history. Every president takes credit for any good news, spins bad news as good news, or blames the previous president for bad news that can’t be denied. The president has absolutely zero impact on the economy or stock market over the short term. It’s like taking credit for the sun rising in the east each morning.

The Big Lie method works wonders when you have a willfully ignorant, mathematically challenged, easily manipulated populace. I spent the entire Obama presidency obliterating the fake economic data perpetuated by his BLS, BEA and every other government agency trying to paint a rosy economic picture. I voted for Trump because the thought of Crooked Hillary as the president made me ill. Despite disagreeing with many of his economic, budgetary, and military policies during his first year in office, I’d vote for him again over Hillary in an instant. The thought of having that evil shrew running the country gives me chills.

But that doesn’t mean I will stand idly by, cheerlead and ignore the facts to provide cover for Trump. I despise false narratives, whether they are spun by Democrats or Republicans. The Deep State still runs the show on a day to day basis, and it is in their best interest to mislead the public, keep them sedated, unaware of how bad things have become, and oblivious to the coming debt shitstorm destined to destroy this country. Every remedy prescribed by the Deep State players within the government, Federal Reserve, and Wall Street since 2008 not only did not cure the disease infecting this country, but exacerbated the disease and insured the inevitability of our demise.

It is particularly irritating to hear Trump and his minions bloviating about the tremendous job growth since he was elected. U.S. job growth has averaged 176,000 jobs per month over the past year. That’s down from an average of 208,000 in the prior year, and 217,000 over the prior 4 years. But why let facts get in the way of a good story. The number of new jobs being added per month is on a declining slope. We are eight years into a fake recovery built on trillions in debt, with the ensuing bubbles in the stock market, bond market and real estate market. I don’t need politicians pissing down my back and telling me its raining.

The other false narrative flogged relentlessly by politicians, Wall Street shysters, CNBC bimbos, and a myriad of highly paid MSM talking heads is the record stock market highs are a reflection of a strong robust economy. What a load of crap. The stock market went up 360% over the last nine years as real wages stagnated and even the highly manipulated GDP barely grew at a 2% rate. The Dow hit a record 26,616 on January 26, proceeded to collapse by 2,800 points in less than two weeks, and has since soared by 1,700 points in the next two weeks. None of these moves had anything to do with the economy, corporate earnings or cash on the sidelines.

The stock market bubble has been driven solely by the Federal Reserve providing free money to Wall Street, with a guaranteed put by Bernanke and then Yellen. QE, ZIRP, and an unspoken agreement between the central bankers at the Fed, ECB, Bank of Japan and the Swiss National Bank to buy stocks has effectively elevated stocks around the world to absurd valuations. These highly educated intellectual-yet-idiots now cannot unwind their debt house of cards without blowing up the world financial system. With total public and private U.S. debt of $67 trillion and over $200 trillion of unfunded liabilities, this powder keg of debt awaits the inevitable spark.

The Fed announced the unwinding of their $4.4 trillion balance sheet of dodgy mortgages, treasuries, and other Wall Street created dreck, many months ago. They had been all talk until the last week of January when they reduced their balance sheet by a measly .5%. Do you think it was just a coincidence the stock market imploded by 10% in an instant? Shockingly, the Fed increased their balance sheet by $15 billion over the next two weeks and the stock market rebounded dramatically. Weakening the dollar at the same time didn’t hurt either.

Read More @ TheBurningPlatform.com

Digital Gold Provide the Benefits Of Physical Gold?

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by Mark O’Byrne, Goldcore:

– Digital gold and crypto gold products claim to combine efficiencies of blockchain with value of gold
– They are yet to provide the same benefits or safety as owning physical gold
– National mints jumping in on the ‘sexy blockchain’ act
– BOE  declares bitcoin ‘not a currency;’ Royal Mint launches blockchain gold product
– Digital gold, blockchain gold and crypto gold is frequently not fully backed, unallocated, pooled and unsecured gold holdings

At the beginning of last week Bank of England Governor Mark Carney claimed bitcoin was not a currency on the grounds that it is neither a medium of exchange or a store of value.

Scoffs aside about what this means for the British Pound, there are many out there who are trying to satisfy Mark Carney’s definition of a currency by backing digital tokens with gold.

The Royal Mint is one of them. They announced a new digital gold investment service entitled RMG back in December 2016. Interesting that a sister organisation to the Bank of England is looking at jumping into the crypto currency market by combining the blockchain with gold.

There are plenty of others doing the same thing. It is unsurprising given the recent volatility and negative press around the cryptocurrency market that there are many  out there seeing opportunity in the interesting nexus that is blockchain and gold.

Is there value to be found in ‘digital’ money?

Is it possible to find ‘value’ in something which is as digital as fiat itself? For now, the jury is very much divided but there are some in the market who believe they can add value to cryptocurrency by backing it with gold (in some shape or form).

Many in the mainstream believe that this is bitcoin coming full-circle. Since its inception it has frequently been referred to as ‘digital gold’. Now, the backing of crypto currencies, or in fact just digital tokens, with gold has made the term come into its own.

Digital gold has, in fact, been around for many years. It is product offered by multiple online gold trading platforms. This involves buying ‘gold’ which is frequently pooled and the buyers locked into a closed-loop system with a single counter party. The owner does not own an actual physical gold coin or bar or coins or bars which are segregated and allocated in their name. They are captive to that particular platform with potentially poor liquidity, captive, monopoly pricing and counterparty risk exposure.

In the last few weeks there have been a plethora of announcements from both new and well-established organisations that have announced new digital gold products, either with a cryptocurrency, blockchain or just digital token angle. There is a serious danger that new investors believe they are getting decent exposure to this booming cryptocurrency market but with the security of the gold market to support them.

In truth, most of these new gold offerings are likely no better (and arguably worse) than the digital gold products that preceded them. As MoneyWeek’s Ben Judge concluded, last week, ‘my view is that so far, if you want exposure to gold, it’s better to stick with the real deal.’

Something not quite gold-standard about it all

The majority of those in the crypto space know there is something to be said for gold, hence the introduction of so many ‘gold-backed’ digital currencies. Many purport to have an advantage over more traditional means of gold ownership as there are low to zero transaction and storage fees.

This is fishy. Why store something for free and why buy something that is unallocated. We recently wrote about unallocated gold. We mentioned that whilst new gold investors might think that owning gold without having to pay storage fees seems highly attractive, it also comes with risks and, arguably hidden costs.

Unallocated gold is free to store because the bank or institution that you have chosen to buy it through, is using it for it’s own purposes. It is likely rehypotehated and loaned out. You the “investor” or “owner” is actually an unsecured creditor of multiple bank custodians.

Whilst the likes of the Royal Mint’s token is allocated, it is offering free storage. As we explained last year, this is a bit too picture perfect:

We’re all familiar with the expression ‘if it sounds too good to be true then that’s because it usually is’. The Royal Mint is owned by HM Treasury, it pays an annual dividend their way every year. It goes without saying that the United Kingdom is pretty broke at the moment and with the fallout of Brexit still playing out, against a backdrop of geopolitical uncertainty who knows how much worse it will become.

And when it does, how is the government planning on paying to keep the country going? Who knows, but it’s all happening at the same time that the government is trying to encourage you to hold gold in their vaults.

Ben Judge goes onto express our matching concerns about any national mint’s involvement in digital gold:

For many goldbugs, the Mint’s involvement might be a concern, given its ties to the government – governments have confiscated gold before (though not in the UK) and could well do so again. The Mint acknowledges this on its website, asking: “What protection against government confiscation does RMG offer?”, although it ducks the issue, as, of course, there is no protection.

Of course, this isn’t just an issue with offerings from the likes of the Royal Mint, the Canadian Mint or the Perth Mint’s soon-to-launch digital offering. It’s a common problem with many digital gold platforms, especially those purporting to be using blockchain technology.

Read More @ Goldcore.com

GOLD UP $2.40 TO $1331.20/SILVER UP 8 CENTS TO $16.60/OPTIONS EXPIRY THIS WEDNESDAY

by Harvey Organ, Harvey Organ Blog:

GOLD EFP ISSUANCE:2651 CONTRACTS/SILVER EFP ISSUANCE: 2651 CONTRACTS/ ANOTHER BIG INCREASE IN GOLD INVENTORY AT THE GLD (1.77 TONNES)..FOR 5 OUT OF THE LAST 6 TRADING DAYS, GOLD INVENTORY HAS ADVANCED AT THE GLD/TRUMP SET TO INITIATE ANOTHER ROUND OF HARSH TARIFFS AIMED AT CHINA AND SOUTH KOREA ON STEEL AND ALUMINIUM/THE MEXICAN PESO PLUNGED TODAY/NEW HOME SALES IN THE USA CRASHED AND YET THE DOW RISES BY ALMOST 400 POINTS/SWAMP STORIES

GOLD: $1331.20 UP $2.40

Silver: $16.60 UP 8 cents

Closing access prices:

Gold $1333.50

silver: $16.65

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: $1344.69 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1334.65

PREMIUM FIRST FIX: $10.04

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SECOND SHANGHAI GOLD FIX: $1348.69

NY GOLD PRICE AT THE EXACT SAME TIME: $1339.50

discount of Shanghai 2nd fix/NY:$9.14

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LONDON FIRST GOLD FIX: 5:30 am est $1339.65

NY PRICING AT THE EXACT SAME TIME: $1339.30

LONDON SECOND GOLD FIX 10 AM: $1333.50

NY PRICING AT THE EXACT SAME TIME. $1334.00

For comex gold:

FEBRUARY/

NUMBER OF NOTICES FILED TODAY FOR FEBRUARY CONTRACT: 825 NOTICE(S) FOR 82500 OZ.

TOTAL NOTICES SO FAR:2625 FOR 262500 OZ (8.1640 TONNES),

For silver:

FEBRUARY

20 NOTICE(S) FILED TODAY FOR

100,000 OZ/

Total number of notices filed so far this month: 407 for 2,035,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $9,701/OFFER $9,771: DOWN $231(morning)

Bitcoin: BID/ $10,358/offer $10,428: UP $421  (CLOSING/5 PM)

 

end

We are now entering options expiry week for the big gold and silver contracts for the LBMA/OTC contracts. Comex options expired on Friday.

Let us have a look at the data for today\

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In silver, the total open interest FELL BY A CONSIDERABLE SIZED 1992 contracts from 198,429  FALLING TO 196,437 WITH  FRIDAY’S 10 CENT LOSS IN SILVER PRICING.  WE HAD CONSIDERABLE COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  1770 EFP’S FOR MARCH AND AND 139 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 1909 CONTRACTS.  WITH THE TRANSFER OF 1909 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. THE 1909 CONTRACTS TRANSLATES INTO 9.54 MILLION OZ DESPITE  WITH THE CONTINUAL DROP IN OPEN INTEREST IN SILVER AT THE COMEX.

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF FEBRUARY:

45,132 CONTRACTS (FOR 18 TRADING DAYS TOTAL 45,132 CONTRACTS OR 225.660 MILLION OZ: AVERAGE PER DAY: 2507 CONTRACTS OR 12.537 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  225.660 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 32.22% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  474.19 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

RESULT: A CONSIDERABLE SIZED LOSS IN OI SILVER COMEX DESPITE THE  10 CENT LOSS IN SILVER PRICE.  WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 1909 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER . FROM THE CME DATA 1909 EFP’S  FOR  MONTHS MARCH AND MAY WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE LOST  83 OI CONTRACTS i.e. 1909 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 1992  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF 10 CENTS AND A CLOSING PRICE OF $16.52 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A FAIR AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.985 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 20 NOTICE(S) FOR 100,000 OZ OF SILVER

In gold, the open interest  ROSE BY 2189 CONTRACTS RISING TO 526,638 DESPITE THE FALL IN PRICE OF GOLD WITH RESPECT TO FRIDAY’S TRADING ($1.15). HOWEVER, IN ANOTHER DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR MONDAY AND IT TOTALED AN SMALL SIZED  2651 CONTRACTS OF WHICH  APRIL SAW THE ISSUANCE OF 2401 CONTRACTS AND  JUNE SAW THE ISSUANCE OF 250 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.    The new OI for the gold complex rests at 526,638. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR FEBRUARY COMEX. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE A GAIN OF 4840  CONTRACTS: 2189 OI CONTRACTS INCREASED AT THE COMEX AND A SMALL SIZED  2651 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.(4840 oi gain in CONTRACTS EQUATES TO 15.05TONNES)

YESTERDAY, WE HAD 2746 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEBRUARY STARTING WITH FIRST DAY NOTICE: 187,370 CONTRACTS OR 18,737,000  OZ OR 582.79 TONNES (18 TRADING DAYS AND THUS AVERAGING: 10,409EFP CONTRACTS PER TRADING DAY OR 1,040,900 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 18 TRADING DAYS: IN  TONNES: 582.79 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2200 TONNES

THUS EFP TRANSFERS REPRESENTS 582.79/2200 x 100% TONNES =  26.49% OF GLOBAL ANNUAL PRODUCTION SO FAR IN FEBRUARY ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  1216.18 TONNES

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22  TONNES

Result: A  GOOD SIZED INCREASE IN OI AT THE COMEX DESPITE THE FALL IN PRICE IN GOLD TRADING YESTERDAY ($1.15).  HOWEVER, WE HAD ANOTHER TINY SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 2651 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 2651 EFPCONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 4840 contracts ON THE TWO EXCHANGES:

2651 CONTRACTS MOVE TO LONDON AND  2189 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 15.05 TONNES).

we had: 825 notice(s) filed upon for 82,500 oz of gold.

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

GLD

WITH GOLD UP $2.40 : A BIG CHANGE IN GOLD INVENTORY AT THE GLD/ANOTHER DEPOSIT OF 1.77 TONNES OF GOLD INTO THE GLD

Inventory rests tonight: 831.03 tonnes.

SLV/

WITH SILVER DOWN 10 CENTs TODAY: 

NO CHANGES IN SILVER INVENTORY AT THE SLV

/INVENTORY RESTS AT 316.590 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 1992  contracts from 198,429 DOWN TO 196,437 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH THE FALL  IN PRICE OF SILVER  (10 CENT WITH RESPECT TO  FRIDAY’S TRADING).  OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 1770 PRIVATEEFP’S FOR MARCH AND 139 EFP CONTRACTS OR MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS .  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI LOSS AT THE COMEX OF  1518 CONTRACTS TO THE 1909 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A TINY LOSS OF 83  OPEN INTEREST CONTRACTS .  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN FEBRUARY (SEE BELOW). THE NET LOSS TODAY IN OZ ON THE TWO EXCHANGES:  0.415 MILLION OZ!!!

RESULT: A CONSIDERABLE SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE  FALL OF 10 CENTS IN PRICE (WITH RESPECT TO FRIDAY’S TRADING ). BUT WE ALSO HAD ANOTHER GOOD 1909 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR FEBRUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(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 SUNDAY night/MONDAY morning: Shanghai closed UP 40.55 POINTS OR 1.23% /Hang Sang CLOSED UP 231.43 POINTS OR 0.74% / The Nikkei closed UP 260.0 POINTS OR 1.19%/Australia’s all ordinaires CLOSED UP 0.67%/Chinese yuan (ONSHORE) closed UP at 6.3090/Oil UP to 63.51 dollars per barrel for WTI and 67.06 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN  .   ONSHORE YUAN CLOSED UP AT 6.3090 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3076 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR AND ALL OTHER CURRENCIES. CHINA IS  HAPPY TODAY (STRONGER CURRENCY/STRONGER MARKETS) 

Read More @ HarveyOrganBlog.com

Lemonade Stand Economics

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by Gary Christianson, Miles Franklin:

Summary:  Timmy, a precocious ten-year-old opens a lemonade stand and learns about unbacked currencies.

“Dad, I’m excited and ready for business. Mom made me sign an IOU when she gave me sugar and frozen lemonade so I have stuff to sell.” Timmy looked up at his father and smiled in anticipation.

“Great job! This’ll be a learning experience. Here comes your first customer.” James, his father, wanted to be helpful, but expected Timmy to interact with customers.

A retired gentleman pushed his walker toward the lemonade stand and said, “Hi little fellow, I want a cup of that lemonade.”

Timmy poured lemonade into a twelve ounce plastic cup and handed it to his first customer. “That will be one dollar.”

The man handed Timmy a dollar bill, sipped his drink and shuffled away.

James said, “That was easy.”

Timmy examined the dollar bill and said, “It’s paper and says one dollar, but what is it worth?”

James groaned. This is what I get for raising an intelligent kid. “Timmy, the dollar bill is valuable because you can buy books, food, video games, or pay your mom back for the sugar and lemonade mix. And you can deposit the dollar into your bank account.”

Timmy looked puzzled and said. “So it’s monopoly money, but because other people will exchange it for goods, this dollar has value.”

James said, “That’s correct, but it’s better than monopoly money. The central bank of the United States, the Federal Reserve, issued this dollar and stands behind it.” That explanation should satisfy him.

“So the Federal Reserve puts ink on a piece of paper and makes it valuable?  That doesn’t make sense.” Timmy sounded confused.

James tried again. “The Federal Reserve issued and backs this note, so people trust and accept it for goods. You took the dollar in exchange for lemonade as an example.”

Timmy frowned as he looked at the dollar bill. “It says ‘Federal Reserve Note’ and ‘This Note is Legal Tender’ but it doesn’t say it’s money. What does that mean?”

This is getting out of hand. “Well, Timmy, it isn’t money, it’s a debt or promissory note issued by the Federal Reserve. That dollar is similar to the IOU you gave your mom for the lemonade supplies. This is an IOU from the Federal Reserve. They acknowledge this dollar bill as a debt they owe to you. But it’s valuable because we know the Federal Reserve supports the debt.”

“So the Federal Reserve owes me a debt. What backs that debt?”

Uh-oh. Got in too deep. James sounded defensive as he said, “That dollar is backed by the ability of the government to collect taxes and issue debt, basically faith and credit.”

Timmy looked puzzled. “So what happens if people lose faith in these Federal Reserve debts, or they no longer trust the government?”

Definitely too deep!  “Timmy, that’s a very astute question, but few people worry about the dollar. However, many other currencies became worthless because nothing real backed them, and everyone lost faith in their usefulness.”

Timmy looked satisfied. But a moment later he asked, “So people might lose faith in the dollar?”

“Well yes, I suppose they could.”

Timmy looked up at his dad and asked, “Why did those other currencies fail?”

James cleared his throat and said, “Their governments went deep into debt, and their central banks printed trillions of their currency notes.”

“But dad, I heard you complaining about the massive debts our government created, and you’re critical of the Federal Reserve for printing trillions of dollars in the last several years. What’s the difference?”

“Well, Timmy, there isn’t a difference except those other currencies and governments were poorly managed.”

“So dollars and our government are managed well?”  Timmy looked confused.

“I didn’t say that. I said the other governments were worse. Oh look, here comes another customer.” Just how smart is my son?  I didn’t think about this stuff when I was ten.

A young woman jogged up to Timmy and said, “One cup of lemonade please. I assume you take plastic.” She jogged in place waiting for her lemonade.

Timmy stammered, “I don’t take plastic, only cash. Sorry.”

“If you want to run a business, you have to take plastic. Well, next time.” She jogged down the street.

Timmy looked up at this dad and said, “Dad, I need help. How can I take credit cards? I’m not Wal-Mart.”

“You already have a checking account, and you can buy a cell phone and a slide attachment. Then you register with a bank for a commercial VISA account. But that might be more trouble than it’s worth.” James struggled to sound positive and upbeat.

Timmy asked, “Sounds expensive. How much will that cost?”

James explained, “The cell phone has a monthly fee. I’m not sure about the bank’s Visa account or the slide attachment. The bank will take three or four percent of your sales and deposit the remaining dollars in your checking account.”

“So I pay extra to take a credit card, and the bank charges me for every transaction?”  Timmy sounded disgusted.

“Visa claims their system is a convenience that boosts sales. In return they take a slice out of every transaction. Someday all transactions will run through the banks and there’ll be no need for cash.”

Jimmy frowned for the tenth time and said, “So I get paid with paper dollars that are unbacked debts from the Federal Reserve, while the government destroys the value of those dollars by issuing too much debt. They want to eliminate cash, and the banks demand a piece of every transaction. There must be a better way. I feel cheated.”

James looked at the grass and said, “A long time ago dollars were real silver coins, and nobody used credit cards. Paper dollars could be exchanged for silver, banks didn’t run the world, and people trusted banks and the government. But those days are gone forever.”

Read More @ MilesFranklin.com

ITALY: BONDS AND RIOTS

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by Joseph P. Farrell, Giza Death Star:

For a few years, as the crisis that is the European Union and its disastrous immigration policies have been unfolding, I’ve been urging people to watch Italy. Indeed, during last week’s News and Views I implicitly suggested that the center of the European stage has shifted from Berlin – where a workable coalition government has yet to take shape in any recognizable fashion and where Mad Madam Merkel is under increasing pressure to go – and from Paris, where M. Macron, if his performance in the recent Munich security conference is any measure, has yet to muster enough pluck to stand up to the paper tigress in Berlin, to Rome. Why is Italy so crucial? For one thing, it’s in the top ten economies of the world, and depending on who one consults, comes in at about number 8, making its economy about as large as Russia’s. More importantly, Italy’s is by far the strongest economy in southern Europe, which on any analysis, has been suffering the transference of wealth to the north under the crazy euro scheme, a scheme which one might say is nothing but the old Exchange Rate Mechanism and the Deutschmark, version 2.0.

During the last News and Views I also implied that the European “project” is being threatened by the looming Italian elections in a major way. At stake is a simple question: should Brussels bureaucrats, firmly in Berlin’s pocket, be the arbiters of Italy’s policy and destiny, or should Italy be in charge? And lurking behind this, as always, is money. The Italian banking system is a mess, and that mess is inextricably intertwined with a certain big German bank north of the Alps.

As is to confirm all these relationships, Ms. K.M. passed along this article which appeared at Zero Hedge, and there’s a key point which this article makes.

Riots Breakout Across Italy Ahead Of General Election (And Markets Are Getting Anxious)

The politics-as-usual, with a Merkel-style coalition government of all the leading parties (except the “populist” ones), simply isn’t in the cards in Italy, which has had to bear the brunt of the Mad Madam’s policy diktats via her cronies in Brussels:

These are the most important elections in Europe this year – laying aside the possibility of a German re-vote – and the amount of coverage it is getting is disturbingly scant.  Articles like this bit of pablum from Bloomberg is what passes for analysis, purporting to tell you “What You Need to Know about Italy’s March 4th Elections”

Even as the specter of populist revolt recedes elsewhere in Europe, Italy’s anti-establishment, Euroskeptic Five Star Movement is seeking a breakthrough.

That’s a lie.  And a bald-faced one at that.  There hasn’t been one election in Europe in the past two years where populism hasn’t been a major and rising factor.  The fact that Italy’s President dissolved parliament early and moved elections up from May to March 4th is proof they are scared of the trend.

Because the trend is against them.  Five Star Movement or M5S continues to rise in the polls and another two months would put them in a position to put a government together.

The writers of this article push a lie that M5S is uninterested in forming a coalition government.  The rules for this election were changed to allow the parties to fight as coalitions to freeze out M5S from ruling, even if they win the most votes.

The last polls taken had the Northern League tied at 15% with Silvio Berlusconi’s Forza Italia.  These two are campaigning together.  And the intention, clearly expressed by the Bloomberg writers, is to create a ‘grand coalition’ a la Germany, which no one in Italy wants except the political elites who back further integration with the European Union.

As the article also points out however, the bond markets belie the political narrative.

These are the real stakes in the Italian elections next week. And despite the gaslighting of the Bloombergs and worse, the Los Angeles Times, trying to tell everyone that M5S has no chance at winning, traders in the sovereign bond pits aren’t buying it.

Since the beginning of December European bond yields across the board have been rising.  The chart below is the magnitude of the rise in yields for Germany, France, Portugal and Italy.

Now, it’s hard for that market to not be bullish when the ECB is the only marginal buyer of Italian debt and heretofore, traders bet on that behavior continuing in perpetuity, front-running the ECB’s buying.

But, rising yields means that the net volume of selling across the spectrum of European sovereign debt is more than the ECB is willing or allowed to buy.  So, what’s happening is the ECB is managing the rate of the rise in sovereign bond yields and that is clear in the chart above.

What is also clear is that it is losing control of the Italian bond markets.

So, what’s next?  While new polls will not be published between now and the election, polls are being taken.  Someone has seen them.  And, by inference, the Italian bond market is telling us that those numbers are either far worse than we’ve been led to believe at this point or some traders are simply nervous.

For now that is off the table to get votes but Salvini and his M5S counterpart Luigi Di Maio both know that Italy’s path to prosperity lies through either a massive write-down of its sovereign debt, something German voters are clearly not in favor of (and are becoming moreso every day) or leaving the euro and depreciating it away.

Given the rate at which rates are rising that is moving that timetable up considerably.  And with no government in Germany yet that creates a lot of uncertainty for investors, who rightly, are beginning to panic that those in charge really aren’t. (Bold emphasis in the original, italicized emphasis added)

And that about says it all, except for a couple of high octane speculative possibilities. As I implied in last week’s News and Views, the long-term prospects for Italy in the European Union – in the “atlanticist straightjacket” – are not good. Indeed, a few years ago I noted that Italian businessmen, like their German counterparts, were unhappy with the sanctions regime against Russia, and were trying to explore ways around it. Throw in massive social programs and their looting by the usual culprits in the usual fashion, an immigration crisis, a banking system on the verge of collapse, and you get the picture. Riots? We’ve seen those stage-managed affairs here as well, and we know who was behind them, and I wouldn’t be a bit surprised that he has a hand in staging some of these Italian riots as well. Indeed, Italians are well aware of his role in “helping” refugees into Italy. No surprise there.  So what does one do if one is a globaloney elitist Eurocrat and wants to make sure to avoid any strong showing by the Lega Nord or M5S parties in Italy, which all the indicators appear to suggest?  One would have either to nullify the results of the election somehow, or stuff the ballot boxes and rig the election. Even then, a person with enough determination and a real talent for incompetence can still manage to lose a rigged election (just ask Darth Hillary). And if that happens, expect the rioting to continue as the populist parties mobilize support on the right. And if the elections turn out as the above indicators seem to suggest, expect the riots to continue as the political elites mobilize their forces on the left. And as I said a few years ago, once things start to get “interesting” in Italy, they will roll on into Spain, and then northward into France.

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