Sunday, August 18, 2019

Why the Next Downturn “Will Not Look Like 2008”

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by Wolf Richter, Wolf Street:

Nine years of scorched-earth monetary policies come home to roost.

There are always cycles. The current cycle started at the bottom of the Great Recession and will last “until central banks put on the brakes,” said Ray Dalio, founder of Bridgewater Associates, in an interview with Bloomberg. “We’re in a perfect situation, inflation is not a problem, growth is good, but we have to keep in mind the part of the cycle we’re in.”

We’re “in the late stage of the cycle, a period that might last two years,” he said without specifying how far we’re already into that late stage. We do know that the Fed is gingerly taking the foot off the gas though it hasn’t yet slammed on the brakes.

“When the operating rate gets high enough, when central banks think they should put on the brakes,” he said, “that’s part of the cycle.”

“From 2008 until the central banks put on the brake we have one kind of environment. So now we are closer to its capacity constraints… and we’re still going to have a lot of stimulation… in particular short-term stimulation,” and there is “a lot of cash on the sidelines” by investors, banks, consumers, and companies. “And they can feel that they’re being left out. It feels stupid to own cash in this kind of environment.”

He thinks this environment “is going to be great for earnings and great for stimulation of growth.” But “we have to look beyond that: What is monetary policy going to be in that?”

This short-term stimulus is producing a “spurt,” and this “will be a 12-to-18-month spurt,” and while that spurt is taking place, and while people feel stupid about holding cash, the central banks “will have to tighten monetary policy.”

“There is a lot more interest-rate sensitivity in the economy,” he said. “Assets themselves are more sensitive. Like a 1% rise in bond yields will produce the largest bear market in bonds that we have seen since the 1980 to 1981 period.”

Given that stimulus-driven spurt and the capacity constraints this spurt is running into, the Fed “will tighten at a rate that is probably faster than they’re signaling” because “they’re going to be concerned.”

“You also have a supply and demand situation with bonds,” he said. “With larger deficits, the government has to sell more bonds.” And this is happening just as the Fed and other central banks are letting the securities on their balance sheets roll off, he said.

The Fed’s QE Unwind is already happening, even the Bank of Japan has quietly started to reduce its bond holdings, despite verbiage about continued ultra-easy monetary policy, and the ECB has tapered its purchases to €30 billion a month and will likely end these purchases later this year. This is taking a lot of demand for securities off the table.

At the same time, the deficit in the US has been climbing and will likely surge under the new tax cuts, and debt issuance to pay for it is expected to soar.

In November, the US Treasury said that it would increase auctions of Treasury securities that have coupons, so longer-date securities. This excludes short-term “bills,” which mature in 52 weeks or less, and are sold at a discount from face value in lieu of a coupon. An increase in “coupon auctions” would be the first since November 2009.

On January 31, the Treasury Department will announce some details on how it will finance the expected surge in deficit spending over the next three months. According to Bloomberg, “Dealers forecast an onslaught of debt supply that will lead issuance to at least double this year to more than $1 trillion, the most since 2010.” For example, JPMorgan Chase strategists lifted their projection for net new Treasury issuance this year by about $100 billion, to $1.42 trillion – compared to net issuance in 2017 of about $550 billion.

With supply of this new debt surging, and with demand from central banks disappearing and even reversing (QE Unwind), more investors will have to be lured from the woodwork to buy this debt, which may require a more appealing yield. There will always be demand for US Treasuries – but the yield may have to be higher, and therefore prices lower.

Hence the massive bear market in bonds, according to Dalio.

But Dalio said that the next economic downturn is “not going to look like 2008,” which was “a classic debt crisis.” The next economic downturn is going to be different, after nine years of scorched-earth monetary policies.

Read More @ WolfStreet.com

USA DOLLAR TANKS ON MNUCHIN STATEMENT THAT HE WANTS A LOWER DOLLAR VALUE

by Harvey Organ, Harvey Organ Blog:

USA INDEX BREAKS 90 AND ENDS AT 89.25/USA 10 YR BOND NOTE AT 2.65%/GOLD RISES $25.00 TO $1357.15/SILVER RISES 56 CENTS TO $17.50 AND BREAKS THE HUGE $17.25 RESISTANCE/MONSTROUS ISSUE IN GOLD EFPS: 12,223/HUGE SILVER EFP ISSUANCE OF 2598 CONTRACTS/HUGE 2.65 TONNES OF GOLD ADDED INTO THE GLD/NOTHING ADDED INTO THE SLV/HUGE NUMBER OF SWAMP STORIES FOR YOU TONIGHT

GOLD: $1357.15 UP $25.00

Silver: $17.50 UP 56 cents

Closing access prices:

Gold $1359.00

silver: $17.57

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: $1348.77 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1341.15

PREMIUM FIRST FIX: $7.62

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SECOND SHANGHAI GOLD FIX: $1358.46

NY GOLD PRICE AT THE EXACT SAME TIME: $1343.00

Premium of Shanghai 2nd fix/NY:$15.46

SHANGHAI REJECTS NY /LONDON PRICING OF GOLD

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LONDON FIRST GOLD FIX: 5:30 am est $1350.50

NY PRICING AT THE EXACT SAME TIME: $1349.80

LONDON SECOND GOLD FIX 10 AM: $1353.70

NY PRICING AT THE EXACT SAME TIME. $1355.25

For comex gold:

JANUARY/

NUMBER OF NOTICES FILED TODAY FOR JANUARY CONTRACT: 8 NOTICE(S) FOR 800 OZ.

TOTAL NOTICES SO FAR: 692 FOR 69200 OZ (2.1524 TONNES),

For silver:

jANUARY

10 NOTICE(S) FILED TODAY FOR

50,000 OZ/

Total number of notices filed so far this month: 726 for 3,630,000 oz

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Bitcoin: BID $10,947/OFFER $11,047  DOWN $171 (morning)

 Bitcoin: BID   $11,108/OFFER  $11,212 UP $332  (CLOSING/4 PM)

 

end

Let us have a look at the data for today

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In silver, the total open interest FELL BY A TINY 76 contracts from 200,061 FALLING TO 199,985 WITH YESTERDAY’S 6 CENT LOSS IN SILVER PRICING.  WE THUS  MINIMAL COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  2598 EFP’S FOR MARCH AND ZERO FOR OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 2598 CONTRACTS. HOWEVER THE MOVEMENT ACROSS TO LONDON IS NOT AS SEVERE AS IN GOLD AS THERE SEEMS TO BE  MAJOR PLAYERS WILLING TO TAKE ON THE BANKS AT THE COMEX. STILL, WITH THE TRANSFER OF 2598 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.

ACCUMULATION FOR EFP’S/SILVER/ STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JANUARY:

37,797 CONTRACTS (FOR 17 TRADING DAYS TOTAL 37,797 CONTRACTS OR 188.98 MILLION OZ: AVERAGE PER DAY: 2223 CONTRACTS OR 11.116 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  188.98 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 26.99% OF ANNUAL GLOBAL PRODUCTION

RESULT: A TINY SIZED LOSS IN OI COMEX DESPITE THE 6 CENT LOSS IN SILVER PRICE WHICH USUALLY INDICATES ANOTHER FAILED BANKER SHORT-COVERING. WE ALSO HAD A HUGE SIZED EFP ISSUANCE OF 2598 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 2598 EFP’S WERE ISSUED FOR TODAY  FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS. WE REALLY GAINED 2522 OI CONTRACTS i.e. 2598 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 76  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE  FALL IN PRICE OF SILVER OF 6 CENTS AND A CLOSING PRICE OF $16.92 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A GOOD 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. 0.999 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JANUARY MONTH/ THEY FILED: 10 NOTICE(S) FOR 50,000 OZ OF SILVER

In gold, the open interest SURPRISINGLY ROSE  BY A CONSIDERABLE 9126 CONTRACTS UP TO582,421 WITH THE GOOD SIZED RISE IN PRICE OF GOLD WITH YESTERDAY’S TRADING ($5.55). IN ANOTHER HUGE DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR WEDNESDAY AND IT TOTALED A HUMONGOUS SIZED  12,223 CONTRACTS OF WHICH FEBRUARY SAW 11,023 CONTRACTS ISSUED AND  APRIL SAW THE ISSUANCE OF 1200 CONTRACTS.    The new OI for the gold complex rests at 583,590. ALSO REMEMBER THAT THERE CAN 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 JANUARY 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 TODAY WE HAVE A HUGE GAIN OF 21,349  CONTRACTS: 9126 OI CONTRACTS INCREASED AT THE COMEX AND A GOOD SIZED  12,223 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. EXPECT HUGE NUMBERS OF EFP’S TO BE ISSUED AS WE APPROACH FIRST DAY NOTICE IN THE GOLD FEB COMEX CONTRACT, WEDNESDAY JAN 31.2018

YESTERDAY, WE HAD 11,759 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY STARTING WITH FIRST DAY NOTICE: 164,474 CONTRACTS OR 16.474 MILLION OZ OR 512.41 TONNES(17 TRADING DAYS AND THUS AVERAGING: 9674 EFP CONTRACTS PER TRADING DAY OR 967,400 OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 17 TRADING DAYS: IN  TONNES: 513 TONNES

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

THUS EFP TRANSFERS REPRESENTS 474/2200 TONNES =  23.31% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JANUARY ALONE.

Result: A SHOCKINGLY STRONG SIZED INCREASE IN OI AT THE COMEX WITH THE FAIR SIZED RISE IN PRICE IN GOLD TRADING ON YESTERDAY ($5.55). WE HAD ANOTHER GIGANTIC SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 12,223. 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 12,223 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 21,349 contracts ON THE TWO EXCHANGES:

12,223 CONTRACTS MOVE TO LONDON AND  9,126 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 70.03 TONNES).

we had: 8 notice(s) filed upon for 800 oz of gold.

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

GLD

With gold UP $25.00, we had  a huge change in gold inventory at the GLD/A DEPOSIT OF 2.65 TONNES

Inventory rests tonight: 849.32 tonnes.

SLV/ 

A BIG CHANGES IN SILVER INVENTORY AT THE SLV/A HUGE WITHDRAWAL OF 1.131 MILLION OZ FROM THE SLV INVENTORY/

INVENTORY RESTS AT 313.048 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 A TINY 76 contracts from 200,061 DOWN TO 199,985 (AND now A LITTLE FURTHER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH  THE FALL  IN PRICE OF SILVER TO THE TUNE OF 5 CENTS WITH RESPECT TO  YESTERDAY’S TRADING.   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 2598 PRIVATE EFP’S FOR MARCH (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 ZERO COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI LOSS AT THE COMEX OF  76 CONTRACTSTO THE 2598 OI TRANSFERRED TO LONDON THROUGH EFP’S WE OBTAIN A BIG GAIN OF 2522 OPEN INTEREST CONTRACTS.  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NET GAIN TODAY IN OZ ON THE TWO EXCHANGES: 12.61 MILLION OZ!!!

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE TINY FALL  OF 6 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). BUT WE ALSO HAD ANOTHER STRONG 2598 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR JANUARY, 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 night/WEDNESDAY morning: Shanghai closed UP 12.96 points or 0.37% /Hang Sang CLOSED UP 27.99 pts or 0.08% / The Nikkei closed DOWN 183.97 POINTS OR 0.76%/Australia’s all ordinaires CLOSED UP 0.29%/Chinese yuan (ONSHORE) closed  WELL UP at 6.3748/Oil UP to 64.63 dollars per barrel for WTI and 69.91 for Brent. Stocks in Europe OPENED ALL RED .   ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.2748. OFFSHORE YUAN CLOSED UP AGAINST  THE ONSHORE YUAN AT 6.3732//ONSHORE YUAN MUCH STRONGER AGAINST THE DOLLAR/OFF SHORE MUCH STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS  MUCH WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY  HAPPY TODAY.(GOOD MARKETS/WEAKER USA DOLLAR )

 

Read More @ HarveyOrganBlog.com

Perth Mint to create cryptocurrency backed by gold

by Filip Karinja, Small Caps:

The cryptocurrency movement is capturing everyone’s imagination – including governments. Australia’s state-owned Perth Mint, operated by the Gold Corporation, intends to create its own cryptocurrency backed by gold.

Based in close proximity to Perth airport, the Perth Mint serves as the focal point of Australia’s precious metals refining. The refinery works on the vast majority of gold produced in Australia, as well as gold from surrounding countries.

In its own right, the Perth Mint stands up as one of Western Australia’s largest exporters distributing around $18 billion in pure gold, silver and platinum bars and coins to investors in more than 100 countries.

However, with the recent rush into Bitcoin and cryptocurrencies becoming mainstream, the Perth Mint is adapting to the challenge of modern financial markets. In a bid to keep up the digital times and to make its services available to a wider number of people and companies, Perth Mint has its sights set on developing a cryptocurrency that will be linked to a physical commodity.

Over the past two years, Perth Mint has taken affirmative steps into the digital realm of online trading, by launching its very own trading platform allowing consumers to purchase gold and other precious metals at the touch of a button.

Intending to take things a step further, the Perth Mint wants to incorporate blockchain and Distributed Ledger Technology (DLT) into its toolkit.

According to Perth Mint, the introduction of a crypto-gold product would improve accessibility to gold for all consumers as well as making gold investments more secure and transparent. The inherent value-add advantages offered by blockchain technology includes real-time market visibility, impenetrable security and flawless transparency across whichever network it operates on.

Read More @ SmallCaps.com

Read More @ SmallCaps.com.au

Exclusive: World Gold Council investigates standard for gold kilobars

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by Pratima Desai, Reuters:

LONDON (Reuters) – The World Gold Council (WGC) is studying the creation of a global standard for gold kilobars so they can be deployed as collateral in futures markets and potentially encourage demand, sources close to the matter said.

Kilobars — 1 kilogram gold bars — dominate Asian trade but a lack of transparency about their origin and the absence of a global standard hinders their use on exchanges elsewhere.

Clearing houses, some of which allow bullion to be used as collateral on futures markets, might accept such bars if they all met a set of internationally recognized criteria.

London Metal Exchange clearing arm LME Clear cannot accept the kilobars used in Asia because they differ from London Good Delivery standard bars, typically around 400 ounces, as specified by the London Bullion Market Association (LBMA).

Independently of the WGC initiative, the LME has been looking at accepting kilobars as collateral for all its contracts which include copper, aluminum and zinc, sources familiar with the matter said.

The council and the LME declined to comment.

Intercontinental Exchange’s ICE Clear Europe and CME Group’s U.S.-based clearing house accept bullion as collateral, but only if it conforms with LBMA criteria, which typically would rule out bullion traded in Asia.

“We continuously evaluate new forms of collateral based on client demand and at this time, we haven’t heard interest from clients,” CME said when asked whether the exchange was considering accepting kilobars.

ICE declined to comment when asked.

WGC talks on creating a global kilobar standard would aim to include companies from the world of gold refining, banks and brokers that trade the precious metal in the futures and physical markets and the LBMA.

The LBMA said it was not currently involved in any specific discussions over the creation of a new standard.

KILOBARS DOMINATE

“The plan is to create a standard for kilobars that can be adopted around the world, delivered anywhere, possibly using blockchain to identify the bars, their origins,” a physical gold trading source said.

“Rigid standards and blockchain would bring in people who are worried they could be getting conflict metal,” he said.

Blockchain, the technology behind cryptocurrencies like bitcoin, is drawing interest from a range of industries as a means to track minerals or create more security and transparency in trade and other financial transactions. [nL8N1PB4GZ]

Sources estimate top consumer China imports about 95 percent of gold in kilobars, while world No. 2 consumer India imports 80 percent in kilobars. The WGC estimates China’s gold demand at 900 to 1,000 tonnes last year and India’s at 650 tonnes.

Gold contracts on the Shanghai Gold Exchange, Shanghai Futures Exchange and Hong Kong Exchanges and Clearing are in kilobars.

“The Asian consumer market is in kilobars, it dominates gold trade,” a gold industry source said. “If you want to trade on the LME and you want to lodge your collateral in kilobars in another location, why shouldn’t you be able to? There are vaults all over the world.”

Brinks, London-listed G4S and Loomis International provide gold storage facilities around the world.

Vaults in London as of September 2017 held 7,743 tonnes of gold, worth $334 billion at today’s prices, LBMA data shows.

The gold vaulting business in London is dominated by LBMA members JP Morgan and HSBC, the two largest gold traders in London’s over-the-counter market with total traded volumes estimated at about $5 trillion a year.

The gold they hold is on the LBMA’s Good Delivery list, which was defined in 1750 by the Bank of England. The LBMA was founded in 1987 to oversee that list.

However, the London market was designed for central banks, many of which have diversified reserves into currencies and government bonds, so are no longer as active in the gold market.

“What (London has) in place is a simple standardized format that allows large volume trade. The large bar format doesn’t work outside London,” the physical gold trading source said.

“Kilobars should be included in the London Good Delivery list, it would be less costly and more efficient for a lot of people, but it is not in the interests of some LBMA members.”

Anyone wanting to deliver kilobars in London has to accept a deep discount from the vault owners on the value of their gold or they have to be melted and remoulded into Good Delivery bars.

Read More @ Reuters.com

Tax Cuts Supercharge the Economy

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from BATR:

If you get your fake news from the corporatist filtered media, the sky is falling now that the Trump tax cuts are law. Pounded into the skulls of the dense hard heads of diminished grey matter is that the benefits of putting more cash into the pockets of everyday workers is peanuts. The collectivists who operate under communist economic doctrines fear that their normal class warfare rhetoric is hitting a wall of worry from their pro redistribution base. This factor requires telling an even bigger lie. Unleashing the animal spirits of confidence in growing the economy is now a reality, and the defenders of slicing a shrinking pie cannot bear the contrast of a vibrant and expanding economy.

As companies repatriate funds held in oversea accounts, they take advantage of paying the reduced onetime tax payment. Apple is a prime example of this aspect in the new law as reported in Real Clear Politics. They will pay a tax rate of “15% instead of 35% for a total of $37-38 billion in taxes. Even at a 15% rate on their $250 billion, and they’re doing this happily.”

Now the reason all these foreign profits built up over the years is a direct result of double taxation when brought back into the U.S. The elimination of this most negative of globalist taxation devices to drive domestic companies to leave our shores are over. The net result is that the liberation from this intentional tax schemes to de-industrialize American manufacturing translates into encouraging an immense incentive for a dramatic re-establishment of reinventing our economy.

Jobs, jobs and even more jobs will be the result. Imagine the explosion in expectations based upon real expansion in economic activity. For the demented democrats such a prospect is doggie doo in the Pelosi parlance and version of her Apocalypse Now panic chambers. Sounds like the “Chucky” Schumer government shutdown is based upon the tactics of Colonel Kurtz:

“It’s impossible for words to describe what is necessary to those who do not know what horror means. Horror… Horror has a face… and you must make a friend of horror. Horror and moral terror are your friends. If they are not, then they are enemies to be feared.”

Economic imperialism is practiced by the donors of the establishment. The Democrats are the true fascists of the unholy alliance between Big Business and Despotic Government. The saps that demonstrate for expanding this vile partnership of governance are economic illiterates.

The Trump tax cuts will elevate entrepreneurship with immediate expensing the cost of certain assets as faster write-offs really appeal to businesses. As any experienced businessperson knows, when the return on capital invested increases without prolonged tax depreciation for the expense, business growth will multiply.

Investing back into a business is a proven method to grow any enterprise that sells products or services that customers demand. Those justifiers of the dependence society only grow one occupation; government addiction. Since Trump is increasing the income of the middle class and exempting lower wage earners from any federal tax, the patrons of welfare economy must become mercenaries in the service of the Sheriff of Nottingham. Hanging Trump from the Major Oak in Sherwood Forest displays the same fear that King John had from Robin Hood.

England became a nation of shopkeepers because individuals were able to participate within an expanding economy that benefited much of the country. America was able to create the largest middle class in history by putting in place the conditions for upward mobility. People could better themselves and rise about their previous station in the economy. Sadly, that promise of improvement includes fewer segments of the population for a very long time.

The swamp thieves wear a crown of despotism, designed to keep serfs in economic servitude. President Trump is upending the corrupt system and offers a path for economic prosperity for the ordinary people. The barons of the aristocracy have the money, resources and contacts to work the system which was designed to benefit them. The poor will always exist as the LBJ Great Society clearly demonstrates.   

Only the expansion of a viable middle class can increase wealth for the country. Trump rejected globalism by withdrawing from the TPP and NAFTA will be renegotiated or the U.S. will withdraw from the lopsided agreement. Adopting a Merchantry economy is consistent with the Trump initiatives. The recent tax cuts are a first step in the rejuvenation of an optimistic outlook through the financial retention of more of your money through lower taxes.

Wages are rising, bonuses paid and hiring is increasing. This is the mark of an improving economy. What you are witnessing from the envy opposition of the trump tax cuts is that they are dedicated to re-impose a marginal if not a dwindling business activities environment.

In order to build a domestic alternative to the mega corporations, small businesses need to become far more profitable. The next change needed is the revamping and overhaul of Dodd-Frank that will restore a loan based community banking model to finance the capital needs of a booming small business segment.

The approach for raising the bondservant out of poverty is not robbing from the rich and giving to the poor but for expanding the velocity of commerce among and between the residents of this country. Robin Hood may be a folklore myth but his message was never that of a bleeding heart. He fought for the natural rights of all Englishmen.

Read More @ BATR.org

Hyperinflation Watch Super Bowl Edition: Sticker Shock Even After The Plunging Ratings And The Boycotts

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from SilverDoctors:

Five digits (six if you’re rounding) and a comma. In the latest edition of the Hyperinflation Watch, we set our sights on the Super Bowl…

This has not been the poster-boy year for the NFL.

Low ratings, loss of sponsors, kneeling players and a Vice President walk-out were just some of the highlights this season.

As we draw closer to the Super Bowl, however, all of those negatives get thrown out the window because this could be one of the priciest Super Bowl’s yet.

Here’s CBS explaining just how pricey they have become:

In the Hyperinflation Watch, we try to point out real world examples that show just how worthless fiat currencies are becoming.

Once the sheeple realize that all of this U.S. dollar money printing has shifted the decimal point one place to the right – when a bottle of ranch salad dressing costs not $4.50 but $45, when a pair of Nike shoes costs $1,500, or when a round-trip coach-class plane ticket from Detroit to Chicago costs $5,750, it will be too late to give the warnings because the hyperinflation will have engulfed the United States, and, if by some chance the rest of the world is still dumb enough to be using dollars as the world reserve currency, the hyperinflation will have engulfed the entire world.

Far fetched?

Devaluations are real, just as resets happen.

Read More @ SilverDoctors.com

US Freight Spending, Shipments, Rates & Costs all Surge

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by Wolf Richter, Wolf Street:

Transportation Recession of 2015 and 2016 is just an Ugly Memory.

The transportation recession of 2015 and 2016 has receded into memory, and the trucking industry is hopping and railroads are getting their share, rates are surging, and so are costs, and the money is flowing. The Cass Freight Index, which tracks US shipment volumes by all modes of transportation, rose 7.2% year-over-year in December, to the highest level for any December since 2007.

The Cass Freight Index is not seasonally adjusted, with peaks in early summer for back-to-school season and in September during shipping season ahead of the holiday sales season. December marks the end of shipping season, and shipments normally plunge from November. But in December 2017, instead of plunging, shipments barely edged down from November. In the chart, the difference between 2017 (red line with black markers) and 2016 (black line with red markers) shows the severity of the transportation recession and the powerful recovery since:

The green line in the chart above represents 2014, which had been a banner year for US transportation until it began to unravel at the end of 2014 and descended into the full-blown transportation recession covering much of 2015 and 2016.

The index is based on “more than $20 billion” in annual freight transactions, according to Cass Information Systems. It does not cover bulk commodities, such as oil and coal but is focused on consumer packaged goods, food, automotive, chemical, OEM, and heavy equipment, shipped via truck, rail, barge, and air.

The chart below of year-over-year percentage changes in the Cass Freight Index for shipments shows the severity of the transportation recession in 2015 and 2016 — which I covered, including in May 2016, with Freight Rail Traffic Plunges: Haunting Pictures of Transportation Recession. The chart also shows just how powerful the recovery has been:

The e-commerce boom gets part of the credit, with e-commerce sales surging 15.5% in the third quarter of 2017, according to the Commerce Department, and 18% over the holiday period, according to Adobe. Cass: “Data continues to suggest that the consumer is finally starting to spend a little, albeit not with brick and mortar retailers.”

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