Thursday, December 12, 2019

The Empire Strikes Back – At Bitcoin

by John Rubino, Dollar Collapse:

One of the uncertainties with cryptocurrencies has always been how governments would react once bitcoin and its kin got big enough to actually threaten the monopolies of national fiat currencies.

That day seemed to be approaching as cryptocurrencies’ aggregate market cap blew through $100 billion and the pipeline of new bitcoin wannabes (initial coin offerings, or ICOs) swelled into the hundreds. Even – in a classic sign of a bubble top — Paris Hilton got involved:

 

Hotel Heiress Paris Hilton Is the Latest Celebrity to Promote an ICO

(Coin Desk) – Celebrity heiress and reality TV star Paris Hilton has taken to Twitter to announce her participation in a token sale, or ICO.

Called Lydian, the venture claims the project is developing “blockchain driven technologies to reduce ad fraud and to maximize the effectiveness of ad marketing expenditures.” The idea has been floated by a number of projects of late, including efforts backed by advertising industry participants.

In the tweet, Hilton wrote:
Looking forward to participating in the new @LydianCoinLtd Token! #ThisIsNotAnAd #CryptoCurrency #BitCoin #ETH #BlockChain pic.twitter.com/a8kT9eHEko
— Paris Hilton (@ParisHilton) September 3, 2017

And lately governments have indeed begun to defend their turf. The US Internal Revenue Service decided that since cryptocurrencies were clearly not money (only the dollar is money!) they must be commodities, which means every transaction creates a taxable gain or loss. In August the IRS drove the point home by unveiling software that can track supposedly anonymous crypto transactions:

The IRS Has Special Software to Find Bitcoin Tax Cheats

(Fortune) – One benefit of using bitcoin is the digital currency can be anonymous—its owners can move money around the world without revealing who they are. Well, in theory at least. In reality, bitcoin is less secret than people think.

The latest reminder of this comes via a report that the Internal Revenue Service is using software to unmask bitcoin users who have failed to report profits. According to a contract unearthed by the Daily Beast, the IRS is paying a company called Chainalysis to help identify the owners of digital “wallets” that users employ to store their bitcoins.

In a letter to the IRS, the co-founder of Chainalysis says the company has information on 25 percent of all bitcoin addresses and that it deploys millions of tags to help track and identify transactions.

The decision by the IRS to license the software of Chainalysis, which is based in Switzerland with an office in New York, appears to be part of the agency’s larger campaign to target digital currency users who have failed to pay tax.

As Fortune reported earlier this year, the IRS claims only 802 people declared a capital gain or loss related to bitcoin in 2015. This is significant since the price of bitcoin soared from around $13 to over $1100 between 2013 and 2015, and hundreds of thousands (like millions) of Americans bought and sold digital currency during this time—in other words, there are many people who face bitcoin-related tax trouble, and the IRS is tracking some of them down.

Then China decided it had had enough of the dot-com-like tsunami of new digital currencies pouring into its economy, and banned future releases, crashing the price of most extant cryptocurrencies.

China Halts Initial Coin Offerings

(Bloomberg) – Bitcoin tumbled the most since July after China’s central bank said initial coin offerings are illegal and asked all related fundraising activity to be halted immediately, issuing the strongest regulatory challenge so far to the burgeoning market for digital token sales.

The People’s Bank of China said on its website Monday that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalizing legal violations in ones already completed. The regulator said that those who have already raised money must provide refunds, though it didn’t specify how the money would be paid back to investors.

It also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies. Digital tokens can’t be used as currency on the market and banks are forbidden from offering services to initial coin offerings.

“This is somewhat in step with, maybe not to the same extent, what we’re starting to see in other jurisdictions — the short story is we all know regulations are coming,” said Jehan Chu, managing partner at Kenetic Capital Ltd. in Hong Kong, which invests in and advises on token sales. “China, due to its size and as one of the most speculative IPO markets, needed to take a firmer action.”

Bitcoin tumbled as much as 11.4 percent, the most since July, to $4,326.75. The ethereum cryptocurrency was down more than 16 percent Monday, according to data from Coindesk.

Read More @ DollarCollapse.com

Fed Vice (Stanley Fischer) Chair Stepping Down in October

from TRU News:

Sooner than expected, President Donald Trump will have an opportunity to shape U.S. monetary policy with the announcement Wednesday that Federal Reserve Vice Chairman Stanley Fischer is resigning effective in mid-October.

Fischer’s resignation letter to the president states:

I am writing to inform you that for personal reasons it is my intention to resign from the Board of Governors of the Federal Reserve System on or around October 13, 2017.

It has been a great privilege to serve on the Federal Reserve Board and, most especially, to work alongside Chair Yellen as well as many other dedicated and talented men and women throughout the Federal Reserve System. During my time on the Board, the economy has continued to strengthen, providing millions of additional jobs for working Americans. Informed by the lessons of the recent financial crisis, we have built upon earlier steps to make the financial system stronger and more resilient and better able to provide the credit so vital to the prosperity of our country’s households and businesses.

 Federal Reserve Vice-Chairman Stanley Fischer informed President Donald Trump in a letter Wednesday he intends to resign effective mid-October. This will allow the president to replace all but two members of the Fed's Board of Governors in his current term.
Federal Reserve Vice-Chairman Stanley Fischer informed President Donald Trump in a letter Wednesday he intends to resign effective mid-October. This will allow the president to replace all but two members of the Fed’s Board of Governors in his current term.

Fischer is the former chairman of Citigroup, and also served as governor of the Bank of Israel, as first deputy managing director of the International Monetary Fund, and as the chief economist at the World Bank. He also taught economics at MIT for more than 20 years—former Fed chairman Ben Bernanke was a student.

Currently, three other seats on the seven-member Board of Governors are vacant, and Chairwoman Janet Yellen’s term expires in February. Prior to Fischer’s announcement, analysts were predicting National Economic Council Director Gary Cohn would be the president’s choice to succeed Yellen.

The president will now have the opportunity to replace all but two members of the Board of Governors at the Fed during his current term in office.

Read More @ TRUNews.com

A Massive Surge In GLD “Inventory”

by Turd Ferguson, TF Metals:

Yesterday saw the 2nd-largest one day surge in GLD “inventory” in the past five years. What does this signal, if anything at all?

I think most everyone here knows how I feel about the GLD. It’s a scam. It’s a sham and it’s a fraud. Oh sure, there’s almost certainly some gold held in the HSBC vaults but how much is truly, 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} allocated to just the GLD? Recall the whole charade from back in 2011 when Bob Pissonme of CNBS was allegedly driven in circles for hours before being allowed into the super-secret vaults that house the GLD’s gold: http://www.silverdoctors.com/gold/gold-news/ned-naylor-leyland-reveals-actual-owner-of-bob-pisanis-gld-gold-bar/

Meh, whatever. There’s no sense in relitigating this nonsense today. What is curious sometimes is the timing of the the Authorised Participant (Bullion Bank) alleged additions and withdrawals. Most recently we noted a stretch of 16 consecutive withdrawals over the period from June 26 through August 7. The total amount of “gold” withdrawn from “inventory” over that time was 66.81 metric tonnes.

However, since August 7, the GLD has seen seven consecutive additions to inventory. The first six, from August 14 to August 30, were for a total of 29.56 metric tonnes. This is astonishing in its own right as it’s difficult to imagine this gold just laying around, waiting for HSBC to pick it up when needed. And then yesterday, we got the coup de grace…an incredible 23.65 metric tonnes were allegedly added yesterday alone.

How much gold is 23.65 metric tonnes? That’s about 760,000 troy ounces.

And is that a lot? Well, there are about 400 troy ounces in every London Good Delivery Bar so 23.65 metric tonnes equates to about 1,900 of these babies:

If you stack 192 of them to a pallet, it also means you’re looking at 10 pallets as shown below:

So, I’m sure this is all totally on the up-and-up and honest. Remember, the custodian for the GLD gold is HSBC and they have a stellar and impeccable reputation: http://www.corp-research.org/HSBC

Again…whatever. This is all old news. The only reason I bring this up is to remind you of the last two times the GLD saw such a massive addition to “inventory”.

Recall the heady days of June and July 2016. The Brexit vote had just shocked the financial world. Negative rates abounded and even the 10-year US treasury note traded at a yield of just 1.50{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Comex Digital Gold began the year near $1100 but had risen to $1300 and beyond.

On June 24, 2016…the day after the Brexit vote…the GLD “inventory” surged by 18.41 mts. “Inventory” continued to rise into early July and then, with the largest one day surge that we have on record since 2012, “inventory” jumped 28.81 metric tonnes on July 5. Hmmmm….July 5. What else happened on July 5? That was the very day of the 2017 price peak near $1375! How about that?

Cause and effect? Effect and cause? Simple coincidence? Maybe there’s no connection at all as the APs (Bullion Banks) can simply stuff the GLD “inventory” with as many delivery receipts and promissory notes as they deem necessary to give the appearance of propriety. But then again, maybe not.

However, I don’t want to leave you with the impression that this HAS TO BE a bad sign and signal of a short-term price top. According to our records over the past five years, there was one other massive GLD inflow. It was for 18.74 metric tonnes and it came in on December 18, 2015. And where was price then? Near $1060 and the absolute bottom of the 2012-2015 bear market. From that point, price soared nearly 30{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in 6 months and the GLD “inventory” rose with it from 630.17 mts on December 17, 2015 to that July 5, 2016 peak noted above at 982.72 mts.

Read More @ TFmetals.com

These are the 45 goals of communism’s takeover of America… more than half have already been achieved

0

by Jayson Veley, Natural News:

If the decay of our constitutional system and the general success of the progressive movement over the past one hundred plus years all seems like some kind of elaborate plot unfolding before our very eyes, that’s because it is. The liberals know that they can’t just introduce totalitarianism overnight, as much as they might want to. Rather, the process must be slow and steady; so slow and steady, in fact, that most Americans don’t even realize what’s happening.

Recently, Donna Calvin of BeliefNet.com published a list of the 45 communist goals as read into the congressional record in the year 1963 by Hon. A. S. Herlong Jr. of Florida, who was quoting from Cleon Skousen’s book “The Naked Communist.” The 45 stepstowards the introduction of a communist state are as follows:

  1. U.S. acceptance of coexistence as the only alternative to atomic war

The statists among us must weaken our country to the point where the people believe surrender and coexistence is more important than military strength and national security. To do this, they often use scare tactics, such as the idea that the only alternative to coexistence is atomic war.

  1. U.S. willingness to capitulate in preference to engaging in atomic war

Much like goal number one, the idea here is to make the people believe that surrender is the only real, legitimate option.

  1. Develop the illusion that total disarmament by the United States would be a demonstration of moral strength

You often hear the liberals say that the United States should adopt stricter gun lawsbecause it is the moral thing to do. This too is just another step in their elaborate plan to bring about totalitarianism in America – they need you to be unarmed and incapable of defending yourself.

  1. Permit free trade between all nations regardless of Communist affiliation and regardless of whether or not items could be used for war

Put simply, this is a tactic used to get the people to let their guard down when it comes to the advancement of foreign communist nations.

  1. Extension of long-term loans to Russian and Soviet satellites

If the goal is to put America on a path towards totalitarianism, then it only makes sense that those seeking this transformation would want to force us to follow behind nations who are already there.

  1. Provide foreign aid to all nations regardless of communist domination

The transformation of America into a communist country requires us to be actively supporting other communist nations around the world.

  1. Grant recognition of Red China. Admission of Red China to the U.N.

In order for totalitarianism in the United States to be more widely accepted, it is crucial that the statists bolster up the idea of communism on the global stage.

  1. Set up East and West Germany as separate states in spite of Khrushchev’s promise in 1955 to settle the German question by free elections under supervision of the U.N.

 To those who embrace the rise of communism, the destruction of individual liberty is the ultimate goal. It is imperative that they do away with free elections and make moves to consolidate power into fewer and fewer hands.

  1. Prolong the conferences to ban atomic tests because the United States has agreed to suspend tests as long as negotiations are in progress

If communism is to become the dominant ideology, then those who might resist must be rendered defenseless. America’s military strength has got to be diminished if a centralized authority is to successfully take over.

  1. Allow all Soviet satellites individual representation in the U.N.

The injection of more Soviet propaganda into American society will only make the progressives’ quest to bring about a tyrannical state more acceptable to the public.

  1. Promote the U.N. as the only hope for mankind. If its charter is rewritten, demand that it be set up as a one-world government with its own independent armed forces.

The U.N. is the primary vehicle that the left uses to amass more and more power into the hands of fewer and fewer. As such, the public must view it in a positive light and embrace its existence.

  1. Resist any attempt to outlaw the Communist Party

Obviously, if communism is to become the dominant ideology in the United States, then the Communist Party cannot be outlawed.

  1. Do away with all loyalty oaths 

All loyalty oaths must be done away with so that the people become solely committed to the communist state and nothing else.

  1. Continue giving Russia access to the U.S. patent office.

In the left’s slow and steady journey to bring about communism in the United States, close cooperation with the Russian government is key.

  1. Capture one or both of the political parties in the United States

It’s obvious that the communists and the statists have taken over the Democrat Party, and there is a strong argument to be made that they are beginning to take over the Republican Party as well.

  1. Use technical decisions of the courts to weaken basic American institutions by claiming their activities violate civil rights

One of the best examples of this is the left’s assault on the institution of marriage, which they insist must be redefined to include same-sex couples so as to protect the civil rights of all Americans.

  1. Get control of the schools. Use them as transmission belts for socialism and current Communist propaganda. Soften the curriculum. Get control of teachers’ associations. Put the party line in textbooks.

The introduction of communist propaganda in to America’s education system is an area where the Left has been incredibly successful. They are brainwashing an entire generation through various lectures and textbooks, all of which promote, in one way or another, big government.

Read More @ NaturalNews.com

Dear Russia: An Enemy Is Not A Partner

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by Paul Craig Roberts, Paul Craig Roberts:

Russians are concerned about Washington’s arbitrary closing of their San Francisco consulate and the illegal searching of diplomatic properties. There is no question that Washington has violated diplomatic protections and international law.

Why did Washington show its outlaw face to the world?

Was it to show that as strong as Russia is, Russia cannot protect herself from Washington? No international law, no diplomatic immunity can stand in Washington’s way. Washington can violate all law with no consequence.
Washington’s view is that might, and only might, makes right. Law is thrown out of the window, so why does Russia rely on law in her dealings with Washington?

Was it to plant some fake evidence in the Russian properties of Russian complicity in the US presidential election that elected a candidate that prefered peace over conflict with Russia?

Russia’s foreign minister Lavrov has told the US Secretary of State that Russia is going to sue over the seizure and search of Russia’s diplomatic properties. So, here we see again the Russians trying to deal with Washington through law, courts, diplomacy, whatever, and not facing the real issue.

What is the real issue?

The Real Issue is that the US military/security complex, the most powerful component of the US government, has decided that Russia is the ENEMY that justifies its $1,000 billion annual budget and the power that goes with it.

In other words, Russia is designated America’s Number One Enemy, and there is nothing whatsoever Russian diplomacy, Russian measured responses, and Russian references to her enemy as her “partner” can do about it.

Dear Russia, you must understand that you have been assigned the role of “the Enemy.”

Yes, of course, there is no objective reason for Russia being designated America’s enemy. Nevertheless, that is Russia’s designation. Washington has no interest in any facts. Washington is ruled by a shadow government and the deep state, consisting of the CIA, the military/security complex, and financial interests. These interests support US world hegemony, both financial and military. Russia and China are in the way of these powerful interest groups.

The case against Russia becomes more absurd by the day. Newsweek just published a story that suggests Russia is behind the Boston Marathon Bombing. https://sputniknews.com/politics/201709061057119169-newsweek-claims-russia-boston-bombing/

Russia can’t do anything about her designation as Enemy Number One.

So, what can Russia do?

All Russia can do is to turn her back to the West, while watching very closely for the coming suprise attack. There is nothing in America for Russia. Any American investment in Russia will be used to damage Russia. Russia does not need any American capital. The Russian central bank’s belief in Russia’s need for foreign capital is proof of the successful brainwashing of Russian economists by American neoliberalism during the Yeltsin era. The Russian central bank is so brainwashed that it is incapable of understanding that the Russian central bank can finance Russian development without any foreign loans. The Russian government still doesn’t seem to understand that the only reason sanctions can be imposed on Russia is because Russia is ensnared in the Western financial system. The economic advice that the Russian government gets from its brainwashed neoliberal economists serves Washington’s interests, not Russia’s.

Russia should not be using Western financial clearing mechanisms that serve Washington’s interests.

When will the Russian government cease pretending that its enemy is its partner?

Why can’t the Russian government recognize the reality that stares her in the face, that continually insults and abuses Russia?

Why is Russia so determined to be part of the corrupt and declining West that Russia accepts every insult, every abuse?

Read More @ PaulCraigRoberts.org

The Coming Run On Banks And Pensions

by Dave Kranzler, Investment Research Dynamics:

“There are folks that are saying you know what, I don’t care, I’m going to lock in my retirement now and get out while I can and fight it as a retiree if they go and change the retiree benefits,” he said.  – Executive Director for the Kentucky Association of State Employees,  Proposed Pension Changes Bring Fears Of State Worker Exodus

The public awareness of the degree to which State pension funds are underfunded has risen considerably over the past year.  It’s a problem that’s easy to hide as long as the economy is growing and State tax receipts grow.  It’s a catastrophe when the economic conditions deteriorate and tax revenue flattens or declines, as is occurring now.

The quote above references a report of a 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} jump in Kentucky State worker retirements in August after it was reported that a consulting group recommended that the State restructure its State pension system.   I personally know a teacher who left her job in order to cash completely out of her State employee pension account in Colorado (Colorado PERA).  She knows the truth.

But the problem with under-funding is significantly worse than reported.  Pensions are run like Ponzi schemes.  As long as the amount of cash coming in to the fund is equal to or exceeds beneficiary payouts, the scheme can continue.   But for years, due to poor investment decisions and Fed monetary policies, beneficiary payouts have been swamping investment returns and fund contributions.

Pension funds have notoriously over-marked their illiquid risky investments and understated their projected actuarial investment returns in order to hide the degree to which they are over-funded.  Most funds currently assume 7{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to 8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} future rates of return. Unfortunately, the ability to generate returns like that have been impossible with interest rates near zero.

In the quest to compensate for low fixed income returns, pension funds have plowed money into stocks, private equity funds and illiquid and very risky investments,  like subprime auto loan securities and commercial real estate.   Some pension funds have as much as 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of their assets in private equity.  When the stock market inevitably cracks, it will wipe pensions out.

As an example of pensions over-estimating their future return calculations, the State of Minnesota adjusted the net present value of its future liabilities from 8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} down to 4.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} (note:  this is the same as lowering its projected ROR from 8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to 4.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}).   The rate of under-funding went from 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} to 47{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

I can guarantee you with my life that if an independent auditor spent the time required to implement a bona fide market value mark-to-market on that fund’s illiquid assets, the amount of under-funding would likely jump up to at least 70{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.  “Bona fide mark-to-market” means, “at what price will you buy this from me now with cash upfront?”

For instance, what is the true market price at which the fund could sell its private equity fund investments?   Harvard is trying to sell $2.5 billion in real estate and private equity investments.   The move was announced in May and there have not been any material updates since then other than a quick press release in early July that an investment fund was looking at the assets offered.  I would suggest that the bid for these assets is either lower than expected or non-existent other than a pennies on the dollar  “option value” bid.

At some point current pension fund beneficiaries are going to seek an upfront cash-out. If enough beneficiaries begin to inquire about this, it could trigger a run on pensions and drastic measures will be implemented to prevent this.

Similarly, per the sleuthing of Wolf Richter, ECB is seeking from the European Commission the authority to implement a moratorium on cash withdrawals from banks at its discretion. The only reason for this is concern over the precarious financial condition of the European banking system.  And it’s not just some cavalier Italian and Spanish banks.  I would suggest that Deutsche Bank, at any given moment, is on the ropes.

But make no mistake. The U.S. banks are in no better condition than their European counter-parts.  If Europe is moving toward enabling the ECB to close the bank windows ahead of an impending financial crisis, the Fed is likely already working on a similar proposal.

Read More @ InvestmentResearchDynamics.com

Toronto Home Price Bubble Descends into Bear Market

by Wolf Richter, Wolf Street:

With surprise rate hike, Bank of Canada turns against housing market.

Home sales in the Greater Toronto Area, the largest housing market in Canada, plunged 34.8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in August compared to a year ago, to 6,357 homes, with sales of detached homes and semi-detached homes getting eviscerated:

Sales by type:

  • Detached houses -41.6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • Semi-detached houses -37.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}
  • Townhouses -27.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}:
  • Condos -28.0{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}.

Even as total sales plunged, the number of active listings of homes for sale soared 65{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} year-over-year to 16,419, with 11,523 new listings added in August, according to the Toronto Real Estate Board (TREB).

“The relationship between sales [plunging] and listings in the marketplace today [soaring] suggests a balanced market,” the report explained, adding hopefully:

“If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels.”

And the average price of all homes, at C$732,292 in August, plunged 20.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} from the crazy peak in April (C$920,761). By this measure, it has now entered a bear market.

The average price in April had shot up 30{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} year-over-year. To cool this nutty business, the Ontario government introduced a laundry list of measures on April 20. It included most prominently a 15{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} transfer tax on nonresident foreign speculators. That appears to have done the trick.

Given the enormous price gains in recent years, the market remains hyper-inflated, and the four-month downturn into a bear market hasn’t even brought prices back to the year-ago level, with the average price for all types of housing up 3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}, and the condo price up 21.4{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} year-over-year.

To cool a similarly nutty housing bubble in Vancouver, the government of British Columbia had passed a year ago similar legislation with a 15{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} nonresident foreign speculator tax. But worried about an outright implosion of the bubble, it has since been subsidizing with taxpayer money down-payments aimed at first-time buyers and condos, which has inflated the condo bubble and condo speculation to new heights.

Politicians – they’re desperately dependent on extracting property taxes from homeowners – don’t want the world’s most majestic housing bubble to implode. They just want it to remain stable so that taxes can be extracted from willing homeowners that have gotten rich off years of house-price inflation. But for now, the Ontario government is letting the market ride.

The TREB report said that the sharp drop in average prices “points to fewer high-end home sales this year compared to last.” So are speculators with the most money abandoning the market?

Even the Bank of Canada has been warning home buyers – particularly speculators – all year long about big potential losses. Then in July, it raised its target for the overnight rate by 0.25 percentage points. Another rate hike was expected in December, to match the Fed’s presumed rate hike.

But today, in a surprise move, it raised rates again by 0.25 percentage points, to 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} – and there are now expectations that it might raise its target rate a third time later this year. In response, the loonie jumped 1.3{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} against the US dollar this morning.

These rate hikes “would just further dampen” the housing market, explainedBank of Montreal chief economist Doug Porter, adding that the surprise increase so soon after July’s rate hike “accentuates” the Bank of Canada’s urgency to raise rates.

Read More @ WolfStreet.com

SMALL FLASH CRASH KNOCKS GOLD DOWN $4.90 TO $1334.14 AND SILVER DOWN ONE CENT TO $17.86

by Harvey Organ, Harvey Organ Blog:

USA TELLS UN ITS 5 WISHES TO CURTAIL KIM OF WHICH BOTH RUSSIAN AND CHINA DISAGREE WITH THOSE SANCTIONS/IRMA FLATTENS ST MARTAAN AND NOW IS HEADING STRAIGHT FOR MIAMI/LOOKS LIKE THE DEBT CEILING DEBACLE HAS BEEN PUT OFF FOR ANOTHER 3 MONTHS SO AS TO FUND HARVEY

GOLD: $1334.15 DOWN   $4.90

Silver: $17.86  DOWN 1 CENT(S)

Closing access prices:

Gold $1334.20

silver: $17.88

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: $1342.93 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1339.90

PREMIUM FIRST FIX:  $3.03

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1344.02

NY GOLD PRICE AT THE EXACT SAME TIME: $1338.00

Premium of Shanghai 2nd fix/NY:$6.02

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1340.15

NY PRICING AT THE EXACT SAME TIME: $1339.90

LONDON SECOND GOLD FIX  10 AM: $1337.85

NY PRICING AT THE EXACT SAME TIME. 1338.85 ???

For comex gold:

SEPTEMBER/

NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 0 NOTICE(S) FOR  nil  OZ.

TOTAL NOTICES SO FAR: 49 FOR 4900 OZ  (0.1524 TONNES)

For silver:

SEPTEMBER

 

 160 NOTICES FILED TODAY FOR

 

800,000  OZ/

Total number of notices filed so far this month: 3,078 for 15,390,000 oz

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end

Today we had a mini flash crash that took gold down initially to $1331.00.  This happened as soon as London was put to bed and thus we were strictly in the paper markets.  Gold then rebounded a bit but in the end it was down almost $5.00.  Silver ended the session down only 1 cent.As soon as we hit the physical time zones, gold will rebound form where it left off yesterday. It looks like the USA will get a 3 month reprieve on its debt ceiling.  They needed funding for Harvey and did not wish to complicate things.

Let us have a look at the data for today

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In silver, the total open interest ROSE BY A CONSIDERABLE  3581 contracts from 178,897 UP TO 183,276 WITH THE GOOD SIZED GAIN IN PRICE THAT SILVER UNDERTOOK YESTERDAY’S TRADING (UP 14 CENTS). WE NOW HAVE MORE NEWBIE LONGS ENTER THE SILVER CASINO WITH NO SILVER LONGS EXITING FOR EFP’S. THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE SHORT PAPER IN TOTAL SYMPATHY WITH GOLD

RESULT: A SMALL RISE IN OI COMEX  WITH THE 22 CENT PRICE RISE. 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.916 BILLION TO BE EXACT or 130{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 160 NOTICE(S) FOR 800,000OZ OF SILVER

In gold, the open interest ROSE BY A MONSTROUS 11,274 CONTRACTS WITH THE RISE  in price of gold ($13.45 GAIN YESTERDAY). The new OI for the gold complex rests at 566,817.

CONDITIONS ARE RIPE AND AMPLE FUEL FOR ANOTHER  HUGE RISE IN THE NUMBER OF  NEWBIE SPECS  ENTERING THE GOLD ARENA WITH THE COMMERCIALS AGAIN SUPPLYING THE NECESSARY PAPER. THE NORTH KOREAN SITUATION CERTAINLY  ENCOURAGED  MORE NEWBIE LONGS TO  BECOME EMBOLDENED IN THEIR CONTINUING QUEST OF TAKING ON THE BANKERS WHO RECIPROCATED IN KIND WITH  SHORT PAPER.

Result: A HUGE SIZED GAIN IN OI WITH THE RISE IN PRICE IN GOLD ($13.45). THE COMMERCIALS SUPPLIED THE NECESSARY SHORT PAPER. MORE NEWBIE LONGS ENTERED THE COMEX CASINO WILLING TO TAKE ON THE BANKERS

we had: 0 notice(s) filed upon for nil oz of gold.

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

GLD:

Tonight , we had another huge  changes in gold inventory: a huge deposit of 5.91 tonnes

Inventory rests tonight: 837.12 tonnes

it the last two days: 20.69 tonnes

IN THE LAST 37 TRADING DAYS: GLD ADDS 9.02 TONNES YET GOLD IS HIGHER BY $100.75 .

SLV

Today:  WE HAD NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 331.178 MILLION OZ

 

end

.

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

1. Today, we had the open interest in silver ROSE BY A STEADY 3,581 contracts from 178,897 UP TO 183,276 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH YESTERDAY’S 14 CENT GAIN IN TRADING. SILVER RESPONDED LIKE GOLD TO THE ECONOMIC CLIMATE (E.G NORTH KOREA’S ATOMIC BLAST.) AS  NEWBIE LONGS PILED INTO THE SILVER ARENA. THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE NECESSARY SHORT PAPER.

RESULT:  A  HIGHER OI AT THE COMEX WITH THE INCREASE IN PRICE OF 14 CENTS.  BANKERS SUPPLIED THE NECESSARY  SHORT PAPER.  

(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 1.07 POINTS OR 0.03{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}   / /Hang Sang CLOSED DOWN 127.59 POINTS OR 0.46{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/ The Nikkei closed DOWN 27.83 POINTS OR 0.14{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Australia’s all ordinaires CLOSED DOWN 0.26{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}/Chinese yuan (ONSHORE) closed UP at 6.5250/Oil UP to 48.83 dollars per barrel for WTI and 53.81 for Brent. Stocks in Europe OPENED RED. Offshore yuan trades  6.5374 yuan to the dollar vs 6.5250 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  WEAKER DOLLAR. CHINA IS HAPPY TODAY

Read More @ HarveyOrganBlog.com

Time to Exercise CAUTION in Gold & Silver

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from SilverDoctors:

Just a week ago silver was clinging to $17. Gold is bogged down in the swamp until solidly taking out $1350, and there is quick sand all around. Complacency here and now can sink us like it has all year long. Especially as the MSM has turned bullish, too bullish…

Silver did not decisively break through $17 until last Thursday, just a few trading days ago. On Sunday night, silver futures broke through $18. We are nowhere near the “all clear”.

We must be more careful than ever to not get too bullish or too complacent.

Looking at the daily on silver, there is some resistance around $18.25, and major resistance around $18.50. Seeing that we have just shot up a greenback in a couple of days, this does not mean we will just storm the lines and over-run the resistance. Good news is that since bottoming out at $15.14 in July, we have had two healthy pullbacks. What is worrisome, however, is that the RSI is beginning to signal “overbought”.

If we are rooting for anything this week, it would be nice to see silver hold at $18, because with a dollar move in two days, there is a bunch of factors, both technical and fundamental in nature, that could cause another dollar move before the week is up. If silver breaks-out to $19, that would be the time to get bullish. If it breaks down to $17, that would be the time to back-up the truck and load up on physical while the getting is good.

Gold, as has been the case all year, is faring much better than silver. Gold is within’ spitting distance of the 52-week highs:

As the days go by, the 52-week highs will be taken out all on their own even if gold consolidates here. We recognize, however, there has been very little consolidation in the metals this year. It has been going up, or going down. With geo-political tensions and mother nature reaching a climax this week, some consolidation would be welcome in somewhat of a figurative and literal calm before the storm.

That would also give silver the chance to catch up to gold from their divergence that just does not want to close:

If gold drops from here, silver has room to run, if gold consolidates from here, silver has room to run, and if gold rises in price from here, silver still has room to run. The strength in the yellow metal has not been shown in the white metal, even though it has been shown in literally every other metal, base, industrial or precious. We keep highlighting the fact that the price of three of the four precious metals averages over $1000, and today, the average price for gold, palladium and platinum is over $1,100. Even when we average in silver to get an average price of all four precious metals, we still have an average price of $832.

When we talk about the absolute cheapest asset on the entire planet, there is a reason for that. How long silver remains to have the price suppressed is the question we are all trying to answer, but trying to time purchases for $.50 savings of downside price action could end up in paying $1 more based on just what we have seen in the last few days.

Palladium and copper continue to show the strength in price action that they have showed all year:

Palladium is precious and industrial. Copper is a base metal that the entire internet runs off of. It is not so much an infrastructure “spend”, but an infrastructure “rebuild”, and raw materials are going to be in high demand, which include the metals among other things.

Read More @ SilverDoctors.com

Kentucky Public Employee Retirements Surge As Fears Of Pension Collapse Mount

0

from ZeroHedge:

Slowly but surely it is becoming increasingly clear to public workers in states with massively underfunded pensions that they’ve been lied to for the past several decades as their states can’t possibly afford to pay for the retirement they’ve all been promised.  As a local radio station in Bowling Green points out today, fears over potential pension changes in Kentucky have resulted in a surge of early retirements as workers move to lock in payouts before any potential cuts go into effect.

More state workers retired last month than the year before amid concerns that the legislature and Gov. Matt Bevin will make changes to state retirement plans.

David Smith, executive director for the Kentucky Association of State Employees, said state workers have been retiring after consultants hired by the state recommended drastic changes to the pension systems.

“There are folks that are saying you know what, I don’t care, I’m going to lock in my retirement now and get out while I can and fight it as a retiree if they go and change the retiree benefits,” he said.

The Lexington Herald-Leader reports that there was a 20 percent jump in state worker retirements last month.

“Who are they going to replace them with if they truly offer up what they’re proposing or what was proposed? Who is going to want to work for state government? I wouldn’t,” Smith said.

As we pointed out last week, Kentucky’s public pensions face a daunting funding hole of $33-$84 billion, depending on your discount rate assumptions, according to a recent analysis conducted by PFM Group.

The problem is that the aggregate underfunded liability of pensions in states like Kentucky have become so incredibly large that massive increases in annual contributions, courtesy of taxpayers, can’t possibly offset liability growth and annual payouts.  All the while, the funding for these ever increasing annual contributions comes out of budgets for things like public schools even though the incremental funding has no shot of fixing a system that is hopelessly “too big to bail.”

Read More @ ZeroHedge.com