Sunday, August 25, 2019

Silver Will Have Its Day

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from Salivate Metal:

Guest Post: “Why You Should Store Precious Metal In Multiple International Locations”, by Olivier Garret of Hard Assets Alliance

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by Olivier Garret, TF Metals:

We’ve maintained an affiliation with our friends at Hard Assets Alliance since 2012 and I hope they are always on your list of bullion dealers when making a purchase.  They provide a fantastic service and you’ll likely find this new post from Olivier Garret, the Founder and CEO of HAA, to be extremely helpful and interesting.

Why You Should Store Precious Metals in Multiple International Locations

By Olivier Garret, Founder and CEO of Hard Assets Alliance

“Where should I store gold?” and “Should I store in multiple international gold storage facilities?” are some of the most common questions I receive from Hard Assets Alliance customers.

In short, the main reason why investors would consider storing precious metals in more than one international location is risk mitigation.

In addition to being a store of value, precious metals are insurance against a number of potentially disastrous scenarios: financial crashes, civil wars, political unrests, and other crises.

Unfortunately, any form of wealth can become a prime target of theft or government seizure in times of great distress. And diversification between storage locations can help mitigate it.

Here are the four serious risks to your metals holdings that international diversification will help avoid or reduce:

  • Confiscation or outlawing of personal gold ownership.

  • Capital controls—the government limits or denies a citizen’s right to carry or send any form of money abroad.

  • Administrative actions—seizure of property by a government agency without notice or due process; becoming enmeshed in a frivolous civil lawsuit.

  • Currency debasement/inflation will lower one’s standard of living and destroy wealth not adequately protected.

The most likely risk is that someone (including a family member) finds out that you store gold at home and steals it—or worse. For this reason, taking possession of large amounts of precious metals puts your wealth, as well as the lives of your family, at risk.

A better option is to store some of your precious metals in a safe storage location somewhere nearby. This way, you reduce the risk of theft and can quickly take delivery of your holdings.

I do not recommend storing your precious metals with a financial institution, though.

The reason is that the contents of a bank vault is not adequately insured.  In addition, financial institutions would be amongst the first casualties in a financial crisis. Further, your holdings would become an easy target in case of government seizures.

If you have enough precious metals to be concerned about government seizure/confiscation or capital controls, you should consider jurisdictional diversification. Storing precious metals abroad makes it much harder for a desperate government to seize them.

Besides, you could access part of your holdings in case you have to flee from your homeland for any unexpected reason like war.

For real-world examples, look no further than Europe in the 1930s and 1940s. Many Europeans were fortunate enough to have assets in Switzerland or the United States during the 1930s and 1940s. The offshore assets were their escape tickets from fascist regimes and wars.

If you decide to go global, make sure you store metals with the most reputable independent vaults. Look for precious metals storage companies that safeguard assets for large institutional investors and governments, such as Brink’s.

Further, be sure that your precious metals are fully insured and available for immediate delivery at all times.

Another important decision is picking the destination countries to store some of your safety nest. 

I suggest looking for the most stable countries with a long history of depositor protection.  Don’t forget the destination country will have its own set of regulations controlling the import of precious metals, too.

But in the end, you have to choose a location that makes sense to you.

I would personally more likely choose Switzerland or Australia than Singapore. That’s because I would be more likely to relocate near one of these two countries than to Asia. 

But this is a personal preference, and your criteria may be different.

For non-US investors, the United States may be a great place to store metals.  Switzerland is also attractive because it has the longest track record of political stability and neutrality. Singapore’s financial history is much shorter, but the country appears to be very stable.

England, Australia, New Zealand, and Canada are also great alternatives. 

The key is to diversify across jurisdictions as much as it makes sense based on the size of your precious metals holdings. I personally hold precious metals in four different jurisdictions, including the United States.

The only drawback of storing assets abroad is that foreign-held assets require greater awareness and planning:

  • Access to your metals may not be as quick and easy. Foreign-held bullion is for those with sufficient gold and silver already stored at or near home. Storing all your precious metals overseas defeats one of its purposes—to have it handy for an emergency.

  • The receipt of proceeds after a sale could take time. The delay between selling your foreign-held gold and receiving the funds can be days. Offshore precious metals should not be considered ready cash.

  • While the US may pose the greatest threat to a US investor, a foreign government could move to control certain assets as well. The risk varies by country and is generally greater within the banking system than with a private vaulting facility. Be sure to perform your due diligence before selecting a country. Choose a location with a history of strong depositor protection, governed by the rule of law, and solid property rights—and select bullion storage facilities with the highest reputation.

  • Understanding and complying with reporting requirements is essential.

The bottom line: Gold stored abroad is all about minimizing risks and maximizing options. As your metals holdings grow and governments become increasingly desperate, diversification becomes increasingly important.

Read More @ TFMetals.com

Crisis In Men

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from TruthNeverTold:

The Amazing Amount of Gold The U.S. Exported Since 2000

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by Steve St. Angelo, SRSrocco:

The U.S. exported a stunning amount of gold since the turn of the century.  As the price of gold surged along with the massive increase in U.S. debt, gold exports jumped to record highs.  In 2012 alone, the United States exported nearly 700 metric tons of gold.  The total amount of U.S. net gold exports over the past 17 years equaled the combined gold reserves of six high ranking countries.

While the U.S. exported nearly 8,000 metric tons (mt) of gold since 2001, it also imported a great deal as well.  Thus, we arrive at a “net export” figure by subtracting gold imports from gold exports.  During the past 17 years, there were only four years where the U.S. imported more gold than it exported.  These net gold import years were in 2004-2005 and 2010-2011 and totaled only 322 mt.

However, U.S. gold net exports were the mainstay as a staggering 2,340 mt of gold were shipped abroad.  If we look at the chart below, U.S. gold net exports picked up during the 2007-2008 U.S. Housing and Investment Banking collapse:

From 2012 to 2017, U.S. net gold exports totaled 1,354 mt or 43.5 million.  That’s one heck of a lot of gold.  Of course, the United States produces a lot of gold, 210-225 mt annually, however, domestic demand consumes a large percentage of that amount.

Now if we compare U.S. net gold exports versus the official reserves at top-ranking countries, the number turns out to be quite large.  The combined official gold holdings of the U.K., Saudi Arabia, Portugal, Taiwan, European Central Bank and India of 2,512 mt is about the same amount of U.S. net gold exports (2,430 mt) from 2001 to 2017.  Moreover, Italy (2,452 mt) and France (2,436 mt) which rank 4th and 5th respectively in official world gold reserves, are approximately the same amount of U.S. net gold exports during the same period (official gold reserves: source, World Gold Council).

The majority of U.S. gold exports were shipped to Switzerland, the U.K., and Hong Kong.  These three countries received more than 80% of U.S. gold exports during the 17-year period.

When the U.S. Dollar finally loses its world reserve status, Americans are going to wish that they held onto their gold instead of sending it overseas, ending up mostly in China and India.

HOW TO SUPPORT THE SRSROCCO REPORT SITE:

My goal is to reach 500 PATRON SUPPORTERS.  Currently, the SRSrocco Report has 181 Patrons now!   I would also like to thank those foundation supporters, who have chosen to become a member by making donations through PayPal to further the research and publishing work at the SRSrocco Report.

Read More @ SRSrocco.com

A2A with Simon Mikhailovich of Tocqueville Bullion Reserve

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by Craig Hemke, TF Metals:

Earlier today, we were able to visit with a new guest for our webinar series, Simon Mikhailovich of Tocqueville Bullion Reserve. Simon was full of terrific information and insights so I strongly encourage you to carve out some time to give this a listen.

Among the topics covered over the course of this 45-minute discussion:

  • What might be the global impact of President Trump’s new tariff plan?
  • What lies ahead in 2018 for global interest rates and the US dollar?
  • Might global central banks move one day to officially revalue gold significantly higher?
  • How does the global gold supply/demand equation look at present?
  • And a whole lot more!

Click HERE to listen

Again, there’s a bunch information packed into this audio so please be sure to give it a thorough listen. Thanks again to Simon for spending time with us and we look forward to visiting with him again sometime soon.

Read More @ TFmetals.com

GOLD REBOUNDS, UP $2.25 TO $1323.40

by Harvey Organ, Harvey Organ Blog:

SILVER UP 21 CENTS TO $16.60/VERY STRONG JOBS REPORT AND IT SEEMS BROAD BASED/CONSUMER PRICES SPIKING IN CHINA/CHINA CONSIDERING INCREASING TARIFFS TO COUNTER THE TRUMP TARIFFS/MORE SWAMP STORIES

GOLD: $1323.40  UP $2.25

Silver: $16.60 UP 21 CENTS

Closing access prices:

Gold $1323.75

silver: $16.61

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: $1326.55 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1318.45

PREMIUM FIRST FIX: $8.10

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SECOND SHANGHAI GOLD FIX: $1329.10

NY GOLD PRICE AT THE EXACT SAME TIME: $1318.85

PREMIUM SECOND FIX /NY:$10.25

SHANGHAI REJECTS NY PRICING OF GOLD.

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LONDON FIRST GOLD FIX: 5:30 am est $1319.35

NY PRICING AT THE EXACT SAME TIME: $1319.50

LONDON SECOND GOLD FIX 10 AM: $1320.60

NY PRICING AT THE EXACT SAME TIME. $1320.85

For comex gold:

MARCH/

NUMBER OF NOTICES FILED TODAY FOR MARCH CONTRACT: 0 NOTICE(S) FOR nil OZ.

TOTAL NOTICES SO FAR:4 FOR 400 OZ

For silver:

MARCH

173 NOTICE(S) FILED TODAY FOR

865,000 OZ/

Total number of notices filed so far this month: 4727 for 23,635,000 oz

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Bitcoin: BID $8907/OFFER $8,977: DOWN $348(morning)

Bitcoin: BID/ $8947/offer $9017: DOWN $308  (CLOSING/5 PM)

 

end

Let us have a look at the data for today

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In silver, the total open interest ROSE BY A FAIR SIZED 796 contracts from 195,724  RISING TO 196,520  DESPITE YESTERDAY’S TINY  1 CENT FALL IN SILVER PRICING.  WE OBVIOUSLY HAD ZERO 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 : 2693 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 2693 CONTRACTS.  WITH THE TRANSFER OF 2693 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 24-48 HRS IN THE ISSUING OF EFP’S. THE 2693 CONTRACTS TRANSLATES INTO 13.43 MILLION OZ   WITH THE RISE 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 MARCH:

18,356 CONTRACTS (FOR 7 TRADING DAYS TOTAL 18,356 CONTRACTS OR 91.780 MILLION OZ: AVERAGE PER DAY: 2622 CONTRACTS OR 13.111 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  91.780 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 13.11% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  584.255 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

ACCUMULATION FOR MONTH OF FEBRUARY: 244.945 MILLION OZ

RESULT: WE HAD A SMALL SIZED GAIN  IN COMEX OI SILVER COMEX OF 796 DESPITE THE TINY 1 CENT FALL IN SILVER PRICE.  WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 2693 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 2693 EFP’S  FOR THE  MONTH OF MAY WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE GAINED  3489 OICONTRACTS i.e. 2693 open interest contracts headed for London (EFP’s) TOGETHER WITH A INCREASE OF 796  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF 1 CENT AND A CLOSING PRICE OF $16.49 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. 0.982 BILLION TO BE EXACT or 140% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 173 NOTICE(S) FOR 865,000 OZ OF SILVER

 

 

*** note in gold.  last last night, the CME released EFP’s for yesterday and today and I reversed them ie. the EFP for today is 7473 and yesterday 7106.  I will not change and it will not make a difference when the two are added.

In gold, the open interest  FELL BY A STRONG 10,663 CONTRACTS DOWN TO 497,387  WITH THE CONSIDERABLE FALL IN PRICE YESTERDAY ($5.45) HOWEVER  FOR TODAY, THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED AN GOOD SIZED  7106 CONTRACTS  THE ISSUANCE OF,  APRIL SAW THE ISSUANCE OF 7106 CONTRACTS ,  JUNE SAW THE ISSUANCE OF 0 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.    The new OI for the gold complex rests at 497,387. 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  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE A HUGE LOSS OI  CONTRACTS: 10,663 OI CONTRACTS DECREASED AT THE COMEX AND A GOOD SIZED 7106 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS  TOTAL OI LOSS:  3557 CONTRACTS OR 355,700 OZ =11.06 TONNES

YESTERDAY, WE HAD 7473 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MARCH : 68,796 CONTRACTS OR 6,879,600  OZ OR 213.96 TONNES (7 TRADING DAYS AND THUS AVERAGING: 9828 EFP CONTRACTS PER TRADING DAY OR 982,800 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 5 TRADING DAYS IN  TONNES: 213.96 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 213.96/2550 x 100% TONNES =  8.39% OF GLOBAL ANNUAL PRODUCTION SO FAR IN MARCH ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  1464.33 TONNES

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

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY: 649.45 TONNES

Result: A  HUGE SIZED DECREASE IN OI AT THE COMEX WITH THE CONSIDERABLE FALL IN PRICE IN GOLD TRADING YESTERDAY ($5.45).  HOWEVER, WE HAD ANOTHER HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 7106 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 7106 EFP CONTRACTS ISSUED, WE HAD A NET LOSS IN OPEN INTEREST OF 3557 contracts ON THE TWO EXCHANGES:

7106 CONTRACTS MOVE TO LONDON AND 10,663 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the LOSS in total oi equates to 11.063  TONNES).

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

WITH GOLD UP $2.25 : NO  CHANGES IN GOLD INVENTORY AT THE GLD /

Inventory rests tonight: 833.73 tonnes.

SLV/

WITH SILVER UP 21 CENTS TODAY: 

NO CHANGES IN SILVER INVENTORY AT THE SLV/

/INVENTORY RESTS AT 318.069 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 796  contracts from 195724 UP TO 196,520 (AND now A LITTLE  CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE TINY FALL IN PRICE OF SILVER  (1 CENTS WITH RESPECT TO  YESTERDAY’S TRADING).  OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER  2686 EFP CONTRACTS FOR 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 SOME COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI GAIN AT THE COMEX OF  796 CONTRACTS TO THE 2693 OITRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A GAIN OF 3484  OPEN INTEREST CONTRACTS  WE STILL HAVE A STRONG AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN MARCH (SEE BELOW). THE NET GAIN TODAY IN OZ ON THE TWO EXCHANGES:  17.420 MILLION OZ!!!

RESULT: A SMALL SIZED  INCREASE IN SILVER OI AT THE COMEX DESPITE THE TINY  FALL OF 1 CENT IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING ). BUT WE ALSO HAD ANOTHER GOOD SIZED 2693 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR MARCH, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

(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

 

)FRIDAY MORNING/LATE THURSDAY NIGHT: Shanghai closed UP 18.76 POINTS OR 0.57% /Hang Sang CLOSED UP 341.69 POINTS OR 1.11% / The Nikkei closed UP 101.13 POINTS OR 0.47%/Australia’s all ordinaires CLOSED UP 0.37%/Chinese yuan (ONSHORE) closed UP at 6.3365/Oil DOWN to 60.58 dollars per barrel for WTI and 64.25 for Brent. Stocks in Europe OPENED RED EXCEPT PARIS CAC  .   ONSHORE YUAN CLOSED DOWN AT 6.3365 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3360 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR . CHINA IS NOT VERY  HAPPY TODAY (STRONGER CURRENCY GOOD CHINESE MARKETS/BUT TRUMP TARIFFS  INITIATED/ ) 

Read More @ HarveyOrganBlog.com

CENTRAL BANKERS NEVER GET IT RIGHT

by Egon von Greyerz, Gold Switzerland:

Central bank heads have been at it again last week. And they have clearly all been singing from the same hymn sheet. The messages have been very similar from the bosses of the Fed, ECB and BOJ. The head of the Swedish Riksbank had a different and much more interesting message. More about that later.

Why should we ever listen to any of these self-important central bankers. They are consistently inaccurate in their forecasts and policies. Their timing is always wrong as they are always behind the curve. More importantly they are distorting the natural economic cycles by artificial manipulation of markets and thereby creating booms and busts of an enormous magnitude. The natural laws of ebb and flow or supply and demand are the best regulators of markets. If the economy was allowed to take its natural course, the world would not experience massive bubbles and nor the economic troughs with severe recessions or depressions. Central banks and bankers should not exist. They fulfil no purpose and the world economy would function so much better without them.

DRAGHI WILL EAT HIS WORDS

So let us now have a look at what three “wise” bank heads told the world last week:

If someone wonders why I have used caricatures rather than real photos of these bankers, the reason must be obvious. No one must take a central bank head seriously!

Starting with the Fed chairman, Jay Powell, Wall Street did not like what they heard from him: “My personal outlook for the economy has strengthened since December”. He thus vowed to forge ahead with interest rate increases to avoid an “overheated economy”. This was interpreted as a much faster rate of increases than the market had expected. And stocks did not take kindly to his message. The Dow has fallen 1,300 points since his statement and stock markets around the world have followed. But this fall is just the beginning. More about that later.

Mario Draghi, the president of the ECB, said last Monday that slack in the Eurozone might be bigger than previously estimated and this could slow the rise of inflation but only temporarily and prices will eventually climb. He also said the factors that slow down the rise of inflation will wane as growth continues. A few days later he suggested that the ECB remains confident that inflation is finally on an upward trend which will permit the bank to end its bond purchases programme this year. He is likely to eat these words as the Eurozone financial system comes under severe pressure, starting with bank failures in Italy, Greece and Spain.

Finally Haruhiko Kuroda of the Bank of Japan (BOJ) joined the queue of the banks looking toward an exit of money printing. He stated that the BOJ will start thinking about how to end its monetary stimulus, beginning in 2019. The bank forecasts that inflation will reach its target of 2% in 2019. For over 25 years, Japan has tried to achieve inflation by printing unlimited amounts of money. This is a country that has over one quadrillion in debt and where the central bank is buying all of the debt that the country issues. Eventually the Japanese economy will disappear into the Pacific with very few young people to take care of an ageing population.

HYPERINFLATION COMES FROM CURRENCY DEBASEMENT

So here we have three central bank heads who all believe that the trillions or quadrillions of money that they have printed over the years will finally bear fruit and create some minimal inflation of 2% or so. Firstly, it should of course not be the purpose of central banks to manufacture inflation. Inflation is a disease and not a virtue. Inflationary growth that central banks are trying to create by printing money has zero beneficial real effect on an economy. All it does is to give an illusory effect of growth which has no positive outcome. Secondly, the world economy is not about to generate inflationary growth. Instead what will happen is a debt and asset implosion that will kill the world economy for a very long time. The central bankers will respond the only way they know, by printing unlimited amounts of money. It is the coming money printing and currency debasement that will create inflation and hyperinflation and not the central bank stimulus.

GLOBAL LIABILITIES ARE 2,400% OF GDP

After 11 years of massive money printing, the world has achieved no real growth. In the meantime global debt has doubled to $240 trillion which, if unfunded liabilities and derivatives are included, becomes a total liability for the world of $2 quadrillion. With global GDP at $80 trillion this means that total liabilities to GDP is 2,400%. Central banks just managed to kick the can down the road in 2007-9 but this time around, the can is just too big and the failure of the financial system is getting closer. Greenspan who started the mess the world is now in, has just stated “that the world is in a debt bubble”. He should have thought about that 30 years ago when he became chairman of the Fed rather than today. That was the time to stop it and not to start it. But Greenspan’s timing was just as disastrous as all other central bankers’.

ABOLISHING CASH MAKES CENTRAL BANK POWERLESS

Let us finish the discussion of central bankers by mentioning someone who now realises that banning of cash actually makes the central bank powerless. Stefan Ingves, head of the world’s oldest central bank, Sweden’s Riksbank, has just realised that the bank has now lost control of the cash in the country.

In the last 10 years, the value of cash in circulation in Sweden has halved from 112 billion kronor to 50 billion. Many shops and banks refuse to handle cash at all. Ingves states that Sweden now has a situation where many commercial parties control the payment system.

As I have often stated, It is a fallacy to believe that money printing is the prerogative of the central bank. When a commercial bank receives a deposit, it lends that money to someone less a minuscule reserve. That process is repeated many times thus expanding money supply infinitely. A credit card company also prints money and so do many other commercial entities by extending credit. All this money creation outside the central bank is highly inflationary and destroys the value of the currency which Sweden is experiencing, like many other countries.

Ingves argues that the Riksbank is losing control of the currency which he says is problematic. A parliamentary commission is therefore now looking into how to protect the Swedish kronor issued by the Riksbank. This will lead to a new central bank regulation. Without a payment system that accepts the currency issued by the country, Ingves says, the Riksbank cannot carry out its role effectively.

Interesting how a country that has been promoting a cashless society for tax evasion and money laundering purposes now realises that the consequences instead lead to a total loss of control of the country’s currency.

HYPERINFLATION WATCH

In my article last week I mentioned that the gold price in Venezuelan Bolivars was VEF38 million at the official exchange rate. Well one week later the gold price went up to VEF46.5 million – a 22% increase in one week. And in the last week the gold price has surged to VEF52.6 million. Just like Sweden is on its way to do, Venezuela has lost control of its currency, albeit in a very different way.

THE WORLD IS AT THE END OF A SUPER CYCLE

Matterhorn’s primary purpose is to protect investors from the substantial risks that we have identified in the stock, bond and property markets. The psychology of bull markets means that at the end of a major cycle, most investors are more confident than ever. Making money creates this confidence and greed prevents investors from protecting the gains.

I have for some time been very clear that we are now at the end of a very major supercycle which is of a magnitude of at least 100 years but it could even be a 2000 year cycle. Historians will let the world know at some point in the future. Whatever the size of the cycle, the coming downturn in the world economy and markets will be devastating for the world.

TOP FOR US STOCKS IS IN – ALSO FOR GLOBAL MARKETS

It is possible that we could have a final melt-up in markets that would last for yet a few months. But analysing many global stock markets, using our proprietary cycle system, it now looks more likely to me that the top is in for the Dow and for all the major US indices.

Looking at most other world markets, the picture is similar. Canada, UK, Germany, Japan and many more, all show tops in January which are not confirmed by momentum indicators on weekly and monthly charts. That is normally a very bearish sign and a strong indication that the stimulus that central banks have injected around the globe no longer has any effect.

If this is correct we will soon see a major decline in the US markets and also all world markets. This decline will be totally devastating as it is the end of a major cycle. We don’t see any important intermediate bottom until the summer of 2019. But this is the start of a secular bear market which has many, many years to go.

Read More @ GoldSwitzerland.com

China Set to Gradually Internationalize Yuan by Opening Its Financial Markets

from Sputnik News:

According to the head of the People’s Bank of China Governor Zhou Xiaochuan, the Chinese authorities will continue to gradually promote the internationalization of the yuan including through the further opening of its financial markets.

“In the process of internationalization of the yuan we have taken sufficient measures that from now on will allow the yuan to be used in trade and investment. Moreover, the yuan has been included in the SDR currency basket. The key procedures have already been carried out… As for the future role of the government or the Central Bank in the internationalization of the yuan, to my mind, it is still possible to do something to establish communication between domestic and international capital markets,” Zhou Xiaochuan said at a press conference on Friday.

As to the degree of the use of the yuan by market participants in their calculations and investments, it will take quite a long time.

“We cannot force anyone, decisions are made based on their own logic, that is why it is a gradual process. We will continue gradual internationalization of the yuan,” added Xiaochuan.

The head of the PBC proceeded to say that the further opening of its financial markets would help the process of the currency’s internationalization.

In November 2015, the IMF Executive Board made a decision to include the yuan in the SDR currency basket beginning from October 1, 2016. The basket already includes the dollar, euro, pound sterling and Japanese yen. The PBC welcomed the Fund’s move, calling its recognition the result of economic development and policy reform as well as China’s transparency.

Read More @ SputnikNews.com

JPMorgan’s Motivation – Ted Butler

by Ted Butler, SilverSeek:

To be sure, there are many who reject, out of hand, my allegation that JPMorgan has accumulated a massive amount of physical silver over the past seven years, amounting to 700 million ounces or more. That’s completely understandable, since I can’t document and point out all 700 million oz and few have taken the time to review the basis of my claim. It doesn’t matter that I first picked up on JPMorgan’s quest to acquire physical silver four years ago, by which time it had already accumulated 300 million oz and have been monitoring and reporting on it ever since – if I can’t show every ounce belonging to JPM, some will remain skeptical.

Heck, there are still some who doubt that the 135 million oz of silver that JPMorgan has moved into its own COMEX warehouse since 2011 belong to the bank, despite most of the silver being brought in as a result of JPMorgan taking delivery of that metal in its own name in futures contract deliveries. In this case, even seeing is still disbelieving. And please remember, it is in JPMorgan’s best interest that its physical metal ownership remain largely unknown, so the bank can’t be expected to confirm its holdings.

The highly visible 135 million oz of silver that JPMorgan holds in its own COMEX warehouse is more silver than ever owned by any private entity in history, eclipsing the amounts held by the Hunt Bros in 1980 or Warren Buffett’s Berkshire Hathaway in 1998. To those who wonder how JPMorgan could buy the most silver ever without driving prices higher (as was the case with the Hunt Bros and Buffett), look no further than the fact that JPMorgan was also the largest paper short seller in COMEX silver futures over the entire seven years of its physical accumulation.

Yes, I still believe Buffett came to sell short paper COMEX silver contracts after he acquired physical silver (that’s how he came to lose his metal in 2006); the big difference with JPMorgan is that the bank was the biggest paper short seller on the COMEX both before and during its epic accumulation of physical silver. Not only does this answer the question of why prices didn’t rise despite JPMorgan buying so much actual silver over the past seven years, it also presents the clearest evidence of commodity market price manipulation, a matter I will avoid today, even though it remains the overarching issue. 

The issue today is the motivation behind JPMorgan’s epic accumulation of actual metal. To those who will remain unconvinced of the physical accumulation, this will matter little; but among those who accept that JPMorgan owns anywhere from 135 million to more than 700 million oz of silver (in the form of industry standard 1000 oz bars), I’ve detected differences of opinion as to JPM’s motivation for the accumulation.

My opinion, as I’ve consistently maintained, is that JPMorgan first began acquiring physical silver as the one surefire solution of covering its massive paper short position without driving prices sharply higher. Then, after acquiring enough physical metal to neutralize its dominant paper short position early on (by 2012), JPMorgan continued to accumulate hundreds of millions of physical ounces of metal with the sole intent of someday selling that silver at as high a price as possible.

Just to be clear, I don’t think JPMorgan envisioned in 2011 that it would amass the largest stockpile of silver in history at artificial low prices; no one could be that prescient. But JPM’s decision to buy physical metal as the solution to covering its otherwise impossible to cover massive paper short position was nothing less than a stroke of manipulative genius. And JPMorgan was smart enough to realize that once it had effectively covered its paper short position, any additional physical ounces acquired could be sold at a great profit someday.

But even among those who accept that JPMorgan has amassed epic amounts of physical metal, not all agree with my take on the motivation behind the accumulation. Many feel that the main motivation for JPMorgan accumulating physical silver is not to profit by someday by selling at a very high price, but instead to use the physical metal to prolong and extend the manipulation for as long as possible. Invariably, those feeling this way also sense this is related to JPMorgan acting on behalf of the US Government for various reasons, ranging from the US insuring it has adequate supplies of this vital material to keeping the price contained so as not to set off a price disruption in gold and broader financial markets.

I think I do understand why many feel this way and it revolves around the natural fatigue that sets in after years of truly rotten price performance and the very natural tendency to extrapolate current price levels into the future.  And just to be objective, let me admit that any single entity holding a large physical position could be considered potentially bearish, since the possibility of sale clearly exists. But the same could be said of the massive physical accumulations of gold by Russia, China, India and elsewhere, where the possibility of sale also exists. But let me deal with the most popular alternative version that has been advanced for the silver manipulation continuing, namely, it is orchestrated by the US Government.

My immediate reaction to JPMorgan running the silver market as a front for the USG is who exactly in the government is running the show? Certainly not anyone I’ve observed over the past half-century of my adult life. And presently, the USG is more dysfunctional than any time in memory (if not in the history of the republic). But my list of reasons for seriously doubting the US Government is behind the manipulation doesn’t stop there. We did run up in silver to $50 fairly quickly in 2011 and I don’t recall any financial market upheaval or even much reaction in gold which rose around $100 (less than 10%) as silver climbed 250%. If silver’s price rise didn’t affect other markets back then, why would it in the future?

As far as the US Government using JPMorgan to build up a strategic stockpile of silver for the future collective good of the country, the same government spent 50 years, from 1950 to 2000, disposing of our existing national stockpile of silver and removing it from strategic status, thanks to the underhanded efforts of the Silver Users Association. Suddenly and with absolutely no public notice, the US Government secretly began stockpiling silver? Such an initiative would have had to have started in the Obama administration and have been fully 

Read More @ SilverSeek.com