Sunday, August 18, 2019

Silver News: Supply and Demand Fundamentals, and New Technological Breakthroughs

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by Peter Schiff, SchiffGold:

Silver had a tough year in 2017, with flat demand and shrinking supply. Even with these headwinds, the white metal still gained more than 6% on the year. With demand growing in key industrial sectors and supply tightening, it appears silver is poised for a strong year in 2018.

In its most recent issue of Silver News, the Silver Institute outlines the 2017 silver market data compiled in the GFMS/Thomson Reuters’s Interim Silver Market Review and highlights a number of technological innovations involving silver.

According to the GFMS survey, overall silver demand fell roughly 5% in 2017 primarily due to a sharp dip in investment. The market will show a small annual physical surplus of 32.2 million ounces for 2017, but there are signs demand is turning around. Industrial fabrication is forecast to show a 3% rise when the numbers are all in for 2017, led by strong gains in the solar industry and modest increases in demand from electronics and brazing alloys and solders. This is expected to accelerate in 2018.

Silver supply remained broadly flat last year. Mine production fell about 2% year-on-year. An increase in scrap supply helped offset declining mine production.

During the Silver Industrial Conference in Washington, D.C., the focus was on growing demand for silver in key sectors.

The latest issue of Silver News also features some fascinating technological developments related to silver.

  • By combining silver nanowires and graphene — a form of carbon — a team of UK scientists has made a material that could produce touchscreens that are stronger and more flexible than those currently available.
  • Scientists at Kumamoto University, Keio University and Dai Nippon Toryo Co., Ltd., in Japan have developed a process using lasers that increases the anti-bacterial fighting properties of silver nanoparticles.
  • A team led by Shahnaz Qadri, Ph.D., College of Science and Engineering, Hamad Bin Khalifa University, Doha, Qatar, explored the potential of using particles composed of silver, copper and boron to minimize the risk of bone infection in diabetics. A single dose of the antimicrobial nanoparticles killed 90% of bacteria-causing infection in bone cells.
  • A research team at Binghamton University, State University of New York, has developed a textile-based, bacteria-powered bio-battery that could be integrated into wearable electronics. The batteries are powered by bacteria in sweat and rely on silver-oxide as one of its components.

Read More @ SchiffGold.com

How quickly will the dollar collapse?

by Alasdair Macleod, GoldMoney:

This might seem a frivolous question, while the dollar still retains its might, and is universally accepted in preference to other, less stable fiat currencies. However, it is becoming clear, at least to independent monetary observers, that in 2018 the dollar’s primacy will be challenged by the yuan as the pricing medium for energy and other key industrial commodities. After all, the dollar’s role as the legacy trade medium is no longer appropriate, given that China’s trade is now driving the global economy, not America’s.

At the very least, if the dollar’s future role diminishes, then there will be surplus dollars, which unless they are withdrawn from circulation entirely, will result in a lower dollar on the foreign exchanges. While it is possible for the Fed to contract the quantity of base money (indeed this is the implication of its desire to reduce its balance sheet anyway), it would also have to discourage and even reverse the expansion of bank credit, which would be judged by central bankers to be economic suicide. For that to occur, the US Government itself would also have to move firmly and rapidly towards eliminating its budget deficit. But that is being deliberately increased by the Trump administration instead.

Explaining the consequences of these monetary dynamics was the purpose of an essay written by Ludwig von Mises almost a century ago.[i] At that time, the German hyperinflation was entering its final phase ahead of the mark’s eventual collapse in November 1923. Von Mises had already helped to stabilise the Austrian crown, whose own collapse was stabilised at about the time he wrote his essay, so he wrote with both practical knowledge and authority.

The dollar, of course, is nowhere near the circumstances faced by the German mark at that time. However, the conditions that led to the mark’s collapse are beginning to resonate with a familiarity that should serve as an early warning. The situation, was of course, different. Germany had lost the First World War and financed herself by printing money. In fact, she started down that route before the war, seizing upon the new Chartalist doctrine that money should rightfully be issued by the state, in preference to the established knowledge that money’s validity was determined by markets. Without abandoning gold for her own state-issued currency, Germany would never have managed to build and finance her war machine, which she did by printing currency. The ultimate collapse of the mark was not mainly due to the Allies’ reparations set at the treaty of Versailles, as commonly thought today, because the inflation had started long before.

The dollar has enjoyed a considerably longer life as an unbacked state-issued currency than the mark did, but do not think the monetary factors have been much different. The Bretton Woods agreement, designed to make the dollar appear “as good as gold”, was cover for the US Government to fund Korea, Vietnam and other foreign ventures by monetary inflation, which it did without restraint. That deceit ended in 1971, and today the ratio of an ounce of gold to the dollar has moved to about 1:1310 from the post-war rate of 1:35, giving a loss of the dollar’s purchasing power, measured in the money of the market, of 97.3%.

True, this is not on the hyperinflationary scale of the mark – yet. Since the Nixon shock in 1971, the Americans have been adept at perpetuating the myth of King Dollar, insisting gold now has no monetary role at all. By cutting a deal with the Saudis in 1974, Nixon and Kissinger ensured that all energy, and in consequence all other commodities, would continue to be priced in dollars. Global demand for dollars was assured, and the banking system of correspondent nostro accounts meant that all the world’s trade was settled in New York through the mighty American banks. And having printed dollars to ensure higher energy prices would be paid, they would then be recycled as loan capital to America and her friends. The world had been bought, and anyone not prepared to accept US monetary and military domination would pay the price. 

That was until now. The dollar’s hegemony is being directly challenged by China, which is not shy about promoting her own currency as her preferred settlement medium. Later this month an oil futures contract priced in yuan is expected to start trading in Shanghai.[ii] Only last week, the Governor of China’s central bank met the Saudi finance minister, presumably to agree, amongst other topics, the date when Saudi Arabia will start to accept yuan for oil sales to China. The proximity of these two developments certainly suggest they are closely related, and that the end of the Nixon/Saudi deal of 1974, which created the petrodollar, is in sight.

Do not underestimate the importance of this development, because it marks the beginning of a new monetary era, which will be increasingly understood to be post-dollar. The commencement of the new yuan for oil futures contract may seem a small crack in the dollar’s edifice, but it is almost certainly the beginning of its shattering. 

Read More @ GoldMoney.com

Gold Market Charts – December 2017

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by BullionStar, via GoldSeek:

The December issue of BullionStar’s  ‘Gold Market Charts’ looks at developments in the world’s major physical gold markets during November, the latest month for which the relevant data is available. Each month, this series of article uses gold charts from the GOLD CHARTS R US market charting website.

SGE Gold Withdrawals

Physical gold withdrawals from the vaults of the Shanghai Gold Exchange (SGE) totalled 189.1 tonnes during November 2017. These gold withdrawals are a suitable proxy for Chinese wholesale gold demand due to the fact that nearly all gold supply in the Chinese domestic gold market is traded through Shanghai’s gold bourse, and all gold for the SGE contracts has to be stored in the Exchange’s vaults.

  Shanghai Gold Exchange Gold Withdrawals (in tonnes), November 2017. Source: www.GoldChartsRUs.com
Shanghai Gold Exchange Gold Withdrawals (in tonnes), November 2017. Source: www.GoldChartsRUs.com

On a year-to-date basis for the 11 months from January to November, a total of 1845 tonnes of gold has been withdrawn from the SGE vaults, putting 2017 gold demand in China on a par with the year 2014, and ahead of 2016.

December’s gold withdrawal data from the SGE, released in January, will confirm whether 2017 was the 3rd highest ever or 4th highest ever year for Chinese wholesale gold demand.

  SGE Gold Withdrawals (in tonnes), 11 months to November, 2008 - 2017 comparisons. Source: www.GoldChartsRUs.com
SGE Gold Withdrawals (in tonnes), 11 months to November, 2008 – 2017 comparisons. Source: www.GoldChartsRUs.com

Chinese and Indian Gold Demand (CHINDIA)

The unique CHINDIA gold chart captures the strength of gold demand across the world’s two largest gold markets, India and China. The logic of the chart is that it combines net Indian gold imports (a proxy for Indian gold demand) and SGE gold withdrawals (a proxy for Chinese wholesale gold demand). A third demand source in the form of Chinese central bank gold reserves is also added, due to the fact that the Chinese central bank does not purchase gold on the SGE, meaning that Chinese central bank demand is distinct from Chinese wholesale gold demand.

  Chinese and Indian Gold (CHINDIA) to October 2017. Source:  www.GoldChartsRUs.com
Chinese and Indian Gold (CHINDIA) to October 2017. Source:  www.GoldChartsRUs.com

The latest CHINDIA chart is for October 2017 due to the fact that official Indian gold import data is released with a 2 month lag. During October 2017,  CHINDIA physical gold demand totalled 222 tonnes, which comprised 151.5 tonnes for SGE Gold Withdrawals, and net gold imports into India of approximately 70 tonnes. The gold demand component from the Chinese central bank was zero in October, because, as per every month for over a year now, the People’s Bank of China has not announced any additions to its official gold reserves.

Read More @ GoldSeek.com

Toxicity Plus Toxicity Does Not Equal Purification

by Dave Kranzler, Investment Research Dynamics:

Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’ – Francisco’s “Money” Speech – from “Atlas Shrugged”

You have to love it – the City of Houston issues $1.01 billion  “pension obligation” bonds to “ease” the underfunding of the underfunded public pension fund.  “Pension underfunding”  is the politically acceptable euphemism for “debt obligation.”  Underfunding occurs when a pension investment returns PLUS future beneficiary contributions are not enough to cover current beneficiary payments.

Some might say it’s the difference between the NPV of future payouts and the current value of the fund. But that’s horse-hooey. Houston had a cash flow deficit it had to address and it did that by issuing taxpayer obligation debt – $1.01 billion dollars of taxpayer debt.  Furthermore, let’s use a realistic NPV and ROR assumption on any pension fund plus throw-in a real mark to market of illiquid assets like PE fund investments.  Every pension fund in the U.S. is tragically underfunded.

The rational remedy would be to cut beneficiary payments or force larger contributions from current working stakeholder or both.  The problem is that implementing either or both of those remedies might cost elected officials their jobs in the next election.

Instead, the proverbial can is kicked further into the sewage ditch by issuing more debt and using the the proceeds to help the pension fund cover current cash outflows to beneficiaries.  Regardless of what you call it, an underfunded pension liability is simply “debt”.  This bond issue might ensure that Houston’s retired public employees will continue, for now, to receive their expected flow of monthly pension payment, but this bond deal in no way whatsoever “eases” the debt burden of the pension fund.  Rather, it shifts wealth from the taxpayers to the retired public employees.

Similarly, the Trump Tax Cut does nothing more than shift the distribution of wealth from 99.5%’ers to the 0.5%’ers plus big corporations.  In this case, it’s not wealth per se.  Rather, it’s shifting the burden of supporting the Government’s spending deficit from the tax cut beneficiaries (billionaires and big corporations) to the rest of the population.

I could care less what CBO projections show – CBO forecasts are always appallingly inaccurate – the Government’s spending deficit is going to accelerate next year.   Between the cut in tax revenues from Trump’s Tax Cut and the big jump in spending built into the budget for defense and re-paving the roads that were paved during the Obama era, total spending will soar.  The gap between inflows and outflows will be bridged with more Treasury bond issuance.

Read More @ InvestmentResearchDynamics.com

Venezuela Forced To Pay For Medicine With Diamonds And Gold

from ZeroHedge:

Venezuela’s government has nearly exhausted its foreign exchange reserves and its citizens have resorted to mining bitcoin  and fashioning ad hoc neighborhood currencies  to facilitate day-to-day transactions.

But the cash crunch that has helped worsen the country’s economic crisis is finally forcing the government to make an unusual request of its trading partners, including pharmaceutical companies from which the government buys medicine for the country’s hospitals: Would they accept payment in diamonds, gold or other precious stones?

According to the Wall Street Journal, companies were baffled by Venezuela’s offer. As for whether they accepted it: That’s not clear.

The proposed exchange perplexed the pharma representatives, whose companies had no policies on accepting precious gems and metals as payment, according to three people familiar with the meeting last month where Venezuela’s health minister made the offer.

While it isn’t clear if any of the companies accepted it, the proposal underscores how Venezuela’s economic collapse is forcing President Nicolás Maduro’s embattled administration to improvise to pay for goods as severe dollar shortages push the country toward a barter society.

As WSJ  pointed out, using commodities as payment isn’t uncommon for large global companies trading in mining or oil. But it’s almost unheard of as a way to settle debts to other sectors like pharmaceuticals. The trend also mirrors the rise of bartering on the streets of many Venezuelan towns and cities.

In this capital city’s sprawling Petare slum, residents like 25-year-old baker Norvis Bracho use Facebook groups—some with more than 100,000 members—to post pictures of sugar and corn flour offered in exchange for beans or blood-pressure pills.

“This is how we get by every day,” said Mr. Bracho, a member of 13 Facebook and WhatsApp networks where he trades everything from bread to computer parts.

On a recent day, Mr. Bracho’s family, thrilled to see hard-to-find Coca-Cola sold on the streets, rushed to purchase a dozen 2-liter bottles with a debit card.

“This will come in handy to exchange later,” his aunt, Ruth Villarreal, said.

The Venezuela bolivar has depreciated more than 97.5% against the dollar over the past year. And economists expect annualized inflation to surpass 2,000% during the coming year, even as the price of oil has steadily crept higher.

Given the country’s opaque finances, it isn’t clear how much Venezuela holds in certified precious metals and stones.

Read More @ ZeroHedge.com

GOLD REBOUNDS FROM AN EARLY WHACKING TO RISE $2.50 UP TO $319.50/SILVER ALSO RECOVERS TO REMAIN BASICALLY UNCHANGED

by Harvey Organ, Harvey Organ Blog:

HUGE GOLD EFP TRANSFER BY ALMOST 9,000 CONTRACTS/SILVER EFP’S OVER 3100 CONTRACTS

GOLD: $1319.50 up $2.50

Silver: $17.19 down 1 cent

Closing access prices:

Gold $1322.75

silver: $17.23

For comex gold:

JANUARY/

NUMBER OF NOTICES FILED TODAY FOR JANUARY CONTRACT: 16 NOTICE(S) FOR 1600 OZ.

TOTAL NOTICES SO FAR: 238 FOR 23800 OZ (0.7402 TONNES),

For silver:

jANUARY

0 NOTICE(S) FILED TODAY FOR

nil OZ/

Total number of notices filed so far this month: 505 for 2,525,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $14,908/OFFER $15,028 DOWN $167(morning)

 Bitcoin: BID   14,810/OFFER  $14,928 down  $264(CLOSING)

 

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY FELL BY A SMALL  695 contracts from 192,124 FALLING TO 191,728 DESPITE YESTERDAY’S GOOD 7 CENT RISE IN SILVER PRICING.  WE HAD SMALL  COMEX LIQUIDATION BUT WITHOUT A DOUBT WE WITNESSED ANOTHER MAJOR BANK SHORT- COVERING OPERATION. NOT ONLY THAT , WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE: A HUGE 3123 EFP’S FOR MARCH (AND ZERO FOR OTHER MONTHS) AND THUS TOTAL ISSUANCE OF 3123 CONTRACTS. HOWEVER THE MOVEMENT ACROSS TO LONDON IS NOT AS SEVERE AS IN GOLD AS THERE SEEMS TO BE A MAJOR PLAYER TAKING ON THE BANKS AT THE COMEX. STILL, WITH THE TRANSFER OF 3123 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. YESTERDAY WITNESSED  EFP’S FOR SILVER ISSUED. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. I BELIEVE THAT WE MUST HAVE HAD SOME MAJOR BANKER SHORT COVERING AGAIN TODAY.

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

10,316 CONTRACTS (FOR 4 TRADING DAYS TOTAL 10,316 CONTRACTS OR 51.580 MILLION OZ: AVERAGE PER DAY: 2579 CONTRACTS OR 11.988 MILLION OZ/DAY)

RESULT: A SMALL SIZED LOSS IN OI COMEX DESPITE THE STRONG 7 CENT RISE IN SILVER PRICE WHICH USUALLY INDICATES HUGE BANKER SHORT-COVERING. WE ALSO HAD A HUGE SIZED SIZED EFP ISSUANCE OF 3123 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS.  FROM THE CME DATA 3123 EFP’S WERE ISSUED FOR TODAY (FOR MARCH EFP’S AND NONE FOR ALL OTHER MONTHS) FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS. WE REALLY GAINED 2427 OI CONTRACTS i.e. 3123 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 695 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE RISE IN PRICE OF SILVER BY 7 CENTS AND A CLOSING PRICE OF $17.20 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. 0.9585 BILLION TO BE EXACT or 137% of annual global silver production (ex Russia & ex China).

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

In gold, the open interest ROSE BY AN HUMONGOUS SIZED 11,441 CONTRACTS UP TO 512,172 WITH THE SMALL RISE IN PRICE OF GOLD WITH YESTERDAY’S TRADING ($2.00). IN ANOTHER HUGE DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED YESTERDAY FOR TODAY AND IT TOTALED A STRONG SIZED  8798 CONTRACTS OF WHICH THE MONTH OF FEBRUARY SAW 8498 CONTRACTS AND APRIL SAW THE ISSUANCE OF 300 CONTRACTS.  The new OI for the gold complex rests at 512,172. 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. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE ANOTHER STRONG GAIN OF 20,239 OI CONTRACTS: 11,441 OI CONTRACTS INCREASED AT THE COMEX AND A GOOD SIZED 8798 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.

YESTERDAY, WE HAD 3168 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY STARTING WITH FIRST DAY NOTICE: 34,277 CONTRACTS OR 3.4277 MILLION OZ OR 106.72 TONNES (4 TRADING DAYS AND THUS AVERAGING: 8,569 EFP CONTRACTS PER TRADING DAY OR 856,900 OZ/DAY)

Result: A STRONG SIZED INCREASE IN OI WITH THE SMALL SIZED RISE IN PRICE IN GOLD TRADING ON YESTERDAY ($2.00). WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 8798. 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 THE8798 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 20,239 contracts:

8798 CONTRACTS MOVE TO LONDON AND  11,441 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the gain in total oi equates to 62.95 TONNES)

we had: 16 notice(s) filed upon for 1600 oz of gold.

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

GLD:

Today, NO CHANGES IN GOLD INVENTORY AT THE GLD/

 

Inventory rests tonight: 836.32 tonnes.

A SLIGHT CHANGES IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 180,000 OZ TO PAY FOR FEES/

INVENTORY RESTS AT 320.449 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 SMALL SIZED 695 contracts from 193,827 DOWN TO 191,728 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE  RISE IN PRICE OF SILVER TO THE TUNE OF 2 CENTS  YESTERDAY.  WE HAD WITHOUT A DOUBT A MAJOR SHORT COVERING FROM OUR BANKERS AS THEY HAVE CAPITULATED. NOT ONLY THAT BUT OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER 3123 PRIVATE EFP’S FOR MARCH (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM).  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD NO COMEX SILVER COMEX LIQUIDATION. BUT, IF WE TAKE THE SLIGHT OI LOSS AT THE COMEX OF 695 CONTRACTS TO THE 3123 OI TRANSFERRED TO LONDON THROUGH EFP’S WE OBTAIN A GAIN OF 2427 OPEN INTEREST CONTRACTS DESPITE THE
 MAJOR BANKER SHORT COVERING. WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NET GAIN TODAY IN OZ: 12.135MILLION OZ!!!

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE TINY SIZED RISE OF 2 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). BUT WE ALSO HAD ANOTHER 3123 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

Read More @ HarveyOrganBlog.com

Precious Metals Finish Strong as Investors Eye Silver in 2018

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by Mike Gleason, Money Metals:

David Morgan: What the Smart Money Is Doing & Dangers of Complacency

Coming up David Morgan of The Morgan Report joins me for a replay of one of the very best interviews we did in 2017. David talks about the metals and the markets and shares his insights on what the smart money is already doing, the dangers of complacency and the importance of limiting counter party risk. Back by popular demand, don’t miss this wonderful interview with the Silver Guru, David Morgan, coming up after this week’s market update.

As markets close out their final trading day of 2017, it’s a good time to review the year that was in precious metals and look forward to the year that might be in 2018.

Click HERE to listen

Read More @ MoneyMetals.com

A Golden Anchor for the Dollar

by Rory Hall, The Daily Coin:

Dr Warren Coats, former Chief of the SDR with the title Assistant Director of the Monetary and Financial Systems Department at the IMF penned an article on a return to the gold standard in 2013 – A Hard Anchor for the Dollar. Not a classic gold standard, but an “updated version” of a gold standard that would allow for entities like the IMF, World Bank and BIS to stay involved and be part of the global banking system. This would allow these global banks to continue dictating monetary policy and continue to squash our freedoms and human rights.

Fractional reserve banking is a big part of the problem the Federal Reserve Note currently suffers. When a so-called bank, like Goldman Sachs or any of the Federal Reserve member banks, can simply state, for example, their books are 10 times greater than the reality, that is a major problem and allows for serious imbalances in the economy and the financial system. Eliminate fractional reserve banking and inflation would collapse and our economy would begin to improve almost overnight. The too big to jail banks would all collapse, which used to be called capitalism. When a privately owned company acts irresponsible and these banks are nothing more than another private company, like a neighborhood hardware store, plumbing company or auto repair shop, when they get themselves into financial trouble they should go bankrupt and not be “saved” by the people, the people’s taxes nor any other public means.

 cartoon via  The Burning Platform
cartoon via The Burning Platform

The greatest period of growth the world has ever seen was during the classic gold standard period between 1792 (Coinage Act was introduced) to 1934. The Federal Reserve, underBen Bernanke, admitted to engineering the Great Depression, which in turn, is an admission of destroying the global economy and global financial system for personal gain. The hijacking of our economy and financial system by the Federal Reserve in 1913 set in motion 99% of the economic problems we are dealing with today. Eliminate the Federal Reserve and return the issuance of currency back to the people – Congress/U.S. Treasury – where it belongs according to the Constitution and our economy and financial system would have a better opportunity of returning to health instead of what we have today, which is nothing more than corruption, malfeasance and a stock market that is having a “front loaded wealth effect , according to former Dallas Federal Reserve President, Richard Fisher. Full disclosure of the ESF (Exchange Stabilization Fund)  and returning this currency back to the people and eliminating any and all laws, bills, acts, rules and/or regulations supporting the ESF would be another step in the right direction.

Dr. Coats states the price of the “anchor” – gold – was a weakness. Weakness for who? The economy was robust, growing and innovation between 1792 and 1934 was one of the largest expansions of global economies the world has ever seen. Not sure that I see this as a weakness.

Dr. Coats states Expanding the anchor from one commodity to 10 to 30 goods and services with collective stability relative to the goods and services people actually buy (e.g. the CPI index), would reduce this volatility. 

How would this work? Is Dr. Coats proposing 10-30 “Ft Knox’ ” or FRBNY (Federal Reserve Bank New York) built around the country or how exactly could this “basket” be accountable for the value of currency? The rules of a gold and silver standard are already laid out and work just fine. The only problem is the bank doesn’t benefit and the currency is not corrupted when these rules are utilized. From my perspective this is a win-win.

The exact composition and amounts of the items in the valuation basket could be adjusted periodically just as the CPI basket is. ~Dr. Coats

This is another part of the overall problem – this allows for corruption, manipulation and banks to get their hands on our currency, the overall economy and financial systems. Gold and silver have served as money and currency for thousands of years and the banks and their minions have been attempting to manipulate the entire system for the past several hundred years. They have been successful, but the people are awakening to their deception

Read More @ TheDailyCoin.org

People Weren’t Buying Paper Gold & Silver Last Week – They Were Buying Actual Metal

by Keith Weiner, via SilverDoctors:

Keith Weiner says that something unusual happened in the gold and silver market last week. Here’s the details…

by Keith Weiner of Monetary Metals

We hope everyone had a happy New Year.

There is a long informercial airing on American TV. It shows an endless parade of senior citizens, struggling to pay their bills, unable to buy that motorized stairway lift, play golf, or eat out at restaurants. The solution?

Get a reverse mortgage! The number to call is 1-800-GET-CASH. That number again is one eight hundred get your free cash now!

To summarize the point of the commercial—if not the terms of the fine print—the senior gets a monthly check, and this free money pays for all the things currently missing in his life. Free, as in magic unicorns and rainbows. Right?

Not so fast. The senior is merely borrowing. He’s just going into debt. He leverages his house to buy consumer goods. He begins with an asset worth, say $500,000, and no debt. And he ends with the same $500,000 asset only now it’s matched with a $500,000 liability. Therefore $500,000 worth of equity has been drained away. His equity, or more accurately, former equity has been dissipated.

He is spending his house, while still living in it. His kids, of course, forfeit their inheritance. The family home must be sold to pay off the mortgage—to a buyer who will probably have little to no equity either.

There is a great libertarian metaphor. First, the government breaks your leg. Then it gives you free crutches. People are supposed to be—and apparently are, looking at voting behavior—grateful for the crutches. But it should be obvious that crutches plus broken leg do not equal two strong legs.

The government breaks the legs of seniors by depriving them of interest on their savings. Good thing government comes to the rescue with crutches, in the form of reverse mortgages. The senior may not be able to walk—earn interest—but at least he’s propped up by an artificial appliance—a reverse mortgage.

Zero interest rate policy is the utopia envisioned by John Maynard Keynes. He actually called for the “euthanasia of the rentier.” Rentier means someone who lives on interest on his capital, including senior citizens. Euthanasia means driving interest to basically zero, to suffocate them.

The reverse mortgage promises the economically impossible. It would seem to violate Say’s Law, which basically says that you get the consumer goods you want by producing something to trade for them. The senior is no longer productive. And with zero interest, his capital is not enabling a productive activity either. So how does he get this free purchasing power? Where do the free stair lifts and golf clubs come from? What does he give, in exchange?

If you are consuming goods, but not producing goods to exchange, then there is only one possibility. You are trading a capital asset that was previously produced. In this case, the capital asset is the senior’s house.

This story would be bad enough if it were isolated to a lone case. We would shake our heads and say there will always be people who make bad decisions. But it is not isolated. It is occurring on a large scale, due to the Fed’s war on interest.

The productivity—and hence yield—is being sucked out of capital. This is why banks pay about zero on savings (and why marginal productivity of debt has been falling for many decades). It’s an economic tragedy. If you can’t get a return on your capital, then you must consume it. And we are systematically consuming capital all across the economy.

The design and manufacture of a stairway lift requires engineers, metal fabricators, motors, etc. All of the employees of the various companies have to eat, drive cars, etc. And all of those companies are wearing out their manufacturing machinery.

It should be simple common sense to see that, if there is no capital production elsewhere to offset it, that something is being depleted. It may take an economist to precisely identify the causal chain, but an 8th grader should be able to see that there ain’t no such thing as a free lunch.

The free lunch is coming from … the savings of the next generation. They are earning income and depositing it in the banking system. It’s their deposits which are lent at dirt-cheap rates to the golf-playing, stairway-riding senior. Their savings is being consumed, replaced with a note that says the senior owes them $500,000.

And the catch is that the senior does not have the $500,000. Nor does he have income to amortize the $500,000. The senior has only a house on which the next buyer currently bids $500,000.

When the senior dies, the buyer borrows at dirt-cheap rates to buy the house. The savers who had financed the senior’s consumption are repaid—with the savings that finance the next buyer of the house. In other words, the debt is not repaid but merely shifted. That which was consumed is not returned by new production. The banking system merely changes the names on various records of debt and savings. Capital consumption continues unabated.

Needless to say, that if rates weren’t pushed to dirt-cheap levels, the bid on the house would not be $500,000. If buyers had to satisfy savers in a free market, it would mean at least, 20% down, 15 year amortization, and a reasonable interest rate. What could most buyers afford under these terms? It would be a fraction of $500,000. Even if a senior were inclined to consume his house, he wouldn’t get a lot of money and it would cost him more to get it. Reverse mortgages would not be a big thing.

Falling interest not only enables consumption of senior citizen’s capital, it forces it.

Read More @ SilverDoctors.com

The Next Great Bull Market in Gold Has Begun

by Jim Rickards, Daily Reckoning:

Dear Reader,

A new, long-term, secular bull market in gold has begun.

This new trend will take gold past $1,400 per ounce by the end of 2018, past $4,000 per ounce by 2020 (if not sooner) and ultimately to $10,000 per ounce or higher by the mid-2020s.

This bull market actually began on Dec. 17, 2015, when the dollar price of gold sank to $1,051 per ounce. This new bull market was two years old last weekend.

That’s OK. Bull markets begin slowly, almost unnoticed in the gloom of the prior bear market. The biggest gains often come after a few years when the crowd catches on and the price action gains momentum.

This new bull market in gold is the real deal and should last until 2028 or beyond.

The moves so far have been relatively small compared with what’s ahead. This is the perfect time to make your allocation to physical gold, gold mining shares and gold royalty companies or “streamers.”

The last secular bull market began on Aug. 25, 1999, when gold bottomed at $252 per ounce. From there, it began a spectacular 12-year run until peaking at just under $1,900 per ounce on Sept. 2, 2011.

The 1999–2011 bull market represented a 655% gain over the starting price, easily outpacing stocks, bonds, emerging markets and other competing asset classes.

September 2011 marked the start of a brutal four-year bear market, with gold finally bottoming at $1,051 per ounce. Unfortunately, that bear market included a lot of head fakes and bear traps along the way.

Gold managed a 13% rally from around $1,580 to $1,780 per ounce in the late summer and early fall of 2012. It also managed another 15% rally from $1,200 to $1,380 per ounce in the first quarter of 2014.

Read More @ DailyReckoning.com

GOLD RISES $2.00 TO $317.00/SILVER UP 7 CENTS/OVER 3,000 EFP GOLD CONTRACTS ISSUED/OVER 2500 SILVER EFP’S ISSUED

by Harvey Organ, Harvey Organ Blog:

GOLD: $1317.00 up $2.00

Silver: $17.20 up 7 cents

Closing access prices:

Gold $1313.50

silver: $17.13

For comex gold:

JANUARY/

NUMBER OF NOTICES FILED TODAY FOR JANUARY CONTRACT: 50 NOTICE(S) FOR 5000 OZ.

TOTAL NOTICES SO FAR: 222 FOR 22200 OZ (0.6905 TONNES),

For silver:

jANUARY

181 NOTICE(S) FILED TODAY FOR

905,000 OZ/

Total number of notices filed so far this month: 505 for 2,525,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $14,928/OFFER $15,068 UP $845 (morning)

 Bitcoin: BID   15,013/OFFER  $15,137 UP  $907(CLOSING)

 

 

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY FELL BY A TINY  805 contracts from 193,228 FALLING TO 192,1243DESPITE YESTERDAY’S GOOD 24 CENT RISE IN SILVER PRICING.  WE HAD SMALL  COMEX LIQUIDATION BUT WITHOUT A DOUBT WE WITNESSED ANOTHER MAJOR BANK SHORT- COVERING OPERATION. NOT ONLY THAT , WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE: A HUGE 2574 EFP’S FOR MARCH (AND ZERO FOR OTHER MONTHS) AND THUS TOTAL ISSUANCE OF 2574 CONTRACTS. HOWEVER THE MOVEMENT ACROSS TO LONDON IS NOT AS SEVERE AS IN GOLD AS THERE SEEMS TO BE A MAJOR PLAYER TAKING ON THE BANKS AT THE COMEX. STILL, WITH THE TRANSFER OF 2574 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. YESTERDAY WITNESSED  EFP’S FOR SILVER ISSUED. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. I BELIEVE THAT WE MUST HAVE HAD SOME MAJOR BANKER SHORT COVERING AGAIN TODAY.

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

7193 CONTRACTS (FOR 3 TRADING DAYS TOTAL 7193 CONTRACTS OR 35.965 MILLION OZ: AVERAGE PER DAY: 2397 CONTRACTS OR 11.988 MILLION OZ/DAY)

RESULT: A SMALL SIZED LOSS IN OI COMEX DESPITE THE STRONG 24 CENT RISE IN SILVER PRICE WHICH USUALLY INDICATES HUGE BANKER SHORT-COVERING. WE ALSO HAD A HUGE SIZED SIZED EFP ISSUANCE OF 2574 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS.  FROM THE CME DATA 2574 EFP’S WERE ISSUED FOR TUESDAY (FOR MARCH EFP’S AND NONE FOR ALL OTHER MONTHS) FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS. WE REALLY GAINED 1769 OI CONTRACTS i.e. 2574 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 805 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE RISE IN PRICE OF SILVER BY 24 CENTS AND A CLOSING PRICE OF $17.13 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. 0.961 BILLION TO BE EXACT or 137% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT JANUARY MONTH/ THEY FILED: 181 NOTICE(S) FOR 905000 OZ OF SILVER

In gold, the open interest ROSE BY AN GOOD SIZED 7761 CONTRACTS UP TO 500,731 WITH THE STRONG RISE IN PRICE OF GOLD WITH YESTERDAY’S TRADING ($12.00). IN ANOTHER HUGE DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED YESTERDAY FOR TODAY AND IT TOTALED A GOOD SIZED  3,168 CONTRACTS OF WHICH THE MONTH OF FEBRUARY SAW 2870 CONTRACTS AND APRIL SAW THE ISSUANCE OF 270 CONTRACTS AND FINALLY OCTOBER SAW  22 ISSUED. The new OI for the gold complex rests at 500,731. 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. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE A STRONG GAIN OF 10,931 OI CONTRACTS: 7761 OI CONTRACTS INCREASED AT THE COMEX AND A GOOD SIZED 3168 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.

YESTERDAY, WE HAD 11,193 EFP’S ISSUED.

ACCUMULATION OF EFP’S/ GOLD(EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JANUARY STARTING WITH FIRST DAY NOTICE: 25,479 CONTRACTS OR 2.5479 MILLION OZ OR 79.25 TONNES (3 TRADING DAYS AND THUS AVERAGING: 8,493 EFP CONTRACTS PER TRADING DAY OR 849,300 OZ/DAY)

Result: A STRONG SIZED INCREASE IN OI WITH THE GOOD SIZED RISE IN PRICE IN GOLD TRADING ON YESTERDAY ($12.00). WE HAD ANOTHER GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 3168. 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 3168 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 10,931 contracts:

3168 CONTRACTS MOVE TO LONDON AND  7761 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the gain in total oi equates to 34.00 TONNES)

we had: 50 notice(s) filed upon for 5000 oz of gold.

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

GLD:

Today, A HUGR CHANGE IN GOLD INVENTORY AT THE GLD/A WITHDRAWAL OF 1.18 TONNES FROM THE GLD

Inventory rests tonight: 836.32 tonnes.

 

 

NO CHANGES IN SILVER INVENTORY AT THE SLV/

 

INVENTORY RESTS AT 320.629 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 SMALL SIZED 805 contracts from 193,827 DOWN TO 192,243 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE GOOD SIZED RISE IN PRICE OF SILVER TO THE TUNE OF 24 CENTS  FRIDAY.  WE HAD WITHOUT A DOUBT A MAJOR SHORT COVERING FROM OUR BANKERS AS THEY HAVE CAPITULATED. NOT ONLY THAT BUT OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER 2574 PRIVATE EFP’S FOR MARCH (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM).  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD NO COMEX SILVER COMEX LIQUIDATION. BUT, IF WE TAKE THE SLIGHT OI LOSS AT THE COMEX OF 805 CONTRACTS TO THE 2574 OITRANSFERRED TO LONDON THROUGH EFP’S WE OBTAIN A GAIN OF 1769 OPEN INTEREST CONTRACTS DESPITE THE MAJOR BANKER SHORT COVERING. WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN JANUARY (SEE BELOW). THE NE
T GAIN TODAY IN OZ: 8.845MILLION OZ!!!

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE GOOD SIZED RISE OF 24 CENTS IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). BUT WE ALSO HAD ANOTHER 2574 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

Read More @ HarveyOrganBlog.com