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Updated: 8 hours 23 min ago

OCT17/ANOTHER RAID BY THE BANKERS KNOCKS GOLD AND SILVER DOWN/KOBE STEEL FRAUD GOES GLOBAL/CHINA BUILDS A SIX LANE HIGHWAY AS THEY ARE READY TO INVADE NORTH KOREA AND TAKE AWAY THEIR NUCLEAR WEAPONS/ISIS LOSES RAQQA/IRAQI KURDS LOSE KIRKUK AND GOES...

Tue, 10/17/2017 - 19:03

 

 

GOLD: $1284.95 DOWN $17.40

Silver: $17.02 DOWN 33 cents

Closing access prices:

Gold $1285.50

silver: $17.03

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: $1303,20 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1293.20

PREMIUM FIRST FIX:  $10.00 (premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $1301.69

NY GOLD PRICE AT THE EXACT SAME TIME: $1291.90

Premium of Shanghai 2nd fix/NY:$9.79(PREMIUMS GETTING LARGER)  

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LONDON FIRST GOLD FIX:  5:30 am est  $1289.70

NY PRICING AT THE EXACT SAME TIME: $1304.10

LONDON SECOND GOLD FIX  10 AM: $1284.75

NY PRICING AT THE EXACT SAME TIME. 1299.60

For comex gold: OCTOBER/

NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 1 NOTICE(S) FOR  100  OZ.

TOTAL NOTICES SO FAR: 2354 FOR 235,400 OZ  (7.329TONNES)

For silver: OCTOBER  166 NOTICES FILED TODAY FOR 830,000  OZ/ Total number of notices filed so far this month: 562 for 3,640,000 oz

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Bitcoin:  $5659 bid /$56 79 offer up $171.00

end

Let us have a look at the data for today

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In silver, the total open interest ROSE BY 1268contracts from  190,994  UP TO 192,262  WITH RESPECT TO YESTERDAY’S TRADING (DOWN 6 CENTS).  THE CROOKS ARE STILL HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS.  IT IS OBVIOUS THAT WE MUST HAVE HAD ZERO BANKER SHORT COVERING AND THUS THE REASON FOR ANOTHER RAID TODAY.

RESULT: A GOOD SIZED RISE IN OI COMEX  WITH THE  6 CENT PRICE FALL.  OUR BANKERS COULD NOT COVER ANY OF THEIR HUGE SHORTFALL AND THUS ANOTHER RAID WAS CALLED UPON . 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.961 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 166 NOTICE(S) FOR 830,000  OZ OF SILVER.

In gold, the open interest ROSE BY A HUGE 4992 CONTRACTS DESPITE THE SMALL SIZED  FALL IN PRICE OF GOLD ($1.64) .  The new OI for the gold complex rests at 533,134. OUR BANKER FRIENDS COULD NOT COVER ANY OF THEIR GOLD SHORTS AS THEY  COMMENCED ANOTHER OF THEIR FAMOURS  RAIDS ..

 

Result: A GOOD SIZED INCREASE IN OI WITH THE FALL IN PRICE IN GOLD ($1.64). WE HAD ZERO BANKER GOLD SHORT COVERING BY THE BANKERS SO ANTHER RAID WAS INITIATED . 

we had: 1notice(s) filed upon for 100 oz of gold.

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

GLD:   

Tonight , NO CHANGES  in gold inventory at the GLD/

Inventory rests tonight: 853.13 tonnes.

SLV

Today:  A HUGE change in inventory: A MONSTROUS WITHDRAWAL OF 3.49 MILLIONOZ

INVENTORY RESTS AT 322.271 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 1268 contracts from 190,994  UP TO 192,262(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) .  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. THE DATA ALSO SUGGESTS THAT THE BANKERS COULD NOT COVER ANY THEIR GOLD SHORTS  . HOWEVER IT IS CLEAR THAT  SILVER  IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER. AS I STATED YESTERDAY: “THE BANKERS ON FRIDAY RETREATED TO HIGHER GROUND WHERE THEY WILL TRY AGAIN.”..AND THUS THE RAID TODAY!!

RESULT:  A GOOD SIZED INCREASE IN SILVER OI  AT THE COMEX WITH THE  FALL IN PRICE OF 6 CENTS WITH RESPECT TO YESTERDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS AND AFTER RETREATING TO HIGHER GROUND , THEY DECIDED TO RAID TODAY

(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 DOWN 6.43 points or .19% /Hang Sang CLOSED UP 4.69 pts or .02% / The Nikkei closed UP 80.56 POINTS OR .38/Australia’s all ordinaires CLOSED UP 0.89%/Chinese yuan (ONSHORE) closed DOWN  at 6.6210/Oil UP to 52.03 dollars per barrel for WTI and 58.12 for Brent. Stocks in Europe OPENED IN THE GREEN .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6210. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.6179AND //ONSHORE YUAN  WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT PARTICULARLY  HAPPY TODAY

)

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

b) REPORT ON JAPAN c) REPORT ON CHINA 4. EUROPEAN AFFAIRS   5. RUSSIAN AND MIDDLE EASTERN AFFAIRS 6 .GLOBAL ISSUES

 

7. OIL ISSUES 8. EMERGING MARKET 9.   PHYSICAL MARKETS 10. USA Stories
Let us head over to the comex:

The total gold comex open interest ROSE BY A GOOD SIZED 4,992 CONTRACTS UP to an OI level of 533,134WITH THE FALL IN THE PRICE OF GOLD ($1.64 DROP IN YESTERDAY’S TRADING).  IT  OUR BANKER FRIENDS FAILED AGAIN IN THEIR ATTEMPT  TO COVER SOME OF THEIR HUGE GOLD SHORTFALL . SO THE BANKERS RETREATED TO HIGHER GROUND AND THEN INITIATED ANOTHER  RAID YESTERDAY AFTERNOON AND CONTINUING ON THIS MORNING AGAIN.  OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH WE SHOULD EXPECT  GOLD TO BE STRONG THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  GOODSIZED open interest INCREASE WITH THE SMALL SIZED FALL IN THE PRICE OF GOLD ($1.164.  AFTER BANKERS RETREATED TO HIGHER GROUND THEY INITIATED ANOTHER RAID YESTERDAY AFTERNOON CONTINUING ON THIS MORNING. 

 

IN SEPTEMBER,CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

NOW THAT WE ARE CLOSE TO THE 19TH CHINESE CONGRESS, THE BANKERS ARE TAKING NO CHANCES AS THEY START TO COVER THEIR GOLD/SILVER SHORTFALL.

We have now entered the active contract month of Oct and here we saw a GAIN of 62 contracts UP TO 318 contracts.  We had 19 notices filed yesterday so we GAINED 81 contracts or an additional 8100 oz will stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given. The low number of notices early in the delivery cycle is evidence of a lack of physical gold. We are also witnessing queue jumping in the gold comex which is another indicator of physical shortage.

The November contract saw A loss OF 155 contracts down to 1078.

The very big active December contract month saw it’s OI GAIN OF 3631 contracts UP to 404,518

.

We had 1 notice(s) filed upon today for  100 oz

 VOLUME FOR TODAY (PRELIMINARY) 320,951

CONFIRMED VOLUME YESTERDAY: 278,324

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI ROSE BY  A STEADY 1268 CONTRACTS FROM 190,994 UP TO 192,262WITH YESTERDAY’S 6 CENT FALL IN PRICE. WE  HAD NO BANKER SHORT COVERING AS THE CROOKS TRIED AND FAILED IN THEIR ATTRMPT TO  LOOSEN ANY SILVER LONGS FROM THE SILVER TREE.  THE BANKERS HAD NO CHOICE BUT TO RETREAT TO HIGHER GROUND WHERE YESTERDAY THEY INITIATED A RAID WHICH IS CONTINUING THIS MORNING. We have now entered the non active contract month of October and here the OI LOST 0 contacts DOWN TO 401.  We had 9 notices filed on yesterday so we gained 9  contracts or AN ADDITIONAL 45,000 oz will  stand for delivery and 0 EFP’s were issued.   November saw a GAIN of 13 contract(s) and thus RISIING TO  344. After November, the NEXT big active contract month is December and here the OI GAINED 884 contracts UP to 145,057 contracts.

We had 9 notice(s) filed for  45,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.17/2017.

Gold Ounces Withdrawals from Dealers Inventory in oz   n/a Withdrawals from Customer Inventory in oz   n/a oz Deposits to the Dealer Inventory in oz    n/a oz Deposits to the Customer Inventory, in oz   n/a No of oz served (contracts) today   1notice(s) 100 OZ No of oz to be served (notices) 317contracts (31,700 oz) Total monthly oz gold served (contracts) so far this month 2354 notices 235,400 oz 7.3219 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz Today we HAD  xx kilobar transaction(s)/   WE HAD xx DEALER DEPOSIT: total dealer deposits: xx oz We had xxx dealer withdrawals: total dealer withdrawals:  xx oz we had xxx customer deposit(s): total customer deposits; xx oz We had n/a customer withdrawal(s) total customer withdrawals; nil  oz  we had xxx adjustment(s) For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 1 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2354) x 100 oz or 235,400 oz, to which we add the difference between the open interest for the front month of OCT. (318contracts) minus the number of notices served upon today (1) x 100 oz per contract equals 267,100  oz, the number of ounces standing in this active month of OCT.   Thus the INITIAL standings for gold for the OCTOBER contract month: No of notices served  (2354) x 100 oz  or ounces + {(318)OI for the front month  minus the number of  notices served upon today (1) x 100 oz which equals 267,100 oz standing in this  active delivery month of OCTOBER  (8.307 tonnes). WE GAINED 81 CONTRACTS OR AN ADDITIONAL 8100 OZ WILL   STAND  IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY  PHYSICAL GOLD TO DELIVER UPON LONGS IN SEPTEMBER AND THIS CONTINUES ON IN OCTOBER.   THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE AND IT ALSO EXPLAINS THE LACK OF DELIVERY NOTICES IN THE EARLY PART OF THIS DELIVERY ACTIVE MONTH. QUEUE JUMPING IS ANOTHER INDICATOR OF PHYSICAL SCARCITY xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear) Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes    I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE OCTOBER DELIVERY MONTH OCTOBER INITIAL standings  Oct 17/ 2017 Silver Ounces Withdrawals from Dealers Inventory  n/a Withdrawals from Customer Inventory  n/a oz Deposits to the Dealer Inventory  n/a oz Deposits to the Customer Inventory   n/a No of oz served today (contracts) 166CONTRACT(S) (830,000,OZ) No of oz to be served (notices) 235contracts (1,175,000 oz) Total monthly oz silver served (contracts) 728contracts

(3,640,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month    xx oz today, we had  xxx deposit(s) into the dealer account: total dealer deposit: xxx   oz we had xxx dealer withdrawals: total dealer withdrawals: xxx oz we had  xx customer withdrawal(s): TOTAL CUSTOMER WITHDRAWALS: xx  oz We had xx Customer deposit(s): ***deposits into JPMorgan have stopped  again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: 600,627.490  oz    we had 0 adjustment(s) The total number of notices filed today for the OCTOBER. contract month is represented by 166 contracts( for 830,000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 728x 5,000 oz  = 3,640,0000 oz to which we add the difference between the open interest for the front month of OCT. (401) and the number of notices served upon today (166x 5000 oz) equals the number of ounces standing.  

 

.   Thus the INITIAL standings for silver for the OCTOBER contract month:  728 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(401) -number of notices served upon today (166)x 5000 oz  equals  4,815,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE   WE GAINED 9  CONTRACTS OR  AN ADDITIONAL 45,000 OZ WILL  STAND FOR DELIVERY.  ESTIMATED VOLUME FOR TODAY:   87,044 CONFIRMED VOLUME FOR YESTERDAY:  79,983 CONTRACTS     Total dealer silver:  39.345 million (close to record low inventory   Total number of dealer and customer silver:   220.100 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada

will update later tonight

1. Central Fund of Canada: traded at Negative 3.1 percent to NAV usa funds and Negative 3.3% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.4% Percentage of fund in silver:37.6% cash .+0.0%( Oct17/2017)  2. Sprott silver fund (PSLV): STOCK   FALLS TO -0.62% (Oct 17/2017)  3. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.63% to NAV  (Oct 17.2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.62%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.63%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

Oct 17./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes

Oct 16/A HUGE WITHDRAWAL OF  5.32 TONNES FROM THE GLD/INVENTORY RESTS AT 853.13 TONNES

0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES

Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES

oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT  854.30 TONNES

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes

Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES

Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/

Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

Sept 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

Inventory rests at 836.87 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Oct 17/2017/ Inventory rests tonight at 853.13 tonnes *IN LAST 252 TRADING DAYS: 87.82 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 187 TRADING DAYS: A NET  69,46 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY. *FROM FEB 1/2017: A NET  38,35 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 17/ A MONSTROUS WITHDRAWAL OF 3.494 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.271 MILLION OZ

Oct 16/  NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 325.765 MILLION OZ

oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ

OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z

Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615  MILLION OZ

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/

Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/

Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Oct 17/2017:

Inventory 322.271 million oz end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.52%
  • 12 Month MM GOFO + 1.69%
  • 30 day trend

end

 

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures
By janskoyles October 17, 2017 0 Comments

– Brexit UK vulnerable as gold bar exports distort UK trade figures
– Britain’s gold exports worth more than any other physical export
– Gold accounted for more than one in ten pounds of UK exports in July 2017
– UK’s stock of wealth has collapsed from a surplus of £469bn to a net deficit of £22bn – ONS error
– Brexiteers argue majority of trade is outside EU, this is due to large London gold exports
– Single gold bar (London Good Delivery) is, at today’s prices, worth just over £400,000
– “There are few things you’ll ever touch which pack so much weight into such a small size”
– UK’s economic vulnerability means safe haven gold essential protection

I’ve never played poker but I’m pretty sure the number one rule is not to reveal your cards to your opponents.
Yesterday the ONS possibly gave the EU one of the biggest reveals so far in Brexit negotiations. Revised figures from the statistics bureau showed the country’s stock of wealth has fallen from a surplus of £469 billion to a net deficit of £22 billion as reported by LBC.
This is down to FDI and fall in reserve foreign assets. In the first half of the year FDI fell from a £120 billion surplus in the first half of 2016 to a £25 billion deficit for the first half of this year.
With the UK totally losing its foreign assets, the EU (and the rest of the world) is aware that its safety net is no longer there. Not great timing, just as the government is trying to get through this crucial stage of Brexit negotiations.
The amount that has been knocked off the UK’s wealth is the equivalent of 40% of EU contributions. The bank balance isn’t the only thing the UK has at best misunderstood or at worst been mislead over. Their trade is not as internationally diverse as Brexiteers might have led markets to believe.
Following the referendum result there was an increase in Britain’s exports. Many pointed to the numbers as a sign of confidence in the future of the UK, following the Brexit vote.
It turns out that much maligned gold was to thank for this uptick. Without gold, the majority of the UK’s trade would be with the EU.
This is a reminder of how vulnerable we are to negotiations and reliant we are on the precious metal.
Gold’s saving role
As we can all recall, there was an air of uncertainty and panic surrounding the UK’s referendum last June. This prompted investors to diversify into gold bullion as a safe haven.
The increase in purchases of gold bars was so big that estimates of the country’s end-of-year GDP were pushed up. The majority of the gold sold in London eventually goes onto Switzerland, India and China. Therefore the export of gold is recorded as non-EU trade.

It is this that politicians, economists and the mainstream saw when they looked at export figures. An uptick in non-EU trade led them to conclude that Britain’s exports to the EU were growing which was a sign of confidence in the soon-to-be ex-EU Britain.
It was more of a sign of faith in the London Gold market over others in the UK. This past July Britain’s gold exports were greater than any other (physical) export.  More than 10% of the value of UK exports in July were accounted for by gold.
Gold, the ultimate test for lack of confidence in the UK
Much of the gold didn’t even hang around in the UK. So little confidence did investors have. Reports show that some of that bullion bought in London was then moved out of the country to China, by investors, at the end of 2016.
These purchases and movement of gold was a double-edged sword, or contrasting sign of confidence and lack of confidence. It is an indication that foreign investors were still faithful to the hallmark that is the London Gold market, however have declining confidence in the United Kingdom.
Ed Conway on Sky News, explains the tricky picture this creates for those pushing confidence in the UK:
This raises doubts over one of the few Brexit claims which has yet to be challenged – that Britain now exports far more outside the EU than inside.
The official trade figures produced by HM Revenue & Customs show that over the past five years the EU’s share of Britain’s exports has dropped to 46%.
But strip gold out of the statistics and the EU’s share is still 50%. Falling, yes, but not quite as fast as the official numbers might have you believe.
There are a few provisos: for one thing, these numbers don’t include services trade – Britain’s real speciality, particularly with non-European partners.
Even so, when you exclude gold from the overall trade balance (goods and services) – a tricky operation since the numbers are fiddly and not altogether comparable – a similar thing happens: the share going to the EU rises from about 45% to 47%.
The lesson is clear: that while Britain remains a dynamic trading nation, it is actually considerably more reliant on trade with Europe than the official numbers suggest.
International investors put their faith in gold
No matter how long someone works in the world of gold investment, it never ceases to amaze how much faith and value is put into something so small. A London Good Delivery bar is currently worth just over £400,000. A huge amount given it weighs 12.5 kilos.

But little comes down to size, instead it is about history and solid economic evidence that proves its role as a safe haven and hedge against economic risks.
These increased gold purchases show international investors still hold the London Good Delivery system to a high standard but do not have faith in the economy.
It is quite a contrast to the UK government which puts little faith into gold, with very low gold reserves despite the UK having no natural gold assets for mining.
The faith of foreign investors in gold over the British economy is one which is unlikely to change. Not only is the Brexit picture getting bleaker but so are figures that indicate in what poor health the system is in.
Today the news that inflation has hit 3%, a five-year high, is bad news for all holders of the pound and particular bad news for those who continue to see their wages squeezed.

Gold is an excellent hedge against the serious damage inflation leaves in its wake. It is also an excellent hedge against government mismanagement and weak economic decisions.
International investors and gold buyers including central banks are better informed about this than the UK’s own government. The same group who are supposed to be managing the country’s finances.
Conclusion
Yesterday UK and EU leaders agreed that Brexit negotiations needed to ‘accelerate’. Despite some forced smiles and statements from officials on both sides it’s clear that the most infamous (and expensive) divorce  discussion is not going well.
The longer politicians and bureaucrats continue to snipe at one another the less time there is for the United Kingdom to build and grow trade relationships in the wider world.
This is bad news for sterling, for jobs and for our overall wealth. We are in an extremely vulnerable position.
The UK government continues to ask the public for their faith and support in the Brexit negotiations. However this is too little too late. Very little support has been shown for British voters and outside investors when it comes to how the economy has (and will be managed). The public is unlikely to respond positively.
Inflation is climbing, property is stumbling and wages and pensions continue to be at risk from cuts and mismanagement.
Those vulnerable to Brexit negotiations must follow in the footsteps of those international investors by placing their faith in gold rather than await the outcome of negotiations being carried out by self-serving politicians and bureaucrats

END

Now that China and Russian are neck and neck with respect to official reserves, will China let Russia surpass them?

courtesy Ronan Manly/Bullionstar)

Ronan Manly: Neck and neck — Russian and Chinese official gold reserves

Submitted by cpowell on Mon, 2017-10-16 17:04. Section: Daily Dispatches
1:03p ET Monday, October 16, 2017
Dear Friend of GATA and Gold:

Gold researcher Ronan Manly today wonders whether in coming months China will let Russia overtake it in officially disclosed gold reserves. Manly acknowledges that the gold reserves of both countries probably exceed what they report. Manly’s commentary is headlined “Neck and Neck: Russian and Chinese Official Gold Reserves” and it’s posted at Bullion Star here:
https://www.bullionstar.com/blogs/ronan-manly/neck-neck-russian-chinese-…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

end

Your early TUESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST    i) Chinese yuan vs USA dollar/CLOSED DOWNAT 6.6210/shanghai bourse CLOSED DOWN AT 6.43POINTS .19%   / HANG SANG CLOSED UP 4.69 POINTS OR .02% 

2. Nikkei closed UP 80,56 POINTS OR .38%     /USA: YEN RISES TO 112.38

3. Europe stocks OPENED IN THE GREEN ( /USA dollar index RISES TO  93.60/Euro DOWNto 1.1750

3b Japan 10 year bond yield: RISES  TO  -+.070/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  52.03and Brent: 58.20

3f Gold DOWN/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP or Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.374%/Italian 10 yr bond yield DOWN to 2.017%  /SPAIN 10 YR BOND YIELD UP TO 1.569%  

3j Greek 10 year bond yield FALLS TO  : 5.497???  

3k Gold at $1285.40silver at:17.08 :9 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 20/100 in  roubles/dollar) 57.14

3m oil into the 52 dollar handle for WTI and 58handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.44 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9797as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1507 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.374%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.325% early this morning. Thirty year rate  at 2.841% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Stocks Just Shy Of Record Highs As Dollar, Yields Rise On Taylor Tension 

Global markets traded near all-time highs on Tuesday, with S&P futures, Asian shares and European stocks all flat this morning, while oil continued to gain on Kurdish geopolitical concerns while most industrial metals fell.  The euro extended its recent slide and stocks drifted as Spain’s escalating hard-line response to the Catalonian secession threat fueled concern the crisis may intensify.
Markets initially followed the US reaction to reports of a positive John Taylor (Rule) – Donald Trump meeting, which sent 2Y Treasury yields to their highest since 2008 and pushed up the dollar higher amid speculation the next Federal Reserve chairman will be more hawkish, while TSYs briefly traded through Monday’s session lows because as we showed yesterday, the Taylor Rule would suggest a Fed Funds rate that is far higher than the current.

However, the pop in short-yields was not matched at the long end and the 2-to-10 year U.S. yield curve hit its shallowest in more than a year.
“Fed chairs have often influenced U.S. monetary policy quite considerably in the past. And I would certainly see Taylor as a candidate who would fit in this pattern,” Commerzbank analyst Thu Lan Nguyen said. “That makes one thing clear: should Trump nominate Taylor as Yellen’s successor the U.S. dollar would initially appreciate notably.”
Cable remained volatile through U.K. inflation data and dovish commentary from BOE’s Ramsden but eventually traded flat. In addition to Spain, the EUR/USD continued its recent trend lower, pricing a nine-month QE extension within ECB taper, while bunds and other EGBs continue to grind higher. The South African rand weakened following a Zuma cabinet reshuffle
The common currency declined for a fourth day, the longest streak since May. The Stoxx Europe 600 Index was little changed following mixed trading in Asian stocks earlier, after North Korea warned that a nuclear war could “break out any moment.” Core European equity markets dipped from the open before trading back to unchanged with the tech sector supported by Infineon (2.5%) after positive comments from BofA, leisure sector underperforms after Merlin Entertainments (-19.5%) posts poor earnings forecast. Spain’s IBEX Index fell 0.3 percent to the lowest in a week as Spain cut its economic growth forecast for 2018, acknowledging the impact of an escalating political crisis that led the National Court in Madrid to jail two leading Catalan separatists. As reported on Monday, the Spanish state is turning up the pressure on the separatist leaders as Prime Minister Mariano Rajoy tries to persuade Catalan President Carles Puigdemont to drop his push for independence or see Madrid take direct control of the regionl two Catalan independence leaders were ordered jailed without bail during a sedition trial.
Asia’s regional stock benchmark was little changed, holding near its highest level in 10 years, while a gauge of mining stocks advanced after Rio Tinto Group signaled it’s on track for record annual iron ore shipments. The MSCI Asia Pacific Index added less than 0.1 percent to 167.82 as of 11:40 a.m. in Hong Kong, after extending gains from its highest level since November 2007 on Monday. Materials stocks led gains Tuesday, rising 0.5 percent. Japan’s Topix fluctuated, erasing early gains, after a six-day rally pushed it further into technically overbought levels. It eventually closed 0.2% higher in Tokyo after gaining as much as 0.6%. Australia’s S&P/ASX 200 Index rose 0.7 percent and South Korea’s Kospi index was up 0.2 percent.
“Investors are pausing just a bit while waiting for more directional data points on the global state of affairs before they assess whether current high valuations have firm footing,” said Attila Vajda, managing director of Project Asia Research & Consulting Pte. China’s GDP eport due on October 19 will help determine investment decisions.

Elsewhere, the pound dropped amid speculation the Bank of England will deliver the U.K.’s first rate increase in more than a decade next month after data showed inflation in U.K. accelerated in September, although testimony by Governor Mark Carney befire lawmakers in London appears to have taken away the fizzle. British Prime Minister Theresa May and European Commission chief Jean-Claude Juncker agreed over dinner in Brussels on Monday that the pace of negotiations over Britain’s departure from the European Union should be stepped up. Some market watchers such as JP Morgan are sceptical on sterling’s outlook, recommending investors to buy euros against the British pound as “the overhang of the Brexit issue itself would constrain how much accommodation the BoE would be able to remove.”
One of Monday’s big movers, oil, consolidated a near month-high having spiked after Iraqi forces seized the oil-rich city of Kirkuk from fighters loyal to the country’s semi-autonomous Kurdish Regional Government. After months of rangebound trading during which OPEC-led supply cuts supported crude values but rising U.S. output capped markets, prices have moved up significantly this month. Brent crude oil was 5 cents higher at $57.87 a barrel by 0800 GMT, up almost a third from its mid-year levels. U.S. West Texas Intermediate (WTI) crude CLc1 was nudging up again too at $51.99. There were unconfirmed reports that Kurdish forces had shut around 350,000 barrels per day (bpd) of oil production from major fields. “The 500,000 bpd Kirkuk oilfield cluster is at risk,” Goldman Sachs said in a note to clients.

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Tension between the United States and Iran is also rising, after U.S. President Donald Trump on Friday refused to certify Iran’s compliance over a nuclear deal which removed long-running sanctions. “If there (were new sanctions), we expect that several hundred thousand barrels of Iranian exports would be immediately at risk,” Goldman said. During the previous round of sanctions around 1 million bpd of oil was cut from global markets.
In currencies, the Bloomberg Dollar Spot Index gained 0.1 percent to the highest in more than a week.  The euro dipped 0.3 percent to $1.1764. The British pound dropped to session lows near $1.3226. The Japanese yen climbed less than 0.05 percent to 112.15 per dollar.
Yields were little changed, with the US 10-year up one basis point to 2.31%; Germany’s 10-year yield decreased less than one basis point to 0.37 percent; Britain’s 10-year yield climbed two basis points to 1.336 percent, the biggest increase in almost two weeks.
Gold declined and most emerging-market currencies weakened alongside developing-nation stocks. WTI crude resumed its push above $52 a barrel as tensions in Iraq lingered. Treasuries edged higher as odds rose that John Taylor will replace Janet Yellen at the Fed.
Johnson & Johnson, Goldman Sachs, Harley-Davidson, Morgan Stanley, Omnicom are among companies reporting earnings
Market Snapshot

Market Snapshot
S&P 500 futures little changed at 2,556.10
STOXX Europe 600 down 0.07% to 391.13
VIX Index down 0.6% at 9.85
MSCI Asia down 0.04% to 167.74
MSCI Asia ex Japan unchanged at 553.36
Nikkei up 0.4% to 21,336.12
Topix up 0.2% to 1,723.37
Hang Seng Index up 0.02% to 28,697.49
Shanghai Composite down 0.2% to 3,372.04
Sensex down 0.09% to 32,605.86
Australia S&P/ASX 200 up 0.7% to 5,889.61
Kospi up 0.2% to 2,484.37
German 10Y yield unchanged at 0.372%
Euro down 0.2% to $1.1769
Brent Futures up 0.5% to $58.10/bbl
Italian 10Y yield fell 4.9 bps to 1.766%
Spanish 10Y yield fell 1.6 bps to 1.566%
Brent Futures up 0.5% to $58.10/bbl
WTI crude up +0.5% at $52.15/bbl
Gold spot down 0.5% to $1,289.85
U.S. Dollar Index up 0.1% to 93.41
Top Overnight News from Bloomberg
John Taylor, a Stanford University economist and a candidate for
Federal Reserve Chairman, made a favorable impression on President
Donald Trump after the interview at the White House last week, according
to several people familiar with the matter
North Korea
warned that a nuclear war may “break out any moment” as the U.S. and
South Korea launched one of the largest joint naval dri
Spanish Interior Ministry is preparing first steps it would take if govt opts to trigger clause in constitution allowing for suspension of Catalonia’s self-government, El Pais reported
Spain cut growth forecast for 2018 to 2.3% from 2.6% earlier, acknowledging the impact of an escalating political crisis
BOE is seen keeping rates on hold through 2018 after making first hike in over a decade in November, according to a Bloomberg survey; 76% of the economists see a rise next month, up from 22 percent of respondents in September but they don’t see another increase until 1Q 2019
BOE’s David Ramsden said he wasn’t in MPC majority pushing for a hike in coming months
Last-minute efforts by U.K. PM Theresa May to unblock stalled Brexit talks came up short with EU officials now looking to December to move negotiations on to discussions about the future EU-Britain relationship
Some Qatari banks are becoming less willing to sell dollars to foreign lenders amid a lingering regional standoff with a Saudi- led alliance, according to people familiar with the matter
European car sales fell in September for only the second monthly drop this year as concerns about Brexit among U.K. consumers more than offset gains in France, Italy and Spain
Reserve Bank of Australia said economic conditions at home and abroad “had been more positive since 2016,” according to minutes of this month’s policy meeting where interest rates were left unchanged
U.K. Prime Minister Theresa May and European Commission President Jean-Claude Juncker’s dinner attempt to smooth out Brexit differences yielded little, revealing entrenched previous stances before the summit on Thursday
Industrial production in September and Home Builders Market Index for October will be announced today in the U.S.
Goldman Sachs, Morgan Stanley, IBM, Johnson & Johnson, Harley Davidson
Asia equity markets eventually traded mostly higher following the momentum from their US peers, where all major indices edged to fresh record levels once again. The positive lead provided an early bid tone in ASX 200 (+0.8%) which was also led by materials names as Rio Tinto rose to its highest in around 6 years on strong Q3 iron ore shipments, while Nikkei 225 (+0.4%) was also higher but saw some intraday pressure in which participants took heed of a strengthening JPY and booked profits. Elsewhere, Hang Seng (+0.1%) and Shanghai Comp. (+0.1%) were choppy despite a substantial liquidity operation by the PBoC, with participants tentative in the midst of earnings season and ahead of China’s 19th National Congress. Finally, 10yr JGBs were subdued amid a somewhat positive risk tone in Japan and after softer 20yr bond auction results in which the amount sold, b/c and accepted prices all declined from prior. PBoC injected CNY 100bln via 7-day reverse repos and CNY 90bln via 14-day reverse repos. PBoC set CNY mid-point at 6.5883 (Prev. 6.5839) China researcher states that China should tighten its monetary policy and toughen property curbs.
Top Asian news
The Money-Losing Volatility Trade That Hedge Funds Can’t Resist
China Bonds Slump as Zhou’s Optimism on Economy Seen Taking Toll
HNA to Spend $7.6 Billion on Technology in Tourism Industry
Hedge Fund Oasis Joins Asatsu Shareholders Opposing Bain Bid
China’s Stocks, Bonds, Currency Drop in Unison Before Congress
Gym of Choice for Hong Kong Financial Elite Is Said to Seek Sale
Don’t Panic: China’s Deleveraging May Actually Be Good for Bonds
European equity markets trade marginally in the red, the FTSE found a marginal bid following the UK CPI data, recovering from best levels, however, still
behaving as one of the noticeable underperformers across Europe. The CAC continues to trade near session lows,despite strong despite strong earrings from the likes of Danone. An opening markdown for the 10-year German debt future, largely due to reports that the more hawkish-leaning John Taylor put in
an impressive performance when interviewed by President Trump for the role as next Fed chair. The news unsettled US
Treasuries, and especially the short end of the curve where 2 year yields rallied to multi-year peaks alongside a jump in implied
rates per Eurodollar contracts from the turn of next year through to 2019. A strong German ZEW report could add more
pressure, while supply is also due via a Eur4 bn Schatz offering (though dovish ECB forward guidance on rates should
underpin sentiment here, and reiterated by speakers to come). Back to Eurex, the range so far for Bunds has been 162.59-
37.
With a 3% headline print all priced in to the UK CPI data, (and in fact a bit more for many), Gilts have rebounded to a fresh intraday
high of 124.34 (from 124.23 at best pre-data), while Short Stg futures have pared losses to just a tick. Note, comments from BoE’s
Ramsden may also be lending some support to the 10 year bond and 3 month strip as he highlights slack in the economy, no
second round inflation in wages and investment risks from Brexit. Note, however, y/y CPI has hit a 5 year-plus peak and November
tightening remains a better than 50% prospect so any further bounce in debt/STIRs may be contained.
Germany sells EUR 3.22bln vs. Exp. EUR 4bln 0% 2y Schatz Auction b/c 1.3 prev. 1.8 and average yield -0.75 prev. -0.72%,
retention 19.5%.
Top European news
Bunds Unruffled by ECB Taper Prospects Paint a Picture of Calm
Italy Exercises Power Over Strategic Telecom Italia Assets
Lloyds Can’t Shake Troubled Past in Suit Over HBOS Takeover
U.K. Inflation Climbs to 5 1/2-Year High on Food, Transport
Brexit Timeline Pushed Back as May’s Late Push Comes Up Short
Credit Suisse Investor Herro Opposes Push to Break Up Bank
In currencies, Sterling saw choppy trade following the 9.30 data, as the bid coming into the figures saw a marginal retracement. GBP/USD still trades near session highs, likely to look toward 1.33. USD: The greenback firmer by 0.2% following the move higher in US rates amid source reports stating that John Taylor (very hawkish) made a favourable impression on President Trump in regards to the Fed Chair position. The break above 93.32 (38.2% Fib retrace of the October fall) and the subsequent push through 93.40 indicates a bullish trend forming, however 93.50 is capping further gains for now. Meanwhile, the downward trend continues for EUR which ended yesterday’s session on the back foot amid the stronger greenback. Although with little key risk events until the Oct 26th ECB monetary policy decision it is possible that the pair will stay within close proximity to 1.18.
In commodities, US Total shale regions oil production for November is seen upwards of 82,000 bpd at 6.12mln bpd WTI and Brent Crude futures have ground higher through early European trade as WTI trades through   52.00/bbl, with latest news from an IEA head stating that OPEC compliance is currently at 86%.
Looking at the day ahead, the September industrial production print is the most notable release, while September manufacturing production and the import price index readings are also due, along with the October NAHB housing market index print. Onto other events, keep an eye on BoE Governor Carney testifying before the UK Parliament. Away from this, the ECB’s Constancio and Costa is also slated to make comments. Meanwhile EU foreign ministers hold preparatory talks ahead of the summit at the end of the week. Morgan Stanley, Goldman Sachs and IBM results are also due.

end

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 6.43 points or .19% /Hang Sang CLOSED UP 4.69 pts or .02% / The Nikkei closed UP 80.56 POINTS OR .38/Australia’s all ordinaires CLOSED UP 0.89%/Chinese yuan (ONSHORE) closed DOWN  at 6.6210/Oil UP to 52.03 dollars per barrel for WTI and 58.12 for Brent. Stocks in Europe OPENED IN THE GREEN .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6210. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.6179AND //ONSHORE YUAN  WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT PARTICULARLY  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

The rhetoric between North Korea and the rest of the world continues as the North states that nuclear war could break out at any moment

(courtesy zerohedge)

 North Korea Warns “Nuclear War Could Break Out At Any Moment

Less than a day after South Korean and US naval forces kicked off their latest round of joint military drills, which are slated to run until the end of the week, North Korea’s deputy UN ambassador claimed during a fiery speech at the UN General Assembly that the Korean peninsula “has reached the touch-and-go point and a nuclear war may break out any moment,” the Associated Press reported.
Complaining to the UN General Assembly’s disarmament committee, Kim In Ryong argued that North Korea is the only country in the world that has been subjected to “such an extreme and direct nuclear threat” from the United States since the 1970s, adding that the isolated North has the right to posses nuclear weapons in self-defense.
This latest warning arrives as the US and South Korea are bracing for another North Korean missile test. For weeks now, South Korean intelligence has suspected that its isolated neighbor could use the beginning of China’s National Party Congress, which begins on Thursday, as an opportunity for what would be a bold act of defiance, angering both the US and the North’s primary benefactor and only major ally, China. The North has also been threatening to unveil a new ICBM that intelligence services believe might be capable of striking the west coast.

During his speech, Kim accused the US and South Korea of conducting military exercises involving “nuclear assets” and also mentioned a top-secret plan to stage a “secret operation aimed at the removal of our supreme leadership” developed by US and South Korean intelligence. The plan was exposed after North Korean hackers stole a large cache of military documents from the South.
Boasting about the country’s nuclear capabilities, Kim bragged that the North Korea had completed its “state nuclear force and thus became the full-fledged nuclear power which possesses the delivery means of various ranges, including the atomic bomb, H-bomb and intercontinental ballistic rockets.”

“The entire U.S. mainland is within our firing range and if the U.S. dares to invade our sacred territory even an inch it will not escape our severe punishment in any part of the globe,” he warned.
The dangerous rhetoric comes as Russia – which was recently rumored to be ramping up economic support for the North – reversed course and said it would curtail economic, scientific and other ties with North Korea in line with UN sanctions
Meanwhile, the European Union announced new sanctions on Pyongyang for developing nuclear weapons and ballistic missiles.
US Secretary of State Rex Tillerson said Sunday that diplomatic efforts aimed at resolving the North Korean crisis “will continue until the first bomb drops.” His commitment to diplomacy came despite
President Donald Trump’s tweets several weeks ago that his chief envoy was “wasting his time” trying to negotiate with North Korean leader Kim Jong Un, whom he derisively referred to as “Little Rocket Man.”
A report published by Russian media earlier today claiming that US and North Korean diplomats might be meeting at a conference in Moscow next week was quickly denied by the isolated country’s government, which said it’s not yet ready to begin negotiating with its greatest geopolitical foe.
Kim also reiterated that North Korea considers its missile arsenal “a precious strategic asset that cannot be reversed or bartered for anything.”

“Unless the hostile policy and the nuclear threat of the U.S. is thoroughly eradicated, we will never put our nuclear weapons and ballistic rockets on the negotiating table under any circumstances,” Kim said.
But in an interesting twist, Kim told the disarmament committee that while the Democratic People’s Republic of Korea — North Korea’s official name — would like to see nuclear weapons vanish from the face of the earth, aggressive expansion of nuclear arsenals has left the country no choice but to arm itself.
By accelerating the modernization of its weapons, the US is “reviving a nuclear arms race reminiscent of [the] Cold War era,” Kim said. He also noted that the nuclear weapon states, including the United States, boycotted negotiations for the Treaty on the Prohibition of Nuclear Weapons that was approved in July by 122 countries at the United Nations.

“The DPRK consistently supports the total elimination of nuclear weapons and the efforts for denuclearization of the entire world,” he said.

But as long as the United States rejects the treaty and “constantly threatens and blackmails the DPRK

with nuclear weapons … the DPRK is not in position to accede to the treaty.”

end

b) REPORT ON JAPAN

the Kobe Steel scandal as promised goes nuclear: they have faked data for decades and even had a fraud manual.  The fraud now extends to the main product steel.  The fallout is spreading to  hundreds of companies.

(courtesy zerohedge)

Kobe Steel Scandal Goes Nuclear: Company Faked Data For Decades, Had A “Fraud Manual

Last week we reported that in the latest instance of criminal Japanese corporate malfeasance, Japan’s third-biggest steel producer admitted falsifying data about the quality of steel, aluminum, copper, iron powder and other products it sold to customers across virtually every single industry. The news sent the company’s stock tumbling 43% from levels before the scandal broke, to the lowest price since 2012.

KOBE STEEL TRADING AT 827 YEN ($.70) DOWN FROM 1900 YEN ($1.61)

The downstream impact was quickly felt, with selling hitting names across the global supply chain…
… while the NYT reported that the fallout has the potential to spread to hundreds of companies. As of a week ago, the extent of the problems at Kobe Steel was still unfolding, and prompted\ the Nikkei newspaper to conclude that “the falsification problem has become an issue that could destroy international faith in Japanese manufacturing.”
Well, as of moments ago that tipping point was this much closer, when the same Nikkei reported that some Kobe Steel plants in Japan had been falsifying product quality data for decades, well beyond the roughly 10-year time frame given by the lying steelmaker. According to the Japanese newspaper, “employees involved in the data manipulation used the industry term tokusai to refer to shipping of products that did not meet the standards requested by customers”, the Nikkei source said. Though tokusai usually refers to voluntary acceptance of such products, plants sometimes sent substandard goods without customers’ consent. The word was apparently in use at some plants for 40 to 50 years.
But wait, it gets better.

Not only did the company, having already been caught, lie to shareholders and rule-abiding employees how long this illegal behavior had been going on, but – in a glaring example of corporate idiocy – had effectively enshrined and codified its fraudulent ways, as the cheating procedures eventually became institutionalized in what was essentially a tacit fraud manual, allowing the practice to continue as managers came and went.

Meanwhile, the Nikkei also reports that everyone could have been in on it, as data manipulation may have occurred with the knowledge of plant foremen and quality control managers. Some shipments even came with forged inspection certificates.

Kobe Steel has tapped senior officials in the aluminum and copper business – where most of the misconduct took place – to serve on its board. How far up the chain of command knowledge of the fraud may have extended in the past remains an open question.
According to the latest update, systemic data falsification took place at no less than four Japanese production sites and appears to have affected virtually every product made by the company: the scandal has spread to the manufacturer’s mainstay steel business, with revelations Friday that steel wire was also shipped without inspection or with faked certificates. Meanwhile, the number of affected customers has swelled from around 200 to roughly 500.

One can only imagine the “honesty”, measured in alpha, beta and gamma radiation, if Kobe was also behind the Tepco nuclear disaster, where of course as we learned over the past 6 years, the amount of data fabrication was just as unprecedented. It is almost as if there is something rather rotten with Japan’s entrenched, corporate ways…

But not to worry: in an amusing twist, Kobe Steel has promised it will complete safety inspections for already shipped products in two weeks or so. A report on the causes of the fraud and measures to prevent a recurrence will come out in a month or so; we can’t wait to read the lies in that one. The steelmaker is conducting a groupwide probe that includes interviews with former senior officials. Because if there is anything Kobe will be successful at, it is diligent, honest self-reporting.
Where the company is certainly lying however, is when it told analysts earlier on Monday that “liquidity is not an issue” according to Bloomberg. Judging by the explosion in Kobe Steel CDS in recent days…

… one more gaffe by the scandal-plagued company, and Kobe Steel will be insolvent. As for all those who are considering providing liquidity to this fraud of a company, good luck with lying to yourselves that you will ever see any of that money back.

3. CHINA REPORT

China is building a huge 6 lane highway close to the border with North Korea. Is China planning to deploy its army against North Korea and seize its nuclear weapons.  This could lead to a path for World War iii

(courtesy Mac Slavo/SHFTPlan.com)

Road To World War 3 Unveiled: Is China Planning To Deploy Its Army Against North Korea?

Authored by Mac Slavo via SHTFplan.com,

New photos of a recent highway construction in China could be part of a contingency plan to invade North Korea or amass a huge army on their shared border.

Experts fear this newly uncovered plot could stoke the fires of World War 3, inevitably involving the United States.
According to The Express UK, communist China has traditionally been North Korea’s closest ally, but Kim Jong-un’s continued nuclear and ballistic missile tests have tested Beijing’s patience on the rising tensions worldwide. These new revelations also come as North Korea was spotted transporting 30 Scud missiles from Hwangju, south of the capital Pyongyang, to Nampo, on the Korea Bay coast opposite China.

New photos have emerged and they reveal that the Communist superpower is building a six-lane highway in its desolately populated northeast on route to North Korea.

With most Chinese peasants not able to afford the luxury of a car, the construction of the G1112 Ji’an–Shuangliao Expressway, has led experts to believe it will be used for quick deployment of tanks and troops to its North Korean border.
The photos obtained by Daily Star Online show Chinese construction workers digging tunnels through the mountains and massive cranes constructing bridges over rivers.

Chinese workers construct a six lane highway to North Korea’s border.
Scott Snyder, senior fellow for Korea studies and director of the program on US-Korea policy at the Council on Foreign Relations, told Daily Star Online:

“China’s Jilin province has even budgeted and paid for improvements in road infrastructure inside some parts of North Korea in recent years in order to improve logistical access to the Rason port inside North Korea.”
Dean Cheng, an Asia security expert at the Heritage Foundation, a think tank in Washington, said Beijing would have a ”vast array” of contingency plans involving military options to seize Kim Jong-un’s nuclear weapons. And just last week, a highly respected security think tank warned that the threat of war between China and the US was now real. In the bombshell report, the Rand Corporation said any conflict between North Korea and South Korea and the US would quickly spiral into World War 3.
If it’s decided upon by a nation to “take out” the North Korean dictator, Kim Jong-Un, American and Chinese troops would then rush across the border in a race to take control of the tyrant’s nuclear weapons and missile facilities colliding in a clash between China and the US, effectively spawning WW3. A whopping 85% of North Korea’s nuclear facilities are believed to be located within 62 miles of the Chinese border.
China actually threatened the US with a “real war” last month. The communist nation said that Donald Trump had made a “serious miscalculation over North Korea. Photos uncovered by a North Korean monitoring site suggested China was secretly helping Kim’s nuclear missile program. But there were other confusing and conflicting signs that North Korea may be preparing to fire missiles towards China next week.
It looks like the world is steamrolling its way to a third world war

end

4. EUROPEAN AFFAIRS

As expected Spain’s constitutional court declares Catalan Referendum null and void

(courtesy zerohedge)

Spain Constitutional Court Declares Catalan Referendum Void

While it will not come as a surprise to anyone following ongoing events in Spain, moments ago the country’s Constitutional Court said on Tuesday the referendum law passed by the Catalan government Sept. 6 to hold a vote on independence was unconstitutional and void, a spokesman said. The court’s full statement can be found here, while the opinion is at this link.
The court had originally suspended the referendum law as it studied its legality, though the Catalan government went ahead with the ballot regardless.

According to the Court, the Catalan legislation, approved by the region on Sept. 6 and suspended by the court the following day, usurped powers of the State to hold referendums. It also violated the principle that the Spanish nation is indissoluble.
In other words, this is the definitive confirmation from Spain that any Catalan separation is not possible, nor legal.
And with Spain having extended the ultimatum given to Catalan leader Puigdemont to definitively clarify his stance on the declaration of independence through Thursday, the separatist leader finds himself increasingly trapped, as a response will either prompt a crackdown by Spain or a blowback from other pro-independence groups inside Catalonia.
Meanwhile, the market appears to already feel more comfortable, with Catalan 2Y yields having fallen sharply from recent highs.

end

May made the mistake that she would pay the EU  when Britain exits the Monetary Union.  That was a fatal mistake as the EU now refuses to budge until the payment is signed in ink.  This will no doubt cause the collapse of negotiations and maybe here government

(courtesy zerohedge)

Theresa May’s Government Fears Imminent Collapse Of Brexit Negotiations

Following Theresa May’s dinner with Jean-Claude Juncker in Brussels, we have a promise that both sides are committed to accelerating Brexit negotiations…except nobody actually believes that.

Apart from the “bear hug” that Juncker gave Britain’s Brexit Secretary, David Davis, as they went their separate ways, there is no evidence that relations are any more cordial, or that any tangible progress was made in breaking the deadlock.
Rather than no progress, however, Bloomberg is reporting that the UK government sees the potential for the negotiations to collapse after this week’s EU Summit. “U.K. Prime Minister Theresa May’s government fears Brexit talks will break down unless the European Union gives ground at a key summit this week, according to a person familiar with her team’s views. Without a clear sign that negotiations will progress to trade and transition arrangements by December at Thursday’s summit of EU leaders, the entire Brexit process will be in danger of collapse.”

Mrs May made a telephone call on Sunday to the one person, Merkel, who could have softened the EU’s stance ahead of the dinner. Consequently, we were not surprised to learn that now “senior British ministers are losing faith in the EU’s willingness to strike a deal, the person said.”
As we’ve said before, it still boils down to money and the EU is not shifting until the two sides can agree on a number.
The growing problem for Mrs May is that she now has little room to maneuver due to the weakness of her own position. The source in Mrs May’s team told Bloomberg “May took a political risk by promising to pay into the EU budget and settle the divorce bill in a speech in Florence, Italy, last month and now needs something in return for before she can make concessions.”
So…the stand-off continues, with the EU contingent staying confident that they have far more to gain at this point.  “German Chancellor Angela Merkel and French President Emmanuel Macron are the two key obstacles to allowing talks to move on trade, according to the first official. Germany has a vested interest in delaying the progress in the Brexit talks because Frankfurt is trying to tempt companies away from London, the person said.”
You can throw in Paris, Amsterdam and Dublin as beneficiaries too…just as long as the deeply embedded structural problems in European banks don’t suddenly flare up again.

by Tyler Durden

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

Iranian Parliamentary speaker states that the USA will regret withdrawing from the nuclear deal

(courtesy zerohedge)

Iranian Parliament Speaker Says US “Will Regret” Withdrawing From Nuclear Deal

Iranian Parliament Speaker Ali Larijani said Monday that the US would face stiff consequences if it withdraws from the JCPA – informally known as the Iran deal.
Speaker of Iran’s parliament Ali Larijani said that Iran “had a developed plan and a certain law,” should the United States withdraw from the agreement on Tehran’s nuclear program, adding that Washington would “regret it,” Sputnik reported.
Larijani made the statement in St. Petersburg where he was taking part in a parliamentary forum.

President Donald Trump elicited cries of protest from the US’s co-signers of the pact, after saying last week that his administration had decided not to certify Iran’s compliance with the deal and would instead leave the final decision up to Congress. The Trump administration has repeatedly insisted that, while Iran is technically complying with the terms of the pact, it is more broadly violating the “spirit” of the agreement by allegedly continuing to fund terrorist groups and developing and testing ballistic missiles.

Trump’s speech, in which he also accused Iran of being a threat to global security, elicited howls of disapproval from the US’s partners in negotiating the deal.
“We encourage the US Administration and Congress to consider the implications to the security of the US and its allies before taking any steps that might undermine the JCPOA, such as re-imposing sanctions on Iran lifted under the agreement,” French President Emmanuel Macron, German Chancellor Angela Merkel and British Prime Minister Theresa May said in a joint statement.
In Brussels, Federica Mogherini, the EU foreign policy chief, said the Iran deal is an international agreement and “it is not up to any single country to terminate it.”
In a statement after Trump’s speech, Russia’s foreign ministry said there was no place in international diplomacy for “threatening” and “aggressive” rhetoric, adding that such methods were doomed to fail.
“It is a hangover from the past, which does not correspond to modern norms of civilised dealings between countries,” the statement said.
“We viewed with regret the decision of the US President not to confirm to Congress that Iran is fulfilling in good faith” the nuclear deal, it added.
During an appearance on CNN’s “State of the Union” on Sunday, Secretary of State Rex Tillerson claimed the US is trying to stay in the Iran nuclear deal while hoping to achieve more from it, days after President Donald Trump threatened to pull the US out of the agreement.
The 2015 deal, reached between Iran and the United States, Britain, France, Germany, Russia and the European Union, saw Tehran curtailing its nuclear program in exchange for the easing of crippling economic sanctions.
In an amusing development, Trump has urged lawmakers to adopt a bill co-sponsored by Senator “Little” Bob Corker (who has recently traded barbs with the president after saying he wouldn’t seek another term in the senate) that would impose so-called “triggers” like Iran continuing its provocative missile launches, or advancing its nuclear-enrichment capabilities to the point to where it could build a nuclear bomb in a year’s time. Any of these actions would result in sanctions immediately being reimposed.
The US’s allies – not to mention President Donald Trump’s political enemies – have insisted that Trump’s decision to throw a wrench in the works of the deal could lead to its collapse, which in turn would result in Iran resuming its nuclear program, reviving the possibility of a future military showdown with a nuclear-armed Iran.

end

ISIS capital Raqqa surrenders

(courtesy zerohedge)

US-Backed Forces Declare Victory Over ISIS In Raqqa

After a US-backed coalition of Kurds, Shiite militias and Iraqi forces pushed ISIS out of Mosul earlier this year, a similar coalition of US-backed Arab and Kurdish fighters – supported by US airstrikes – has declared victory over ISIS in Raqqa, reclaiming the terror group’s de facto capital for the first time since ISIS first rose to prominence in 2014.
Victory was effectively assured as of Tuesday as the last remaining fighters surrendered to the allied forces after four months of fighting. The battle saw thousands of ISIS family members flee, and many locals who claimed they’d joined the group but only served in a civilian capacity had earlier surrendered.
The movement’s reported collapse in Raqqa followed a four-month long battle between the extremists and US-backed Syrian Democratic Forces, a coalition of Kurdish and Arab fighters. In the assault’s final days, hundreds of Islamic State militants surrendered to the SDF, leaving a handful of foreign fighters in the city, according to the Washington Post. According to rights groups, much of the city’s infrastructure is destroyed, and some 270,000 civilians remain in camps in surrounding areas.

A Reuters witness said militia fighters celebrated in the streets, chanting slogans from their vehicles. The fighters and commanders clasped their arms round each other, smiling, in a battle-scarred landscape of rubble and ruined buildings at a public square.
Allied fighters are still checking to see if any foreign fighters remain in the city, and are also working to clear landmines. Victory will officially be declared as soon as the mines are finished being cleared, Reuters reported.
“We do still know there are still IEDs and booby traps in and amongst the areas that ISIS once held, so the SDF will continue to clear deliberately through areas,” said Colonel Ryan Dillon, a spokesman for the coalition.
The flags in the stadium and others waved in the city streets were of the SDF, its strongest militia the Kurdish YPG, and the YPG’s female counterpart, the YPJ. Fighters hauled down the black flag of Islamic State, the last still flying over the city, from the National Hospital near the stadium.
Locals shared horrifying stories with Reuters after the fighting had finished.
Fatima Hussein, a 58-year-old woman, sitting on a pavement smoking a cigarette said she had emerged from her house after being trapped for months by the fighting. Islamic State had killed her son for helping civilians leave the city, she said.

Fighters managed to push the last remaining bastions of ISIS fighters out of a hospital and a stadium in the city. The stadium and hospital had become the last major positions held by Islamic State after the departure of some of the group’s fighters on Sunday, leaving only foreign jihadists to mount a last stand.
The final SDF assault began on Sunday after a group of Syrian jihadists surrendered after striking a deal with tribal elders, leaving only a group of 300 fighters to defend the last positions.
Many of the ISIS fighters who fought until they were killed or captured were foreigners with no local connection, Reuters said. The stadium and hospital became the last major positions held by Islamic State after the departure of some of its fighters on Sunday, leaving only foreign jihadists to mount a last stand.
ISIS had used its de-facto capital as a center for planning and operations for its warfare in the Middle East and its string of attacks overseas. It also imprisoned Western hostages there before killing them in slickly produced films distributed online.
The SDF’s Sunday advance also brought control over a central city roundabout, where Islamic State once displayed the severed heads of its enemies, and which became one of its last lines of defense as the battle progressed.
The offensive has pushed Islamic State from most of northern Syria, while a rival offensive by the Syrian army, backed by Russia, Iran and Shiite militias, has driven the jihadists from the central desert.
On Tuesday, a military media unit run by Lebanon’s Hezbollah group said the Syrian army on whose side Hezbollah fights had pushed into the last Islamic State districts in Deir al-Zor.
The only populated areas still controlled by the jihadist group in Syria are the towns and villages downstream of Deir al-Zor along the Euphrates valley. They are areas that for the past three years Islamic State ran from Raqqa

END

armed conflict is avoided and we do not have an oil conflict as the Iraqi Kurds  are now out of Kirkuk and have returned to the 2003 border

(courtesy zerohedge)

Iraqi Kurd Army Agrees To Return To 2003 Border, Oil Slides

In a dramatic de-escalation of recent hostilities in Iraqi Kurdistan, where in a blitz campaign the Iraqi army was able to recapture Kirkuk , effectively regaining control of the oil-rich region, the Kurdish Peshmerga forces, i.e. the army of the autonomous region of Iraqi Kurdistan told Sky News Arabia that it has agreed to return to the 2003 Iraq border, which if confirmed would be a major concession to Iraq which has been pushing for just this conclusion for the past month.

FOR THE COMPLETE ARTICLE SEE:

http://www.zerohedge.com/news/2017-10-17/iraqi-kurd-army-agrees-return-2003-border-oil-slides?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

6 .GLOBAL ISSUES

USA continues with its protectionist policies as both Canada and Mexico reject the latest USA NAFTA proposals

(courtesy zerohedge)

Mexico, Canada Said To “Firmly Reject” US NAFTA Proposals

It appears that Trump’s attempt to ram through a sweeping NAFTA renegotiation is about to hit its first major roadblock: according to CNBC, top trade negotiators from Canada and Mexico will meet Tuesday with the U.S. Trade Representative, Robert Lighthizer, and firmly reject the U.S. proposals floated in the current round of NAFTA negotiations citing two people briefed on the countries’ positioning.
Still, Canada and Mexico will not walk away from the negotiating table altogether, despite an outright rejection of the U.S. protectionist demands will leave the ball in the U.S.’ court.

Some more details from CNBC:

Talks among staff negotiators from the three countries concluded Monday. A meeting among Canada’s Foreign Minister Chrysita Freeland, Mexico’s Economy Minister Ildefonso Guajardo and Lighthizer will take place Tuesday, followed by a joint statement at 3 p.m. ET.

U.S. lawmakers and business trade groups have aligned themselves with Canada and Mexico in wanting to preserve the deal. It remains to be seen how President Donald Trump, who has repeatedly slammed the 23-year-old trade agreement, will react to the position.

Following the news, both the loonie and the peso slid to lows, as the question of how Trump reacts to this latest snub becomes a key concern for North American trade.

END

THIS IS SUCCESS…NAFTA DISCUSSIONS END IN A DELAY TO 2018..

(COURTESY ZEROHEDGE)

Peso, Loonie Spike After NAFTA Discussions End With “Success” Delay Until 2018

NAFTA negotiators said they “successfully completed” Round 4 of their discussions… adding that talks will be extended past the end-2107 deadline (odd definition of success?). Nevertheless, this seems to have appeased the FX markets as both the peso and loonia are spiking..

*NAFTA NEGOTIATORS SAY THEY SUCCESSFULLY COMPLETED ROUND 4
*NAFTA MINISTERS SAY MEXICO TO HOST ROUND 5 NOVEMBER 17-21
*NAFTA MINISTERS EXTEND PERIOD BETWEEN ROUND 4 AND ROUND 5
*NAFTA MINISTERS SAY NEW PROPOSALS HAVE CREATED CHALLENGES, GAPS
*FREELAND: NAFTA

NAFTA MINISTERS SAY NEW PROPOSALS HAVE CREATED CHALLENGES, GAPS
*FREELAND: NAFTA HAS BEEN GOOD FOR MILLIONS IN ALL THREE NATIONS
*NAFTA  MINISTER STATE MORE ROUNDS TO BE SCHEDULED THROUGH Q1 2018

THE SOLD THEN SOLD OFF…

END

7.OIL ISSUES 8. EMERGING MARKET Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings TUESDAY morning 7:00 am

Euro/USA   1.1750 DOWN.0043/ REACTING TO SPAIN VS CATALONIA/REACTING TO  +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES  GREEN /  

USA/JAPAN YEN 1124.4 UP 0.254(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/   

GBP/USA 1.3181 DOWN .0071 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2538 UP .0013(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro FELL by 43 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1750; / Last night the Shanghai composite CLOSED DOWN 6.43 POINTS OR .19%      / Hang Sang  CLOSED UP 4.69OR .02%   /AUSTRALIA  CLOSED UP 0.89% / EUROPEAN BOURSES OPENED GREEN

The NIKKEI: this TUESDAY morning CLOSED UP 80,56POINTS OR .36% 

Trading from Europe and Asia:
1. Europe stocks  OPENED GREEN \

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 4.69 POINTS OR .02%  / SHANGHAI CLOSED DOWN 6.43 POINTS OR .19%    /Australia BOURSE CLOSED UP 0.89% /Nikkei (Japan)CLOSED UP 80.56POINTS OR .38%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1284.75

silver:$17.05

Early TUESDAY morning USA 10 year bond yield:  2.325% !!! UP 4 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.841 UP 3 IN BASIS POINTS  from MONDAY night. (POLICY FED ERROR)

USA dollar index early TUESDAY morning: 93.60 UP 29 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  TUESDAY MORNING

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And now your closing TUESDAY NUMBERS  \4 PM

Portuguese 10 year bond yield: 2.321% DOWN 1 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.07%  up 1/2  in   basis point yield from MONDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.547% DOWN 4 IN basis point yield from MONDAY 

ITALIAN 10 YR BOND YIELD: 2.000 down 3 POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 46points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.365% down 1 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY 

Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM

Euro/USA 1.1767 DOWN 26 (Euro DOWN 026Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.21 UP 0.32(Yen DOWN 32  basis points/ 

Great Britain/USA 1.3184 DOWN  0.0070( POUND DOWN 70 BASIS POINTS)

USA/Canada 1.2527 UP.0003 Canadian dollar DOWN 3 basis points AS OIL ROSE TO $51.96

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This afternoon, the Euro was DOWN 26 to trade at 1.1768

The Yen FELL to 112.21 for a LOSS of 32  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  

The POUND FELL BY 70 basis points, trading at 1.3184/ 

The Canadian dollar FELL by 3 basis points to 1.2527,  WITH WTI OIL RISING TO :  $51.96

The USA/Yuan closed AT 6.6236  the 10 yr Japanese bond yield closed at +.074% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2  IN basis points from MONDAY at 2.303% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.806 DOWN 1 in basis points on the day /

Your closing USA dollar index, 93.51  UP 20 CENT(S)  ON THE DAY/500 PM/BREAKS RESISTANCE OF 92.00 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY: 1:00 PM EST

London:  CLOSED DOWN  10.80 POINTS OR 0.14%
German Dax :CLOSED DOWN 8.64 POINTS OR .07%
Paris Cac  CLOSED DOWN 1.51 POINTS OR 0.03% 
Spain IBEX CLOSED UP 35.40POINTS OR 0.35%

Italian MIB: CLOSED DOWN 90.53POINTS OR 0.40% 

The Dow closed UP  40.48 POINTS OR .18%

NASDAQ WAS closed DOWN 0.35 PTS OR .01%  4.00 PM EST

WTI Oil price;   51.96   1:00 pm; 

Brent Oil: 58.13  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.33 UP 7/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 7 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +.365%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$51.96

BRENT: $58.13

USA 10 YR BOND YIELD: 2.303%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.806% 

EURO/USA DOLLAR CROSS:  1.1768 DOWN .0026

USA/JAPANESE YEN:112.21   UP  0.320

USA DOLLAR INDEX: 93.15 UP 6 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3184 : DOWN 70 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2527 DOWN 3 BASIS pts 

German 10 yr bond yield at 5 pm: +0.365%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY Stocks

END

Well that about does it for tonight

I HOPE TO DO A COMMENTARY FOR WEDNESDAY NIGHT BUT NOT PROMISING

HARVEY


OCT 16/2017/GOLD AND SILVER FALL ON NEWS THAT TRUMP IS CONSIDERING JOHN TAYLOR AS FED GOVERNOR/KIRKUK FALLS TO IRAQI GOVERNMENT/SPECIAL FORCES LAND IN SOUTH KOREA/BREXIT TALKS GOING NOWHERE

Mon, 10/16/2017 - 18:35

GOLD: $1302.35 DOWN $1.64

Silver: $1733 DOWN 6 cents

Closing access prices:

Gold $1295.50

silver: $17.24

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: $1309,55 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1301,50

PREMIUM FIRST FIX:  $8.05 (premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $1311.55

NY GOLD PRICE AT THE EXACT SAME TIME: $1303.50

Premium of Shanghai 2nd fix/NY:$8.60(PREMIUMS GETTING LARGER)  

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LONDON FIRST GOLD FIX:  5:30 am est  $1305.10

NY PRICING AT THE EXACT SAME TIME: $1304.10

LONDON SECOND GOLD FIX  10 AM: $1299.60

NY PRICING AT THE EXACT SAME TIME. 1299.60

For comex gold: OCTOBER/

NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 19NOTICE(S) FOR  1900  OZ.

TOTAL NOTICES SO FAR: 2353 FOR 235,300 OZ  (7.318TONNES)

For silver: OCTOBER  9 NOTICES FILED TODAY FOR 45,000  OZ/ Total number of notices filed so far this month: 562 for 2,810,000 oz

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Bitcoin:  $5659 bid /$56 79 offer up $171.00

end

Let us have a look at the data for today

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In silver, the total open interest ROSE BY 2283 contracts from  188,711  UP TO 190,994  WITH RESPECT TO FRIDAY’S TRADING (UP  22 CENTS).  THE CROOKS ARE HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS.  IT IS OBVIOUS THAT WE MUST HAVE HAD ZERO BANKER SHORT COVERING.

RESULT: A GOOD SIZED RISE IN OI COMEX  WITH THE  22 CENT PRICE RISE.  OUR BANKERS COULD NOT COVER ANY OF THEIR HUGE SHORTFAL . 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.955BILLION TO BE EXACT or 136% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 9 NOTICE(S) FOR 45,000  OZ OF SILVER.

In gold, the open interest ROSE BY A HUGE 6,895 CONTRACTS WITH THE GOOD SIZE  RISE IN PRICE OF GOLD ($10.15 ) .  The new OI for the gold complex rests at 528,142. OUR BANKER FRIENDS COULD NOT COVER ANY OF THEIR GOLD SHORTS AS THEY RETREATED TO HIGHER GROUND.

 

Result: A GOOD SIZED INCREASE IN OI WITH THE RISE IN PRICE IN GOLD ($10.15). WE HAD ZERO BANKER GOLD SHORT COVERING BY THE BANKERS. 

we had: 19notice(s) filed upon for 1900 oz of gold.

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

GLD:   

Tonight , ANOTHER BIG CHANGES  in gold inventory at the GLD/A HUGE WITHDDRAWAL OF 5.32 TONNES

Inventory rests tonight: 853.13 tonnes.

SLV

Today:  NO changes in inventory:

INVENTORY RESTS AT 325.765 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 2283 contracts from 188,711  UP TO 190,994(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) .  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. THE DATA ALSO SUGGESTS THAT THE BANKERS COULD NOT COVER ANY THEIR GOLD SHORTS COVERING . HOWEVER IT IS CLEAR THAT  SILVER  IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER.  THE BANKERS ON FRIDAY RETREATED TO HIGHER GROUND WHERE THEY WILL TRY AGAIN.

RESULT:  A GOOD SIZED INCREASE IN SILVER OI  AT THE COMEX WITH THE  RISE IN PRICE OF 22 CENTS WITH RESPECT TO FRIDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS AND RETREATED TO HIGHER GROUND 

(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

)Late SUNDAY night/MONDAY morning: Shanghai closed DOWN12.05 points or .36% /Hang Sang CLOSED UP 216.37 pts or .76% / The Nikkei closed UP 100.38 POINTS OR .47/Australia’s all ordinaires CLOSED UP 0.55%/Chinese yuan (ONSHORE) closed DOWN  at 6.5900/Oil UP to 52.26 dollars per barrel for WTI and 58.32 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.5900. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5780AND //ONSHORE YUANS  WEAKER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT PARTICULARLY  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

b) REPORT ON JAPAN c) REPORT ON CHINA 4. EUROPEAN AFFAIRS   5. RUSSIAN AND MIDDLE EASTERN AFFAIRS 6 .GLOBAL ISSUES

 

7. OIL ISSUES 8. EMERGING MARKET 9.   PHYSICAL MARKETS 10. USA Stories

i

Let us head over to the comex:

The total gold comex open interest ROSE BY A GOOD SIZED 6,895CONTRACTS UP to an OI level of 528,142WITH THE RISE IN THE PRICE OF GOLD ($10.15 RISE IN FRIDAY’S TRADING).  IT SEEMS THAT OUR BANKER FRIENDS FAILED AGAIN IN THEIR ATTEMPT  TO COVER SOME OF THEIR HUGE GOLD SHORTFALL . SO THE BANKERS RETREATED TO HIGHER GROUND HOPING TO TRY AGAIN COVERING SOME OF THEIR SHORTFALL AT A LATER DATE. OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH WE SHOULD EXPECT  GOLD TO BE STRONG THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  GOODSIZED open interest INCREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($10.15). BANKERS RETREATED TO HIGHER GROUND AND COULD NOT  COVER ANY PORTION OF THE GOLD SHORTFALL

 

IN SEPTEMBER,CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

NOW THAT WE ARE CLOSE TO THE 19TH CHINESE CONGRESS, THE BANKERS ARE TAKING NO CHANCES AS THEY START TO COVER THEIR GOLD/SILVER SHORTFALL.

We have now entered the active contract month of Oct and here we saw a GAIN of 36 contracts UP TO 236 contracts.  We had 0 notices filed yesterday so we GAINED 36 contracts or an additional 3600 oz will stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given. The low number of notices early in the delivery cycle is evidence of a lack of physical gold.

The November contract saw A loss OF 64 contracts down to 1233.

The very big active December contract month saw it’s OI GAIN OF 6,004 contracts UP to 405,887

.

We had 19 notice(s) filed upon today for  1900 oz

 VOLUME FOR TODAY (PRELIMINARY) not available

CONFIRMED VOLUME FRIDAY: 302,070

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI ROSE BY  A STEADY 2283 CONTRACTS FROM 188,711 UP TO 190,994 WITH FRIDAY’S 22 CENT RISE IN PRICE. WE  HAD NO BANKER SHORT COVERING AS THE CROOKS TRIED AND FAILED IN THEIR ATTRMPT TO  LOOSEN ANY SILVER LONGS FROM THE SILVER TREE.  THE BANKERS HAD NO CHOICE BUT TO RETREAT TO HIGHER GROUND WHERE THEY WILL ATTEMPT AGAIN AT COVERING AT A FUTURE DATE. We have now entered the non active contract month of October and here the OI LOST 24 contacts DOWN TO 401.  We had 37 notices filed on yesterday so we gained 13  contracts or AN ADDITIONAL 65,000 oz will  stand for delivery and 0 EFP’s were issued  IN WHICH DEPARTING LONGS RECEIVED A FIAT BONUS PLUS A FUTURE DELIVERABLE PRODUCT AND NO DOUBT THAT WOULD BE A LONDON BASED FORWARD.  November saw a GAIN of 24 contract(s) and thus RISIING TO  331. After November, the NEXT big active contract month is December and here the OI GAINED 2092 contracts UP to 144,217 contracts.

We had 9 notice(s) filed for  45,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.16/2017.

Gold Ounces Withdrawals from Dealers Inventory in oz   n/a Withdrawals from Customer Inventory in oz   n/a oz Deposits to the Dealer Inventory in oz    n/a oz Deposits to the Customer Inventory, in oz   n/a No of oz served (contracts) today   19notice(s) 1900 OZ No of oz to be served (notices) 237contracts (23,700 oz) Total monthly oz gold served (contracts) so far this month 2353 notices 235,300 oz 7.3188 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz Today we HAD  xx kilobar transaction(s)/   WE HAD xx DEALER DEPOSIT: total dealer deposits: xx oz We had xxx dealer withdrawals: total dealer withdrawals:  xx oz we had xxx customer deposit(s): total customer deposits; xx oz We had n/a customer withdrawal(s) total customer withdrawals; nil  oz  we had xxx adjustment(s) For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 19  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 12 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2353) x 100 oz or 235,300 oz, to which we add the difference between the open interest for the front month of OCT. (256 contracts) minus the number of notices served upon today (19) x 100 oz per contract equals 259,000  oz, the number of ounces standing in this active month of OCT.   Thus the INITIAL standings for gold for the OCTOBER contract month: No of notices served  (2353) x 100 oz  or ounces + {(256)OI for the front month  minus the number of  notices served upon today (19) x 100 oz which equals 259,000 oz standing in this  active delivery month of OCTOBER  (8.0568tonnes). WE GAINED 36 CONTRACTS OR AN ADDITIONAL 3600 OZ WILL   STAND  IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER AND THIS CONTINUES ON IN OCTOBER.   THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE AND IT ALSO EXPLAINS THE LACK OF DELIVERY NOTICES IN THE EARLY PART OF THIS DELIVERY ACTIVE MONTH. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear) Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes    I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE OCTOBER DELIVERY MONTH OCTOBER INITIAL standings  Oct 16/ 2017 Silver Ounces Withdrawals from Dealers Inventory  n/a Withdrawals from Customer Inventory  n/a oz Deposits to the Dealer Inventory  n/a oz Deposits to the Customer Inventory   n/a No of oz served today (contracts) 9CONTRACT(S) (45,000 OZ) No of oz to be served (notices) 392contracts (1,960,000 oz) Total monthly oz silver served (contracts) 562 contracts

(2,810,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month    xx oz today, we had  xxx deposit(s) into the dealer account: total dealer deposit: xxx   oz we had xxx dealer withdrawals: total dealer withdrawals: xxx oz we had  xx customer withdrawal(s): TOTAL CUSTOMER WITHDRAWALS: xx  oz We had xx Customer deposit(s): ***deposits into JPMorgan have stopped  again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: 600,627.490  oz    we had 0 adjustment(s) The total number of notices filed today for the OCTOBER. contract month is represented by 9 contracts( for 45,000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 562 x 5,000 oz  = 2,810,0000 oz to which we add the difference between the open interest for the front month of OCT. (401) and the number of notices served upon today (9x 5000 oz) equals the number of ounces standing.  

 

.   Thus the INITIAL standings for silver for the OCTOBER contract month:  562 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(401) -number of notices served upon today (9)x 5000 oz  equals  4,770,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE   WE GAINED 13  CONTRACTS OR  AN ADDITIONAL 65,000 OZ WILL  STAND FOR DELIVERY. AMOUNT STANDING IS CORRECTED FROM A FRIDAY ERROR.  ESTIMATED VOLUME FOR TODAY:   NOT AVAILABLE CONFIRMED VOLUME FOR YESTERDAY:  82,443 CONTRACTS     Total dealer silver:  39.345 million (close to record low inventory   Total number of dealer and customer silver:   220.100 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 3.1 percent to NAV usa funds and Negative 3.3% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.4% Percentage of fund in silver:37.6% cash .+0.0%( Oct16/2017)  2. Sprott silver fund (PSLV): STOCK   FALLS TO -0.62% (Oct 16/2017)  3. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.63% to NAV  (Oct 16/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.62%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.63%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

Oct 16/A HUGE WITHDRAWAL OF  5.32 TONNES FROM THE GLD/INVENTORY RESTS AT 853.13 TONNES

0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES

Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES

oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT  854.30 TONNES

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes

Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES

Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/

Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

Sept 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

Inventory rests at 836.87 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Oct 16/2017/ Inventory rests tonight at 853.13 tonnes *IN LAST 251 TRADING DAYS: 87.82 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 186 TRADING DAYS: A NET  69,46 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY. *FROM FEB 1/2017: A NET  38,35 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 16/  NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 325.765 MILLION OZ

oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ

OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z

Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615  MILLION OZ

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/

Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/

Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Oct 16/2017:

Inventory 325.765  million oz end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.45%
  • 12 Month MM GOFO + 1.65%
  • 30 day trend

end

 

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Silver Set To Soar

 

by GoldCore
Oct 16, 2017 10:59 AM

Gold prices have far outpaced gains in silver so far this year, but silver will emerge as the winner for the second year in a row.
With a per-ounce price of $17.41 for silver futures as of Friday, analysts say the white metal is poised for a big climb, particularly as the gold-to-silver ratio stands well above historical averages. “Silver is definitely undervalued compared to gold and as a stand-alone investment. I consider it likely to be the most undervalued asset in the general investment markets,” says Paul Mladjenovic, author of Precious Metals Investing For Dummies.

The best barometer of its potential gains comes from its value relative to gold. The long-term average gold-to-silver ratio runs around 15 to 1, while the modern average going back a century is roughly 40 to 1, says Mark O’Byrne, research director at precious-metals storage provider GoldCore. The ratio, which reflects how many ounces of silver it takes to equal the value of one ounce of gold, stood at a whopping 75 to 1 on Friday.
That steep ratio suggests “it’s a good time to buy silver,” says O’Byrne. He explains that the “huge amount of silver used up in industrial applications” suggests the ratio should fall over the long term: “It’s likely that the gold/silver ratio will gradually return to below the 100-year average of 40 to 1.” At the current gold price, that would put silver at nearly $32 an ounce, O’Byrne says.
So far this year, however, prices of gold futures have risen nearly 12%, while silver has gained roughly 6%. Last year, silver’s climb of about 16% outpaced gold’s rise of almost 9%.
“Silver isn’t keeping pace with gold because the market perception is that gold is a safer play, while the market perceives silver’s role as exposed to economic weakness. But as inflation heats up, more of the public will realize silver’s second role as a store of value and inflation hedge,” says Mladjenovic.
Gold is viewed as more of a “pure monetary play, so as more difficulties emerge with paper assets,” such as currencies and debt, “gold will hold up well,” he adds. At the same time, silver, which is a smaller market, has “greater ties to industry,” notably in tech products like smartphones and solar power, and “will do well as markets see greater demand in those sectors.”
The main reason gold has outperformed silver this year, however, is the U.S. dollar, says Brien Lundin, editor of Gold Newsletter, noting, “Gold and the greenback have been trading in a very close inverse correlation for about the last two years, and the relationship has only grown closer this year.”

THE DOLLAR, AS REPRESENTED by the Intercontinental Exchange’s U.S. Dollar Index (ticker: DXY), has fallen 8.8% this year because of “underlying skepticism” about the Federal Reserve’s ability to keep raising rates, says Lundin. “Even the Fed admits a new-normal rate environment would mean a federal-funds rate of around 2.5%. Balance that against its goal of 2% inflation, and you see they [the Fed] want an ultralow real-rate environment that would be bullish for gold and bearish for the dollar,” he adds. Traders in the fed-futures market still overwhelmingly expect a quarter-percentage-point interest-rate hike at the central bank’s December meeting.
Peter Schiff, CEO of Euro Pacific Capital and SchiffGold, says most investors aren’t considering the “strong likelihood” that the Fed will have to cut rates and revert to quantitative easing before it can lift rates back to historically normal levels. A stock market correction or economic decline will force the Fed’s hand. “When rates come down, the dollar will fall and metals will rise,” he says.
If or when that happens, silver will post the bigger gain. GoldCore’s O’Byrne expects gold to finish the year above $1,300 an ounce, for a gain of roughly 13% in 2017. Silver, meanwhile, is set to test $20 an ounce by the end of this year, and close above $19—representing a “healthy” 20% gain for the year.

END

Gold Drops Below $1300 As Taylor Reportedly Trumps Warsh For Fed Chair

 

 

Gold and USDJPY have had a busy last 60 minutes as they swung wildly on North Korea headlines but Gold tumbled back below $1300 when Bloomberg reports that Stanford’s John Taylor is said to impress President Trump, as Warsh’s star fades.
*WARSH AND TAYLOR BOTH REMAIN ON SHORTLIST, PEOPLE FAMILIAR SAY
*TRUMP INTERVIEWED TAYLOR LAST WEEK WITH CHIEF OF STAFF KELLY
*KEVIN WARSH IS SAID TO SEE STAR FADE IN WHITE HOUSE FED SEARCH
*STANFORD’S TAYLOR IS SAID TO IMPRESS TRUMP FOR FED CHAIR
Which jumped Taylor up to 3rd place with the bookies.

The dollar strength is likely related to the fact that according to John Taylor’s “Rule”, the current Fed Funds rate based on inflation and unemployment – should be around 5.74%!!

 

end

 

THIS IS SUCH AN IMPORANT COMMENTARY THAT I PRESENTED TO YOU ON FRIDAY SO I AM PROVIDING IT AGAIN IN CASE YOU MISSED IT

 

(COURTESY ZEROHEDGE)

Oil for gold – the real story

By Alasdair Macleod
Alasdair Macleod October 12, 2017

Following an article in the Nikkei Asia Review, which reported China will shortly introduce an oil futures contract priced in yuan, there has been some confusion about what it means. The article pointed out that in combination with existing gold futures priced in yuan, an oil exporter to China contracting to accept yuan could use these two futures contracts to take delivery of physical gold in payment for oil.
I was quoted in that article as follows:
“It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,”i
The mechanism of introducing an oil for yuan contract could hardly be clearer, yet the rumour mill went overtime into Chinese whispers. Some analysts appeared to think China was authorising a new oil for gold contract of some sort, or that China would be supplying the gold, both of which are untrue.
The purpose of this article is to put the proposed oil for yuan contract, which has been planned for some time, into its proper context. It requires knowledge of the history of how China’s policy of internationalising the yuan has been developed, and will be brought up to date with an analysis of how the partnership of China and Russia is taking over as the dominant power over the Eurasian land-mass, a story that is now extending to the Middle East.
This fulfils the prophecy of the founder of geopolitics, Sir Halford Mackinder, made over a century ago. He described the conjoined continents of Eurasia and Africa as the World Island, and that he who controls the Heartland, which lies between the Volga and the Yangtze, and the Himalayas and the Artic, controls the World Island.ii The Chinese-Russian partnership is well on its way to controlling the World Island, including sub-Saharan Africa. We know that successive Soviet and Russian leaders have been guided by Mackinder’s concept.
Events of recent months have accelerated the pace of the Heartland’s growing dominance over the World Island, and become pivotal to the balance of global power shifting in favour of the Heartland. Even political commentators in the mainstream media are hardly aware this is happening, let alone future implications. Financial commentators and economists are even less informed, despite the monetary consequences being of overriding importance for the impact on the wealth of nations and their peoples.
This is the backdrop to China’s internationalisation of her currency. To enhance our understanding of the implications of the introduction of yuan futures contracts, we must begin with the relevant monetary developments.
The Hong Kong – London axis
For a considerable time, China has followed a policy of replacing the dollar as its settlement currency for the purposes of trade. After all, China dominates international trade, and on a purchasing power parity basis, her economy rivals that of the US, and if it hasn’t done so already will soon overtake it. From China’s point of view, being forced by her trading partners to accept and pay in dollars is an irritating anachronism, a hangover from American imperialism.
Furthermore, China’s strategic military analysis has convinced her that America uses the dollar as an economic weapon, wielding it to sustain global hegemony and to support her own economy at the expense of others. Therefore, there are clear strategic reasons for China to do away with the dollar for as much of her international and trans-Asian trade as possible.iii
For America’s part, she has strongly resisted moves to have the dollar replaced as the world’s dominant trade currency. America has a tough grip on all commodities, because international physical and derivative markets are priced almost exclusively in dollars. Furthermore, nearly all currency hedging has the dollar on one side of the transaction. This allows the Americans to exercise enormous control over international markets, and even to artificially inflate commodity supplies through the creation of futures contracts, keeping prices lower than they would otherwise be. By these means, America has suppressed the relationship between monetary and price inflation, increasing the apparent stability of the dollar. This is central to the illusion of American monetary hegemony. Therefore, China’s policy of doing away with the dollar is, from the American standpoint, a fundamental challenge to her post-war global domination, and amounts to a declaration of financial war.
China’s problem in displacing the dollar is the lack of an international market for the yuan. Furthermore, with strict exchange controls limiting the ability of Chinese citizens and businesses to trade on the foreign exchanges, it was always going to be an uphill struggle to provide the necessary liquidity in the yuan to make it acceptable to foreign counterparties. China had to come up with a plan, and it made sense to use the existing financial links between Hong Kong and London to develop international markets for her own currency.
We can date public awareness of China’s strategy to June 2012, when Hong Kong Exchanges and Clearing made a successful offer for the London Metal Exchange. While noting that Hong Kong is an autonomous region, and that, officially at least, China does not meddle in Hong Kong’s affairs, China has a direct interest in important acquisitions of this sort. China is the world’s largest importer of base metals, and London is the global metal pricing centre for warehouse stocks and physical delivery.
The LME earlier this year decided to offer a series of precious metal futures contracts, priced in dollars, centred on gold. The gold contract has been a great success, something guaranteed when you bear in mind that the Industrial and Commercial Bank of China, owned by the Chinese state, is a lead sponsor of these precious metals contracts. By this action, China is parking its tanks on the London Bullion Market Association’s lawn. At some stage in the future, the LME will almost certainly offer deliverable futures contracts priced in yuan, not just for precious metals but for base metals as well.
In October 2013, fifteen months after the acquisition of the LME, Boris Johnson as Mayor of London led a trade mission to Beijing. British trade missions are a major feature of Foreign Office duties, the way Britain develops bilateral trade relationships. These trade missions, being planned through diplomatic channels, are prearranged and coordinated well in advance. Therefore, it was unusual to find that George Osborne, the Chancellor of the Exchequer, at very short notice got up a second trade mission, and met Johnson in China.
The reasons for this turn of events were never properly explained; however, we can work them out. In May 2012, David Cameron had met the Dalai Lama in London, which caused a diplomatic furore with China. Despite this earlier public spat and the point having been made, Osbourne was sent to China. While it is likely his trade mission was a cover for UK Government efforts to smooth things over, subsequent events suggest financial cooperation between Hong Kong and London was discussed, and Chinese plans to use Hong Kong and London to enhance the yuan’s international liquidity were agreed in principal. Following Osborne’s visit, David Cameron himself went to Beijing for discussions with President Xi the following month, confirming the importance to Britain of bilateral financial relations with China.
The following year, the UK took the unusual step of issuing a 3bn yuan bond, both as an indication of intent, and to help kick-start the offshore yuan market in London. This was followed by Britain being the first non-Asian nation to join the Asia Infrastructure Investment Bank as a founder member in March 2015 (announced by none other than George Osborne). The AIIB, which was set up by China and headquartered in Beijing, is the first supra-national organisation independent of the Bretton Woods institutions, which are all controlled by the US. These institutions, led by the World Bank and the IMF, as well as several regional development banks, were how the US, using the dollar, dominates the world’s finances. The establishment of the AIIB was an unwelcome development for America, and the US expressed acute disappointment that Britain had decided to join.
And lastly, after six or seven years of lobbying the IMF, the yuan was finally included in the SDR basket from 1 October last year, further promoting it as a trade settlement currency to be included in foreign countries’ reserves.
There can be no clearer evidence of China’s intention to replace the dollar with her own currency, than the sequence of events outlined above. She identified that Britain’s interests were aligned with her own, enabling her to cut out America from future developments. She has obtained arms-length control over London’s physical metal exchange. She had set up a non-dollar rival to the World Bank and IMF, ensuring future Asian development financing is under her control. And, with more than 80 member countries eventually joining the AIIB, she has successfully picked off America’s allies. The inclusion of the yuan in the SDR basket can be taken as an acknowledgement of China’s importance on the world stage.
The eventual intention is to price in yuan everything imported into and exported from China. Much trans-Asian business is already settled in yuan, and even remote Angola settles her oil sales to China in yuan. It will in time involve developing yuan futures contracts for all the tradeable commodities the state deems significant. The most important of these is a standard oil contract. But before we cover the genesis of the oil contract, we should remind ourselves about China’s gold strategy.
Cornering the physical gold market
It is only relatively recently that Western capital markets have become aware that Chinese demand for physical gold absorbs large quantities of annual mine production, and that the country is now the largest mining nation by far, extracting it at a rate of over 450 tonnes per annum. Knowledge of China’s overall demand is restricted to deliveries out of the Shanghai Gold Exchange’s vault into public hands, running at about 2,000 tonnes per annum, which with India’s public demand accounts for nearly all global mine extraction of about 3,000 tonnes.
The SGE was established in 2002, yet China began to embrace capitalism in 1980, when the first Special Economic Zone was established. China at that time showed reserves of 395 tonnes, a figure that was unchanged until 2001, when it was increased to 500 tonnes, and the following year to 600 tonnes, which it remained until 2009. Over this time, the Chinese economy enjoyed enormous capital inflows from 1980 until the early 1990s, when Western companies set up manufacturing facilities. These were followed by growing export surpluses thereafter. The Peoples Bank of China (PBOC), the state-owned central bank, was managing the currency, neutralising these flows by buying mostly dollars.
It also made sense for the Chinese to diversify the foreign exchange portfolio gained through intervention. The need to increase gold holdings would have been obvious to communist-trained economists at the heart of government. They had had the Marxist belief drummed into them that capitalism would eventually destroy itself, and the capitalists’ paper currencies with it. Rather like Germany in the 1950s and the Arabs in the 1970s, they felt it was prudent to put a significant part of their foreign exchange into gold.
Consequently, new regulations appointing the PBOC to “guarantee the state’s requirements for gold and silver” came into force on June 15, 1983.iv Private ownership of gold and silver remained banned.
It should be noted that state-owned gold declared as official reserves bear little relation to the total accumulated. Anecdotal evidence informs us that bullion is dispersed into accounts in the possession of the Peoples Liberation Army and the Communist Party. Therefore, we cannot know China’s true holdings. All one can do is make a reasonable assessment of how much gold the PBOC is likely to have accumulated since 1983 and before 2002, when private citizens were allowed for the first time to buy physical gold and silver. During this period gold had suffered the greatest bear market in the history of fiat currencies. The scale of redistribution from weak hands into stronger long-term hands was enormous, bearing in mind that Indians, the other great national buyers today, only began to buy gold in significant quantities in the early-nineties, after the repeal of the 1968 Gold Control Act in 1990. It is also known that in 1990-2000, many Middle Eastern portfolios sold gold in favour of equity investment, as did many other private investors with Swiss private bank accounts. Furthermore, central banks were leasing gold in large quantities, artificially inflating physical supply.
Taking all these factors into account, plus mine production totalling 42,460 tonnes over the period, it was easily possible for the Chinese state to secretly amass over 20,000 tonnes by 2002, through a process of gradual accumulation. As to whether they did so, we must look at the evidence from China’s gold strategy. The following bullet list is a summary:

The introduction of the 1983 regulations appointing the PBOC amounts to a declaration of intent. The PBOC as a central bank has access to capital markets, and commands the state-owned commercial banks. Accumulating gold is a natural extension of the PBOC’s currency management.
There were both the opportunity and the supply during the greatest bear market gold has ever seen. Between 1983-2002, world mine output added an estimated 42,460 tonnes to above-ground stocks at a time when the West was disgorging both central bank and privately owned physical gold. All that gold went somewhere, so China must have been a major buyer.
In 2002, the Shanghai Gold Exchange (SGE) was set up by the PBOC to permit the public to buy gold. This signalled that the state had acquired sufficient gold and silver bullion for its own purposes by then.
The state actively advertised gold ownership through the media, promoting a policy to its citizens of holding gold as sound money. This would help her corner the physical market.
The state deliberately fostered gold mining, to the point where Chinese mines are now the largest producers in the world by far. Mine output was a record 463.7 tonnes in 2016.
The state monopolises China’s refining capacity, taking in doré from other countries as well, retaining control over ingot production.
China now hosts the world’s most important bullion exchange in Asia, has set itself up as a rival to the LBMA in London through the London Metal Exchange, and is developing gold futures markets.
The LBMA 400 ounce 99.50 standard bar has been replaced by the new Chinese 99.99 one kilo bar as the Asian standard. The large Swiss refiners have been converting LBMA bars into the new standard for customers, particularly those resident in the Middle East.
Almost all gold acquired by China and her citizens remains in China. Chinese refined bars are almost never seen in Switzerland, the West’s principal refining centre.v
Gold futures contracts in yuan are now available to international dealers in Hong Kong and Dubai using the SGE gold price as benchmark.
Private ownership of gold in China is now estimated to total over 15,000 tonnes, in addition to anything the state has acquired since 1983. China’s gold policy, which may have commenced as a sensible diversification of reserves, now has strategic implications. China’s gold is now a vital defence against the hegemony of the dollar, and as Major-General Qiao Liang has advised the Peoples Liberation Army, there is a continuing risk that America will try to use its currency as a financial and economic weapon against China.vi
The Chinese state, having secured its physical gold dominance, has little need to acquire more gold in the market: that much was signalled by the establishment of the SGE in 2002. It may well have accumulated further gold since, but this is incidental. Russia is now accumulating gold under President Putin, who belatedly learned of the dangers the Western financial system poses Russia in the wake of American sanctions, and more particularly the financial devastation faced by Iran, when America forced the supposedly independent SWIFT inter-bank settlement system to ban Iranian transfers in all other currencies. Gold smuggled from Turkey via Dubai proved to be Iran’s saviour.
By having control of the physical market for gold, China can threaten to use it to destabilise the dollar, without destabilising the yuan. As such, it is potentially devastating, and used carelessly could trigger an economic collapse in Western capital markets, wreaking financial and economic havoc in America and other advanced nations. China will never be wholly independent from trade with these nations, and severe financial and economic damage to the advanced economies will rebound upon her to some extent. For this reason, she has so far held off using gold as an economic and financial weapon, while she continues to insulate herself from periodic crises in Western economies.
China, with Russia, clearly plans to create what amounts to an enormous internal market, covering most of Asia. It is doing this through trade, in contrast with the way America traditionally wields her influence, through the sticks and carrots of guns and butter. In every minor geopolitical skirmish with America, the Sino-Russian partnership has won. The patient approach of letting American influence diminish through her own errors has made the economic violence of driving up the gold price unnecessary. However, times are changing, and this phase is passing.
The oil connection
The success of the Sino-Russian partnership in outwitting the Americans has overtaken China’s own plans to develop liquidity for a wide range of derivative contracts priced in yuan on its own and other international exchanges. Nowhere has this been more obvious than in the delay of introducing an oil futures contract priced in yuan.
This was first mooted, so far as we are aware, in 2012, when it was intended to introduce a contract based on the high-sulphur grades China commonly used at that time. This contract was to be settled in either dollars or yuan at the oil supplier’s choice. However, the absence of an offshore market for yuan meant this proposal was premature.vii
In 2014, these plans resurfaced, with the Shanghai Futures Exchange chairman quoted as saying that the yuan had become more international and recognised in the market. He added that the proposed contract had support from both the government and financial regulators.viii
At about that time, Guo Jianwei, a PBOC monetary policy official, was quoted in the Shanghai Securities News as saying that the PBOC planned to start yuan-denominated gold and oil futures to help establish a global payment system for the Chinese currency.ix This statement gets to the nub of the reason for introducing oil and gold contracts together, and that is they will internationalise the yuan, probably more quickly than any other measure taken by the PBOC. To back up his quote, Mr Guo then described how the PBOC had agreed CNY2.5 trillion of currency swaps with 23 central banks, pointedly excluding the US.
The oil for yuan story rumbled on, with the Chinese delaying the introduction of internationally tradable oil futures. That is, until Damon Evans reported that not only were traders being trained, but that locally registered entities of JPMorgan and UBS are among the first to have gained regulatory approval to trade the contract.
Geopolitical developments relative to the oil contract
It is natural to assume that China and Russia are controlling, Svengali-like, all the geopolitical outcomes. China has retained an unerring focus on the grand prize of excluding the dollar from all her trade, and with it US monetary influence in Asia. But, being reliant on America to make strategic mistakes, China is not totally in control of events and their timing. For example, the collapse in July of the American campaign in Syria was sudden and unexpected, leaving Russia, in partnership with Syria, Iran, and Turkey to sort out the mess.
Even Mr Netanyahu, the Prime Minister of Israel, has beaten a path to Mr Putin’s door several times. When Turkey, still a NATO member, decided to side with Russia along with Iran, Israel recognised that US protection was no longer good enough to secure her future. When Saudi Arabia was under American influence, Israel had felt as safe as she could be in that turbulent region. But a combination of a Hezbollah/Syrian/Turkish/Iranian axis to Israel’s north, and Prince Mohammed bin Salman’s silent coup in Saudi Arabia has fundamentally altered the balance of power.
Prince Salman is now the heir-apparent to King Salman, having replaced Mohammed bin Nayef, America’s nominee, as heir to the throne. Only last week, King Salman himself visited Moscow as the guest of President Putin. No doubt, the other gulf states will follow the Saudi lead.
Instead of President Trump, Putin finds himself, very suddenly, the ring-master for most of the Middle East. And while we cannot rule out a counter-move from the Americans, it should be noted that the Arabs dislike the Americans and much of what they stand for. However, notwithstanding its national antipathy, Saudi Arabia went along with Kissinger’s plan in 1973 to use the dollar for oil payments, and to buy US Treasuries and to deposit surplus dollars in American banks. In return, America guaranteed it would protect Saudi Arabia from outside influences. Also, part of the deal was Saudi Arabia would not support Israel’s enemies.
Now that the Kissinger deal is unravelling, it is reasonable to assume the financial deal, the Middle East’s support of the petrodollar to the exclusion of all rival currencies, will also come to an end, more rapidly than thought possible only four months ago. But for this to be realised requires an alternative settlement currency to be available. And while Russia and China have already agreed joint investment projects involving both their currencies, Saudi Arabia is almost certainly not ready to accept the yuan as a full currency replacement for the dollar.
The rest of the world is watching closely. America’s allies officially remain onside with America, but in terms of foreign relations, interests guide relationships, not the other way around. We saw this when Britain joined the AIIB, demoting the special relationship with America. Central banks, holding massive quantities of the dollar, will be particularly jittery. Knowing this, will China dare make a move to undermine the dollar and trigger a run against it by providing the means for oil exporters to sell oil for yuan and then yuan for gold in international futures exchanges? If Shanghai fails to offer the facility, other markets, such as Hong Kong or Dubai, where there are already yuan gold contracts, could do so.
Realistically, China now has limited control over the timing of her planned moves, and this is particularly true about the prospective oil future priced in yuan. China imports over 8 million barrels of oil per day, for a total annual value of $150bn. She imports oil from a wide variety of sources, including Russia, Angola, Saudi Arabia, Iraq, Brazil, Iran and Venezuela. Some of these countries are on the US black-list (such as Russia, Iran and Venezuela) and others may prefer gold to dollars. If we assume that one-third of China’s oil imports are converted into gold, that amounts to 1,200 tonnes of gold at current prices to be sourced annually in a tight gold moarket.
The effect on the dollar could be catastrophic. Not only would the dollar sink as it loses its exorbitant privilege, but finding the extra physical gold would drive up the gold price. Inevitably, foreign holders of the dollar would probably join in by dumping the dollar and any fiat currencies aligned with it and join the rush for gold.
Conclusion
The ideal way for China to replace the dollar as the dominant currency for her cross-border trade is to encourage her oil suppliers to accept payment in her own currency, the yuan. It is clear from statements made in 2014 by Guo Jianwei, a PBOC monetary policy official, that China had already planned to wean her oil suppliers off the dollar by introducing both oil and gold futures denominated in yuan, allowing them to take at least part-payment in gold. Persuading them to do so without unduly disrupting global capital markets should have been a gradual process, perhaps spread out over the best part of another decade. Instead, geopolitical developments have accelerated the time-table following the election of President Trump, who is noticeably lacking in diplomatic patience. His latest renegation of the Iran nuclear deal is for Asian observers classic US perfidy.
China’s energy suppliers are not yet prepared to accept the full exposure to the yuan that oil sales contracted in yuan implies. Meanwhile, it is becoming apparent that the petrodollar has a limited life, the duration of which has been significantly shortened by America’s withdrawal from the Syrian conflict. The balance of interests is therefore undergoing a seismic change, with the dollar facing the real prospect of becoming redundant for the most significant aspect of its global use.
But if you dump your petrodollars, what do you buy? This is the question which China’s geopolitical and monetary policies must now address.
Perhaps the reason why China has been forced to bring forward plans to introduce the oil futures contract priced in yuan is indirectly due to America abandoning control over the Middle East. If so, the loss of American influence over the Eurasian continent will accelerate, and the status of the dollar will sink .

 

end

 

Jansen believes that the oil yuan futures contact to be gold backed will not happen as of yet

 

(courtesy zerohedge)

Koos Jansen: The gold-backed oil-yuan futures contract myth

Submitted by cpowell on Sun, 2017-10-15 14:06. Section: Daily Dispatches
10:06a ET Sunday, October 15, 2017
Dear Friend of GATA and Gold:

 

Gold researcher and Chinese gold market expert Koos Jansen today argues that the Nikkei Asian Review’s September 1 report asserting that China is planning an oil futures contract somehow “backed” by gold —
https://asia.nikkei.com/Markets/Commodities/China-sees-new-world-order-w…
— is full of holes.
Jansen writes:
“China hasn’t announced anything but an oil-yuan futures contract. Gold has nothing to do with it.

Yuan can technically be spent on gold at the Shanghai Gold Exchange but gold in the Chinese domestic market (the Shanghai Gold Exchange system) is not allowed to be exported. Gold from the Shanghai Gold Exchange International is allowed to be exported but is bought in the international market via yuan with U.S. dollars.

“Foreign enterprises, like oil producers, cannot hedge gold on the Shanghai Futures Exchange. The Shanghai Futures Exchange is not open for international customers. There is only a spot-deferred product listed on the Shanghai Gold Exchange, which is comparable to a futures contract, through which foreign enterprises can hedge gold in yuan. But why would oil producers buy gold and subsequently hedge the metal in yuan? Their end position would be merely exposure to the price of yuan. Why then not buy a yuan-denominated bond with an interest rate? Or hold gold without the hedge?”
Jansen’s analysis is headlined “The Gold-Backed Oil-Yuan Futures Contract Myth” and it’s posted at Bullion Star here:
https://www.bullionstar.com/blogs/koos-jansen/the-gold-backed-oil-yuan-f…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    i) Chinese yuan vs USA dollar/CLOSED DOWNAT 6.5900/shanghai bourse CLOSED DOWN AT 12,05POINTS .36%   / HANG SANG CLOSED UP 216.37 POINTS OR .76% 

2. Nikkei closed UP 100,38 POINTS OR .76%     /USA: YEN RISES TO 111.83

3. Europe stocks OPENED IN THE GREEN EXCEPT SPAIN  ( /USA dollar index RISES TO  93.18/Euro DOWNto 1.1805

3b Japan 10 year bond yield: FALLS  TO  -+.064/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  52.26and Brent: 58.32

3f Gold UP/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP or Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.390%/Italian 10 yr bond yield UDOWN to 2.052%  /SPAIN 10 YR BOND YIELD DOWN TO 1.518%  

3j Greek 10 year bond yield FALLS TO  : 5.50???  

3k Gold at $1304.70silver at:17.44:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 20/100 in  roubles/dollar) 57.14

3m oil into the 52 dollar handle for WTI and 58handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.83 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.97593as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1515 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.390%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.291% early this morning. Thirty year rate  at 2.821% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Stocks Rise Oblivious Of Growing Geopol Risks; Oil, Commodities Jump On Kurdish Clashes

 

 

World stocks and commodities rose on Monday, boosted by upbeat Chinese data, while U.S. oil futures jumped to a near six-month high as escalating tensions between the Iraqi government and Kurdish forces threatened supply.  Global markets digested the large amount of weekend newsflow, and clearly liked what they saw as S&P futures were modestly in the green, as both European and Asian stocks are higher.
The USD is marginally stronger after Yellen’s comments suggest the Fed may look through weak inflation. Still, for those who missed this weekend financial elite extravaganza, Yellen stated that new normal will be lower interest rates than seen historically and that inflation has been largest surprise for the US economy this year. Yellen added that gradual hikes in fed funds rate are likely to be appropriate during next few years and that she will be paying attention to inflation data in the upcoming months, although she guesses that the soft reading will not persist. Meanwhile, Fed’s non-voting soft-hawk Rosengren said 3 to 4 rate hikes next year will probably be appropriate and that the Fed may need to overshoot on rates if unemployment is below 4% while inflation reaches target.
Looking at the big macro picture, via Bloomberg:
The dollar advanced against its major G10 peers and Treasury yields rose after Federal Reserve Chair Janet Yellen said on Sunday her “best guess” is consumer prices will soon accelerate after a period of surprising softness, a forecast echoed by European Central Bank President Mario Draghi and Bank of England Governor Mark Carney.
The Mexican peso hit a fresh five-month low as NAFTA talks revealed aggressive U.S. proposals;
Oil climbed as Iraqi troops moved to take over control of Kurdish fields.
The euro trades under pressure via crosses, EUR/JPY accelerates after breaking lower through 132.00,
JPY one-week calls also bid as they now capture domestic election date of Oct. 22;
EUR/GBP lower as GBP is supported by hawkish comments by Carney on Friday and on news U.K. PM making surprise visit to Brussels today for talks.
Gilts underperform from the open, gilt/bund spread wider by 3bps, short sterling strip bear steepens.
Bunds steadily grind higher; latest ECB sources report saying some ECB members see $3t QE is within market tapering expectations;
Little reaction seen in Spanish bonos to latest Catalonia rhetoric. However, Spanish IBEX underperforms other European equity markets as domestic banks sell off. Eurostoxx and Dax trade flat, miners rally strongly as copper forwards run upside stops through $7000/MT, new YTD high.
Crude futures higher after Iraq forces push into Kirkuk region

IBEX index lags against its counterparts, down -0.7%  on Catalan fears with Spanish banks leading the losses. As reported previously, the Catalan Leader suspended independence mandate to pursue dialogue with PM Rajoy, however the letter sent by Puigdemont failed to clarify whether he has declared independence or not, prompting the head of the People’s Party in Catalonia Xavier Garcia Albiol says Puigdemont’s answer shows he is irresponsible. CaixaBank falls 2.4%, BBVA down 1.4%, Bankia down 1.5%; the IBEX is down 2% since independence vote on Oct. 1, vs 1% gain for Stoxx 600 over same period. Elsewhere, Convatec shares fall some 14% after announcing a profit warning, while strength in material names are helping European bourses make slight gains this morning.
The MSIC Asia index was higher by 0.6%, its highest level since November 2007, led by Australia’s ASX 200 (+0.3%) underpinned by strength in commodity related stocks after crude approached $52/bbl and iron ore gained over 4%, while Nikkei 225 (+0.5%) extended on its best levels in over 2 decades. Elsewhere, Hang Seng (+0.8%) outperformed and posted its highest close since December 2007 following stronger than expected Chinese Aggregate Financing, New Yuan Loans and PPI data, although the Shanghai Composite (-0.4%) lagged after the PBoC kept its liquidity operations at a minimal. Meanwhile, China’s ChiNext Index of small-cap shares drops as much as 2.3%, the biggest intraday loss since July 17, amid expectations that liquidity could tighten and as investors turn more cautious ahead of the Communist Party congress this week. “Zhou Xiaochuan’s comments signal that China will move further to rein in financial leverage and is unlikely to maintain an easy liquidity environment,” says Shen Zhengyang, Shanghai-based analyst with Northeast Securities Co.
Overnight, as reported previously, China CPI printed at 1.6% Y/Y, in line with expectations, and down from, 1.8% in August largely due to high year-over-year base effects, but it was PPI to come in smoking hot, jumping from 6.3% last month to 6.9% Y/Y, slamming ecosts and strong PMI surveys.xpectations of a 6.4% print and just shy of the highest forecast, driven by the recent surge in commodity

 Japan’s torried rally continued as technology firms and banks bolstered the Japanese stock market, sending the Topix index to its sixth day of gains, up 0.6%, and its longest winning streak for this year. All but four industry groups in the Topix advanced, while the Nikkei 225 Stock Average rose for the 10th day, the longest stretch since June 2015. Technology shares mirrored gains in U.S. peers as chipmakers and internet giants bolstered the S&P 500 Index at the end of last week. Automakers underperformed after the yen strengthened against the dollar for a second day on Friday as data showed the core U.S. consumer price index rose 0.1 percent in September from a month earlier, below the estimate of 0.2 percent. “Risks of not buying into Japanese equities are rising,” said Masahiko Sato, an analyst at Nomura Holdings Inc. in Tokyo. “In the midst of a global economic expansion, local corporate earnings are improving and equities are looking cheap. Foreign investors are buying into this.”
The Bloomberg Dollar Spot Index rose 0.1 percent as the euro weakened and Spanish shares fell after Spain’s government gave Catalonia a new deadline to back down from its independence claim. The pound extended gains as British Prime Minister Theresa May headed for Brussels to intervene in deadlocked exit negotiations. The Japanese yen increased less than 0.05 percent to 111.81 per dollar.
The Bloomberg Commodity Index gained 0.4% to the highest in six months. West Texas Intermediate crude rose 1.3% to $52.12 a barrel, the highest in two weeks, due to the conflict in Kurdish Iraq. Gold increased 0.1 percent to $1,304.53 an ounce.  Copper climbed 2.3 percent to $3.21 a pound, hitting the highest in more than three years. Palladium traded above $1,000 an ounce for the first time since 2001.
Economic data include Empire Manufacturing Survey. Netflix, Schwab and CSX are among companies reporting earnings
Bulletin Headline Summary from RanSquawk
Catalonian uncertainty continues to shadow over markets
EUR marginally underperforms, as CAD benefits from bullish oil markets
Looking ahead, investors will await US NY Fed Manufacturing data
Top Overnight News
Kirkuk: Iraqi forces moved to take over oil fields from Kurdish forces
Fed’s Yellen: ongoing economic strength to warrant gradual rate hikes as soft inflation readings will not persist
ECB’s Draghi: no convincing signs of underlying inflation; would expect higher wage growth at this stage; sees V-shaped path of inflation due to oil prices
ECB QE: GC sees a limit of just over EU2.5t for the QE program based on current rules; enough bonds available to cut monthly purchases to EU30b in Jan. lasting until Sept, according to people familiar
Brexit: U.K. PM making surprise visit to Brussels today to meet EU’s Barnier and Juncker for talks; U.K. MPs holding cross-party talks in a bid to stop “No Deal” style Brexit
Catalonia: regional president does not give yes/no answer to Spanish govt. on independence declaration; defends claim to independence, asks for negotiations; Spanish Deputy PM says Thursday deadline is now activated
Italy: elections could be held March 4 after passage of 2018 budget law: Corriere
China Sept. CPI 1.6% vs 1.6% est; PPT 6.9% vs 6.4% est; M2 Money Supply: 9.2% vs 8.9% est; new Yuan Loans 1.27t vs 1.20t est; agg. Financing 1.82t vs 1.57t est.
Market Snapshot
S&P 500 futures little changed at 2,553.50
STOXX Europe 600 up 0.2% to 392.30
MSCI Asia up 0.6% to 167.66
MSCI Asia ex Japan up 0.5% to 552.89
Nikkei up 0.5% to 21,255.56
Topix up 0.6% to 1,719.18
Hang Seng Index up 0.8% to 28,692.80
Shanghai Composite down 0.4% to 3,378.47
Sensex up 0.5% to 32,603.26
Australia S&P/ASX 200 up 0.6% to 5,846.76
Kospi up 0.3% to 2,480.05
German 10Y yield unchanged at 0.403%
Euro down 0.3% to $1.18
Italian 10Y yield fell 3.3 bps to 1.815%
Spanish 10Y yield fell 1.1 bps to 1.6%
Brent futures up 1.4% to $57.98/bbl
Gold spot up 0.04% to $1,304.39
U.S. Dollar Index up 0.1% to 93.22
Asia equity markets began the week on the front-foot again after another record setting session last Friday on Wall Street, where softer than expected US CPI figures caused some to rethink the Fed’s hiking trajectory, while the region also digested encouraging Chinese lending and inflation data. ASX 200 (+0.3%) was underpinned by strength in commodity related stocks after crude approached USD 52/bbl and iron ore gained over 4%, while Nikkei 225 (+0.5%) extended on its best levels in over 2 decades. Elsewhere, Hang Seng (+0.8%) outperformed and posted its highest since December 2007 following stronger than expected Chinese Aggregate Financing, New Yuan Loans and PPI data, although the Shanghai Comp. (-0.4%) lagged after the PBoC kept its liquidity operations at a minimal. Finally, 10yr JGBs were initially mildly higher to track recent upside in T-notes and amid the BoJ’s presence in the market for an amount just shy of JPY 1tln in JGBs ranging from 1yr-10yr maturities, but then failed to sustain gains amid the positive risk tone.
For those who missed the main Chinese economic data over the weekend, here are the highlights:
China Sept fiscal revenues CNY 2.27tln +9.2% y/y, spending at CNY 2.02tln, +1.7% y/y.
Chinese New Yuan Loans (CNY)(Sep) 1270.0B vs. Exp. 1100.0B (Prev. 1090.0B). Chinese Aggregate Financing (CNY)(Sep) 1820.0B vs. Exp. 1572.7B (Prev. 1480.0B)
Chinese Money Supply M2 (Sep) Y/Y 9.2% vs. Exp. 8.9% (Prev. 8.9%)
Chinese CPI YY (Sep) 1.6% vs. Exp. 1.6% (Prev. 1.8%).
Chinese PPI YY (Sep) 6.9% vs. Exp. 6.4% (Prev. 6.3%)
PBoC injected CNY 20bln via 7-day reverse repos; PBoC set CNY mid-point at 6.5839 (Prev. 6.5866)
PBoC Governor Zhou stated that total debt leverage in China is too high and that there is no clear fiscal discipline to restrict local governments; Zhou also stated that China’s economic growth is to hit 7% in H2.
Top Asian News
Japan Shares Rise, Topix Marks Longest Winning Streak This Year
Bad-Loan Recast Failures Portend More Pain for India Lenders
More Factories Go Dark as China’s Expansion Hangs in the Balance
Bitauto Car-Financing Arm Is Said to File for $800 Million IPO
H&M Supplier Crystal Sets Price Range for $574 Million IPO
Li’s H.K. Tower Sells for Record $5.15 Billion, Report Says
Wanda Golf Courses in Chinese Resort Shut Down by Authorities
In Europe, the IBEX lags against its counterparts on Catalan fears with Spanish banks leading the losses. As reported previously, the Catalan Leader suspended independence mandate to pursue dialogue with PM Rajoy, however the letter sent by Puigdemont failed to clarify whether he has declared independence or not. Convatec shares fall some 14% after announcing a profit warning, while strength in material names are helping European bourses make slight gains this morning. UK debt appears to have weathered an early storm, but like Short Sterling remains on the relative backfoot on near term BoE tightening prospects. This follows more policy guidance from Governor Carney at the World Bank/IMF, and precedes Tuesday’s potentially policy-defining inflation reportConsensus is for headline CPI to climb to 3% y/y, but the bias suggests an above forecast print that would see the mandate breached and by inference strengthen the MPC’s resolve to act sooner rather than later (ie in November). Bunds are steady in comparison, and rangebound amidst contrasting drivers (ECB underscoring tapering intentions, but ongoing Spanish/Catalan uncertainty underpinning the EZ safe-haven). Perhaps surprisingly, Bonos not too adversely affected by the latest regional-national Government impasse, and RAGBs also holding in despite an unexpectedly strong showing by the far right in the weekend Austrian election. US Treasuries have eased off Friday’s post-CPI highs, with Fed chair Yellen still predicting higher inflation ahead and repeating that the wage components in the latest jobs data are encouraging – inference that this is more important than the negative (and obviously hurricane distorted) headline payrolls number.
Top European News
Catalan Leader Defends Claim to Independence, Defying Spain
Spain’s OHL Studies Sale of Concessions Unit, EL Mundo Reports
Cyprus Rogue Borrowers Pose Threat to Sustained Growth
EDP Falls in Lisbon Following Regulator’s Proposal on Tariffs
European Miners Rise to 4-Yr High; Citi Still Bullish on Sector
U.K.’s Johnson Urges ‘Some Serious Negotiations’ in Brexit Talks
Serbia May Present Kosovo ‘Proposal’ in March, President Says
In currencies, morning reports from the Spanish/Catalonian saga, stating that Catalan leader, Puigdemont has suspended the independence mandate to pursue dialogue with PM Rajoy, led to no reprieve in the EUR, which saw a slow, downward grind through the Asian session, as EUR/USD came back to break through Friday’s pre-US inflation data levels. EUR/GBP has come back to trade in the 0.8900 – 0.8750 range, alongside EUR/USD breaking firmly down through 1.18, with participants showing little optimism towards positive Spanish developments. Focus now slowly moves toward the end of October, as EUR/USD volatility sellers suggest more rangebound trade as we approach the ECB meeting. Options continue to play a part in FX markets as the large expiries theme remains, with hedges evident – EUR/USD sees 2.5bln between 1.1760 and 1.1910, and EUR/GBP has 1.7bln rolling off between 0.8885 and 0.8900. The probability of a Fed move in December has declined (as low as 73.2%, according to some measures) , following Friday’s tame inflation report. Some concerns over the US economy continued over the weekend, with comments from Fed Chair Yellen, stating that the new normal will be lower interest rates, further saying that inflation has been the largest surprise for the US economy this year, yet did add that gradual hikes in the Fed Funds rate are likely to be appropriate during the next few years and will pay close attention to inflation in the coming months. DXY remains rangebound, struggling to break into the range seen prior to Friday’s Inflation report. A marginal inflow into the JPY has been seen in early European trade, however, USD/JPY continues to struggle to trade below 111.70, with rangebound price action clear. The day sees no standout economic data on the docket, with trade potentially likely to remain subdued, as investors focus on global concerns given that various geopolitical and political uncertainties remain.
In commodities, oil prices notably firmer with WTI and Brent making a breach above USD 52 and USD 58 respectively, largely as a result of the conflict between Iraqi and Iraqi-Kurdish forces, whereby Iraqi forces have moved into Kirkuk, consequently raising concerns over exports (Kirkuk exports account for roughly 600k). OPEC Secretary General Barkindo stated that OPEC and shale companies share responsibility to rebalance market, while there were also comments from Kuwait that producers need another month before deciding on deal extension and decision may be made in November. Iraqi forces capture Kirkuk’s K1 airbase from Kurdish forces, according to a military statement. Kurdish leaders have agreed to avoid fighting in Kirkuk’s Oil and Gas facilities, according to the Iraqi oil ministry.
US Event Calendar
Oct. 16-Oct. 20: Monthly Budget Statement, est. $6.0b, prior $33.4b
8:30am: Empire Manufacturing, est. 20.5, prior 24.4
DB’s Jim Reid concludes the overnight wrap
There were few inflationary gusts on Friday after the much anticipated US CPI report. After nudging against 2.40% last Friday after a strong US average hourly earnings number, 7 days later the miss on CPI saw 10yr USTs close the week at 2.274% having traded just below 2.33% most of the session before hand. September core inflation rose only 0.13% mom (vs. 0.2% expected) and 1.7% yoy (vs. 1.8% expected). In the details, core services inflation was inline, but the main miss was on the core goods side, which fell 0.2% mom (-1% over past 12 months – the lowest reading since August 2004). Our US team believes some of this weakness should prove transitory (eg: medical care commodities), but there were also more broad based signs of weakness. The team still expects core CPI inflation to remain near recent levels in yoy terms through 2017, albeit with risks that it now rounds down to 1.6%.
This now makes it 6 out of 7 months of misses relative to expectations but a) remember that we’ve previously shown US inflation tends to lag growth by around 18 months and growth was weak at the end of ‘15/ early 16, b) that many at the Fed have recently suggested a bias to look through the ‘temporary’ weakness, and c) the Fed have also made it clear they’re looking more and more at (the very loose) financial conditions in their rate discussions.
So overall, Friday’s number should reduce the risk of a December Fed hike but not perhaps by much. Bloomberg’s calculator has it at 73.3% now, down 3.4ppt versus Thursday’s close. If the usual lag between growth and CPI holds, we still may have weak YoY CPI into Q1 but just as the market gives up on inflation ever rising again, we may get some higher than expected shocks as we move into Q2 2018. Staying with inflation, China’s September CPI was in line at 1.6% yoy, but lower than the prior month, driven by lower food prices. Elsewhere, PPI was notably higher than consensus at 6.9% yoy (vs. 6.4% expected).
Over the weekend, the main movers and shakers of global central banks spoke on inflation, tapering and risks at the annual IMF meeting. Firstly, Mrs Yellen said “my best guess is that these soft readings (inflation) will not persist” and that “with the ongoing strengthening of labour markets, I expect inflation to move higher next year”. On rates, she noted “we expect the neutral level of the federal fund rates to rise somewhat over time” and that “additional gradual rate hikes are likely to be appropriate over the next few years to sustain the economic expansion”. On fiscal policy changes, she said “it’s a source of uncertainty”, we have taken “a kind of wait and see attitude”.
ECB’s Draghi also reiterated that he is “confident” inflation will “gradually converge in a self-sustained manner”, but we should be patient, because “it’s going to take time”. On tapering, ECB’s Praet had noted the idea of a bigger reduction in monthly bond buying in exchange for longer duration of the program earlier. When asked by reporters, Draghi said that Praet “had said it very well”. Back on Friday, Bloomberg reported that ECB policy makers are considering reducing the pace of bond buying to €30bn/mth (from €60bn/mth), but for nine more months to September 2018. Elsewhere, Bundesbank President Weidmann noted he does not see the need to further expand monetary stimulus, while the ECB’s Italian governor Visco noted he would prefer not to have specific dates on the unwinding of QE as ECB needs “the flexibility that is in the program”. Given the difference in opinions, we shall find out more at the next ECB meeting next week on 26 October.
Elsewhere, BOE’s Carney reiterated he may need to raise rates in the “coming months” as the UK’s economy is running out of spare capacity. Japan’s BOJ Kuroda noted “achieving the 2% target is still a long way off and the BOJ  will persistently [maintain] aggressive monetary easing” and he does not “see risks mounting in the financial markets in the US, Europe and Japan”. This was also backed up by Draghi who saw little signs that “stocks and bonds are having valuations that are stretched when compared to historical averages”.
Finally, China’s PBC Governor Zhou noted that “6.9% economic growth may continue in the second half”. He also said “the main problem (in China) is that the corporate debt is too high” and that while debt servicing costs remain low, “we need to pay further efforts to deleveraging and strengthen the policy for financial stability”. Zhou flagged that some of China’s corporate debt includes borrowing from financing vehicles owned by the local  governments, so if redefined, corporate debt / GDP is closer to c125% than the official figure of 160%, while government debt would be 70% of GDP (vs. 36%). Elsewhere, he said the asset management business is “a relatively chaotic situation”, partly due to three different regulators with different sets of rules. For those who have missed it, our note “The next financial crisis” takes a closer look at this and other developing risks.
Overnight, South Korean military officials warned North Korea may be preparing for another round of missile launches, while US and SK navies have begun a joint drill involving 40 warships. Elsewhere, US Secretary of State  Tillerson said he will continue with diplomacy measures with NK “until the first bomb drops”. This morning in Asia, markets havefollowed the positive lead from the US and are trading higher. The Kospi (+0.12%), Nikkei (+0.68%), ASX 200 (+0.63%) and Hang Seng (+0.81%) are slightly higher as we type.
In Austria, the centre-right People’s Party (OVP) leader Sebastian Kurz is expected to become the world’s youngest government leader (aged 31). Of the votes counted (c85%), the Interior Minister Sobotka said the OVP received 31.4% (vs. c33% in late polls per The Independent), while the Social Democrats party has 26.7% (vs. 24.4%) and the Freedom Party (FPO) has 27.4% (vs. c26%). A renewed coalition between OVP and SPO is seen as less likely, which makes the far right, anti-immigrant and euro-sceptic FPO party in a strong bargaining position when forming the next coalition government. This would mark the FPO’s first return to government since 2005. So it will be interesting to see what a potential OVP & FPO tie up would mean for Europe on issues such as immigration and deeper EU integration.
Over in Germany, Merkel’s CDU party has likely suffered the worst election result since 1959 in the northern state of Lower Saxony (home state of Volkswagen with 7.8m people). The Social Democrats Party (SPD) was the big winner, with official preliminary results putting the SPD as winning 36.9% (+4.1ppt from 2013) of the votes, while Merkel’s party came second, wining 33.6% (-2.6ppt). The loss is unlikely to shift the power mix at the state level as the Social democrats and the Green already govern the state, but the softer  sentiment for her party could have follow on implications ahead of Merkel’s talks with potential coalition partners (likely the Greens & FDP) this week, in order to form the next federal government.
Indeed UK PM May is expected to travel to Brussels and meet with EC Commission President Junker and Chief Brexit negotiator Barnier for Brexit talks today. According to her office, the trip has been in her diary for some time, but has only now been publicly announced. We wait and see whether her efforts will improve the chance of some resolution ahead of the EU Summit meeting later this week. Elsewhere tomorrow’s Euro and UK CPI will be a focal point as will the 57 S&P 500 companies reporting. Today, Spain and Catalonia will be back in the spotlight with Catalan President Puigdemont due to face a deadline to clarify to the Spanish Government Catalonia’s position on independence. For the full week ahead we’ve copied the text from “Next week, this week” at the end.
On the US fiscal front, optimism and pricing of a deal has again faded but the next key step is the adoption of a budget by the Senate (expected to be later this month), which should be followed by a House-Senate conference to agree on a common FY18 budget. As DB’s fixed income weekly explains, the base case is that the House will converge towards a plan consistent with the Senate’s USD1.5 trillion deficit target (relative to the CBO baseline) and assuage deficit hawks with the prospects of higher growth reducing the deficit relative to this target. The final tax reform is more likely to amount to a more modest tax cut with a relatively limited impact on GDP. However, the increase in deficits will still be relevant to bond markets from a flow perspective.
Quickly recapping the markets performance on Friday. Equities (S&P +0.09%, Stoxx 600 +0.29%) edged higher back towards their record highs. Within the S&P, HP rose 6.42% post results, while bank results were mixed with WFC down 2.75% following an unexpected $1bn legacy legal charge and softer revenue trends, while BofA gained 1.49%, partly due to improved cost discipline.
Bond markets were broadly firmer following the US CPI miss and stronger than expected retail sales. Core bond yields fell 4-5bp at the 10y part of the curve (UST: -4.5bp; Bunds -4.1bp; OATs -4.6bp), but Gilts underperformed (-1bp). The US dollar index was broadly flat (+0.04%) while Sterling gained 0.17% but the Euro dipped 0.08% versus the Greenback. In commodities, WTI oil rose 1.68% following reports of lower US crude stockpiles, and continues to edge higher this morning as fighting broke out between Iraqi and Kurdish forces near Kirkuk. Iron Ore rallied 4.06% to $62.53/ton following China trade figures that showed a three year high for monthly ore imports.
Before we take a look at today’s calendar, we wrap up with other data releases from Friday. Excluding the CPI miss, other US macro data were broadly stronger than expected. The September retail sales (ex-auto & gas) beat expectations at 0.5% mom (vs. 0.4% expected), while the University of Michigan’s October consumer confidence also beat at 101.1 (vs. 95 expected). Elsewhere, the August business inventories print was in line at 0.7% mom. In  Europe, the final readings of September CPI for Germany and Italy was unrevised, at 1.8% yoy (flat mom) and 1.3% yoy respectively.
Looking at the day ahead, in Europe the August trade balance reading for the Euro area is the sole release due while in the US the October empire manufacturing print is due. Away from the data Spain and Catalonia will be back in the spotlight with Catalan President Puigdemont due to face a deadline to clarify to the Spanish Government Catalonia’s position on independence. Earnings wise, Netflix results are likely to be the most significant.

end

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed DOWN12.05 points or .36% /Hang Sang CLOSED UP 216.37 pts or .76% / The Nikkei closed UP 100.38 POINTS OR .47/Australia’s all ordinaires CLOSED UP 0.55%/Chinese yuan (ONSHORE) closed DOWN  at 6.5900/Oil UP to 52.26 dollars per barrel for WTI and 58.32 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.5900. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5780AND //ONSHORE YUANS  WEAKER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT PARTICULARLY  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

Satellite images show that North Korea is preparing another ballistic missile launch

(courtesy zerohedge)

Satellite Footage Shows North Korea Preparing Ballistic Missile Launch Ahead Of US Naval Drills

 

 

Echoing a report from earlier this week, when on Wednesday the Seoul-based Asia Business Daily reported that North Korea is preparing to fire multiple short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18 – arguably the year’s most important geopolitical event – on Saturday the South Korean press claimed that “North Korea is believed to be preparing to launch a ballistic missile ahead of an upcoming joint naval drill by the US and South Korea”, according to a government source.
The Donga Ilbo daily said satellite pictures show ballistic missiles mounted on “transporter erector vehicles” and being moved out of hangars near Pyongyang and in the North Phyongan Province. US and South Korean military officials suspect the North might be preparing to launch missiles capable of reaching US territory, the newspaper said.

A defence ministry spokesman declined to comment on the report, saying: “we don’t comment on any matters of military intelligence” but added that “we are keeping a close watch over the North.”
Quoted by AFP, Donga Ilbo said that US and South Korean military officials suspect the North might be preparing to launch missiles capable of reaching US territory, and that this could be the Hwasong-14 inter-continental ballistic missile, whose range could extend to Alaska, or Hwasong-12 intermediate-range missiles which Pyongyang threatened to fire towards the US Pacific territory of Guam in Augus . Another possibility is that the North might be preparing to test a new Hwasong-13 ICBM, it added, that has a longer maximum range than the other two missiles and could potentially reach the US West Coast.

On Friday, the US navy said that a US aircraft carrier will lead a joint naval drill between the US and South Korea in the coming week. The drills, led by the USS Ronald Reagan aircraft carrier, are scheduled to begin on Monday in waters east and west of South Korea. The 10-day exercise, which will include the USS Stethem and USS Mustin Arleigh Burke-class guided missile destroyers, will check the allies’ “communications, interoperability and partnership,” the United States Navy’s 7th Fleet said in a statement.
The training mission comes after hectic US military hardware movements around the Korean peninsula in recent days. These follow a flurry of missiles from Pyongyang, which conducted its sixth and most powerful nuclear test last month in defiance of international sanctions. Also on Friday the nuclear-powered USS Michigan submarine arrived at the southern South Korean port of Busan, just days after another nuclear-powered submarine – the USS Tuscon – left after a five day visit.

The drill will also be the latest show of force against North Korea, as tensions soar over the hermit state’s weapons programme, and will likely rile Pyongyang which has previously responded angrily to joint exercises.
Indeed, as the two nations prepare for next week’s joint naval exercise, North Korean officials on Friday renewed their threat to launch ballistic missiles near Guam.  An op-ed published by Pyongyang’s KCNA state news agency said: “We have already warned several times that we will take counteractions for self-defense including a salvo of missiles into waters near the US territory of Guam, an advance base for invading the DPRK, where key US bases are located.”
“The US military action hardens our determination that the US should be tamed with fire and lets us take our hand closer to ‘trigger’ for taking the toughest countermeasure,” Kim Kwang Hak, a researcher at the Institute for American Studies of North Korea’s Foreign Ministry, said in the op-ed.
KCNA’s statement also came on the heels of a flyby of two US Air Force B-1B Lancer strategic bombers over the Korean Peninsula in a show of force on Tuesday night. Two B-1Bs took off from Guam and traveled in the vicinity of the Sea of Japan, staging an aerial exercise with Japanese and South Korean combat aircraft in the middle of the night.
* * *
In any event, local experts are concerned. On Friday, a researcher at the Institute for American Studies at the North Korean Foreign Ministry warned that the joint exercise, as well as a flight by two American B-1B bombers over South Korea on Tuesday, would compel the North to “take military counteraction.” Additionally, professor Yang Moo-Jin of the University of North Korean Studies said it was “highly likely” that the North could launch missiles in response to next week’s joint navy drill.
President Trump’s continued threats of military action against Pyongyang if it does not tame its weapons ambitions have fuelled fears of conflict on the Korean peninsula. But military intervention against North Korea would have “devastating consequences”, NATO chief Jens Stoltenberg warned Friday, after Trump said diplomatic efforts had failed.

end

 

Today, the USA deploys special forces into the Korean peninsula and on board is a special “decapitation” team:   the team’s primary goal is to remove the commander in chief of the enemy

 

(courtesy zerohedge)

US Deploys Special Forces “Decapitation” Team To South Korea

Today, the South Korean and U.S. navies kicked off massive combined drills off the coast of the Korean peninsula amid heightened tensions, a training exercise which North Korea has warned may prompt another ballistic missile launch potentially to coincide with the launch of the Chinese 19th Party Congress on October 18. The two allies plan to continue the Maritime Counter Special Operations Exercise (MCSOFEX) through Friday in the East Sea and the Yellow Sea.

As reported over the weekend, the drill involves the U.S. 7th Fleet’s aircraft carrier USS Ronald Reagan (CVN-76) and two Arleigh Burke-class destroyers – the USS Stethem (DDG-63) and the USS Mustin (DDG-89). The carrier strike group will train with South Korean warships and other defense assets, such as the Sejong the Great Aegis ship and P-3 Orion anti-submarine aircraft in the East Sea.

And while details of the drill were well-known in advance, what was reported for the first time overnight from Yonhap is that a unit of U.S. special forces tasked with carrying out “decapitation” operations is also aboard a nuclear-powered submarine in the group, according to a defense source. So far, little else is known about why said decapitation team is on location, or whether it will be put into use, although it presence may explain Trump’s “calm before the storm” comment that beffudled the media two weeks ago.
Among other assets mobilized for the joint drill are F-15K, FA-18 and A-10 fighter jets, as well as AH-64E Apache attack helicopters, Lynx and AW-159 Wild Cat naval choppers. The U.S. has also deployed a Joint Surveillance Target Attack Radar System (JSTARS) plane to closely monitor the North’s ground and naval forces.
Some more details about the drill from Yonhap:

 

The joint training is aimed at promoting “communications, interoperability and partnership in the (U.S.) 7th Fleet area of operations,” the fleet said. It initially announced that the practice around the peninsula will end next Thursday but later corrected the date to Friday. Meanwhile, the U.S. has sent a B-1B Lancer strategic bomber, F-22 Raptor stealth fighter jets and several other types of high-profile defense assets to the Seoul air show to open this week.

“Approximately 200 U.S. personnel are expected to participate in the Seoul International Aerospace and Defense Exhibition (ADEX) 2017, scheduled from Oct. 17-22 at the Seoul K-16 airport,” the 7th Air Force said.

Among the U.S. military aircraft to join the biennial event are the F-22 Raptor, B-1B Lancer, A-10 Thunderbolt II, C-17 Globemaster III, C-130J Hercules, KC-135 Stratotanker, E-3 Sentry, U-2 Dragon Lady and RQ-4 Global Hawk, it added. Also fielded will be the Air Force’s fifth-generation fighter, the F-35A Lightning II, U.S. Navy P-8A Poseidon and a U.S. Army CH-47F Chinook.

“This year’s air show will feature demonstrations from U.S. Air Force F-22 Raptors assigned to the 3rd Wing, Joint Base Elmendorf-Richardson, Alaska,” the 7th Air Force said. More than 400 defense firms from 33 countries plan to participate in the ADEX to begin Tuesday.
As part of the drills, the US military said on Monday that it would practice evacuating noncombatant Americans out of South Korea in the event of war and other emergencies, the NYT reported.  The evacuation drill, known as Courageous Channel, is aimed at preparing American “service members and their families to respond to a wide range of crisis management events such as noncombatant evacuation and natural or man-made disasters,” the United States military said in a statement.
The South Korean government of President Moon Jae-in has repeatedly warned that it opposes a military solution to the North Korean nuclear crisis because it could quickly escalate into a full-blown war in which Koreans would suffer the most, with some estimates predicting that over 2 million South Koreans could die in the North Korean retaliation.
Meanwhile, on Monday, North Korea accused the US of “pushing” the DPRK into making a hydrogen bomb, the head of North Korea’s delegation to the multinational Inter-Parliamentary Union (IPU) meeting has said.
“Exactly the US have pushed the DPRK [Democratic People’s Republic of Korea] to become a possessor of the hydrogen bomb,” the deputy chairman of the Supreme People’s Assembly of North Korea, An Tong Chun, announced Monday. The North Korean official was speaking at the assembly of the world’s oldest international body of lawmakers in St. Petersburg, Russia. Parliamentarians from more than 160 nations are attending the IPU session.
The question now is whether North Korea will once again test said Hydrogen bomb and, if so, whether the crack “decapiation” team meant to take out North Korea’s leadership will be put to use.

b) REPORT ON JAPAN 3. CHINA REPORT

 

China’s CPI came in as expected but it recorded a smoking hot 6.9% PPI (a forerunner to inflation)…banks inject another equivalent 250 billion uSA into their economy

 

(courtesy zerohedge)

Overheating China PPI Sends 10Y Yields To 30 Month Highs As Banks Inject Another Quarter Trillion Dollars In Loans

 

 

Despite a disappointing US CPI report on Friday, which saw core inflation miss once again despite an expected spike due to the “hurricane effect”, moments ago China reported that in September, its CPI printed at 1.6% Y/Y, in line with expectations, and down from, 1.8% in August largely due to high year-over-year base effects, but it was PPI to come in smoking hot, jumping from 6.3% last month to 6.9% Y/Y, slamming expectations of a 6.4% print and just shy of the highest forecast, driven by the recent surge in commodity costs and strong PMI surveys.

While there has been no reaction in the Yuan, either on shore or off, the stronger than expected PPI has pushed China’s 10Y yield to the highest in 30 months, or since April of 2015.

Adding fuel to the flame was PBOC head Zhou Xiaochuan who said earlier that China’s GDP would pick up from the 6.9%  figure recorded in the first six months of the year “thanks to a boost from household spending”, according to a synopsis of his comments at the G30 International Banking Seminar posted to the People’s Bank of China website on Monday.” The reason why his comments have impacted the long-end is that the reported, and completely fabricated number, is higher than the previous consensus forecast of a goalseeked Q3 Chinese GDP of 6.8%.
And while spiking Chinese yields wouldn’t be concerned if China was indeed deleveraging as the Communist Party and the PBOC claim it is doing, the reality is, of course, that China continues to add more and more debt as the latest weekend credit numbers out of the PBOC revealed. As Bloomberg reported earlier, China’s broadest credit aggregated, Total Social Financing, jumped to 1.82 trillion yuan, or over a quarter trillion dollars in September ($276BN to be precise), vs a Wall Street estimate of 1.57 trillion yuan and 1.48 trillion yuan the prior month. New yuan loans also beat expectations, at 1.27 trillion yuan, versus a projected 1.2 trillion yuan, while for the first time in months, the broader M2 money supply did not hit fresh fresh record lows, and instead beat expectations, rising to 9.2% from an all time low of 8.9%.

Just as notable, after China’s shadow banking credit appeared to have finally been tamed after several months of contraction, shadow banking finance saw a pick-up in Sept (trust loans, entrusted loans and undiscounted bills), which accounted for 22% of Sept TSF vs. 18% in August. This was due mostly to milder deleveraging pace post the completion of self-checking of CBRC regs

Commenting on the latest burst of credit creation by China, Kenneth Courtis, chairman of Starfort Investment Holdings and a former Asia vice chairman for Goldman Sachs Group, said that “Momentum continues to be very strong. Loan demand of the private sector has finally turned up in recent months.”
It also means that just two weeks after the PBOC cuts its RRR for most banks in an unexpected monetary easing on Sept 30, “there is little hope of further policy easing in the fourth quarter as the monetary policy is very accommodative,” said Zhou Hao, an economist at Commerzbank AG in Singapore. “There could be even a tightening bias.”
Of course, confirming what we have been saying for years, Christopher Balding who is an associated professor in Peking Univeristy in Shenzhen said that “deleveraging is not happening if we look at any measure of credit growth” and that “lending in 2017 has actually accelerated significantly from 2016.” This is shown in the chart below, which confirms that to keep its GDP at 6.9% or some other goalseeked number, China has to inject more than double that amount in credit every single month, in this case 15%. The biggest question is what happens to China’s credit impulse after the 19th Party Congress which begins on Wednesday.

When looking at the boost in household spending noted above by Zhou Xiaochuan, all of this is the result of a surge in household lending: “Household short-term loans have increased too rapidly, with some funds being invested in stock and property markets,” said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing. “Regulators have started to pay attention to the sector and required banks to strengthen credit review. I think the momentum will show signs of slowing in the fourth quarter.”
Commenting on the recent burst in Chinese household leverage, where short-term household loans soared to 1.53 trillion yuan, versus 524.7 billion yuan this time one year ago, Deutsche Bank’s Hans Fan writes that “noticeably China households are levering up quickly. We welcome the personal loans driven by genuine consumption growth, but there may be a notable portion of short-term consumer loans that were used to finance property purchases, which in our view contains higher risks.”

Some more details:

 

A breakdown by borrower suggests household and corporate sectors continued to lever up, making up 31%/41% of new system credit in Sept (35%/38% in Aug). For households, while mortgage growth had slowed, s/t retail loan growth accelerated to 17.6% yoy in Sept (vs. 15.8% in Aug or 7.3% in 1Q17) to make up c.10% of credit creation. We attribute this to both decent consumption growth with rising credit penetration and property-related lending. We estimate 1/3 of new consumption loans may be used to finance purchases of second homes. However, PBOC and local CBRC offices have started to crack down on property-related consumer loans in September and we expect consumer loan growth momentum to moderate in the coming months

http://www.zerohedge.com/news/2017-10-15/overheating-china-ppi-sends-10y-yields-30-month-highs-banks-inject-another-quarter-t?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

 

end

4. EUROPEAN AFFAIRS

SPAIN

Pepe Escobar highlights history with respect to the Spanish Civil war in 1936 with the accession of Franco.  He is afraid that Madrid’s response to Barcelona’s request for dialogue will end up in a lethal response

(courtesy zerohedge)

The Spanish Civil War, Revisited: Pepe Escobar Fears “Lethal Response” From Madrid

 

 

Authored by Pepe Escobar via The Asia Times,

 

Puigdemont’s political twist could invoke a lethal response from Madrid: suspension of Catalonia’s government

Call it theatre of the absurd – with a lethal subtext. Under pressure from all corners – even Donald Tusk, president of the EU Council – in his fateful date with destiny Carles Puigdemont, President of Catalonia, came up with some last-minute judo dialectics. He issued a non-denial denial Unilateral Declaration of Independence from Spain. What was declared was immediately suspended; the Republic of Catalonia lasted for six seconds.

The deft political gambit left Madrid predictably bewildered. Prime Minister Mariano Rajoy, a.k.a. nano-Franco, issued an ultimatum; you have five days to say if you declared independence or not.
Independent of the answer, Madrid’s nuclear option remains on the cards; infamous article 155 of the Constitution, which calls for the suspension of Catalonia’s government and parliament from six to 12 months.

Yet that may come with a twist; an article 155 in slow motion, parallel to the hazy offer of starting a process, in six months maximum, leading to Spanish constitutional reform. Madrid needs Catalonia for this reform to succeed. So, essentially, Puigdemont just needs to say “no” for the train to start rolling.
It’s way more complex than it seems. The Catalan extreme left, up to the last minute, was trying to convince Puigdemont to proclaim unconditional independence. At the same time, those six seconds left Catalan unionists predictably furious. Moderates for their part prefer to see a faint light at the end of the tunnel.
The problem is that even with discreet back channels in place, Madrid’s strategy is to ultimately force a fissure in the independentist coalition; secession inside Catalonia to prevent secession from Spain. So far, the fissure has been prevented by some members of the Catalonian Parliament signing a declaration of support for the – still non-existent – republic.

Scrap that constitution

The President of the Cantabria region, Miguel Ángel Revilla, sums it all up: Rajoy is to blame. Revilla worries that “50% of Catalans want to leave Spain. Four years ago, that was not the case.” He stresses how a “Catalan statute – approved by the Catalans and the Spanish Parliament – was impugned by the Constitutional court, so they had to be mad, right? It did not deal with independence, it was a pact, delineating a series of obligations.”
So the unwillingness of the Spanish government to talk, according to Revilla, is what led to the current impasse. No wonder; Rajoy is closely advised by former Prime Minister José María Aznar.
The extremely reactionary administration in place in Madrid could have defused the bomb even before the referendum, by mobilizing sectors of the working class in Catalonia whose first language is Spanish, not Catalan; many of these view the independence dossier as a “war of the elites”.
Madrid though opted for Franco-ist repression tactics. King Felipe VI had one chance to appeal for calm and reunite the nation; he chose to play Scaremonger-in-Chief. EU “leaders” stuck to platitudes, like Rothschild favorite Emmanuel Macron extolling his “profound” vision of an integrated Europe and Chancellor Angela Merkel abdicating from her role of Dispenser of Wisdom; after all, this is not Crimea.
The European Commission (EC), losing the scarce credibility it still possessed, sharply ignored its own “core values”; the rights of national minorities enshrined in Article 2 of the EU founding treaty, as well as Article 21 of its charter of fundamental rights.

Podemos has some decent ideas to “save Spanish democracy”.

Yet there seems to be only one sensible road map ahead.
Kick out the incompetent, nano-Franco administration, which does not want any dialogue; a tough call in a nation so viscerally conservative as Spain.
Explain to everyone in Catalonia, especially the different strands of the working class, what independence would mean in practice – something the current “leaders” are incapable of. Catalonia – one of the EU’s wealthiest regions – in or out of the EU? Trading in which currency? Without an army? Able to manage a neighboring hostile power (Spain) and not recognized by France?

Launch a comprehensive national dialogue process to reform the outdated 1978 constitution – privileging a modern, federal charter, emphasizing more consensus among regions, and considering the concerns of at least 25% of hardcore independentists in Catalonia.

None of this seems to be on the cards – and that’s why the real tragedy is only beginning. Spain is already broken – and there will be no turning back.

Calling Rosa Luxemburg

 

The temptation to strike parallels with Europe a century ago are strong. What about adapting Rosa Luxemburg’s latest, searing essay before she was assassinated in January 1919; “You stupid henchmen! Your ‘order’ is built on sand.” At the same time Rosa Luxemburg warned the Left about the petty-bourgeois nationalisms emerging after the collapse of the Habsburgs (the exception was Czechoslovakia.)
“Catalanism” – which sprang up in the 19th century – is a different beast though. The Barcelona-Madrid fissure is based on deep economic/fiscal reasons, amplified by the dire consequences of the financial crisis in Spain since 2008. Catalonia’s nationalism is not narrow-minded but inclusive, largely open to The Other – from other parts of Spain and abroad.

The intractability of the political problem is that Catalonia – the most European of all Spanish regions and historically in favor of republicanism and federalism – contests the very essence of the Spanish system. To scrap this outdated constitution – written immediately after Franco’s demise and drenched in amnesty for Franco-ists – is as important as self-determination. To say that the Bourbons face a legitimacy crisis is a major understatement.
Madrid’s actions on Referendum Repression Day – led by a Franco-ist partisan of torture, infamous General Bum-Bum – could not but revive the memory of Catalonia as the key anarchist/republican hub during the Spanish Civil War; the Civil Guard in itself represents the memory of Francoism. It’s understandable how separatists prefer to discard the historic/ financial heavy load when they see the impossibility of a true modernization of Spain.
The prospect of an implosion of this current Spanish state – with repercussions everywhere from the Basque country to Scotland –   should be driving Europeans east and west to think hard about all the interconnections between city, territory, nation, state and (European) union; a healthy exercise in political economy thinking.
Instead, once again, we have total Brussels paralysis. There’s no plan B. Worse; there’s no political will, as some Greens at the European Parliament have remarked. No wonder, with EU “leaders” as mediocre as the Juncker/Tusk bunch, and the number two of the EC, Dutch jurist Frans Timmermans, saying that “sometimes the rule of law must be preserved by a proportionate use of force.”
Brussels, facing the prospect of a region that may leave in one go not only the EU but also the euro, is incapable to see that the Spanish fracture is a microcosm of the nation-state fracture inside the EU. The Juncker/Tusk unconditional support for nano-Franco cannot but be interpreted all across progressive European circles for what it is; what good could possibly emerge out of “mediation” by these non-entities? It’s civil society, in tandem, in Spain and Catalonia, that should be the mediators. One wonders if they’re up to the task.

end

 

SPAIN/CATALONIA

 

HOURS TO GO BEFORE  PUIGDEMONT DECLARES HIS POSITION WHETHER CATALONIA SEEKS INDEPENDENCE.  REGARDLESS OF OUTCOME, IT LOOKS LIKE WE WILL HAVE REGIONAL ELECTIONS. CATALONIA ALSO PROPOSES ITS OWN CENTRAL BANK

 

(courtesy zerohedge)

With Just Hours Until Spain’s Ultimatum Runs Out, Catalonia Proposes Its Own Central Bank

 

 

It’s D-Day for Catalan President Carles Puigdemont who has just a few hours left until 10 am on Monday (4am ET) to respond to the Spanish government’s ultimatum delivered last week by the prime minister, demanding to know whether Puigdemont did, indeed, declare independence last week. If Puigdemont says yes, fails to respond, or provides another meandering answer, Rajoy will start the process under Article 155 to seize control of the breakaway administration in the coming weeks.
While Catalan television station TV3, which is controlled by the regional government, said Puigdemont will not give Rajoy a clear ‘Yes’ or ‘No’ according to Bloomberg, shortly after Jordi Sanchez, leader of separatist group Catalan National Assembly, denied the report and said that, after speaking to Puigdemont on Sunday, the Catalan reply to Rajoy “will be clear.” Speaking to Spanish broadcaster La Sexta, Sanchez said he agrees 100% with Puigdemont’s reply to Spanish Prime Minister Mariano Rajoy, and that the response will be dignified and clear with no surprises, adding that a will for dialogue exists but the Catalan government will not renounce mandate given by the Oct. 1 independence referendum.
Meanwhile, El Mundo reported that Spain’s central government in Madrid is weighing two options it may impose on Catalonia if the region’s government unequivocally declares independence, El Mundo reported, without saying where it got the information. Madrid would either name a caretaker administration or a unity government made up of representatives of all parties, the newspaper said per Bloomberg. Regional elections would then be called in three to six months, according to the report. It adds that while Replacing the rebel government would require the state using special powers under Article 155 of the Spanish Constitution. that action is not imminent, and may not be taken if the Catalan government demonstrates it hasn’t broken away from Spain and instead will abide by Spanish law.
Earlier on Sunday, Puigdemont appealed for calm ahead of Monday’s deadline: “The (Catalan) Government and I want to reiterate our commitment to peace, civility and serenity, and also to (…) democracy as inspiring the decisions we have to make,” Puigdemont said during at a memorial event at Barcelona’s Montjuic cemetery. “In these difficult hours of hope in Catalonia, let’s take a clear attitude against violence (…) in favour of civility, hope, serenity and respect.”

In any event, Rajoy will demand that Puigdemont clear up his “deliberate” confusion over Catalan independence.
“The pressure building on Puigdemont is absolutely enormous,” Angel Talavera, an analyst at Oxford Economics in London, told Bloomberg. “Anything that looks at all non-committal is going to make the government act” against his regional government.
As Bloomberg adds, “this week is shaping up to be a possible watershed for the region, a $250 billion economy that’s seen dozens of its largest companies announce they’ll move elsewhere in Spain rather than face the legal limbo of secession.”
Here are the three possible outcomes tomorrow:
The best case for Spain is that Puigdemont, 54, renegs on his referendum promise and states clearly he didn’t actually declare independence for Spain’s largest regional economy. At that point his separatist alliance might start to unravel. That sets Catalonia on track toward early regional elections with an uncertain outcome to the balance of power, which currently runs in favor of separatism.
Alternatively, the worst case is – obviously – the opposite: should the Catalan leader and fomer journalist assert he did declare independence, Rajoy will use Article 155 of the Spanish Constitution to take direct control of the Catalan administration and sideline Puigdemont and his team. In that scenario, Rajoy eventually would have to call regional elections himself in order to return to normality.
A third option would be for Puigdemont to call regional elections himself. That would bring the Catalan political process back in line within the Spanish rule of law, allow a more measured debate on the rebel region’s future and may buy the president a couple more months in office at least.
To summarize Puigdemont’s deilmma, if he says he does proclaim independence, the central government will step in. If he says he did not, the far-left Catalan party CUP would probably withdraw its support for his minority government.
“The end-game looks the same whatever Puigdemont does, Catalonia is probably headed for regional elections,” said Talavera.
And as the world, and traders, await with bated breath to hear Puigdemont’ answer, at least 531 companies have already made their decision and transferred their legal bases out of Catalonia to other parts of Spain since the Oct. 1 referendum, according to El Mundo citing data from Spain’s College of Registrars. Furthermore, Spain’s largest banks have agreed not to recognize the government of Catalonia if it declares independence this week.
However, in a sign that Puigdemont may just force Rajoy to activate the “nuclear option”, late on Sunday Spain’s Efe news agency reported that the Catalan government believes the region would continue within the European Union and euro zone if it declared independence,  which would require the creation of a Central Bank of Catalonia (BCC) “as a monetary authority of the new country”, with a staff of 500 employees.
While it is unclear if the proposition is a bluff, EFE cited a document that was prepared by the department of the Vice Presidency and Economy and Finance, directed by Oriol Junqueras, which was obtained by EFE, and which detailed what the Catalan economy would look like in a hypothetical republic. It was also unlear if there is any particular role for bitcoin or some other altcurrency in Catalonia’s immedia future, if for some reason, the ECB decided that the breakaway territory would no longer be part of the eurozone, leaving a major question mark over what its future currency would be.

 

END

 

In defiance of Rajoy, Puigdemont gives an evasive reply which in turn activates a second ultimatum deadline

 

(courtesy zerohedge)

Catalan Leader Defies Spain, Sends Evasive Reply To Rajoy Activating Second Ultimatum Deadline

The Catalan stand-off has been extended until Thursday as both sides hold their ground.
After days of expectation and talks with his separatist allies, Catalan leader Carles Puigdemont stood by his decision to keep his region’s declaration of independence from Spain “in suspension” despite a demand for clarity from Spain prime minister Rajoy, effectively challenging the central government to follow through on promises to forcibly take control of the region by sending an evasive reply to the central government’s Article 155 notification, which on Wednesday began the process of suspending home rule in the region.
The Spanish Prime Minister’s office was seeking a simple “yes” or “no” reply by 10 a.m. on Monday on the question of whether Mr. Puigdemont had or had not declared independence last Tuesday. Anything other than “no”, the First Minister was warned, would lead to the activation of the so-called faced the use of Article 155 of the Spanish constitution. This article is the so-called “nuclear option” which allows Madrid to dissolve the regional government and call fresh regional elections. The central government can also take over the local police force and television channels.
Eventually, Puigdemont chose more obfuscation and defiance: his four-page reply, obtained by Catalan radio stations Catalunya Radio and RAC1 and released by The Spain Report, neither confirmed nor denied he had proclaimed a new Catalan republic last week, but said the declaration remained “in suspension” and proposed two months of dialogue arguing that the Spanish people and Europe will only understand “dialogue, negotiation and agreement.” He did not say what he would do if talks did not take place by the middle of December.
The full letter is below.

“The situation we are living through”, the letter begins: “is of such transcendence that it demands political solutions and replies that are up to the job”. Both “the majority of society” and Europe would only understand a solution based on “dialogue, negotiation and agreement”.

Puigdemont says he was “surprised” by the central government’s decision to begin the process of suspending home rule, and that his proposal of dialogue was “sincere” and “honest”, not “a demonstration of weakness”. He also argued that despite “violent police action”, “more than two million Catalans” entrusted the regional parliament with a “democratic mandate to declare independence”.
Most “no” voters stayed at home on October 1 and opposition parties refused to take part in an illegal referendum campaign. 90% of those who voted chose “yes”. “The priority of my government is to seek the path of dialogue with all intensity… The suspension of the political mandate that came out of the ballot boxes on October 1 demonstrates our firm will to seek a solution and not confrontation.”
Furthermore, in addition to again not replying clearly to the Article 155 notification, and demanding dialogue with the central government, Puigdemont made two specific requests of Madrid.
First, he asked the Spanish government to lift “the repression of the people and government of Catalonia”. That means he would like sedition charges against the chairmen of Omnium Cultural, Jordi Cuixart, and the Catalan National Assembly (ANC), Jordi Sánchez, and Catalan Police chief Josep Lluis Trapero, dropped. He also says fundamental rights in the region have been violated, the Internet and media outlets “censored” and public accounts frozen. He makes a second mention of the “brutal police violence against a peaceful civilian population” on October 1.
The second thing Mr. Puigdemont wants is a meeting with Mariano Rajoy, “that allows us to explore the first agreements” pleading to “let us not allow the situation to deteriorate further.”
* * *
In response to Puigdemont’s non-confirmation – and non-denial – Spanish Prime Minister Rajoy said that Puigdemont’s response was a step toward Article 155, while Deputy Prime Minister Soraya Saenz de Santamaria said the Catalan government now has until its second deadlin, at 10 a.m. on Thursday, to disown its claims to a mandate for independence, and that Catalonia can still avert next steps by Spain.
“It is not difficult for Puigdemont to return to a sensible position” by then, said the Deputy PM, framing the Article 155 process as seeking to return legal government to the region rather than suspend home rule, one which aims to ensure regional self-govt is excercised according to law. She also said that Spain regrets that Puigdemont didn’t reply to PM Rajoy’s demand and that the second deadline of Spain’s demand is now activated.
“It has never been easier for someone to avoid the Constitution being applied.”
She concluded that dialogue can only take place within the law, in parliament, and that Puigdemont cannot keep population in uncertainty.
As for Prime Minister Rajoy, in his response to Puigdemont – also in the form of a letter – he said that he says laments not getting a response from the Catalan leader on whether or not they have declared independence, and said he now expects a clear response in the coming hours before the new and revised Oct. 19 deadline.
And so, today’s Catalan showdown has been pushed back by another three
days as neither side appears ready or willing to back down.

end

 

and just to infuriate the Catalans, Madrid seeks to jail popular Catalan police chief, Trapero

(courtesy zerohedge)

Spanish Prosecutors Seek To Jail Popular Catalan Police Chief

 

 

In a move that is set to further infuriate the Catalan separatists for whom the breakaway region’s police chief has emerged as a quasi-folk hero, and prompting an even more vocal push for independence, moments ago the Spanish Public Prosecutor’s Office petitioned Madrid Judge Carmela Lamela, investigating charges of sedition in Barcelona on September 20, to jail Catalan Police chief Josep Lluis Trapero on remand, court reporters for Spanish media tweeted

According to Bloomberg, Jordi Sanchez, head of the pro-independence campaign group the Catalan National Assembly, and Jordi Cuixart, who leads the Catalan cultural lobby group Omnium, are also to be interrogated by magistrates.
The judge is expected to make a decision at 6 p.m. on Monday.
According to the Spain Report, Major Trapero first appeared at the National High Court as part of the investigation on October 6, but was allowed to return to Barcelona and remain in his post after the hearing.
The current Spanish criminal code describes the crime of sedition as unlawfully preventing officers of the law from properly enforcing it or otherwise executing their duties. Organisers of sedition in positions of authority may be jailed for up to 15 years.

 

end

 

 

 

AUSTRIA Austria moves to populist agenda where the anti immigrant party comes in second and a 31 yr old wins the election and must seek the anti immigrant party to lead Austria, (courtesy zerohedge) In Historic Result, 31-Year-Old Wins Austrian Elections, Worst Result For Establishment Party Since Hitler Rule

 

 

In another stunning defeat for Europe’s establishment, as previewed earlier this morning Austria’s 31-year-old Sebastian Kurz is assured victory in the Austrian National Council elections, with his center-right People’s Party set to take roughly 30.2% of the vote according to exit polls by Austrian broadcaster ORF, while just as shocking is that the anti-immigrant, nationalist Freedom Party appears set to top the Social Democrats in 2nd place with 26.8% of the vote: the two parties are expected to form a coalition government, while Chancellor Christian Kern’s Social Democrats are looking at another devastating – for Europe’s legacy parties – loss, sliding to 3rd spot with just 26.3% of the vote.
The full breakdown from the initial exit polls vs the last election results in 2013:

People’s Party (Foreign Minister Sebastian Kurz) 30.5% vs 24%
Freedom Party (Heinz-Christian Strache) 26.8% vs 20.5%
Social Democrats (Chancellor Christian Kern) 26.2% vs 26.8% in 2013
Neos (Matthias Strolz) 5.3% vs 5%
Greens (Ulrike Lunacek) 4.7% vs 12.4%
Liste Pilz (Peter Pilz) 4.3% (didn’t run in 2013)

The preliminary geographic breakdown of Sunday’s election shows that most constituencies voted for the People’s Party:

It remains to be seen if and how Kurz will form a coalition with the anti-immigrant Freedom Party – a historic outcome for the nationalist party which could enter government for the first time in history – however one thing is clear: just like in Germany, where Merkel’s CDU/CSU suffered its worst result since 1949, so in Austria the “establishment” SPÖ, or Social Democrat party just suffered what Europe Elects described as the “worst result since Hitler rule.”

We now await the market’s reaction to the news that Europe’s populist anti-establishment, anti-immigrant revolt, considered to have been dead and buried following the French elections, was not only revived after last month’s German election, but is once again thriving

FOR FULL REPORT SEE:

http://www.zerohedge.com/news/2017-10-15/historic-result-31-year-old-wins-austrian-elections-worst-result-establishment-party?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

 

 

end

 

UK/EU/BEXIT TALKS

 

Theresa May heads to Brussels trying to get the stalled talks revived

(courtesy zerohedge)

Theresa May heads to Brussels for another surprise Brexit dinner hoping to get the stalled talks  revived

 

 

 

After her disastrous speech at the Conservative party conference, Theresa May is in desperate need of some good news as she puts her reputation on the line by unexpectedly heading to Brussels and personally intervening in the stalled Brexit talks. News of the meeting came as a surprise to some in Westminster, although 10 Downing Street insisted that tonight’s dinner with EU leaders “had been in the diary for weeks.”
Unfortunately for Mrs May, the precedent for Brexit dinners is neither successful nor enjoyable. As the Telegraph reports, last time Mrs May had dinner with EU Commission President, Jean Claude Juncker, in April, Mr Juncker “was reported to have launched a scathing attack on Mrs May…saying that Brexit ‘cannot be a success’.
Maybe he’d had too many cognacs again.

Yesterday, in an effort to tip the odds slightly more in her favour, May phoned the only person that Mr Juncker might take instructions from, Angela Merkel. Downing Street claimed that the phone conversation focused on Iran (right), but acknowledged that they agreed on the importance of “constructive progress” in the Brexit negotiations. According to the FT “Theresa May has personally urged Angela Merkel to end the Brexit stand-off at this week’s EU summit in Brussels after Berlin and Paris led moves to toughen the EU’s negotiating line in the next phase of talks.”
Inexplicably, the Germans and the French were concerned that a draft statement for this week’s summit might raise UK hopes about what could be achieved in December 2017. This is the next time that EU leaders gather to assess whether enough progress has been made on negotiating the monetary settlement to begin talks on the future relationship (transition and trade, etc).
The FT quotes a colleague of Mrs May as saying “We’ve almost run out of things to talk about…it comes down to money.”
There seems little hope for Mrs May if Merkel is backing a tougher negotiating stance and, right from the start, the EU has put money first, everything else second.
The following summary of the key issues in the “divorce bill” comes from today’s Telegraph. It will be calculated based on the following:
The ongoing EU budget. The current EU budgetary period began in 2014 and continues until 2020 – a year after the UK is expected to withdraw. EU negotiators argue that the UK government voted to contribute funding to, for example, long-term infrastructure projects, until 2020. The UK government would rather these funding commitments ended in 2019.
Liabilities for loans. The UK has backed EU development lending to other member states, for example Ireland, Ukraine and Portugal. The EU wants us to make funds available to cover the chance of these loans defaulting. This money would eventually be repaid as each of the loans clears.
Pension promises. The UK would be expected to cover the pension contributions of EU officials employed during its membership period.
Other expenses. For example, two European Union agencies are currently based in the UK. The European Banking Authority and the European Medicines Agency will need to relocate after Brexit.
Considerations reducing this amount will be:
The UK’s standard rebate from all EU contributions.
A discount of whatever future EU spending had been allocated to the UK
A share of assets, such as capital from the European Central Bank or the value of European Union buildings built during our membership
If May cannot make progress and the chances of a “no-deal” Brexit rise, her position will be further undermined as MPs from her own party hold talks with the opposition Labour Party for a parliamentary veto of a no-deal Brexit.
The dinner will start at 18:30 local Brussels time and only last about 90 minutes… which is barely time for Juncker and Barnier to get on to the second bottle.

 

end

 

The pound plummets from 1.3310 down to 1.327 on a report that the Brexit talks are heading for a catastrophic breakdown due to no EU compromise. I doubt very much that the EU will budge

 

(courtesy zerohedge)

 

Cable Plummets On Report Brexit Talks Headed For “Catastrophic Breakdown” If No EU Compromise

Having traded near sessions highs most of the morning session, sterling suddenly tumbled (even if Gilts refused to move) following a Bloomberg report that the UK is said to see Brexit breakdown if the EU refuses to compromise. In immediate kneejerk reaction, GBPUSD plunged 50 pips, to session lows on fears that Theresa May’s visit to Brussels will be meaningless and just another opportunity for Juncker to get drunk.

As Bloomberg adds, Brexit negotiations are heading for a “catastrophic breakdown” unless the European Union signals this week that it will allow talks to move on to trade, according to a person familiar with the U.K. government’s position.
While the headline is likely just another trial balloon meant to send a message to Brussles, Bloomberg notes that without a clear sign that negotiations will progress to trade and transition arrangements by December at this week’s summit of European leaders, “the entire Brexit process will be in danger of collapse – and senior British ministers are losing faith in the EU’s willingness to strike a deal”, a Bloomberg source said.

 

Speaking on condition of anonymity, the person said Prime Minister Theresa May took a political risk by promising to pay into the EU budget and settle the divorce bill in a speech in Florence, Italy, last month and now needs something in return before she can make further concessions. As reported earlier, the assessment comes as the prime minister heads to Brussels for dinner with EU chiefs ahead of a critical summit starting Thursday, and is calling EU leaders individually in last-minute diplomatic efforts. May will spend 90 minutes talking with European Commission President Jean-Claude Juncker and the bloc’s chief negotiator Michel Barnier on Monday in an attempt to break the deadlock in the negotiations.
Some more details from Bloomberg:

 

Germany and France made clear on Friday they want to toughen the tone of a declaration that’s being prepared for the summit, according to an official familiar with the discussions. The latest draft already offered the U.K. little beyond encouraging words and a call for Barnier to start preparatory discussions on trade talks — but only within the European side.

Talks have stalled because Britain won’t detail how much it’s ready to pay as it leaves the bloc until the EU starts discussing the future trading agreement and the transition that Britain wants to smooth the split. Europe says it won’t do that until May’s government takes steps toward an agreement on the bill. With or without a deal, the U.K. will leave in March 2019.

German Chancellor Angela Merkel and French President Emmanuel Macron are the two key obstacles to allowing talks to move on to trade, according to the first official. Germany has a vested interest in delaying progress in the Brexit talks because Frankfurt is trying to tempt companies away from London, the person said.
Meanwhile, Euroskeptics in May’s Conservative Party want her to “call time” on the negotiations and walk away without a deal. She needs the EU now to create the atmosphere and the space for her to make any further concessions, because her political position at home is so precarious, the person said.
Since so far no compromises have been offered by any Eurocrats, tonight’s unexpected Theresa May dinner and drinks with Juncker could make or break the Brexit process, not to mention cost May her job.

 

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

The Syrian government is not happy with Turkey’s incursion into Syria as they ask for their unconditional withdrawal.  They have stated that Turkey is allied with the terror supporting iSIS. Their real wish is to stop the Kurds from forming an independent Kurdistan

 

(courtesy zerohedge)

Syria Demands “Immediate, Unconditional Withdrawal” Of “Terror Supporting” Turkey From Its Territory

 

 

The Syrian government has issued a strong condemnation of Turkey’s recent military incursion into northern Syria, demanding “immediate and unconditional withdrawal” according to Syrian state media citing the foreign ministry. Though Turkey claims to be acting in accordance with the Astana agreement reached by Russia, Turkey, and Iran, Damascus is now calling the move a departure from the deal and an intentional violation of Syrian sovereignty, while further accusing Turkey of collaborating with al-Qaeda terrorists on the ground in pursuance of an expansionist policy.
On Thursday a large Turkish army convoy consisting of more than 100 Turkish soldiers, including special forces and commandos, along with at least 30 armored trucks entered Syria’s Idlib region for a joint mission ostensibly to monitor a local de-escalation zone and “to pacify al-Qaeda linked militants” there, according to official Turkish statements.
Many analysts, however, predict that Turkey will not directly confront al-Qaeda, but instead will either allow the terror group to secure an exit or will recognize it under a new form or identify while pretending it to be a local organization.

The Syrian foreign ministry said on Saturday, “The Syrian Arab Republic condemns in the strongest terms the incursion of Turkish military units in the Idlib Province, which constitutes to blatant aggression against the sovereignty and territorial integrity of Syria and flagrant violation of international law.” According to SANA Syrian state news, the foreign ministry further noted that Turkey’s military entered Idlib province “accompanied by Jabhat a-Nusra terrorists which shows clearly the close relationship between Turkish regime and terrorist groups, a matter that the international community should pay more attention to and take firm stance in order to oblige Turkey to end its support to terrorism which managed to shed the blood of Syrian people and destabilize the region and the entire world.”
Meanwhile, Russia has not formally responded to Damascus’ condemnation, and it is unclear how the Syrian government’s declaration will be interpreted. Turkish government officials have consistently claimed complete cooperation and coordination between Turkey and Russia – though President Erdogan this week stressed that Turkey would implement its “own game plan, step by step” in Syria and that “we are not bounded by just resistance or defense.”

Map source: Middle East Eye
Erdogan has also vowed to prevent the YPG (Syrian Kurdish “People’s Protection Units”) from establishing what he called a “terror corridor” to the Mediterranean. Turkey has long sought a green light from Russia to attack YPG-held Afrin – a city close to the Turkish border which is part of the Kurdish declared Rojava autonomous zone – as part of a broader Turkish attempt to prevent such a Kurdish zone from gaining any permanence. And it appears we are now witnessing the beginning this strategy which Turkey clearly holds as its top priority far and above pacifying Idlib (after all, Turkey assisted al-Qaeda’s takeover of Idlib in the first place).
Both the Syrian Kurds and the Damascus government see Turkey’s real motives in Idlib as merely a land grab using both local proxies (including al-Qaeda) and direct troop occupation. Turkey hopes the deal reached in Astana, Kazakhstan to implement “safe zones” in the area will give Russian backing to its war on the Kurds, and Turkey’s first step which it began implementing this week is to ensure the YPG is contained. As a spokesman for the Turkish sponsored Free Syrian Army (FSA) told the Reuters this week, the Turkish deployment would “ensure the area is protected from Russian and regime bombing and to foil any attempt by the separatist YPG militias to illegally seize any territory.”
In doing a deal with Turkey, it now appears Russia will walk a fine line between keeping a leash on Erdogan’s machinations and conducting legitimate anti-terror operations with its Syrian ally.

 

end

 

Israeli jets hit Syrian air defense targets near Damascus

 

(courtesy zerohedge)

Israeli Fighter Jets Launch Air Strike On Syrian Air Defense Battery Near Damascus

 

 

After years of undermining the regime of Syrian leader Bashar al Assad, an effort that has seen Israel countenance ISIS training camps near its borders and launch recurring missile strikes on Syrian territory and its army bases while threatening to bomb Assad’s palace, the simmering conflict between the two nations broke out into the open once again overnight.

The Israeli Defense Forces confirmed that Israeli Air Force fighters conducted a missile strike against a Syrian base after a missile was fired at Israeli jets on a routine aerial reconnaissance mission in Lebanese airspace, Russia’s news agency Sputnik reports. No people were in injured, and the Israeli jets returned safely, but not before attacking an anti-aircraft battery east of the Syrian capital of Damascus. As usual, The IDF blamed the Syrian government for the incident, however, presenting no proof to support the claim. Damascus has yet to comment on the situation.

“The IDF maintains its ability to thwart hostilities against Israeli civilians,” the Israeli Defense Forces stated. According to one of the heads of the Israeli military’s press service, Israel notified Russia of the airstrike as it was being carried out. Ironically, the Israeli military said that it “has no intention to destabilize the situation.”
Following several incidents earlier in the year, a de-escalation zone had been created covering territories near the Syria-Israel border in the south of the country. The agreement was reached following the first talks between Putin and US President Donald Trump at G-20 summit.
Today’s incident is the latest in a series of similar provocations that have been taking place between the two countries. Israel has claimed to have been repeatedly shelled from the Syrian territory bordering the country and retaliated for the attacks it blames on Damascus, despite the fact that terrorist groups have been controlling parts of bordering territories throughout Syria with some suggesting that Israel cultivates said terrorist organizations. A de-escalation zone had been created on territories near the Syrian border with Israel in the south of the country. The agreement was reached following the first talks between Putin and US President Donald Trump at G20 summit.
Most of the incidents took place in the Golan Heights, internationally recognized as Syrian territory that was seized by Israel during the Six-Day War in 1967 with the peace treaty never signed. In 1981, the Israeli parliament voted to annex two-thirds of the Golan Heights. The United Nations has stated on several occasions that Israel’s occupation of the Golan Heights is illegal, calling for it to be returned to Syria

 

 

END

 

KIRKUK IS NOW COMPLETELY UNDER IRAQI CONTROL  WITH THE KURDS ABANDONING THE CITY…AND A MAJOR CONTRIUBTOR FOR THEIR OIL INCOME

 

(COURTESY ZEROHEDGE)

After Lightning Offensive, Kirkuk Is Now Fully Under Iraqi Military Control

 

 

Iraq’s military has effectively gained control of major assets and government buildings in Kirkuk city, and is now set to fully pacify it after overnight clashes at a moment when oil prices rose toward a six month high as the conflict now threatens output.
Iraq’s elite U.S.-trained Counter-Terrorism Force has taken over the provincial government headquarters in the center of Kirkuk after operations to seize the city from Kurdish forces began overnight – the contested city is now reportedly under the control of Iraqi national forces. Some of the first footage Western audiences woke up to Monday morning were of (ironically enough) US supplied equipment – including tanks, being used to bulldoze images of Iraqi Kurdistan President Masoud Barzani. Iraqi forces have further pulled down Kurdish flags flying over government buildings throughout the city, while leaving the Iraqi flag flying.

 

Image source: Rudaw
The Iraqi advance on the oil-rich and ethnically diverse previously Kurdish-held city was lightning fast and largely without a major fight – aided by the fact that some Kurdish Peshmerga fighters fled their posts as national militias advanced, which is a reflection of Iraqi Kurdistan’s own political divide: one faction within the PUK Peshmerga (Patriotic Union of Kurdistan) is relatively pro-Baghdad, making the Iraqi advance easy in sections of the city held by the group.
And though Kurdish media frequently highlighted footage of armed civilians taking to the streets Sunday and Monday, the city’s large Turkmen population as well as the up to 20% Arab and Assyrian population generally fears and rejects Kurdish dominance over the region.

The Kurdish opposition party PUK, whose fighters allowed Iraqi forces to enter parts of the city, confirmed Monday that it allowed the breach after reaching an agreement with the Iraqi military even as fighters representing the governing Kuristan Democratic Party (KDP) continued to battle. A Peshmerga spokesman, however, warned that the  “government of Abadi bears the main responsibility for triggering war on the Kurdistan people, and will be made to pay a heavy price.” The Peshmerga further accused those PUK factions which refused to fight of “plotting” against the Kurds and committing “a great and historic treason.”

A PUK Peshmerga commander, Wista Raool, told the New York Times that his party seeks the return of contested oil fields to the federal government:

 

Mr. Raool accused Mr. Barzani and his party of “stealing” the oil from the Iraqi government. Many members of the P.U.K., which maintains its own pesh merga force, opposed the referendum vote because it was led by Mr. Barzani.

But northwest of Kirkuk city, Kurdish fighters defending oil fields administered under Barzani’s KDP party vow to never surrender to the Iraqi army or its Shiite paramilitary forces:

 

The commander of forces there, Kamal Karkokly, said in an interview at his command post Sunday that his fighters would not surrender their positions.

“We have enough weapons,” Mr. Karkokly said. “We can fight as long as we have to.”
Though oil production continued without interruption throughout the end of last week and over the weekend, even as reports of fighting south of Kirkuk surfaced, Reuters reported early Monday some 350,000 barrels per day (bpd) of production was temporarily shut down from major fields Bai Hassan and Avana due to security concerns as Iraqi forces entered Kirkuk. This helped spur a jump in world oil prices Monday, and markets remain unsettled. Kirkuk oil fields produce 10% of Iraq’s total output. However, Kurdish officials are now disputing that the KRG (Kurdistan Regional Government) ever gave the order to halt production:

 

 

 

 

 

The Kurdistan Region’s Ministry of Natural Resources (MNR) on Monday denied rumors of oil production being shut down following the recent violence in Kirkuk Province.

Ashti Hawrami, MNR’s minister of natural resources, ordered the resumption of full production from oil fields in Kirkuk after a brief interruption.

Meanwhile, a senior Baghdad oil official told Reuters after Iraqi forces entered the city that, “We’ve got confirmation from military commanders that it’s a matter of a very short time,” and added, “our brave forces will regain control of all Kirkuk oil fields and then we will restart production immediately.”
This morning, the US embassy in Baghdad issued a statement calling for calm on both sides, and reiterating the common cause of fighting ISIS:

 

We support the peaceful exercise of joint administration by the central and regional governments, consistent with the Iraqi Constitution, in all disputed areas. ISIS remains the true enemy of Iraq, and we urge all parties to remain focused on finishing the liberation of their country from this menace.

 Ironically, the US has given military aid to both sides which were previously partners in anti-ISIS operations, which is why US equipment is increasingly appearing on either side of the firefights. 6 .GLOBAL ISSUES 7.OIL ISSUES

This may halt the rally in oil, but most important it drives a nail into the heart of USA hegemony and the uSA dollar petro scheme.  Will China demand that oil be priced in yuan?

(courtesy zerohedge)

Oil Rally Threatened As China Reportedly Offers To Buy Aramco Stake Directly

 

 

Amid confusion over whether the massive Saudi Aramco IPO is on hold until 2019, or permanently shelved in favor of a private placement, Reuters suggests the latter is now more likely as ‘sources familiar with the matter’ say China is offering to buy up to 5 percent of Aramco directly (offering the Saudis the lack of transparency they may have been nervous of with  a public placing).

As we noted previously, China has been very actively diversifying its sources of energy…

 

China has understandably played the leading role in Russia’s attempts to broaden its role as an energy supplier in Asia. Rosneft recently sold 14.16 percent of its shares to CEFC China Energy for about $9 billion by way of the Qatar Investment Authority and Glencore. The move reflected the challenges financial sanctions have created for the firm as well as China’s growing clout as an importer. Chinese demand hit 11.67 million barrels per day (bpd) and had risen 6 percent year-on-year in July. Rosneft was smart to finalize supply agreements with PetroChina set to boost its daily exports to China from 400,000 bpd to 600,000 bpd next year. Rosneft also signed an agreement with CEFC to jointly explore for Eastern Siberian reserves and increase direct deliveries to China.

These deals play into Russian-Saudi competition for the Chinese market. China’s oil imports are up 12.3 percent year-on-year, but cuts haven’t hit Russian exports. Saudi oil exports to China hovered at 1.03 million bpd so far this year, a 1.7 percent drop. Russia’s stood at 1.16 million bpd, a 13.2 percent increase. After closing the CEFC deal, Rosneft announced it expected to deliver 40 million tons of oil to China by year’s end, a 9 million ton increase on their expected deliveries. That would average out to around 800,000 bpd from Rosneft alone, assuring Rosneft’s dominant control over Russian supplies to the Chinese market. The increase in supplies has paralleled a long-standing project to develop a refinery in Tianjin. But the project, first announced in 2009, has no clear end date despite a press release concerning its implementation with CNPC in January.

Saudi Arabia has disproportionately lost share in China for several reasons. For one, it bears the burden of cut compliance. Angola overtook it because of China’s dominant position there and didn’t feel the need to comply. For another, Russian firms have built up new assets and export capacity in Eastern Siberia and the Far East. Russian blends have more physical access to Asia-Pacific markets, making them more competitive than they’ve historically been. Finally, spreads on the market between light and heavy crude have narrowed, making Russia’s lighter crudes more competitive against Saudi heavy crudes. But Saudi Arabia is not without a means of responding.

Saudi Aramco reached a refinery deal with state-owned China North Industries Group Corp. in May around the Belt and Road summit. Though the refinery is smaller than that proposed in Tianjin, Saudi Aramco has one considerable advantage over Rosneft: it lacks the same messy history Rosneft has with China’s state firms and it’s not sanctioned. CEFC was a logical partner for Rosneft in China because, unlike CNPC and state-owned players, it could more easily afford to take the sanctions risk. It can also dangle shares to China. Further, the refinery deal signals a willingness to work with China’s independent refiners. These so-called “teapot” refineries have driven demand growth and provide Aramco greater diversity in business opportunities longer-term than Rosneft’s relationships with CNPC and CEFC afford it.

Ever since the company started talking about an IPO of 5 percent of its shares, China has been a logical partner. A sale to Chinese firms in exchange for investments into China’s downstream would be huge win. The Kingdom also signed a similar agreement for an investment platform with China worth $20 billion in late August, just as it became clear CEFC would acquire stakes in Rosneft. That throws a fair bit of shade on Russia’s $1 billion fund agreed to this last visit. Topping it all off, King Salman and Aramco also signed deals reportedly worth $65 billion with China in March.

 

And than last week, headlines hit regarding delays/shelving of the IPO…
The FT notes that talks about a private sale to foreign governments – including China – and other investors have gathered pace in recent weeks, according to five people familiar with the IPO preparations, amid growing concerns about the feasibility of an international listing.

 

The Saudi state oil company has struggled to select a suitable international venue for its shares, as New York and London have vied for what has been billed as the largest ever flotation.

The company would still aim to list shares on the kingdom’s Tadawul exchange next year if they pursue the private sale, the people said.

The latest proposal by the company’s financial advisers was described by one of the people as a “face-saving” option for Saudi Aramco, which has worked on plans to list its shares internationally for more than a year.

 

Desk chatter included comments that the Saudis were anxious about the level of due diligence and transparency involved in a public offering.
A Saudi Aramco spokesperson said:

 

“A range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track.”
The planned listing of a 5 per cent stake in Saudi Aramco is the centrepiece of an economic reform programme led by Saudi Arabia’s powerful crown prince Mohammed bin Salman, who is keen for a 2018 IPO. He has said the company could be worth $2tn although a Financial Times analysis put the valuation figure at around $1tn.
An economic recession in the kingdom is piling pressure on the prince, the king’s son and next in line for the throne, amid calls for the government to increase investment and ease austerity.
And now, as Reuters reports, perhaps the king has options…

 

Chinese state-owned oil companies PetroChina and Sinopec have written to Saudi Aramco in recent weeks to express an interest in a direct deal, industry sources told Reuters. The companies are part of a state-run consortium including China’s sovereign wealth fund, the sources say.

Saudi Arabia’s Crown Prince Mohammed bin Salman said last year the kingdom was considering listing about 5 percent of Aramco in 2018 in a deal that could raise $100 billion, if the company is valued at about $2 trillion as hoped.

“The Chinese want to secure oil supplies,” one of the industry sources said. “They are willing to take the whole 5 percent, or even more, alone.”

PetroChina and Sinopec declined to comment.
Two senior industry sources said Riyadh was keen on China, its biggest buyer of oil, becoming a cornerstone investor in Aramco.
But no decision has yet been taken on whether to accept China’s offer, or how much stock could be offered to cornerstone investors, the sources said.
Two sources told Reuters that sovereign wealth funds from South Korea and Japan, which are also major buyers of Saudi oil, were also interested in acquiring a stake in Aramco.
Critically though, as The Wall Street Journal reports, the oil rally could have the legs kicked out from under it if Saudi Aramco opts to forgo a public listing of its shares.

 

“I think the market is clinging to the IPO as the rationale,” said Robert McNally, president of the Rapidan Group.

Conventional wisdom has it that “the Saudis, as long as they were planning this IPO next year, they had almost no choice but to unilaterally, if necessary, cut production to keep oil prices from falling.”
Mr. McNally and other analysts said a delayed or canceled IPO wouldn’t necessarily weaken Saudi Arabia’s resolve. The kingdom needs higher oil prices to shore up its budget–not just to ensure the success of its offering.
But convincing investors of that may be a tougher sell.

 

“It does seem like a large number of people put significance on that Saudi IPO,” said Kyle Cooper, a consultant at ION Energy Group.
Bill O’Grady, chief market strategist at Confluence Investment Management, has said that prospect of a 2018 IPO was part of the reason he believed U.S. crude futures could climb as high as $60 a barrel. But the market may have been pricing in some skepticism.

 

“It is bearish news, but the market hasn’t seemed to put 2+2 together on this issue,” he said in an email Friday.

“If the market had discounted that the Saudis would do whatever necessary to get oil to $60 for the IPO, it would already be there.”

8. EMERGING MARKET Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings MONDAY morning 7:00 am

Euro/USA   1.1805 DOWN.0005/ REACTING TO SPAIN VS CATALONIA/REACTING TO  +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES  GREEN EXCEPT SPAIN/  

USA/JAPAN YEN 111.83 UP 0.234(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/   

GBP/USA 1.3294 UP .0024 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2530 UP .00186(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS MONDAY morning in Europe, the Euro FELL by 5 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1805; / Last night the Shanghai composite CLOSED DOWN 12.05 POINTS OR .36%      / Hang Sang  CLOSED UP 216.37 OR .76%   /AUSTRALIA  CLOSED UP 0.55% / EUROPEAN BOURSES OPENED GREEN EXCEPT SPAIN 

The NIKKEI: this MONDAY morning CLOSED UP 100,38 POINTS OR .47% 

Trading from Europe and Asia:
1. Europe stocks  OPENED GREEN EXCEPT SPAIN  

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 216.37 POINTS OR .76%  / SHANGHAI CLOSED DOWN 12.05 POINTS OR .36%    /Australia BOURSE CLOSED UP 0.55% /Nikkei (Japan)CLOSED UP 100.38 POINTS OR .47%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1304,75

silver:$17.45

Early MONDAY morning USA 10 year bond yield:  2.291% !!! UP 2 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.8214 UP 2 IN BASIS POINTS  from THURSDAY night. (POLICY FED ERROR)

USA dollar index early MONDAY morning: 93.18 UP 9 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  MONDAY MORNING

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And now your closing MONDAY NUMBERS  \4 PM

Portuguese 10 year bond yield: 2.329% DOWN 1/2 in basis point(s) yield from FRIDAY 

JAPANESE BOND YIELD: +.064%  0  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.582% DOWN 3 IN basis point yield from FRIDAY 

ITALIAN 10 YR BOND YIELD: 2.035 down 8 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 46points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.377% down 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY 

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM

Euro/USA 1.1810 DOWN 0 (Euro DOWN 0 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.74 UP 0.153(Yen DOWN 15  basis points/ 

Great Britain/USA 1.3287 UP  0.0017( POUND UP 17 BASIS POINTS)

USA/Canada 1.2533 UP.0089 Canadian dollar DOWN 89 basis points AS OIL ROSE TO $51.89

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This afternoon, the Euro was FLAT 15 to trade at 1.1810

The Yen FELL to 111.74 for a LOSS of 16  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  

The POUND FELL BY 7 basis points, trading at 1.3276/ 

The Canadian dollar ROSE by 32 basis points to 1.2442,  WITH WTI OIL RISING TO :  $51.39

The USA/Yuan closed AT 6.589  the 10 yr Japanese bond yield closed at +.064% DOWN 0 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1  IN basis points from FRIDAY at 2.2873% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.813 UP 1 in basis points on the day /

Your closing USA dollar index, 93.15  UP 6 CENT(S)  ON THE DAY/400 PM/BREAKS RESISTANCE OF 92.00 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 1:00 PM EST

London:  CLOSED DOWN  8,47 POINTS OR 0.11%
German Dax :CLOSED UP 11.83 POINTS OR .09%
Paris Cac  CLOSED UP 11.14 POINTS OR 0.21% 
Spain IBEX CLOSED DOWN 76.60 POINTS OR 0.75%

Italian MIB: CLOSED UP 14.77POINTS OR 0.07% 

The Dow closed UP  85.24 POINTS OR .37%

NASDAQ WAS closed UP  18.20 PTS OR .28%  4.00 PM EST

WTI Oil price;   51.89 1:00 pm; 

Brent Oil: 57.1731:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.34 DOWN 1/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 1 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +.377%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$51.89

BRENT: $57.34

USA 10 YR BOND YIELD: 2.2873%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.813% 

EURO/USA DOLLAR CROSS:  1.1815 DOWN .0015

USA/JAPANESE YEN:111.74   UP  0.153

USA DOLLAR INDEX: 93.15 UP 6 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3287 : UP 17 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2533 DOWN 89 BASIS pts 

German 10 yr bond yield at 5 pm: +0.377%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY Stocks Surge To Moar Record Highs But Taylor Chatter

by Tyler Durden

http://www.zerohedge.com/news/2017-10-16/stocks-surge-moar-record-highs-taylor-chatter-spooks-bonds-dollar-gold?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

end

 

More fiction:  the Empire (NY Mfg Index) soars to 8 yr highs despite the fact that new orders plunged and prices paid increased. The beat was an increase of 8 standard deviations

 

(courtesy zerohedge)

Empire Fed Survey Soars To Highest In 8 Years (As New Orders Plunge)

Beating expectations by 5 standard deviations…

Respondents to the Empire Fed’s Manufacturing Survey have not been more exuberant about America since Oct 2009.

This continues the recent trend of incredible survey-based beats as hard data remains unimpressed…

The only thing that is odd about this monstrous number is the plunge in new orders… and prices paid… and work hours … and inventories.
Prices paid fell to 27.3 vs 35.8
New orders fell to 18 vs 24.9
Work hours fell to 0 vs 5.7
Inventory fell to -7.8 vs 6.5

So what drove the spike? Simple – Hope!!
Six-month general business conditions rose to 44.8 vs 39.3

 

 

end

 

Good for gold and silver to retreat:  NAFTA talks heat up as the Trump administration again takes a protectionist and aggressive stance on the auto sector

 

(courtesy zerohedge)

 

NAFTA Talks Heat Up As Trump Administration Takes Aggressive Stance On Autos

 

 

Trump’s NAFTA negotiators in recent days put forth a string of bold proposals on everything from auto rules of origin, a sunset clause, government procurement, and gutting dispute panels seen by the other nations as core to the pact. The moves were long-signaled, as was Canadian and Mexican opposition to them, but with a more aggressive stance taken by U.S. negotiators in the 4th round of talks, which will continue today in Washington D.C., many are beginning to question whether a deal is ultimately feasible.  Per Bloomberg:

 

The fourth round of Nafta talks will continue Monday at a Washington-area hotel, before a ministerial-level meeting on Tuesday. People familiar with the proceedings describe essentially a two-track process: legitimate progress being made to modernize the pact in less contentious areas, including topics like regulations and services, with essentially no progress on the most divisive U.S. proposals.

Nafta’s fate may now hang on how flexible the U.S. is about its demands heading into the fifth round of talks, scheduled for Mexico City around the first week of November. While the parties had wanted to reach a deal by December, officials familiar with the negotiations say the talks are likely to drag on for months.
Of course, hanging over the negotiations are Trump’s regular threats to walk away.

 

One official familiar with the proceedings, who wasn’t authorized to speak publicly, said on Sunday that it seems more likely Trump will give the mandatory six months’ notice required to leave Nafta, though not necessarily end up backing out. Others were less sure.

“He’s unpredictable, so I don’t know,” said Stephen Moore, a senior economic adviser during Trump’s campaign and chief economist at the Heritage Foundation. “I do feel, though, that his bark has been worse than his bite on trade. That doesn’t mean that he’s retreating. But I think we’re going to see a Nafta 2.0 that will find areas that will give the U.S. even greater benefits, while protecting American workers.”

Mexico has signaled that it won’t negotiate during the six-month window if Trump announces he’ll walk away, and it’s unclear what the next steps would be were that to happen. Congress and others are vowing legal and political fights if the president tries to pull out. If Trump manages to, though, Canada could still fall back on an existing bilateral deal with the U.S.; Mexico has no such previous deal.

 

That said, as Richard Neal of Massachusetts, the top Democrat on the House Ways and Means committee, said over the weekend, a full withdrawal from NAFTA would require a vote from Congress…a hurdle which Trump has had some difficulty clearing in his first 10 months in Washington D.C.

 

The proposals have spurred public warnings from prominent U.S. lawmakers and the private sector about the perils of scuttling a deal that over more than two decades has broken down trade barriers, including tariffs, for industries like manufacturing and agriculture.

Warnings are growing from Congress. Richard Neal of Massachusetts, the top Democrat on the House Ways and Means committee, said he prefers a Nafta renewal to a pull-out, which he said Congress would probably block.

If Trump “even suggests that the United States should leave Nafta, to undo that relationship, you would have to go back to Congress. And that would be a much more difficult task for him,” Neal said in a Canadian TV interview with The West Block that aired on Sunday.

The U.S. Chamber of Commerce has issued its own warning. Last week, Chief Executive Officer Tom Donohue visited Mexico City and pledged to fight “like hell” to preserve Nafta. The largest American business lobbying group plans to send an “army” of representatives to Capitol Hill to demonstrate support for the deal, Donohue said.

Of course, as Boston Consulting Group pointed out in a recent presentation to the Motor & Equipment Manufacturers Association, any success in imposing tariffs on imported parts could mean large price increases for American consumers as roughly $2,000 worth of content on each U.S. assembled car is sourced from Mexico.

Meanwhile, Mexico is just one small component of a truly global automotive supply chain with $3,500 worth of imported parts on each car assembled in U.S. plants.

For those reasons, Mexico’s negotiators said they’re still optimistic a deal can be reached because they expect pushback from the U.S. private sector.

 

END

 

Well that about does it for tonight

I HOPE TO DO A COMMENTARY FOR TUESDAY AND WEDNESDAY NIGHT BUT NOT PROMISING

HARVEY


Oct 13/GOLD AND SILVER RISE DUE TO POOR USA WAGE GROWTH/TRUMP DECERTIFIES USA /IRAN NUCLEAR AGREEMENT/

Fri, 10/13/2017 - 18:48

GOLD: $1302.35 up $10,15

Silver: $1739 up 22 cents

Closing access prices:

Gold $1303.90

silver: $17.42

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: $1304,65 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1295,60

PREMIUM FIRST FIX:  $9.05 (premiums getting larger)

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1305.65

NY GOLD PRICE AT THE EXACT SAME TIME: $1297.00

Premium of Shanghai 2nd fix/NY:$8.65(PREMIUMS GETTING LARGER)  

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1293.90

NY PRICING AT THE EXACT SAME TIME: $1293.90

LONDON SECOND GOLD FIX  10 AM: $1299.60

NY PRICING AT THE EXACT SAME TIME. 1299.60

For comex gold: OCTOBER/

NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 5 NOTICE(S) FOR  500  OZ.

TOTAL NOTICES SO FAR: 2334 FOR 233,400 OZ  (7.259TONNES)

For silver: OCTOBER  124 NOTICES FILED TODAY FOR 620,000  OZ/ Total number of notices filed so far this month: 516 for 2,580,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE BY 1289 contracts from  187,422  UP TO 188,711  WITH RESPECT TO YESTERDAY’S TRADING (UP  9 CENTS).  THE CROOKS ARE HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS.  IT IS OBVIOUS THAT WE MUST HAVE HAD ZERO BANKER SHORT COVERING.

RESULT: A GOOD SIZED RISE IN OI COMEX  WITH THE  9 CENT PRICE RISE.  OUR BANKERS COULD NOT COVER ANY OF THEIR HUGE SHORTFAL . 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.944BILLION TO BE EXACT or 135% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 124 NOTICE(S) FOR 620,000  OZ OF SILVER.

In gold, the open interest ROSE BY 2858 CONTRACTS WITH THE GOOD SIZE  RISE in price of gold ($6.20 ) .  The new OI for the gold complex rests at 521,247. OUR BANKER FRIENDS COULD NOT COVER ANY OF THEIR GOLD SHORTS AS THEY RETREATED TO HIGHER GROUND.

 

Result: A GOOD SIZED INCREASE IN OI WITH THE RISE IN PRICE IN GOLD ($6.20). WE PROBABLY HAD ZERO BANKER GOLD SHORT COVERING BY THE BANKERS. 

we had: 5 notice(s) filed upon for 500 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:   

Tonight , NO CHANGES  in gold inventory at the GLD/

Inventory rests tonight: 858.45 tonnes.

SLV

Today:  NO changes in inventory:

INVENTORY RESTS AT 326.898 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 1289 contracts from 187,442  UP TO 188,711(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. THE DATA SEEMS TO SUGGEST THAT THE BANKERS COULD NOT ALSO COVER THEIR GOLD SHORTS COVERING . HOWEVER IT IS CLEAR THAT  SILVER  IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER.  THE BANKERS RETREATED TO HIGHER GROUND WHERE THEY WILL TRY AGAIN.

RESULT:  A GOOD SIZED INCREASE IN SILVER OI  AT THE COMEX WITH THE  RISE IN PRICE OF 9 CENTS WITH RESPECT TO YESTERDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS 

(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 THURSDAY night/FRIDAY morning: Shanghai closed UP 4,42 points or .13% /Hang Sang CLOSED UP 17,40 pts or .06% / The Nikkei closed UP 200.46 POINTS OR .96/Australia’s all ordinaires CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed UP  at 6.5877/Oil UP to 51.58 dollars per barrel for WTI and 57.45 for Brent. Stocks in Europe OPENED MIXED .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5877. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5826 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY

i

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

b) REPORT ON JAPAN c) REPORT ON CHINA 4. EUROPEAN AFFAIRS   5. RUSSIAN AND MIDDLE EASTERN AFFAIRS 6 .GLOBAL ISSUES

 

7. OIL ISSUES 8. EMERGING MARKET 9.   PHYSICAL MARKETS 10. USA Stories

i

Let us head over to the comex:

The total gold comex open interest ROSE BY A STRONG 2858 CONTRACTS UP to an OI level of 521,247 WITH THE RISE IN THE PRICE OF GOLD ($6.20 RISE IN YESTERDAY’S TRADING).  IT SEEMS THAT OUR BANKER FRIENDS TRIED  TO COVER SOME OF THEIR HUGE GOLD SHORTFALL BUT TO NO AVAIL. SO THE BANKERS RETREATED TO HIGHER GROUND HOPING TO TRY AGAIN COVERING SOME OF THEIR SHORTFALL. OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH WE SHOULD EXPECT  GOLD TO BE STRONG THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  GOODSIZED open interest INCREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($6.20). BANKERS RETREATED TO HIGHER GROUND AND COULD NOT  COVER ANY PORTION OF THE GOLD SHORTFALL

 

IN SEPTEMBER,CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

NOW THAT WE ARE CLOSE TO THE 29TH CHINESE CONGRESS, THE BANKERS ARE TAKING NO CHANCES AS THEY START TO COVER THEIR GOLD/SILVER SHORTFALL.

We have now entered the active contract month of Oct and here we saw a LOSS of 0 contracts DOWN to 220 contracts.  We had 0 notices filed yesterday so we LOST 0 contracts or NIL oz will NOT stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given. The low number of notices early in the delivery cycle is evidence of a lack of physical gold.

The November contract saw A loss OF 90 contracts down to 1297.

The very big active December contract month saw it’s OI GAIN OF 310 contracts UP to 399,883

.

We had 5 notice(s) filed upon today for  500 oz

 VOLUME FOR TODAY (PRELIMINARY) 273,662

CONFIRMED VOLUME YESTERDAY: 258,630

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI ROSE BY 1289 CONTRACTS FROM 187,422 UP TO 188,711 WITH YESTERDAY’S 9 CENT RISE IN PRICE. WE HAVE HAD NO BANKER SHORT COVERING AS THE CROOKS TRY AND FAILED TO  LOOSEN ANY SILVER LONGS FROM THE SILVER TREE AS THE BANKERS RETREATED TO HIGHER GROUND.  THE GOOD SIZED RISE IN SILVER PRICE MEANS THAT THEY HAVE ABANDONED ALL HOPE OF COVERING AT LOWER PRICES, SO THEY REGROUP AT MUCH HIGHER PRICES WHERE THEY WILL ATTEMPT AGAIN AT COVERING. We have now entered the non active contract month of  October and here the OI LOST 87 contacts DOWN TO 425.  We had 1 notice filed on yesterday so we LOST 86  contracts or AN ADDITIONAL 430,000 oz will NOT stand for delivery and 86 EFP’s were issued IN WHICH DEPARTING LONGS RECEIVED A FIAT BONUS PLUS A FUTURE DELIVERABLE PRODUCT AND NO DOUBT THAT WOULD BE A LONDON BASED FORWARD.  November saw a GAIN of 17 contract(s) and thus RISIING TO  307. After November, the NEXT big active contract month is December and here the OI GAINED 437  contracts UP to 142,081 contracts.

We had 124 notice(s) filed for  620,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.13/2017.

Gold Ounces Withdrawals from Dealers Inventory in oz   n/a Withdrawals from Customer Inventory in oz   n/a oz Deposits to the Dealer Inventory in oz    n/a oz Deposits to the Customer Inventory, in oz   n/a No of oz served (contracts) today   5notice(s) 500 OZ No of oz to be served (notices) 215contracts (21,500 oz) Total monthly oz gold served (contracts) so far this month 2334 notices 233,400 oz 7.2441 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz Today we HAD  xx kilobar transaction(s)/   WE HAD xx DEALER DEPOSIT: total dealer deposits: xx oz We had xxx dealer withdrawals: total dealer withdrawals:  xx oz we had xxx customer deposit(s): total customer deposits; xx oz We had n/a customer withdrawal(s) total customer withdrawals; nil  oz  we had xxx adjustment(s) For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 5  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 4 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2334) x 100 oz or 232,900 oz, to which we add the difference between the open interest for the front month of OCT. (220 contracts) minus the number of notices served upon today (5) x 100 oz per contract equals 254,900  oz, the number of ounces standing in this active month of OCT.   Thus the INITIAL standings for gold for the OCTOBER contract month: No of notices served  (2334) x 100 oz  or ounces + {(220)OI for the front month  minus the number of  notices served upon today (5) x 100 oz which equals 254,900 oz standing in this  active delivery month of OCTOBER  (7.928tonnes). WE LOST 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL   STAND  IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER AND THIS CONTINUES ON IN OCTOBER.   THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE AND IT ALSO EXPLAINS THE LACK OF DELIVERY NOTICES IN THE EARLY PART OF THIS DELIVERY ACTIVE MONTH. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear) Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes    I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE OCTOBER DELIVERY MONTH OCTOBER INITIAL standings  Oct 13. 2017 Silver Ounces Withdrawals from Dealers Inventory  n/a Withdrawals from Customer Inventory  n/a oz Deposits to the Dealer Inventory  n/a oz Deposits to the Customer Inventory   n/a No of oz served today (contracts) 124 CONTRACT(S) (620,000 OZ) No of oz to be served (notices) 301contracts (1,505,000 oz) Total monthly oz silver served (contracts) 516contracts

(2,580,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month    xx oz today, we had  xxx deposit(s) into the dealer account: total dealer deposit: xxx   oz we had xxx dealer withdrawals: total dealer withdrawals: xxx oz we had  xx customer withdrawal(s): TOTAL CUSTOMER WITHDRAWALS: xx  oz We had xx Customer deposit(s): ***deposits into JPMorgan have stopped  again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: 600,627.490  oz    we had 0 adjustment(s) The total number of notices filed today for the OCTOBER. contract month is represented by 124 contract(s) for 620000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 514 x 5,000 oz  = 2,580,000 oz to which we add the difference between the open interest for the front month of OCT. (425) and the number of notices served upon today (124x 5000 oz) equals the number of ounces standing.  

 

.   Thus the INITIAL standings for silver for the OCTOBER contract month:  516 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(425) -number of notices served upon today (124)x 5000 oz  equals  4,085,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE   WE LOST 86 CONTRACTS OR  AN ADDITIONAL 430,000 OZ WILL NOT STAND FOR DELIVERY.  ESTIMATED VOLUME FOR TODAY:   80,543 CONFIRMED VOLUME FOR YESTERDAY:  64,376 CONTRACTS     Total dealer silver:  39.345 million (close to record low inventory   Total number of dealer and customer silver:   220.100 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 1.7 percent to NAV usa funds and Negative 1.5% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.6% Percentage of fund in silver:37.4% cash .+0.0%( Oct13/2017)  2. Sprott silver fund (PSLV): STOCK   FALLS TO -0.60% (Oct 13/2017)  3. Sprott gold fund (PHYS): premium to NAV falls TO -0.58% to NAV  (Oct 13/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.60%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.58%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES

Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES

oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT  854.30 TONNES

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes

Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES

Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/

Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

Sept 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

Inventory rests at 836.87 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Oct 12/2017/ Inventory rests tonight at 858.45 tonnes *IN LAST 250 TRADING DAYS: 82.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 185 TRADING DAYS: A NET  74.78 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY. *FROM FEB 1/2017: A NET  43.67 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ

OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z

Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615  MILLION OZ

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/

Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/

Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Oct 11/2017:

Inventory 325.765  million oz end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.43%
  • 12 Month MM GOFO + 1.64%
  • 30 day trend

end

 

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold
By janskoyles October 13, 2017 0 Comments

 

 

– US Mint gold coin sales and VIX at weakest in a decade
– Very low gold coin sales and VIX signal volatility coming
– Gold rises 1.7% this week after China’s Golden Week; pattern of higher prices after Golden Week
– U.S. Mint sales do not provide the full picture of robust global gold demand
– Perth Mint gold sales double in September reflecting increased gold demand in both Asia and Europe
– Middle East demand likely high given geopolitical risks
– Iran seeing increased gold demand and Iran’s gold coin price up by 5%
– Trump’s war mongering could see demand accelerate
– Germany seeing very robust demand and now world’s largest gold buyer

Editor: Mark O’Byrne
Source: ZeroHedge
US Mint coin sales fell to a decade low last month. This follows poor sales since the beginning of 2017. In the third quarter sales reached nearly 3.7 million ounces. September gold coin sales were down a whopping 88% compared to the same period last year.
Year to date sales at 232,000 ounces are 66.5% lower than the 692,500 ounces delivered during the first nine months of 2016, according to the U.S. Mint.
American Eagle gold coin sales did see a slight uptick in demand from very low levels and increased by 11,500 ounces in September which was up by 21.1% in August.

Is this pick-up in US coin demand a sign of things turning around? Perhaps, but we believe the low coin sales this year might say something else about the wider economy. It is also important to look at gold coin and bar sales across the globe to get a better feel for actual demand.
Sign of the end, but for what?
Bloomberg were quick to point out that US Mint sales were at a decade low.
They believed this was due to investors turning ‘sour on bullion’ and that gold’s appeal ‘is waning as retail investors seek better returns in equities, lured by the S&P 500 Index’s climb to records.’

However, the picture of declining gold coin sales has not been taken against the backdrop of the last decade.
ZeroHedge were quick to spot a potential pattern and correlation with the VIX which may point to increased volatility and uncertainty and a prompt recovery in the gold price:
“The first nine months of 2017 have seen demand for gold coins slump. As stocks soar unendingly (and vol drops unerringly) the US Mint notes that sales of coins is at its weakest in a decade as complacency in the face of ever-increasing potential-crisis-events nears record highs.
The question is – what happened the last time the public gave up on buying “protection against the idiocy of the political cycle”?
The answer is awkwardly simple… everything collapsed.”
This is important news for those who are getting wary about the massive complacency and “irrational exuberance” currently seen in global stock and bond markets.
It’s not all about the U.S. Mint gold coin demand
Given how much Trump dominates the headlines it might be hard to remember that U.S. demand is not a reflection of total gold demand.
Whilst the U.S. Mint poor gold coin continued in September, their cousins ‘down under’ recorded excellent sales in September.
On Monday we covered how Perth Mint gold coins sales doubled in September. Last month the Perth Mint sold 46,415 ounces of gold in bars and coins. In August, its gold bullion sales were just 23,130 ounces. Silver product sales soared by 78 percent from the previous month.

Why is this relevant? The Perth Mint sells gold all over the world. The US Mint predominantly sells domestically and would be more dependent on domestic demand.
The Australian Mint’s sales figures are a better reflection of the robust demand in the likes of Asia and Europe, where investors are growing increasingly risk aware.
Data released by the World Gold Council last week showed Germany is now the world’s largest buyers of gold. We explained:
Last year, more than €6bn was ploughed into gold investment products in Germany and, encouragingly, there is room for further growth: consumer research indicates there is latent retail demand which the industry can tap into.
We have long said that German physical and ETF gold demand is a very important demand factor in the gold market and one that is continuously underestimated. It was good to have the WGC research bolster our view.
No way of knowing real levels of demand
In the short-term we need to remind ourselves that these are only official figures for two mints.
When we reported on the 11% increase in gold bar and coin demand for the first half of 2017, we reminded readers that there are likely other sources of demand that are not recorded. We said that it is
“Important to note this is all official, transparent and recorded demand. There is demand and flows of gold that cannot be and are not recorded – especially into the Middle East, India, Russia and of course China.”

Each week there are stories of gold smugglers caught in airports, but this is just the tip of the iceberg. At a much higher level we know that the likes of Russia and China are working together to fight US dollar hegemony, with the help of gold.
The Government of India Ministry Of Commerce and Industry reported this month that $1.9 billion worth of gold was imported to the county in August. In the same month last year, it was more than $1.1 billion worth of gold
We also see record numbers of gold imports and exchange activity in the Middle East, especially in Dubai.
Last month the Central Bank of Iran cut interest rates. Since then the gold price has surged, setting a new five-year record. The price of a gold coin in Iran, according to the Tehran Gold and Jewelry Union, has climbed by 5% in the last month.
What about China? The mainstream have also been quick to point to weak sales despite China’s Golden Week. This is also missing the bigger picture, argues ZeroHedge.
“China will be back in business on October 9th, and that means the Shanghai Gold Exchange, which opened in 2015 to counter Western manipulation of precious metals, will likely help re-balance prices to where they were before this recent takedown.
We could be wrong, but something tells us gold and silver prices won’t stay this low for much longer and that they could well see a complete turnaround when China reopens on October 9th.”
China’s Golden Week might even point to a quick recovery and the gold price coming back stronger than before, if earlier years are anything to go by:

 

Complacency dominates
Currently the mood of markets is thick with complacency. Risk is significantly under priced and underestimated.
It is tough to reconcile the risks we see currently and on the horizon against the backdrop of record stock market prices. Complacency may well have seeped into the market for the US Mint’s coins.
However, it is clear market volatility is coming. It looks like central bankers and governments won’t be able to forestall the inevitable for much longer.
Some in the mainstream media are, as ever, keen to point to ‘disaster’ in the gold market.
At worst, the US Mint figures are a small snapshot of complacency in a world which is otherwise focused on stocking up on gold. At best they are an indication that markets are due to have another roller coaster ride of uncertainty and volatility making the case for hedging with gold even more compelling.
Investors should be taking advantage of the valuable time in this the ‘calm before the storm’ and the low gold price. In Europe and Asia it is the imminent feeling of uncertainty and growing instability which is driving buyers to allocate more to gold. This might not be felt just yet in the United States, but lots of indications suggest it soon will be.
As ever, best to hope for the best but be financially prepared for less benign scenarios …
News and Commentary
Gold rally pauses ahead of U.S. inflation data (Reuters.com)
Dollar Snaps Four-Week Rally as Stocks Consolidate (Bloomberg.com)
Inflation weighs on yields, dollar; stocks lackluster (Reuters.com)
U.S. producer prices increase; weekly jobless claims fall (Reuters.com)
Bitcoin Breaches New Milestone by Smashing Past $5,000 Mark (Bloomberg.com)
Bitcoins surges to new record over $5000. Source Bloomberg
Five things to do when every investment is too expensive (MarketWatch.com)
Stocks will beat houses over the next few years – Frisby (MoneyWeek.com)
Three ways that China’s big political congress matters to investors (StansBerryChurcHouse.com)
Bob Corker Is Just the Beginning of Trump’s Tax-Cut Problems (Bloomberg.com)
Yellowstone Supervolcano’s Nasty Surprise: Only Decades To Prepare For An Eruption (Forbes.com)
Central banks hedging against geopolitical risk with gold (Nikkei.com)
Gold Prices (LBMA AM)
13 Oct: USD 1,293.90, GBP 972.88 & EUR 1,093.73 per ounce
12 Oct: USD 1,294.45, GBP 977.96 & EUR 1,092.26 per ounce
11 Oct: USD 1,290.20, GBP 978.62 & EUR 1,091.90 per ounce
10 Oct: USD 1,289.60, GBP 977.77 & EUR 1,094.61 per ounce
09 Oct: USD 1,282.15, GBP 976.23 & EUR 1,092.01 per ounce
06 Oct: USD 1,268.20, GBP 970.43 & EUR 1,083.93 per ounce
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
Silver Prices (LBMA)
13 Oct: USD 17.20, GBP 12.94 & EUR 14.55 per ounce
12 Oct: USD 17.20, GBP 13.06 & EUR 14.50 per ounce
11 Oct: USD 17.15, GBP 13.00 & EUR 14.51 per ounce
10 Oct: USD 17.12, GBP 12.98 & EUR 14.53 per ounce
09 Oct: USD 16.92, GBP 12.86 & EUR 14.41 per ounce
06 Oct: USD 16.63, GBP 12.73 & EUR 14.20 per ounce
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce

Recent Market Updates
– Global Outlook – Mad, Mad, Mad, MAD World: News in Charts
– Young Guns of Gold Podcast – ‘The Everything Bubble’
– London House Prices Are Falling – Time to Buckle Up
– Perth Mint Gold Coins Sales Double In September
– Survey shows UK and US Pensions Crisis is Imminent
– Gold Investment In Germany Surges – Now World’s Largest Gold Buyers
– Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Safe Haven Silver To Outperform Gold In Q4 And In 2018
– Plan For Run On The Pound
– Russia Gold Rush Sees Record Reserves For Putin Era
– China Catalyst To Send Gold Over $10,000 Per Ounce?
– Gold Matches S&P 500 Performance In First 3 Quarters; Up 12% 2017 YTD
– Gold Standard Resulted In “Fewer Catastrophes” – FT

http://www.goldcore.com/us/gold-blog/gold-investment-germany-surges-now-worlds-largest-gold-buyers/

END

This is a big story as China now establishes a yuan-rouble payment system which will be a forerunner for the eventual backing of the yuan with gold and the setting up of the yuan -petro –gold payment system.

 

(courtesy Reuters)

 

China establishes yuan-ruble payment system

 

SHANGHAI (Reuters) – China has established a payment versus payment (PVP) system for Chinese yuan and Russian ruble transactions in a move to reduce risks and improve the efficiency of its foreign exchange transactions.

FILE PHOTO: A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo
The PVP system for yuan and ruble transactions was launched on Monday after receiving approval from China’s central bank, according to a statement by the country’s foreign exchange trading system.

It marks the first time a PVP system has been established for trading the yuan and foreign currencies, said the statement, which was posted on Wednesday on the website of the China Foreign Exchange Trade System (CFETS).

PVP systems allow simultaneous settlement of transactions in two different currencies.

CFETS said the system would reduce settlement risk as well as the risk of transactions taking place in different time zones, and improve foreign exchange market efficiency.

CFETS said it plans to introduce PVP systems for yuan transactions with other currencies based on China’s Belt and Road initiative, and complying with the process of renminbi internationalization.

China has ambitious plans to create a New Silk Road to expand links between Asia, Africa, Europe.

Russia and Central Asia are considered top-priority oil and gas sources for China, the world’s top energy consumer.

Reporting by Andrew Galbraith; Editing by Kim Coghill
Our Standards:The Thomson Reuters Trust Principles.

 

end

 

ZEROHEDGE COMMENTS ON THE ABOVE STORY

(COURTESY ZEROHEDGE)

China Launches Yuan-Ruble Payment System

 

The monetary regimes of China and Russia, two of the world’s most resource-rich nations, are drawing closer with every passing day.
In the latest push for convergence, China has established a payment versus payment (PVP) system for Chinese yuan and Russian ruble transactions in a move to reduce risks and improve the efficiency of its foreign exchange transactions. The PVP system for yuan and ruble transactions, designed to streamline commerce and curency transactions between the two nations, was launched on Monday after receiving approval from China’s central bank, according to a statement by the country’s foreign exchange trading system.
It marks the first time a PVP system has been established for trading the yuan and foreign currencies, said the statement, which was posted on Wednesday on the website of the China Foreign Exchange Trade System (CFETS). PVP systems allow simultaneous settlement of transactions in two different currencies.
According to CFETS, the system would reduce settlement risk as well as the risk of transactions taking place in different time zones, and improve foreign exchange market efficiency. Of course, if the two countries had a blockchain-based settlement system, they would already have all this and much more.
CFETS said it plans to introduce PVP systems for yuan transactions with other currencies based on China’s Belt and Road initiative, and complying with the process of renminbi internationalization. Russia, however, is a top priority: the world’s biggest oil producer recently became the largest source of oil for China, the world’s top energy consumer.
To be sure, the monetary convergence between Beijing and Moscow is hardly new. The most notable recent development took place in April, when the Russian central bank opened its first overseas office in Beijing on March 14, marking a step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system, and to phase-in a gold-backed standard of trade. As the South China Morning Post reported at the time, the new office was part of agreements made between the two neighbours “to seek stronger economic ties” since the West brought in sanctions against Russia over the Ukraine crisis and the oil-price slump hit the Russian economy.

At the time, Vladimir Shapovalov, a senior official at the Russian central bank, said the two central banks were drafting a memorandum of understanding to solve technical issues around China’s gold imports from Russia, and that details would be released soon, to which we said that If Russia – the world’s fourth largest gold producer after China, Japan and the US – is indeed set to become a major supplier of gold to China, the probability of a scenario hinted by many over the years, namely that Beijing is preparing to eventually unroll a gold-backed currency, increases by orders of magnitude.
Furthermore, also around the same time, as the Russian central bank was getting closer to China, China was responding in kind with the establishment of a clearing bank in Moscow for handling transactions in Chinese yuan. The Industrial and Commercial Bank of China (ICBC) officially started operating as a Chinese renminbi clearing bank in Russia on Wednesday this past Wednesday
“The financial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation,” Dmitry Skobelkin, the abovementioned deputy head of the Russian Central Bank, said. “The launching of renminbi clearing services in Russia will further expand local settlement business and promote financial cooperation between the two countries,” he added according to.
Irina Rogova, a Russian financial analyst told the Russian magazine Expert that the clearing center could become a large financial hub for countries in the Eurasian Economic Union.
* * *
The creation of the clearing center, and the launch of PVP systems enables the two countries to further increase bilateral trade and investment while decreasing their dependence on the US dollar. It will create a pool of yuan liquidity in Russia that enables transactions for trade and financial operations to run smoothly. In expanding the use of national currencies for transactions, it could also potentially reduce the volatility of yuan and ruble exchange rates. The clearing center is one of a range of measures the People’s Bank of China and the Russian Central Bank have been looking at to deepen their co-operation, Sputnik reported.
But one of the most significant measures under consideration is the previously reported push for joint organization of trade in gold.
In recent years, China and Russia have been the world’s most active buyers of the precious metal. On a visit to China last year, the deputy head of the Russian Central Bank Sergey Shvetsov said that the two countries want to facilitate more transactions in gold between the two countries.
“We discussed the question of trade in gold. BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets,” First Deputy Governor of the Russian Central Bank Sergey Shvetsov told Russia’s TASS news agency.
In other words, China and Russia are continuing to shift away from dollar-based trade, to commerce which will eventually be backstopped by gold, or what is gradually emerging as an Eastern gold standard, one shared between Russia and China, and which may day backstop their respective currencies.
Meanwhile, the price of gold continues to reflect none of these potentially tectonic strategic shifts, just as China – which has been the biggest accumulator of gold in recent years – likes it.

END

 

Ridiculous!! Bitcoin is now 5625.00.  I guess another way of viewing Bitcoin is that gold would be trading at this price if it was not for manipulation

 

(courtesy zerohedge)

 

 

Bitcoin Is Now Bigger Than Morgan Stanley

 

 

 

 

 

 

On the back of (unconfirmed) rumors suggesting China may back down from its harsh stance of ICOs and crypto exchanges following this week’s National Congress, the price of Bitcoin soared overnight, testing near $5900 before falling back a little this morning.

That has pushed Bitcoin’s market cap above $90 billion for the first time, surpassing PayPal, Netflix, and Morgan Stanley…

Goldman Sachs’ market cap is looming ($96bn) but JP Morgan’s $337 billion market cap is a long way off for now.

 

end

Only central bank intervention keeps gold down, USGlobal’s Frank Holmes says

Submitted by cpowell on Thu, 2017-10-12 13:56. Section: Daily Dispatches
9:55a ET Thursday, October 12, 2017
Dear Friend of GATA and Gold:

Only intervention by central banks in the gold market is keeping the monetary metal’s price down, fund manager Frank Holmes of U.S. Global Investors told Daniela Cambone of Kitco News in an interview yesterday. The interview is five minutes long and can be viewed here:
http://www.kitco.com/news/video/show/Gold-Game-Film/1735/2017-10-11/Gold…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

end

 

Another Swiss bank won’t let customer see his gold, von Greyerz tells KWN

 

 

Submitted by cpowell on Thu, 2017-10-12 18:45. Section: Daily Dispatches
2:45p ET Thursday, October 12, 2017
Dear Friend of GATA and Gold:
Swiss gold fund manager Egon von Greyerz today tells King World News that another Swiss bank has refused to let a substantial customer inspect the gold bars the bank claims to be vaulting for him. Von Greyerz reminds investors that they should not trust the banking system with their metal. His comments to KWN are posted here:
https://kingworldnews.com/breaking-another-well-known-swiss-bank-has-jus…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

end

 

 

Oil for gold – the real story

 

By Alasdair Macleod
Alasdair Macleod October 12, 2017

 

Following an article in the Nikkei Asia Review, which reported China will shortly introduce an oil futures contract priced in yuan, there has been some confusion about what it means. The article pointed out that in combination with existing gold futures priced in yuan, an oil exporter to China contracting to accept yuan could use these two futures contracts to take delivery of physical gold in payment for oil.
I was quoted in that article as follows:
“It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,”i
The mechanism of introducing an oil for yuan contract could hardly be clearer, yet the rumour mill went overtime into Chinese whispers. Some analysts appeared to think China was authorising a new oil for gold contract of some sort, or that China would be supplying the gold, both of which are untrue.
The purpose of this article is to put the proposed oil for yuan contract, which has been planned for some time, into its proper context. It requires knowledge of the history of how China’s policy of internationalising the yuan has been developed, and will be brought up to date with an analysis of how the partnership of China and Russia is taking over as the dominant power over the Eurasian land-mass, a story that is now extending to the Middle East.
This fulfils the prophecy of the founder of geopolitics, Sir Halford Mackinder, made over a century ago. He described the conjoined continents of Eurasia and Africa as the World Island, and that he who controls the Heartland, which lies between the Volga and the Yangtze, and the Himalayas and the Artic, controls the World Island.ii The Chinese-Russian partnership is well on its way to controlling the World Island, including sub-Saharan Africa. We know that successive Soviet and Russian leaders have been guided by Mackinder’s concept.
Events of recent months have accelerated the pace of the Heartland’s growing dominance over the World Island, and become pivotal to the balance of global power shifting in favour of the Heartland. Even political commentators in the mainstream media are hardly aware this is happening, let alone future implications. Financial commentators and economists are even less informed, despite the monetary consequences being of overriding importance for the impact on the wealth of nations and their peoples.
This is the backdrop to China’s internationalisation of her currency. To enhance our understanding of the implications of the introduction of yuan futures contracts, we must begin with the relevant monetary developments.
The Hong Kong – London axis
For a considerable time, China has followed a policy of replacing the dollar as its settlement currency for the purposes of trade. After all, China dominates international trade, and on a purchasing power parity basis, her economy rivals that of the US, and if it hasn’t done so already will soon overtake it. From China’s point of view, being forced by her trading partners to accept and pay in dollars is an irritating anachronism, a hangover from American imperialism.
Furthermore, China’s strategic military analysis has convinced her that America uses the dollar as an economic weapon, wielding it to sustain global hegemony and to support her own economy at the expense of others. Therefore, there are clear strategic reasons for China to do away with the dollar for as much of her international and trans-Asian trade as possible.iii
For America’s part, she has strongly resisted moves to have the dollar replaced as the world’s dominant trade currency. America has a tough grip on all commodities, because international physical and derivative markets are priced almost exclusively in dollars. Furthermore, nearly all currency hedging has the dollar on one side of the transaction. This allows the Americans to exercise enormous control over international markets, and even to artificially inflate commodity supplies through the creation of futures contracts, keeping prices lower than they would otherwise be. By these means, America has suppressed the relationship between monetary and price inflation, increasing the apparent stability of the dollar. This is central to the illusion of American monetary hegemony. Therefore, China’s policy of doing away with the dollar is, from the American standpoint, a fundamental challenge to her post-war global domination, and amounts to a declaration of financial war.
China’s problem in displacing the dollar is the lack of an international market for the yuan. Furthermore, with strict exchange controls limiting the ability of Chinese citizens and businesses to trade on the foreign exchanges, it was always going to be an uphill struggle to provide the necessary liquidity in the yuan to make it acceptable to foreign counterparties. China had to come up with a plan, and it made sense to use the existing financial links between Hong Kong and London to develop international markets for her own currency.
We can date public awareness of China’s strategy to June 2012, when Hong Kong Exchanges and Clearing made a successful offer for the London Metal Exchange. While noting that Hong Kong is an autonomous region, and that, officially at least, China does not meddle in Hong Kong’s affairs, China has a direct interest in important acquisitions of this sort. China is the world’s largest importer of base metals, and London is the global metal pricing centre for warehouse stocks and physical delivery.
The LME earlier this year decided to offer a series of precious metal futures contracts, priced in dollars, centred on gold. The gold contract has been a great success, something guaranteed when you bear in mind that the Industrial and Commercial Bank of China, owned by the Chinese state, is a lead sponsor of these precious metals contracts. By this action, China is parking its tanks on the London Bullion Market Association’s lawn. At some stage in the future, the LME will almost certainly offer deliverable futures contracts priced in yuan, not just for precious metals but for base metals as well.
In October 2013, fifteen months after the acquisition of the LME, Boris Johnson as Mayor of London led a trade mission to Beijing. British trade missions are a major feature of Foreign Office duties, the way Britain develops bilateral trade relationships. These trade missions, being planned through diplomatic channels, are prearranged and coordinated well in advance. Therefore, it was unusual to find that George Osborne, the Chancellor of the Exchequer, at very short notice got up a second trade mission, and met Johnson in China.
The reasons for this turn of events were never properly explained; however, we can work them out. In May 2012, David Cameron had met the Dalai Lama in London, which caused a diplomatic furore with China. Despite this earlier public spat and the point having been made, Osbourne was sent to China. While it is likely his trade mission was a cover for UK Government efforts to smooth things over, subsequent events suggest financial cooperation between Hong Kong and London was discussed, and Chinese plans to use Hong Kong and London to enhance the yuan’s international liquidity were agreed in principal. Following Osborne’s visit, David Cameron himself went to Beijing for discussions with President Xi the following month, confirming the importance to Britain of bilateral financial relations with China.
The following year, the UK took the unusual step of issuing a 3bn yuan bond, both as an indication of intent, and to help kick-start the offshore yuan market in London. This was followed by Britain being the first non-Asian nation to join the Asia Infrastructure Investment Bank as a founder member in March 2015 (announced by none other than George Osborne). The AIIB, which was set up by China and headquartered in Beijing, is the first supra-national organisation independent of the Bretton Woods institutions, which are all controlled by the US. These institutions, led by the World Bank and the IMF, as well as several regional development banks, were how the US, using the dollar, dominates the world’s finances. The establishment of the AIIB was an unwelcome development for America, and the US expressed acute disappointment that Britain had decided to join.
And lastly, after six or seven years of lobbying the IMF, the yuan was finally included in the SDR basket from 1 October last year, further promoting it as a trade settlement currency to be included in foreign countries’ reserves.
There can be no clearer evidence of China’s intention to replace the dollar with her own currency, than the sequence of events outlined above. She identified that Britain’s interests were aligned with her own, enabling her to cut out America from future developments. She has obtained arms-length control over London’s physical metal exchange. She had set up a non-dollar rival to the World Bank and IMF, ensuring future Asian development financing is under her control. And, with more than 80 member countries eventually joining the AIIB, she has successfully picked off America’s allies. The inclusion of the yuan in the SDR basket can be taken as an acknowledgement of China’s importance on the world stage.
The eventual intention is to price in yuan everything imported into and exported from China. Much trans-Asian business is already settled in yuan, and even remote Angola settles her oil sales to China in yuan. It will in time involve developing yuan futures contracts for all the tradeable commodities the state deems significant. The most important of these is a standard oil contract. But before we cover the genesis of the oil contract, we should remind ourselves about China’s gold strategy.
Cornering the physical gold market
It is only relatively recently that Western capital markets have become aware that Chinese demand for physical gold absorbs large quantities of annual mine production, and that the country is now the largest mining nation by far, extracting it at a rate of over 450 tonnes per annum. Knowledge of China’s overall demand is restricted to deliveries out of the Shanghai Gold Exchange’s vault into public hands, running at about 2,000 tonnes per annum, which with India’s public demand accounts for nearly all global mine extraction of about 3,000 tonnes.
The SGE was established in 2002, yet China began to embrace capitalism in 1980, when the first Special Economic Zone was established. China at that time showed reserves of 395 tonnes, a figure that was unchanged until 2001, when it was increased to 500 tonnes, and the following year to 600 tonnes, which it remained until 2009. Over this time, the Chinese economy enjoyed enormous capital inflows from 1980 until the early 1990s, when Western companies set up manufacturing facilities. These were followed by growing export surpluses thereafter. The Peoples Bank of China (PBOC), the state-owned central bank, was managing the currency, neutralising these flows by buying mostly dollars.
It also made sense for the Chinese to diversify the foreign exchange portfolio gained through intervention. The need to increase gold holdings would have been obvious to communist-trained economists at the heart of government. They had had the Marxist belief drummed into them that capitalism would eventually destroy itself, and the capitalists’ paper currencies with it. Rather like Germany in the 1950s and the Arabs in the 1970s, they felt it was prudent to put a significant part of their foreign exchange into gold.
Consequently, new regulations appointing the PBOC to “guarantee the state’s requirements for gold and silver” came into force on June 15, 1983.iv Private ownership of gold and silver remained banned.
It should be noted that state-owned gold declared as official reserves bear little relation to the total accumulated. Anecdotal evidence informs us that bullion is dispersed into accounts in the possession of the Peoples Liberation Army and the Communist Party. Therefore, we cannot know China’s true holdings. All one can do is make a reasonable assessment of how much gold the PBOC is likely to have accumulated since 1983 and before 2002, when private citizens were allowed for the first time to buy physical gold and silver. During this period gold had suffered the greatest bear market in the history of fiat currencies. The scale of redistribution from weak hands into stronger long-term hands was enormous, bearing in mind that Indians, the other great national buyers today, only began to buy gold in significant quantities in the early-nineties, after the repeal of the 1968 Gold Control Act in 1990. It is also known that in 1990-2000, many Middle Eastern portfolios sold gold in favour of equity investment, as did many other private investors with Swiss private bank accounts. Furthermore, central banks were leasing gold in large quantities, artificially inflating physical supply.
Taking all these factors into account, plus mine production totalling 42,460 tonnes over the period, it was easily possible for the Chinese state to secretly amass over 20,000 tonnes by 2002, through a process of gradual accumulation. As to whether they did so, we must look at the evidence from China’s gold strategy. The following bullet list is a summary:

The introduction of the 1983 regulations appointing the PBOC amounts to a declaration of intent. The PBOC as a central bank has access to capital markets, and commands the state-owned commercial banks. Accumulating gold is a natural extension of the PBOC’s currency management.
There were both the opportunity and the supply during the greatest bear market gold has ever seen. Between 1983-2002, world mine output added an estimated 42,460 tonnes to above-ground stocks at a time when the West was disgorging both central bank and privately owned physical gold. All that gold went somewhere, so China must have been a major buyer.
In 2002, the Shanghai Gold Exchange (SGE) was set up by the PBOC to permit the public to buy gold. This signalled that the state had acquired sufficient gold and silver bullion for its own purposes by then.
The state actively advertised gold ownership through the media, promoting a policy to its citizens of holding gold as sound money. This would help her corner the physical market.
The state deliberately fostered gold mining, to the point where Chinese mines are now the largest producers in the world by far. Mine output was a record 463.7 tonnes in 2016.
The state monopolises China’s refining capacity, taking in doré from other countries as well, retaining control over ingot production.
China now hosts the world’s most important bullion exchange in Asia, has set itself up as a rival to the LBMA in London through the London Metal Exchange, and is developing gold futures markets.
The LBMA 400 ounce 99.50 standard bar has been replaced by the new Chinese 99.99 one kilo bar as the Asian standard. The large Swiss refiners have been converting LBMA bars into the new standard for customers, particularly those resident in the Middle East.
Almost all gold acquired by China and her citizens remains in China. Chinese refined bars are almost never seen in Switzerland, the West’s principal refining centre.v
Gold futures contracts in yuan are now available to international dealers in Hong Kong and Dubai using the SGE gold price as benchmark.
Private ownership of gold in China is now estimated to total over 15,000 tonnes, in addition to anything the state has acquired since 1983. China’s gold policy, which may have commenced as a sensible diversification of reserves, now has strategic implications. China’s gold is now a vital defence against the hegemony of the dollar, and as Major-General Qiao Liang has advised the Peoples Liberation Army, there is a continuing risk that America will try to use its currency as a financial and economic weapon against China.vi
The Chinese state, having secured its physical gold dominance, has little need to acquire more gold in the market: that much was signalled by the establishment of the SGE in 2002. It may well have accumulated further gold since, but this is incidental. Russia is now accumulating gold under President Putin, who belatedly learned of the dangers the Western financial system poses Russia in the wake of American sanctions, and more particularly the financial devastation faced by Iran, when America forced the supposedly independent SWIFT inter-bank settlement system to ban Iranian transfers in all other currencies. Gold smuggled from Turkey via Dubai proved to be Iran’s saviour.
By having control of the physical market for gold, China can threaten to use it to destabilise the dollar, without destabilising the yuan. As such, it is potentially devastating, and used carelessly could trigger an economic collapse in Western capital markets, wreaking financial and economic havoc in America and other advanced nations. China will never be wholly independent from trade with these nations, and severe financial and economic damage to the advanced economies will rebound upon her to some extent. For this reason, she has so far held off using gold as an economic and financial weapon, while she continues to insulate herself from periodic crises in Western economies.
China, with Russia, clearly plans to create what amounts to an enormous internal market, covering most of Asia. It is doing this through trade, in contrast with the way America traditionally wields her influence, through the sticks and carrots of guns and butter. In every minor geopolitical skirmish with America, the Sino-Russian partnership has won. The patient approach of letting American influence diminish through her own errors has made the economic violence of driving up the gold price unnecessary. However, times are changing, and this phase is passing.
The oil connection
The success of the Sino-Russian partnership in outwitting the Americans has overtaken China’s own plans to develop liquidity for a wide range of derivative contracts priced in yuan on its own and other international exchanges. Nowhere has this been more obvious than in the delay of introducing an oil futures contract priced in yuan.
This was first mooted, so far as we are aware, in 2012, when it was intended to introduce a contract based on the high-sulphur grades China commonly used at that time. This contract was to be settled in either dollars or yuan at the oil supplier’s choice. However, the absence of an offshore market for yuan meant this proposal was premature.vii
In 2014, these plans resurfaced, with the Shanghai Futures Exchange chairman quoted as saying that the yuan had become more international and recognised in the market. He added that the proposed contract had support from both the government and financial regulators.viii
At about that time, Guo Jianwei, a PBOC monetary policy official, was quoted in the Shanghai Securities News as saying that the PBOC planned to start yuan-denominated gold and oil futures to help establish a global payment system for the Chinese currency.ix This statement gets to the nub of the reason for introducing oil and gold contracts together, and that is they will internationalise the yuan, probably more quickly than any other measure taken by the PBOC. To back up his quote, Mr Guo then described how the PBOC had agreed CNY2.5 trillion of currency swaps with 23 central banks, pointedly excluding the US.
The oil for yuan story rumbled on, with the Chinese delaying the introduction of internationally tradable oil futures. That is, until Damon Evans reported that not only were traders being trained, but that locally registered entities of JPMorgan and UBS are among the first to have gained regulatory approval to trade the contract.
Geopolitical developments relative to the oil contract
It is natural to assume that China and Russia are controlling, Svengali-like, all the geopolitical outcomes. China has retained an unerring focus on the grand prize of excluding the dollar from all her trade, and with it US monetary influence in Asia. But, being reliant on America to make strategic mistakes, China is not totally in control of events and their timing. For example, the collapse in July of the American campaign in Syria was sudden and unexpected, leaving Russia, in partnership with Syria, Iran, and Turkey to sort out the mess.
Even Mr Netanyahu, the Prime Minister of Israel, has beaten a path to Mr Putin’s door several times. When Turkey, still a NATO member, decided to side with Russia along with Iran, Israel recognised that US protection was no longer good enough to secure her future. When Saudi Arabia was under American influence, Israel had felt as safe as she could be in that turbulent region. But a combination of a Hezbollah/Syrian/Turkish/Iranian axis to Israel’s north, and Prince Mohammed bin Salman’s silent coup in Saudi Arabia has fundamentally altered the balance of power.
Prince Salman is now the heir-apparent to King Salman, having replaced Mohammed bin Nayef, America’s nominee, as heir to the throne. Only last week, King Salman himself visited Moscow as the guest of President Putin. No doubt, the other gulf states will follow the Saudi lead.
Instead of President Trump, Putin finds himself, very suddenly, the ring-master for most of the Middle East. And while we cannot rule out a counter-move from the Americans, it should be noted that the Arabs dislike the Americans and much of what they stand for. However, notwithstanding its national antipathy, Saudi Arabia went along with Kissinger’s plan in 1973 to use the dollar for oil payments, and to buy US Treasuries and to deposit surplus dollars in American banks. In return, America guaranteed it would protect Saudi Arabia from outside influences. Also, part of the deal was Saudi Arabia would not support Israel’s enemies.
Now that the Kissinger deal is unravelling, it is reasonable to assume the financial deal, the Middle East’s support of the petrodollar to the exclusion of all rival currencies, will also come to an end, more rapidly than thought possible only four months ago. But for this to be realised requires an alternative settlement currency to be available. And while Russia and China have already agreed joint investment projects involving both their currencies, Saudi Arabia is almost certainly not ready to accept the yuan as a full currency replacement for the dollar.
The rest of the world is watching closely. America’s allies officially remain onside with America, but in terms of foreign relations, interests guide relationships, not the other way around. We saw this when Britain joined the AIIB, demoting the special relationship with America. Central banks, holding massive quantities of the dollar, will be particularly jittery. Knowing this, will China dare make a move to undermine the dollar and trigger a run against it by providing the means for oil exporters to sell oil for yuan and then yuan for gold in international futures exchanges? If Shanghai fails to offer the facility, other markets, such as Hong Kong or Dubai, where there are already yuan gold contracts, could do so.
Realistically, China now has limited control over the timing of her planned moves, and this is particularly true about the prospective oil future priced in yuan. China imports over 8 million barrels of oil per day, for a total annual value of $150bn. She imports oil from a wide variety of sources, including Russia, Angola, Saudi Arabia, Iraq, Brazil, Iran and Venezuela. Some of these countries are on the US black-list (such as Russia, Iran and Venezuela) and others may prefer gold to dollars. If we assume that one-third of China’s oil imports are converted into gold, that amounts to 1,200 tonnes of gold at current prices to be sourced annually in a tight gold moarket.
The effect on the dollar could be catastrophic. Not only would the dollar sink as it loses its exorbitant privilege, but finding the extra physical gold would drive up the gold price. Inevitably, foreign holders of the dollar would probably join in by dumping the dollar and any fiat currencies aligned with it and join the rush for gold.
Conclusion
The ideal way for China to replace the dollar as the dominant currency for her cross-border trade is to encourage her oil suppliers to accept payment in her own currency, the yuan. It is clear from statements made in 2014 by Guo Jianwei, a PBOC monetary policy official, that China had already planned to wean her oil suppliers off the dollar by introducing both oil and gold futures denominated in yuan, allowing them to take at least part-payment in gold. Persuading them to do so without unduly disrupting global capital markets should have been a gradual process, perhaps spread out over the best part of another decade. Instead, geopolitical developments have accelerated the time-table following the election of President Trump, who is noticeably lacking in diplomatic patience. His latest renegation of the Iran nuclear deal is for Asian observers classic US perfidy.
China’s energy suppliers are not yet prepared to accept the full exposure to the yuan that oil sales contracted in yuan implies. Meanwhile, it is becoming apparent that the petrodollar has a limited life, the duration of which has been significantly shortened by America’s withdrawal from the Syrian conflict. The balance of interests is therefore undergoing a seismic change, with the dollar facing the real prospect of becoming redundant for the most significant aspect of its global use.
But if you dump your petrodollars, what do you buy? This is the question which China’s geopolitical and monetary policies must now address.
Perhaps the reason why China has been forced to bring forward plans to introduce the oil futures contract priced in yuan is indirectly due to America abandoning control over the Middle East. If so, the loss of American influence over the Eurasian continent will accelerate, and the status of the dollar will sink with

 

 

Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    i) Chinese yuan vs USA dollar/CLOSED UP AT 6.5877/shanghai bourse CLOSED UP AT 4.42POINTS .13%   / HANG SANG CLOSED UP 17.40 POINTS OR .06% 

2. Nikkei closed UP 200,46 POINTS OR .96%     /USA: YEN FALLS TO 112,15

3. Europe stocks OPENED MIXED  ( /USA dollar index RISES TO  93.16/Euro UDOWNto 1.1842

3b Japan 10 year bond yield: FALLS  TO  -+.0676/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  51.58 and Brent: 57.45

3f Gold DOWN/Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP or Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.422%/Italian 10 yr bond yield UP  to 2.097%  /SPAIN 10 YR BOND YIELD DOWN TO 1.612%  

3j Greek 10 year bond yield RISES TO  : 5.555???  

3k Gold at $1293.20 silver at:17.21:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 3/100 in  roubles/dollar) 57.68

3m oil into the 51 dollar handle for WTI and 57 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.15 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9759 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1530 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.422%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.325% early this morning. Thirty year rate  at 2.853% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

World Stocks Hit 4th Consecutive Record High, Bonds Rise On ECB QE Report

 

 

World stocks rose to a 4th consecutive record highs, while the dollar headed for its worst week; U.S. stock-index futures are steady, with European and Asian stocks higher ahead of much anticipated US inflation data, which is expected to give cues on the outlook for the Federal Reserve’s interest rates. MSCI’s all world equity index was up 0.1% after hitting record highs on Thursday. Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan hit a 10-year high, up 0.3 percent on the day.
The Stoxx Europe 600 Index rose 0.3%, led by steelmakers and miners as most industrial metals gained and WTI crude rose back above $51 a barrel. The dollar nudged lower as investors awaited the U.S. latest inflation data. Sterling pared gains after European Commission President Jean-Claude Juncker said “new problems” were emerging “day after day” in the Brexit withdrawal process. The British currency had rallied earlier on a report that the EU may offer the U.K. a two-year transition period to stay in the union.
Elsewhere, Asian stocks rose for a sixth day, the longest winning streak in three months, on optimism that U.S. economic data will prompt gradual rate hikes by the Federal Reserve. The MSCI Asia Pacific Index rose 0.5 percent to 166.47 as of 4:59 p.m. in Hong Kong, the highest level since November 2007. In Tokyo, the Nikkei 225 powered past 21,000 and completed a nine-day winning streak. The equities benchmark in the Philippines rose to a record, while mainland Chinese shares trading in Hong Kong extended their advance to a two-year high. The MSCI Asia Pacific Index has advanced 23 percent this year, poised for its sharpest annual gain since 2009. The gauge is trading at 14 times 12-month forward estimated earnings, highest since January.
The Asian highlight was once again Japan’s Nikkei 225 Stock Average, which completed a nine-day winning streak to close above 21,000 for the first time since November 1996. Fast Retailing Co., which accounts for about 6.5 percent of the measure, contributed most to its rise, after the company predicted that international sales for its Uniqlo chain will surpass those in Japan this fiscal year and reported the biggest jump in annual earnings in more than a decade on Thursday. The Topix index rose to a fresh decade-high even as the yen advanced against the dollar for a second day. The gauge was boosted by electronics makers and retailers. Both indexes posted a fifth consecutive week of gains, the longest weekly rally this year. The market will target the 22,000 mark next for the Nikkei 225, anticipating a currency rate of 115 yen per dollar and positive earnings continuing in the following fiscal year, said Takuya Takahashi, a strategist at Daiwa Securities Co. in Tokyo.

The U.S. later today will publish data on consumer prices and retail sales for September. Fed minutes released Wednesday showed several policy makers looking for stronger evidence of price gains before supporting a third interest-rate increase this year.
“The market is pricing another rate increase in December and it won’t derail the bounce in the U.S. economy because there won’t be a sharp rate ascent,” said Noel Reyes, chief investment officer at Security Bank Corp. in Manila. “Also, improving economic outlook in Asia, Europe and the U.S. are translating to better performance for stocks.”
Among the main overnight reports which pushed European bonds higher was a trial balloon “leak” to bother Reuters and Bloomberg, according to which the ECB was considering cutting quantitative easing in half to €30 billion euros  a month from the current pace of €60 billion, according to officials familiar with the debate. While the central bank’s governors are split on the need to identify an end date for purchases, a pledge to keep buying bonds until September may offer grounds for compromise, they said.
“For the ECB, duration of the program should trump monthly purchases,” Royal Bank of Canada economists including Sam Hill said in a client note. “This should anchor front-end rates firmly, through the forward guidance linking interest rates to the duration of the bond buying, and steepen the yield curve.”
Following the reports, the EURUSD first dropped, then spiked, and ultimately dumped on what, on the surface at least, would look like hawkish news.
Also overnight we got the latest trade data from China, which missed modestly on exports, even as imports rose more than expected.
Chinese Trade Balance (CNY)(Sep) 193.0B vs. Exp. 266.05B (Prev. 286.50B). (Newswires)
Chinese Exports (CNY)(Sep) Y/Y 9.0% vs. Exp. 10.9% (Prev. 6.9%)
Chinese Imports (CNY)(Sep) Y/Y 19.5% vs. Exp. 16.5% (Prev. 14.4%)
Chinese Trade Balance (USD)(Sep) 28.47B vs. Exp. 38.00B (Prev. 41.99B). (Newswires)
Chinese Exports (USD)(Sep) Y/Y 8.1% vs. Exp. 10.0% (Prev. 5.5%)
Chinese Imports (USD)(Sep) Y/Y 18.7% vs. Exp. 14.7% (Prev. 13.5%)a
Commenting on the data, Goldman said, “Exports growth for China accelerated to 8.1% yoy in September from 5.6% yoy in August, slightly below consensus. Imports growth was also up to 18.7% yoy from 13.5% yoy in August, above expectations. In sequential terms, exports grew by 0.2% mom sa non-annualized, up from a fall of 0.2% in August. Imports increased by 2.4% mom sa non-annualized, moderating from 3.2% in August. The trade surplus moderated significantly to US$29.2bn from US$41.0bn in August. Sequential momentum in exports remained mild in September though picking up a bit, and has weakened significantly in Q3 as a whole to -4.5% from a significant rise of 12.0% in Q2. Trade prices might have decelerated modestly in Q3 (data on September trade prices have not been released), but sequential growth in real exports should have also moderated. This is consistent with our previous expectation that the strong exports growth we saw in H1 could probably be hard to maintain in H2. Going forward, sequential momentum in real exports should remain modest, and year-on-year growth will probably moderate due to a high base of Q4 last year.”

 

 

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Elsewhere, in the U.S., the Trump administration’s tax plan clouded up as the president was said to voice frustration with certain aspects of the existing framework. Some Congressional Republicans have aired concerns, though Treasury Secretary Steven Mnuchin reiterated his confidence that a plan will get passed this year. Data Friday on prices and retail sales may give more clues about the Fed’s policy path amid a debate about whether low inflation is temporary or permanent.
“The hurricane effects will mean that interpretations of the data will be difficult,” John Cairns, a strategist at Rand Merchant Bank in Johannesburg, said in a client note. “Anyway, the Fed has made it clear that it intends to raise rates in December even if inflation remains weak.”
Overnight Fed’s Rosengren (Non-Voter, Soft Hawk) said a December hike is appropriate and that 3 rate hikes next year seems appropriate, while he added that low inflation gives the Fed the luxury of being gradual. Meanwhile, Fed’s Bostic (Non-Voter, N/A) repeated he is unsure if Fed will hike rates in December and said US is moving quickly towards full employment.
In geopolitical updates, the White House will keep the Iran nuclear deal for now, but wants Congress to make a list of actions that would prompt sanctions, according to NYT
Meanwhile, overnight bitcoin soared to just shy of $6,000 before easing back modestly.
In rates, the yield on 10-year Treasuries climbed one basis point to 2.33%. Germany’s 10-year yield dipped two basis points to 0.43 percent, the lowest in more than two weeks. Britain’s 10-year yield gained two basis points to 1.363 percent, the highest in more than eight months.  Spain’s 10-year yield fell three basis points to 1.608 percent, the lowest in more than a week.
In commodities, West Texas Intermediate crude gained 1.6 percent to $51.41 a barrel, the highest in more than a week.  Gold climbed less than 0.05 percent to $1,293.86 an ounce. Copper increased 0.3 percent to $3.13 a pound, hitting the highest in almost five weeks with its fifth consecutive advance.
Today we get earnings from Bank of America and First Horizon. Also on
the agenda are a number of data points, including CPI, retail sales and
Michigan sentiment.
Bulletin headline summary from RanSquawk
ECB is reported to mull reducing QE to EUR 30bln/month from January and extending it until at least September 2018
Indecisive trade in major EU bourses this morning with the Eurostoxx 50 relatively flat; traders await tier 1 US data
Looking ahead, highlights include US CPI, retail sales, business inventories, Uni. of Michigan and a slew of central bank speakers
Market Snapshot
S&P 500 futures little changed at 2,550.25
VIX Index down 0.4%, at 9.87
STOXX Europe 600 up 0.3% to 391.42
MSCI Asia up 0.5% to 166.47
MSCI Asia ex Japan up 0.3% to 549.57
Nikkei up 1% to 21,155.18
Topix up 0.5% to 1,708.62
Hang Seng Index up 0.06% to 28,476.43
Shanghai Composite up 0.1% to 3,390.52
Sensex up 0.9% to 32,463.58
Australia S&P/ASX 200 up 0.3% to 5,814.15
Kospi down 0.05% to 2,473.62
German 10Y yield fell 1.9 bps to 0.426%
Euro down 0.03% to $1.1827
WTI crude up 1.5% at $51.40
Brent up 1.8% to $57.25/bbl
Italian 10Y yield fell 4.4 bps to 1.848%
Spanish 10Y yield fell 1.7 bps to 1.62%
Gold spot up 0.03% to $1,294.15
U.S. Dollar Index down 0.02% to 93.04
Top Overnight News
The Trump administration is cutting tens of millions of dollars from organizations that help Americans enroll in Obamacare health plans
Trump is expected to refuse to certify that the multinational accord to curb Iran’s nuclear program sufficiently serves U.S. interests, though he will stop short of abandoning it, according to two senior administration officials; Trump’s Iran Decision Throws New Uncertainty Into Business Plans
European Central Bank officials are considering cutting their monthly bond buying by at least half starting in January and keeping their program active for at least nine months, according to officials familiar with the debate
China’s overseas shipments rose from a year earlier amid robust external demand, the latest sign Asian trade is strengthening as the global outlook brightens
Equity funds globally record inflows of $11.6b in the week to Oct. 11, the largest in 17 weeks, BofAML strategists write in note, citing EPFR Global data
Emerging markets equity funds see inflows of $3.3b, largest in 21 weeks; Japanese equity funds see inflows of $0.3b, first in 4 weeks
Turkey sent special forces and commandos over the border into Syria, the start of a joint mission with Russia and Iran whose stated goal is to monitor a cease-fire agreement and pacify a stronghold for Islamic militants — but one that also has major implications for the region’s Kurds
Trump Digs In on Health Care, Iran Deal; Bank of America, Wells Fargo Earnings; Samsung’s CEO Steps Down as Profit Beats
President Donald Trump’s administration took its most drastic step yet to roll back the Affordable Care Act on Thursday evening, cutting off a subsidy to insurers just hours after issuing an executive order designed to draw people away from the health law’s coverage markets
JPMorgan Chase & Co. and Citigroup Inc. kicked off banks’ earnings season by showing the effects of muted trading and concerns about consumer credit; both beat earnings as JPMorgan relied on improved lending margins while Citigroup continued to squeeze costs
The chief executive officer of Samsung Electronics Co. is stepping down in a surprise resignation after decades at the company
The strength of the U.S. shale boom and prospects for electric vehicles are stoking fears for the oil industry’s future. But that’ll only make crude more valuable, one analyst says, boosting prices as high as $80 a barrel by 2022
Asia-Pac equity markets shrugged off the pullback in US stocks from record levels, although upside was somewhat capped as the region digested the latest Chinese trade figures. ASX 200 (+0.45%) and  Nikkei 225 (+1.0%) were mildly ositive with Australia underpinned by defensive stocks, while Nikkei 225 tested 21,200 and was led by strength in index heavyweight Fast Retailing after the Co. reported its FY net more than doubled. Elsewhere, Shanghai Comp. (+0.1%) and Hang Seng (+0.1%) traded indecisive after the PBoC skipped open market operations but then offered funds via its MLF facility and as participants mulled over mixed Chinese trade data. Finally, 10yr JGBs were initially subdued with demand sapped amid a positive risk tone in Japan, before an improved enhanced liquidity auction result for longer-dated JGBs supported in late trade. MAS (Singapore central bank) kept the appreciation of SGD NEER unchanged at 0%, while it also maintained the width and level of the policy band. MAS made a reference to neutral policy being appropriate for an extended period of time from the October 2016 Monetary Policy Statement and said that it sees Singapore economy likely to expand at a steady, but slightly slower pace in 2018 compared to 2017.
Top Asian News
China Exports Remain Resilient as Import Gains Signal Strength
Big Banks Winning in China Battle of Unequals as Curbs Bite
In Surprise Move, Samsung CEO to Step Down After Record Profit
‘Enigma Network’ Crash Spurs Hong Kong’s Largest Financial Raid
Nomura Probe Said to Find No Evidence of Aomori Stock Sale Leaks
In European markets, there has been indecisive trade in major EU bourses this morning with the Eurostoxx 50 relatively flat. Focus in the session will be on the slew of central bank speakers and US data later in the session. Energy names have been supported by the upside in WTI and Brent crude futures, in which Brent briefly made a break above USD 57. In stock specific news, Bayer shares are  outperforming in the DAX after reports that BASF is to purchase the company’s seed unit for EUR 5.9bln. FTSE 100 the laggard today, slipping 0.4% amid the move higher in GBP, while the worst performing  stock in the FTSE, GKN, has seen a sharp drop after a profit warning. Bunds bolstered by latest ECB source reports and a technical short squeeze, which lifted the core 10 year bond future through this week’s previous peak and a new high for the month. EZ periphery debt also benefiting from suggestions that QE could be extended by 9 months at least (longer end of the previously touted 6-9 month range), and seemingly unperturbed by talk that the monthly pace of asset purchases could be scaled down relatively sharply to Eur30 bn from January 2018. Conversely, some signs of compromise in the form of a contingent 2-year Brexit transition offer from the EU, per media reports, has left UK Gilts languishing and underperforming again, with similar divergence seen at the short end  of the curve (ie Short  Sterling contracts down vs firmer Euribor and Eurodollar peers). US Treasuries largely holding modest gains made in wake of a solid 30 year auction, and braced for Friday’s key data  (CPI and retail sales, latter possibly carrying an upside skew on above consensus PPI).
Top European News
ECB Is Said to Consider Cutting QE Flow in Half in Next Year
Saudis Mull Slower Subsidy, Spending Cuts to Support Economy
Greece Dreams of Bailout-Free Existence as Creditor Audit Looms
More Than 400 Firms ‘Expelled’ From Catalonia: PP’s Hernando
Romania Ruling Party Defuses Crisis as Three Ministers Quit
BASF Enters Seeds Market as Bayer Sells $7 Billion in Assets
In currencies, Much of the latest FX volatility occurred post European close yesterday, as reports from Handelsblatt circulated, stating thatmEU Brexit negotiator Barnier could offer the UK a two-year transitional deal, with the offer tied to the UK meeting its exit obligations to the EU. Sterling has recovered all and more of the losses prompted by Barnier’s earlier comments on Thursday, as Cable breaks through 1.33, and above October’s previous highs to resume this week’s overall bullish trend. Comments could continue to dictate Sterling direction as many will await BoE’s Carney this evening. EUR/GBP initially followed the trend of the bullish pound, however, marginal support was seen on reports that the ECB is set to mull reducing QE to EUR 30bln/month from January and extending it until at least September 2018, while sources also stated that policymakers are in agreement about extending asset purchases at the October meeting, but are still debating the taper size. EUR 30bln over nine months  was initially perceived by markets as marginally hawkish. Nevertheless, the Euro has been offered against most of its major counterparts in early European trade, amidst comments from ECB’s Weidmann, stating again that he is against softening the capital key, and thus favouring Bunds. The Yen has outperformed generally, up 0.37% for the session vs the Usd, despite this week’s option expiries closing with just short of 2bln between 112.65 – 113.00. The pair trades sub-112.00, looking at the 200 DMA at 111.82. The dollar index has been muted, with much of the trade impetus coming from the other major currencies, as anticipation turns to tier 1 data (CPI and retail sales), then Yellen who is set to speak over the weekend.
In commodities, WTI and Brent crude futures hovering near intra-day highs this morning. Participants will be keeping an eye out on President Trumps remarks over the Iran nuclear deal, where it is expected that he will refuse to certify Iran’s compliance with the accord and as such this may lead to sanctions on Iran yet again. Additionally, Chinese trade data out last night showed that Chinese imports of crude oil climbed to the second highest level on record.
Looking at the day ahead, in the US it’s all eyes on the September CPI report, while last month’s retail sales numbers are also worth keeping a close eye on. The preliminary October University of Michigan consumer sentiment reading will also be out along with August business inventories data. Onto other events, the Fed’s Evans, Kaplan and Rosengren are all on the cards to speak on Friday. President Trump will speak on Iran later in the day and Wells Fargo / Bank of America also report earnings.
US Event Calendar
8:30am: US CPI MoM, est. 0.6%, prior 0.4%; CPI Ex Food and Energy MoM, est. 0.2%, prior 0.2%
US CPI YoY, est. 2.3%, prior 1.9%; CPI Ex Food and Energy YoY, est. 1.8%, prior 1.7%
Real Avg Weekly Earnings YoY, prior 0.88%
8:30am: Retail Sales Ex Auto MoM, est. 0.9%, prior 0.2%; Retail Sales Ex Auto and Gas, est. 0.4%, prior -0.1%; Retail Sales Control Group, est. 0.4%, prior -0.2%
10am: U. of Mich. Sentiment, est. 95, prior 95.1; Current Conditions, est. 111.6, prior 111.7; Expectations, est. 85.3, prior 84.4
10am: Business Inventories, est. 0.7%, prior 0.2%
DB’s Jim Reid concludes the overnight wrap
there’s definitely chocolate inflation in the modern world but is there any outside of the ‘brown gold’? Today’s US CPI number will likely cast a large shadow over the next month’s trading and is therefore a  key release. The market’s expectation is for a +0.6% mom headline number and +0.2% mom for the core. DB in is line with the market. Remember that last month (+0.2% core) marked the first time in 6 months that US CPI didn’t undershoot expectations. In terms of the details, headline CPI should get a boost from gas prices post the hurricane disruption so be a bit careful when interpreting this part. In  terms of the core, DB’s Brett Ryan expects some modest negative payback for rent and owners’ equivalent rent following a big monthly gain in August. Lodging away from home prices may also dip reflecting the weather events, as evidenced by the post Hurricane Katrina data. In fairness though this is overall a small part of the CPI data though. Don’t forget US retail sales is realised at the same time so something else to add to the mix.
Ahead of this the most interesting story yesterday was around Brexit with wildly conflicting stories buffeting the currency. Indeed Sterling had a bit of a roller coaster ride yesterday versus the Euro, falling as much as 0.9% intraday but closing up 0.55%. Initially, markets were disappointed on how negative Chief EU negotiator Michel Barnier was in his press conference after the fifth round of Brexit talks. He noted that “we have reached a state of deadlock…” over the Brexit divorce bill and “no deal will be a very a bad deal (for the UK)” and then followed up with firm comments like “to be clear on our side, we’ll  be ready to face any and all eventualities”. However, Sterling rebound after Handlesblatt reported (after the UK closed) that Barnier may still offer the UK a two-year transition deal provided that the deadlock can be overcome and there is still hope that sufficient progress can be made by the December summit if the UK provided more clarity on what PM May alluded to back in her Florence speech. DB’s Oliver Harvey believes next week’s European Council meeting will be an important turning point for talks. If unsatisfactory, it could increase the risks to the UK growth and may undermine market’s confidence in a BOE hike at its November meeting.
Onto the US tax reforms, where the plan continues to be to get something done by the end of the year. However, the rhetoric is stepping up now, with House speaker Paul Ryan noting “we’re going to keep everybody (in Congress) here to Christmas if we have to, I don’t care, it’s that important”. He added that he wants to wake up on New Year’s Day 2018 with the new tax code.
Staying with politics, the Italian government has now won all of the confidence votes to pass a new electoral law (375 vs. 215 against), which could potentially penalise the 5-Star Movement party (5SM). The bill will now go to the upper house later in the month where the government has no clear majority. Italy’s bond markets slightly outperformed yesterday, with 10y yields down 4.6bp, while core bond yields (UST 10y -3bp; Bunds -1.7bp; OATs -2.1bp) were also down slightly, but Gilts was broadly flat. At the 2y part of the curve, yields were mixed but little changed, with UST (-0.6bp) and Bunds (-1bp) down marginally, but Gilts (+0.6bp) and Italy BTPs (+1.2bp) rose.
Turning to equities and US bank results yesterday. US equities softened, with the S&P 500 (-0.17%), Dow (-0.14%) and Nasdaq (-0.18%) down slightly, impacted by weakness in the financials and telco sector, where AT&T dropped 6.1% after losing 90k video subscribers in 3Q due to heavy competition and the recent Hurricanes. Both Citi and JPM’s 3Q EPS beat consensus, mainly driven by better than expected cost discipline (at Citi) and lending margins (at JPM),but shares fell 3.43% and 0.88% respectively, partly due to concerns of a higher than expected build up in provisions for credit losses, albeit off a low base. Elsewhere, 3Q total trading income was weak but broadly similar to management’s prior guidance (JPM: -21% pcp vs. -20%; Citi -11% on pcp vs. -15%).
European markets were mixed but little changed, with the Stoxx (+0.03%) broadly flat, but the DAX (+0.09%) and FTSE 100 (+0.30%) both nudged up to a fresh record high. Elsewhere, the CAC (-0.02%) and Italy’s FTSE MIB (-0.68%) fell slightly.
Turning to the search for the next Fed Chair, White House Chief of Staff John Kelly said “all of the people who’ve been in to interview (with President Trump) have been first round draft choices…..we still have more to come”. He didn’t specify who the candidates were, but prior reports suggests a shortlist including: Mrs Yellen, Fed governor Jerome Powell, former Fed governor Kevin Warsh, Stanford University economist John Taylor and National economic council director Gary Cohn. Elsewhere, Treasury Secretary Mnuchin said President Trump hopes to make a decision within a month.One of the  candidates, the Fed’s Powell echoed his peers by saying “it’s likely that the process of (monetary) normalisation will proceed without significant disruption”, but cautioned that “significant risks of more adverse scenarios remains”. One area he has flagged is corporate debt in emerging markets, where the current situation may not be alarming, “but risks can be significant and bear close watching, especially in China”, where “markets reactions to even small surprises can be outsized”. For those who have missed it, our note “The next financial crisis” takes a closer look at this and other developing risks. Elsewhere, he said differences in the projections of interest rate moves between the Fed’s dot plot and market prices should be ‘taken with a grain of salt”.
Staying with central bankers’ commentaries. The Fed’s Brainard was a bit dovish, noting that temporary factors impact inflation both ways, “so that (temporary factors) cannot fully account for what we’ve been observing in the inflation data” and “…it seems to be that the Phillips curve is just not very important in the overall inflation process”. Further, she added that a lot of time-series work would suggests that we have actually seen “a reduction in the underlying trend rate of inflation that’s material”. Elsewhere, ECB’s Draghi reiterated that interest rates will remain low “well past” the end of QE. He added that the “well past” reference is “very, very important”. On wage inflation, he is seeing some progress, but “we’re still not there” yet.
This morning in Asia, markets are trading slightly higher.The Nikkei (+0.23%), ASX (+0.30%), Chinese bourses (up c0.2%) and Kospi (+0.15%) are up slightly, while the Hang Seng (-0.08%) is marginally down.
Quickly recapping other markets performance yesterday. Excluding Sterling, currencies were little changed with the US dollar index up 0.05% while Euro/ USD dipped 0.24%. In commodities, WTI oil fell 1.36% despite the last EIA report showing lower US crude inventories, in part as the IEA estimated that the decline in supply could be offset in 2018 due to rising output from US and other countries. Elsewhere, precious metals were marginally higher (Gold +0.15%; Silver +0.43%) while other base metals also increased slightly (Copper +0.93%; Zinc +1.53%; Aluminium +1.13%).
Away from the markets, the IMF’s MD Christine Lagarde was reasonably optimistic on global economic growth, noting “it’s broad based, more solid and it should get better”, but added that “it needs to get sustainable and benefit all”. The Fed’s Powell also agrees, noting “there have been signs lately that a sustainable global recovery may finally be materialising” although caveat it with “significant risks and uncertainties remain”.
This Sunday, we’ll see another election, this time over at Austriawhere the centre-right People’s Party (OVP) led by its 31 year old leader Sebastian Kurz is expected to win c33% of the votes. As per the Independent, an average of major pollsters (The Independent) suggest the other two parties are currently neck and neck, with FPO at c26% and the Social Democrats (SPO) at c24.4%. A renewed coalition between OVP and SPO is seen as less likely, which makes the far right, anti-immigrant and euro-sceptic FPO party in a strong bargaining position when forming the next coalition government. Mr Kurz has  been Austria’s foreign minister since 2013, with one of his key policies being “above all, we want to stop illegal immigration so there is order and security in our country”. So it will be interesting to see what an OVP & FPO tie up would mean for Europe if it eventuates.
Turning to job security in the world of politics. In the US, White House Chief of Staff Kelly said “I’m not getting fired and I don’t think I’ll fire anyone tomorrow”. In the UK, former Finance Chief Nigel Lawson suggested PM May should fire Chancellor Hammond over his negative Brexit comments, noting “what he is doing is very close to sabotage”. Later on, a spokesman for PM May said “May has full confidence in Hammond”. Elsewhere, the FT reported the UK government is planning to hire 2,000 more staff to deal specifically with Brexit. So all this is bubbling along in the background while tax reforms and Brexit  alks are underway.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the core September PPI (ex food and energy) was above consensus at 0.4% mom (vs. 0.2%) and 2.2% yoy (vs. 2.0% expected). Notably, the healthcare costs component edged up 0.1% mom so that throughyear inflation was broadly steady at 1.2% yoy, which at least suggests that healthcare will not be a drag on core PCE inflation like it was last month. Elsewhere, the weekly initial jobless claims (243k vs. 250k expected) and continuing claims (1.89m vs. 1.93m expected) were both lower than expectations, with continuing claims down to a new 44-year low.
The Eurozone’s August IP was higher than expectations at 1.4% mom (vs. 0.6%) and 3.8% yoy (vs. 2.6% expected), while France’s final September CPI reading was broadly in line at 1.1% yoy. In the UK, the BOE released its 3Q Credit Conditions Survey and Bank Liabilities Survey. For households, i) the availability of secured credit has increased slightly in 3Q, but ii) the availability of unsecured credit has decreased in 3Q and lenders expected a further substantial decrease in 4Q, likely a response to rising default rates for these loans. Finally, there was no change in the availability of credit to the corporate sector.
Looking at the day ahead, we get the final September CPI revisions for Germany and Italy. In the US it’s all eyes on the September CPI report, while last month’s retail sales numbers are also worth keeping a close eye on. The preliminary October University of Michigan consumer sentiment reading will also be out along with August business inventories data. Onto other events, the Fed’s Evans, Kaplan and Rosengren are all on the cards to speak on Friday. President Trump will speak on Iran later in the day and Wells Fargo / Bank of America also report earnings.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 4,42 points or .13% /Hang Sang CLOSED UP 17,40 pts or .06% / The Nikkei closed UP 200.46 POINTS OR .96/Australia’s all ordinaires CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed UP  at 6.5877/Oil UP to 51.58 dollars per barrel for WTI and 57.45 for Brent. Stocks in Europe OPENED MIXED .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5877. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5826 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

 Trump sends a second aircraft carrier to the Korean peninsula
(courtesy zerohedge)
Trump Sends Second Aircraft Carrier To Korean Peninsula With 7,500 Marines Aboard

Just one week after uttering his now-infamous “this is the calm before the storm” statement to the press ahead of a dinner with military leaders, we now learn that President Trump has dispatched a second nuclear aircraft carrier, the USS Theodore Roosevelt, filled with 7,500 marines, to the Korean Peninsula.  Of course, this comes after rumors swirled earlier this week that North Korea is preparing to fire multiple short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18th.

The USS Theodore Roosevelt, a Nimitz-class aircraft carrier, is en route to the western Pacific after leaving San Diego port last week.
The Roosevelt will focus on maritime security operations in the Pacific and Middle East, the US military announced.
But the £3.4billion ($4.5billion) warship, known as “the Big Stick”, has been sent to boost US defence on the Korean peninsula, according to South Korean media.
It is expected to arrive in region in the coming weeks amid fears North Korea is about to test another missile or nuclear weapon.
Per the following map from Stratfor, the USS Theodore Roosevelt will join the USS Ronald Reagan which is already operating in the region.

According to a statement from Admiral Steve Koehler, a strike group commander on the ship, the Roosevelt is carrying some 7,500 sailors and marines that are “ready as a war fighting force”.

“The US Navy carrier strike group is the most versatile, capable force at sea,” he said in a statement before the ship’s launch.
“After nearly a year of training and integration exercises, the entire team is ready as a warfighting force and ready to carry out the nation’s tasking.”
Of course, as we noted above, this buildup of naval forces in the Pacific follows an ominous warning from the President last week that preceded a dinner with military leaders: “You guys know what this represents? Maybe it’s the calm before the storm,” he said: “It could be the calm… before… the storm.”
A reporter quickly asked what the storm might be -“Is it Iran, ISIS, what’s the storm?”  to which he replied… “…you’ll find out.”
So what say you?  Just more bluster from a headline seeking President and normal-ish naval patrols in the Pacific or have we reached a point of no return in an escalating conflict with a rogue North Korean leader that could turn violent at any moment? end b) REPORT ON JAPAN 4. EUROPEAN AFFAIRS   5. RUSSIA AND MIDDLE EASTERN AFFAIRS

Turkey

this morning we witness 100 Turkish soldiers and 30 armored vehicles cross into Syria.  Their stated goal is to help the Syrian government out iSIS and Sunni influences in Northern Syria.  Their real goal is try and remove the Syrian Kurds. Thus on the surface they are turning their backs against the West and joining forces with Russia and Iran

(courtesy zerohedge)

More Than 100 Turkish Soldiers, 30 Armored Vehicles Cross Into Syria

 

 

A large Turkish army convoy consisting of more than 100 Turkish soldiers, including special forces and commandos, along with at least 30 armored trucks entered Syria’s Idlib region around 22:15 local time, for a joint mission with Russia and Iran to monitor a local de-escalation zone and “pacify al-Qaeda linked militants” there, Hurriyet newspaper reports. While their destination was not clear, local sources told Al Jazeera the troops were headed towards the western part of Aleppo province.

The de-escalation zone forms part of an agreement reached between Turkey, which backs forces battling the government of President Bashar al-Assad, and Iran and Russia, which support his government.
This move by the Turkish Army comes just days after Turkish President, Recep Tayyip Erdogan, announced that the Ankara-backed Euphrates Shield Forces were preparing an operation to expel the Al-Qaeda linked Hay’at Tahrir Al-Sham terror group from the Idlib Governorate.

 

Al Jazeera, reporting from Antakya, along Turkey’s border with Syria, said:

 

“This is what we know so far: dozens of military vehicles have crossed into Syria. “It remains to be seen what happens to the fighters who control Idlib province. Civilians there have been living in fear of potential clashes between Turkish-backed opposition Free Syrian Army fighters and Hayat Tahrir al-Sham, an alliance of armed groups that controls Idlib.”
A military build-up has taken place of late along Turkey’s border with Syria, with Turkey supporting a campaign to secure opposition control over Idlib province.
With Turkish relations with the US – not to mention Europe – at rock bottom, we doubt that the US State Department will be pleased by this sudden escalation in which Russia once again projects to the west that Syria is its domain, and that NATO member Turkey has become one of its biggest allies in the middle east region. The US, however, will have no choice but to respond as the Turkish incursion means that Kurdish US-coalition allies will demand a US response, or else the entire region will henceforth perceive Washington as a paper tiger

end

 

Israel:

 

not good: Israeli TV shows footage of iSIS training camp on Israel’s border

 

 

Israeli TV Shows Footage Of ISIS Training Camp On Israel’s Border

for complete report see zerohedge)

http://www.zerohedge.com/news/2017-10-13/israeli-tv-shows-footage-isis-training-camp-israels-border

 

Last November Israel Prime Minister Benjamin Netanyahu said his country “won’t allow Islamic State figures or other enemy actors, under the cover of the war in Syria, to set up next to our borders,” but it appears this has already happened, to the point that a sizable ISIS training camp has been set up just across the Golan Heights border with Israel. Though Syrian al-Qaeda has long been a mainstay in southern Syria along Israel’s border, this constitutes the first widespread public acknowledgement and confirmation of a significant ISIS base of operations in the Golan region.

Israeli media this week is reporting news of the base camp after Israel’s Channel 2 aired an extensive report with video and photographic evidence of what’s being described as a training and recruitment center which has already attracted hundreds of new terror recruits. Channel 2 is one of Israel’s most visible and established news broadcast channels and operates under “The Second Authority for Television and Radio” licensed by the Knesset and the Ministry of Communications. According to the Times of Israel:

 

Israel’s Channel 2 said the commanders have made their way to an Islamic State-controlled enclave “close to the border” with Israel. They have set up a training camp to which they have recruited 300 local youths, said the report, which showed footage apparently of the camp and training sessions.

Among the commanders is one of Islamic State’s most notorious recruiters, Abu Hamam Jazrawi, the TV report said.

The commanders are also now running Islamic State internet propaganda campaigns from their new base, in place of the former campaign headquarters in Raqqa, the extremists’ former de facto capital in northwest Syria where the fight to oust them has entered what appear to be its final stages.

Featured in Israel’s Channel 2 broadcast: Islamic State training camp (Channel 2 screenshot)

Channel 2 screenshot purporting to show the ISIS base camp just across Israel’s border.

The Channel 2 exposé further notes the presence of multiple senior Islamic State commanders at the camp, which suggests the terror group could be attempting to relocate its assets to Syria’s south as it appears to be crumbling with the onset of SDF, Syrian Army, and Russian forces in the eastern part of the country.
The Times of Israel acknowledges another shocking fact, which has itself become an open secret of sorts among Israeli defense and policy officials: what it calls the long lasting “live and let live” relationship with al-Qaeda in the region. The Times of Israel explains:

 

Both the IS-affiliated Khalid ibn al-Walid Army and the Jabhat Fateh al-Sham, formerly the al-Nusra Front, which is linked to al-Qaeda, have been set up on Israel’s borders for years.

Despite a relatively long-lasting “live and let live” relationship with these groups, the IDF has warned of a potential — some say inevitable — conflict with them and has been preparing to respond to cross-border attacks.

Though the IDF has “warned” of some “potential” direct action against the most notorious terrorist groups in the world which seem to be comfortably ensconced within eyesight of Israeli border posts, it has never taken significant direct action against these groups, instead routinely targeting the Syrian army, Iranian-linked militias, and Hezbollah with airstrikes. This is a general reflection of the Israeli strategy of regime change in Syria, which has resulted in a well-documented history of assistance to al-Qaeda affiliated rebel groups.
A Wall Street Journal investigation found that this relationship involved weapons transfers, salary payments to anti-Assad fighters, and treatment of wounded jihadists in Israeli hospitals, the latter which was widely promoted in photo ops picturing Netanyahu himself greeting militants. As even former Acting Director of the CIA Michael Morell once directly told the Israeli public, Israel’s “dangerous game” in Syria consists in getting in bed with al-Qaeda in order to fight Shia Iran.
Channel 2 News and the The Times of Israel also featured an image from a prior video of a lone ISIS militant holding an Islamic State flag with the Israeli side of the Golan border in clear view.

The Times of Israel featured the above image: “Threats from across the border in a video released by an Islamic State affiliate on the Syrian side of the Golan Heights on September 3, 2016.”
In recent years, multiple current and former Israeli defense officials have gone so far as to say that ISIS is ultimately preferable to Iran and Assad. For example, former Israeli Ambassador to the US Michael Oren in 2014 surprised the audience at Colorado’s Aspen Ideas Festival when he said in comments related to ISIS that, “the lesser evil is the Sunnis over the Shias.” Oren, while articulating Israeli defense policy, fully acknowledged he thought ISIS was “the lesser evil.”
Likewise, for Netanyahu and other Israeli officials the chief concern was never the black clad death cult which filmed itself beheading Americans and burning people alive, but the possibility of, in the words of Henry Kissinger, “a Shia and pro-Iran territorial belt reaching from Tehran to Beirut” and establishment of “an Iranian radical empire.”
With Israeli media now widely reporting the Islamic State’s presence along Israel’s border we wonder why such a clear and documented fact isn’t cause for bigger outrage. Though Israel’s Channel 2 bombshell report aired earlier this week, there’s been resounding silence in international press. ISIS is camping out along Israel’s border, yet all we hear about is the supposed “Iranian threat” to Israel’s existence

end

Germany, UK, France And Russia Slam Trump’s Decision To Decertify Iran Deal

 

It didn’t take long for Europe’s biggest nations – the other signatories to the Joint Comprehensive Plan of Action, aka the Iran Nuclear Deal –  as well as Russia, to slam Trump’s unilateral decision to decertify the Iran agreement and, in the process, put the entire deal in jeopardy. Moments ago, in a joint statement, Theresa May, Angela Merkel and Emmanuel Macron all reiterated their commitment to the JCPOA, expressed their concern by the possible implications of Trump’s decision not to recertify the deal, and urged the US to think hard before taking further steps that might undermine it further.

Here is the statement they released together moments ago:

 

We, the Leaders of France, Germany and the United Kingdom take note of President Trump’s decision not to recertify Iran’s compliance with the Joint Comprehensive Plan of Action to Congress and are concerned by the possible implications.

We stand committed to the JCPoA and its full implementation by all sides. Preserving the JCPoA is in our shared national security interest. The nuclear deal was the culmination of 13 years of diplomacy and was a major step towards ensuring that Iran’s nuclear programme is not diverted for military purposes. The JCPoA was unanimously endorsed by the UN Security Council in Resolution 2231. The International Atomic Energy Agency has repeatedly confirmed Iran’s compliance with the JCPoA through its long-term verification and monitoring programme. Therefore, we encourage the US Administration and Congress to consider the implications to the security of the US and its allies before taking any steps that might undermine the JCPoA, such as re-imposing sanctions on Iran lifted under the agreement.

At the same time as we work to preserve the JCPoA, we share concerns about Iran’s ballistic missile programme and regional activities that also affect our European security interests. We stand ready to take further appropriate measures to address these issues in close cooperation with the US and all relevant partners. We look to Iran to engage in constructive dialogue to stop de-stabilising actions and work towards negotiated solutions.

Federica Mogherini, the EU foreign policy chief, responded to the Trump announcement, saying the eight inspections have so far shown Iran in compliance with the nuclear deal. “There have been no violations of any of the commitments included in the agreement,” she said.
“The deal has prevented and continues to prvenet Iran from developing nuclear weapons.”
She added that the US President has many powers but that no single country has the authority to nullify the deal. “The international community, and the E U with it, has clearly indicated that the deal is – and will continue to be – in place,” she said.
Russia expressed similar sentiment, with Sergey Lavrov quoted by RIA as saying that all sides should stick to the deal and saying that the main task now is preventing the nuclear deal from collapsing.
Ironically, it was up to none other than Iran itself to remind Trump that the “deal” is not unilateral:
ROUHANI: TRUMP DOESN’T KNOW NUCLEAR DEAL ISN’T UNILATERAL
ROUHANI TO TRUMP: ONE COUNTRY CAN’T DICTATE TERMS OF IRAN DEAL
There was one nation that was delighted by today’s events however: the true sponsor of terrorism in the Middle East and around the globe, and certainly on September 11: Saudi Arabia. The Saudis welcomed the new US policy towards Iran and said lifting sanctions had allowed Iran to develop its ballistic missile program and step up its support for militant groups, state news agency SPA reported on Friday. The kingdom said Iran took advantage of additional financial revenues to support for the Lebanese Shia movement Hezbollah and the Houthi group in Yemen.
Actually, there was another. Israel.
Israeli Prime Minister Benjamin Netanyahu congratulated Trump for his speech, seeing an opportunity to change the 2015 nuclear deal with Tehran as well as Iranian conduct in the region. “He boldly confronted Iran’s terrorist regime (and) created an opportunity to fix this bad deal, to roll back Iran’s aggression and to confront its criminal support of terrorism,” he said in a Facebook video.

 

end

 

 

Trump Invites “Crushing” Response After Designating Iran’s Revolutionary Guard As Terrorist Organization

 

 

While Trump’s just announced decision to decertify the Iranian nuclear deal, giving Congress 60 days to decide whether to unwind Obama’s landmark deal, was widely leaked previously even though few can point to what terms of the agreement Iran has violated, one aspect of Trump’s Iran statement was unclear: whether he would designate Iran’s Islamic Revolutionary Guard Corp, or IRGC, the elite wing of Iran’s army, a terrorist organization –  a move which Iran vowed would prompt “decisive , crushing” retaliation.
Trump did just that, and the new, sweeping sanctions on the IRGC could affect conflicts in Iraq and Syria, where Tehran and Washington both support warring parties that oppose the Islamic State militant group.
This is what the Treasury’s OFAC unit posted on its sanctions website moments ago:

 

Treasury Designates the IRGC under Terrorism Authority and Targets IRGC and Military Supporters under Counter-Proliferation Authority

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Iran’s Islamic Revolutionary Guard Corps (IRGC) pursuant to the global terrorism Executive Order (E.O.) 13224 and consistent with the Countering America’s Adversaries Through Sanctions Act.  OFAC designated the IRGC today for its activities in support of the IRGC-Qods Force (IRGC-QF), which was designated pursuant to E.O. 13224 on October 25, 2007, for providing support to a number of terrorist groups, including Hizballah and Hamas, as well as to the Taliban.  The IRGC has provided material support to the IRGC-QF, including by providing training, personnel, and military equipment.

“The IRGC has played a central role to Iran becoming the world’s foremost state sponsor of terror.  Iran’s pursuit of power comes at the cost of regional stability, and Treasury will continue using its authorities to disrupt the IRGC’s destructive activities,” said Treasury Secretary Steven T. Mnuchin.  “We are designating the IRGC for providing support to the IRGC-QF, the key Iranian entity enabling Syrian President Bashar al-Assad’s relentless campaign of brutal violence against his own people, as well as the lethal activities of Hizballah, Hamas, and other terrorist groups. We urge the private sector to recognize that the IRGC permeates much of the Iranian economy, and those who transact with IRGC-controlled companies do so at great risk.”

IRGC

The IRGC was designated today for the activities it undertakes to assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.  The IRGC, which is the parent organization of the IRGC-QF, was previously designated pursuant to E.O. 13382 on October 25, 2007, in connection with its support to Iran’s ballistic missile and nuclear programs, and pursuant to E.O. 13553 on June 9, 2011 and E.O. 13606 on April 23, 2012, in connection with Iran’s human rights abuses.

The IRGC has provided material support to the IRGC-QF, including by providing training, personnel, and military equipment.  The IRGC has trained IRGC-QF personnel in Iran prior to their deployments to Syria, and has deployed at least hundreds of personnel from its conventional ground forces to Syria to support IRGC-QF operations.  IRGC personnel in Syria have provided military assistance to the IRGC-QF, and have been assigned to IRGC-QF units on the battlefield, where they provide critical combat support, including serving as snipers and machine gunners.

Additionally, the IRGC has recruited, trained, and facilitated the travel of Afghan and Pakistani nationals to Syria, where those personnel are assigned to, and fight alongside, the IRGC-QF.  The IRGC also has worked with the IRGC-QF to transfer military equipment to Syria.  The IRGC used both IRGC bases and civilian airports in Iran to transfer military equipment to Iraq and Syria for the IRGC-QF.

Now it becomes a question of what Iran (and Russia) does: as a reminder, on Monday, Iran vowed to give a “firm and crushing” response if Washington adds the IRGC to the list of terrorist organizations, which the US just did.
“We are hopeful that the United States does not make this strategic mistake,” Iranian Foreign Ministry spokesman Bahram Qasemi stated during a news conference according to Reuters. “If they do, Iran’s reaction would be firm, decisive and crushing and the United States should bear all its consequences.”
Commenting on the IRGC designation, University of Tehran analyst Seyed Mohammad Marandi said that Iran will give a similar designation to the US military. Asked by the local media if he expects Trump to decertify the nuclear deal on October, 15, and what impact this could have on stability in the world, Marandi responded:

 

It is quite possible. Of course, Mr. Trump is a very unpredictable person, but all indications seem to show that that is what he is going to do. If he does decertify the agreement, basically it will show the international community the US is an untrustworthy country, and it is not a country you can negotiate with. It will prevent Iran from being able to carry out any negotiations in the future with the US because the Iranians will conclude that even if there is some sort of agreement over any Issue, the US may tear up that agreement later on. And I think the same is true with any country that wants or is even contemplating negotiating with the US. The US hurts itself more than anyone else. If it wishes to increase sanctions on Iran, then I think the Iranians will find the means to retaliate.

* * *

If he decertifies the nuclear deal, a lot will depend on the reaction of the EU countries. If the EU countries simply verbally oppose Trump, that is one way of moving forward. I think that would lead to the deal unfolding completely. If on the other hand, the EU countries and England decide that they will retaliate against the US, that they will sue the US or punish the US if it tries to punish their companies, that may bring about a different situation. But without a doubt, if the US wants to push for greater confrontation with Iran, the Iranians know quite well that the only way to make sure the US backs off is if the Iranians push back just as hard, if not harder. Iran will not initiate any form of confrontation, conflict or tit-for-tat, but if the US begins something, then the Iranians will definitely push back very hard
As for whether the Iran deal ends following a Congressional review, a U.S. pullout from the Iran deal would unravel an accord seen by supporters as vital to preventing a Middle East arms race and tamping down regional tensions, since it limits Iran’s ability to enrich uranium for nuclear fuel in exchange for the lifting of sanctions that damaged its oil-based economy. As a reminder, prior to the deal Iran and Israel were constantly at each other’s throats, resulting in a constant fear of imminent war between the two nations.

6 .GLOBAL ISSUES 7. OIL ISSUES 8. EMERGING MARKET Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am

Euro/USA   1.1822 DOWN.0009/ REACTING TO SPAIN VS CATALONIA/REACTING TO  +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES  RED /mixed/  

USA/JAPAN YEN 112.15 DOWN 0.092(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/   

GBP/USA 1.3294 UP .0030 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2475 DOWN .0013 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro FELL by 9 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1822; / Last night the Shanghai composite CLOSED UP 4.222 PO.18INTS OR .06%      / Hang Sang  CLOSED UP 17.40 OR .06%   /AUSTRALIA  CLOSED UP 0.35% / EUROPEAN BOURSES OPENED MIXED 

The NIKKEI: this FRIDAY morning CLOSED UP 200,46 POINTS OR .96% 

Trading from Europe and Asia:
1. Europe stocks  OPENED MIXED  

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 17.40 POINTS OR .06%  / SHANGHAI CLOSED UP 4.43 POINTS OR .13%    /Australia BOURSE CLOSED UP 0.35% /Nikkei (Japan)CLOSED UP 200.46 POINTS OR .96%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1293.65

silver:$17.23

Early FRIDAY morning USA 10 year bond yield:  2.325% !!! DOWN 2 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.856, DOWN 3 IN BASIS POINTS  from THURSDAY night. (POLICY FED ERROR)

USA dollar index early FRIDAY morning: 93.08 UP 3 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  FRIDAY MORNING

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And now your closing FRIDAY NUMBERS  (NOTPROVIDED TONIGHT)

Portuguese 10 year bond yield: 2.333% DOWN 0 in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.064%  down 1/5  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.611% DOWN 2 IN basis point yield from THURSDAY 

ITALIAN 10 YR BOND YIELD: 2.115 down 5 POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 51 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.403% down 6  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY  (NOT PROVIDED TONIGHT)

Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM

Euro/USA 1.1815 DOWN .0015 (Euro DOWN 15 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.60DOWN 0.642(Yen UP 64  basis points/ 

Great Britain/USA 1.3276 DOWN  0.0007( POUND DOWN 7 BASIS POINTS)

USA/Canada 1.2442 DOWN.0032 Canadian dollar UP 32 basis points AS OIL ROSE TO $51.39

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This afternoon, the Euro was FELL 15 basis points to trade at 1.1815

The Yen ROSE to 111.60 for a GAIN of 64  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  

The POUND FELL BY 7 basis points, trading at 1.3276/ 

The Canadian dollar ROSE by 32 basis points to 1.2442,  WITH WTI OIL RISING TO :  $51.39

The USA/Yuan closed AT 6.5790  the 10 yr Japanese bond yield closed at +.064% DOWN 1/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 6  IN basis points from THURSDAY at 2.273% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.805 DOWN 7 in basis points on the day /

Your closing USA dollar index, 93.06  UP 1 CENT(S)  ON THE DAY/400 PM/BREAKS RESISTANCE OF 92.00 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 1:00 PM EST

London:  CLOSED DOWN  20,80 POINTS OR 0.28%
German Dax :CLOSED UP 8.98 POINTS OR .07%
Paris Cac  CLOSED DOWN 9.07 POINTS OR 0.17% 
Spain IBEX CLOSED DOWN 17.80 POINTS OR 0.17%

Italian MIB: CLOSED UP 15.03 POINTS OR 0.07% 

The Dow closed UP  30.71 POINTS OR .13%

NASDAQ WAS closed UP  14.029PTS OR .18%  4.00 PM EST

WTI Oil price;   51.39 1:00 pm; 

Brent Oil: 57.16 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.34 DOWN 37/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 37 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +.403%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

 

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$51.39

BRENT: $57.16

USA 10 YR BOND YIELD: 2.273%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.805% 

EURO/USA DOLLAR CROSS:  1.1815 DOWN .0015

USA/JAPANESE YEN:111.59   DOWN  0.64

USA DOLLAR INDEX: 93.06 UP 1  cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3276 : DOWN 7 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2442 UP 32 BASIS pts 

German 10 yr bond yield at 5 pm: +0.403%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY Record High Stocks, Record Low VIX But Bitcoin, Bonds, & Bullion Bid

 

see zero hedge below for graphs for today:

http://www.zerohedge.com/news/2017-10-13/record-high-stocks-record-low-vix-bitcoin-bonds-bullion-bid

 

Buy it all… On the week

END

 

Retail sales were scheduled to rise 1.7% due to the huge influx of auto purchases due to the storm.  However the retail sales jumped by only 1.6% and that was the catalyst for gold jumping past the 1300 dollar barrier:

 

(courtesy zero hedge)

 

Storm-Impacted Retail Sales Disappoint Despite Biggest Spike Since March 2015

 

 

Following August’s slump (worst since Jan ’16), September’s retail sales data was expected to surge 1.7% MoM (thanks in large part to the spike in auto sales) but it disappointed with a 1.6% spike (still the most since March 2015

U.S. retail sales jumped last month by the most in more than two years as motor vehicles lost to hurricanes were quickly replaced and higher prices lifted receipts at gasoline stations, Commerce Department figures showed Friday.

The main drivers (as expected) were a surge in gas prices (biggest gain in 4 years) and auto sales (biggest since March 2015).
8 of 13 major retail categories showed a gain.

As Bloomberg reports, vehicle sales helped to drive the overall gain at retailers in September. Demand recovered after auto dealerships around Houston, among the top markets for new-vehicle sales, took a hit from Hurricane Harvey a month earlier. Industry figures released last week showed cars and light trucks sold in September at the fastest annualized rate since 2005.
The September report also showed the biggest monthly advance in sales at service stations since February 2013, reflecting a spike in gasoline prices as Houston-area refiners were forced to suspend operations in the wake of Harvey. The Commerce Department figures aren’t adjusted for price changes.
Excluding motor vehicles and gasoline, September sales increased a more moderate 0.5 percent. While analysts expect tropical storm-related distortions will continue for several months, underlying demand is expected to keep growing. Steady hiring and limited inflation are helping to sustain household spending, the biggest part of the economy.

end

 

 

Core CPI Stays Below Fed Mandate For 6th Straight Month

Core CPI has now been below the Fed’s 2% mandate for 6 straight months, printing a 1.7% YoY gain in September (weaker than the expected 1.8% rise).

For the report:  (see zerohedge)

http://www.zerohedge.com/news/2017-10-13/core-cpi-stays-below-fed-mandate-6th-straight-month

 

 

end

 

two biggies:

 

loan originations for cars crash  and….

loan originations for house mortgages crash

and these are with the nations largest bank in both of these sectors:

 

(courtesy zerohedge)

More Bad News For Autos: Wells Fargo Car Loan Originations Crash To All Time Low

 

 

Joining the Q3 roster of banks that beat yet which all surprised investors with a cautionary red flag (for the other banks this involved a drop in FICC trading revenue and a sharp increase in loan loss reserves), moments ago Wells Fargo also reported better than expected Q3 EPS of $1.04 (exp. $1.03) which however was the result of a material 20 cent litigation accrual addback to a GAAP EPS of $0.84, indicating that management is expecting significant lawsuits in the coming months. Worse, the bank missed badly on the top line (revenue of $21.9bn vs exp. $22.4bn), but the reason why the stock has tanked by over 3% pre market is the unexpected miss in the company’s Net Interest Margin, which slumped from 2.90% to 2.87%, well below the 2.92% expected, and resulting in a lower sequential Net Interest Income number of $12.476 billion.

 

Not helping matters is that the company’s mortgage loan pipeline once again took a sharp leg lower. While total originations in Q3 rose to $59 billion sequentially (and down 16% Y/Y), what was more disappointing was the 27% Y/Y drop in Mortgage Applications, which declined to $73 billion in Q3, while the Mortgage Application pipeline, the most informative advance look at the state of the housing market, tumbled 42% to just $29 billion, which was just shy of lowest prints since the financial crisis.

However, while the bank’s ongoing mortgage pains – traditionally the bread and butter for the largest US mortgage lender – was disappointing, if not exactly surprising for a bank that has seen scandal after scandal in recent months, there was a flashing red light elsewhere: following the sharp plunge last quarter, Wells reported that the decline in auto loan originations continued, tumbling 47% Y/Y to only $4.3 billion, the lowest print since the bank started disclosing this item back in 2013.

The lack of loan origination hit Wells at the bottom line, with total average loans $951.9 billion, down $5.5BN q/q, as a result of “lower commercial real estate and commercial & industrial loans” offset by “consumer loans up $201 million as growth in real estate 1-4 family first mortgage loans and consumer credit card was largely offset by the continued decline in auto on tighter credit underwriting standards, as well as continued paydowns in junior lien mortgage loans.”
As for the ongoing slide in auto loan, Wells blamed “tighter credit underwriting standards”, which if accurate is ominous for the broader auto sector which is now facing not only surging delinquencies primarily among subprime borrowers, but according to Wells, is about to get squeezed “bigly” on the supply side. It also means that auto sales in the coming quarters, already poor, are about to suffer an even sharper decline, pressuring not only overall US debt-funded consumer spending but also manufacturing production among the auto suppliers and downstream sectors, with adverse consequences for the broader economy.
Source: Wells Fargo

 

 

end

Real Wage Growth Slumps To Weakest Since May

Despite soaring expectations, real average weekly earnings growth is slowing dramatically, falling 0.1% MoM in September – the second monthly decline in a row.

This is the first consecutive monthly decline in real wages since April 2014…

“Transitory” – we are sure.

 

for the report see zerohedge)

http://www.zerohedge.com/news/2017-10-13/real-wage-growth-slumps-weakest-may

 

 

Trump To Scrap Crucial Obamacare Insurer Subsidy

 

 

Just hours after signing an executive order that implicitly begins unwinding ObamaCare, Politco reports, citing two people familiar with the matter, that President Trump plans to cut off critical subsidy payments to insurers selling Obamacare coverage.

Earlier today, Trump signed an executive order expanding access to more loosely regulated insurance options with low premiums, a move that could undermine the ACA insurance markets.

 

“We’ve been hearing about the disaster of Obamacare for so long,” Trump said in signing the order at a White House ceremony. “For a long time, I’ve been hearing repeal, replace, repeal, replace.”

He then said that the order is “starting that process” to repeal ObamaCare.

It will be the “first steps to providing millions of Americans with ObamaCare relief.”
And now, as Politico reports, the process appears to accelerating as Trump’s decision to end the payments, estimated at $7 billion this year, marks the president’s most aggressive move yet to dismantle Obamacare after months of failed GOP repeal efforts on Capitol Hill.
As Reuters notes, Trump has repeatedly threatened to stop the payments, which are made directly to insurance companies to help cover out-of-pocket medical expenses for low-income Americans enrolled in individual healthcare plans under Obamacare.
The move is likely to draw lawsuits and may put pressure on Congress to appropriate funding for the subsidies.
This latest move is likely to throw healthcare markets into chaos, and will infuriate Democrats – effectively closing the ‘Chuck and Nancy’ channel of communications – leaving a deal to avert government shutdown on or after Dec 8th (when the currenct extension deal runs out) increasingly doubtful.

 

END

 

 

“The Democrats ObamaCare Is Imploding” Trump Tweets Hours After Cutting Off “Broken Mess” Obamacare Subsidies

 

 

Update: President Trump has continued to hammer Obamacare…

*  *  *

As we detailed earlier, it was an early morning for a seemingly excited, insomniac Donald Trump, who shortly before 6am tweeted on the topic of the night, namely the late Thursday elimination of subsidies to health insurers, which took place just hours after the president signed an executive order to designed to draw people away from Obamacare coverage markets.
“The Democrats ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”

As reported last night, late on Thursday, the Trump administration said it would immediately stop paying what are known as cost-sharing reduction, or CSR, subsidies. The payments, which have been a subject of legal dispute during the Obama administration, go to health insurers in the Affordable Care Act to help lower-income people with co-pays and other cost sharing. Without them, insurers have said they’ll dramatically raise premiums or pull out of the law’s state-based markets, as Bloomberg reports.
Ahead of the White House announcement, and given the disagreements over the payments including ongoing lawsuit questioning their legality, many health insurers had dramatically raised the premiums they planned to charge for next year in anticipation of not getting the funds. The payments are made monthly, and have been estimated at $7 billion in total this year. “Many, but not all, insurers assumed these payments would end and set 2018 premiums accordingly,” Larry Levitt, a senior vice president at the Kaiser Family Foundation, said by email. “Those that didn’t build this into their premiums may petition to adjust their rates or threaten to pull out of the marketplace. It seems like we’re in for a chaotic run up to the beginning of open enrollment.”

The White House said the Department of Justice and the Department of Health and Human Services both concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare.
“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” the White House said in the statement.
Separately, acting HHS Secretary Eric Hargan and Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement that the payments will stop immediately, with no transition period. They next payments were due next week. “Congress has not appropriated money for CSRs, and we will discontinue these payments immediately,” the department said.
Democrats immediately slammed the decision: “Instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans’ health premiums. It is a spiteful act of vast, pointless sabotage,” the Democrats said in a statement.
Meanwhile, House Speaker Paul Ryan backed the move. “Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with the Trump administration to provide the American people a better system,” Ryan said in a statement.
And while Trump may (or may not be) hoping that Democrats will promptly reach out to “fix” the current unstable equilibrium, what he has done in effect is to own Obama’s mess, as any subsequent surges in insurance premiums will now be “Trump’s fault.”
What is more apropos, however, is that having once again slammed the Democrats’ most precious law, suddenly the spectre of a government shutdown, and failure to reach a long-term debt ceiling deal on December 8 when the current temporary arrangement runs out, is back front and center, along with the associated risks to various capital markets.

 

end

\
UMich Survey Shows Americans Have Never, Ever Been More Bullish About Stocks

Despite storms, wildfires, quakes, higher gas prices, and failed Washington policies, Americans are – according to The University of Michigan – their most confident since January 2004.

 

for the report see

http://www.zerohedge.com/news/2017-10-13/umich-consumer-sentiment-spikes-above-100-first-time-2004

end

 

Trump Sends Second Aircraft Carrier To Korean Peninsula With 7,500 Marines Aboard

 

 

Just one week after uttering his now-infamous “this is the calm before the storm” statement to the press ahead of a dinner with military leaders, we now learn that President Trump has dispatched a second nuclear aircraft carrier, the USS Theodore Roosevelt, filled with 7,500 marines, to the Korean Peninsula.  Of course, this comes after rumors swirled earlier this week that North Korea is preparing to fire multiple short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18th.

 

The USS Theodore Roosevelt, a Nimitz-class aircraft carrier, is en route to the western Pacific after leaving San Diego port last week.

The Roosevelt will focus on maritime security operations in the Pacific and Middle East, the US military announced.

But the £3.4billion ($4.5billion) warship, known as “the Big Stick”, has been sent to boost US defence on the Korean peninsula, according to South Korean media.

It is expected to arrive in region in the coming weeks amid fears North Korea is about to test another missile or nuclear weapon.
Per the following map from Stratfor, the USS Theodore Roosevelt will join the USS Ronald Reagan which is already operating in the region.

According to a statement from Admiral Steve Koehler, a strike group commander on the ship, the Roosevelt is carrying some 7,500 sailors and marines that are “ready as a war fighting force”.

 

“The US Navy carrier strike group is the most versatile, capable force at sea,” he said in a statement before the ship’s launch.

“After nearly a year of training and integration exercises, the entire team is ready as a warfighting force and ready to carry out the nation’s tasking.”
Of course, as we noted above, this buildup of naval forces in the Pacific follows an ominous warning from the President last week that preceded a dinner with military leaders: “You guys know what this represents? Maybe it’s the calm before the storm,” he said: “It could be the calm… before… the storm.”
A reporter quickly asked what the storm might be -“Is it Iran, ISIS, what’s the storm?”  to which he replied… “…you’ll find out.”
TRUMP: “Maybe it’s the calm before the storm.”

REPORTER: “What storm Mr. President?”
TRUMP: “You’ll find out.” (via Satellite News) pic.twitter.com/bWMzGrDPNa
— Kyle Griffin (@kylegriffin1) October

 

 

end

 

Well that about does it for tonight

 

I will see you with a partial commentary MONDAY night.

HARVEY


Oct 12/comex final data/plus a few major stories

Thu, 10/12/2017 - 18:23

GOLD: $129200 up $6,20

Silver: $1717 up 9 cents

Closing access prices:

Gold $

silver: $

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: $xxx DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $xxx

PREMIUM FIRST FIX:  $11.31 (premiums getting larger)

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $xxx

NY GOLD PRICE AT THE EXACT SAME TIME: $xxx

Premium of Shanghai 2nd fix/NY:$9.00 (PREMIUMS GETTING LARGER)  

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

NY PRICING AT THE EXACT SAME TIME: $xx

LONDON SECOND GOLD FIX  10 AM: $xx

NY PRICING AT THE EXACT SAME TIME. xxx

For comex gold: OCTOBER/

NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 5 NOTICE(S) FOR  500  OZ.

TOTAL NOTICES SO FAR: 2334 FOR 233,400 OZ  (7.259TONNES)

For silver: OCTOBER  124 NOTICES FILED TODAY FOR 620,000  OZ/ Total number of notices filed so far this month: 516 for 2,580,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

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In silver, the total open interest  FELL BY  838 contracts from  188,258  DOWN TO 187,422   WITH RESPECT TO YESTERDAY’S TRADING (UP  9 CENTS).  THE CROOKS ARE HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS.  IT IS OBVIOUS THAT WE MUST HAVE HAD A TINY BANKER SHORT COVERING.

RESULT: A SMALL SIZED FALL IN OI COMEX  WITH THE  9 CENT PRICE RISE.  OUR BANKERS WERE FORCED TO COVER SOME OF THEIR HUGE SHORTFAL . 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.937BILLION TO BE EXACT or 133% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 124 NOTICE(S) FOR 620,000  OZ OF SILVER.

In gold, the open interest SURPRISINGLY  FELL BY 1616 CONTRACTS DESPITE THE GOOD SIZE  RISE in price of gold ($6.20 ) .  The new OI for the gold complex rests at 518,389. OUR BANKER FRIENDS WERE CERTAINLY CAUGHT OFF GUARD WITH THE FOMC ANNOUNCEMENT YESTERDAY AFTERNOON AND THEY ALSO DECIDED TO COVER SOME OF THEIR HUGE GOLD SHORTS.

 

Result: A GOOD SIZED DECREASE IN OI DESPITE THE RISE IN PRICE IN GOLD ($6.20). WE PROBABLY HAD SOME BANKER GOLD SHORT COVERING BY 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 , NO CHANGES  in gold inventory at the GLD/

Inventory rests tonight: 858.45 tonnes.

SLV

Today:  NO changes in inventory:

INVENTORY RESTS AT 326.898 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 838contracts from 188,252  DOWN TO 187,422(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. THE DATA SEEMS TO SUGGEST SOME GOLD SHORT COVERING BUT IN SILVER IT IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER. AS SUCH THEY RETREATED TO HIGHER GROUND AND THEN THEY WILL TRY AGAIN.

RESULT:  A SMALL SIZED DECREASE IN SILVER OI  AT THE COMEX DESPITE THE  RISE IN PRICE OF 9 CENTS WITH RESPECT TO YESTERDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS 

(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 WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 2,18 points or .06% /Hang Sang CLOSED UP 69.48 pts or .24% / The Nikkei closed UP 73.45 POINTS OR .35/Australia’s all ordinaires CLOSED UP 0.40%/Chinese yuan (ONSHORE) closed UP  at 6.5886/Oil DOWN to 50.63 dollars per barrel for WTI and 56.39 for Brent. Stocks in Europe OPENED RED EXCEPT ENGLAND FTSE  .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5885. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5828 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

b) REPORT ON JAPAN c) REPORT ON CHINA 4. EUROPEAN AFFAIRS   5. RUSSIAN AND MIDDLE EASTERN AFFAIRS 6 .GLOBAL ISSUES

 

7. OIL ISSUES 8. EMERGING MARKET 9.   PHYSICAL MARKETS 10. USA Stories

i

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY FELL BY A STRONG 1616 CONTRACTS DOWN to an OI level of 518,389 WITH THE RISE IN THE PRICE OF GOLD ($6.20 RISE IN YESTERDAY’S TRADING).  IT SEEMS THAT OUR BANKER FRIENDS TRIED  TO COVER SOME OF THEIR HUGE GOLD SHORTFALL IN THE MORNING WITH LIMITED SUCCESS THE BANKERS RETREATED TO HIGHER GROUND AS WELL AS COVERING SOME OF THEIR SHORTFALL. OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH WE SHOULD EXPECT  GOLD TO BE STRONG THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  GOODSIZED open interest DECREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($6.20). BANKERS RETREATED TO HIGHER GROUND AND COVERED A TINY PORTION OF THE GOLD SHORTFALL

 

IN SEPTEMBER,CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

NOW THAT WE ARE CLOSE TO THE 29TH CHINESE CONGRESS, THE BANKERS ARE TAKING NO CHANCES AS THEY START TO COVER THEIR GOLD/SILVER SHORTFALL.

We have now entered the active contract month of Oct and here we saw a LOSS of 0 contracts DOWN to 220 contracts.  We had 0 notices filed yesterday so we LOST 0 contracts or NIL oz will NOT stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given. The low number of notices early in the delivery cycle is evidence of a lack of physical gold.

The November contract saw A loss OF 42 contracts down to 1387.

The very big active December contract month saw it’s OI LOSS OF 1856 contracts DOWN to 399,573

.

We had 5 notice(s) filed upon today for  500 oz

 VOLUME FOR TODAY (PRELIMINARY) NOT  AVAILABLE

CONFIRMED VOLUME YESTERDAY: XXX

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI FELL BY 838 CONTRACTS FROM 188,422 DOWN TO 187,2422WITH YESTERDAY’S 9 CENT RISE IN PRICE. WE HAVE HAD SOME BANKER SHORT COVERING AS THE CROOKS TRY AND  LOOSEN SOME SILVER LONGS FROM THE SILVER TREE WITH LIMITED SUCCESS AS THE BANKERS RETREATED TO HIGHER GROUND.  THE GOOD SIZED RISE IN SILVER PRICE MEANS THAT THEY HAVE ABANDONED ALL HOPE OF COVERING AT LOWER PRICES, SO THEY REGROUP AT MUCH HIGHER PRICES WHERE THEY WILL ATTEMPT AGAIN AT COVERING. We have now entered the non active contract month of  October and here the OI LOST 16 contacts DOWN TO 512.  We had 1 notice filed on yesterday so we LOST 15  contracts or AN ADDITIONAL 75,000 oz will NOT stand for delivery and z15 EFP’s were issued IN WHICH DEPARTING LONGS RECEIVED A FIAT BONUS PLUS A FUTURE DELIVERABLE PRODUCT AND NO DOUBT THAT WOULD BE A LONDON BASED FORWARD.  November saw a GAIN of 8 contract(s) and thus RISIING TO  290. After November, the NEXT big active contract month is December and here the OI LOST 997  contracts DOWN to 141M644 contracts.

We had 124 notice(s) filed for  620,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.12/2017.

Gold Ounces Withdrawals from Dealers Inventory in oz   n/a Withdrawals from Customer Inventory in oz   n/a oz Deposits to the Dealer Inventory in oz    n/a oz Deposits to the Customer Inventory, in oz   n/a No of oz served (contracts) today   5notice(s) 500 OZ No of oz to be served (notices) 220contracts (22,000 oz) Total monthly oz gold served (contracts) so far this month 2334 notices 233,400 oz 7.2441 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz Today we HAD  xx kilobar transaction(s)/   WE HAD xx DEALER DEPOSIT: total dealer deposits: xx oz We had xxx dealer withdrawals: total dealer withdrawals:  xx oz we had xxx customer deposit(s): total customer deposits; xx oz We had n/a customer withdrawal(s) total customer withdrawals; nil  oz  we had xxx adjustment(s) For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 5  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 4 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2334) x 100 oz or 232,900 oz, to which we add the difference between the open interest for the front month of OCT. (220 contracts) minus the number of notices served upon today (5) x 100 oz per contract equals 254,900  oz, the number of ounces standing in this active month of OCT.   Thus the INITIAL standings for gold for the OCTOBER contract month: No of notices served  (2334) x 100 oz  or ounces + {(220)OI for the front month  minus the number of  notices served upon today (5) x 100 oz which equals 254,900 oz standing in this  active delivery month of OCTOBER  (7.928tonnes). WE LOST 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL   STAND  IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER AND THIS CONTINUES ON IN OCTOBER.   THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE AND IT ALSO EXPLAINS THE LACK OF DELIVERY NOTICES IN THE EARLY PART OF THIS DELIVERY ACTIVE MONTH. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear) Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes    I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE OCTOBER DELIVERY MONTH OCTOBER INITIAL standings  Oct 12.2017 Silver Ounces Withdrawals from Dealers Inventory  n/a Withdrawals from Customer Inventory  n/a oz Deposits to the Dealer Inventory  n/a oz Deposits to the Customer Inventory   n/a No of oz served today (contracts) 124 CONTRACT(S) (620,000 OZ) No of oz to be served (notices) 388contracts (1,940,000 oz) Total monthly oz silver served (contracts) 516contracts

(2,580,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month    xx oz today, we had  xxx deposit(s) into the dealer account: total dealer deposit: xxx   oz we had xxx dealer withdrawals: total dealer withdrawals: xxx oz we had  xx customer withdrawal(s): TOTAL CUSTOMER WITHDRAWALS: xx  oz We had xx Customer deposit(s): ***deposits into JPMorgan have stopped  again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: 600,627.490  oz    we had 0 adjustment(s) The total number of notices filed today for the OCTOBER. contract month is represented by 124 contract(s) for 620000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 514 x 5,000 oz  = 2,580,000 oz to which we add the difference between the open interest for the front month of OCT. (528) and the number of notices served upon today (124x 5000 oz) equals the number of ounces standing.  

 

.   Thus the INITIAL standings for silver for the OCTOBER contract month:  516 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(5212) -number of notices served upon today (124)x 5000 oz  equals  4,535,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE   WE LOST 12 CONTRACTS OR  AN ADDITIONAL 60,000 OZ WILL NOT STAND FOR DELIVERY.  ESTIMATED VOLUME FOR TODAY:   NOT AVAILABLE CONFIRMED VOLUME FOR YESTERDAY: XXXCONTRACTS     Total dealer silver:  39.345 million (close to record low inventory   Total number of dealer and customer silver:   220.100 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 1.9 percent to NAV usa funds and Negative 2.2% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.5% Percentage of fund in silver:37.5% cash .+0.0%( Oct12/2017)  2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.02% (Oct 11/2017)  3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.37% to NAV  (Oct 11/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.18%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.38%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES

Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES

oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT  854.30 TONNES

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes

Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES

Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/

Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

Sept 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

Inventory rests at 836.87 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Oct 12/2017/ Inventory rests tonight at 858.45 tonnes *IN LAST 249 TRADING DAYS: 82.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 1824TRADING DAYS: A NET  74.78 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY. *FROM FEB 1/2017: A NET  43.67 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ

OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z

Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615  MILLION OZ

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/

Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/

Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Oct 11/2017:

Inventory 325.765  million oz end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.44%
  • 12 Month MM GOFO + 1.64%
  • 30 day trend

end

Bitcoin prices for THIS MORNING:  Bid $4755.00 offer: $4775.00

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

NONE TODAY

END

 

Bitcoin Explodes To New Record High Over $5200

Having bounced back from China’s exchange closures and Dimon’s damning, Bitcoin just broke above its pre-China ICO ban highs and traded above $5000 for the first time in history (even as Russia decided to block local access). There was no looking back as the cryptocurrency is now trading $5240 – a new record high.
As Coindesk notes, prices had dropped to a low of $2,980 in mid September after China banned token sales and local cryptocurrency exchanges. However, in the subsequent days, BTC quickly regained poised, reportedly due to a pick-up in trading volumes in Japan, South Korea and other markets. The rotation of money out of the ether and ethereum-based coins and into bitcoin also helped the cryptocurrency scale new heights.
Increased institutional interest seems to have played a role in boosting bitcoin prices. For example, a ‘bitcoin desk’ at Goldman Sachs would certainly be a game changer. News had hit the wires earlier this month that Goldman Sachs is considering a brand new operation which would be dedicated to bitcoin trading.
Still, while skeptics continue to call bitcoin rally a bubble, the price action analysis indicates no serious trouble ahead for the cryptocurrency.
Resistance is seen at $5,378.56 – 161.8 percent Fibonacci extension of the move from the Sep 15 low – Sep 18 high – Sep 23 low.

As Iqbal V. Gandham, Managing Director at eToro UK, commented:

 

“Recent criticism from industry and regulation crackdowns in China and Russia spooked markets in recent weeks and caused the Bitcoin price to plummet. So we expect some investors to be surprised by Bitcoin bouncing back to this record high so soon afterwards.

“Yet Bitcoin was designed to operate outside of the influence of governments and central banks, and is doing exactly that. So to us, this bounce back in price is no surprise.

“In reality, whilst we’re excited to see Bitcoin hit this record high, this is just the beginning for Bitcoin. Bitcoin has a lot further to go than this price point to become a real world currency, as it was designed to one day be. Most are unaware that in future people will not spend a single Bitcoin. Instead people would spend the underlying tokens, called Satoshis, in the same way we spend coins and not a bar of gold. A single Satoshi is only worth $0.00005 currently. Clearly, for this to gain spending power, the price of a Bitcoin will need to be significantly higher than $5,000.

“This price peak may boost more support for the bubble argument we’ve seen from investors in recent months. But we continue to argue these calls on bubble territory are coming far too early in the story for Bitcoin.

“This record is an exciting milestone and sign of market confidence in the outlook for Bitcoin and the underlying technology behind the cryptocurrency, Blockchain. But we expect many more milestones like this to come.”
Furthermore,  appears Mike Novogratz may be right after all… while bitcoin is a bubble, the mania is justified, because it is a technological advancement that promises to fundamentally alter our lives.

 

“I can hear the herd coming” Novogratz said.
And bubble or not, Novogratz concluded eloquently on the extreme nature of cryptocurrencies’ potential…

 

“Remember, bubbles happen around things that fundamentally change the way we live,” he said.

“The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”
Bitcoin is set to become “the biggest bubble of our time,” he added, and could reach $10,000 very soon due to fast-building interest.

 

(courtesy GATA/Reuters)

Russian central bank may boost gold trading on Moscow exchange

Submitted by cpowell on Wed, 2017-10-11 13:58. Section: Daily Dispatches

Elena Fabrichnaya
Reuters
Tuesday, October 10, 2017

 

MOSCOW — Russia’s central bank may start buying gold for its official reserves on the Moscow Exchange, two people familiar with the matter told Reuters.
The Russian central bank is one of the world’s largest holders of bullion and the switch would boost currently low turnover in gold trading on the Moscow Exchange, which launched a precious metals market only in 2013.
The bank has been regularly buying gold as it wrestles with weaker oil prices and Western sanctions imposed over Moscow’s role in the Ukraine crisis. It has access to gold trading on the Moscow Exchange but has not been active so far, trading gold on the over-the-counter market instead.
The two sources said a final decision had yet to be taken but senior central bank officials were looking at what volumes could be bought via the exchange — which serves as an equity, bond, foreign exchange, and derivatives market — and from what date. …
… For the remainder of the report:
https://www.reuters.com/article/russia-cenbank-gold-moex/russian-central

 

 

END

LME to expand trading around gold and silver reference prices

Submitted by cpowell on Wed, 2017-10-11 14:21. Section: Daily Dispatches

By Jan Harvey and Peter Hobson
Reuters
Tuesday, October 10, 2017

LONDON — The London Metal Exchange expects three more clearing members to join its precious metals contracts by year-end and is looking to expand trading around its gold and silver reference prices, Chief Executive Matthew Chamberlain told Reuters on Tuesday.
Adding further clearing members is a top priority for the exchange as it looks to expand volumes on LME precious, the suite of gold and silver spot and futures it launched in July, Chamberlain said.
“We have three clearing members who are in the testing environment now,” he said. “They have done all their documentation and are now configuring their systems to be ready to go. I’ll be very disappointed if those three weren’t publicly announced and publicly trading in the next couple of months.” …
… For the remainder of the report:
https://www.reuters.com/article/us-commodities-summit-lme/lme-to-expand-…

END

China will ‘compel’ Saudis to trade oil in yuan, economist tells CNBC

Submitted by cpowell on Wed, 2017-10-11 15:57. Section: Daily Dispatches

China Will ‘Compel’ Saudi Arabia to Trade Oil in Yuan — and That’s Going to Affect the US Dollar
By Sam Meredith
CNBC, New York
Wednesday, October 11, 2017

 

China will “compel” Saudi Arabia to trade oil in yuan and, when this happens, the rest of the oil market will follow suit and abandon the U.S. dollar as the world’s reserve currency, a leading economist told CNBC on Monday.
Carl Weinberg, chief economist and managing director at High Frequency Economics, said Beijing stands to become the most dominant global player in oil demand since China usurped the U.S. as the “biggest oil importer on the planet.”

Saudi Arabia has “to pay attention to this because even as much as one or two years from now, Chinese demand will dwarf U.S. demand,” Weinberg said.

“I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it — as the Chinese will compel them to do — then the rest of the oil market will move along with them.” …
When asked what it could mean for the dollar should the oil market move oil trade out of the U.S. currency and into the yuan, Weinberg said the world’s transaction currency would suffer “lesser demand for U.S. securities across the board.”
“Moving oil trade out of dollars into yuan will take right now between $600 billion and $800 billion worth of transactions out of the dollar. … (That) means a stronger demand for things in China, whether it’s securities or whether it’s goods and services. It is a growth plus for China and that’s why they want this to happen.”
… For the remainder of the report:
https://www.cnbc.com/2017/10/11/china-will-compel-saudi-arabia-to-trade-…

 

END

World is turning its back on the dollar, Saxo Bank FX strategist writes

Submitted by cpowell on Wed, 2017-10-11 16:06. Section: Daily Dispatches

Three Reasons the World Could Turn Its Back on the U.S. Dollar
By David Reid
CNBC, New York
Wednesday, October 11, 2017

 

A combination of geopolitical pressures could spark the end of the U.S. dollar as the world’s reserve currency, according to the head of foreign exchange strategy at Saxo Bank.
In a quarterly outlook note titled “The World Is Turning Its Back on the Almighty Dollar,” John Hardy claimed the U.S. currency was “increasingly dysfunctional” and there was an urgent need to replace it.
The currencies analyst highlighted these three geopolitical issues currently putting pressure on the dollar’s status

“– The ongoing rise of China as it assumes a more prominent role in global trade and financial markets and in particular how it will manage policy and unwinding the excesses of its credit bubble in the wake of the 19th Party Congress scheduled for October 2017 without upsetting its domestic economy and the global economy.

“– The North Korean regime’s striving to maintain credibility and untouchability as a nuclear power and how this impacts China-U.S. relations, but also how Japan deals with this threat in terms of domestic as well as foreign policy,
“– The loosening of the U.S.-Europe transatlantic alliance and how Europe and the European Union find their feet as a more independent superpower — or not — in their own right after the German elections.”
Hardy extracts “de-dollarization” as a direct theme that can be pulled from China’s situation as the country looks to encourage demand for its yuan.
“China is eyeing the benefits of having its own currency play a larger role and to supplant the U.S. dollar’s role in global trade,” he said. “The initial focus is on the global oil trade, where it has announced the intention of buying oil in yuan and allowing trade partners to settle that yuan in gold.”
Hardy said settling in gold is a clever move by Beijing as it provides oil-exporting countries with a greater degree of comfort. …
… For the remainder of the report:
https://www.cnbc.com/2017/10/11/the-us-dollar-may-be-at-risk-as-the-glob…

 

 

Your early THURSDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    i) Chinese yuan vs USA dollar/CLOSED UP AT 6.5885/shanghai bourse CLOSED DOWN AT 2.318POINTS .06%   / HANG SANG CLOSED UP 69,48 POINTS OR .24% 

2. Nikkei closed UP 73,45 POINTS OR .35%     /USA: YEN RISES TO 112,44

3. Europe stocks OPENED  RED EXCEPT LONDON ( /USA dollar index RISES TO  93.16/Euro UDOWNto 1.1842

3b Japan 10 year bond yield: RISES  TO  -+.067%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  50.59 and Brent: 56.39

3f Gold DOWN/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil DOWN for WTI and DOWN or Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.458%/Italian 10 yr bond yield UP  to 2.130%  /SPAIN 10 YR BOND YIELD DOWN TO 1.671%  

3j Greek 10 year bond yield RISES TO  : 5.581???  

3k Gold at $1293.30 silver at:17.1278:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 7/100 in  roubles/dollar) 57.74-

3m oil into the 50 dollar handle for WTI and 56 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.44 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9749 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1553 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to  +0.458%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.344% early this morning. Thirty year rate  at 2.881% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

 

Global Stocks Hit New Record High, Dollar Mixed After Dovish Fed

 

 

In a trend observed every day this week, S&P futures are slightly in the red ahead of a post-open ramp with the VIX rising to 9.91, as Asian shares climb, European stocks are little changed. WTI crude pares recent gains, slipping below $51 after API showed an unexpected crude build. Earnings season launches with bank earnings reports from JPMorgan and Citigroup, while Economic data include PPI figures, jobless claims.
As Reuters notes, broader investor risk sentiment has improved this week after Catalonia dialed back plans to break away from Spain, with MSCI’s 47-country world stocks index reaching a record high. Global equities now appear to be taking geopolitical developments such as the secessionist push in Spain and tensions on the Korean peninsula in their stride, to reach those record tops.
Analysts will be keeping a close eye on banks Q3 reports: Trading probably dropped from the same period a year earlier. Executives from JPMorgan, Citigroup and Bank of America Corp. told investors last month to expect declines ranging from 15 percent to 20 percent. Goldman Sachs Group Inc., coming off its worst first half for the trading business in more than a decade, said the third quarter remained challenging. Subdued volatility, especially compared with the turmoil from Brexit and the U.S. election a year earlier — made the period particularly tough.

The Bloomberg Dollar Spot Index held a four-day decline as buying interest remained low after some Federal Reserve policy makers expressed concern in the account of the latest FOMC meeting that weak inflationary pressures are more than just transitory.  The minutes of the FOMC’s Sept. 19-20 meeting were interpreted as dovish, posing risks to the path of interest rate rises investors price in for 2018 onward should inflation be weaker than targeted. The importance of U.S. CPI growth data due Friday is highlighted by overnight volatility in euro-dollar, which hit a more than two-week high, surpassing the levels seen ahead of U.S. payrolls last week, although it was unable to hold on to gains and fizzled to session lows after the European open.
Asian stocks advanced for a 5th day, sending the regional benchmark to a fresh 10-year high on Thursday, after minutes of the latest U.S. Federal Reserve meeting boosted optimism that rate increases in the world’s biggest economy will remain gradual, while the dollar sagged after the Federal Reserve showed a more guarded view towards inflation.  The MSCI Asia Pacific Index rose 0.5 percent to 165.80 as of 4:40 p.m. in Hong Kong, heading for the highest close since November 2007. As Bloomberg reports, SoftBank was the second-biggest contributor to the regional gauge’s advance as Japan’s Topix also added to decade-long highs.
The Fed minutes released Wednesday showed officials debated hard last month over whether forces holding inflation down were persistent or temporary, with several policy makers looking for stronger evidence of price gains before supporting a third interest-rate increase this year.
“We expect that only a further unanticipated decline in inflationary pressures would prevent the Fed from moving in December,” said David Sloan, senior economist at Roubini Global Economics. “Looking further ahead, however, inflation is likely to need to show some improvement if three more rate hikes are to be delivered in 2018.”
“The Fed minutes signify the U.S. economy is on a recovery path and that succeeding rate increases will not be sharp,” easing concerns of market shocks, said Lexter Azurin, analyst at Manila-based AB Capital Securities. “An improving U.S. economy is taken positively by market for its big role in the global economy.”
European equities kicked off the session on a relatively tame footing with very little seen in the way of direction. In terms of sector specific performance, things are also relatively contained with some very modest underperformance seen in financial names in the wake of yesterday’s slightly more dovish than anticipated FOMC minutes release. Individual movers include Deutsche Lufthansa (+2.6%) amid expectations the Co. will purchase 81 planes from Air Berlin and retain 3k of their staff, with easyJet (+2.2%) supported by a pre-market broker move. ECB’s Praet said deflation risks have disappeared, but that Euro area inflation remains subdued and that sustained inflation adjustment will guide QE exit. Praet added that a substantial amount of stimulus is still required and that ECB should communicate more on reinvestment policy
In the U.K., sterling rose for a fourth day even as the fifth round of Brexit negotiations draws to a close with seemingly little progress. The U.K.’s chief negotiator David Davis and his EU counterpart Michel Barnier are due to brief reporters before noon in Brussels. Brexit negotiations are at a virtual political standstill, with no notable advances made in the fifth round of negotiations, according to several diplomats briefed on the discussions, the FT reported.
Overnight, President Trump stated we cannot allow North Korea situation go on. The President also commented on his tax plan, saying that he is looking at around 10% repatriation tax rate and vowing to lower corporate taxes to a maximum 20% from 35% and above, also pledges to cut small business tax marginal rate by 40%.
Treasury yields dropped as the market looks to inflation data out of the U.S. due Friday.

 

Gold continued its rally to climb above its 21-DMA, rising 0.2% to $1,294.66 an ounce, the highest in more than two weeks. West Texas Intermediate crude declined 0.7 percent to $50.93 a barrel.
Bulletin Headline summary from RanSquawk
Greenback sees a marginal recovery as DXY finds support at 92.80
European equities trade subdued, failing to follow Asia and the US, likely hampered by the bullish EUR and lack of newsflow
Looking ahead, highlights include weekly jobs data, US PPI, DoEs and a slew of central bank speakers
Market Snapshot
S&P 500 futures down 0.2% to 2,548.80
VIX Index up 0.6%, at 9.91
STOXX Europe 600 up 0.06% to 390.40
MSCI Asia up 0.5% to 165.79
MSCI Asia ex Japan up 0.6% to 548.24
Nikkei up 0.4% to 20,954.72
Topix up 0.2% to 1,700.13
Hang Seng Index up 0.2% to 28,459.03
Shanghai Composite down 0.06% to 3,386.10
Sensex up 0.5% to 31,991.46
Australia S&P/ASX 200 up 0.4% to 5,794.47
Kospi up 0.7% to 2,474.76
German 10Y yield fell 1.4 bps to 0.449%
Euro up 0.03% to $1.1862
Italian 10Y yield rose 5.9 bps to 1.892%
Spanish 10Y yield rose 0.7 bps to 1.645%
Brent Futures down 0.5% to $56.65/bbl
Gold spot up 0.4% to $1,296.56
U.S. Dollar Index down 0.09% to 92.93
Top Overnight News from Bloomberg
Republican lawmakers from high-tax states are set to meet with House Majority Leader Kevin McCarthy and Ways and Means Chairman Kevin Brady Thursday to discuss GOP proposals to end the state and local tax deduction
U.S. and Turkish officials will meet in the coming days to try to defuse a diplomatic crisis over Turkey’s arrest of some U.S. citizens and local consular workers, Turkey’s Deputy Prime Minister Bekir Bozdag said
Fed’s Bostic said that with a relatively strong and improving labor market and stable inflation expectations, “I am looking for inflation to drift up to 2 percent over the next year or so”
Kevin Warsh has emerged as the leading candidate to run the Federal Reserve next year, jumping ahead of current Chair Janet Yellen, according to a Bloomberg survey of economists Oct. 6–11; Jerome Powell, until now seen as a long-shot, vaulted into a tie for second with Yellen in the poll
Germany wants the European Union to be prepared to grant U.K. financial companies transitional access to the EU if the Brexit process drags on, according to a government strategy document
Global oil supply and demand estimates for 2018 indicate that inventories may not fall further, potentially capping prices, following a projected drop in stocks this year, the International Energy Agency said in its monthly report
Trading Revenue in Focus at JPMorgan, Citi; Warsh Favored as Next Fed Chair; Trump on Iran, Tax and Health Care
President Donald Trump said his tax plan would simplify the tax code and save money for millions of U.S. businesses and families as he campaigns against criticism the proposal is a giveaway to the rich
U.S. central bankers are looking for clues that underlying strength in the economy will underwrite their plans to raise interest rates for a third time this year, a record of their meeting last month showed, as officials wrestled with why inflation remains so low
Comcast Corp., 3M Co. and Wal- Mart Stores Inc. are among the companies buying back bonds now in transactions that could save them millions of dollars if the latest proposed tax changes from the Trump administration and Congress end up becoming law
Prime Minister Mariano Rajoy gave his Catalan antagonist Carles Puigdemont five days to clarify whether he has declared independence from Spain or not as the country prepared for its national holiday on Thursday
Passive investments, already eating away at active managers’ assets, are getting another boost from MiFID and two other new rules
Trump Is Said to Demand Tax-Break Change to Protect Middle Class
Brexit Talks Edge Backward as U.K. Prepares for the Worst
Proxy War Over Iran Nuclear Agreement Divides U.S., Europe at UN
BMW Said to Make Mini Brand Outside Europe in New China Tie-Up
China Sept. Auto Sales Rise 3.3% Y/y: CAAM
Bitcoin Strengthens Above $5,000 for the First Time
Asian equity markets traded mostly positive after another set of fresh record levels for all major indices in US, where focus was on the FOMC minutes which suggested concerns over weak inflation. The positive momentum helped Nikkei 225 (+0.35%) extend on its highest levels in over 2 decades and test the 21,000 level, while ASX 200 (+0.40%) was somewhat muted as weakness in miners capped upside. Elsewhere, Hang Seng (+0.24%) and Shanghai Comp. (-0.06%) were mixed with underperformance in the mainland after another lacklustre PBoC liquidity operation which led to a net daily drain of  CNY 40bln. 10yr JGBs were relatively flat as demand lacked amid a mostly positive risk tone and reserved BoJ Rinban announcement for JPY 710bln of JGBs in the belly to the super-long end. PBoC injected CNY 20bln via 7-day reverse repos for a net daily drain of CNY 40bln.
Top Asian News
Hong Kong Slaps Banker With Ban for Mobile Phone, WeChat Use
Sri Lanka Makes Arrests in $60 Million Taiwanese Bank Cyberheist
Japan Stocks Set Fresh Highs Amid Optimism of Abe Election Win
European equities have kicked off the session on a relatively tame footing with very little seen in the way of direction. In terms of sector specific performance, things are also relatively contained with some very modest underperformance seen in financial names in the wake of yesterday’s slightly more dovish than anticipated FOMC minutes release. Individual movers include Deutsche Lufthansa (+2.6%) amid expectations the Co. will purchase 81 planes from Air Berlin and retain 3k of their staff, with easyJet (+2.2%) supported by a pre-market broker move. A firmer tone overall, with Bunds leading the way after an initial blip to set a fresh high for the week so far, but then running into selling above 161.50 (albeit with relatively tight stops). Some caution evident ahead of 30 year US long bond issuance, while  BTPs also pared best gains ahead of Italy’s multi-tranche offering. However, EZ peripheral debt still marginally outperforming on dovish ECB comments (Praet) and a brief period of calm on the Catalonia-Spain front. Contrasting fortunes for Italy’s BTP issuance, with the top end of the range raised, but yields mixed and covers not that liberal overall – hence, the 10 year benchmark yield showing little net change since the results, but still a tad softer on the day around 2.144%. If anything, the cost of borrowing reflects modest curve flattening, and note that this is the first tap of the long dated 30 year maturity that was launched via syndication.
Top European News
Italy Bank Bulls Say Bad Loan Panic Overdone as Stocks Slide
European Refiners Hardest Hit If Kurdish Oil Disrupted, IEA Says
Serco Is Said to Be Among Bidders for Carillion Health Unit
Event-Driven Hedge Fund Melqart Plans to Stop Taking New Money
Tallinna Sadam Eyes Passenger Growth, Nordic Cargo Ahead of IPO
In FX markets, the USD has regained some ground against its major counterparts that was seen in the wake of the aforementioned FOMC minutes with ranges overall relatively tight. This is likely as a by-product of a quiet European calendar and macro newsflow with a bulk of today’s releases and speakers not due until the latter half of the session. SEK has seen some weakness early doors with Swedish inflation metrics all falling short of expectations and subsequently providing the Riksbank with further ammo to stand pat on existing policy despite recent calls from the market to reconsider their  approach. In option activity, 2bln worth of expiries loom in EUR/USD between 1.1790 – 1.1805 with another 7.5bln worth of expiries between 112.00 and 113.05 in USD/JPY. AUD benefited from stronger than expected Home Loans data, printing 1.0% vs. Exp. 0.5%. EUR/AUD ran into key levels ahead of  the data, rejecting June’s high around the 1.5224 area.
In commodities, WTI and Brent crude futures continue to remain in close proximity to their post-API lows with the latest report revealing a surprise 3.1mln bbl build and subsequently pushing WTI back below USD 51/bbl. This morning’s IEA release has done little to instigate price action with key findings including expectations that OPEC will maintain output steady around current levels and their measure of compliance standing at 88%. Gold prices have remained supported by the broadly softer USD while copper was flat overnight and held onto recent advances amid a mostly positive global risk tone during Asia-Pac trade.
US Event Calendar
8:30am: PPI Final Demand MoM, est. 0.4%, prior 0.2%; Ex Food and Energy MoM, est. 0.2%, prior 0.1%; Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.2%
8:30am: PPI Final Demand YoY, est. 2.6%, prior 2.4%; Ex Food and Energy YoY, est. 2.0%, prior 2.0%; Ex Food, Energy, Trade YoY, prior 1.9%
8:30am: Initial Jobless Claims, est. 250,000, prior 260,000; Continuing Claims, est. 1.93m, prior 1.94m
9:45am: Bloomberg Consumer Comfort, prior 49.9
DB’s Jim Reid concludes the overnight wrap
Markets should be wide awake over the next 30 hours or so as we have US bank earnings kicking off Q3 reporting (JPM and Citi today), PPI today, US retail sales tomorrow and then possibly the data  highlight of the month at the moment,  namely US CPI. Before all that, the Fed kickstarted the second half of the week with their minutes last night where there was a clear debate on inflation but the tone – coupled with the two Fed speakers – was perhaps a bit more dovish than market expectations with UST 10y down 1.3bp. The odds of a December rate hike is c77% (per Bloomberg) though and not much changed.
In the details, the minutes noted “many participants expressed concerns that the low inflation this year might reflect not only transitory factors…” and that several policy makers said their decision on whether to raise rates this year “would depend on whether the economic data in the coming months increased their confidence” that inflation is on track to reach the Fed’s target. Further, “it was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted”. Elsewhere, some participants were more worried about upside risks to inflation arising from “a labour market that had already reached full employment and was projected to tighten further”. Notably, many participants continued to believe that labour market pressure would show through to higher inflation eventually.
Onto the Fedspeak. The more dovish Fed Evans said “it’s too early” to make a call on a December rate hike and that “I really don’t see any harm in waiting longer just to take more stock of the inflation situation”. Further, he added that while price pressure should emerge from a stronger labour market, “it might take something like 3.5% unemployment rate before you really see inflation pick up”. Elsewhere, the Fed’s Williams said that with the unemployment rate now down to 4.2% in September, the Fed had “not only reached the full employment mark, we’ve exceeded it”. He expects the unemployment rate to fall below 4% and remains optimistic that core PCE inflation should rise to 2% “over the next couple of years”.
Staying on the inflation debate, DB’s US economics yesterday published a note looking at demographics and inflation and find that aging has in fact been positive for US inflation in recent decades and that population aging should continue to act as a tailwind for inflation in the years ahead. Most people assume ageing is deflationary. I disagreed with that in last year’s long-term study and this report looks at the theme in much more detail. For more details, refer to Link. Also worth noting that Sweden’s September inflation reading (0.4% mom; 2.4% yoy expected) is due today and as George Saravelos reminded  us yesterday it’s interesting as they the only G10 economy to see core inflation hit its target over the last few months. Although the Riksbank has previously said they are not fully convinced with the recent upside surprises and don’t see the price pressures as sufficiently broad based enough to be too concerned.
Over to Catalonia, Spain’s PM Rajoy has given the Catalan President Puigdemont until next Monday (10am local time) to formally clarify whether he has declared independence or not. The formal request for clarity is a necessary step if PM Rajoy decides to trigger legal procedures (Article 155 of  the constitution) which could lead to the suspension of the Catalan Government. PM Rajoy noted “if Mr Puigdemont makes clear his wish to respect the law and return institutions to normality, he would end a period of uncertainty and rupture” and that he “just needs to say he didn’t declare independence”. Spanish markets responded positively, with IBEX up 1.34% and 10y yields down 5.8bp. The spread between Bunds and Spain has now narrowed to 116bp (-15bp than 7 days ago).
Staying with politics, the Italian government has won two of three confidence votes to pass a new electoral law, which could potentially penalise the 5-Star Movement party (5SM). A final confidence vote will be held today before the bill goes to the upper house senate later on where the government apparently has no clear majority. As a reminder, the new voting system allows 36% of lawmakers elected on a first-past-the-post basis and 64% via proportional representation. This development coupled with the latest over in Spain may have assisted the Italian markets too, with the FTSE MIB up 0.97% and 10y bond yields down 2.7bp yesterday.
Turning to the US 3Q reporting season which has kicked off this week. DB’s Chief asset allocation strategist Binky Chadha noted that the bottom up consensus expects 2.9% EPS growth yoy in 3Q, but adjusting for a typical beat (+3.4%) this suggests growth more like 6.3%, although still down from the 12.2% in 2Q, partly driven by the hurricanes. Across sectors, median growth is expected to be stronger for the cyclical sectors, led by Energy (67%), Tech (12%) and the Industrials (11%), with Financials (+8%) in the middle and then lowest for several defensives sectors like Telecoms (-1%), Utilities (+1%) and  Staples (+4%). Link Elsewhere, JP Morgan (3Q adj. EPS $1.65ps consensus; +19% yoy, +4% qoq) and Citi’s (3Q adj. EP $1.32ps consensus; +14% yoy, +9% qoq) 3Q results will be out later today, with expected themes likely to be slowing loan growth, sound credit quality and weaker trading income. Notably, the latter has been well flagged by management, with Citigroup and JP Morgan previously suggesting trading income could decline c15% and c20% yoy respectively.
This morning in Asia, markets are building on the positive US lead and are trading higher as we type. The Nikkei is up 0.42% back around 21-year highs. The Kospi (+0.46%), Hang Seng (+0.26%) and ASX 200 (+0.29%) are all slightly up. Quickly recapping other markets performance from yesterday. US equities nudged higher to another fresh record high, with the S&P and Dow both up 0.18% while the Nasdaq rose 0.25%. Within the S&P, modest gains in the real estate (+0.54%) and utilities sectors were partly offset by losses by telco and financial names. In Europe, excluding the Spanish (+1.34%) and Italian (+0.97%) markets, other indices were little changed (Stoxx 600 flat; DAX +0.17%; FTSE -0.06%).
Over in government bonds, core European bond yields rose modestly while peripherals outperformed. Bunds (10y +2bp), Gilts (+1.7bp) and OATs (+1.4bp) rose modestly while peripherals such as Spain (-5.8bp), Portugal (-5.2bp) and Italy (-2.7bp) all outperformed. At the 2y part of the curve, core bond yields were little changed, with Bunds broadly flat but Gilts rose 2bp.
Turning to currencies, the US dollar index weakened 0.29%, while Sterling and the Euro gained 0.15% and 0.43% respectively, with the latter partly assisted by the Spanish developments. In commodities, WTI oil rose 0.75% following OPEC raising its demand forecasts for next year, but some of those gains are being reversed this morning following a surprise increase in US crude inventories. Elsewhere, precious metals were marginally higher (Gold +0.29%; Silver +0.31%) while other base metals were mixed, but little changed (Copper +1.82%; Zinc -0.96%; Aluminium -0.37%).
Away from the markets, the ECB board member Peter Praet reiterated “a very substantial degree of monetary accommodation is still needed” and “in the next few weeks, the governing council will again  assess….its package of measures…and will recalibrate its instruments accordingly”. On the calibration of QE, the ECB’s Smet sounded a bit dovish, noting “given that we still need more confidence on inflation….” and “when there is more uncertainty, you would probably see more merits from a higher (pace of purchases)”. Earlier in the day, Bloomberg noted that according to Euro-area central bank  officials, policy makers are expected to preserve their pledge to not raise interest rates until “well past” the end of bond buying. We shall find out more in the next ECB meeting on 26th October.
Over in the US, President Trump spoke in Pennsylvania to rally support for his tax reform. He provided more details on how the plans could benefit middle class families, claiming it will eventually translate   into a “$4,000 pay raise for an ordinary worker”, albeit over an eight year timeframe (as per Trump’s economic advisers). For Congress, Trump noted “all I can say is, you better get it (tax plans) passed”. Elsewhere, Trump will reportedly meet with one of the Fed Chair candidates (John Taylor – Stanford Uni. Economist) this week, while Politico reported that Treasury Secretary Mnuchin has privately recommended Fed Governor Powell to Trump. Either way, it sounds like we may have a winner pretty soon.
Turning to Japan, a series of larger opinion polls suggest PM Abe could secure a two third majority in the election on the 22nd October. Kyodo news polled 90k people on 10-11 October and estimated Abe’s LDP party and his coalition partner could win a total 319 seats (out of 465). Elsewhere, the Asahi and Nikkei newspaper predicted the coalition could win c300 seats (c65%). The Kyodo polls estimates Governor Koike’s new Party of Hope could win 60 seats (c13%).
Finally, turning back to Brexit. While the EU and UK are reportedly closer on issues such as citizens’ rights, the actual Brexit talks are still  likely in stalemate with a key issue being the potential financial obligations UK owes to the EU bloc. Chancellor Hammond said “we have to be prepared for a no deal scenario unless or until we have clear evidence that is not where we will end up”. When pressed further, he indicated that he would start investing money (for plan B contingency plans) as soon as January if progress hasn’t been made in the  talks.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the August JOLTS job openings was lower than consensus at 6.08m (vs. 6.13m expected) as well as last month’s record level of 6.14m. The quits rate edged down 0.1pts to 2.1%. Elsewhere, the weekly MBA mortgage applications fell 2.1% (vs. -0.4% previous), but the 4-week average still rose 4.4% yoy. Over in Spain, the final reading for September inflation was broadly unchanged at 0.6% mom and 1.8% yoy (vs. 1.9% expected).
Looking at the day ahead, in France we’ll receive the final September CPI revisions, while Eurozone’s August IP will be out (0.6% mom; 2.6% yoy expected). The BoE will also release the latest credit conditions and bank liabilities surveys mid-morning. In the US, the big focus will be on the September PPI report (0.2% mom; 2% yoy expected for core), while the latest weekly initial jobless claims will also be released. Onto other events, today is a busy day for speakers with the ECB’s Draghi and Fed’s Brainard due to take part in a monetary policy panel in the afternoon, while the Fed’s Powell will speak shortly after at a conference in Washington. President Trump is also tentatively scheduled to give a speech on US policy towards Iran. Earnings season also gains some early momentum with JP Morgan and Citi scheduled to report.

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 2,18 points or .06% /Hang Sang CLOSED UP 69.48 pts or .24% / The Nikkei closed UP 73.45 POINTS OR .35/Australia’s all ordinaires CLOSED UP 0.40%/Chinese yuan (ONSHORE) closed UP  at 6.5886/Oil DOWN to 50.63 dollars per barrel for WTI and 56.39 for Brent. Stocks in Europe OPENED RED EXCEPT ENGLAND FTSE  .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5885. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5828 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

b) REPORT ON JAPAN 4. EUROPEAN AFFAIRS   5. RUSSIA AND MIDDLE EASTERN AFFAIRS 6 .GLOBAL ISSUES 7. OIL ISSUES 8. EMERGING MARKET Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am

Euro/USA   1.1842 DOWN.0022/ REACTING TO SPAIN VS CATALONIA/REACTING TO  +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES  RED EXCEPT LONDON  

USA/JAPAN YEN 112.44 DOWN 0.014(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/   

GBP/USA 1.3135 DOWN .0102 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2485 UP .0035 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS THURSDAY morning in Europe, the Euro FELL by 22 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1842; / Last night the Shanghai composite CLOSED DOWN 2 PO.18INTS OR .06%      / Hang Sang  CLOSED UP 69.48 OR .24%   /AUSTRALIA  CLOSED UP 0.40% / EUROPEAN BOURSES OPENED ALL RED EXCEPT LONDON

The NIKKEI: this THURSDAY morning CLOSED UP 73,45 POINTS OR .35% 

Trading from Europe and Asia:
1. Europe stocks  OPENED  IN THE RED EXCEPT LONDON

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 69.48 POINTS OR .24%  / SHANGHAI CLOSED DOWN 2,18 POINTS OR .06%    /Australia BOURSE CLOSED UP 0.40% /Nikkei (Japan)CLOSED UP 73.45 POINTS OR .35%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1291.85

silver:$17.17

Early THURSDAY morning USA 10 year bond yield:  2.3446% !!! UP 1  IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.881, UP 1 IN BASIS POINTS  from WEDNESDAY night. (POLICY FED ERROR)

USA dollar index early THURSDAY morning: 93.16 UP 14 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  THURSDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing THURSDAY NUMBERS  (NOTPROVIDED TONIGHT)

Portuguese 10 year bond yield: 2.332% DOWN 7 in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.066%  UP 1  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.635% DOWN 6 IN basis point yield from WEDNESDAY 

ITALIAN 10 YR BOND YIELD: 2.165 UP 4 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.464% UP 2  IN  BASIS POINTS ON THE DAY

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IMPORTANT CURRENCY CLOSES FOR THURSDAY  (NOT PROVIDED TONIGHT)

Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM

Euro/USA 1.1842 UP .0030 (Euro UP 30 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.45 UP 0.102(Yen DOWN 10  basis points/ 

Great Britain/USA 1.3204 DOWN  0.0004( POUND DOWN 4 BASIS POINTS)

USA/Canada 1.2515 UP .0004 Canadian dollar DOWN 4 basis points AS OIL ROSE TO $50.74

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was ROSE 30 basis points to trade at 1.1842

The Yen FELL to 112.45 for a LOSS of 10  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  

The POUND FELL BY 4 basis points, trading at 1.3204/ 

The Canadian dollar FELL by 4 basis points to 1.2515,  WITH WTI OIL RISING TO :  $50.74

The USA/Yuan closed AT 6.5910  the 10 yr Japanese bond yield closed at +.066% UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 0  IN basis points from WEDNESDAY at 2.337% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.8713 DOWN 0 in basis points on the day /

Your closing USA dollar index, 93.08  DOWN 21 CENT(S)  ON THE DAY/400 PM/BREAKS RESISTANCE OF 92.00 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 1:00 PM EST

London:  CLOSED UP  22,43 POINTS OR 0.30%
German Dax :CLOSED UP 12.21 POINTS OR .09%
Paris Cac  CLOSED DOWN 1.60 POINTS OR 0.03% 
Spain IBEX CLOSED DOWN 2.50 POINTS OR 0.02%

Italian MIB: CLOSED DOWN 153.70 POINTS OR 0.68% 

The Dow closed DOWN  31.88 POINTS OR .14%

NASDAQ WAS closed DOWN  12.05 PTS OR .18%  4.00 PM EST

WTI Oil price;   XXXX  1:00 pm; 

Brent Oil: XXX 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  XXX DOWN 7/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 7 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0XXX%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

NOT PROVIDED TONIGHT

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$50.99

BRENT: $56.51

USA 10 YR BOND YIELD: 2.363%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.8952% 

EURO/USA DOLLAR CROSS:  1.1807 UP .0065

USA/JAPANESE YEN:112.43   DOWN  0.241

USA DOLLAR INDEX: 93.26 DOWN 41  cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3202 : UP 60 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2515 UP 40 BASIS pts 

German 10 yr bond yield at 5 pm: +0.462%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY Bitcoin Rips, Banks Dip As Fed Crushes Yield Curve To 10-Year Flats

 

 

The yield curve collapse means nothing…

Don’t sweat it…

While Trannies ripped higher, the rest of the equity market hummed along the unchanged line in a narrow range… (NOTE the weakness toward the end of the day which seems to have been catalkyzed by reports that Trump met with John Taylor re: fed head)

The S&P dipped to unchanged on the week…

 

Trending Articles

 

And The Nation That ‘Cannot Live Without The Internet’ The…
Have you ever thought about what life would be like ? Given the volume of time people spend immersed in their…

FOR THE REST SEE ZERO HEDGE)

end

This is a good one:  Trump angry that the repeal of  state and local taxes means higher taxes for the middle class.  He was sold a bill of goods that he did not understand

(courtesy zerohedge)

Trump “Angry” After Learning What State And Local Tax Repeal Really Means

 

 

In what may be the final nail in President Trump’s tax reform proposal, months after the White House proposed ending a tax break for people in high-tax states – which would suggest Trump had more than enough time familiarize himself with how it all works –  Trump reportedly “grew angry” when he learned that the change would hurt some middle-income taxpayers, Bloomberg reports citing people familiar with his thinking.
As Bloomberg amusingly adds, “It’s not clear why the president didn’t know the implications of the SALT deduction for middle-class taxpayers when the plan was released.”
Trump’s confusion appears to have led to even more confusion everywhere else: according to Bloomberg, Trump’s concerns led him to say this week that “we’ll be adjusting” the tax-overhaul framework, but it’s not clear how he and congressional leaders would make up for the $1+ trillion in revenue that would be lost without ballooning the deficit or torpedoing support for the plan among hard-line conservative Republicans. Meanwhile, Trump’s top economic adviser Gary Cohn said Thursday morning that the president “is not rethinking his position on repealing the state and local tax deduction” contradicting what Trump himself said previously.
In any case, while the plan to eliminate State and Local tax deductions may have been prompted by an initial assumption that such a move would mostly hit blue states as shown below…

… the realization that it would have a dire impact on republican politicians in NY, NJ and CT may have given Trump reason to reevaluate.
The White House press office on Wednesday night declined to comment on internal deliberations, but released a general statement that said in part: “The president has made it unequivocally clear that a key priority for tax reform is to cut taxes for America’s hardworking middle class families.”
But Trump’s chief economic advisor, Gary Cohn, said Thursday that the president is not rethinking his position on the state and local tax deduction, which allows households to deduct state and local taxes on their federal returns. Cohn declined to take other questions. Cohn had previously suggested that the White House was open to negotiation on the issue.
With many – among them Goldman – speculating that Trump’s tax plan may be phased in (if it even passes) amid revenue offset concerns, the so-called SALT deduction has emerged as a key flash point in the tax debate, “one that could determine whether Trump has enough votes or will fail again on one of his top legislative priorities.”

As Bloomberg put it, the numbers are daunting for Trump: Roughly two dozen House Republicans are concerned about eliminating the deduction – and he can’t afford to lose too many more votes than that in the House.
Predicably, republican lawmakers from the states that would be most impacted from the SALT deduction are worried, and are scheduled to meet Thursday with the House’s chief tax writer, Ways and Means Chairman Kevin Brady, to discuss the issue. Many come from the high-tax states that would be hardest hit, including New York and New Jersey.

 

King on Wednesday floated the idea of limiting the use of the deduction to people with incomes less than $400,000 — a cap that that has drawn some support, including from New Jersey’s Tom MacArthur. MacArthur was one of the key Republicans who forged a compromise in the House over a bill to repeal Obamacare. That effort ended last month when the Senate failed to vote on its own repeal-and-replace legislation.

MacArthur said he’s taken his concerns to House leaders and the White House “because I think it’s important that everyone involved understands — you can’t gloss over this, this is a big issue, and we can’t do tax reform on the backs of six or seven states. It’s just not fair.”

House Speaker Paul Ryan defended the repeal of state and local tax deductions at an event in Washington on Thursday, criticizing the break for “propping up profligate big government states.”
“People are going to be better off no matter what state you come from,” Ryan said, citing the tax plan’s call to double the standard deduction and increase the child tax credit.

Trending Articles

 

Mattis: “Transgender Troops Can Continue Serving, Pending…
The approximately 15,000 transgender servicemembers can breathe a sigh of relief – for now, at least. Defense…

 

 

Powered By

Trump’s White House first proposed ending the SALT deduction in April, in a one-page outline of the president’s tax goals. Its repeal is estimated to generate about $1.3 trillion over 10 years, making it an important way to help pay for the business and individual tax-rate cuts Trump and congressional leaders propose.
Representative Chris Collins, a New York Republican who’s close to Trump said he thought the president has been more focused on cutting taxes for corporations and pass-through businesses to stimulate the economy. “And he’s left it to others for the details of how we get there” and “how we pay for it,” a confused Collins said.
At the same time, many conservatives argue that the tax break should be abolished because it subsidizes state and local governments that tax their citizens heavily – a view Trump echoed during an interview that Fox News aired Wednesday night. “It is finally time to say, ‘Make sure your politicians do a good job of running your state,”’ he told interviewer Sean Hannity.
* * *
Of course, should the SALT provision be amended, absent any additional government revenues, it would greatly increase the federal deficit that would result from Trump’s tax bill – endangering the legislation’s support among some lawmakers or limiting the size and duration of its cuts.
In the White House, Trump’s point-person on tax policy, Shahira Knight, met Wednesday with representatives of groups that want to preserve the tax break, including the National Association of Realtors. But earlier in the day, Kevin Hassett, one of the president’s top economic advisers, said the administration still expects to see a tax bill with permanent rate cuts and no deduction for state and local taxes. The state and local tax deduction primarily benefits high-income people in high-tax states, including New York, New Jersey and California – i.e. largely blue states as shown in the chart above. But about 10 percent of tax filers with incomes less than $50,000 claimed the deduction in 2014, according to the Tax Policy Center, a Washington policy group. People who make more than $100,000 a year accounted for about two-thirds of the SALT deductions claimed that year.
Meanwhile, in its latest assessment of the Trump tax plan, Goldman said that “it seems likely that Congress will phase in the tax cut over time. Congressional Republicans are likely to try to provide some near-term tax benefit to individuals ahead of the midterm election, but the greater emphasis in our view will be to reduce statutory tax rates while keeping the overall cost within the parameters laid out in the pending budget resolution. This would argue for a somewhat backloaded tax cut.”
In any case, judging by the market, and specifically the ratio of “High tax” corporates to the overall market, as of this moment, the market is once again convinced that Trump’s tax reform is effectively dead.

White House

 

JPMorgan FICC Revenues Plunge 27%, “Low Volatility” Blamed

 

 

Launching Q3 earnings season, moments ago JPM reported third quarter Net Income of $6.7 billion and EPS of $1.76, beating expectations $1.67 and 18 cents, or 7% higher than a year ago, on “managed” revenue of $26.2 BN, beating consensus expectations of $25.7 BN, up 3% from the $25.5BN in Q3 2016 revenue .

JPM reported average core loans up 7% Y/Y and 2% Q/Q, with net interest income up $1.2Bn Y/Y to $12.5bn, “primarily driven by the net impact of rising rates and loan growth” even as average NIM missed.
Commenting on the results, if not on this morning’s new all time high in bitcoin, Dimon said “JPMorgan Chase delivered solid results in a competitive environment this quarter with steady core growth across the platform. And for the first time, the Firm led the nation in total U.S. deposits, as consumers and businesses continue to view us as their partner of choice.

 

The global economy continues to do well and the U.S. consumer remains healthy with solid wage growth. Unfortunately, natural disasters in the U.S. and abroad have impacted many of our customers and we have responded with enormous financial support as well as the expertise and generosity of our employees to help these customers, clients and communities. Building on our success to-date in Detroit, we have announced new initiatives in Chicago and Washington, D.C. to drive inclusive economic growth in those communities. We will be there to do our part. And this is in addition to the $1.7 trillion of credit and capital supplied this year to consumers and small and mid-sized businesses and corporate clients.”
Breaking down the data, Dimon said that “in Consumer & Community Banking, card sales and merchant processing volumes were once again up double digits, while loans and deposits continued to grow strongly. In the Corporate & Investment Bank, we continued to lead our peers in Investment Banking fees, and Treasury Services and Securities Services each generated over $1 billion in revenue. Commercial Banking again delivered outstanding performance with record revenue as our long-term investments in the business are paying off. Our Asset & Wealth Management business delivered strong results with record net income and AUM this quarter.”
JPM reported that its provision for credit losses in Q3 was $1.45BN, above the $1.34BN and above the $1.27BN one year ago, suggesting the bank is starting to prepare for stormier weather ahead.

END

House Passes $37 Billion Disaster-Aid Package

 

 

Disaster victims in Puerto Rico, Texas and Florida can breath a sigh of relief. A piece of legislation authorizing $36.5 billion in aid for communities affected by recent hurricanes and wildfires easily passed the House on Thursday, despite some conservatives’ concerns about the growing cost of disaster relief as wildfires raging in California – expected to be the costliest in modern California history – place yet another strain on FEMA’s budget. All of those who voted against the legislation were from Republicans, but the bill managed to passeasily in the 353-69 vote. The legislation will provide direct disaster relief and replenish FEMA’s depleted coffers as well as the federal government’s flood insurance program.
The package includes $18.7 billion for the Federal Emergency Management Agency’s (FEMA) disaster relief fund – including $4.9 billion for a disaster relief loan account – $16 billion to address national flood insurance program debt and $576.5 for wildfire recovery efforts. It also provided $1.27 billion for disaster food assistance for Puerto Rico.

As the Hill points out, more than 80% of Puerto Rico remains without power in the aftermath of Hurricanes Maria and Irma, and major cities in Texas, Florida, and other Gulf states are slowly rebuilding following Hurricanes Harvey and Irma. Congress is likely to approve still more billions of dollars for disaster aid in the months to come.
Many of the Republicans who opposed the bill bristled at the revitalization of the federal flood insurance program and expressed concern about the growing costs of natural disasters.

 

Congress is likely to approve still more billions of dollars for disaster aid in the months to come. Yet, many of the Republicans who voted against the relief bill said they were protesting the increasing monetary toll that natural disasters are having on the federal budget.

Rep. Mark Walker (R-N.C.), the head of the Republican Study Committee, said that supplemental disaster relief should be offset with spending cuts.

“It is only a matter of time before the U.S. faces the next catastrophe. But for some reason, the government does not budget with this in mind. Instead, Congress waits for a crisis to happen and then hurries to pass an aid package afterward,” he wrote in a Wall Street Journal op-ed.

Rep. Mark Sanford (R-S.C) said the debts would add up regardless of how good the cause of disaster relief was.

“If we don’t do something to begin to offset some of this, I think that in a matter of months or a matter of years people are going to look back at this Congress and say, ‘what were they thinking?’” he said.

His fellow House Freedom Caucus member Rep. David Schweikert (R-Az.) said that bailing out the Flood Insurance program without reforms amounted to throwing good money after bad.
“Emergency is emergency, but there are programs we’re going to have to deal [with], bite the bullet, and I think flood insurance is one of them, where you also have a moral hazard in its current design,” he said.
The disaster relief bill is now awaiting consideration in the Senate. The bill was the second installment of funds for areas that have been ravaged by fires and hurricanes that have hammered the US this year, following a $15.3 billion relief package that was signed into law in September by President Donald Trump, as the New York Times points out. However, with total cleanup costs across a broad swath of the Southern US, along with Puerto Rico and the Virgin Islands, already eclipsing the $50 billion mark, much more funding will be needed.
The bill’s passage comes after President Donald Trump tweeted earlier today that the federal government couldn’t stay in Puerto Rico forever.

Given Puerto Rico’s bankruptcy, th federal money is the island’s only real hope to rebuild its devastated power grid and repair roads, dams and hundreds of thousands of homes that were wrecked by Irma and Maria. Even before this year’s storms, the National Flood Insurance Program owed the Treasury more than $30 billion.
The Senate is currently away on a week-long recess, but is expected to pass the bill when lawmakers return next week.

 

 

END

 

 

 

I will see you with a partial commentary THURSDAY OR FRIDAY night.

HARVEY


Oct 11/WORK IN PROGRESS/COMEX DATA NOT PROVIDED BY CME

Wed, 10/11/2017 - 13:21

GOLD: $xx

Silver: $xx

Closing access prices:

Gold $

silver: $

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: $1302.86 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1291.55

PREMIUM FIRST FIX:  $11.31 (premiums getting larger)

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1298.30

NY GOLD PRICE AT THE EXACT SAME TIME: $1289.30

Premium of Shanghai 2nd fix/NY:$9.00 (PREMIUMS GETTING LARGER)  

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1290.20

NY PRICING AT THE EXACT SAME TIME: $1289.50

LONDON SECOND GOLD FIX  10 AM: $1289.25

NY PRICING AT THE EXACT SAME TIME. 1289.25

For comex gold: OCTOBER/

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

TOTAL NOTICES SO FAR: 2329 FOR 232,900 OZ  (7.241TONNES)

For silver: OCTOBER  1 NOTICES FILED TODAY FOR 5,000  OZ/ Total number of notices filed so far this month: 392 for 1,960,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

 DATA LATE/I WILL PROVIDE COMEX DATA LATE TONIGHT  

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest  ROSE BY A STRONG  1688 contracts from  186,144  UP TO 187,832   WITH RESPECT TO YESTERDAY’S TRADING (UP  23 CENTS).  THE CROOKS ARE HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS.  IT IS OBVIOUS THAT THE HUGE RISE IN PRICE YESTERDAY NEGATED ANY ATTEMPT TO COVER THAT SHORTFALL 

RESULT: A GOOD SIZED RISE IN OI COMEX  WITH THE  23 CENT PRICE RISE.  OUR BANKERS FAILED AGAIN IN THEIR ATTEMPT TO COVER ANY OF THEIR MASSIVE SILVER SHORTFALL. 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.939 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 1 NOTICE(S) FOR 5,000  OZ OF SILVER.

In gold, the open interest SURPRISINGLY  FELL BY 336 CONTRACTS DESPITE THE GOOD SIZED  RISE in price of gold ($8.90 ) .  The new OI for the gold complex rests at 513,815. IT SURE LOOKS LIKE OUR BANKER FRIENDS SEEM A LITTLE EDGY AS THEY WERE INTENT ON COVERING SOME OF THEIR HUGE GOLD SHORTFALL WHICH WILL EXPLAIN THE DROP IN OI DESPITE THE GAIN IN OUR GOLD PRICE.

 

Result: A SMALL SIZED DECREASE IN OI WITH THE RISE IN PRICE IN GOLD ($8.90). WE PROBABLY HAD SOME GOLD SHORT COVERING BY THE BANKERS. 

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:   

Tonight , NO CHANGES  in gold inventory at the GLD/

Inventory rests tonight: 858.45 tonnes.

SLV

Today:  NO changes in inventory:

INVENTORY RESTS AT 326.898 MILLION OZ

end

.I WILL PROVIDE DATA LATE TONIGHT

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

1. Today, we had the open interest in silver ROSE BY A STRONG  1688 contracts from 186,144  UP TO 187,832(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. THE DATA SEEMS TO SUGGEST SOME GOLD SHORT COVERING BUT IN SILVER IT IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER. AS SUCH THEY RETREATED TO HIGHER GROUND AND THEN THEY WILL TRY AGAIN.

RESULT:  A GOOD SIZED INCREASE IN SILVER OI  AT THE COMEX WITH THE  RISE IN PRICE OF 23 CENTS WITH RESPECT TO YESTERDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS 

(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 5.30 points or .16% /Hang Sang CLOSED DOWN 101.26 pts or .36% / The Nikkei closed UP 57.76 POINTS OR .28/Australia’s all ordinaires CLOSED UP 0.58%/Chinese yuan (ONSHORE) closed WELL DOWN  at 6.5910/Oil UP to 50.93 dollars per barrel for WTI and 56.69 for Brent. Stocks in Europe OPENED RED EXCEPT SPANISH IBEX .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.5910. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5803 AND BOTH YUANS ARE WEAKER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS  HAPPY TODAY.

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

North Korea is planning to fire multiple short range missiles next week around the time of the 29th Chinese Congress

( zerohedge)

b) REPORT ON JAPAN

KOBE STEEL/JAPAN

The following is a huge story and may be our black swan event globally:  Kobe steel collapses after admitting it falsified data on its copper, aluminum and iron products.  This should cause the recall of millions of products and place a huge dent in faith in Japanese products.

( zerohedge)

c) REPORT ON CHINA 4. EUROPEAN AFFAIRS i)UK/EU/BREXIT A terrific commentary from Nigel Farage who describes Teresa May as a weak partner in the Brexit process.  Nigel always and accurately states what is going on behind the scenes in the UK ( Nigel Farage/London’s Telegraph) ii)SPAIN/CATALONIAWe highlighted this to you yesterday where the Central Government of Madrid is planning to exercise Article 155 in which they will try to again control of the autonomous region of Catalonia.  This will cause huge tension and we may have civil war breaking out( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey/USA

Relations between Turkey and USA now at  an all time low as Turkey sentences a Wall Street Journalist to jail in absentia for terrorist propaganda.

(courtesy zerohedge)

6 .GLOBAL ISSUES

 

7. OIL ISSUES 8. EMERGING MARKET

Venezuela

We are now in the last stages in the death of the economic affairs of Venezuela.  on the black market one USA dollar buys 26,800 bolivars, a 900% loss of purchasing power in one year

( zero hedge)

9.   PHYSICAL MARKETS

i)This is good:  the Western Australia’s liberal party is blocking the big royalty tax hike that has miner’s screaming

( Sunday Times/Perth/Mercer Adshead and Caporn/GATA

ii)Bloomberg columnist is surprised that gold really is a good hedge against market turmoil.  However we can only wish if these columnists would ask questions on the surreptitious interventions by central bankers ( Bloomberg/GATA) 10. USA Stories

i)Janet Yellen’s favourite indicator for job growth is the JOLTS report.  Today openings pulled back from its all time high last month

(courtesy zerohedge)

ii a)Supposedly Trump asks for a huge 10 fold increase in the uSA nuclear arsenal.

( zerohedge)

ii b)This was shot down by Trump as fake news

( zerohedge)

ii c) Trump now threatens to pull the NBC broadcast license after the fake 10 x nuke story

 

( zerohedge)

iii)In another tweetstorm Trump equates the 5.2 trillion USA stock market gains to him ignoring the obvious manipulation by the bankers.  He is now stating that if Congress gives him his tax cuts, then citizens could expect more gains on the stock market. Trump also hints that help from the Democrats is off the table..

( zerohedge)

iv) The best predictor of future inflation:  food prices

( Graham Summers/Phoenix Research Capital)

v)For those of you who are following the Imran/Debbie Wasserman Schultz story, we now have the wife of indicted iT staffer Imran Wan turning against her husband.  She states that he committed fraud along with polygamy

( zerohedge)

vi)California’s wine country is devastated with the Sunday fires. Officials are stating it could take years to recover

( zerohedge)

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY FELL BY 336 CONTRACTS DOWN to an OI level of 513,815 DESPITE THE RISE IN THE PRICE OF GOLD ($8.90 RISE IN YESTERDAY’S TRADING). IT SEEMS THAT OUR BANKER FRIENDS TRIED  TO COVER SOME OF THEIR HUGE GOLD SHORTFALL WITH LIMITED SUCCESS.  OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH WE SHOULD EXPECT  GOLD TO BE STRONG THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  TINY SIZED open interest DECREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($8.90). BANKERS MILDLY SUCCESSFUL IN THEIR ATTEMPT TO COVER SOME OF THEIR GOLD SHORTFALL. 

 

IN SEPTEMBER,CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

NOW THAT WE ARE CLOSE TO THE 29TH CHINESE CONGRESS, THE BANKERS ARE TAKING NO CHANCES AS THEY START TO COVER THEIR GOLD/SILVER SHORTFALL.

We have now entered the active contract month of Oct and here we saw a GAIN of 3 contracts UP to 223 contracts.  We had 0 notices filed yesterday so we GAINED 3 contracts or 300 oz will  stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given. The low number of notices early in the delivery cycle is evidence of a lack of physical gold.

The November contract saw A loss OF 70 contracts down to 1325.

The very big active December contract month saw it’s OI LOSS OF 1261 contracts DOWN to 402,022.

We had 0 notice(s) filed upon today for  NIL oz

 VOLUME FOR TODAY (PRELIMINARY) NOT  AVAILABLE

CONFIRMED VOLUME YESTERDAY: 338,143

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI ROSE BY 1,688 CONTRACTS FROM 186,144 UP TO 187,832 DESPITE YESTERDAY’S 23 CENT RISE IN PRICE. WE HAVE HAD NO BANKER SHORT COVERING OVER THESE PAST TWO WEEKS AS THE CROOKS TRY AND  LOOSEN MORE SILVER LONGS FROM THE SILVER TREE.  THE HUGE RISE IN SILVER PRICE MEANS THAT THEY HAVE ABANDONED ALL HOPE OF COVERING AT LOWER PRICES, SO THEY REGROUP AT MUCH HIGHER PRICES WHERE THEY WILL ATTEMPT AGAIN AT COVERING. We have now entered the non active contract month of  October and here the OI LOST 2 contacts DOWN TO 520.  We had 1 notice filed on yesterday so we GAINED 3 contracts or AN ADDITIONAL 15,000 oz will stand for delivery and zero EFP’s were issued.  November saw a LOSS of 7 contract(s) and thus FALLING TO  282. After November, the NEXT big active contract month is December and here the OI GAINED 69  contracts DOWN to 143,522 contracts.

We had 1 notice(s) filed for  5,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.11/2017.

Gold Ounces Withdrawals from Dealers Inventory in oz   n/a Withdrawals from Customer Inventory in oz   n/a oz Deposits to the Dealer Inventory in oz    n/a oz Deposits to the Customer Inventory, in oz   n/a No of oz served (contracts) today   0 notice(s) NIL OZ No of oz to be served (notices) 223 contracts (22300 oz) Total monthly oz gold served (contracts) so far this month 2329 notices 232,900 oz 7.2441 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz Today we HAD  xx kilobar transaction(s)/   WE HAD xx DEALER DEPOSIT: total dealer deposits: xx oz We had xxx dealer withdrawals: total dealer withdrawals:  xx oz we had xxx customer deposit(s): total customer deposits; xx oz We had n/a customer withdrawal(s) total customer withdrawals; nil  oz  we had xxx adjustment(s) For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2329) x 100 oz or 232,900 oz, to which we add the difference between the open interest for the front month of OCT. (223 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 255,200  oz, the number of ounces standing in this active month of OCT.   Thus the INITIAL standings for gold for the OCTOBER contract month: No of notices served  (2329) x 100 oz  or ounces + {(223)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 255,200 oz standing in this  active delivery month of OCTOBER  (7,937 tonnes). WE GAINED 3 CONTRACTS OR AN ADDITIONAL 300 OZ WILL  STAND AS THE BANKERS ISSUED 0 EFP CONTRACTS.  IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER AND THIS CONTINUES ON IN OCTOBER.   THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE AND IT ALSO EXPLAINS THE LACK OF DELIVERY NOTICES IN THE EARLY PART OF THIS DELIVERY ACTIVE MONTH. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear) Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes    I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE OCTOBER DELIVERY MONTH OCTOBER INITIAL standings  Oct 11.2017 Silver Ounces Withdrawals from Dealers Inventory  n/a Withdrawals from Customer Inventory  n/a oz Deposits to the Dealer Inventory  n/a oz Deposits to the Customer Inventory   n/a No of oz served today (contracts) 1 CONTRACT(S) (5,000 OZ) No of oz to be served (notices) 520 contracts (2,600,000 oz) Total monthly oz silver served (contracts) 392 contracts (1,960,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month    xx oz today, we had  xxx deposit(s) into the dealer account: total dealer deposit: xxx   oz we had xxx dealer withdrawals: total dealer withdrawals: xxx oz we had  xx customer withdrawal(s): TOTAL CUSTOMER WITHDRAWALS: xx  oz We had xx Customer deposit(s): ***deposits into JPMorgan have stopped  again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: 600,627.490  oz    we had 0 adjustment(s) The total number of notices filed today for the OCTOBER. contract month is represented by 1 contract(s) for 5,000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 392 x 5,000 oz  = 1,960,000 oz to which we add the difference between the open interest for the front month of OCT. (520) and the number of notices served upon today (1 x 5000 oz) equals the number of ounces standing.  

 

.   Thus the INITIAL standings for silver for the OCTOBER contract month:  392 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(520 ) -number of notices served upon today (1)x 5000 oz  equals  4,555,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE   WE GAINED  3 CONTRACTS OR  AN ADDITIONAL 15,000 OZ WILL STAND FOR DELIVERY.  ESTIMATED VOLUME FOR TODAY:   NOT AVAILABLE CONFIRMED VOLUME FOR YESTERDAY: 95,923 CONTRACTS     Total dealer silver:  39.345 million (close to record low inventory   Total number of dealer and customer silver:   220.100 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 2.6 percent to NAV usa funds and Negative 2.3% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.5% Percentage of fund in silver:37.5% cash .+0.0%( Oct10/2017)  2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.18% (Oct 10/2017)  3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.38% to NAV  (Oct 10/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.18%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.38%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

 

Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES

Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES

oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT  854.30 TONNES

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes

Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES

Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/

Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

Sept 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

Inventory rests at 836.87 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Oct 11/2017/ Inventory rests tonight at 858.45 tonnes *IN LAST 247 TRADING DAYS: 82.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 182 TRADING DAYS: A NET  74.78 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY. *FROM FEB 1/2017: A NET  43.67 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

 

Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ

OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z

Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615  MILLION OZ

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/

Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/

Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Oct 11/2017:

Inventory 326.898  million oz end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.44%
  • 12 Month MM GOFO + 1.64%
  • 30 day trend

end

 

Bitcoin prices for THIS MORNING:  Bid $4755.00 offer: $4775.00

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Young Guns of Gold Podcast – ‘The Everything Bubble’ By davidrussell October 11, 2017 0 Comments

– Young Guns of Gold Podcast – ‘The Everything Bubble’
– Precious Metal Roundtable discuss gold in 2017 and outlook
– Gold +9.1% year to date; Performing well given Fed raising rates, lack of volatility and surge in stock markets
– “People are expecting too much from gold”

– Economy: Inflation indicators, recession on the horizon, global debt issues
– Global demand: ETF inflows, Russia central bank purchases, Germany investment figures and international coin demand bode well for gold
– “First monetary inflation, then asset inflation, next is price inflation …”
– Gold bull market resumed; silver should outperform gold

Indicators point to inflation, a recession is on the horizon and the ‘Everything Bubble’ is the great threat to financial stability – these are the conclusions of the Young Guns of Gold who hosted a Precious Metal Roundtable, this week.

Jan Skoyles from GoldCore and Jordan Eliseo of Australia’s ABC Bullion were hosted by Ronald Stoeferle of Incrementum in a reboot of their Young Guns of Gold podcast.

The Young Guns of Gold discussion was broken into three parts:

  1. Gold, Markets and Macro
  2. Gold’s Role in a Portfolio, 2017 and beyond
  3. Gold on the international stage
  4. Engagements and buying diamonds : )

Executive Summary

  • High expectations of Trump’s reflationary growth policy dampened the gold price increase in 2016. However, Gold was still up 8.5% in 2016 and is up 10.6% since Jan. 2017.
  • The further development of the normalization of monetary policy in the US is the litmus test for the US economy and it is decisive for how the gold price will develop.
  • If the normalization of monetary policy does not succeed – which we expect so – gold will pick up momentum.
  • Based on the premise that the bull market in gold has resumed, we expect the gold-silver ratio to decline.


In order to listen to and watch the Young Guns of Gold podcast click here.

 

Gold and Silver Bullion – News and Commentary

Gold gains on weaker dollar (Reuters)

Stocks Gain, With Japan at Decade High; Euro Rise: Markets Wrap (Bloomberg)

China Is Said to Meet Bankers for First Dollar Bond Since 2004 17 (Bloomberg)

Chinese central-bank chief talks of reforms aimed at lifting yuan’s status (Marketwatch)

LME to expand trading around gold and silver reference prices (Reuters)


Allocation to gold contributes to outperformance. Source: Bloomberg

Gold A Good Hedge Against Against Market Turmoil – Research (Bloomberg)

Video: Geopolitical bid and lack of tax reform should push gold higher (Bloomberg)

Rickards Warns “The Market’s Got It Wrong” (Zerohedge)

Are the foundations of London property finally crumbling? (Citywire)

Britain can’t cope with a fall in house prices – here’s why (Independent)

Gold Prices (LBMA AM)

11 Oct: USD 1,290.20, GBP 978.62 & EUR 1,091.90 per ounce
10 Oct: USD 1,289.60, GBP 977.77 & EUR 1,094.61 per ounce
09 Oct: USD 1,282.15, GBP 976.23 & EUR 1,092.01 per ounce
06 Oct: USD 1,268.20, GBP 970.43 & EUR 1,083.93 per ounce
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
04 Oct: USD 1,275.55, GBP 960.87 & EUR 1,085.11 per ounce
03 Oct: USD 1,270.70, GBP 959.00 & EUR 1,081.87 per ounce

Silver Prices (LBMA)

11 Oct: USD 17.15, GBP 13.00 & EUR 14.51 per ounce
10 Oct: USD 17.12, GBP 12.98 & EUR 14.53 per ounce
09 Oct: USD 16.92, GBP 12.86 & EUR 14.41 per ounce
06 Oct: USD 16.63, GBP 12.73 & EUR 14.20 per ounce
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce
04 Oct: USD 16.83, GBP 12.67 & EUR 14.29 per ounce
03 Oct: USD 16.61, GBP 12.53 & EUR 14.13 per ounce


Recent Market Updates

– London House Prices Are Falling – Time to Buckle Up
– Perth Mint Gold Coins Sales Double In September
– Gold Investment In Germany Surges – Now World’s Largest Gold Buyers
– Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Safe Haven Silver To Outperform Gold In Q4 And In 2018
– Plan For Run On The Pound
– Russia Gold Rush Sees Record Reserves For Putin Era
– China Catalyst To Send Gold Over $10,000 Per Ounce?
– Gold Matches S&P 500 Performance In First 3 Quarters; Up 12% 2017 YTD
– Gold Standard Resulted In “Fewer Catastrophes” – FT
– Financial Advice From Man Who Made $1+ Billion in 1929 – Importance Of Being Patient and “Sitting”
– “Gold prices to reach $1,400 before the end of the year” – GoldCore
– Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder

 END Bloomberg columnist is surprised that gold really is a good hedge against market turmoil.  However we can only wish if these columnists would ask questions on the surreptitious interventions by central bankers (courtesy Bloomberg/GATA) Bloomberg columnist surprised to discover that gold is really a good hedge

Submitted by cpowell on Tue, 2017-10-10 13:13. Section: 

9:13a ET Tuesday, October 10, 2017

Dear Friend of GATA and Gold:

A Bloomberg News columnist, Cameron Crise, set out this week to contradict traditional assertions that gold is a good hedge against market turmoil but concluded, to his surprise, that gold indeed performs such a function well. Now if only Bloomberg News would put half as much effort into investigating surreptitious intervention in the gold market by governments and central banks to prevent the monetary metal from becoming the hedge it otherwise would be.

Crise’s analysis is headlined “Is Gold Really a Good Hedge?” and it’s posted at Bloomberg here:

https://www.bloomberg.com/news/articles/2017-10-10/is-gold-really-a-good…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

END

 

This is good:  the Western Australia’s liberal party is blocking the big royalty tax hike that has miner’s screaming

 

(courtesy Sunday Times/Perth/Mercer Adshead and Caporn/GATA)

Western Australia’s Liberal Party to block gold royalty increase

Submitted by cpowell on Tue, 2017-10-10 13:24. Section: 

By Daniel Mercer, Gary Adshead, and Dylan Caporn
The Sunday Times / Perth Now, Perth, Australia
Monday, October 9, 2017

Labor’s $392 million gold royalty hike has been killed off, with Liberal MPs voting to block the controversial measure in the Upper House of Parliament.

The move, which comes after hundreds of gold miners rallied at State Parliament this morning, will mean the State Government will be required to plug a near-$400 million hole in the budget.

Opposition Leader Mike Nahan said the decision had been reached based on the concerns about job losses.

“It was our view that Mr McGowan did not seek or have a mandate to raise the gold royalty rate,” he said. “It was a tough decision because we take our role very seriously.”

Dr. Nahan said that a royalty increase did not reduce debt was also considered.

The decision comes as gold miners ramp up their campaign against the royalty hike, with a protest planned for the front steps of State Parliament ahead of the vote by Liberal MPs. …

… For the remainder of the report:

http://www.perthnow.com.au/news/western-australia/wa-liberals-set-to-blo..

end

Your early WEDNESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    i) Chinese yuan vs USA dollar/CLOSED WELL DOWN AT 6.5910/shanghai bourse CLOSED UP AT 5.30 POINTS .16%   / HANG SANG CLOSED DOWN 101.26 POINTS OR .36% 

2. Nikkei closed UP 57.76 POINTS OR .28%     /USA: YEN RISES TO 112,15

3. Europe stocks OPENED  RED EXCEPT SPAIN  ( /USA dollar index FALLS TO  93.07/Euro UP to 1.1835

3b Japan 10 year bond yield: RISES  TO  -+.065%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  50.93 and Brent: 56.69

3f Gold UP/Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP or Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.454%/Italian 10 yr bond yield UP  to 2.179%  /SPAIN 10 YR BOND YIELD DOWN TO 1.671%  

3j Greek 10 year bond yield FALLS TO  : 5.579???  

3k Gold at $1289.65 silver at:17.12(8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 17/100 in  roubles/dollar) 57.80-

3m oil into the 50 dollar handle for WTI and 56 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.15 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9734 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1521 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to  +0.454%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.336% early this morning. Thirty year rate  at 2.871% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

S&P Futures Flat, Spain Rebounds, Nikkei Closes At 21 Year High  

S&P500 futures point to a slightly lower open, as Asian stocks rise to trade near decade highs, with Japan’s Nikkei 225 closing at highest since 1996. European stocks are little changed, with Spanish shares gaining after Catalan President rows back from an immediate declaration of independence. MSCI’s all-world stocks index briefly hit a fresh record high in opening European trading as a 1.5% jump in Spain’s IBEX added to a 10-year high set by Asian shares overnight.

In early trading, the euro extended gains spurred by Catalonia’s pullback from an immediate declaration of independence from Spain, while the dollar drifted as investors awaited minutes from the last Federal Reserve meeting. Spanish stocks ralied sharply, with the IBEX 35 index rising as much as 2%, helped by a rise in banking shares which rallied as much as 4%, after Catalan President Carles Puigdemont said he’ll seek talks with Madrid over the future of his region in Spain delaying any independence announcement for “weeks”, rowing back from an immediate declaration of independence.

“There was a chance Puigdemont would have made a decisive declaration, so now yields are dropping because there is room for negotiation left,” said DZ Bank strategist Christian Lenk.

At the same time, the Spanish 10y bond yield dropped 5bps to 1.65%. However, shortly before 5am ET, the EURUSD slumped without a specific catalyst, while the European rally fizzled modestly as renewed fears over the fate of the Catalan region re-emerged.  Puigdemont’s backtrack averted an immediate confrontation over independence for Catalonia, though Spanish leaders are maintaining a hard line. Deputy Prime Minister Soraya Saenz de Santamaria accused Puigdemont of irresponsible leadership even as he sought to reassure companies fleeing the region. Prime Minister Rajoy convened an extraordinary meeting of his cabinet in Madrid on Wednesday to discuss his next move.

Elsewhere in Europe, the FTSE 100 climbed to as high as 7,550.17, surpassing its record closing level of 7547.63, after rising steadily the past 3 weeks. However, the index was down fractionally at last check. The pound has been under pressure in the past month as Brexit negotiations remain stuck on questions over the divorce terms, such as the size of the U.K.’s exit payments and the future of EU citizens’ rights. Stocks elsewhere on the continent, however, struggled for traction, with the Stoxx Europe 600 gauge flat as a drop in industrial metals led miners lower.

Asian equity markets were mostly positive as the region got a tailwind from Wall Street where all 3 major indices posted fresh all-time highs. This supported sentiment with ASX 200 (+0.6%) also lifted by energy names after WTI reclaimed the USD 51/bbl level to the upside. Shanghai Comp. (+0.2%) and Hang Seng (-0.4%) were choppy after a feeble liquidity effort by the PBoC and with Hong Kong benchmark just about kept afloat amid Chief Executive Lam’s policy address and profit tax cut announcement.

The most notable overnight move was the jump in Japanese shares, with the Nikkei 225 closing at its highest since December 1996, propped by companies in industries ranging from technology to retail. Machinery maker Fanuc Corp., Recruit Holdings Co., FamilyMart UNY Holdings Co., SoftBank Group Corp. and Terumo Corp. were the biggest contributors to the Nikkei 225’s gain, while scandal-whipped Kobe Steel Ltd. was the worst performer, falling a record 36 percent over two sessions. Railway companies and insurers propelled the benchmark Topix index to a decade-high for a second straight day.

“Expectations for upward revisions in local companies’ annual profit targets are pretty high ahead of the earnings season kicking off later this month,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. in Tokyo. “It also reflects anticipation of a victory for the Abe administration in the upcoming election.”

Japan’s stock market has been buoyed by a series of upbeat economic data. A Cabinet Office report released before the market opened Wednesday showed Japan’s core machinery orders for August climbed more than analysts expected. The yen’s weakness against the dollar has further fanned speculation for robust growth in quarterly earnings. Japanese voters will head to the polls on Oct. 22 for a general election in which Prime Minister Shinzo Abe’s Liberal Democratic Party will be challenged by Tokyo Governor Yuriko Koike’s new Party of Hope. Support for the LDP was up marginally to 31.2 percent in an opinion survey conducted Oct. 7-9, compared with a poll from last week, according to public broadcaster NHK.

In the US, President Donald Trump’s public feud with Tennessee Senator Bob Corker, an influential fellow Republican, has raised concern that his push for a tax-code overhaul could be harmed. At the same time, the Federal Reserve will publish the minutes from its last minute later with a third U.S. rate hike of the year now looking nailed on for December.

“Squabbles surrounding Trump’s efforts come as no surprise, but it is still not helping the dollar,” said Yukio Izhizuki, senior currency strategist at Daiwa Securities in Tokyo.

Overnight, Trump tweeted dismisses rumours that Chief of Staff Kelly will be fired soon, in which he blames dishonest media and says the chief is doing a fantastic job. Elswhere, Fed’s Kaplan (voter, soft hawk) said will be assessing progress of US economy towards full employment and looking for more signs of upward inflation. Kaplan added that he is mindful waiting too long to raise rates could leave the Fed behind the curve and increases chances of a recession, but also commented that the Fed can afford to be patient on rate hikes because economic growth is not running away. US may seek stricter NAFTA rules of origin and may require 85% of content to come from 3 NAFTA countries, may also seek 50% US content requirement, according to reports.

In FX, most Asian emerging currencies were higher after China fixed the yuan stronger and as news on Catalonia encouraged risk-taking, while concerns over U.S. tax reform and geopolitical risks lingered. Taiwan’s dollar was the biggest gainer, followed by Thailand’s baht while the offshore yuan fell. The euro rose to the highest level in two weeks after Catalan President Carles Puigdemont said that while an Oct. 1 referendum had given him the mandate to pursue independence, he would “suspend” the result for some weeks for dialogue with Spanish Prime Minister Mariano Rajoy’s administration. Catalan concerns have been rolled over to a future date and the yuan has been stronger, which are among the positive factors for Asia’s emerging currencies, said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp.

“Not too surprisingly, Asia’s EM FX is looking a lot brighter.” The Bloomberg Dollar Spot Index declines and the 10-year U.S. Treasury yields stayed below their recent highs of 2.4 percent, amid a feud between U.S. President Donald Trump and high-ranking Republican Senator Bob Corker that’s put the tax-reform agenda in question. The yen strengthened against the U.S. currency amid persistent concerns about North Korea. The Australian dollar rose, while the kiwi was steady

The dollar was little changed against its peers before FOMC minutes; stock futures held to tight ranges after Tuesday’s record high, while Treasury yields slipped. The euro held above 1.18 as options suggested further upside, while Spanish bonds outperformed on lower Catalan risks and the Turkish lira climbed for the first time in nine days. The Bloomberg Dollar Spot Index edged lower as London came into the market, reversing gains in the Asia session; the euro edged higher for a fourth day of gains against the dollar; Aussie dollar caught a bid from offshore funds following strong response to record bond auction; dollar-yen edges lower but trades above 112.00; cable steady around 1.3200 but neared 0.9000 against the euro as evidence emerged of further splits within the U.K. government over Brexit; Spanish bonds rallied as Catalans put off an immediate declaration of independence and sought dialogue.

Treasuries stuck in tight ranges through Asian hours and edge higher early in Europe as stocks unwind opening gains. Treasuries continue to outperform bunds, with spread 3bps tighter, though no evidence of large cross-market block trades that helped drive the tightening on Tuesday

In geopolitics, North Korea is reportedly looking as if it could be ready to launch multiple scud missile. US President Trump was briefed by Defence Secretary Mattis and a top military leader, in which they discussed a range of options to respond to any North Korea aggression. There were reports that 6 planes including 2 US B1-B bombers flew over the Korean peninsula as a show of force.

In the U.S., investors will parse Wednesday’s FOMC minutes for further confirmation a December rate increase is on track. Ten-year U.S. Treasury yields nudged lower after President Donald Trump said Tuesday he plans to make changes to his tax plan within the next few weeks, while dismissing concerns that his public spat with Senator Bob Corker would scuttle an overhaul. BlackRock, Delta among companies set to report earnings.

Bulletin headline summary from RanSquawk:

  • European bourses trade in the green with Spain leading the charge following yesterday’s announcement by Puidgemont
  • FX trade has been limited early in the European session, as markets digest the Catalonian announcement, and wait in anticipation for the latest FOMC minutes
  • Looking ahead, highlights include US JOLTS, FOMC minutes, Fed’s Evans, Williams and ECB’s Praet

Market Snapshot

  • S&P 500 futures down 0.09% to 2,546.25
  • STOXX Europe 600 down 0.01% to 390.12
  • MSCI Asia up 0.1% to 165.00
  • MSCI Asia ex Japan up 0.3% to 544.82
  • Nikkei up 0.3% to 20,881.27
  • Topix up 0.1% to 1,696.81
  • Hang Seng Index down 0.4% to 28,389.57
  • Shanghai Composite up 0.2% to 3,388.28
  • Sensex down 0.06% to 31,905.31
  • Australia S&P/ASX 200 up 0.6% to 5,772.15
  • Kospi up 1% to 2,458.16
  • German 10Y yield rose 1.7 bps to 0.459%
  • Euro up 0.2% to $1.1833
  • Italian 10Y yield rose 1.3 bps to 1.833%
  • Spanish 10Y yield fell 2.8 bps to 1.667%
  • Brent Futures up 0.2% to $56.74/bbl
  • Gold spot up 0.05% to $1,288.69
  • U.S. Dollar Index down 0.2% to 93.14

Top Overnight News

  • Dallas Fed President Robert Kaplan says he’s undecided on a rate move, with U.S. economy solid and inflation pressures probably building
  • European Central Bank policy makers are poised to preserve their commitment to ultra-low interest rates as they wrangle over how long to keep their bond-buying program going, according to central bank officials, who declined to be named because such matters are confidential
  • Bets on EUR/USD through options suggest that traders are the most bullish on the euro since 2009 on prospects for ECB tapering
  • China is moving forward with plans to issue its first dollar-denominated bonds since 2004, with the Ministry of Finance scheduled to meet with bankers in Beijing Wednesday to discuss the sale, according to people familiar with the plans
  • Expect High Fees in Cohen’s Hedge Fund Relaunch; Fed Minutes May Fan Inflation Debate; Trump to Renew Offensive on Tax Plan
  • President Donald Trump said Tuesday he plans to make changes to his tax plan within the next few weeks, while dismissing concerns that his public spat with Senator Bob Corker would scuttle an overhaul
  • Billionaire trader Steven Cohen, who may stage a comeback to the business next year when his regulatory ban on managing client money expires, has considered charging management fees of at least 2.75 percent and may pass on certain costs to investors for the first time
  • The scandal engulfing Kobe Steel Ltd. deepened Wednesday as the steelmaker said it may have falsified data about two more products, triggering a further collapse in its shares and intensifying concern that compromised material found its way into cars, trains and aircraft
  • China is moving forward with plans to issue its first sovereign bonds in dollars since 2004 in a deal that will put a symbolic seal of approval on the booming offshore Asian debt market
  • Spain maintained its hard line against Catalonia’s secession campaign after the regional leader in Barcelona stopped short of the declaration of independence his allies wanted

Asian equity markets were mostly positive as the region got a tailwind from Wall St where all 3 major indices posted fresh all-time highs. This broadly supported sentiment with ASX 200 (+0.6%) also lifted by energy names after WTI reclaimed the USD 51/bbl level to the upside. Nikkei 225 (+0.3%) pared opening weakness as USD/JPY nursed losses, although Kobe Steel woes persisted after further confirmation of product data falsification. Shanghai Comp. (+0.2%) and Hang Seng (-0.4%) were choppy after a feeble liquidity effort by the PBoC and with Hong Kong benchmark just about kept afloat amid Chief Executive Lam’s policy address and profit tax cut announcement. Finally, 10yr JGBs were subdued amid a positive risk tone in Japan and after a mixed 30yr auction where the b/c increased but accepted prices declined from last month. PBoC injected CNY 20bln via 7-day reverse repos. PBoC set CNY mid-point at 6.5841 (Prev. 6.6273)/

Top Asian News

  • Noble Group Said in Advanced Talks to Sell Oil Unit to Vitol
  • Hong Kong Developers Won’t Get Lower Land Premiums, Lam Says
  • India Oil, Gas Service Providers Surge After Sales Tax Clarity
  • Japan Shares Rise With Nikkei 225 Closing at Highest Since 1996
  • Deutsche Bank’s Japan Investment Bank Chairman Said to Leave

Most EU bourses are trading marginally in the green, while outperformance has been seen in Spanish assets with the IBEX surging higher, led by banking names. This comes after yesterday’s press conference from the Catalan leader, whereby Puigdemont announced that he had requested the mandate to pursue independence from Spain but said it would not be implemented for a few weeks. A strong German 5 year auction could induce a bid and re-test of the intraday highs, but debt futures are still lacking any real conviction ahead of the after-hours Fed minutes and latest from Spain on Catalonia (PM Rajoy holding a news conference at 11.00BST). However, Spanish Bonos and EZ peripheral paper overall continue to outperform, with Portuguese bonds deriving additional support from well received 5 and 10 year supply, even though this was destined to draw decent investor interest as the first bond offerings since S&P upgraded the sovereign in September. Conversely, UK Gilts remain the laggards after  Tuesday’s lacklustre DMO 20 year tap, with Brexit and BoE tightening expectations all weighing on sentiment/direction

Top European News

  • Europe’s Natural Gas Traders Have a Bone to Pick With Italy
  • Pound to Climb Toward $1.40 Amid Floundering Brexit: Saxo Bank
  • Italy New Electoral Law May Not Enhance Governability: Citi
  • Smith and Nephew Gains After Report of Elliott Stake Building
  • Mondi Falls as Rising Costs, Currency Moves Weigh on Earnings

In currencies, trade has been limited early in the European session, as markets digest the Catalonian announcement, and wait in anticipation for the latest FOMC minutes. The greenback has backed off this morning, with the DXY finding support around yesterday’s lows, just ahead of 93.10. As such, Dollar counterparts have ticked up, with EUR/USD edging higher following marginal bids amid the Catalonian leader avoiding making a formal declaration of independence from Spain, to test its August 29th high. In fact, the EUR has seen a slight bid against all its counterparts, as EUR/GBP grinds higher through the 0.8940 consolidation, while EUR/CAD attacks September’s high of 1.4812, where offers are likely placed. USD/JPY has edged away from 112.50, with option expiries the theme this week, (2bln worth of expiries between 112.80 and 113.00).

In commodities,trade has also been quiet throughout the session with WTI crude futures mildly extending on yesterday’s 3% increase to briefly break above the USD 51/bbl level. Of note, today will see the release of the API crude report after US close and the monthly OPEC report at 1200BST.  Gold climbed 0.1 percent to $1,288.98 an ounce, the highest in more than two weeks.

Looking at the day ahead, China’s Xi Jinping is due to deliver a communique following the meeting of the Chinese Communist Party. The UK’s Philip Hammond will face questions in the House of Commons, including on Brexit related issues. In the US, the big focus in the US will be the FOMC meeting minutes from the September meeting. Datawise we’ll receive August JOLTS data prior to this, while the Fed’s Evans and Williams are both due to speak later on. The ECB’s Praet is also due to deliver comments this evening.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -0.4%
  • 7:15am: Fed’s Evans Speaks on Economy and Monetary Policy
  • 10am: JOLTS Job Openings, est. 6,135, prior 6,170
  • 2pm: FOMC Meeting Minutes
  • 2:40pm: Fed’s Williams Gives Community Leaders Speech

DB’s Jim Reid concludes the overnight wrap

Markets spent yesterday mostly waiting for Catalan President Carles Puigdemont’s address last night to the regional parliament. It seemed he’d increasingly been boxed in by differences of opinion within his own coalition and also the fact that 6 of the 7 Catalonian based companies in the IBEX 35 have made strong overtures towards relocating their legal bases away from the region. Given that his options had seemingly been reduced over recent days he played his hand relatively well by saying the referendum had given the region a mandate for independence but that they would hold off for now to enter into dialogue with PM Rajoy and his administration. He said “we propose the suspension of the effects of the declaration of independence for a few weeks, to open a period of dialogue”.

Later in the evening, Bloomberg reported that Catalan lawmakers (including Puigdemont) are signing a document titled “Declaration of the representatives of Catalonia”, but are delaying its implementation. On the other side, the Spanish Deputy PM said “neither Mr Puigdemont nor anyone else can draw conclusions from a law that doesn’t exist, from a referendum that hasn’t taken place…” We shall find out more soon as the Spanish PM Rajoy will convene an extraordinary cabinet meeting in Madrid today (9am local time) and will address the Spanish Parliament later in the day.

Outside of this, the big focus today will be the FOMC meeting minutes from the September meeting (2pm local time). Our US team believes inflation will be a heavily debated topic, but given the recent Fed speak, it appears that most voting members are looking through some of the recent weakness and prefer to continue the “gradual” removal of monetary accommodation. For example, based on the forecasts submitted at the meeting, 12 of the 16 FOMC participants favoured at least one more rate hike this year. Elsewhere, the Fed’s Rosengren said over the weekend that inflation “is still not at the level that I would expect it to be, but we’re definitely seeing that tight labour markets are causing wages and salaries to gradually go up as well” and that inflation “will be much closer to 2%” a few months into 2018. As a reminder, the voting Chicago Fed Evans (today) and Fed Governors Brainard and Powell (tomorrow) will be speaking over the next day or so. Data wise, the September PPI is due tomorrow, followed by the big CPI release and retail sales on Friday. So plenty of opportunity for the rate debate to move on.

Turning to the proposed US tax reforms now. When asked if the latest public rhetoric with Senator Corker would undermine his tax efforts, President Trump said “I don’t think so. I think we’re well on the way”. Further, he noted “we’ll be adjusting (the plans) a little bit over the next few weeks to make it even stronger…”. Later on, the White House Press Secretary Sanders noted that “… the final piece of legislation has not been finalised….(but) the framework is still the same”. For now we wait and watch, perhaps not for too long, as according Kevin Brady (Chairman of the Ways and Means Committee), his committee will release the tax bill “very soon” after both Chambers of Congress adopt a budget resolution later this month.

Circuling back to Brexit. The EU President Donald Tusk said the EU was not preparing for a full collapse of Brexit talks, but if talks “continue at a slow pace and that sufficient progress has not been reached, then we will have to think about where we’re heading”. Elsewhere, Chancellor Hammond has written for The Times overnight and noted that the UK government is “planning for every outcome and we will find any necessary funding and will only spend it when it’s responsible to do so”. We shall know more this Thursday post a wrap up news conference by EU negotiator Michel Barnier.

Staying with politics. Over in Italy, the Premier Gentiloni’s cabinet has called a confidence vote to pass a new electoral law which could potentially penalise the 5-Star Movement party (5SM). The new system (Rosatellum 2.0) would likely be used in next year’s election and could allow the formation of broad coalitions before the ballot. The new system allows 36% of lawmakers elected on a first-past-the-post basis and 64% via proportional representation. The 5SM candidate for PM (Luigi Di Maio) said “this is a mortal blow to democracy…the aim is to destroy us”. However, as per Reuters, the Rosatellum, even if passed, still looks unlikely to lead to a clear parliamentary majority, with opinion polls showing the centre-left, centre-right and 5SM splitting the vote three ways. For now, the voting process for the new law is expected to end this Thursday with the likely backing from the ruling PD party, Berlusconi’s opposition centre-right Forza Italia, the Northern League and the small centrist Popular Alternative (AP) group. Then the bill will go to the upper house senate where the government apparently has no clear majority.

This morning in Asia, markets are following the positive lead from the US. The Nikkei (+0.26%), Kospi (0.86%), ASX 200 (+0.61%) and Shanghai Comp. (+0.33%) are all modestly up, but the Hang Seng is broadly flat as we type.

Turning to market performance yesterday. US equities rebounded towards its record high, with the S&P 500 (+0.23%), Dow (+0.31% to a fresh all time high) and Nasdaq (+0.11%) all up slightly. Within the S&P, gains were led by the utilities and consumer staples sector with minor offset from the consumer discretionary sector. Wal-Mart jumped 4.47% after announcing a US$20bln share buyback (c8% of market cap) with positive guidance to its e-commerce sales. European equities broadly softened yesterday ahead of Catalan President’s address which took place after market hours. The Stoxx 600 (-0.01%), CAC (-0.04%) and DAX (-0.21%) dipped marginally, while the IBEX fell 0.92% but the FTSE 100 advanced 0.40%.

Bond markets were mixed but little changed. Core 10y bond yields were broadly flat (UST +0.2bp; Bunds -0.2bp; OATs unch), while Gilts (+0.6bp) and peripherals such as Italian BTPs (+1bp) and Spain (+1.5bp) were slightly higher. At the 2y part of the curve, Bunds and OATs were broadly flat, but Gilts and Spanish yields rose 1.7bp and 2.3bp respectively.

Turning to currencies, the US dollar index fell 0.41% while Euro and Sterling gained 0.58% and 0.46% respectively, partly aided by higher than expected macro data and the more conciliatory tone from the Catalan President’s address. WTI oil rose 2.70% to US$50.89/bbl ahead of EIA data, which are expected to show crude inventories declined for a third week. Precious metals were slightly higher (Gold +0.31%; Silver +0.90%) while other base metals were mixed but little changed (Copper +0.56%; Zinc +0.67%; Aluminium -0.93%).

Away from markets, the Netherlands has just formed a new coalition government 208 days after the actual election. Mark Rutte of the People’s Party for Freedom and Democracy will lead the coalition along with three other parties, although with only a 1 seat majority (76 out of 150) in the parliament. As per the FT, some of the government’s early focus include: i) support the unity of the remaining 27 EU members and protect the interests of the Dutch fishing sector and ii) any common Eurozone debt instruments are undesirable, in part as all member states cannot shift the negative impact of their policies onto other countries.

Looking at the day ahead, China’s Xi Jinping is due to deliver a communique following the meeting of the Chinese Communist Party. In Europe the final September CPI revisions for Spain are due. Onto other events, The UK’s Philip Hammond will face questions in the House of Commons, including on Brexit related issues. Across the pond, the big focus in the US will be the FOMC meeting minutes from the September meeting. Datawise we’ll receive August JOLTS data prior to this, while the Fed’s Evans and Williams are both due to speak later on. The ECB’s Praet is also due to deliver comments this evening.

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed up 5.30 points or .16% /Hang Sang CLOSED DOWN 101.26 pts or .36% / The Nikkei closed UP 57.76 POINTS OR .28/Australia’s all ordinaires CLOSED UP 0.58%/Chinese yuan (ONSHORE) closed WELL DOWN  at 6.5910/Oil UP to 50.93 dollars per barrel for WTI and 56.69 for Brent. Stocks in Europe OPENED RED EXCEPT SPANISH IBEX .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.5910. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5803 AND BOTH YUANS ARE WEAKER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

North Korea is planning to fire multiple short range missiles next week around the time of the 29th Chinese Congress

(courtesy zerohedge)

North Korea Preparing To Fire Multiple Short-Range Missiles Next Week: Report

North Korea is preparing to fire multiple short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18, the Seoul-based Asia Business Daily reports, citing an unidentified person. According to the newspaper, the U.S. and South Korean militaries have recently spotted about 30 Scud rockets being moved from Hwangju, south of the capital Pyongyang, to a missile maintenance facility in the western coastal city of Nampo.

More from the report, google translated:

According to the authorities, the ROK-US military intelligence agency captured the process of transferring 30 Scud missiles deployed in the Hwangju area of ??North Hwanghae province to a missile repair facility in Jamsun, West Sea, Nampo, through information assets. It is unusual for North Korea to massively move Scud missiles.

The Jangjin missile factory, which North Korea refers to as the Taesung Machinery Factory, is the most important missile production plant in North Korea, producing a variety of missiles such as scud and labor. Kim Jong-un inspects the Jamsil plant in March last year, when the North Korean Workers’ Party chairman passed a resolution imposing sanctions on the UN Security Council, emphasizing that “the working class should shine forth the immortal achievements of the followers with high productivity.” to be.

 

The US military says the signs of North Korea ‘s massive missile launch are similar to those of a Frog rocket launched in March 2014. It is predicted that the missile will be launched in a bunch of scud missiles to avoid blaming the international community for the long-range ballistic missile provocation and to check off the multinational offshore power gathering near the Korean peninsula.
Some argue that Scud missiles are intended to be upgraded to Scud-ER missiles. On September 5, last year, North Korea shot 1000 kilometers of Scud-ER in Hwangju. It is the first time Korea and America have caught the test launch of the Scud-ER, which has improved the Scud. At the time, North Korea reported that “the drill was conducted to limit the range of the missile to the port and airfields of South Korea, where nuclear weapon equipment is being used.”

 

Scud-ER missiles are equipped with various aids to increase the precision of the ASBM combined with ballistic missiles, and may threaten the US military reinforcements deployed on the Korean Peninsula in case of emergency. When a satellite receiver (GPS) receiver is mounted on the Scud-ER missile, the ground stationary target can be struck precisely. North Korea succeeded in precise induction by attaching a GPS receiver to a new 300mm radial tube.

As Bloomberg adds, while launching dozens of short-range rockets simultaneously is unusual, it’s not unprecedented. In March 2014, Kim Jong Un’s regime fired 71 of them in a single week. Such a move would also show how North Korea is capable of various types of provocation, having spent the past few months testing missiles that could potentially deliver a nuclear warhead to the U.S. mainland.

Firing the missiles would be an act of protest against the U.S. and South Korea’s joint military exercises, which include mobilizing key American assets such as aircraft carriers, the daily said. Such a launch would be deemed a substantial act of provocation by the White House and would lead to another sharp round of escalations and potential retaliation by the Trump administration.

end

b) REPORT ON JAPAN

The following is a huge story and may be our black swan event globally:  Kobe steel collapses after admitting it falsified data on its copper, aluminum and iron products.  This should cause the recall of millions of products and place a huge dent in faith in Japanese products.

(courtesy zerohedge)

Kobe Steel Collapses 37% After Admitting Falsifying Data: “Could Destroy International Faith In Japanese Manufacturing”

Japan’s third-biggest steel producer is in trouble. After admitting falsifying data about the quality of aluminum and copper it sold, shares in Kobe Steel have collapsed 37%,  -20% limit down yesterday and another -17% at the open today following news that the falsification also involved iron powder productin the biggest bloodbath the company has ever seen.

Bloomberg provides a quick Q&A:

1. What exactly did Kobe Steel falsify?
Data related to the products’ strength and durability. Kobe Steel says it discovered the falsification in inspections on goods shipped in the 12 months through August, affecting some 4 percent of shipments of aluminum and copper parts as well as castings and forgings. As yet, the company, which employs about 37,000 people, says there have been no reports of safety issues.

 

2. Was this a rogue event?
Hardly. The fabrication of figures was found at all four of Kobe Steel’s local aluminum plants in conduct the company described as “systematic.” For some items, the practice dated back some 10 years ago, according to executive vice president Naoto Umehara. Details have yet to emerge.

 

3. What do its customers say?
Here’s a taster. Toyota is “rapidly working to identify which vehicle models might be subject to this situation and what components were used,” according to spokesman Takashi Ogawa. “We recognize that this breach of compliance principles on the part of a supplier is a grave issue.” Toyota found the materials in question in hoods and doors, as did Honda Motor Co. Boeing, which gets some parts from Kobe Steel customer Subaru Corp., said there’s nothing to date that raises any safety concerns. Hitachi Ltd. said trains it has exported to the U.K. contained compromised metal as well as bullet trains in Japan. Mazda Motor Corp. also confirmed it uses aluminum from the company, while Suzuki Motor Corp. and Mitsubishi Motors Corp. all said they were checking whether their vehicles are affected.

After yesterday’s limit down open (and no shift), today’s 17% plunge following a report in the Yomiuri newspaper that Kobe may also have fabricated data on iron powder products used typically in components such as automotive gears, the stock smashed back to 12 month lows (and erased $1.7bn of the company’s $4.5bn market cap as of Friday)…

This is the biggest 2-day drop and the heaviest volume in the history of the stock…

The scandal that is reverberating through the global supply chain…

And casting a new shadow over the country’s reputation for precision manufacturing, and as The New York Times reportsthe fallout has the potential to spread to hundreds of companies.

Manufacturers of cars, aircraft and bullet trains have long relied on Kobe Steel to provide raw materials for their products, making the steel maker a crucial, if largely invisible, pillar of the Japanese economy.

 

The scandal hits a tender spot for Japan.

 

The country relies on its reputation for quality manufacturing as a selling point over China and other countries that offer cheaper alternatives. But its reputation has been marred by a series of problems at some of Japan’s biggest manufacturers.

 

Last week, Nissan Motor said unqualified staff members had carried out inspections at its factories, prompting the carmaker to recall 1.2 million vehicles, though it was not clear if the quality of the vehicles had been affected. Mitsubishi Motors and Suzuki Motor both admitted last year that they had been exaggerating the fuel economy of their vehicles by cheating on tests.

 

Perhaps the biggest blow to Japan’s reputation for quality has come from Takata, the airbag maker that was at the center of the largest auto safety recall in history, involving tens of millions of vehicles. Its faulty airbags have been blamed for more than a dozen deaths. Takata declared bankruptcy in June.

The extent of the problems at Kobe Steel are still unfolding: “The falsification problem has become an issue that could destroy international faith in Japanese manufacturing,” the Japanese financial newspaper Nikkei said in an article on Tuesday.

end

4. EUROPEAN AFFAIRS  UK/EU/BREXIT A terrific commentary from Nigel Farage who describes Teresa May as a weak partner in the Brexit process.  Nigel always and accurately states what is going on behind the scenes in the UK (courtesy Nigel Farage/London’s Telegraph) Nigel Farage: “This Is The Clearest Proof Yet That The Great Brexit Betrayal Is Under Way”

Authored by Nigel Farage, originally published in the Telegraph

Theresa May is now the EU’s Stepford Wife: subservient and submissive to their every whim

So there we have it. Theresa May does not believe in Brexit. In an interview with Iain Dale on LBC, she completely collapsed, proving incapable of answering the question of how would she vote if there was a referendum now. She simply would not answer if she would support Leave.

Everyone listening to that interview knows that the reality is that May is still a Remainer. I don’t believe it’s possible to carry out this great, historic change against a huge amount of international criticism unless you truly believe in it. Nor, as it happens, does May: in a speech on June 1 she herself said: “To deliver Brexit you have to believe it”. This is the clearest proof yet that the Great Brexit Betrayal is under way.

It is only the latest piece of evidence in a whole procession. On Monday we also found out that Boris Johnson – supposedly Brexit’s loudest cheerleader in the Cabinet – has bottled it. Last month the Foreign Secretary stated in print his demand that the UK must leave the wretched European Court of Justice (ECJ) on Day One of our exit from the EU in March 2019. But then folded like a cheap suit by backing to the hilt Theresa May’s House of Commons Brexit statement – a speech which was itself further confirmation of the great betrayal.

This came to light in her answer to the rapier-like question from Jacob Rees-Mogg MP, in which she said that the UK will still be bound by ECJ rulings during the Brexit transition period, Jacob looked somewhat deflated by this answer. She also would not deny that any new EU laws would be applicable to us, simply trying to ignore the question by saying it was ‘highly unlikely’ this this would occur.

During her parliamentary address, May admitted to MPs that Britain will still be bound by the ECJ’s rulings during the Brexit transition period, currently set to end in 2021. Not only that, but she suggested this country will also have to accept any new EU laws which are dreamt up in Brussels during this time.

In her world, this arrangement represents part of a “smooth and orderly process of withdrawal, with minimum disruption”.

To me, this demonstrates that May has become the Stepford Wife of the EU – conformist, subservient, submissive. It is woeful stuff.

The only good news of the day is that, at last, some contingency plans have been prepared for a no deal outcome. The only trouble is I simply do not believe that May has the courage to opt for this.

https://www.facebook.com/plugins/post.php?href=https%3A%2F%2Fwww.facebook.com%2Fborisjohnson%2Fposts%2F10155096885336317&width=500

Depressingly, another supposed Brexiteer in the Cabinet, Environment Secretary Michael Gove, joined Johnson, hailing May’s “strong statement” in the Commons. To him, it was as though she had just made some important breakthrough for the good of mankind when all she had done was roll over and surrender for even longer our courts and laws to a distant power.

I realise that Johnson and Gove have assumed this new anything-goes position because they want to publicly support their troubled party leader at a difficult time and, by extension, remain in government for as long as possible. Anything to keep Jeremy Corbyn out of Downing Street is the mantra.

But is there not something utterly shameless about their acquiescence? Indeed, does anyone seriously believe either man actually welcomes our remaining under the ECJ for the foreseeable future?

By putting themselves and, let’s face it, their careers first, Johnson and Gove have made clear that they have no serious interest in carrying out the will of the 17.4 million people who last year voted to leave the EU. To them, the lives of the citizens are secondary.

Michael Gove 

@michaelgove

Boris is right https://twitter.com/faisalislam/status/917450006264676358 …

In backing a proposition they don’t even agree with, they have done little more than make themselves look foolish and mocked the notion that we are an independent state.

What their actions show is that this is fast becoming Brexit in name only and, as I’ve written before, it should concern everybody that our politicians are caving in at the very time they should be standing firm.

What sort of message does it send to potential trading partners in the world that Britain is still bowing and scraping to the institution which in June 2016 we very publicly dumped?

Countries outside the EU will regard us as flaky, a shadow of ourselves, perhaps even untrustworthy. At the same time, some within the EU will smell blood, and will use our confused domestic political situation to punish us as they see fit. It is lose-lose.

With every week that passes we see May and her government dither and delay over one issue or another, and it is this sense that she is being worn down by her opponents in the EU that I find truly alarming. The fight appears to have gone out of her at the time we need it most. I wrote last month of May’s naivety in thinking that the EU even wants to do a deal with Britain. It is blatantly obvious they don’t, and that she should call their bluff and walk away. The time for appeasing Messrs Juncker, Barnier and Verhofstadt is over.

Yesterday, Theresa May became Theresa Maybe in that she left open the door to further concessions. Once again I find myself wondering whether, 16 months after we voted to do so, we have the leaders to complete the job.

 

end

 

SPAIN/CATALONIA

 

We highlighted this to you yesterday where the Central Government of Madrid is planning to exercise Article 155 in which they will try to again control of the autonomous region of Catalonia.  This will cause huge tension and we may have civil war breaking out

 

(courtesy zerohedge)

 

Spanish Government Begins Process To Suspend Catalan Autonomy

In a much anticipated televised briefing, Spanish Prime Minister Mariano Rajoy formally demanded the Catalan leader clarify whether independence has been declared, saying that is needed before he can decide what steps to take. The Spanish leader announced that the central government has moved to take the first step towards suspending home rule in Catalonia on Wednesday morning.

“Cabinet has agreed to notify the Catalan government [so that it may] confirm if it has declared independence”, he said.

And while Rajoy said that he will send a letter to the leader of Catalonia’s regional government, informing him, essentially, that the referendum was illegal, and that they are considered to have broken the law and should desist, he did not go so far as the trigger Article 155 yetAlso in his statement, Rajoy did not set a deadline for the reply.

In a veiled threat, Rajoy said the clarity was required by the constitutional article that would allow Spain to intervene and take control of some or all of Catalonia’s regional powers. The Prime Minister mentioned Article 155 of Spain’s Constitution, hours after Catalan President Carles Puigdemont declared independence for the region, and then suspended it.

“In the reply to the notification”, said Mr. Rajoy: “Mr. Puigdemont has the opportunity to respond to the clamour of petitions made to him to return to the law”.

“This notification is necessary when it comes to activating Article 155 of the Constitution”, he added.

Rajoy issued the demand Wednesday following a special Cabinet meeting to respond to an announcement from the head of the wealthy Catalonia region that he was proceeding with a declaration of independence but was suspending it for several weeks to facilitate negotiations.

According to Bloomberg, making a formal demand on a regional president to correct his behavior, or to change his administration’s policies, is a necessary step toward possibly suspending his regional government under Article 155 of Spanish Constitution. The central government can only advance in this action if response from regional president is unsatisfactory.

According to various observes, it is rumored that the Catalan leader, Carles Puigdemont, will ignore Spain’s demand at which point Article 155 may be properly exercised, which would empower the government in Madrid to suspend the autonomy of the regional government and call new elections.

The FT reports: “If the government uses Article 155 to curtail Catalonia’s powers, it would be a significant escalation of a tense conflict between Barcelona and Madrid that threatens to turn into a severe constitutional crisis”.

end

Early this afternoon, Madrid gives 5 days to Catalonia whether they have declared independence

Madrid Gives Catalonia 5 Day Ultimatum To Clarify If It Declared Independence

With Spain’s prime minister having opened earlier in the day the path for Madrid to use a constitutional “nuclear option” to suspend Catalonia’s autonomy, demanding that the regional government makes clear whether it considers itself independent, moments ago Spain’s Prime Minister Mariano Rajoy gave Catalan President Carles Puigdemont a five day ultimatum to clarify whether he actually declared the region’s independence in his speech devoted to the highly controversial referendum, and another 3 to “rectify it.”

The news comes after Rajoy said earlier on Wednesday that the cabinet of ministers asked for clarification on the issue of autonomous region’s independence.  As reported earlier, Rajoy decided to take the first step towards triggering Article 155 of the Spanish constitution, which would give Madrid previously unused powers to take control of Catalonia’s regional government, after an emergency cabinet meeting on Wednesday.

Rajoy said his formal request for clarity was “necessary when activating Article 155” and would dictate the next steps in the crisis to “offer certainty to the citizens”.

Using Article 155 to suspend Catalan autonomy would deepen the constitutional crisis in Spain since Catalonia held a contested referendum on independence on October 1. Spain’s government says Catalonia’s independence drive is unconstitutional.

The prime minister also said that the “illegal referendum”  has failed, adding that Catalan authorities lack the legitimacy to propose a unilateral declaration of independence. He underlined that the vote undermines our democracy, Spanish unity and the Statute of Catalonia.

Meanwhile, as AP reports, there were signs that the government was trying to take some steps to de-escalate the situation. Pedro Sanchez, the head of the opposition socialists, said on Wednesday that his party and the ruling centre-right PP party had agreed to talks to renegotiate laws governing regional autonomy.

He said there would be six months of talks on reforming the constitution, followed by a debate in parliament, adding that his party wanted a constitutional reform to “allow for Catalonia to remain a part of Spain”.

Also on Wednesday, Puidgemont told CNN his regional government is prepared to have talks on independence without preconditions with Spain. To date, Carles Puigdemont has repeatedly said that the right to self-determination must be on the table in any talks. Spain, in turn, says it can’t discuss an independence referendum as it goes against the constitution.

Puigdemont said Wednesday that Spain and Catalonia should “have no prior conditions to sit down and talk.”

Separately, European Commission vice-president Valdis Dombrovskis said that Catalonia’s separatist authorities have appealed to Brussels to help mediate with Madrid but Mr Rajoy has not sought EU help.

“The commission is following closely the situation in Spain, and reiterates its earlier call for full respect of the Spanish constitutional order,” he said. “We are supporting the efforts to overcome division and fragmentation, to ensure unity and respect of the Spanish constitution.”

Late on Tuesday, Catalan leader Carles Puigdemont asked for the mandate to declare independence from Spain, saying millions of voters supported the idea. However, he said that the effect of the independence declaration was suspended to continue talks with Madrid.  Alfonso Dastis, Spain’s foreign minister, said Puigdemont’s speech amounted to a “trick to say one thing and do the opposite”, without giving further details of the government’s plans.

 

 

 

 

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

Turkey/USA

Relations between Turkey and USA now at  an all time low as Turkey sentences a Wall Street Journalist to jail in absentia for terrorist propaganda.

(courtesy zerohedge)

Turkey Sentences Wall Street Journal Reporter To Jail For Terrorist Propaganda

A Turkish court has just fanned the flames of an incipient diplomatic crisis between the US and NATO’s most problematic member, when it found a Wall Street Journal reporter guilty of engaging in “terrorist propaganda” in support of a banned Kurdish organization. Ayla Albayrak was sentenced to more than two years in prison for writing a 2015 story about clashes between Turkish security forces and Kurdish separatists in the country’s restive southeast.

While charges have been pending against the reporter – who presently resides in New York and was convicted in absentia – for more than a year, the decision will promptly be interpreted by the US as the latest recrimination in a spat that began last week when Turkey arrested a local employee at the US consulate in Istanbul on terrorism-related charges, alleging he was a supporter of Fehtullah Gulen, an Turkish cleric living in self-imposed exile in the US who Turkish President Recep Tayyip Erdogan has blamed for last year’s coup attempt. The arrest prompted the US to suspend visa issuance for Turkish citizens, a move that was swiftly reciprocated by the Turkish government. On Monday, Turkey announced charges against another US embassy employee, sending the Turkish lira crashing the most since the July 2016 failed “coup”, while local stocks and bonds tumbled in sympathy.

WSJ Editor in Chief Gerry Baker slammed the Turkish court’s decision” “This was an unfounded criminal charge and wildly inappropriate conviction that wrongly singled out a balanced Wall Street Journal report,” said Baker. “The sole purpose of the article was to provide objective and independent reporting on events in Turkey, and it succeeded.”

The reporter, Ayla Albayrak, has dual Finnish and Turkish citizenship. On Aug. 19, 2015, WSJ published an Albayrak story titled “Urban Warfare Escalates in Turkey’s Kurdish-Majority Southeast.” The story and an accompanying video reported on the state of a conflict in Silopi, Turkey, between Turkish security forces and the outlawed Kurdistan Workers’ Party, or PKK. It included interviews with the local mayor and residents, a Turkish government official, as well as a representative of an organization Turkey says is the youth unit of the PKK. The PKK is considered a terrorist group by both Turkey and the UK.

“Given the current climate in Turkey, this appalling decision shouldn’t have come as a surprise to me, but it did,” said Ms. Albayrak.

Trump and Erdogan discussed the improving US-Turkey relationship during a press conference in Washington earlier this year (which in retrospect could have gone better) and Trump offered his personal congratulations to Erdogan after the Turkish president won a referendum vote to retool the country’s constitution and dramatically expand his own powers. However, Turkey has been frustrated by Trump’s refusal to turn over Gulen, as well as a local prosecutors’ decision to charge members of Erdogan’s security detail with assault for attacking a group of Kurdish protesters during Erdogan’s Washington visit.

As part of the article she was convicted for, Albayrak interviewed a person who described herself as a member of the Patriotic Revolutionary Youth Movement, or YDG-H, which the Turkish government says is the youth unit of the PKK. She has maintained that her reporting was based solely on objective fact, and didn’t represent advocacy for the separatists’ cause.

WSJ points out that the case is a rare example of Turkey bringing terrorism charges against a reporter working for a Western media outlet. Deniz Yücel, a prominent German-Turkish journalist for newspaper Die Welt, was arrested in Istanbul in February under terrorism suspicions and remains in pretrial detention.

Turkey’s crackdown on the press has intensified in recent years. Amnesty International and other rights groups say Turkey has more journalists jailed than any other country in the world. Since last summer’s coup attempt, authorities have closed more than 150 media outlets citing Erdogan’s state of emergency.

Turkey is ranked 155 on Reporters Without Borders Press Freedom Index this year, worse than Russia or Pakistan.

* * *

Meanwhile, after tensions eased modestly following yesterday’s crash in the Turkish Lira, which as noted above plunged as much as 8%, its biggest one day drop since the July 2016 “attempted coup”, which however promptly drew the Buy the Dippers out of the woodwork, news of the sentencing launched another major round of selling, and in light of the daily tit-for-tat deterioration in diplomacy, this time buyers of Turkish assets may just think twice.

end

6 .GLOBAL ISSUES 7. OIL ISSUES 8. EMERGING MARKET

VENEZUELA

We are now in the last stages in the death of the economic affairs of Venezuela.  on the black market one USA dollar buys 26,800 bolivars, a 900% loss of purchasing power in one year

(courtesy zero hedge)

This Is What The Death Of A Nation Looks Like: Venezuela Prepares For 2,300% Hyperinflation

Back in January 2016, we showed what the collapse of Venezuela looks like, when in addition to charting Venezuela’s imploding currency (which back then was trading at a positive expensive 941 bolivars to the dollar), we presented what at the time was the IMF’s latest Venezuela inflation forecast, which stunned us as it surged from 275% in the just concluded 2015 to a whopping 720% at the end of 2016.

Fast forward nearly two years until today, when the IMF released its latest estimate of what it believes will happen to Venezuela’s economy in the coming year and a half. What is striking, besides the fact that Venezuela has somehow still managed to avoid bankruptcy, is that the IMF now expects Venezuela’s hyperinflation to reach a staggering 2,349% in 2018, after rising by “only” 626% this year, the highest estimate for any country tracked by the IMF. While the South American country stopped reporting economic data in 2015, the IMF estimates that last year inflation clocked in around 254%, a number which is set to soar in the coming years for obvious reasons.

At the same time as residents scramble to find alternative currencies to the local paper which will lose all of its purchasing power over the next year, the IMF predicts the “intensification of the political crisis in Venezuela” will lead to a further decrease in economic output. As a result, GDP is expected to shrink 6% in 2018, after dropping an estimated 12% in 2017.

And, as oil production declines and uncertainty increases, unemployment is forecast to increase to about 30% in 2018, also the highest and followed by South Africa’s 28% and Greece’s 21% .

As Bloomberg adds, the Bolivarian Republic isn’t current with most of its key economic statistics, leaving economists scant data to crunch.

Of course, a far better indicator of the hyperinflation in Venezuela is not some forecast from the always wrong IMF, but what is taking place on the country’s currency black market, where as of today, 1 dollar buys 26,808 bolivars on the black market, up from 3,164 at the start of the year, or a nearly 9-fold loss in purchasing power in under a year.

Before Venezuela’s new legislative super body took over the functions of the country’s only remaining opposition-run institution this year, the sidelined National Assembly had started publishing its own inflation index due to the lack of official data. Bloomberg’s Cafe Con Leche Index puts the annual rate at 650%.

Meanwhile, as we wait for the long-overdue Venezuela bankruptcy, here is a photo of an empty carton of eggs sitting on an empty shelf at a supermarket in the Chacao district of Caracas: the sad culmination of every socialist regime.

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 am

Euro/USA   1.1835 UP .0022/ REACTING TO SPAIN VS CATALONIA/REACTING TO  +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES  RED EXCEPT SPAIN  

USA/JAPAN YEN 112.15 DOWN 0.206(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/   

GBP/USA 1.3201 DOWN .0008 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2502 DOWN .0009 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 22 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1835; / Last night the Shanghai composite CLOSED UP 5.30 POINTS OR .16%      / Hang Sang  CLOSED DOWN 101.26 OR .36%   /AUSTRALIA  CLOSED UP 0.58% / EUROPEAN BOURSES OPENED ALL RED EXCEPT SPAIN 

The NIKKEI: this WEDNESDAY morning CLOSED UP 57.76 POINTS OR .28% 

Trading from Europe and Asia:
1. Europe stocks  OPENED  IN THE RED EXCEPT SPAIN

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 101.26 POINTS OR .36%  / SHANGHAI CLOSED UP 5.30 POINTS OR .16%    /Australia BOURSE CLOSED UP 0.58% /Nikkei (Japan)CLOSED UP 57.76 POINTS OR .28%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1290.20

silver:$17.14

Early WEDNESDAY morning USA 10 year bond yield:  2.336% !!! DOWN 3  IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.871, DOWN 2 IN BASIS POINTS  from MONDAY night. (POLICY FED ERROR)

USA dollar index early WEDNESDAY morning: 93.07 DOWN  22 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 2.332% DOWN 7 in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.066%  UP 1  in   basis point yield from TUESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.635% DOWN 6 IN basis point yield from TUESDAY 

ITALIAN 10 YR BOND YIELD: 2.165 UP 4 POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.464% UP 2  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM

Euro/USA 1.1842 UP .0030 (Euro UP 30 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.45 UP 0.102(Yen DOWN 10  basis points/ 

Great Britain/USA 1.3204 DOWN  0.0004( POUND DOWN 4 BASIS POINTS)

USA/Canada 1.2515 UP .0004 Canadian dollar DOWN 4 basis points AS OIL ROSE TO $50.74

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This afternoon, the Euro was ROSE 30 basis points to trade at 1.1842

The Yen FELL to 112.45 for a LOSS of 10  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  

The POUND FELL BY 4 basis points, trading at 1.3204/ 

The Canadian dollar FELL by 4 basis points to 1.2515,  WITH WTI OIL RISING TO :  $50.74

The USA/Yuan closed AT 6.5910  the 10 yr Japanese bond yield closed at +.066% UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 0  IN basis points from TUESDAY at 2.337% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.8713 DOWN 0 in basis points on the day /

Your closing USA dollar index, 93.08  DOWN 21 CENT(S)  ON THE DAY/400 PM/BREAKS RESISTANCE OF 92.00 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for WEDNESDAY: 1:00 PM EST

London:  CLOSED DOWN  8.37 POINTS OR 0.11%
German Dax :CLOSED UP 21.17 POINTS OR .16%
Paris Cac  CLOSED DOWN 4.97 POINTS OR 0.09% 
Spain IBEX CLOSED UP 148.90 POINTS OR 1.47%

Italian MIB: CLOSED UP 201.59 POINTS OR 0.90% 

The Dow closed UP 

NASDAQ WAS closed UP   4.00 PM EST

WTI Oil price;  $50.72  1:00 pm; 

Brent Oil: 56.23 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.90 DOWN 7/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 7 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0.462%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$50.99

BRENT: $56.51

USA 10 YR BOND YIELD: 2.363%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.8952% 

EURO/USA DOLLAR CROSS:  1.1807 UP .0065

USA/JAPANESE YEN:112.43   DOWN  0.241

USA DOLLAR INDEX: 93.26 DOWN 41  cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3202 : UP 60 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2515 UP 40 BASIS pts 

German 10 yr bond yield at 5 pm: +0.462%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY

end

Janet Yellen’s favourite indicator for job growth is the JOLTS report.  Today openings pulled back from its all time high last month

(courtesy zerohedge)

US Job Openings Pull Back From All Time High

After two consecutive months of record high job openings, today’s August JOLTS report  – Janet Yellen’s favorite labor market indicator – showed a modest pullback across most categories, with the total number of job openings falling in august from 6.140MM to 6.082MM, below the 6.125MM consensus estimate, resulting in an unchanged Oct. job opening rate of 4%. Still, after nearly two years of being rangebound between 5.5 and 6 million, the latest job openings number confirms that there may be a “breakout” about what was the previous resistance level, as increasingly more jobs remain unfilled in a labor market where skill shortages and labor imbalances are becoming structural.

The number of total job openings declined modestly by 58,000, increasing in health care and social assistance (+71,000) and in durable goods manufacturing (+31,000), while job openings decreased in other services (-95,000), educational services (-51,000), and non-durable goods manufacturing (-48,000). The number of job openings increased in the Midwest region. Now if only employers could find potential employees that can pass their drug test

The rest of the report was just as subdued, with the pace of hiring reversing last month’s increase, declining by 91,000 to 5.430 million…

… pressuring the pace of hiring lower from 3.8% in July to 3.7% in August. According to the BLS, the number of hires was little changed for total private and for government. The number of hires was little changed in all industries. Hires decreased in the Northeast region.

On an annual basis, the pace of hiring slowed down modestly, declining to 2.7% Y/Y in August, down from 3.6% in July.

The other closely watched category, the level of quits – which indicates workers’ confidence they can leverage their existing skills and find a better paying job – also reversed last month’s increase, and in  declined from 3.194MM to 3.124MM, suggesting workers are feeling less confident about their job skills than the previous month. The number of quits was little changed for total private and for government. Quits decreased in information (-14,000) and mining and logging (-6,000). In the regions, the number of quits increased in the West but decreased in the South.

And with a total 5.2 million separations (a 3.6% rate), this means that there were 1.7 million layoffs and discharges in August, little changed from July. The layoffs and discharges rate was 1.2 percent in August. The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges level decreased in state and local government education (-11,000) and federal government (-4,000). The number of layoffs and discharges was little changed in all four regions.

Finally, and perhaps most notably, the Beveridge Curve (job openings rate vs unemployment rate), appears to be gradually normalizing after a nearly decade-long “drift” from its conventional pattern. From the start of the most recent recession in December 2007 through the end of 2009, the series trended lower and further to the right as the job openings rate declined and the unemployment rate rose. In August 2017, the unemployment rate was 4.4 percent and the job openings rate was 4.0 percent.

 

Supposedly Trump asks for a huge 10 fold increase in the uSA nuclear arsenal.

(courtesy zerohedge)

Trump Once Asked The Pentagon For A ‘Tenfold’ Increase In US’s Nuclear Arsenal

Apparently, possessing the largest nuclear arsenal in the world isn’t enough for President Donald Trump. To wit, NBC News is reporting that Trump had asked for a nearly tenfold increase in the US’s nuclear arsenal during a Pentagon defense briefing in July involving several of the administration’s most-senior officials.

According to the officials present at the meeting, Trump’s advisers, among them the Joint Chiefs of Staff and Secretary of State Rex Tillerson, were surprised by Trump’s request, and quickly explained the legal and practical impediments to a nuclear buildup and how the current military posture is stronger than it was at the height of the build-up. In interviews. The president reportedly relented, and no such expansion is planned.

The description of the meeting was presumably leaked to NBC by thesame sources who furnished the story about Tillerson’s now-infamous “fucking moron” comment. NBC reported that officials who lingered behind after the contentious July 20 security review heard Tillerson call the president a moron – suggesting that Tillerson made the comment in response to Trump’s “nuclear vision.”

However, NBC clarified that it’s unclear which portion of the Pentagon briefing prompted Tillerson’s comment because officials who attended the two-hour session said it included a number of tense exchanges.

The revelation comes as the US and South Korea are bracing for North Korea to test more short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18. Trump also recently revealed that his administration wouldn’t certify the Iran deal, leaving it to Congress to decide if the country has complied with the terms of the 2015 multilateral Iranian nuclear deal.

Trump convened a meeting Tuesday with his national security team in which they discussed “a range of options to respond to any form of North Korean aggression or, if necessary, to prevent North Korea from threatening the US and its allies with nuclear weapons,” according to the White House.

Several people who attended the meeting said they didn’t believe the president’s comments represented a literal desire for the military to increase its stockpiles of nuclear missiles, but instead were rooted in Trump’s limited und nuclear issues. The remark followed a presentation comparing the US’s nuclear capabilities with those of Russia.

Two officials present said that at multiple points in the discussion, the president expressed a desire not just for more nuclear weapons, but for additional US troops and military equipment.

As NBC pointed out, any increase in America’s nuclear arsenal would not only break with decades of US nuclear doctrine but also violate international disarmament treaties signed by every president since Ronald Reagan, potentially triggering the first nuclear arms race since the end of the Cold War.

“If he were to increase the numbers, the Russians would match him, and the Chinese” would ramp up their nuclear ambitions, Joe Cirincione, a nuclear expert and MSNBC contributor, said, referring to the president.

 

“There hasn’t been a military mission that’s required a nuclear weapon in 71 years,” Cirincione said.

Of course, this isn’t the first time that Trump suggested the nuclear arsenal should be expanded. Before the inauguration, then president-elect Trump tweeted that the US “must greatly expand its nuclear arsenal.” It’s also not the first time that the president reportedly demonstrated ignorance about nuclear weapons policy. MSNBC reported that Trump once asked advisers why the US didn’t use its nuclear arsenal more often.

Trump tweeted a video of himself and Vice President Mike Pence leaving the Pentagon following the July 20 meeting.

According to NBC, the July 20 meeting was the second in a series of national security-focused meetings that reportedly left Trump’s military advisers feeling frustrated by the president’s ignorance about foreign policy issues.

That meeting followed one held a day earlier in the White House Situation Room focused on Afghanistan in which the president stunned some of his national security team. At that July 19 meeting, according to senior administration officials, Trump asked military leaders to fire the commander of U.S. forces in Afghanistan and compared their advice to that of a New York restaurant consultant whose poor judgment cost a business valuable time and money.

 

Two people familiar with the discussion said the Situation Room meeting, in which the president’s advisers anticipated he would sign off on a new Afghanistan strategy, was so unproductive that the advisers decided to continue the discussion at the Pentagon the next day in a smaller setting where the president could perhaps be more focused. “It wasn’t just the number of people. It was the idea of focus,” according to one person familiar with the discussion. The thinking was: “Maybe we need to slow down a little and explain the whole world” from a big-picture perspective, this person said.

The July 20 meeting was also attended by Vice President Mike Pence, Treasury Secretary Steven Mnuchin, Defense Secretary James Mattis, Chairman of the Joint Chiefs General Joseph Dunford, Vice Chairman Gen. Paul Selva, Undersecretary of Defense Patrick Shanahan, Stephen Bannon, who served then as Trump’s chief strategist, Jared Kushner who is a senior adviser to the president and Reince Preibus who was then chief of staff. Sean Spicer who was then White House spokesman, and Keith Schiller who was Director of Oval Office Operations at the time, also accompanied Trump to the Pentagon that day.

Asked for a response to the president’s comments, a White House official speaking only on the condition of anonymity, said that the nuclear arsenal was not a primary topic of the briefing. Dana White, spokesperson for the Pentagon said “the Secretary of Defense has many closed sessions with the president and his cabinet members. Those conversations are privileged.”

However, White House officials say the president supports modernization of the US’s nuclear arsenal, and clarified that his concerns weren’t about having enough nukes, but about the fact that the US stopped investing in the program.

Still, officials said they are working to address the president’s concerns within the Nuclear Posture Review, which is expected to be finalized by the end of 2017 or early next year.

 

“He’s all in for modernization,” one official said. “His concerns are the U.S. stopped investing in this.”

The Pentagon is currently undergoing the long-planned posture review. Modernizing the arsenal is a step presidents continuously take that doesn’t put the US in violation of treaty obligations, Cirincione said.

“You don’t get in trouble for modernizing. You do get in trouble if you do one of two things: if you increase the numbers. The strategic weapons are treaty limited. Two, if you build a new type of weapon that is prohibited by a treaty,” he said.

Officials present said that Trump’s comments on a significantly increased arsenal came in response to a briefing slide that outlined America’s nuclear stockpile over the past 70 years. The president referenced the highest number on the chart — about 32,000 in the late 1960s — and told his team he wanted the U.S. to have that many now, officials said.

 

 

end

This was shot down by Trump as fake news

 

(courtesy zerohedge)

 

Trump Blasts NBC For Report He Asked For ‘Tenfold’ Increase In Nuclear Arsenal

Update (9:50 am ET): Continuing the theme of attacking NBC for spreading “fake news” and hearsay, President Donald Trump in a tweet accused the network of making up yet another unflattering story about Trump and his relationships with his most senior advisers. He blasted NBC’s report as a work of “pure fiction” invented “to demean.”

Donald J. Trump 

@realDonaldTrump

Fake @NBCNews made up a story that I wanted a “tenfold” increase in our U.S. nuclear arsenal. Pure fiction, made up to demean. NBC = CNN!

Trump has regularly feuded with the media since taking office. But the latest tiff with NBC intensified after the network published a story alleging that Tillerson called Trump a “fucking moron” last week

* * *

end

 

Trump now threatens to pull the NBC broadcast license after the fake 10 x nuke story

 

(courtesy zerohedge)

Trump Threatens Withdrawal Of NBC Broadcast License After “Fake” Tenfold-Nuke Story

Update (10:10 am ET): Continuing the theme of attacking NBC for spreading “fake news” and hearsay, President Donald Trump in a tweet accused the network of making up yet another unflattering story about Trump and his relationships with his most senior advisers. He blasted NBC’s report as a work of “pure fiction” invented “to demean.”

And, ratcheting up his feud with the network, Trump questioned if it might be appropriate to revoke the network’s broadcasting license, adding that the network’s shoddy reporting is “bad for the country.”

Donald J. Trump 

@realDonaldTrump

Fake @NBCNews made up a story that I wanted a “tenfold” increase in our U.S. nuclear arsenal. Pure fiction, made up to demean. NBC = CNN!

9:45 AM – Oct 11, 2017 Twitter Ads info and privacy

Donald J. Trump 

@realDonaldTrump

With all of the Fake News coming out of NBC and the Networks, at what point is it appropriate to challenge their License? Bad for country!

9:55 AM – Oct 11, 2017 Twitter Ads info and privacy

Trump has regularly feuded with the media since taking office and has threatened to revoke White House press credentials on several occasions. But the latest tiff with NBC intensified after the network published a story alleging that Tillerson called Trump a “fucking moron” last week

In another tweetstorm Trump equates the 5.2 trillion USA stock market gains to him ignoring the obvious manipulation by the bankers.  He is now stating that if Congress gives him his tax cuts, then citizens could expect more gains on the stock market. Trump also hints that help from the Democrats is off the table..

(courtesy zerohedge)

 

 

 

 

 

Trump’s Touts “$5.2 Trillion” In Stock Gains, Promises More If “Congress Gives Us Massive Tax Cuts”

In what appears to be a desperate, early-morning marketing push to avoid the embarrassment of his tax reform package meeting the same fate as his Obamacare repeal effort, Trump released the following tweet storm touting the “unprecedented $5.2 trillion” in stock market gains since his election and promised those gains would “grow by leaps and bounds” if “Congress gives us the massive tax cuts (and reform) I am asking for.”

“Stock Market has increased by 5.2 Trillion dollars since the election on November 8th, a 25% increase. Lowest unemployment in 16 years and if Congress gives us the massive tax cuts (and reform) I am asking for, those numbers will grow by leaps and bounds.”

 

“It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election.Need tax cuts”

Donald J. Trump 

@realDonaldTrump

Stock Market has increased by 5.2 Trillion dollars since the election on November 8th, a 25% increase. Lowest unemployment in 16 years and..

Donald J. Trump 

@realDonaldTrump

…if Congress gives us the massive tax cuts (and reform) I am asking for, those numbers will grow by leaps and bounds. 

Donald J. Trump 

@realDonaldTrump

It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election.Need tax cuts

Of course, with a narrow lead in the Senate, Rand Paul’s rejection, Steve Bannon’s “war on the GOP establishment” and a nasty feud brewing with Senator Corker, the market is seemingly starting to question whether tax reform is possible.

And while Trump has hinted at potentially working with Democrats on tax reform, the following tweet could suggest that is now off the table.

Donald J. Trump 

@realDonaldTrump

The Democrats want MASSIVE tax increases & soft, crime producing borders.The Republicans want the biggest tax cut in history & the WALL!

Finally, just for good measure, the President also took a victory lap in his feud with the NFL by thanking Roger Goodell for caving and asking his players to stand for the National Anthem.

Donald J. Trump 

@realDonaldTrump

It is about time that Roger Goodell of the NFL is finally demanding that all players STAND for our great National Anthem-RESPECT OUR COUNTRY

So, what say you?  Is tax reform already dead or can Trump pull a rabbit out of the hat?  No matter the outcome, we know one thing for certain…it will be positive for stocks.

end

 

The best predictor of future inflation:  food prices

 

(courtesy Graham Summers/Phoenix Research Capital)

The Best Predictor of Future Inflation is Flashing by Phoenix Capital…

The Fed is dramatically understating real inflation.

As you know, I’ve been very critical of the Fed’s inflation measures for years. The official inflation measure (Consumer Price Index or CPI) does a horrible job of measuring the actual cost of living for Americans.

I have long stated that this is intentional as the purpose of CPI is to hide the true rate of inflation so the Fed can paper over the decline in living standards that has plagued the US for the last few decades.

The Fed isn’t doing this out of ignorance, either. Back in 2002, Fed researchers actually reviewed  the usefulness of its CPI metric for forecasting inflation.

The results were not pretty. In fact, the Fed discovered that its official measures of inflation (CPI and PCE) do a horrible job of predicting future inflation.

So what does predict future inflation accurately?

FOOD prices.

We see that past inflation in food prices has been a better forecaster of future inflation than has the popular core measure…Comparing the past year’s inflation in food prices to the prices of other components that comprise the PCEPI (as in Table 1), we find that the food component still ranks the best among them all

https://research.stlouisfed.org/publications/regional/02/01/Inflation.pd…

I want you to focus on these two admissions:

1)   The Fed has admitted that its official inflation measures do not accurately predict future inflation.

2)   The Fed admitted that FOOD prices are a much better predictor of future inflation. In fact food prices were a better predictor of inflation than the Fed’s PCE, non-durables goods, transportation services, housing, clothing, energy and more.

Put simply, if you want to predict inflation well… you NEED to look at food prices.

With that in mind, food inflation is on the rise. As a whole, Food and Beverage inflation has broken out of a descending wedge pattern (blue lines) in the context of a massive wedge triangle pattern (purples lines). We’re heading for a test of the upper purple line shortly.

Overall inflation will be following by a few months, but it’s coming.

Put simply, inflation is rising. And at it is going to be getting worse in the weeks and months ahead. Why do you think the $USD has dumped 10% this year already?

This is THE BIG MONEY trend today. And smart investors will use it to generate literal fortunes.

end

 

 

 

For those of you who are following the Imran/Debbie Wasserman Schultz story, we now have the wife of indicted iT staffer Imran Wan turning against her husband.  She states that he committed fraud along with polygamy

 

(courtesy zerohedge)

 

Wife Of Indicted IT Staffer Imran Awan Turns: “My Husband Committed Fraud Along With Polygamy”

Much of what you thought you knew about the events leading up to the arrest of Debbie Wasserman Schultz’s former, and now indicted, IT staffer Imran Awan just got upended by a new revelation from the Daily Caller which reported that his wife, Hina Alvi, filed a lawsuit against her husband in Pakistan accusing him of fraud.  If true, of course, this would raise questions of whether Alvi might seek, or already has, an immunity deal with the FBI in return for additional evidence and/or testimony related to her husband’s misdeeds.

As you may recall, Alvi reportedly fled the U.S. to Pakistan back in March and was temporarily detained by U.S. Customs officials when they discovered $12,000 in unreported cash in her luggage.  While moving that amount of cash is technically a felony, Alvi to was ultimately allowed to leave the country, presumably to never return.

That said, Alvi stirred rumors that she may have ‘flipped’ last month when she struck a deal with the FBI to return to the U.S. to appear at an arraignment…rumors that have seemingly now been confirmed by the Daily Caller.

The indicted husband-and-wife team of former IT aides to Democratic Rep. Debbie Wasserman Schultz sat directly across from each other at the defendants’ table in federal court Friday in Washington, D.C., but refused to look at each other.

 

Even as they are co-defendants in a U.S. case, Imran Awan’s own wife, Hina Alvi, has become the latest person to accuse him of fraud, filing papers against him in Pakistani court on Sept. 13, records obtained by The Daily Caller News Foundation show. Alvi said Awan “threatened the complainant of dire consequences, he also threatened to harm the lives of family of the complainant if she intervenes.”

 

Yet the couple entered and left the court separately, have different lawyers, and Awan’s lawyer told the judge that the husband and wife are staying “in a one-bedroom apartment and then also a house.” The Pakistani legal papers say they live in separate towns there, too.

 

“My husband Imran Awan son of Muhammad Ashraf Awan, committed fraud along with offence of polygamy,” she charges in the papers.

 

After TheDCNF sent Gowen a copy of a Pakistani news article mentioning the complaint and asked him for comment, Gowen said “your story is totally false” and “clearly part of your Trump agenda.” At TheDCNF’s request, Wajid Ali Syed, a correspondent for Pakistan’s Geo TV, then obtained Alvi’s filing in full from the Pakistani court, and it is posted below.

And here is Alvi’s statement as filed along with her lawsuit in Pakistan:

Meanwhile, within the lawsuit, we also learn that Alvi apparently only learned of Awan’s second marriage over the summer, a full two years after he was married in August 2015.

Respondent has contract a second marriage on 17-08-2015 with one Mst. Sumaira Shehzadi alias Sumaira Siddique… without obtaining prior permission. Rather he mentioned himself as bachelor in… marriage certificate, he falsely declared that he has no wife or biological children at the time of contracting second marriage. This act of the respondent was shocking for the complainant and she asked the respondent about his second marriage on which he became furious while admitting the same and said he has no need to obtain permission from the complainant.

 

He further said furiously that the complainant has no right or power to restrain him from second and even third marriage. Furthermore, the respondent threatened the complainant of dire consequences, he also threatened to harm the lives of family of the complainant if she intervenes into the affairs of the respondent.

 

The Pakistani legal motion filed by Alvi states: “A few months ago I got apprised of the fact that my husband has contracted second marriage secretly, fraudulently and without my consent with Mst. Sumaira Shehzadi Alias Sumaira Siddique Daughter of Muhammad Akram r/o Township, Lahore. The second marriage of my husband is illegal, unlawful and without justification.”

“The court has recorded the testimonies of the applicant and other witnesses,” the Pakistani news outlet ARY reported.

Of course, if the name Sumaira Siddique sounds familiar at all it’s because she is the woman that the Daily Caller previously reported had filed charges against Awan for domestic abuse and keeping her locked up in the house “like a slave.”

Last month, TheDCNF published police reports showing that two women who appeared to be in romantic relationships with Awan, but who were not Alvi, called the police on him in Virginia. One, Salam Chaudry, said she “just wanted to leave,” while the second was named Sumaira Siddique.

 

Criminal investigations involving Siddique and Awan in Virginia took place on Oct. 16, 2015 into assault, and Nov. 16, 2015 into telephone threats. Siddique called them again on July 18, 2016 and said he kept her there “like a slave.” Alvi’s lawsuit says he only married Siddique in August 2015.

So, what say you?  Just another meaningless twist in a truly bizarre case or is Imran about to learn the meaning to the saying “hell hath no fury like a woman scorned?”

end

 

California’s wine country is devastated with the Sunday fires. Officials are stating it could take years to recover

(courtesy zerohedge)

California’s “Wine Country” Could Take Years To Recover From Deadly Wildfires

Wildfires that have been raging across Northern California’s “wine country” since Sunday have destroyed at least four wineries and seriously damaged at least nine more just as the season’s harvest came to an end. The damage could leave one of the state’s signature industry’s hobbled for years, according to NBC.

Of course, assessing the scope of the damage will be impossible until the fires subside. The Napa Valley Vintners trade association has not heard from all members, especially those in the most vulnerable parts of the valley.  By the time the fires started on Sunday – accelerated by dry conditions and strong winds -about 90% grapes had been picked. And most of the remaining crop of thick-skinned cabernet sauvignon grapes not expected to be affected by the smoke.

Most wineries remain closed from power outages and mandatory evacuation orders.

What remains of the Signorello Estate winery…

At the Gundlach Bundschu – the oldest family-run winery in California, started in 1858 – in Sonoma County, workers were not sure whether the grapes above the winery survived the fires, Fox reported.

Katie Bundschu, a sixth-generation vintner, recounted a scary Monday night in which the flames licked at the perimeter of the winery but were beaten back by firefighters. A century-old redwood barn and her grandmother’s 1919 home were spared.

“The winery was in the path of the fire but escaped being engulfed by the flames. We have some damage to fix. The wine is secure in our cellars. We are cleaning up and hoping to have the power back on this week,” Bundschu said.

However, Bundschu said that her winery, while damaged, will soldier on, and was seeking to dispel rumors that the business had been utterly destroyed. With information from the affected areas trickling out, a few other wineries have sought to inform customers that their facilities can be quickly repaired and expect to be back in business soon.

Burned out wine bottles at Signorello Estates

Millions of locals and out-of-staters flock to Napa and Sonoma counties every year to sample wine, sit in mud baths and soak in the region’s natural beauty.

Even one of the four wineries that was reportedly destroyed by the fires, the Signorello Estate winery in Napa, may recover. According to Fox, its vineyard appeared to be untouched by the flames.

Signorello Spokeswoman Charlotte Milan could only confirm damage to the winery and a residence. Fortunately, the estate’s 2015 reds and 2016 whites were stored off-site.

Burned out wine bottles at Signorello Estates

Not every winery was so lucky. The Paradise Ridge Winery in Sonoma County posted that it was “heartbroken” to announce that the facility had burned.

About 12% of grapes grown in California are in Sonoma, Napa and surrounding counties, said Anita Oberholster, a cooperative extension specialist in enology at the University of California, Davis. However, the grapes grown in those counties are of the highest quality and are used in the most state’s most expensive wines.

Since the year’s harvest had already been mostly completed by the time the fires broke out, the fire did little damage to crops, though it would’ve presumably destroyed stocks of harvested grapes and wines that have already been bottles.

What’s left of the Signorello Estate winery is seen through a window

Also, since the soil was unaffected by the fires, next year’s crop should be unharmed, Oberholster said.

Sara Brooks, chairwoman of the Visit Napa Valley Board of Directors and general manager of the historic Napa River Inn, said she has had some cancellations, but expects tourism to bounce back as it did after the 2014 Napa earthquake.

“It’s heartbreaking,” she said, “It’s tough to see these places you’ve seen your whole life on fire.”

However, for some vineyards, the process of rebuilding could be painfully slow. At least 15 people have died from the fires, while 150 more remain missing. More than 1,500 buildings have been destroyed.

end

I will see you with a partial commentary THURSDAY OR FRIDAY night.

 

HARVEY


Oct 10/Gold and silver advance: gold up $8.90 and silver is up 23 cents/Catalonia delays declaring independence but Madrid states that they did declare and thus will institute article 155/South Korea announces that it has been hacked by North Korea...

Tue, 10/10/2017 - 19:15

 

GOLD: $1291.40 UP   $8.90

Silver: $17.16  UP 23 CENT(S)

Closing access prices:

Gold $1288.10

silver: $17.11

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: $1294.21 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1285.95

PREMIUM FIRST FIX:  $8.26 (premiums getting larger)

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1304.05

NY GOLD PRICE AT THE EXACT SAME TIME: $1287.05

Premium of Shanghai 2nd fix/NY:$17.00 (PREMIUMS GETTING LARGER)  

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1289.60

NY PRICING AT THE EXACT SAME TIME: $1288.75

LONDON SECOND GOLD FIX  10 AM: $1291.40

NY PRICING AT THE EXACT SAME TIME. 1292.25 ???

For comex gold: OCTOBER/

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

TOTAL NOTICES SO FAR: 2329 FOR 232,900 OZ  (7.241TONNES)

For silver: OCTOBER  1 NOTICES FILED TODAY FOR 5,000  OZ/ Total number of notices filed so far this month: 391 for 1,955,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest  ROSE BY A STRONG  1688 contracts from  186,144  UP TO 187,832   WITH RESPECT TO YESTERDAY’S TRADING (UP  23 CENTS).  THE CROOKS ARE HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS.  IT IS OBVIOUS THAT THE HUGE RISE IN PRICE YESTERDAY NEGATED ANY ATTEMPT TO COVER THAT SHORTFALL 

RESULT: A GOOD SIZED RISE IN OI COMEX  WITH THE  23 CENT PRICE RISE.  OUR BANKERS FAILED AGAIN IN THEIR ATTEMPT TO COVER ANY OF THEIR MASSIVE SILVER SHORTFALL. 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.939 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 1 NOTICE(S) FOR 5,000  OZ OF SILVER.

In gold, the open interest SURPRISINGLY  FELL BY 336 CONTRACTS DESPITE THE GOOD SIZED  RISE in price of gold ($8.00 ) .  The new OI for the gold complex rests at 513,815. IT SURE LOOKS LIKE OUR BANKER FRIENDS SEEM A LITTLE EDGY AS THEY WERE INTENT ON COVERING SOME OF THEIR HUGE GOLD SHORTFALL WHICH WILL EXPLAIN THE DROP IN OI DESPITE THE GAIN IN GOLDPRICE.

 

Result: A SMALL SIZED DECREASE IN OI WITH THE RISE IN PRICE IN GOLD ($8.00). WE PROBABLY HAD SOME GOLD SHORT COVERING BY THE BANKERS. 

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:   

Tonight , NO CHANGES  in gold inventory at the GLD/

Inventory rests tonight: 858.45 tonnes.

SLV

Today:  NO changes in inventory:

INVENTORY RESTS AT 326.898 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 STRONG  1688 contracts from 186,144  UP TO 187,832(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. THE DATA SEEMS TO SUGGEST SOME GOLD SHORT COVERING BUT IN SILVER IT IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER. AS SUCH THEY RETREATED TO HIGHER GROUND AND THEN THEY WILL TRY AGAIN.

RESULT:  A GOOD SIZED INCREASE IN SILVER OI  AT THE COMEX WITH THE  RISE IN PRICE OF 23 CENTS WITH RESPECT TO YESTERDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS 

(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 MONDAY night/TUESDAY morning: Shanghai closed up 8.61 points or .26% /Hang Sang CLOSED UP 164.24 pts or .58% / The Nikkei closed UP 132.80 POINTS OR .64/Australia’s all ordinaires CLOSED UP 0.03%/Chinese yuan (ONSHORE) closed WELL up  at 6.5792/Oil UP to 50.23 dollars per barrel for WTI and 56.30 for Brent. Stocks in Europe OPENED RED EXCEPT FTSE .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5792. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5704 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. CHINA IS EXTREMELY HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

South Korea ready to try out its new graphite “blackout bomb” which can paralyze North Korea’s antiquated power grid and yet cause no loss of life

( zero hedge)

ii) Late this afternoon will get word that North Korean stole war plans from the South Koreans as well as plans to assassinate Kim Jong- Un ( zerohedge) b) REPORT ON JAPAN

USA sends a nuclear submarine to the Korean Peninsula and will engage in more military exercises with South Korea and Japan

( zero hedge)

c) REPORT ON CHINA 4. EUROPEAN AFFAIRS i)SPAINRajoy is now set to arrest Catalan leader Puigdemont is he declares independence,  Rajoy refuses to negotiate with Catalonia ( zerohedge) ii)I have no idea what Rajoy interpreted with respect to the Puigdemont speech but he is now gung ho on stating that Catalonia has declared independence from Spain and he will now incorporate section 155 and take over affairs in that province

(courtesy zerohedge)

iii)GREAT BRITAIN/NORTH KOREA

Britain draws up plans for war with North Korea;

( Mac Slavo/SHFTPlan.com)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Russia finally accuses the uSA of pretending to fight ISIS something that we have been telling you for years.

( zerohedge)

6 .GLOBAL ISSUES

 

7. OIL ISSUES OPEC is now desperate as they call on the USA shale boys to cut production as well ( zerohedge) 8. EMERGING MARKET 9.   PHYSICAL MARKETS

i)An excellent commentary from Chris Powell who asks Steve Saville why he does not address obvious questions on rigging on the precious metals.

( Chris Powell/GATA)

ii)Jamie Dimon has called bitcoin a fraud so why are they quoting prices?( GATA/Bloomberg)

10. USA Stories

i)In line with what we have been telling you for the past several weeks:  Trump’s tax plan has no chance of passing.  Today the Corker feud and the Paul rejection has put the plan spiraling towards death.

( zerohedge)

ii)The feud between Corker and Trump intensifies with the NYTtimes releasing part of the phone recording

( zerohedge)

iii)An excellent commentary from James Rickards explaining why Janet Yellen has got her “inflation” numbers wrong. He explains the Fed’s preferred number PCE  and also highlights why these numbers are not transitory

(a good read..courtesy James Rickards)

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY FELL BY 336 CONTRACTS DOWN to an OI level of 513,815 DESPITE THE RISE IN THE PRICE OF GOLD ($8.00 RISE IN YESTERDAY’S TRADING). IT SEEMS THAT OUR BANKER FRIENDS TRIED  TO COVER SOME OF THEIR HUGE GOLD SHORTFALL WITH LIMITED SUCCESS.  OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH WE SHOULD EXPECT  GOLD TO BE STRONG THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  TINY SIZED open interest DECREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($8.00). BANKERS MILDLY SUCCESSFUL IN THEIR ATTEMPT TO COVER SOME OF THEIR GOLD SHORTFALL. 

 

IN SEPTEMBER,CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

NOW THAT WE ARE CLOSE TO THE 29TH CHINESE CONGRESS, THE BANKERS ARE TAKING NO CHANCES AS THEY START TO COVER THEIR GOLD/SILVER SHORTFALL.

We have now entered the active contract month of Oct and here we saw a GAIN of 3 contracts UP to 223 contracts.  We had 0 notices filed yesterday so we GAINED 3 contracts or 300 oz will  stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given. The low number of notices early in the delivery cycle is evidence of a lack of physical gold.

The November contract saw A loss OF 70 contracts down to 1325.

The very big active December contract month saw it’s OI LOSS OF 1261 contracts DOWN to 402,022.

We had 0 notice(s) filed upon today for  NIL oz

 VOLUME FOR TODAY (PRELIMINARY) NOT  AVAILABLE

CONFIRMED VOLUME YESTERDAY: 206,720

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI ROSE BY 1,688 CONTRACTS FROM 186,144 UP TO 187,832 DESPITE YESTERDAY’S 23 CENT RISE IN PRICE. WE HAVE HAD NO BANKER SHORT COVERING OVER THESE PAST TWO WEEKS AS THE CROOKS TRY AND  LOOSEN MORE SILVER LONGS FROM THE SILVER TREE.  THE HUGE RISE IN SILVER PRICE MEANS THAT THEY HAVE ABANDONED ALL HOPE OF COVERING AT LOWER PRICES, SO THEY REGROUP AT MUCH HIGHER PRICES WHERE THEY WILL ATTEMPT AGAIN AT COVERING. We have now entered the non active contract month of  October and here the OI LOST 2 contacts DOWN TO 520.  We had 5 notices filed on yesterday so we GAINED 3 contracts or AN ADDITIONAL 15,000 oz will stand for delivery and zero EFP’s were issued.  November saw a LOSS of 7 contract(s) and thus FALLING TO  282. After November, the NEXT big active contract month is December and here the OI GAINED 69  contracts DOWN to 143,522 contracts.

We had 1 notice(s) filed for  5,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.10/2017.

Gold Ounces Withdrawals from Dealers Inventory in oz   nil Withdrawals from Customer Inventory in oz   nil oz Deposits to the Dealer Inventory in oz    nil oz Deposits to the Customer Inventory, in oz   nil No of oz served (contracts) today   0 notice(s) NIL OZ No of oz to be served (notices) 223 contracts (22300 oz) Total monthly oz gold served (contracts) so far this month 2329 notices 232,900 oz 7.2441 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz Today we HAD  0 kilobar transaction(s)/   WE HAD 0 DEALER DEPOSIT: total dealer deposits: nil oz We had nil dealer withdrawals: total dealer withdrawals:  0 oz we had 0 customer deposit(s): total customer deposits; nil oz We had n/a customer withdrawal(s) total customer withdrawals; nil  oz  we had 0 adjustment(s) For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2329) x 100 oz or 232,900 oz, to which we add the difference between the open interest for the front month of OCT. (223 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 255,200  oz, the number of ounces standing in this active month of OCT.   Thus the INITIAL standings for gold for the OCTOBER contract month: No of notices served  (2329) x 100 oz  or ounces + {(223)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 255,200 oz standing in this  active delivery month of OCTOBER  (7,937 tonnes). WE GAINED 3 CONTRACTS OR AN ADDITIONAL 300 OZ WILL  STAND AS THE BANKERS ISSUED 0 EFP CONTRACTS.  IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER AND THIS CONTINUES ON IN OCTOBER.   THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE AND IT ALSO EXPLAINS THE LACK OF DELIVERY NOTICES IN THE EARLY PART OF THIS DELIVERY ACTIVE MONTH. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear) Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes    I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE OCTOBER DELIVERY MONTH OCTOBER INITIAL standings  Oct 10.2017 Silver Ounces Withdrawals from Dealers Inventory  nil Withdrawals from Customer Inventory  62,292.650 oz SCOTIA Delaware Deposits to the Dealer Inventory  nil oz Deposits to the Customer Inventory   600,627.490 oz BRINKS No of oz served today (contracts) 1 CONTRACT(S) (5,000 OZ) No of oz to be served (notices) 520 contracts (2,600,000 oz) Total monthly oz silver served (contracts) 391 contracts (1,955,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month    xx oz today, we had  0 deposit(s) into the dealer account: total dealer deposit: nil   oz we had 0 dealer withdrawals: total dealer withdrawals: nil oz we had 2 customer withdrawal(s): i) Out of SCOTIA: 60,298.800 oz ii) Out of Delaware: 1993.85 oz TOTAL CUSTOMER WITHDRAWALS: 62,292.650  oz We had 1 Customer deposit(s):  i) Into Brinks:  600,627.490 oz ***deposits into JPMorgan have stopped  again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: 600,627.490  oz    we had 0 adjustment(s) The total number of notices filed today for the OCTOBER. contract month is represented by 1 contract(s) for 5,000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 391 x 5,000 oz  = 1,955,000 oz to which we add the difference between the open interest for the front month of OCT. (520) and the number of notices served upon today (1 x 5000 oz) equals the number of ounces standing.  

 

.   Thus the INITIAL standings for silver for the OCTOBER contract month:  391 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(520 ) -number of notices served upon today (1)x 5000 oz  equals  4,555,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE   WE GAINED  3 CONTRACTS OR  AN ADDITIONAL 15,000 OZ WILL STAND FOR DELIVERY.  ESTIMATED VOLUME FOR TODAY:   NOT AVAILABLE CONFIRMED VOLUME FOR YESTERDAY: 59,372 CONTRACTS     Total dealer silver:  39.345 million (close to record low inventory   Total number of dealer and customer silver:   220.100 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 2.6 percent to NAV usa funds and Negative 2.3% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.5% Percentage of fund in silver:37.5% cash .+0.0%( Oct 11/2017)  2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.18% (Oct 11/2017)  3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.38% to NAV  (Oct 11/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.18%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.38%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES

Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES

oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT  854.30 TONNES

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes

Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES

Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/

Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

Sept 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

Inventory rests at 836.87 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Oct 10/2017/ Inventory rests tonight at 858.45 tonnes *IN LAST 247 TRADING DAYS: 82.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 182 TRADING DAYS: A NET  74.78 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY. *FROM FEB 1/2017: A NET  43.67 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ

OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z

Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615  MILLION OZ

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/

Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/

Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Oct 10/2017:

Inventory 326.898  million oz end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.40%
  • 12 Month MM GOFO + 1.62%
  • 30 day trend

end

Bitcoin prices for THIS MORNING:  Bid $4785.00 offer: $4806.00

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

London House Prices Are Falling – Time to Buckle Up

By janskoyles October 10, 2017 0 Comments

– London house prices fall in September: first time in eight years
– High-end London property fell by 3.2% in year
– House sales down by over a very large one-third
– Global Real Estate Bubble Index – see table

– Brexit, rising inflation and political uncertainty causing many buyers to back away from market
– U.K. housing stock worth record £6.8 trillion, almost 1.5 times value of LSE and more than the value of all the gold in world
– Homeowners and property investors should diversify and invest in gold

Editor Mark O’Byrne

In what might be a sign of things to come, London house prices have fallen for the first time in eight years.

London house sales have fallen by a third as years of frenzied bidding come to a shuddering halt.

The capital remains expensive. Housing still costs 10 times the average salary and only 50% of Londoners own their own homes, the EU average is 70%.

Currently the rest of the UK appears to be benefiting from the lack of affordability and stock in London. Buyers are moving further out of the capital in order to secure their footing on the housing ‘ladder’… no snakes here …

Last month U.K. house prices regained their fastest pace since February. A Halifax house price survey showed a 4% price rise in the three months to September compared with the same period last year.

Long-term, a fall in London prices may be an indicator that concerns over Brexit, inflation and political stability are beginning to affect the U.K property market.

This will be a hard landing for a country that is so convinced that putting all one’s eggs in the housing basket is the answer to securing and growing wealth.

‘Global Real Estate Bubble’

Last month, UBS Wealth Management published its Global Real Estate Bubble Index. London came sixth with a score of 1.77. The group concluded that London is still firmly in bubble-territory.

The research found that London house prices have climbed 15% in the last year and 45% since the financial crisis, when adjusted for inflation.

This suggests September’s fall in prices might be a signal that the top of the market is just behind us. This is no surprise when one considers both the known and unknown events on the horizon for the city.

Brexit is the most discussed threat. Foreign buyers are wary of what the future holds and there is anecdotal evidence that EU workers are being offered shorter contracts. Four years ago foreign buyers accounted for 82% of property purchases.

Brexit is the main stymie of political progress in the country.

Conferences, policy announcement and parliamentary discussions are dominated by how this may or may not play out. No-one knows what will happen, prompting many to feel uncomfortable with making major financial decisions.

This could go on for some time.

Meanwhile the Bank of England are tasked with sorting out the economy. They continue to encourage inflation and plan to raise interest rates. Thus devaluing the value of the pounds in our accounts and increasing the cost of borrowing.

It is not surprising, therefore, that it is not just in London that we are looking at the bursting of the property bubble.

Rest of the UK still climbing…according to some

London, often an indicator for things to come for the rest of the U.K., should be a beacon for the rest of the country’s housing market.

Halifax data shows in September house prices had their fastest annual rise since February. The year-on-year increase jumped a surprisingly large 4%.

Pundits believe this is an indicator that buyers are shrugging off threats of a rate hike by the Bank of England.

Others aren’t so sure. Nationwide’s own home price survey showed more subdued numbers (2%), suggesting there is a slowdown in house prices across the country, particularly in certain regions.

The pace of national price increases has slowed and is down from a peak of 10% in early 2016, to 4% today.

Halifax said future demand might be limited by ‘a squeeze on spending power from higher consumer price inflation and the high cost of property.’ However it does not think that future interest rate price rises would  affect the market.

Despite concerns over inflation stretching affordability, mortgage approvals remain at an average pace of almost 67,000 a month, little changed from 2016.

The economist Samuel Tombs of Pantheon Macroeconomics told the Guardian that he thought Halifax was way off the mark.

“Other surveys show that the pipeline of demand is soft; Rics [the Royal Institution of Chartered Surveyors] has reported that new buyer inquiries have fallen in six of the last seven months. Real wages still have further to fall over the next six months and mortgage rates will rise soon in response to the increase in banks’ funding costs.”

Obsession with home ownership 

Last week Prime Minister Teresa May referred to the ‘British Dream’. Judging by Twitter few understood what she meant.

If there is such a thing it has to be the desire to own the roof over your head and then sell it at a ridiculous profit.

In the UK this comes at a serious price, but one which few of us question. Often first-time buyers have to rely on family to help, then be comfortable with a 25-year mortgage and restrict their lifestyles well into middle-age.

Ten years later they have to do it all again as a baby’s on the way, house prices are climbing and they want to climb the proverbial ladder.

Failure to do this is seen as just that … a ‘failure’.

To not pursue home ownership in the UK and in Ireland is seen as pretty nuts and irresponsible.

The problem is that in the UK, renting is enough of an incentive to put yourself in such a dire financial situation. It is very different to continental Europe. In the UK and Ireland few leases are long-term and landlords hold the majority of rights. As a result you feel very insecure in your home.

Brits and Irish want to feel financially secure. Ironically they get this security by getting themselves into hundreds of thousands of pounds worth of debt. But the ‘wealth effect’ is so desired and so encouraged by economists, that this level of debt is both expected and accepted.

The British government has encouraged this. For them this is what capitalism is all about. Home ownership and buy-to-let mortgages. But it may run people and perhaps the economy into the ground.

Consider the number of people who subsidise their lives, savings and retirement with the ‘wealth’ they have locked up in their homes. In 2015 older homeowners borrowed £4.2m a day using equity release loans as pensions are no longer covering retirement costs.

We can only expect this to get worse given the looming pension crisis.

Pensioners will be royally scuppered if they find themselves in negative equity, with no pension to support them. Especially so given a considerable number of pension funds and investment bonds rely on UK property to generate income.

Government has a lot to answer for

The country is consistently coming under fire for a lack of housing supply and lack of affordability.

Earlier this week the government announced plans to extend its “Help to Buy” program to 135,000 buyers. The program offers interest-free loans to homebuyers. This will see an extra £6.7 billion pounds ($8.7 billion) of “stimulus” into the market.

Yet another example of leaders trying to unnecessarily stoke a market which results in increased inflation and higher debt levels for a country which is already one of the most indebted.

Currently the UK housing stock is worth nearly £7 trillion, more than the companies listed on the London Stock Exchange and more than the value of all the gold in the world.

The World Gold Council estimates that all the gold ever mined totaled 187,200 tonnes in 2017. At a price of US$1,250 per troy ounce, one tonne of gold has a value of approximately US$40.2 million.

Thus today, all the gold in the world is worth some $7.5 trillion dollars or £5.7 trillion pounds and less than the value of the UK housing stock.

The ridiculous valuation of the London property in particular is thanks to the government, banks and real estate businesses peddling the Greater Fool Theory.

The theory applies here as buyers bought property they thought was expensive but believed they would be able to sell it at a higher price, for significant profit to an ‘even greater fool’.

Falling house prices will make a fool out of everyone, whilst (no doubt) the government continue to make housing ‘affordable’.

Time to Buckle Up With Physical Gold

Housing in the UK is a single asset class but it accounts for two-thirds of the country’s wealth.

There is not a level in society whether government, businesses, banks or individuals that does not have skin in this game.

The figures and economic outlook suggest we need to start diversifying.

The government needs to stop being so irresponsible and no longer constantly peddle arguments for home ownership. However it is difficult politically to sell that story. Especially when all parties have realised the youth vote has major housing concerns and believes they have the right to own property.

Brexit is the main area of concern and no-one wishes to rock the property market any further. Instead homeowners need to consider how they can both protect themselves from falling prices and diversify their investments and wealth.

It is not prudent to have so much wealth caught up in one falling asset. Especially given that it is inevitable that London property will be affected by a number of issues on the horizon including rising interest rates, inflation and Brexit.

Gold is another real asset that millions of investors have placed their faith in over hundreds of years. Like housing, it is tangible. Unlike housing, it does not come with a massive debt burden and it benefits from rising inflation and uncertainties in both political and economic spheres.

News and Commentary

Gold marks over 1-week high; firm dollar curbs gains (Reuters.com)

South Korea stocks surge, leading Asian market gains (MarketWatch.com)

Germany, China lift world stocks, Spanish worries simmer (Reuters.com)

U.S. Stocks Slip, Dollar Mixed as Gold Advances (Bloomberg.com)

Jewelers Rally on Indian Rule Reversal as Peak Gold Season Looms (Bloomberg.com)


Source: Economyandmarkets.com

Italy Will Default And Create Next Deflationary Crisis (EconomyAndMarkets.com)

The Hated Dollar Resurges. But Why? (WolfStreet.com)

Questions that deniers of monetary metals market rigging won’t answer (Gata.org)

Silver price (InvestingHaven.com)

Donald Trump: Warmonger-in-Chief (Acting-Man.com)

Gold Prices (LBMA AM)

10 Oct: USD 1,289.60, GBP 977.77 & EUR 1,094.61 per ounce
09 Oct: USD 1,282.15, GBP 976.23 & EUR 1,092.01 per ounce
06 Oct: USD 1,268.20, GBP 970.43 & EUR 1,083.93 per ounce
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
04 Oct: USD 1,275.55, GBP 960.87 & EUR 1,085.11 per ounce
03 Oct: USD 1,270.70, GBP 959.00 & EUR 1,081.87 per ounce
02 Oct: USD 1,273.10, GBP 956.48 & EUR 1,084.55 per ounce

Silver Prices (LBMA)

10 Oct: USD 17.12, GBP 12.98 & EUR 14.53 per ounce
09 Oct: USD 16.92, GBP 12.86 & EUR 14.41 per ounce
06 Oct: USD 16.63, GBP 12.73 & EUR 14.20 per ounce
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce
04 Oct: USD 16.83, GBP 12.67 & EUR 14.29 per ounce
03 Oct: USD 16.61, GBP 12.53 & EUR 14.13 per ounce
02 Oct: USD 16.58, GBP 12.46 & EUR 14.12 per ounce


Recent Market Updates

– Perth Mint Gold Coins Sales Double In September
– Survey shows UK and US Pensions Crisis is Imminent
– Gold Investment In Germany Surges – Now World’s Largest Gold Buyers
– Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Safe Haven Silver To Outperform Gold In Q4 And In 2018
– Plan For Run On The Pound
– Russia Gold Rush Sees Record Reserves For Putin Era
– China Catalyst To Send Gold Over $10,000 Per Ounce?
– Gold Matches S&P 500 Performance In First 3 Quarters; Up 12% 2017 YTD
– Gold Standard Resulted In “Fewer Catastrophes” – FT
– Financial Advice From Man Who Made $1+ Billion in 1929 – Importance Of Being Patient and “Sitting”
– “Gold prices to reach $1,400 before the end of the year” – GoldCore
– Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder

END

An excellent commentary from Chris Powell who asks Steve Saville why he does not address obvious questions on rigging on the precious metals.

(courtesy Chris Powell/GATA)

The questions that deniers of monetary metals market rigging won’t answer

Submitted by cpowell on Mon, 2017-10-09 01:11. Section: 

9:27p ET Sunday, October 8, 2017

Dear Friend of GATA and Gold:

Newsletter writer Steve Saville of The Speculative Investor, who long has denied that manipulation of the monetary metals markets means much, has seized on the recent essay by Keith Weiner of Monetary Metals as the conclusive refutation of silver market analyst Ted Butler’s longstanding complaint that JPMorganChase has been rigging the silver market.

Weiner’s analysis, headlined “Thoughtful Disagreement with Ted Butler” and posted here —

https://monetary-metals.com/thoughtful-disagreement-with-ted-butler/

— argued that JPMorganChase is undertaking only ordinary arbitrage in the silver market, exploiting spreads between bid and ask prices

Saville, in commentary headlined “A Silver Price-Suppression Theory Gets Debunked” —

http://tsi-blog.com/2017/10/a-silver-price-suppression-theory-gets-debun…

— cheers Weiner’s essay and goes on to remark: “Entering a debate with someone who is incapable of being swayed by evidence that invalidates his position is a waste of time and energy, so these days I devote no commentary space and minimal blog space to debunking the manipulation-centric gold and silver articles that regularly appear.”

But when has Saville himself ever addressed evidence of manipulation of the gold and silver markets? Of course if he declines to address the evidence, he too can’t be swayed by it.

The manipulation deniers never address the evidence.

Weiner’s technical analysis is no refutation of silver market manipulation, for even if JPMorganChase is just doing arbitrage in silver, a judgment on manipulation would require knowing for whom the investment house was doing the arbitrage.

JPMorganChase’s former chief of commodity operations, Blythe Masters, said on CNBC five years ago that the investment house had no position of its own in silver and was trading only for clients:

https://www.youtube.com/watch?v=gc9Me4qFZYo

So might those clients include governments and central banks, entities with nearly infinite resources sufficient to nullify markets?

The question is compelling because filings with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission by CME Group, operator of the major futures exchanges in the United States, assert that governments and central banks are clients of the exchanges and that the exchanges give them special volume trading discounts for trading all futures contracts, not just financial futures contracts:

http://www.gata.org/node/14385

http://www.gata.org/node/14411

Do Weiner and Saville know that JPMorganChase is not trading silver futures for governments and central banks?

Do Weiner and Saville know that governments and central banks are not trading gold and gold derivatives surreptitiously?

If Weiner and Savillete think they know, they’re wrong, for the Bank for International Settlements admits that it operates as a broker in gold and gold derivatives for its member central banks:

http://www.bis.org/banking/finserv.htm

Indeed, in 2005 the director of the BIS’ monetary and economic department, William R. White, told a conference at BIS headquarters in Basle, Switzerland, that a primary purpose of international central bank cooperation is “the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful”:

http://www.gata.org/node/4279

The BIS even advertises that its services to its member central banks include surreptitious interventions in the gold market:

http://www.gata.org/node/11012

Anyone who wants to engage in honest argument about gold and silver market manipulation needs to address a few simple questions:

1) Are governments and central banks active in the monetary metals markets or not?

2) Are the documents asserting such activity genuine or forgeries?

3) If governments and central banks are active in the monetary metals markets, is it just for fun or is it for policy purposes?

4) If such activity by governments and central banks is for policy purposes, do those purposes involve the traditional objectives of defeating an independent world currency that competes with government currencies and interferes with government control of interest rates, objectives documented at length by GATA here?:

http://www.gata.org/node/14839

Of course if largely surreptitious intervention in the monetary metals markets by central banks and governments is ever acknowledged, technical analysis of those markets is meaningless, which may explain why technical analysts like Weiner and Saville avoid the crucial questions and just sneer at those who raise them.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END

Jamie Dimon has called bitcoin a fraud so why are they quoting prices?

(courtesy GATA/Bloomberg)

Dimon called bitcoin a fraud but JPMorgan is quoting prices

Submitted by cpowell on Mon, 2017-10-09 02:05. Section: 

By Matthew Levine
Bloomberg News
Friday, October 6, 2017

JPMorgan Chase & Co.’s chief executive, Jamie Dimon, famously panned bitcoin. But his bank’s clients apparently aren’t ready to dismiss it as a “fraud.”

The Wall Street firm’s widely followed morning markets note highlights the spot price for the cryptocurrency. There it sits, right below a rundown of commodities and above the 10-year Treasury yield — hardly fringe assets. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-10-06/dimon-called-bitcoin-

END

Russia is not set to block all exchanges offering to buy and sell cryptocurrencies.  Bitcoin briefly underwent a flash crash but is now back above par trading at $4795 up 66 dollars.

(courtesy zerohedge)

Bitcoin Briefly Flash-Crashes On Russia ‘Ban’ Headlines

After weeks of uncertainty surrounding Russia’s plans for cryptocurrencies, local news outlet RBC reports overnight that Bank of Russia is working with the country’s general prosecutor to block all exchanges offering Russians the opportunity to buy and sell cryptocurrency.

As CoinTelegraph reports, first deputy of the central bank, Sergey Shvetsov, said during an international finance forum in Moscow:

“It’s obvious that when a pyramid (scheme) grows, interest in this pyramid hots up with the high rate of return.”

Echoing previous comments, Shvetsov added that the pyramid description is a result of “eyeing Bitcoin’s price dynamics over the past two years.”

The move is the most sweeping yet from Russian authorities regarding cryptocurrency access for citizens, and echoes the less coordinated bans of various industry resources common until last year. The debate as to how to handle cryptocurrency has raged throughout 2017 in Russia, with various high-profile entities giving conflicting views as to what the future will hold in terms of regulation.

This regulation is ostensibly due to go public by the end of the year.

In the meantime, not just private investors, but also the business sector faces “too high a risk” using cryptocurrency, Shvetsov said.

“We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors),”

Financial instruments based on cryptocurrency are “impossible to support,” he continued, adding measures would be taken to “restrict” the ability of the Russian domestic market to interact with them.

The reaction was varied. As Coinivore notes, Bitcoin prices flash-crashed on CoinDesk…

Notably, this would be the third time that the country has issued some form of ban against Bitcoin and digital currency in the past several years.

Russia’s Central Bank just approved its first exchange “Voskhod,” so this is likely a temporary ban until regulations are set which will likely ban normal Russian citizens from investing into cryptocurrency due to high volatility.

However, Bitcoin is now higher on the day (bouncing back as it did from China’s ban), and as BitStamp data shows, not every exchange shows the flash-crash…

It seems the market for Bitcoin is quick to realize that the dcecentralized nature of the cryptocurrency framework means that whiole short-term demand from localized exchange closures may hobble prices, it does not affect the overall value of the independent currency (just as many have found out since China blocked exchanges).

We would not expect this to be the last nation to attempt to ‘ban’ Bitcoin. As Cybersecurity expert John McAfee warnscryptocurrencies may encompass the sum of all fears for governments the world over.

With no centralized exchange to control or influence, national authorities around the world will find it increasingly difficult to determine a given citizen’s income and thus their income tax owed, undermining a critical source of government revenue.

Our income taxes are the greatest source of revenue, but if everybody’s using Bitcoin, the government doesn’t know what your income is. They can’t tax it, and if you choose to say I didn’t have anything, they cannot prove otherwise,” McAfee told CalvinAyre.com.

“It will eventually frighten every nation state, but it doesn’t matter what they do, there’s no way you can create a law or to legislate something that will stop Bitcoin or any cryptocurrency because technically, you cannot,” he added.

The often outspoken and eccentric McAfee did highlight the need for some regulation, however, preaching caution over the latest trend of government-sponsored Initial Coin Offerings (ICOs).

“China is right about one thing, the ICOs, the initial coin offerings, there are lots of scams, lots of people who are fraudulently taking money from other people, so that’s got to stop. But I don’t think governments can stop it. We as users and the bitcoin community have to be self-regulated,” McAfee said.

“The fear is in the fear of governments and central banks, like JPMorgan, which is America’s largest bank,” he said. “The CEO is so concerned that he acted like a madman and called Bitcoin a fraud, said someone is going to get killed eventually. It’s like, what are you talking about? It’s nonsense.”

McAfee concluded:

“So banks and governments are the ones that have the fear. Well they should have some fear. They have taken control and power away from their citizens for hundreds of years. It’s time that we, as citizens, took that power back.”

Your early TUESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    i) Chinese yuan vs USA dollar/CLOSED WELL UP AT 6.5792/shanghai bourse CLOSED UP AT 8.61 POINTS .26%   / HANG SANG CLOSED UP 164.24 POINTS OR .58% 

2. Nikkei closed UP 132.80 POINTS OR .64%     /USA: YEN FALLS TO 112,36

3. Europe stocks OPENED  RED EXCEPT FTSE  ( /USA dollar index FALLS TO  93.39/Euro UP to 1.1791

3b Japan 10 year bond yield: FALLS  TO  -+.055%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  50.23 and Brent: 56.30

3f Gold UP/Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP or Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.447%/Italian 10 yr bond yield UP  to 2.130%  /SPAIN 10 YR BOND YIELD UP TO 1.684%  

3j Greek 10 year bond yield FALLS TO  : 5.60???  

3k Gold at $1291.90 silver at:17.20(8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 44/100 in  roubles/dollar) 57.85-

3m oil into the 50 dollar handle for WTI and 56 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.36 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9769 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1518 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.447%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.359% early this morning. Thirty year rate  at 2.893% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

European Stocks On Edge Ahead Of Catalan Independence Call, S&P Futures Rise

S&P futures are again modestly in the green as European shares hold steady ahead of a meeting of the Catalan regional parliament and a possible declaration of independence by Catalan leader Puigdemont, while Asian shares rise a the second day. The dollar declined for the 3rd day, its losses accelerating across the board amid growing concerns that Trump’s tax reform is once again dead following the Corker spat and a rejection from Paul Ryan, with the move gaining traction after China set the yuan’s fixing stronger for the first time in seven days. Monday’s sell-off in Turkish assets seemed to have little follow-through, with emerging-market currencies all trading higher and Treasuries steady. Traders are also waiting for minutes from the Federal Reserve’s last meeting, which may provide more details on the path of interest rates and balance sheet tapering.

“The weak dollar is a cue for investors that the U.S. Fed will not be aggressive in raising interest rates and this supports the outlook for a strong equities market,” said Cristina Ulang, head of research at First Metro Investment Corp. in Manila. “We will see a U.S. rate increase in December but it’s not going to be sharp since we aren’t seeing runaway U.S. economic growth.”

Asia stocks advanced as traders in Japan and South Korea returned from holidays, pushing the regional benchmark to a three-week high amid a broad weakness in the dollar. The MSCI Asia Pacific Index gained 0.7% to 164.49, its highest close since Sept. 20. The biggest boost came from Samsung Electronics which also helped South Korea’s Kospi advance 1.6%. In Japan, the Topix rose to its highest close in more than a decade, driven by a string of positive economic data both at home and abroad. The Asia-wide gauge has rallied 22 percent so far this year, on course for its best performance since 2009. It’s still trading at the biggest discount to the S&P 500 Index in 15 years in terms of price-to-book.

All eyes are on Europe however, and Spain in particular, where Catalan lawmakers will meet today to consider a declaration of independence that risks an ironclad backlash from Madrid. Attention will focus on the form of words used by Catalan President Carles Puigdemont, who is due to address the parliament in Barcelona at 6 p.m. The IBEX fell alongside most national gauges across Europe. The common currency gained for a third day.  It is Spain’s biggest political crisis since an attempted military coup in 1981. Madrid’s IBEX stocks index drooped 0.5 percent early on and it is now down almost 9 percent since May, though a sharp rise in the euro has also taken a toll.

“We have not witnessed any relevant statement or signal by the separatists that would hint at a change of strategy ahead of today’s discussion in the Catalonian parliament,” economists at Barclays wrote.
“Consequently, at this point, it seems likely that Catalan President Carles Puigdemont remains on track to announce a unilateral declaration of independence as early as today.”

“Rather than a full universal declaration of independence, we may see a ‘symbolic statement’ from the Catalan government,” said Fabio Balboni, economist at HSBC Bank Plc. “Signs of disagreement are starting to emerge within the regional government, with more moderate members fearing the consequences of a further step towards independence, given the lack of support from the EU, and moves by some banks and firms to leave Catalonia.”

Despite the Spain jitters, The euro remained resilient, rising to a one-week high as data showed German exports had surged in August. Traders were also still upbeat on the currency after one of the European Central Bank’s German policymakers called for an end to its stimulus.

Elsewhere, Turkey’s lira recouped some of yesterdays losses even as the U.S. signaled the crisis between the two countries could drag on. Gold rose as the greenback weakened, and West Texas oil held gains near $50 a barrel before U.S. government data forecast to show crude inventories extended declines for a third week. Japan’s Topix index closed at the highest since July 2007 and Korean stocks staged a catch-up rally after a week-long holiday.

Turkey also got some help from a weaker dollar which was down for a third straight day. The dollar index, which tracks the greenback against six major rivals, dropped 0.2 percent to 93.533 and away from Friday’s almost 3-month peak. It gave the Turkish lira a breather having been sent sprawling to a nine-month low on Monday after the United States and Turkey scaled back visa services.

Meanwhile, Mexico’s peso hovered at its weakest in more than four months, ahead of the latest round of talks over the North American Free Trade Agreement (NAFTA) on Wednesday.

Over in Asia, the offshore Chinese yuan rate surged to its strongest levels in more than two-weeks. The central bank had also set a firmer-than-expected official rate, suggesting authorities are keen to keep the currency in check ahead of next week’s key national leadership meeting.

In commodities, Crude oil prices edged slightly higher, supported by OPEC comments signaling the possibility of continued action to restore market balance in the long-term. But gains were seen as limited as oil production platforms in the Gulf of Mexico started returning to service after the latest U.S. hurricane forced the shutdown of more than 90 percent of crude output in the area. Brent crude inched up 1 cent to $55.80 a barrel. U.S. crude added 2 cents to $49.60. Gold prices hit their highest in more than a week, though gains were capped as expectations of another U.S. interest rate hike this year limited appetite. Spot gold added 0.2 percent to $1,286.52 an ounce

Rate markets were largely unchanged, with the yield on 10-year Treasuries declined one basis point to 2.35 percent. Germany’s 10-year yield dipped one basis point to 0.44 percent, the lowest in two weeks. Britain’s 10-year yield was unchanged at 1.357 percent, the lowest in a week.

Traders are awaiting the start of the earnings season this week, with several major banks due to report, as well as Wednesday’s minutes from the Federal Reserve’s last meeting. Canadian stocks reopen after a holiday.  Investors also await speeches by Fed Presidents and the minutes from the most recent Federal Reserve meeting due Wednesday. Economic data include NFIB small-business optimism. No major earnings scheduled.

Market Snapshot

  • E-Mini futures on S&P 500, Dow and Nasdaq 100 each up 0.2%
  • VIX Index down 1.7% at 10.15
  • STOXX Europe 600 down 0.2% to 389.47
  • MSCI Asia up 0.7% to 164.49
  • MSCI Asia ex Japan up 0.7% to 542.58
  • Nikkei up 0.6% to 20,823.51
  • Topix up 0.5% to 1,695.14
  • Hang Seng Index up 0.6% to 28,490.83
  • Shanghai Composite up 0.3% to 3,382.99
  • Sensex up 0.3% to 31,929.41
  • Australia S&P/ASX 200 down 0.02% to 5,738.11
  • Kospi up 1.6% to 2,433.81
  • German 10Y yield fell 0.4 bps to 0.44%
  • Euro up 0.4% to $1.1785
  • Brent Futures up 0.4% to $56.01/bbl
  • Italian 10Y yield fell 3.3 bps to 1.82%
  • Spanish 10Y yield unchanged at 1.677%
  • Gold spot up 0.4% to $1,289.21
  • U.S. Dollar Index down 0.3% to 93.39

Top Overnight News

  • Catalan President Carles Puigdemont is due to address regional lawmakers around noon New York time on the outcome of the Oct. 1 referendum that has been ruled illegal by the Spanish courts
  • Minneapolis Fed President Neel Kashkari, a known dove and a candidate in running for the next Fed Chair, delivers opening remarks at a conference
  • Allies of President Donald Trump say they fear his feud with Republican Senator Bob Corker risks unraveling the White House tax overhaul effort and that another major legislative failure could hobble the administration for the rest of his term
  • The U.S. Ambassador to Turkey issued a video statement saying he “can’t predict” how long the latest crisis between the two countries will last
  • Trump may travel to the demilitarized zone separating North and South Korea as part of his first visit to South Korea in Nov., Yonhap News reported, citing an unidentified military official; Trump is expected to send a “significant message” to North Korea during the trip, Yonhap said
  • Spanish police are ready to arrest Catalan President Carles Puigdemont immediately if he declares independence in the regional parliament, two people familiar with the matter said; Puigdemont has called a press conference at 1pm in Barcelona
  • New Zealand First Party leader to delay his public announcement about the result of talks to form a new government until Friday: NZ Herald
  • German exports rose 3.1% m/m in August, beating an estimate 1.1% rise
  • Banks in Europe have sold about 33 billion euros ($39 billion) of a new type of bank bond they’re calling “senior non-preferred”; the label allows underwriters to market the notes to managers of funds that can only hold senior debt, even though the securities can be forced by regulators to take losses in a crisis
  • U.K. industrial output rose 1.6% y/y in Aug. vs est. 0.9%, while the trade deficit widened to GBP14.2B vs est. GBP11.2B
  • Canadian Prime Minister Justin Trudeau will discuss international
    security and trade during a meeting with President Donald Trump
  • Canadian housing data: Median estimate forecasts a drop; still, momentum for a strong housing market will still be strong

Asia equity markets were mixed after a cautious tone in the US, although the KOSPI (+1.8%) surged as it took its turn to play catch up from a 10-day closure. ASX 200 (-0.3%) was indecisive with weakness in energy names offset by strength in gold miners, while Nikkei 225 (+0.5%) found support from a weaker currency following dovish comments from BoJ Governor Kuroda. Hang Seng (+0.6%) and Shanghai Comp. (-0.3%) were subdued with profit taking seen in the mainland after yesterday’s outperformance. Finally, 10yr JGBs were flat with demand dampened amid a positive risk tone in Japan and a reserved BoJ Rinban announcement for just JPY 605bln of JGBs. BoJ Governor Kuroda said Japan’s economy is expanding moderately and expects CPI to pick up pace towards 2% goal, while Kuroda added the BoJ is to expand the monetary base until inflation overshoots target.

Top Asian News

  • Japan-Wide Scandal Erupts Over Steelmaker’s Falsified Data
  • Bank Indonesia to Keep Inflation Focus Despite Aggressive Easing
  • Japan Stocks to Watch: Fujitsu, Honda, Retailers, Rohm, Toyota
  • Bank Indonesia to Keep Inflation Focus After Aggressive Cuts
  • Chinese Firms List at Fastest Pace Since Market Opened in 1990
  • PBOC Chief Quotes Phantom of the Opera in Push for Market Reform

All anticipation is on the upcoming speech from the Catalonian leader, expected at 12:00 London Time, where there overwhelming consensus is that he will officially announce the referendum result. The IBEX underperforms, yet largely in-line with the periphery European bourses, as the FTSE MIB trades close to 1% down close, with the nation clearly seeing the largest reaction to the ECB’s plan to rein in bad loans. Not the best results in terms of UK and German auctions, and the respective 10 year debt futures are acknowledging the signs of indigestion or simply tepid demand accordingly. Specifically, covers were relatively light and for the DMO the tail was lengthy, while the Buba retained around 20% of its inflation linker. Pre-issuance Eurex low holding in, for now, but Liffe setting a marginal new base and it could be a sell into dips market until or unless something changes to provide fresh leads.

Top European News

  • Famous Brands Plunges Most in 14 Years on Gourmet Burgers Blow
  • U.K. Utilities Heading for Price War to Protect Market Share
  • What to Watch for If Catalan Leader Says ‘Independence’ Today
  • Italy Industrial Output Rises Above Estimate, Boosting Outlook
  • Mirabaud Says Brokerage Business Targets Break-Even This Year

In currencies, the highlight data of the day came from the UK, as sterling was initially propped up by the higher than expected Manufacturing data. Cable tested 1.32 following the data, however, clearly running into offers around this key level. UK Manufacturing Output MM (Aug) 0.4% vs. Exp. 0.2% (Prev. 0.5%, Rev. 0.4%) Manufacturing Output YY (Aug) 2.8% vs. Exp. 1.9% (Prev. 1.9%, Rev. 2.7%) Goods Trade Balance GBP (Aug) 14.24B vs. Exp. -11.20B (Prev. -11.58B, Rev. -12.83B) Goods Trade Bal. Non-EU (Aug) -5.83B vs. Exp. -3.60B (Prev. -3.84B, Rev. -5.34B). The Norwegian Krone took a hit in early European trade, as the nation’s CPI report missed across the board, albeit marginally so. EUR/NOK broke out the week’s early range and spiked through Friday’s highs.

In commodities, gold has continued to recover following the bounce seen ahead of 1260.00, drawing support from global uncertainty, alongside a softer USD. However, the increased expectations of another hike from the Fed, and the tightening likely to move into 2018, upside could be curved. Oil markets have also continued to recover from last week’s lows ahead of 49.00, which is evident of pending bids. WTI trades near session highs, looking to break back through 50.00/bbl, seemingly strengthened by comments from Barkindo stating that growth in US shale had slowed compared to the first half of 2017 and growth in global demand may show further upward revisions, giving the supply cut effort tailwind.

Looking at the day ahead, the only reading due in the US is the September NFIB small business optimism print. Onto other events, The Fed’s Kashkari is scheduled to speak at a regional economic conference. The IMF and World Bank annual meetings also start today and run through to Saturday.

US Event Calendar

  • 6am: NFIB Small Business Optimism 103, est. 105, prior 105.3
  • 10am: Fed’s Kashkari Speaks at Regional Economic Conference
  • 8pm: Fed’s Kaplan Speaks at Stanford Institute
  • Oct. 10-Oct. 15: Annual Meetings of the IMF and the World Bank

DB’s Jim Reid concludes the overnight wrap

Markets were given their own lullaby yesterday with the US on partial hols thus resulting in a quiet session. It was actually a landmark day though as it marked 10 years since the pre-GFC peak in the S&P 500. At periodic intervals throughout this year we’ve marked such 10 year crisis related anniversaries with a quick performance review of the major asset classes from our regular monthly’s performance review. We repeat this today for this latest anniversary with the graph and the 10yr performance table today.

To summarise in dollar terms, the S&P 500 (+102%) actually tops our list of 38 global assets even though this point 10 years ago was the local peak. This is followed by US HY (+85%) and 6 of the top 8 in dollar terms are credit assets. Gold (+74%) breaks up the top 8. 26 of the 38 assets are in positive total return territory since this point and 12 are in negative territory led by Greek equities (-85%), European Banks (-54%) with other major underperformers including Portuguese equities (-39%), Oil (-38%), FTSE-MIB (-34%), Bovespa (-33%), Russian Micex (-30%), Shanghai Comp (-18%) and the IBEX  (-2%). So although US equities and credit markets have shrugged off the impact of the crisis and have prospered, deep scars still remain especially for the European periphery and some EM equities (all dollar adjusted).

Turning to Catalonia, Spanish markets slightly rebounded on Monday (IBEX +0.50%, 10y bonds -3bp) following increased pressure over the weekend on the Catalan authorities to avoid declaring independence. We should have more clarity today as Catalan President Puigdemont is expected to address the regional Parliament in Barcelona (Tuesday, 6pm local time). Back on Monday, Spanish newswire Efe reported Puigdemont plans to declare independence, but is also likely to insist Catalonia wishes to negotiate with the Spanish government with the help of external mediators. Elsewhere, as per Bloomberg, Catalan secessionists have tried to urge the Spanish opposition Socialists to form a coalition to oust Spanish PM Rajoy, which they have since refused. A member of the Socialists’ executive board (Carmen Calvo) said her party is focused on ensuring that the Spanish Constitution is observed.

Over to Brexit, the UK government has published White papers or contingency plans for leaving EU without a new Brexit deal. In the papers, the UK will set up its own customs regime where it will set its own tariffs, quotas and classification of goods, broadly in line with WTO requirements. However, the FT noted that British officials admit these contingency plans are at early stages and the government has not really invested in staff and systems to build a new customs system yet. Following up, PM May spoke yesterday, noting “it is our responsibility as a government to prepare for every eventuality” and that  these white papers “support that work”, which sets out “steps to minimise disruptions for businesses and travellers”. Further, she noted that re the Brexit talks the “ball is in their court”. However, the EU commission spokesman responded “the ball is entirely in the UK court for the rest to happen”. In view of the stalemate, we note that the fifth round of Brexit talks are currently underway and will conclude this Thursday.

This morning in Asia, markets are trading marginally higher as we type. The Kospi is up +1.93% after markets reopened following a 10 day break. Elsewhere, the Nikkei (+0.34%) and ASX 200 (+0.06%) are up slightly, while the Hang Seng (-0.06%) and Shanghai Comp. (-0.25%) are slightly lower.

Turning to Turkey, the Lira/USD fell to a 6 month low (Lira -2.46%; equities -2.73%) yesterday after the US and then Turkey suspended Visa services for citizens seeking to visit the other country over the weekend. While the White House has remained silent, the U S ambassador to Turkey went onto YouTube to say “we hope (the situation) will not last long, but…we can’t predict how long it will take to resolve this matter”. Later on Monday, Turkey’s Erdogan spoke during a news conference, noting “the implementation of such decision (suspending Visa services) by the US ambassador is very saddening. Turkey is a state of law, not a tribal state”. As a reminder, Turkey represents c1% of the MSCI emerging market index, c23% of its government debt is held by foreigners (highest since Aug. 2015) and c37k US citizens travelled to Turkey in 2016.

Onto market performance yesterday now. US bourses softened on limited news flow and trading, with the S&P 500 (-0.18%), Dow (-0.06%) and Nasdaq (-0.16%) all slightly down on light volumes. Within the S&P, marginal gains in the energy and utilities sectors were more than offset by losses from healthcare and industrial names. Conversely, European markets were modestly higher, aided by a rebound in Spain’s IBEX (+0.50%) and a solid IP reading from Germany. Across the region, the Stoxx 600 and DAX both rose c0.2% while the FTSE dipped 0.20%. The VIX has halted its trend of 8th consecutive days of being below 10, rising 0.68 to 10.33, likely reflecting increased geopolitical tensions. The record stretch was 10 days in July this year.

Bond markets were slightly firmer, with core European 10y bond yields down modestly, with Bunds (-1.6bp), OATs (-1.7bp) and Gilts (-0.6bp) all rallying. Elsewhere, peripherals slightly outperformed with Spanish and Italian 10y yields both down 3.4bp. At the 2y part of the curve, changes were more modest, with Bunds (-0.4bp) and OATs (-0.3bp) slightly down while Gilts were unchanged. Most key currencies were little changed with the US dollar index down 0.13% while the Euro gained 0.09%. Notably, Sterling had a solid day (+0.58%), partly due to a positive data revision to the UK labour cost figure (likely a better measure of pay growth). The Office of National Statistics conceded an error in its 2Q growth in unit labour costs, as it should be 2.4% yoy rather than 1.6% as reported on Friday. In commodities, WTI oil rose 0.59%, following reports that Saudi Arabia plans to make further cut to its crude supplies in November. Elsewhere, precious metals (Gold +0.58%; Silver +0.79%) were slightly higher, while other base metals were mixed, but little changed (Copper -0.27%; Zinc -0.13%; Aluminium +0.99%).

Away from the markets, ECB Executive Board member Sabine Lautenschlaeger said “we should begin reducing our bond purchases next year” and exit QE as soon as possible, but noted that “it is important that we really move towards the exit – step by step, but steadily and in a clear direction”. On inflation, she noted “looking to the future, we can be confident that inflation will return to our objective”.

Staying in Europe, some words of caution from politicians and central bankers. The ECB policy maker Klass Knot said it feels “increasingly uncomfortable” to have low volatility in markets while there are risks in the global economy. Elsewhere, in his departing interview with the FT as Germany’s longest servicing finance minister, Schaeuble warned that investors are “concerned about the increased risks arising from the accumulation of more and more liquidity and the growth in public and private debt, “I myself am concerned about this, too”.

Over in Japan, with only 12 days till the election, the latest polls suggests the challenger – Tokyo governor Koike’s new Party of Hope may be losing steam. According to a small survey by Yomiuri newspaper over the weekend, 13% of respondents said they will vote for her party, down from 19% a week ago. Notably, support for Abe’s LDP is at 32% and 27% of respondents are still undecided. Staying in Asia, China’s long serving People’s Bank of China Governor Zhou Xiaochuan reiterated calls for further opening up of China’s financial sector, as per Bloomberg. He said “we could take bigger steps to increase the market access for financial institutions and the opening up of the financial market”. The interview is perhaps conveniently timed before the Chinese Community Party meets tomorrow for a final time before the big party congress later in the month (potentially 18th October).

The latest ECB CSPP numbers were out yesterday. The average daily run rate last week was €356mn (vs. €349mn average since the CSPP started). This is at the low end of the recent range but the  CSPP/PSPP ratio is still notably above the pre-taper ratio. The current week saw the ratio at 12.9% and is above the 11.6% seen before the taper (vs. 16.6%, 14.8%, 19.2%, 13.6% in the last few weeks). So still strong evidence that the ECB is tapering PSPP more than CSPP. It’ll be interesting to see what happens after the expected additional taper likely to be announced in just over two weeks.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In Germany, August IP was materially above expectations at 2.6% mom (vs. 0.9% expected) and 4.7% yoy (vs. 2.9%). Notably this stronger month follows two consecutive months of decline, so annualised growth over the quarter is c3.4% saar for total production. Our German team needs a strong Sep. IP and retail sales to get to their expected 0.6% qoq increase in 3Q GDP, although positive sentiment indicators makes them optimistic that we are getting there.  Elsewhere, the Eurozone’s October Sentix investor confidence index slightly beat at 29.7 (vs. 28.5 expected) to a new post-GFC high, while France’s business industry confidence was a tad softer at 104 (vs. 105 expected).

Looking at the day ahead, it’s a fairly busy day, particularly in Europe. The most significant releases in Europe include the August industrial production prints for France (1.5% yoy expected), Italy (2.9% yoy expected) and the UK (0.9% yoy expected) along with August trade data for Germany and the UK. The only reading due in the US is the September NFIB small business optimism print. Onto other events, The Fed’s Kashkari is scheduled to speak at a regional economic conference. The IMF and World Bank annual meetings also start today and run through to Saturday.

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed up 8.61 points or .26% /Hang Sang CLOSED UP 164.24 pts or .58% / The Nikkei closed UP 132.80 POINTS OR .64/Australia’s all ordinaires CLOSED UP 0.03%/Chinese yuan (ONSHORE) closed WELL up  at 6.5792/Oil UP to 50.23 dollars per barrel for WTI and 56.30 for Brent. Stocks in Europe OPENED RED EXCEPT FTSE .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5792. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5704 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. CHINA IS EXTREMELY HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

South Korea ready to try out its new graphite “blackout bomb” which can paralyze North Korea’s antiquated power grid and yet cause no loss of life

(courtesy zero hedge)

South Korea’s New “Blackout Bomb” Can Paralyze The North’s Power Grid

US and South Korean officials are nervously watching to see if North Korea follows through with its threats to carry out another nuclear test – or to fire a rumored long-range missile capable of accurately striking the west coast of the US into the Pacific – in celebration of the Oct. 10 anniversary of the Communist Party’s creation. Meanwhile, the Telegraph reports that South Korea has developed a new weapon to hobble the North’s infrastructure should an armed conflict erupt on the peninsula. Given that it’s almost daybreak in North Korea, such a test could happen as soon as Monday night, Eastern Time.

The weapon is a graphite bomb – otherwise known as a “blackout bomb” – which South Korean officials say will be capable of shutting down North Korea’s entire power grid. Blackout bombs were first used by the US in Iraq in the 1990 Gulf War and work by releasing a cloud of extremely fine, chemically treated carbon filaments over electrical components. The filaments are so fine that they act like a cloud, but cause short circuits in electrical equipment.

As News.com.au points out, North Korea tends to celebrate the Oct. 10 holiday with military parades and aggressive rhetoric. But this year’s festivities could include new provocative weapons tests.

“The Kim regime usually uses these sorts of occasions to demonstrate some show of strength — in this current climate a missile test is a likely result,” says Dr Genevieve Hohnen, lecturer in politics and international relations at Edith Cowan University.

The Telegraph reports that the South developed the bomb to minimize civilian casualties in the North should a conflict erupt. In a statement to Yonhap, a military official said the South Korean army could assemble a blackout bomb at any time. The weapon was reportedly developed by South Korea’s Agency for Defense Development.

“All technologies for the development of a graphite bomb led by the ADD have been secured. It is in the stage where we can build the bombs anytime,” a military official told Yonhap.

The bomb is often referred to as a “soft bomb” because it only affects targeted electrical power systems.

As the Telegraph explains, the blackout bomb was developed as part of South Korea’s “three pillars” plan for retaliating against the North if it believes a nuclear strike is imminent. Escalating tensions with the North have inspired the South to move its target date for completion forward by three years. The plan was initially slated to be complete by the mid-2020s.

The first two parts of the plan involve detecting – and then intercepting – North Korea missiles. The second part – aptly named the “massive punishment and retaliation plan” involves launching attacks against the country’s leadership, including a plan to assassinate Kim Jong Un.

South Korea is bringing forward the deployment of its “three pillars” of national defence by as much as three years as a result of the growing threat posed by Pyongyang’s nuclear and missile development programmes.

The three-pronged strategy was originally scheduled to be in place by the mid-2020s, but North Korea’s increasingly aggressive and unpredictable behaviour has forced Seoul to revise that timeline.

The Kill Chain programme is designed to detect, identify and intercept incoming missiles in the shortest possible time and operates in conjunction with the Korea Air and Missile Defence system for lower-tier defence against inbound missiles.

The final component of the strategy is the Korea Massive Punishment & Retaliation plan, under which Seoul will launch attacks against leadership targets in North Korea if it detects signs that the regime is planning to use nuclear weapons.

South Korea believes North Korea’s energy grid is outdated and vulnerable, and thus would be incredibly susceptible to a “blackout bomb” attack. Blackout bombs were first used by the US against Iraq in the Gulf War of 1990, when they knocked out about 85 percent of Iraq’s electricity. They were also used by NATO against Serbia in 1999, when it damaged around 70 percent of the country’s electrical supply.

* * *

President Donald Trump fired off his latest threatening tweet about North Korea earlier today, reiterating his view that 25 years of US appeasement and billions of dollars in humanitarian aid for the North clearly have not worked. He ended the tweet with yet another vague hint that the US could soon resort to a military strike.

Donald J. Trump @realDonaldTrump

Our country has been unsuccessfully dealing with North Korea for 25 years, giving billions of dollars & getting nothing. Policy didn’t work!

Though the US has rejected North Korea’s claims that Trump’s rhetoric has amounted to a declaration of war, how much longer can the US credibly claim that “all options are on the table” if North Korea continues to provoke the international community with its missile and nuclear tests?

 end Late this afternoon will get word that North Korean stole war plans from the South Koreans as well as plans to assassinate Kim Jong- Un (courtesy zerohedge) North Korea Hackers Steal War Plans, Kim Jong-Un Assassination Details

While tensions with North Korea have receded in recent weeks, and especially following the latest uneventful weekend, when markets were on edge that Kim could try another missile test launch to celebrate the country’s national holiday, this could reverse following news from the BBC that North Korea hackers have reportedly stolen a large cache of military documents from South Korea, including a plan to assassinate North Korea’s leader Kim Jong-un.

According to South Korean lawmaker Rhee Cheol-hee – a member of South Korea’s ruling party who sits on its parliament’s defence committee – the compromised documents, which were stolen from the country’s defense ministry, include wartime contingency plans created by the US and South Korea, and also include reports to the allies’ senior commanders. Plans for the South’s special forces are also said to have been accessed, along with information on significant power plants and military facilities in the South.

Rhee also said some 235 gigabytes of military documents had been stolen from the Defence Integrated Data Centre, and that 80% of them have yet to be identified.

Just like in the case of Equifax, the breach itself took place long ago, with South Korea waiting over a year to disclose the full details of the the hack which took place in September last year. In May, South Korea said a large amount of data had been stolen and that North Korea may have instigated the cyber attack – but gave no details of what was taken. The South Korean defence ministry has so far refused to comment about the allegation, while North Korea denied the claim.

According to South Korea’s Yonhap news agency reports that Seoul has been subject to a barrage of cyber attacks by its communist neighbour in recent years, with many targeting government websites and facilities. According to long-running media reports, which have yet to be confirmed with hard evidence however, the isolated, backward state is believed to have specially-trained hackers based overseas, including in China.

One thing that’s certain, is that tews that Pyongyang is “likely to have accessed the Seoul-Washington plans for all-out war” in the Koreas will do nothing to soothe tensions between the US and North Korea. The two nations have been at verbal loggerheads over the North’s nuclear activities, with the US pressing for a halt to missile tests and Pyongyang vowing to continue them.

Meanwhile, away from cyber war, Pyongyang has been far more aggressive in the realm of unconventional warfare, and the North recently claimed to have successfully tested a miniaturised hydrogen bomb, which could be loaded onto a long-range missile. In a speech at the UN in September, US President Donald Trump threatened to destroy North Korea if it menaced the US or its allies, and said its leader “is on a suicide mission”.

Kim responded with a rare televized statement, vowing to “tame the mentally deranged US dotard with fire”. Trump’s latest comment took the form of a cryptic tweet at the weekend, where he warned that “only one thing will work” in dealing with North Korea, after years of talks had proved fruitless. He did not elaborate further.

b) REPORT ON JAPAN

USA sends a nuclear submarine to the Korean Peninsula and will engage in more military exercises with South Korea and Japan

(courtesy zero hedge)

US Sends Nuclear Submarine To Korean Peninsula For More Military Drills

As US forces prepare to join their South Korean partners for yet another round of the military exercises that North Korean Leader Kim Jong Un is so fond of, the US has sent a nuclear-powered sub to participate.

The nuclear-powered submarine Michigan will arrive in the Korean port city of Busan, situated in the southern part of the country, by the end of the week, according to Bloomberg, which cited local media reports.

The sub will conduct joint drills with the US aircraft carrier USS Ronald Reagan in the waters off the peninsula next week.

With North Korea celebrating the founding of the country’s ruling Communist Party on Oct. 10, US and South Korean defense officials are anticipating that the country could launch another provocative missile test as soon as tonight.

The US dispatched the USS Ronald Reagan to South Korea last month after North Korea twice fired IRBMs over the northern Japanese island of Hokkaido.

According to a map showing the locations of US Naval assets (the ones that’ve been publicly, at least) created by Stratfor, the USS Ronald Reagan is presently making a scheduled refueling stop in Hong Kong but is expected to return to the peninsula shortly.

The escalation – which conjures up memories of the time Trump revealed that he’d ordered three nuclear subs to Korea, only for it to be revealed that they were actually traveling in the opposite direction – comes as the president has stepped up his rhetoric against the North, recently offering a string of cryptic threats about a coming “storm”, though he has so far refused to elaborate.

Earlier Monday, Defense Secretary James Mattis said that while the US is trying to force North Korea to halt its nuclear weapons program through diplomacy and economic pressure, soldiers must be prepared to fight if negotiations fail and things go south, Trump seems to have suggested they will.

4. EUROPEAN AFFAIRS SPAIN  Rajoy is now set to arrest Catalan leader Puigdemont is he declares independence,  Rajoy refuses to negotiate with Catalonia (courtesy zerohedge) Spanish Police Set To Arrest Catalan Leader “Immediately” If He Declares Independence

Spain’s D-Day is here: the country’s biggest political crisis since an attempted military coup in 1981 is about to get a resolution – one way or another – and as Bloomberg reports, Spanish police are ready to arrest Catalan President Carles Puigdemont “immediately” if he declares independence in the regional parliament, according to two people familiar with the government’s plans.

In what may be a preview of a possible upcoming civil war should today’s event be handled incorrectly, Bloomberg writes that while a final decision on whether to act has not yet been taken, Spain’s National Police force has elite officers deployed in Catalonia who are prepared to join a raid if Catalan police try to shield Puigdemont. If Puigdemont makes a statement that falls short of immediate independence, the government in Madrid may stay its hand. Puigdemont has called a press conference for 1 p.m. in Barcelona.

The National Police and the Civil Guard “have sufficient officers in place to overcome any resistance they might meet” Bloomberg’s sources note. A government press officer declined to comment other than to say that any such decision would have to be ordered by a judge.

Also today, Puigdemont is due to address the regional legislature at 6 p.m on Tuesday with many of his supporters looking for him to announce a new republic to follow through on the makeshift referendum held on Oct. 1. With his core supporters demanding he make good on the illegal vote for independence and officials in Madrid urging Rajoy to finally crack down on the separatist campaign, Puigdemont’s rebellion may be running out of road.

Already armed police have cordoned off the Catalan parliament, hours before the much anticipated independence speech:

AFP news agency @AFP

Armed police cordon off the Catalan Parliament, hours before Carles Puigdemont could declare independence from Spain http://u.afp.com/4zg8 

Meanwhile, Spain’s Prime Minister Mariano Rajoy has held a firm line, refusing to negotiate with the Catalan separatists and insisting all along that he’ll use only proportionate force in relation to the separatist government in Barcelona. Even so, prosecutors have been exploring charges of sedition against other separatist leaders including Jordi Sanchez, head of the biggest pro-independence campaign group. Sedition carries a jail term of up to 15 years.

Rajoy has vowed to use all the legal means at his disposal to prevent Catalonia seceding after Puigdemont’s government defied a series of Constitutional Court rulings to go ahead with the referendum. Catalan police ignored orders to seize ballot boxes ahead of the vote. The Spanish government has stationed thousands of National Police in cruise ships in the Port of Barcelona.

So far local asset markets are taking today’s events in stride, with Spain’s IBEX stock index down just 1% as of noon in Madrid, while 10-year bond yields rose 2 bps.

Courtesy of Bloomberg, here is a flowchart laying out the various possible events in Spain over the next 24 hours.

Finally, from The Spain Report, some more details ahead of Puigdemont’s much anticipated 6pm speech:

This evening at 6 p.m., Carles Puigdemont will appear before the regional parliament to discuss “the general political situation” in Catalonia. Most of the country expects that to translate as some kind of declaration of independence from Spain.

The precise wording of that statement, and to what extent it will be interpreted as a genuine declaration of independence by courts, prosecutors, the central government and Catalan separatists themselves, is unknown this Tuesday morning.

The size and reach of the Spanish state’s response to any declaration of independence is also unknown: the options range from criminal charges of sedition or rebellion, through the suspension of home rule in Catalonia for an unspecified period of time and even to articles of the Spanish Constitution that allow for the declaration of a state of alarm or exception.

Given the policing shortcomings of the past 10 days, any move to arrest Mr. Puigdemont and members of his regional government would be fraught with potential difficulties.

The Catalan Police, the Mossos, have closed parliament park, the Parc de la Ciutadella, in central Barcelona, erected metal barriers around the parliament building and parked several dozen police vans outside.

The Catalan National Assembly (ANC), Omnium Cultural and local separatist groups are busy organising untold thousands of supporters to travel to the park and the area outside the High Court, in the adjacent road.

With a proven ability to mobilise several hundred thousand people, Spaniards will find out this evening if those policing efforts are enough hold back the protestors or if, in the end, they overflow into the park and surround parliament. Messaging shifted slightly overnight from “defend parliament” to “peacefully support” Catalan institutions.

Police—regional or national—were unable (national) or unwilling (regional) to stop most people who wanted to from voting on October 1, and did not stop separatist protestors from shutting down Catalan roads during a day of “total stoppage” last Tuesday.

On September 20, snap protests called by the ANC and Omnium led to the investigation of sedition because court officials and judicial police were blocked inside a building for several hours and Civil Guard SUVs vandalised.

The Spanish Home Office refused to comment on any National Police and Civil Guard provisions for the day, citing operational security requirements.

END

Strange announcement: Puigdemont “asks for a mandate to declare independence” as well as  suspending the consequences of the vote for weeks in order to negotiate with Madrid…then Madrid reads the wrong tea leaves..

(courtesy zerohedge)

Catalan Leader Asks For Mandate To Declare Independence, Suspends Consequences Of Vote “For Weeks”

Summary (via Bloomberg): It sounds like Catalan President Puigdemont is trying to catch Spanish Prime Minister Mariano Rajoy at his own game. Rajoy has always said he won’t talk as long as the Catalan government is acting outside the Spanish Constitution’s framework. Puigdemont is basically saying — fine let’s do that — but if doesn’t go our way we’ll resume with our plans.

* * *

Following a brief intro, thanking supporters, proclaiming this a ‘Spain’ issue, and outlining the referendum’s success, Puigdemont turned more angry, slamming the “humiliation, aggression, and Catalanophobia” of Madrid, suggesting that Spaniards are victims of propaganda, and proclaiming that “many Catalans believe that the only way to guarantee survival is for Catalonia to become a State.”

“We’re not crazy, delinquents or doing a coup,” Puigdemont says.

Then he paused…saying Catalonia has won the right to independence.

“I assume my mandate to convert Catalonia in an independent State.”

And then ads that he calls for weeks of dialog, suspending the independence referendum result.

As Bloomberg notes, Puigdemont has just laid a deal on the table for Madrid. He’s proposing suspending the illegal process that the central government has complained so much about while they talk.

Is Madrid going to consider this blackmail or is Prime Minister Mariano Rajoy going to take into account that Catalan Puigdemont has backed off from declaring independence?

All eyes on Rajoy, but also on the streets of Catalonia. There may be some disappointment among supporters of independence. Remember crowds from both sides were gathering earlier.

Markets are reacting positively with Spain ETF higher…

EURCHF is on the rise…

Alberto Gallo summed it all up perfectly…

View image on Twitter

Alberto Gallo @macrocredit

: Puigdemont asks for dialogue and suspends independence talks.
Back to business as usual

*  *  *

Live Feed (due to start at 1pm ET):

end

I have no idea what Rajoy interpreted with respect to the Puigdemont speech but he is now gung ho on stating that Catalonia has declared independence from Spain and he will now incorporate section 155 and take over affairs in that province

(courtesy zerohedge)

Spain Responds: Considers Puigdemont Speech Declaration Of Independence, “Expected To Apply Article 155”

It has been a hectic day for Spain where moments ago separatist Catalonia appeared to step back from the brink of officially declaring independence – with potentially dire consequences –  even as Puigdemont asked for a mandate to delare indpendence for Catalonia but proposed to suspend the result of the referendum vote “for weeks”, in an attempt to achieve dialogue with the Spanish government “to arrive at an agreed solution to advance with the demands of the people of Catalonia.”

“With the results of October 1, Catalonia has won the right to be an independent state,” Puigdemont said. “If everyone acts responsibly, the conflict can be resolved with calm.”

As Bloomberg summarized the speech, “it sounds like Catalan President Puigdemont is trying to catch Spanish Prime Minister Mariano Rajoy at his own game. Rajoy has always said he won’t talk as long as the Catalan government is acting outside the Spanish Constitution’s framework. Puigdemont is basically saying — fine let’s do that — but if doesn’t go our way we’ll resume with our plans.”

The question then was how the Spanish central government would respond, which it did when it appears to have purposefully misinterpreted Puigdemont speech, declaring that “Catalonia has declared deferred independence” and, as El Pais reports, “Central government sources say they consider Puigdemont’s speech to be a declaration of independence” with a press officer for the Rajoy cabinet telling Bloomberg that “it’s not acceptable to make an implicit declaration of independence and then explicitly leave it hanging.” adding that Puigdemont “has taken his irresponsibility to the absolute extreme by ignoring the laws, citizens.”

As a result, “the Rajoy government will take measures, and is expected to apply Article 155 of the Constitution.

That, as readers are aware by now, is the so-called “nuclear option”, one which would entail Spain seizing control of the separatist province, potentially leading to even more violence and even more demands for independence.

GREAT BRITAIN/NORTH KOREA

Britain draws up plans for war with North Korea;

(courtesy Mac Slavo/SHFTPlan.com)

Britain Draws Up Plans For War With North Korea

Authored by Mac Slavo via SHTFplan.com,

While the United States remains distracted and divided, Great Britain draws up plans for an upcoming war with North Korea.

Tossing major issues aside, Americans have all but forgotten that the world stands on the precipice of World War 3.

While the left is focusing on implementing more gun control and the right is worried about what athletes do during the national anthem, Britain is drawing up plans for a massive war with the rogue nation of North Korea. Britain is preparing for war in the event that the communist regime conducts another successful missile test and the United States responds with a strike.

North Korea is being closely watched right now, especially since the recent ratcheting up of tensions. Amid fears it could launch another long-range missile test on Tuesday to mark the anniversary of the founding of its ruling party, some countries refuse to take the threat lightly. And bellicose rhetoric from Donald Trump has heightened tensions in the region in recent months, prompting British officials to draw up military plans for a response to a break out of hostilities  it was reported.

According to the Daily Mail, part of the wartime preparations include the deployment of the Navy’s newest aircraft carrier, HMS Queen Elizabeth, before it has undergone flight trials.

We have plenty of ships to send… the Type-45 destroyers, the Type-23 frigates. Britain’s new aircraft carrier could be pressed into service early if things turn south,” a senior Whitehall source told the newspaper.

Details of Britain’s secret operation plan have emerged after Donald Trump warned that “only one thing will work” when it comes to dealing with North Korea’s antics.

Donald J. Trump 

@realDonaldTrump

Presidents and their administrations have been talking to North Korea for 25 years, agreements made and massive amounts of money paid……

Donald J. Trump 

@realDonaldTrump

…hasn’t worked, agreements violated before the ink was dry, makings fools of U.S. negotiators. Sorry, but only one thing will work!

The tyrannical fascist in power in North Korea, Kim Jong-Un, has continued nuclear and rocket tests despite widespread condemnation and sanctions.

HMS Queen Elizabeth, which arrived at its home in Portsmouth in August after extensive sea trials, is not due to enter service until 2020. But the possible move to deploy it ahead of schedule drew comparisons with the start of the Falklands War.

“In the Falklands, we had to react to an event and HMS Illustrious was accelerated to respond,” a Navy source told the Mail.

“This was a reaction to protect British territory, however. In this case [North Korea], the UK would be part of a united global coalition. We would see what support we could give.

Sir Michael Fallon, the Defence Secretary, said last week that the UK should increase its military spending in the face of growing threats from states such as North Korea. Last month, Sir Michael told the BBC that Britain was at risk from Pyongyang’’s long-range nuclear missile programme.

“The US is fully entitled to defend its own territory, to defend its bases and to look after its people, but this involves us, London is closer to North Korea and its missiles than Los Angeles, he said.

end

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

Russia

Russia finally accuses the uSA of pretending to fight ISIS something that we have been telling you for years.

(courtesy zerohedge)

Russia Accuses U.S. Of “Pretending To Fight ISIS”

Russia has once again accused the US-led coalition in Iraq and Syria of facilitating the entry of Islamic State terrorists into Syria in order to hinder the advance of the Syrian Army and its allies. On Tuesday Russia’s defense ministry accused the US of merely “pretending” to fight ISIS in a way designed to put maximum pressure on Syrian and Russian front line defenses in Syria’s east. Russian military spokesman Major-General Igor Konashenkov said, “Everyone sees that the U.S.-led coalition is pretending to fight Islamic State, above all inIraq, but continuing to allegedly fight Islamic State in Syria actively for some reason.”

The accusation comes a little over two weeks after Russia released aerial images allegedly showing ISIS, the SDF (US-backed “Syrian Democratic Forces”), and US special forces working side-by-side on the battlefield against Syrian and Russian forces in Deir Ezzor, Syria. While the previous charges implied some level of close coordination between US-backed forces and ISIS in the region, the new claims point to coalition air power intentionally facilitating and utilizing ISIS movements to its advantage: “The actions of the Pentagon and the coalition demand an explanation. Is their change of tack a desire to complicate as much as they can the Syrian army’s operation, backed by the Russian air force, to take back Syrian territory to the east of the Euphrates?” asked Konashenkov. He continued with, “Or is it an artful move to drive Islamic State terrorists out of Iraq by forcing them into Syria and into the path of the Russian air force’s pinpoint bombing?”


Image source: Activist Post

Konashenkov further stated Syrian troops were in the midst of a fierce campaign to oust Islamic State fighters from the city of al-Mayadin, southeast of Deir Ezzor, but that IS was daily reinforcing its ranks there with “foreign mercenaries” pouring in from Iraq. The implications are that the US coalition is engineering this outcome.

Indeed, it’s no secret that throughout the course of the over 6-year long war in Syria, the international powers operating from neighboring countries have allowed border areas to remain remarkably porous, which facilitated record breaking numbers of jihadists entering Syria from dozens of countries. As the US State Department’s own 2014 CountryReport on Terrorism confirms, the rate of foreign terrorist entry into Syria over the past years has been unprecedented among any conflict in history: “The rate of foreign terrorist fighter travel to Syria – totaling more than 16,000 foreign terrorist fighters from more than 90 countries as of late December – exceeded the rate of foreign terrorist fighters who traveled to Afghanistan and Pakistan, Iraq, Yemen, or Somalia at any point in the last 20 years.”

Though Russian claims will be dismissed as outlandish by some, the latest accusations against the US are consistent with both the historical record and even US internal intelligence reports regarding the rise of the Islamic State, which early in the war envisioned a Sunni “Islamic State” in Syria’s east which could “isolate the Syrian regime” and pressure its regional ally Iran.

One of the more shocking admissions of this strategy came in 2016, when then Secretary of State John Kerry was caught on audio telling a Syrian opposition gathering, which met on the sidelines of a UN General Assembly meeting, that Obama hoped to use ISIS as leverage against Assad. According to Kerry on the leaked audio (25:50):

“And we know that this was growing, we were watching, we saw that Daesh was growing in strength, and we thought Assad was threatened”… “(We) thought, however, we could probably manage that Assad might then negotiate. But instead of negotiating he got Putin to support him.”

If the US coalition is indeed allowing ISIS in Iraq to “escape” into eastern Syria, it constitutes a clear continuation of the Obama era policy of “watching” and “managing” Daesh in order to put pressure on Assad and Iran. Former British spy, diplomat, and current Beirut-based Middle East analyst Alastaire Crooke has called this the “wedge concept” of ISIS origins. In previous commentary on the 2012 Defense Intelligence Agency (DIA) memo which first outlined the wedge concept, Crooke explained:

In short, the DIA assessment indicates that the “wedge” concept was being given new life by the desire to pressure Assad in the wake of the 2011 insurgency launched against the Syrian state. “Supporting powers” effectively wanted to inject hydraulic fracturing fluid into eastern Syria (radical Salafists) in order to fracture the bridge between Iran and its Arab allies, even at the cost of this “fracking” opening fissures right down inside Iraq to Ramadi. (Intelligence assessments purpose is to provide “a view” — not to describe or prescribe policy. But it is clear that the DIA reports’ “warnings” were widely circulated and would have been meshed into the policy consideration.)

Crooke further explained that this policy path could not be easily walked back once committed to, as the latest developments in Deir Ezzor appear to demonstrate. While US presence in Syria is now ostensibly based on anti-terror and anti-ISIS operations, the following dynamics are still in play:

But this “view” has exactly come about. It is fact. One might conclude then that in the policy debate, the notion of isolating Hezbollah from Iran, and of weakening and pressurizing President Assad, simply trumped the common sense judgement that when you pump highly toxic and dangerous fracturing substances into geological formations, you can never entirely know or control the consequences. And once you go down this road, it is not easy to “walk it back,” as it were: the toxicity is already suffused through the rocks. So, when the GCC demanded a “price” for any Iran deal (i.e. massing “fracking” forces close to Aleppo), the pass had been already partially been sold by the U.S. by 2012, when it did not object to what the “supporting powers” wanted .

Just prior to Russia’s latest charges against the US, Hezbollah leader Hassan Nasrallah also said on Sunday that American forces were actively hindering the fight against ISIS: “The American air force in some areas prevents the Syrian army and its allies from advancing in areas controlled by Islamic State,” he said in a televised speech. And added further, “The Americans are working to hinder the battle against Islamic State.”

According to veteran Middle East journalist Elijah Magnier, who is reporting from the ground, the US is looking the other way while ISIS pours across the Iraq-Syria border:

Elijah J. Magnier @ejmalrai Replying to @ejmalrai

Turkey in Idlib under Russian Air Force cover and Syrian and Iraqi fo…http://lrai.li/fzvhhmj @AlraiMediaGrouphttps://elijahjm.wordpress.com/2017/10/10/turkey-in-idlib-under-russian-air-force-cover-and-syrian-and-iraqi-forces-will-meet-at-their-respective-borders/ … …

Elijah J. Magnier @ejmalrai

100s of  cross daily Iraqi-Syrian borders: Syria seems tobe safer4 d group. The US “security parameter allows ISIS 2 cross undisturbed+

Elijah J. Magnier @ejmalrai Replying to @ejmalrai @AlraiMediaGroup

In every single  new attack,  forces heading towards al-Qaim will have2 stop & clean the breach behind themhttps://twitter.com/ejmalrai/status/917640765861433345 …

Elijah J. Magnier @ejmalrai

It doesn’t mean there is a deal between  & , but ISIS is allowed 2cross & attack Syrian troops means a lothttps://twitter.com/ejmalrai/status/917640466736275456 …

At minimum it should be clear by now to any objective observer that the US is not fundamentally motivated in its race for Deir Ezzor province by defeat of ISIS terrorism, but in truth by control of the eastern province’s oil fields. Whatever oil fields the SDF can gain control of in the wake of Islamic State’s retreat will then used as powerful bargaining leverage in negotiating a post-ISIS Syria. The Kurdish and Arab SDF coalition which is advised by US special forces, for example, recently captured Tabiyeh and al-Isba oil and gas fields northeast of Deir Ezzor city.

Though the US endgame is the ultimate million dollar question in all of this, it appears at least for now that this endgame has something to do with the Pentagon forcing itself into a place of affecting the Syrian war’s outcome and final apportionment of power: the best case scenario being permanent US bases under a Syrian Kurdish federated zone with favored access to Syrian oil doled out by Kurdish partners.

And it appears that the US coalition is now using ISIS as a geopolitical chess piece (not for the first time) to effect this outcome

END

Saudi Arabia/Russia/

Let us see if Saudi Arabia announces oil priced in yuan and then completely turn towards Russia for muscle support

(courtesy Pepe Escobar)

special thanks to Robert H for sending this to us

The House of Saud bows to the House of Putin Saudi Arabia pivots to Russia, the new sheriff in town By PEPE ESCOBAR OCTOBER 9, 2017 7:26 PM (UTC+8)

What a difference a year – an eternity in geopolitics – makes. No one could see this coming; the ideological matrix of all strands of Salafi-jihadi terror – which Russia fights no holds barred, from ISIS/Daesh to the Caucasus Emirate – beating a path to the Kremlin and about to embrace Russia as a strategic ally.

The House of Saud was horrified by Russia’s successful campaign to prevent regime change in Syria. Moscow was solidifying its alliance with Tehran. Hawks in the Obama administration were imposing on Saudi Arabia a strategy of keeping oil prices down to hurt the Russian economy.

Now, losing all its battles from Syria to Yemen, losing regional influence to both Iran and Turkey, indebted, vulnerable and paranoid, the House of Saud has also to confront the ghost of a possible coup in Riyadh against Crown Prince Mohammad bin Salman, a.k.a. MBS, as Asia Times reported. Under so much pressure, who’re you gonna call?

The ultimate ghostbuster; Russian President Vladimir Putin.

Essentially, the House of Saud is obsessed by three main vectors; low oil prices; Iran and Shi’ism; and what to make of US foreign policy under Trump. Let’s take them one by one.

I want my S-400s

As much as a Moscow-Washington reset remains doomed, even with the implosion of Russia-Gate, House of Saud advisers must have known that the Kremlin won’t ditch its strategic relationship with Iran – one of the key nodes of Eurasia integration.

Moscow will keep aligned with Iran across “Syraq”; that’s part of the “4+1” (Russia-Syria-Iran-Iraq, plus Hezbollah) alliance in the Levant/Mesopotamia, an incontrovertible (and winning) fact on the ground. And that does not preclude Russia’s increasingly cozy relationships across the Arab world – as with Egypt, Jordan, the UAE and Libya.

What concerns Moscow, deeply, is Saudi (formal or informal) financing of Salafi-jihadi outfits inside Russia. So a high-level line of communication between Moscow and Riyadh works towards dissipating any misunderstandings regarding, for instance, jihadism in Tatarstan and Chechnya.

Moscow does not buy the much-spun (in the West) Iranian “aggressive behavior” in the Middle East. As a key negotiator of the Joint Comprehensive Plan of Action (JCPOA), Russia very well knows that Iran’s ballistic missile program is actually the key target of Trump’s imminent decertification of the Iran deal.

These missiles actually represent dissuasion against any possible US attack, “leading from behind” or not. The Islamic Revolutionary Guards Corp (IRGC) in Tehran has made it quite clear the ballistic missile program does not fall into the JCPOA, and will remain active.

Enter the memorandum of understanding (MOU) between the Saudis and Rosoboronexport (Russia’s state body for exporting military hardware) signed in Moscow for the purchase of the S-400 missile system; the Kornet-EM system; the TOS-1A; the AGS-30; and last but not least the new Kalashnikov AK-103.

The S-400 success story is unequivocal. Iran bought it. Turkey bought it. Now Saudi Arabia buys it – even after splurging a fortune in US weapons during Trump’s by now infamous “sword dance” visit to Riyadh.

So no wonder, after the S-400 news, the US State Department like clockwork approved the possible – that’s the operative word – $15 billion sale of 44 THAAD launchers and 360 missiles to Saudi Arabia, a very good business for Lockheed Martin and Raytheon.

The Pentagon’s defense security cooperation agency said, “this sale furthers US national security and foreign policy interests, and supports the long-term security of Saudi Arabia and the Gulf region in the face of Iranian and other regional threats.” Cynics already envisage a battle of Iranian S-400s and Saudi THAADs “moderated” by Saudi S-400s.

We are the new OPEC

King Salman may have boarded the Saudi Arabian Airlines flight, but the real architect of the pivot to Russia is MBS. Oil in Saudi Arabia accounts for 87% of budget revenues, 42% of GDP, and 90% of exports. MBS is betting all his cards on the Vision 2030 program to “modernize” the Saudi economy, and he knows very well it will be impossible to pull off if oil prices are low.

At the Russia Energy Week forum in Moscow, Saudi Arabia’s Energy Minister Khalid Al-Falih said the Aramco IPO – a key driver of funds to Vision 2030 – will happen in the second half of 2018, contradicting Saudi officials who earlier stated the IPO was once again postponed to 2019. And no one can tell whether it will take place in the NYSE or not.

Meanwhile, the priority remains the OPEC / non-OPEC deal (with Russia at the forefront) to “stabilize” oil prices, clinched in November 2016 to cut production. President Putin tentatively agreed the deal could be extended beyond March 2018, something to be discussed in detail at the next OPEC meeting in Vienna in late November.

The deal may certainly be seen as a purely strategic/economic measure to stabilize the oil market – with no geopolitical overtones. And yet OPEC is geared to become a brand new animal – with Russia and Saudi Arabia de facto deciding where the global oil markets go, and then telling the other OPEC players. It’s open to question what Iran, Algeria, Nigeria, Venezuela, among others, will have to say about this. The barely disguised aim is to bring oil prices up to a band of $60-75 a barrel by the middle of next year. Certainly a good deal for the Aramco IPO.

There were a rash of other deals clinched in Moscow – such as Aramco and the Russian Direct Investment Fund (RDIF) $1 billion fund for oil-services projects in Russia, plus another $1 billion for a technology fund.

This synergy implies Saudi Arabia investing in top Russian energy assets and Russia, for instance, supplying gas to the Saudi petrochemical industry and reducing drilling/production costs. Certainly a good deal for Vision 2030.

The new sheriff in town

To say that the Saudi pivot to Russia is rattling nerves across the Beltway is an understatement. The CIA is not exactly fond of MBS. 9/11-related puzzles are bound to resurface.

What’s also clear is that the House of Saud has realized it cannot be left to watching camels as the great Eurasia integration caravan picks up speed. Russia has pipelines crisscrossing most of Eurasia. China is building rail lines connecting all of Eurasia. And we haven’t even touched specific Saudi-Chinese projects part of the Belt and Road Initiative (BRI).

Those were the days of King Abdulaziz and FDR aboard the USS Quincy in the Suez Canal forging a strategic partnership; the days of Washington leading Saudi Arabia to increase oil production, drive down prices and weaken the USSR; the days of the Afghan jihad. Now there’s no US dependence on House of Saud oil anymore. And jihadist blowback is the name of the security game.

It may be too early to identify the Saudi pivot to Russia as the shift of the century. It is though a certified game-changer. Moscow is about to become the new sheriff in town, in virtually any town across Southwest Asia. And it’s getting there on its own terms, without resorting to a Colt dialectic. MBS wants energy/defense cooperation? He gets it. MBS wants less Russian cooperation with Iran? He doesn’t get it. OPEC aims at higher oil prices? Done. And what about the S-400s? Free – sort of – for all.

end

6 .GLOBAL ISSUES 7. OIL ISSUES OPEC is now desperate as they call on the USA shale boys to cut production as well (courtesy zerohedge) A Desperate OPEC Asks US Shale For Help In Cutting Oil Output

While OPEC has been presenting an optimistic facade in recent months, repeating at every opportunity that the global oil market is “rebalancing” and demand is rising, the oil production cartel made a rare slip today when it addressed what should not be named in public: US shale production. Speaking on Tuesday, OPEC Secretary General Mohammed Barkindo called on U.S. shale oil producers to help curtail global oil supply, warning extraordinary measures might be needed next year to sustain the rebalanced market in the medium to long term. Which is odd because in every other public address by OPEC members, we hear precisely the opposite: that the market is already in a state of “healthy rebalancing” and… the oil production cut which was supposed to last until this past June may now be extended beyond March of 2018.

“We urge our friends, in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learnt from the current unique supply-driven cycle,” said Barkindo quoted by Reuters during a speech delivered at the India Energy Forum organized by CERAWeek in New Delhi.

“At the moment we (OPEC and independent U.S. producers) both agreed that we have a shared responsibility in maintaining stability because they are also not insulated from the impact of this downturn,” Barkindo said, referring to a slide in oil prices that spurred OPEC to agree production cuts late last year.

“The call by independents themselves (is) that we need to continue this interaction.”

Some independents… but not all, and certainly not the cash-flush US shale producers.

Which is why it is unclear just how much this “call” by non-shale independents will bother, or even be heard, by shale producers: fundamentally it is all about liquidity and cash flow, and whereas much of OPEC is at or just shy of its all-in breakeven costs (when factoring in government budgets), shale has no problems obtaining funding courtesy of a massive bond bubble, which allows it to keep its balance sheet stocked with cash, even if the cash flow from operations is barely positive. As such, all shale is doing is capturing market share from those OPEC producers who are prohibited from spending more to replenish existing output, something which the overly generous US junk bond market will allow shale to keep doing indefinitely, and at least until there is another sharp drop in oil prices.

Which explains why while OPEC and some other producers, including Russia have cut supplies this year in order to prop up prices, U.S. production has soared by almost 10% this year, driven largely by shale drillers, with shale production surpassing historical highs and reaching new records.

Barkindo also said he hoped that new producers, not just U.S. shale drillers, would join production cuts. We, in turn hope, he doesn’t hold his breath.

Meanwhile, OPEC continues the charade, and on Monday, Saudi Arabia cut crude oil allocations for November by 560,000 barrels per day (bpd), in line with the kingdom’s commitment to the supply reduction pact.

“Demand-supply is returning to rebalance through massive destocking that we have been witnessing of stocks in OECD across regions in a very massive way,” Barkindo said later, speaking to reporters on the sidelines of the conference. “In the past four months alone, we have seen destocking to the tune of 130 million bpd.”

The aim of the OPEC-led cut is to trim the level of oil in OECD industrialized countries compared with the five-year supply average. Barkindo said the stock overhang to the five-year average stood at 171 million barrels in August, against 338 million at the start of the year.

“The speed and pace (of destocking) has accelerated as a result of anticipated and projected demand growth in the second half of 2017 to the tune of 2 million bpd. We are witnessing a fast return to a balanced market,” Barkindo said.

Still, revealing that all the jawboning is hollow, on Sunday Barkindo said OPEC and other oil producers might need to take “some extraordinary measures” next year to rebalance the oil market.

Which naturally wouldn’t be necessary if what OPEC had been saying previously was the truth. It would, however, explain why OPEC is reduced to begging non-cartel members to limit their production, in the process tipping its hand at just how weak it truly is.

8. EMERGING MARKET

VENEZUELA

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings TUESDAY morning 7:00 am

Euro/USA   1.1791 UP .0050/ REACTING TO SPAIN VS CATALONIA/REACTING TO  +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES  RED EXCEPT UK FTSE  

USA/JAPAN YEN 112.36 DOWN 0.319(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/   

GBP/USA 1.3191 UP .0050 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2503 DOWN .0051 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 50 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1737; / Last night the Shanghai composite CLOSED UP 8.61 POINTS OR .26%      / Hang Sang  CLOSED UP 164.34 OR .46%   /AUSTRALIA  CLOSED UP 0.03% / EUROPEAN BOURSES OPENED ALL RED EXCEPT UK FTSE 

The NIKKEI: this TUESDAY morning CLOSED UP 132.80 POINTS OR .64% 

Trading from Europe and Asia:
1. Europe stocks  OPENED  IN THE RED EXCEPT FTSE

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 164.24 POINTS OR .58%  / SHANGHAI CLOSED UP 25.43 POINTS OR .48%    /Australia BOURSE CLOSED UP 0.03% /Nikkei (Japan)CLOSED UP 132.80 POINTS OR .64%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1291.90

silver:$17.20

Early TUESDAY morning USA 10 year bond yield:  2.352% !!! UP 0  IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.891, UP 0 IN BASIS POINTS  from MONDAY night. (POLICY FED ERROR)

USA dollar index early TUESDAY morning: 93.49 DOWN  29 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 2.392% DOWN 1 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.055%  DOWN 1/10  in   basis point yield from MONDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.695% UP 2 IN basis point yield from MONDAY 

ITALIAN 10 YR BOND YIELD: 2.127 UP 1 POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 44 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.442% DOWN 1/5  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM

Euro/USA 1.1802 UP .0061 (Euro UP 61 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.15 DOWN 0.517(Yen UP 52  basis points/ 

Great Britain/USA 1.3212 UP  0.0071( POUND UP 71 BASIS POINTS)

USA/Canada 1.2496 DOWN .0059 Canadian dollar UP 59 basis points AS OIL ROSE TO $51.02

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This afternoon, the Euro was ROSE 61 basis points to trade at 1.1802

The Yen FELL to 112.15 for a GAIN of 52  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  

The POUND ROSE BY 71 basis points, trading at 1.3212/ 

The Canadian dollar ROSE by 59 basis points to 1.2545,  WITH WTI OIL RISING TO :  $51.02

The USA/Yuan closed AT 6.5743  the 10 yr Japanese bond yield closed at +.055% DOWN 1/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 2  IN basis points from MONDAY at 2.336% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.8713 DOWN 2 in basis points on the day /

Your closing USA dollar index, 93.27  DOWN 40 CENT(S)  ON THE DAY/400 PM/BREAKS RESISTANCE OF 92.00 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY: 1:00 PM EST

London:  CLOSED UP  30.28 POINTS OR 0.40%
German Dax :CLOSED DOWN 27.11 POINTS OR .21%
Paris Cac  CLOSED DOWN 2.18 POINTS OR 0.04% 
Spain IBEX CLOSED DOWN 93.70 POINTS OR 0.92%

Italian MIB: CLOSED DOWN 140.84 POINTS OR 0.63% 

The Dow closed UP 69.61 OR 0.31%

NASDAQ WAS closed UP 7.52  POINTS OR 0.11%  4.00 PM EST

WTI Oil price;  $51.02  1:00 pm; 

Brent Oil: 56.87 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.94 DOWN 38/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 38 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +0.442%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$50.99

BRENT: $56.51

USA 10 YR BOND YIELD: 2.363%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.8952% 

EURO/USA DOLLAR CROSS:  1.1807 UP .0065

USA/JAPANESE YEN:112.43   DOWN  0.241

USA DOLLAR INDEX: 93.26 DOWN 41  cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3202 : UP 60 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2515 UP 40 BASIS pts 

German 10 yr bond yield at 5 pm: +0.442%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY Bonds, Bitcoin, & Bullion Bid But Dow Bounces Back To Another Record High  

Odd..

The S&P (orange) managed to scramble back into the green on the week but Small Caps (dark red) and Nasdaq (green) remain red. Trannies (blue) knee-jerked higher (on airlines) at the open but faded all day… The Dow hit a new record high (thanks to WalMart and Boeing)

VIX was smashed at the last second to get the S&P green for the week…

As a reminder – last week’s unrelenting meltup happened with China closed…

After ramping all last week, FANG stocks sank for the 2nd day in a row (with China back – are you seeing a theme yet?)….

Airline stocks jumped again today…

Spanish stocks (ETF) bounced after Puigdemont declared a deferred independence…

Treasuries – open after yesterday’s Columbus Day close – leaked lower in yields…NOTE the bid at the European open and at US open but then selling pressure once Europe closed…

Notably, overnight saw something very unusual in corporate bond land.

With spreads at post-crisis lows…

TRACE said that there were no client and/or affiliate trades of $5m or more in IG long bonds in the hours prior to the NY open. tt is the first time in recent memory that this has been the case. Of course, this follows Columbus Day in the states (bond market closed), and may be related to the market being closed in Japan on Monday for Health and Sports Day. China holidays had ended Sunday.

Did Central Banks kill the US corporate bond market too? Certainly seems that way!

The Dollar Index dropped for the 2nd day in a row (again now that China is back from Golden Week)…

EURUSD rallied overnight into the Catalan leader’s speech, but rolled over on his ‘deferred independence’…

Dollar weakness helped push Gold higher…

And Bictoin soared back above $4900!!

WTI/RBOB rallied onthe day ahead of tonoight’s API data.,..

And finally… “you are here”

end

In line with what we have been telling you for the past several weeks:  Trump’s tax plan has no chance of passing.  Today the Corker feud and the Paul rejection has put the plan spiraling towards death.

(courtesy zerohedge)

Trump Tax Plan On Verge Of Disaster Amid Corker Feud, Paul Rejection

Now that President Trump’s simmering feud with Tennessee Senator Bob Corker has exploded into the open, it appears that Republicans’ odds of passing tax reform before the White House’s self-imposed year-end deadline are growing slimmer by the day, and according to Cowen analyst Chris Krueger, “tax reform is dead, full stop.

And with the administration increasingly staking its credibly on the process, Politico is reporting that White House Legislative Director Marc Short has – on the order’s of the president – embarked on what’s probably a fool’s errand: coaxing Kentucky Sen. Rand Paul – one of the most vocal opponents of the administration’s agenda – to vote “yes” on the bill.

The Republican bill hasn’t yet been written, but Paul has already lashed out at the administration’s nine-page tax-reform proposal for appearing to offset tax cuts for corporations and the rich by raising taxes on the middle class. Indeed, as discussed previously, a review of the preliminary proposal by the nonpartisan Tax Policy Center suggested that middle-class taxpayers could wind up paying more if certain deductions, such as eliminating the deduction for state and local taxes, are eliminated.

Paul said in an interview that he’s undecided on both the budget and the tax plan blueprint but unleashed a torrent of criticism at the tax proposal nonetheless.

“The danger for this bill right now is the pay-for may be a middle-class tax hike. And if that’s that, it’s going to be a real problem,” Paul said. “If you lower the taxes on the rich and lower the taxes on the poor and then say, ‘Oh it’s going to be revenue neutral,’ we’ve got to raise somebody’s taxes to pay for it.”

To be sure, the administration has reportedly backed away from eliminating the SALT deduction following an outpouring of criticism from both Republicans and Democrats. Still, Politico reports that Paul – who like Corker is wary of blowing out the budget deficit – is starting off in the “no” column and planning to vote against the Republican budget which has already passed the House and is working its way through the Senate.

The Kentucky Republican’s outspoken opposition to a leadership-backed Obamacare repeal-and-replace bill and the backup Graham-Cassidy plan helped demolish the GOP’s health care agenda. And now Republicans are worried that the contrarian Paul is going to do the same on tax reform by coming out early and vocally against their work, according to two allies of Senate Majority Leader Mitch McConnell (R-Ky.).

“You have to assume he’s going to be a no on everything,” one of them griped.

The Senate will consider the budget teeing up tax reform in mid-October, and Paul is privately sending signals he’ll vote against it, just as he did on the budget setting up Obamacare repeal in January when he was the lone Republican senator to do so.

Paul’s opposition to the administration’s agenda has frustrated President Trump, who reportedly likes and respects the Kentucky senator and has made winning his vote a priority for Short and the rest of the administration’s legislative team, though Mitch McConnell has reportedly told the president to expect a “no” vote from Paul.

The president seems personally stung, two officials said, when Paul votes against Trump’s nominees and health care plans, because Trump likes him and thinks “he should be on the team,” in the words of one administration official.

McConnell has told Trump that he shouldn’t expect Paul to support the tax bill but Trump won’t accept that, according to a person familiar with their conversations.So Short spoke personally with Paul this week about tax reform and agreed to try to work with Paul to get to him to “yes.” It’s not clear if the White House can give Paul what he wants, but the two men agreed to try.

“Senator Rand Paul will continue to advocate for a tax cut for all. He is not trying to dictate exact policy. There is a wide variety of scenarios that he would support, but raising taxes on the middle class should be a non-starter,” said Sergio Gor, a spokesman for Paul. “Too many individuals in congressional leadership are more worried about bullet points on a white paper instead of delivering on a promise to actually cut taxes for the American people.”

Including Paul, Politico has identified at least four Republican senators who might oppose tax reform – one more than would be needed to kill the bill. The GOP leadership can only afford to lose two votes, assuming all 46 Democrats and the two independents who caucus with the Dems vote against.

Paul’s legislative eccentricities have been magnified by the GOP’s narrow majority even as the party controls all of Washington. Just three GOP senators can stop tax reform, just as they did on health care. And there’s already worry among Republicans that McCain, Sen. Susan Collins (R-Maine), Sen. Bob Corker (R-Tenn.) and a handful of other senators could vote against the nascent tax plan.

Of course, equity strategists have for months postulated that tax reform is the only piece of legislation that matters when it comes to justifying record-high valuations in the US stock market. But in some corners of Wall Street, skeptics are making a compelling case for why the legislation is doomed. Yesterday, Cowen analyst Chris Krueger pointed out that with Bob Corker sounding like he might oppose the Republican tax agenda purely out of spite (while also using it as an opportunity to burnish his credentials as a deficit hawk), and John McCain already talking about a “bipartisan approach” (implying that he’s a hard no), the Republicans appear to have already reached the zero margin of error on the tax reform process, meaning one more no vote could sink the whole thing.

For what it’s worth, Goldman Sachs over the weekend assigned tax reform a 60% chance of passing after a budget bill sailed through the House last week, while a Senate bill was approved by the influential Senate Budget Committee.

As the Washington Examiner explains, passing a budget is the first step in the tax reform process because it unlocks reconciliation, allowing legislation to pass with only 51 votes in the Senate. But Republicans shouldn’t hold their breath: the budget has yet to run the gauntlet in the Senate, a venue that has already earned its reputation as an elephant graveyard for Trump-era legislation.

And a “no” vote from Paul could very well scuttle tax reform before the bill is even written.

For now the market appears to be quickly discounting the probability of meaningful tax reform (though at the index surface, some might argue otherwise)…

end

The feud between Corker and Trump intensifies with the NYTtimes releasing part of the phone recording

(courtesy zerohedge)

White House Slams Corker, Escalating ‘Surreal” Feud As NYT Releases Part Of Phone Recording

The “surreal” feud between president Donald Trump and Senator Bob Corker – as defined yesterday by Cowen analyst Chris Krueger – escalated on Tuesday, when the White House said the outgoing GOP senator was partially responsible for the Obama administration’s nuclear deal with Iran but refused to say whether the retiring Corker should resign immediately. “Senator Corker worked with Nancy Pelosi and the Obama administration to pave the way for that and rolled out the red carpet for the Iran deal,” White House press secretary Sarah Huckabee Sanders said during today’s briefing.

As The Hill adds, reporters pressed Sanders on the claim, noting that Corker originally opposed the deal and that he led a bipartisan effort on Capitol Hill to have the deal reviewed by Congress, against Obama’s wishes.

“He worked with them on the legislation that rolled that out,” Sanders responded. “That’s what helped I think put things in motion. He may have voted against the deal ultimately, but he not only allowed the deal to happen, he gave it credibility. I stand by my statement.”

Adding fuel to the fire, Sanders criticized Corker throughout the press conference.  Asked if Corker should resign, as former Trump chief strategist Stephen Bannon suggested previously,  Sanders responded “I think that’s a decision for Sen. Corker and the people of Tennessee.”

The feud between the President and the Senator resumed this morning, when Trump on Tuesday claimed The New York Times set up Sen. Bob Corker (R-Tenn.) to look like a fool — by recording an interview.

“The Failing @nytimes set Liddle’ Bob Corker up by recording his conversation,” Trump tweeted. “Was made to sound a fool, and that’s what I am dealing with!”

Donald J. Trump 

@realDonaldTrump

The Failing @nytimes set Liddle’ Bob Corker up by recording his conversation. Was made to sound a fool, and that’s what I am dealing with!

8:50 AM – Oct 10, 2017 Twitter Ads info and privacy

As a reminder, in the interview Corker ripped Trump suggesting the president was unstable and that his threats to other countries risked putting the U.S. “on the path to World War III.”

Trump’s tweet prompted the NYT to respond.

Jonathan Martin 

@jmartNYT

NEW: Audio of Corker telling us “I hope you are” taping our interview >>https://www.nytimes.com/2017/10/10/reader-center/trump-claims-we-tricked-bob-corker-heres-the-truth.html …https://twitter.com/realdonaldtrump/status/917734186848579584 …

12:47 PM – Oct 10, 2017 Trump Claims We Tricked Bob Corker. Here’s the Truth.

“I know they’re recording it,” Mr. Corker said, referring to two of his aides who were listening on other lines, “and I hope you are, too.”

nytimes.com

Twitter Ads info and privacy

In an article on Tuesday, the NYT’s Jonathan Martin clarified that “far from being set up, Mr. Corker asked that I tape our conversation. “I know they’re recording it, and I hope you are, too.”

President Trump claimed on Twitter today that The Times “set Liddle’ Bob Corker up by recording his conversation.” Mr. Trump was referring to our interview Sunday with Mr. Corker, the Tennessee Republican and chairman of the Senate Foreign Relations Committee, in which he said Mr. Trump was recklessly tempting “World War III,” treating the presidency “like he’s doing ‘The Apprentice’ or something” and required constant supervision by his own staff.

As the reporter who conducted the 25-minute telephone interview with Mr. Corker, I thought I would offer more insight about what actually transpired.

Far from being set up, Mr. Corker asked that I tape our conversation.

“I know they’re recording it, and I hope you are, too,” he said as two of his aides listened in on other lines, one of them also taping the interview.

As with most on-the-record discussions with an elected official, I was recording our conversation to ensure accuracy.

And after Mr. Corker got off the phone, his two aides made sure I had recorded the call. Like the senator, they wanted to ensure his extraordinary charges were precisely captured.

As Mr. Corker noted in our interview, his comments were only the latest, and sharpest, critique he had made of Mr. Trump this year.

Trump’s accusation escalates his feud with Corker, a onetime ally and an influential member of the upper chamber. The president responded last weekend by claiming Corker had begged him for his endorsement but that he had declined. Corker shot back, saying the White House had become “an adult day care center.”

Far from merely a verbal spat, the rising antagonism between the two politicians could endanger Trump’s effort to pass an overhaul of the tax code. As reported yesterday, Trump can only afford to lose two GOP senators, and Corker told the Times that he would not support a plan that blows a hole in the federal budget.

Corker also chairs the Senate Foreign Relations Committee and could have a major say over the future of the Iran nuclear deal, which the president is expected to decertify in the coming days.

An excellent commentary from James Rickards explaining why Janet Yellen has got her “inflation” numbers wrong. He explains the Fed’s preferred number PCE  and also highlights why these numbers are not transitory

(a good read..courtesy James Rickards)

Rickards Warns “The Market’s Got It Wrong”

Authored by James Rickards via The Daily Reckoning,

Janet Yellen’s mantra is, “It’s transitory!”

That’s Yellen’s typical response to a long litany of data that shows the U.S. is in the grip of a powerful disinflationary trend that may lead to outright deflation – a central banker’s worst nightmare.

The Fed has a publicly announced 2% inflation goal, which they consider to be price stability. In fact, 2% inflation cuts the purchasing power of the dollar by 75% in the course of an average lifetime. The Fed would tell you to ignore that.

Why 2% inflation is considered “price stability” is a subject for another day. For now, let’s just accept the Fed’s definition and see how the Fed responds from a policy perspective.

The Fed carves out food and energy prices from inflation. That gets to something called “core” inflation.

The Fed’s preferred metric is calculated monthly by the U.S. Commerce Department as the personal consumption expenditure (PCE) deflator. The Fed’s preferred interval is monthly data compared to the same month one year earlier, or “year-over-year,” YOY.

With a 2% target for PCE core YOY, what’s the actual time series of data? Here it is:

  • December 2016: 1.9%
  • January 2017: 1.9%
  • February 2017: 1.9%
  • March 2017: 1.6%
  • April 2017: 1.6%
  • May 2017: 1.5%
  • June 2017: 1.5%
  • July 2017: 1.4%
  • August 2017: 1.3%

An objective analyst would give the Fed credit for coming close to their target in late 2016. This is precisely why the Fed embarked on a path of rate hikes. The Fed raised interest rates in December 2016, March 2017 and June 2017.

The chart below is taken from a presentation given by Janet Yellen on September 26, 2017. The black horizontal line is the Fed’s 2% inflation target. The blue line represents actual PCE inflation; the red line represents PCE “core” inflation with food and energy prices removed, (the Fed’s preferred method). The downward trajectory of the red line should be disturbing to the Fed, but is routinely dismissed as “transitory.”

What happened next?

To answer that question, bear in mind that monetary policy works with a lag. That insight is one of Milton Friedman’s few economic contributions that has stood the test of time.

The Fed has been tightening in fits and starts since Bernanke’s “taper talk” in May 2013. This has resulted a consistent pattern in which Fed tightening slows the economy, then the Fed flips to ease, and the economy picks up steam, which leads to another round of tightening, and another slowdown.

Wash, rinse, repeat.

The Fed’s late 2016, early 2017 tightening cycle has now come home to roost. In the latest nine-month time series, shown above in the table and chart, inflation was flat or down in every month, and dropped a total of 0.6%.

That’s huge. The Fed’s range for this purpose is 0% to 2%. The floor is 0% because the Fed must avoid deflation. The ceiling is 2% because that’s the Fed’s announced target. A 0.6% drop covers 30% of the target range. It’s a quite significant move, and all in the wrong direction.

What’s Yellen’s reaction to this in-your-face data? In effect, she says. “It’s transitory!”

First Yellen blamed a price war among cell phone service providers. Then she blamed the strong dollar, which tends to lower import prices (with a strong dollar you get more for your money abroad so unit costs decline).

Then she blamed health care costs because they’re government administered and not responsive to Fed monetary policy. Then she blamed hurricane damage from Harvey, Irma and Maria.

It’s always something.

Why are Yellen and her colleagues in denial about the persistence of disinflation? Why are they insisting that an obvious trend is merely “transitory?”

The first analytic flaw is Yellen’s belief in the Phillips Curve. This model presents an inverse relationship between unemployment and inflation. As unemployment goes down, labor scarcity leads to wage increases above growth potential. This leads to inflation.

The Fed assumes that because of low unemployment today, inflation must be right around the corner.

The only problem with the Phillips Curve is that it does not exist. It has no empirical support. In the late 1970s and early 1980s we had high unemployment and high inflation. Today we have low unemployment and low inflation. Both results are the exact opposite of what the Phillips Curve would predict.

Yellen also believes that monetary ease, acting with a lag, feeds inflation. Therefore it is necessary to tighten policy before inflation arrives in order to avoid getting behind the curve.

Monetary policy does act with a lag, but it does not directly cause inflation. It may add fuel to a fire, but it’s not the catalyst. The Fed has created $3.5 trillion of new money since 2008, yet there has been no appreciable amount of inflation for nine years.

The cause of inflation is not money supply but psychology. It is expressed as velocity — the speed at which money is turned over through lending and spending. Velocity depends on behavioral psychology, or what Keynes called “animal spirits,” regardless of the amount of money around.

Yellen sees inflation under every rock despite the lack of empirical evidence. In fact, the evidence as revealed in the time series of PCE data above points toward disinflation and deflation.

Reality is catching up with the Fed.

They will respond by taking a “pause” on an interest rate hike in December. This is the opposite of current market expectations.

What about the prospects for disinflation and Fed easing?

The most important development is recent strength in the U.S. dollar. This has the effect of lowering import prices, which feeds into the U.S. manufacturing supply chain. Cheaper imports also put a lid on the ability of competing U.S. producers to raise their own prices.

Second, the September employment report came out last Friday. A Reuters survey of economists had expected the economy to add 90,000 jobs in September.

How many did it really add?

Zero. Less than zero, actually. The economy shed 33,000 jobs. This was the first time in seven years that the U.S. economy lost jobs.

This may be due to the hurricanes, but coming on top of the weak inflation data that came out recently, it will certainly give the Fed more than enough reason to hit the “pause” button on a December rate hike.

Finally, Yellen’s term as Chair expires at the end of January 2018, just a few months away. It appears she will not be reappointed by Trump. The current favorite to replace her is Kevin Warsh, as I told readers my earlier this year.

The December 2017 FOMC meeting will be Yellen’s last. She does not want her legacy to be that of the Fed Chair who caused a recession by tightening into weakness. That would repeat the classic Fed blunder of 1937.

Yellen’s legacy is secure because she was able to begin rate hikes and balance sheet normalization, both of which reversed the easy money policies of Ben Bernanke. She will rest on those laurels and not take a risky rate decision on her way out the door.

Eventually the markets will figure this out. Right now markets are giving a nearly 90% chance of a rate hike in December based on CME Fed Funds futures. That rate will drop significantly by December 13 when the FOMC meets again with a press conference. (There’s another meeting on November 1, but no one expects any policy changes then).

As market probabilities catch up with reality, the dollar will sink, the euro and gold will rally, and interest rates will resume their long downward slide.

end

Devastation in Northern California as fires rip through Sonoma County and Napa County  (wine country)

(courtesy zerohedge)

Curfew Enforced As Looters Ransack Homes In Sonoma County; Death Toll In NorCal Fires Climbs To 11

As Santa Rosa residents scramble to flee the path of no fewer than 15 major wildfires raging across eight Northern California counties, police in the Sonoma county seat have instituted a sunrise-to-sunset curfew as they crack down on unscrupulous looters who’ve been raiding abandoned homes.

State officials said that 11 people have been confirmed dead. And in a sign that the toll could rise substantially, emergency responders in Sonoma County say they’ve fielded 100 calls from residents reporting missing family members. Meanwhile, more than 100 people were being treated at Napa- and Sonoma-area hospitals for fire-related injuries or health issues, including burns, smoke inhalation and shortness of breath.

Amy Hollyfield, a reporter with a local ABC News affiliate, said she’s spoken with several area residents who say their homes were broken into and robbed after nearby flames forced them to evacuate.

Some individuals are even voluntarily guarding their neighborhoods from looters. The LA Times reports that one off duty detective in Santa Rosa has been waiting on his lawn with his sheriff’s badge hanging around his neck.

Troy Newton first helped warn his neighbors to flee after spotting a “red snake of fire” near his middle class neighborhood.

After sundown Monday, Newton was lying on his side on the lawn outside his home, his sheriff’s badge dangling from a lanyard around his neck.

By then, he’d taken on a new responsibility: guarding his evacuated neighborhood from looters and vandals.

“After 25 years as a cop, I know that there are going to be people coming in here to rob our homes,” he said. “So I’m gonna sit right here until morning.”

In a sign that wine production in the state is facing serious disruptions, Napa Valley Vintners association says most wineries as employees have evacuated and power outages have caused widespread blackouts.

To be sure, fires haven’t been confined to the northern part of the state. The Anaheim Hills fire in Southern California has scorched between 5,000 to 6,000 acres.

But, so far, Santa Rosa has emerged as the worst-hit city as whole neighborhoods have burned to ground, leaving behind a post-apocalyptic scene.

Destroyed landmark buildings in the city included the Fountaingrove Inn, a 124-room hotel; a nearby event center, the Fountaingrove Round Barn; and classrooms at the Luther Burbank Center for the Arts, The (Santa Rosa) Press Democrat reported. One of Santa Rosa’s fire stations was also lost in the fire, according to a post on the Mountain View Fire Department’s Facebook account, according to CNN.

One disturbing video depicted the charred remains of the city’s Hidden Valley neighborhood.

Brian van der Brug @bvdbrug

Widespread destruction at Hidden Valley neighborhood in Santa Rosa

More than 20,000 people have been evacuated across Northern California because of the fire. More than 1,500 buildings have been destroyed, and the state’s famous wine country may never be the same. Gov. Jerry Brown placed Napa, Sonoma and Mendocino counties under a state of emergency early yesterday.

And already, heartbreaking stories about fire-related casualties have begun to emerge.

A Napa couple who died in their home in the Atlas Peak fire had recently celebrated 75 years of marriage, KTVU-TV reported late Monday.

Their granddaughter Ruby Gibney told the station that their home “was quickly ravaged by the fire, and they were unable to get out in time and tragically died.” The couple were identified by the station as Sara and Charles “Peach” Rippey. They were 99 and 100 years old, respectively. The Atlas fire, which is blazing across Napa, has claimed more than 50 structures, including homes and barns, according to Napa County Fire Chief Barry Biermann said during a news conference.

Most of the Northern California fires ignited Sunday night, driven by winds of more than 50 mph and dry conditions,Director Ken Pimlott of the California Department of Forestry and Fire Protection said Monday. The high winds led to “extreme rates of spread and volatile burning conditions,” according to Cal Fire.

CNN reports that winds have decreased throughout the area – 6 to 13 mph was forecast around Santa Rosa – helping to slow the fires ferocious pace and allowing firefighters to contain some of the blazes. “Winds and the fire weather threat will decrease Tuesday in the north, but a threat will remain in Southern California,” according to the National Weather Service on Tuesday. Months of little rainfall also helped create the dry conditions that have allowed fires to spread across 60,000 acres.

end

I will see you with a partial commentary WEDNESDAY night.

AFTER WEDNESDAY NIGHT, MY COMMENTARIES WILL BE DELIVERED AT ODD HOURS /

HARVEY

 


Oct 9/GOLD AND SILVER ADVANCE: GOLD UP $8.00 AND SILVER IS UP 23 CENTS/COMEX GOLD OPEN INTEREST FALLS BY OVER 2,000 CONTRACTS BUT SILVER DOES THE REVERSE AS SILVER LONGS REFUSE TO BUDGE/TRUMP IN A SHOUTING MATCH WITH BOB CORKER WHICH WILL SEAL THE...

Mon, 10/09/2017 - 18:51

GOLD: $1282.50 UP   $8.00

Silver: $16.93  UP 23 CENT(S)

Closing access prices:

Gold $1284.80

silver: $16.98

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: $1300.79 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1281.60

PREMIUM FIRST FIX:  $19.19 (premiums getting larger)

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1300.79

NY GOLD PRICE AT THE EXACT SAME TIME: $1282.30

Premium of Shanghai 2nd fix/NY:$19.49 (PREMIUMS GETTING LARGER)  

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1282.15

NY PRICING AT THE EXACT SAME TIME: $1281.90

LONDON SECOND GOLD FIX  10 AM: $1278.75

NY PRICING AT THE EXACT SAME TIME. 1279.90

For comex gold: OCTOBER/

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

TOTAL NOTICES SO FAR: 2329 FOR 232,900 OZ  (7.241TONNES)

For silver: OCTOBER  5 NOTICES FILED TODAY FOR 25,000  OZ/ Total number of notices filed so far this month: 390 for 1,950,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest SURPRISINGLY ROSE BY A STRONG  1979 contracts from  184,165  UP TO 186,144   WITH RESPECT TO FRIDAY’S TRADING (UP  10 CENTS).  THE CROOKS TRIED TO COVER AS MUCH OF THEIR SILVER SHORTS AS POSSIBLE YESTERDAY BUT IT LOOKS LIKE THEY HAD NO SUCCESS..SO THEY TRIED ANOTHER RAID ON FRIDAY BUT THEIR PLAN WAS FOILED WITH THE NEWS THAT NORTH KOREA WAS PLANNING ANOTHER LONG RANGE MISSILE CAPABLE OF HITTING THE WEST COAST OF THE USA.

RESULT: A GOOD SIZED RISE IN OI COMEX  WITH THE  10 CENT PRICE RISE AND CONSTANT TORMENT. IT SURE LOOKS LIKE OUR BANKERS FAILED AGAIN IN THEIR ATTEMPT TO COVER MUCH OF THEIR MASSIVE SILVER SHORTFALL SO ANOTHER RAID WAS ORCHESTRATED FRIDAY MORNING BUT THAT FAILED AS WELL ON THE NORTH KOREAN NEWS.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.931 BILLION TO BE EXACT or 133% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 5 NOTICE(S) FOR 25,000  OZ OF SILVER.

In gold, the open interest FELL BY A  MUCH LARGER THAN EXPECTED 2,591 CONTRACTS DESPITE THE  RISE in price of gold ($1.60 ) .  The new OI for the gold complex rests at 514,151. OUR BANKER FRIENDS WERE MILDLY SUCCESSFUL IN COVERING SOME OF THEIR GOLD SHORTS. THE BANKERS WERE REACHING FOR CAPITULATION ON FRIDAY BY CAUSING ANOTHER HUGE RAID ON GOLD AND SILVER BUT THAT WAS FOILED ON NEWS THAT NORTH KOREA WAS PLANNING ANOTHER LONG RANGE MISSILE LAUNCH.

 

Result: A GOOD SIZED DECREASE IN OI WITH THE RISE IN PRICE IN GOLD ($1.40) 

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:   

Tonight , ANOTHER BIG CHANGE  in gold inventory at the GLD/ this time A DEPOSIT OF 4.43 TONNES

Inventory rests tonight: 858.45 tonnes.

SLV

Today:  ANOTHER BIG change in inventory: ANOTHER DEPOSIT OF 1.227 MILLION OZ

INVENTORY RESTS AT 326.898 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  2102 contracts from 184,165  UP TO 186,144(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. OUR BANKER’S ATTEMPTED RAID ON FRIDAY WAS ABORTED ON  NEWS THAT NORTH KOREA WAS PLANNING A MISSILE LAUNCH CAPABLE OF HITTING THE WEST COAST OF THE USA AND THAT PUT AN END TO THE WHACKING.

RESULT:  A GOOD SIZED INCREASE IN SILVER OI  AT THE COMEX WITH THE TINY RISE IN PRICE OF 10 CENTS WITH RESPECT TO FRIDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS AS THEIR  RAID WAS ABORTED ON THE KOREAN NEWS.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed up 25.43 points or .76% /Hang Sang CLOSED down 131.45 pts or .46% / The Nikkei closed /Australia’s all ordinaires CLOSED UP 0.48%/Chinese yuan (ONSHORE) closed up  at 6.6240/Oil DOWN to 49,46 dollars per barrel for WTI and 55.54 for Brent. Stocks in Europe OPENED GREEN EXCEPT FTSE .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6240. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.6197 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. CHINA IS VERY HAPPY TODAY

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

SUNDAY/TRUMPS HINTS AT WAR WITH NORTH KOREA

(COURTESY ZERO HEDGE)

b) REPORT ON JAPAN c) REPORT ON CHINA 4. EUROPEAN AFFAIRS i)SpainRajoy is now ready to trigger the “nuclear option” as hundred of thousands of citizens line the streets in support of Madrid against the Catalans

( zerohedge)

ii) Now Rajoy issued a veiled death threat against the Catalan leader if they declare independence

( zerohedge)

iii)At the end of the day, the Catalan President stated that he will declare a “gradual independence” tomorrow, whatever that means..

(courtesy zerohedge)

iv)The Netherlands/EU

Now it is the Dutch Central bank that is warning of a “calm before the storm” as they describes problems with the low volatility, huge bubbles forming everywhere and the too high valuations in the stock market and other assets

( zero hedge)

v)Germany/EU

So much for Germany’s open door policy on migrants: there will be net limits on refugees

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Iran/USA

Iran threatens the USA if new sanctions are passed

( zero hedge)

ii)Turkey

the uSA suspends all non immigrant visa services due to the arrest of the USA embassy employee in Istanbul

( zerohedge)

iii)The Turkish lira crashes 4% following the visa suspension drama:

( zerohedge)

iv)The rhetoric escalates as Turkey issues a warrant for a second USA consulate worker as the plunge in the Lira accelerates.  We may have an emerging market contagion

( zerohedge)

v) Russia/USA

Now it is Moscow’s turn to warn the USA if the USA issues restrictions on RT and Sputniks news ( zerohedge) 6 .GLOBAL ISSUES

 

7. OIL ISSUES 8. EMERGING MARKET 9.   PHYSICAL MARKETS

i)A great article on the huge total debt in the UK economy.  The IMF warns that this could lead to a financial crash if house (or asset prices) fall

( Duncan/London’s Daily Mail)

ii)Freeport McMoRan gives up control over the large Grasberg Indonesian gold/copper mine.

( Jensen/Reuters)

 

10. USA Stories

i)The White House over the weekend has now revealed that in order for the dreamers to stay in the USA he wants money for the wall. The democrats are saying no!

( zerohedge)

ii)War of words over the weekend between Bob Corker and the President. The senator claims that Trump’s actions could threaten World War iii

( zero hedge)

iii)After a weekend feud with Corker it would now seem that the tax reform package will die on the senate floor ( zerohedge)

iv)Looks like the wine industry is going to be affected:Wildfires engulf NAPA, Sonoma and 6 other counties

(courtesy zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY MUCH LARGER THAN EXPECTED 2,591 CONTRACTS DOWN to an OI level of 514,151 DESPITE THE TINY RISE IN THE PRICE OF GOLD ($1.40 RISE IN FRIDAY’S TRADING). OUR BANKER FRIENDS WERE MILDLY SUCCESSFUL IN THEIR ATTEMPT TO COVER SOME OF THEIR HUGE GOLD SHORTFALL.  OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH EXPECT  GOLD TO FIRM UP THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  LARGER SIZED open interest DECREASE WITH THE SMALL SIZED RISE IN THE PRICE OF GOLD ($1.40) . BANKERS MILDLY SUCCESSFUL IN THEIR ATTEMPT TO COVER THEIR GOLD SHORTFALL. BANKERS WERE TRYING FOR CAPITULATION IN THE WHACKING OF GOLD BUT THEIR PLAN WAS FOILED WITH NEWS OF NORTH KOREA PREPARING TO LAUNCH A MISSILE CAPABLE OF HITTING THE WEST COAST OF THE USA.

 

 

IN SEPTEMBER,CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

We have now entered the active contract month of Oct and here we saw a LOSS of 18 contracts DOWN to 220 contracts.  We had 15 notices filed yesterday so we LOST 3 contracts or 300 oz will NOT stand for delivery at the comex and 3 EFP notices were given.

The November contract saw A loss OF 161 contracts down to 1395.

The very big active December contract month saw it’s OI LOSS OF 4289 contracts DOWN to 403,283.

We had 0 notice(s) filed upon today for  NIL oz

 VOLUME FOR TODAY (PRELIMINARY) 201,749  AVAILABLE

CONFIRMED VOLUME FRIDAY: 384,881

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI ROSE BY 1,979 CONTRACTS FROM 184,165 UP TO 186,144 DESPITE FRIDAY’S TINY  10 CENT RISE IN PRICE. WE HAVE HAD MINIMAL BANKER SHORT COVERING OVER THESE PAST TWO WEEKS AND GAIN ON FRIDAY AS THEIR RAID FAILED AGAIN TO LOOSEN MORE SILVER LONGS FROM THE SILVER TREE.  THE BANKERS TRIED ON MORE TIME ON  FRIDAY MORNING IN THEIR FINAL ATTEMPT TO RAID BEFORE “GOLDEN WEEK” ENDS IN CHINA.  THEIR RAID ATTEMPT FAILED ON NEWS THAT NORTH KOREA WAS PLANNING TO TEST A MISSILE LAUNCH  CAPABLE OF HITTING THE WEST COAST OF THE USA. We have now entered the non active contract month of  October and here the OI LOST 15 contacts DOWN TO 532.  We had 15 notices filed on Friday so we GAINED 0 contracts or AN ADDITIONAL zero oz will stand for delivery.  November saw a gain of 8 contract(s) and thus RISING TO  289. After November, the NEXT big active contract month is December and here the OI LOST 207  contracts DOWN to 143,454 contracts.

We had 5 notice(s) filed for  25,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.9/2017.

Gold Ounces Withdrawals from Dealers Inventory in oz   nil Withdrawals from Customer Inventory in oz   nil oz Deposits to the Dealer Inventory in oz    nil oz Deposits to the Customer Inventory, in oz   nil No of oz served (contracts) today   0 notice(s) NIL OZ No of oz to be served (notices) 216 contracts (21,600 oz) Total monthly oz gold served (contracts) so far this month 2329 notices 232,900 oz 7.2441 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz Today we HAD  0 kilobar transaction(s)/   WE HAD 0 DEALER DEPOSIT: total dealer deposits: nil oz We had nil dealer withdrawals: total dealer withdrawals:  0 oz we had 0 customer deposit(s): total customer deposits; nil oz We had n/a customer withdrawal(s) total customer withdrawals; nil  oz  we had 0 adjustment(s) For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2329) x 100 oz or 232,900 oz, to which we add the difference between the open interest for the front month of OCT. (216 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 254,500  oz, the number of ounces standing in this active month of OCT.   Thus the INITIAL standings for gold for the OCTOBER contract month: No of notices served  (2329) x 100 oz  or ounces + {(216)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 254,500 oz standing in this  active delivery month of OCTOBER  (7,916 tonnes). WE LOST 7 CONTRACTS OR AN ADDITIONAL 700 OZ WILL NOT STAND AS THE BANKERS ISSUED 7 EFP CONTRACTS.  IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER.  THUS THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear) Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes    I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE OCTOBER DELIVERY MONTH OCTOBER INITIAL standings  Oct 6.2017 Silver Ounces Withdrawals from Dealers Inventory  nil Withdrawals from Customer Inventory  31,036.723 oz CNT Delaware Deposits to the Dealer Inventory  nil oz Deposits to the Customer Inventory   599,281.700 oz HSBC No of oz served today (contracts) 5 CONTRACT(S) (25,000 OZ) No of oz to be served (notices) 527 contracts (2,635,000 oz) Total monthly oz silver served (contracts) 390 contracts (1,950,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month    xx oz today, we had  0 deposit(s) into the dealer account: total dealer deposit: nil   oz we had 0 dealer withdrawals: total dealer withdrawals: nil oz we had 2 customer withdrawal(s): i) Out of CNT: 29,984.760 oz ii) Out of Delaware: 1046.963 oz TOTAL CUSTOMER WITHDRAWALS: 31,036.723  oz We had 0 Customer deposit(s): ***deposits into JPMorgan have stopped  again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: nil  oz    we had 0 adjustment(s) The total number of notices filed today for the OCTOBER. contract month is represented by 5 contract(s) for 25,000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 390 x 5,000 oz  = 1,950,000 oz to which we add the difference between the open interest for the front month of OCT. (532) and the number of notices served upon today (5 x 5000 oz) equals the number of ounces standing.  

 

.   Thus the INITIAL standings for silver for the OCTOBER contract month:  390 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(532 ) -number of notices served upon today (15)x 5000 oz  equals  4,585,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE   WE GAINED  0 CONTRACTS OR  AN ADDITIONAL NIL OZ WILL STAND FOR DELIVERY.  ESTIMATED VOLUME FOR TODAY:   58.940 CONFIRMED VOLUME FOR YESTERDAY: 112,459 CONTRACTS     Total dealer silver:  39.345 million (close to record low inventory   Total number of dealer and customer silver:   219.562 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada   CANADIAN HOLIDAY/CENTRAL FUND DATA/SPROTT NOT PROVIDED 1. Central Fund of Canada: traded at Negative 1.5 percent to NAV usa funds and Negative 1.4% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.7% Percentage of fund in silver:37.3% cash .+0.0%( Oct 6/2017)  2. Sprott silver fund (PSLV): STOCK   NAV FALLS TO -0.50% (Oct 6/2017)  3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.40% to NAV  (Oct 6/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.50%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.40%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES

Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES

oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT  854.30 TONNES

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes

Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES

Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO THE GLD/

Sept 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

Sept 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

Inventory rests at 836.87 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Oct 9/2017/ Inventory rests tonight at 858.45 tonnes *IN LAST 246 TRADING DAYS: 82.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 181 TRADING DAYS: A NET  74.78 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY. *FROM FEB 1/2017: A NET  43.67 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ

OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z

Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615  MILLION OZ

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/

Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/

Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 7/STRANGE!! WITH DEMAND FOR SILVER HUGE WE HAD ANOTHER 945,000 OZ WITHDRAWN. NO DOUBT THAT THIS IS CRIMINAL ACTIVITY AS SILVER IS WITHDRAWN AND USED TO CONTAIN THE RISE IN PRICE/INVENTORY RESTS AT 327.088 MILLION OZ/

SEPT 6/STRANGE WITH A HUGE DEMAND FOR SILVER THROUGHOUT THE WORLD THESE DOORKNOBS WITHDRAW A HUGE 3.148 MILLION OZ OF SILVER FROM THE SLV/INVENTORY RESTS AT 328.033 MILLION OZ

Sept 5/2017: no change in silver inventory at the SLV/Inventory rests at 331.178 million oz/

Sept 1/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 331.178 MILLION OZ

AUGUST 31/STRANGE!! a huge withdrawal of 2.019 million oz with silver up today./INVENTORY RESTS AT 331.178 MILLION OZ

August 30/no change in silver inventory at the SLV/inventory rests at 333.178 million oz

August 29/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

AUGUST 28/no change in silver inventory at the SLV/Inventory rests at 333.178 million oz/

AUGUST 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

AUGUST 24/A HUGE WITHDRAWAL OF 1.229 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

August 23/no change in silver inventory at the SLV/Inventory rests at 334.407 million oz

August 22/no change in silver inventory at the SLV/inventory rests at 334.407 million oz.

AUGUST 21/no change in silver inventory/inventory rests at 334.407 million oz/

August 18/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REST AT 334.407 MILLION OZ

August 17/A WITHDRAWAL OF 1.418 MILLION OZ LEAVES THE VAULTS OF THE SLV (WITH SILVER UP 25 CENTS YESTERDAY?)/INVENTORY RESTS AT 334.407 MILLION OZ

Oct 9/2017:

Inventory 326.898  million oz end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.36%
  • 12 Month MM GOFO + 1.60%
  • 30 day trend

end

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Perth Mint Gold Coins Sales Double In September By Mark O’Byrne October 9, 2017 0 Comments

– Perth Mint gold coins see sales double on month in September
– Perth Mint silver bullion coin sales surge 78% in September
– Perth Mint sold 46,415 ounces of gold in September

– Nearly six times more gold coins sold at Perth Mint than U.S. Mint in September
– Sales surge at Perth Mint from low base; could indicate trend change and higher demand in coming months


Click image to enlarge

From Reuters:

The Perth Mint’s sales of gold products doubled in September from a month earlier, while silver sales surged 78 percent, the mint said in a blog post on its website on Tuesday.

Sales of gold coins and minted bars jumped to 46,415 ounces in September from 23,130 ounces a month ago, the mint said.

Silver sales during the month also rose to 697,849 ounces, compared with 392,091 ounces in August.

The Perth Mint refines more than 90 percent of newly-mined gold in Australia, the world’s No. 2 gold producer after China.

Spot gold prices recorded their biggest monthly drop for the year in September, pressured by the strength of the U.S. dollar amid increasing prospects of a December interest rate hike by the Federal Reserve.

From Smaulgld:

September Perth Mint gold coins sales topped U.S. Mint one ounce American Gold Eagle sales of 8,000 ounces by nearly six fold.

Perth Mint gold sales topped the U.S. Mint gold sales for the seventh month in a row.

Gold sales at the Perth Mint in September 2017 were down 21% from September 2016 sales of 58,811 ounces.

Perth Mint gold sales were up 101% in September from 23,130 ounces sold in August.

Sales of American Gold Eagles at the U.S. Mint in September 2017 were at a seventeen year low.

We will cover this in more depth tomorrow and compare and analyse the sharp increase in Perth Mint gold coin and silver coin demand with the still very low US Mint demand.

News and Commentary

Gold gains amid renewed North Korea fears (Reuters.com)

Chinese stocks rise after weeklong holiday (MarketWatch.com)

No Angst Seen Among Indian Investors as Local Flows Accelerate (Bloomberg.com)

Corker says he worries Trump’s recklessness could lead to ‘World War III’ (MarketWatch.com)

Dollar down from 12-week high vs yen as North Korea fears weigh (Reuters.com)


Weekly Precious Metal Price Changes (Ed Steer via GoldSeek)

Gold Readying to Rally (ZealLLC.com)

Gold and Silver Digest – Ed Steer (GoldSeek.com)

Bass On “Worthless” Puerto Rican Debt, The Crypto “Gold Rush”, And Guns (ZeroHedge.com)

JP Morgan Dimon’s status quo bias and the “internet replay” (StansberryChurcHouse.com)

US government lost nearly $1 trillion in FY2017. Again (SoveriegnMan.com)

Gold Prices (LBMA AM)

09 Oct: USD 1,282.15, GBP 976.23 & EUR 1,092.01 per ounce
06 Oct: USD 1,268.20, GBP 970.43 & EUR 1,083.93 per ounce
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
04 Oct: USD 1,275.55, GBP 960.87 & EUR 1,085.11 per ounce
03 Oct: USD 1,270.70, GBP 959.00 & EUR 1,081.87 per ounce
02 Oct: USD 1,273.10, GBP 956.48 & EUR 1,084.55 per ounce

Silver Prices (LBMA)

09 Oct: USD 16.92, GBP 12.86 & EUR 14.41 per ounce
06 Oct: USD 16.63, GBP 12.73 & EUR 14.20 per ounce
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce
04 Oct: USD 16.83, GBP 12.67 & EUR 14.29 per ounce
03 Oct: USD 16.61, GBP 12.53 & EUR 14.13 per ounce
02 Oct: USD 16.58, GBP 12.46 & EUR 14.12 per ounce


Recent Market Updates

– Survey shows UK and US Pensions Crisis is Imminent
– Gold Investment In Germany Surges – Now World’s Largest Gold Buyers
– Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Safe Haven Silver To Outperform Gold In Q4 And In 2018
– Plan For Run On The Pound
– Russia Gold Rush Sees Record Reserves For Putin Era
– China Catalyst To Send Gold Over $10,000 Per Ounce?
– Gold Matches S&P 500 Performance In First 3 Quarters; Up 12% 2017 YTD
– Gold Standard Resulted In “Fewer Catastrophes” – FT
– Financial Advice From Man Who Made $1+ Billion in 1929 – Importance Of Being Patient and “Sitting”
– “Gold prices to reach $1,400 before the end of the year” – GoldCore
– Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder
– Bitcoin “Is A Bubble” but Gold Is Money Says World’s Biggest Hedge Fund Manager

END

A great article on the huge total debt in the UK economy.  The IMF warns that this could lead to a financial crash if house (or asset prices) fall

(courtesy Duncan/London’s Daily Mail)

Debt binge threatens UK economy as IMF warns of financial crash

Submitted by cpowell on Sun, 2017-10-08 23:46. Section: 

By Hugo Duncan
Daily Mail, London
Sunday, October 8, 2017

A surge in household borrowing is paving the way for another financial crisis, according to the International Monetary Fund.

In a hard-hitting report published ahead of its annual meetings in Washington this week, the watchdog warned of “risks down the road” from rising levels of debt.

And raising the prospect of a new financial disaster, ten years on from the last, the fund said: “Higher household debt is associated with a greater probability of a banking crisis, especially when debt is already high.

“A sudden economic shock — such as a decline in home prices — can trigger a spiral of credit defaults that shakes the foundations of the financial system.’

The intervention will set alarm bells ringing among central bankers and top politicians as they prepare for this week’s gathering at the IMF headquarters in Washington. …

… For the remainder of the report:

http://www.dailymail.co.uk/money/news/article-4960572/Debt-binge-203bn-t…

END

Freeport McMoRan gives up control over the large Grasberg Indonesian gold/copper mine.

(courtesy Jensen/Reuters)

Indonesian president urges action on Freeport mine deal

Submitted by cpowell on Sat, 2017-10-07 01:51. Section: 

By Fergus Jensen
Reuters
Friday, October 6, 2017

JAKARTA, Indonesia — Indonesian President Joko Widodo called for faster progress to wrap up a deal with Freeport-McMoRan Inc. on rights to the giant Grasberg copper mine, which the U.S. firm owns, officials said today.

The chief executive of the world’s biggest publicly traded copper company — which under a framework deal in August agreed to divest 51 percent of the mine — held talks with officials in Jakarta earlier in the day.

The deal is intended to replace an existing contract with a “special mining permit” and give Jakarta greater control over its mineral resources.

But significant differences remain including on how Grasberg, the world’s second-largest copper mine, will be valued and on the timing and structure of the required divestment, leading some analysts to raise doubts about the future of the agreement. …

… For the remainder of the report:

http://www.reuters.com/article/us-indonesia-freeport/indonesia-president.

Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    i) Chinese yuan vs USA dollar/CLOSED UP AT 6.6240/shanghai bourse CLOSED UP AT 25.43 POINTS 76%   / HANG SANG CLOSED DOWN 131.45 POINTS OR .46% 

2. Nikkei closed     /USA: YEN RISES TO 112,69

3. Europe stocks OPENED  GREEN EXCEPT FTSE  ( /USA dollar index RISES TO  93.72/Euro UP to 1.1737

3b Japan 10 year bond yield: RISES  TO  -+.056%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  49.46 and Brent: 55.54

3f Gold UP/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil DOWN for WTI and DOWN or Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.448%/Italian 10 yr bond yield UP  to 2.107%  /SPAIN 10 YR BOND YIELD DOWN TO 1.66%  

3j Greek 10 year bond yield FALLS TO  : 5.61???  

3k Gold at $1280.35 silver at:16.91(8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 23/100 in  roubles/dollar) 58.38-

3m oil into the 49 dollar handle for WTI and 55 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.69DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9798 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1503 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.448%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.359% early this morning. Thirty year rate  at 2.893% /

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Markets Bounce As Germany, China, Spain Lift World Stocks, Turkey Crash Ignored  

With no North Korean nuclear test over the weeknd contrary to a Friday morning rumor, S&P futures rebounded and edged higher as European stocks gain, led by Spanish shares after mass demonstrations in favor of Spanish unity and speculation Catalonia may back down on unilateral independence demands, while Chinese mainland stocks reopened catching up to gains missed during the holiday week following last weekend’s RRR cut.

World shares rose to start the week, with Chinese stocks hitting 21-month highs and the German index setting a new record, while political uncertainty triggered big moves in sterling, the Turkish lira and Spanish debt. US futures are also pushing higher in anticipation of the start of Q3 earnings season which begins later this week, with a number of Wall Street banks including JPMorgan, BofA and Citi set to report. While equities are open, the US bond market is closed today for the Columbus day holiday, while Asian markets were relatively quiet following holidays in Japan, South Korea and Taiwan.

European stocks climbed at the start of a week in which investors were closely watching developments in Catalonia as well as U.S. earnings season kicks off. The Stoxx Europe 600 Index adds 0.23%, following four straight weeks of gains. All industry groups except miners climb. The IBEX 35 Index is up 1% as a senior member in the Catalan administration calls for dialogue with Spain, although the gauge is still down 1.2% since Catalans voted for independence in an illegal referendum. After a weekend of mass demonstrations in favor of Spanish unity, Raul Romeva, foreign affairs chief for the separatist government in Barcelona, insisted that the door was open for talks if Prime Minister Mariano Rajoy was willing to grasp the opportunity

As Bloomberg breaks down local markets, 18 out of 19 Stoxx 600 sectors rise; 407 Stoxx 600 members gain, 171 decline. Top Stoxx 600 outperformers include: CaixaBank +2.6%, Centamin +2.5%, TDC +2.4%, Man Group +2.4%, Metro Bank +2.0%. The Stoxx Euro 600 Index also received a boost from data showing German industrial output rebounded from a summer lull with its best month in six years. The euro nudged higher, while most European bonds rose. Gold climbed and crude oil erased earlier gains.

“As regards Catalonia, it is difficult to have much conviction with respect to the eventual outcome,” JPMorgan Chase & Co strategist Mislav Matejka said in a note. “However, we believe that this will be seen as a localized issue, where the dips should be bought.”

Sterling rose 0.6 percent to $1.3112 on reports that British Prime Minister Theresa May, facing threats to oust her, might sack her foreign minister, Boris Johnson. Reports stated that the UK is said to be searching and hoping for the best, but is also continuing making preparations in case it should end up with no deal in Brexit talks. (Telegraph) Further to this, PM May is set to warn EU leaders today that Britain will make no more concessions on Brexit until they compromise on opening trade and transition talks. (Times) UK PM May reportedly suggested over the weekend that she is prepared to demote Foreign Secretary Boris Johnson as part of a cabinet rejig.  However, separate reports suggest that if May was to fire him, he will simply say ‘no’, according to his allies.

“If Boris Johnson were to leave or be demoted as the weekend press is suggesting, that would be showing May’s leadership and that her vision of Brexit is the one that (the government) will be going forward with and that markets should be aligned to,” said Viraj Patel, an FX strategist at ING Bank in London.

The most notable event in European trading was the plunge in Turkey’s lira which slumped to a record low against a basket of currencies including the euro and the dollar, and the nation’s stocks slumped, after U.S. and Turkey each suspended visa services for citizens looking to visit the other country.

Also in Europe, German Chancellor Merkel’s CDU/CSU agreed on refugee cap issue which clears a major hurdle in pursuing coalition discussions.  Germany and France reportedly dashed UK hopes of fast-track talks on transition deal and said that a divorce bill must be resolved first.  EU was reported on Friday to significantly step up backroom Brexit talks with Labour Party over concerns PM May’s government will fall.  Pressure on the BoE to raise interest rates may be building more rapidly than first thought after a mistake by the ONS led to domestic inflation being understated with companies’ employment costs rising faster than previously expected.

In Asia, the MSCI Asia Pacific Index added 0.1% to 163.41 as of 11:40 a.m. in Hong Kong, with Australian banks leading gains after a politician said he’s opposed to a regional levy.  Stocks in New Zealand set a new record while the local dollar slipped as the major political parties vied to form the new government. The S&P/NZX 50 benchmark rose 0.4 percent, topping 8,000 for the first time. In Hong Kong, the Hang Seng Index slipped after hitting a 10-year high on Friday.

Chinese stocks rose as trading resumed after a week-long holiday but an Asia-wide benchmark was little changed as markets in Japan, South Korea and Taiwan were closed. On their first day of trade after a week-long holiday, Chinese blue-chip stocks touched their highest levels since late 2015, partly in a delayed reaction to a targeted cut in the amount of cash some banks must hold in reserve bank announced a week ago. Mainland Chinese markets rose Monday, although the advance faded as banks were unable to hold on to much of their early gains. The Shanghai Composite Index closed up 0.8% at 3,374.38 after rising as much as 1.8% to touch the highest since January 2016, while the Shenzhen Composite Index added 1.3%, the most since Aug. 28. Financials also took the lead in mainland China, where stocks tracked last week’s advance in offshore trading, after the central bank’s decision to cut reserve ratios.

View image on Twitter

YUAN TALKS @YuanTalks

 Composite closed 0.76% higher at 3374, after surging above 3400 intraday to 21-month high

Also notable was the big move higher in Chinese rates, with 10Y futures closing down 0.36%, the biggest one day move in 2 months. A big reason for this was the surge in the Yuan, which jumped over  300 pips, pushing the USDCNH below 6.62 from nearly 6.66 earlier.

Also worth noting that on Monday, Business activity in China’s services sector grew at its slowest pace in 21 months in September as the pace of new business cooled, according to the Caixin Markit PMI survey, in contrast with official data from the National Bureau of Statistics (NBS) showing a faster pace of growth. Specifically, the Chinese Caixin Services PMI printed at 50.6 in September vs. Exp. 53.1 (Prev. 52.7); a 21-month low.

Oil trades around $50, as OPEC Sec-Gen Mohammad Barkindo says that oil producers are succeeding in re-balancing oversupplied market, though they may need to take further steps to sustain recovery into 2018. Production is increasing at Sharara, Libya’s biggest oil field, after it re-opened on Oct. 4, and is now expected to produce up to 250,000bbls/day/

In rates, Spain’s 10-year yield dipped six basis points to 1.645 percent, the lowest in more than a week. Germany’s 10-year yield decreased one basis point to 0.45 percent, the lowest in a week. Britain’s 10-year yield rose one basis point to 1.369 percent.

Gold hit a one-week high as tension over North Korea saw some investors seek safety in the metal. It rose 0.5 percent to $1,282 an ounce. West Texas Intermediate crude decreased less than 0.05 percent to $49.27 a barrel, the lowest in almost four weeks. Copper decreased 0.2 percent to $3.02 a pound.

In other news, Fed’s Rosengren (Non-Voter, Soft Hawk) said that the Fed must respond to very tight labor markets or may damage the economy and that prudent risk management would argue for the continued gradual removal of accommodation to minimize risk that could shorten the economic recovery. US House Speaker Ryan stated that tax reform is on track for implementation by January 2018.

Bulletin Headline Summary from RanSquawk

  • European equities trade mostly higher with Spanish assets outperforming amid hopes for some form of mediation
  • GBP remains a key focus for FX markets amid the shifting political landscape and potential understating of UK inflation form the ONS
  • Today’s calendar is particularly light. Today is US Columbus Day Holiday but markets remain open

Market Snapshot

  • S&P 500 futures up 0.1% to 2,548.00
  • STOXX Europe 600 up 0.2% to 390.24
  • MSCI Asia down 0.02% to 163.28
  • MSCI Asia ex Japan down 0.09% to 538.38
  • Nikkei up 0.3% to 20,690.71
  • Topix up 0.3% to 1,687.16
  • Hang Seng Index down 0.5% to 28,326.59
  • Shanghai Composite up 0.8% to 3,374.38
  • Sensex up 0.2% to 31,887.30
  • Australia S&P/ASX 200 up 0.5% to 5,739.26
  • Kospi up 0.9% to 2,394.47
  • German 10Y yield fell 0.7 bps to 0.452%
  • Euro up 0.03% to $1.1734
  • Brent Futures down 0.2% to $55.51/bbl
  • Italian 10Y yield fell 0.4 bps to 1.853%
  • Spanish 10Y yield fell 6.5 bps to 1.644%
  • Brent Futures down 0.2% to $55.51/bbl
  • Gold spot up 0.3% to $1,280.92
  • U.S. Dollar Index down 0.04% to 93.77

Top Overnight News

  • Trump demands that Congress deliver funding for his border wall and make dramatic changes to immigration policy in exchange for letting young people brought illegally to the U.S. as children stay in the country.
  • Republican lawmakers are expressing unease over the limited details about middle-class relief in the tax framework their leaders released last month.
  • Turkey’s markets took a hammering Monday amid a deepening standoff between the U.S. and President Recep Tayyip Erdogan’s government. The lira, stocks and bonds tumbled after the two NATO members suspended visa services for each other’s citizens.
  • Yuan jumped most in a month as China’s foreign-exchange reserves posted an eighth straight monthly increase in September with the pressure of cash outflows easing amid capital controls
  • German industry rebounded from a summer lull with its best month in six years, keeping Europe’s largest economy on a solid footing in the second half of the year as output increased 2.6% in August from July, compared to an estimated gain of 0.9%
  • Oil producers are succeeding in re-balancing an oversupplied market, though they may need to take further steps to sustain the recovery into 2018, OPEC Secretary-General Mohammad Barkindo said Sunday, without elaborating on any such measures
  • After a weekend of mass demonstrations in favor of Spanish unity, Raul Romeva, foreign affairs chief for the separatist government in Barcelona, insisted that the door was open for talks if Prime Minister Mariano Rajoy was willing to grasp the opportunity
  • Seafarers Fret Over New Assault on Jones Act in Wake of Storms
  • Big Pharma Gets a Boost as China Speeds Up New Drug Approvals
  • Facebook to Require Certain Ads to be Manually Reviewed: Axios
  • Russia May Restrict U.S. Media to Retaliate for RT: Izvestia
  • Equinix Buys Istanbul Data Center From Zenium for $93m Cash

Asia equity markets traded mostly higher as China reopened for the 1st time in over a week, although market closures in Japan, South Korea and Taiwan kept trade relatively quiet. ASX 200 (+0.5%) was lifted by broad strength aside from energy names which underperformed after oil prices fell 3% on Friday and Shanghai Comp. (+0.8%) surged on return from holiday as it played catch up and took its first opportunity to react to the PBoC’s targeted RRR reduction. However, some gains were later pared after a 21-month low Caixin Services PMI release, while Hang Seng (-0.5%) lagged as the mainland stole the limelight and with weakness seen in gambling and energy names. Chinese Caixin Services PMI (Sep) 50.6 vs. Exp. 53.1 (Prev. 52.7); 21-month low. Chinese Caixin Composite PMI (Sep) 51.4 (Prev. 52.4). PBoC skipped open market operations for a net daily drain of CNY 180bln, but gauged demand for MLF loans which are expected to be issued on Friday.

Top Asian News

  • Noble Group Explains Why Gas Sale Earned Less Than Expected
  • New Zealand Coalition Talks Start in Earnest, Deadline Looms
  • Yuan Jumps Most in a Month as Foreign-Exchange Reserves Climb
  • Foreigners Buy Most Mainland Chinese Shares Since August 2015
  • China Bank Rally Fizzles Out in Blow to Eager Hong Kong Traders

Spanish equities firmly in the green, led by the politically sensitive financial sector after demonstrations over the weekend in Barcelona and Madrid supporting pro-unity. Additionally, Caixabank (+3%) have also been permitted to move their HQ away from Catalonia. European equities in general are trading modestly higher, while the DAX yet again hit a fresh record high. Commerzbank shares are higher this morning following reports that the Credit Agricole Chief said the bank would be interested in the German lender if they were up for sale. UK Gilts lagging their core and some non-core EU counterparts, largely on reports that the ONS has miscalculated unit labour costs, which should be considerably higher (2.4% instead of the reported 1.6%), and in theory push the BoE closer towards lifting the Bank rate. Short Sterling futures also acknowledging the increased risk of near term tightening, and perhaps prone to more downside given that November hike probability remains sub-70%. Spanish debt outperforming in contrast amidst some conciliatory noises from Catalonia, with the 10 year Bono yield down around 1.64% from recent 1.80% approx. peaks and spread to German Bunds narrowing to circa 119 bp. Caution still warranted however, with the regional parliament due to convene on Tuesday and potentially ‘declaring Independence’ following the referendum. Staying with the Eurozone periphery, Portuguese bonds are in focus today as the country is high on the EU agenda, and again on Wednesday when supply comes to the table via the first cash auction since S&P upgraded the sovereign last month.

Top European News

  • German Industrial Output Jumps Most in 6 Years After Summer Lull
  • Catalonia Calls for Talks With Spain Ahead of Critical Week
  • Statoil’s Arctic Exploration Comeback Ends With Another Miss
  • This Company Says Its Software Can Pick Soccer Stars

In currencies, GBP starting the week on the front foot amid a flurry of reports over the weekend, which has subsequently led to GBP being the early outperformer. Reports over the weekend noted that PM May could look to reassert her authority with a cabinet, which may lead to Foreign Minister Boris Johnson being demoted. Alongside this, reports noted that the ONS understated its latest unit labour cost reading, consequently placing pressure on the BoE to raise rates. Last week’s decline also represents a slight opportunity to buy given expectations for a rate rise next month is at a modest 66%. NZD underperforming this morning, dampened by political uncertainty ahead of this week’s announcement by New Zealand First Party head and kingmaker Winston Peters on which party they will back to form the next government. NZD over 20 pips, which has briefly saw AUD/NZD over 1.10. TRY weakened 6% overnight after a deterioration of diplomatic ties between US and Turkey, in the latest signs of fraying relations between the NATO allies, as both sides suspended non-immigrant visa services to the citizens of the other.

In commodities, there is very little in the way of newsflow in the commodity complex, both oil and precious metal prices are firmer amid the softer greenback. Friday’s CFTC report for Oct 6th showed speculators cut net long gold and silver bets for the 3rd consecutive week BSEE stated on Saturday that 92% of current Gulf of Mexico production was shut in due to Hurricane Nate, but on Sunday reported that there was no damage to offshore oil facilities. OPEC Secretary General Barkindo stated consultations are underway for extension of OPEC cuts past March 30th and that extraordinary steps may be needed in 2018 for stability. (Newswires) Libya’s Sharara oil field output has risen to 250k bpd, according to sources.

US Event Calendar: nothing major scheduled

Central Banks speakers: nothing major scheduled

DB’s Jim Reid concludes the weekend wrap

It’ll likely be a slow start to this week with Columbus Day in the States today (fixed income markets closed, equities open) but it’ll end with a bang with US CPI on Friday. Although if the weekend papers are anything to go by, I wouldn’t get too worried about CPI given that a guy called Dave Meade suggesting that October 15th would mark the start of a 7 year period where the world will eventually end. As of next Sunday he predicts that the world will be hit with a tempest of tsunamis, earthquakes, hurricanes and nuclear war. As an analyst who makes predictions himself I couldn’t help but look back on some of his previous calls. The most startling was that the apocalypse will take place on September 23 of this year. So unless I’ve missed something he hasn’t necessarily always been accurate. Although I’ve noticed that Liverpool haven’t won since September 23rd so maybe this is what the apocalypse feels like. Whilst we’re on the subject I certainly haven’t had a good night’s sleep since and feel shattered so the more I think about it maybe he’s on to something.

Anyway back to US CPI. As is well known now, the data missed expectations for 5 months in a row until last month so with lots of discussion about the Fed’s rate hike profile and new Chair and board composition, this number is about as big as it gets at the moment. PPI the day before will give us a teaser and the Fed minutes on Wednesday will provide some interesting context to the hawkish meeting last month. Outside of the data three US banks kick start Q3 earnings on Thursday/Friday. For a full view of the week ahead and also the key DB Research macro pieces of last week see our new document “Next week…. This week” out on Friday. This is a new document aimed at giving readers a view of the week ahead by around lunchtime UK time on a Friday. We’ve copied the text at the end for the week ahead but in the note we also include a cut out and keep table of major global events. All feedback to me as to whether you do or don’t find it useful as we’re trialling it for now.

Ahead of CPI, it was the average hourly earnings that stole the show within Friday’s payroll report. This was much less impacted by the hurricane and saw the YoY rate rise to 2.9% (2.6% expected) with a 0.2% upward revision to the previous month. 10 year US treasuries spiked from 2.364% to 2.40% in the aftermath but headlines suggesting that North Korea is planning to test missiles capable of hitting the US west coast returned them to 2.36% (+1bp) at the close. Later on, Trump tweeted that “…only one thing will work!” re NK and when asked to clarify his earlier comments on “the calm before the storm”, he said “you’ll find out”.

Back to inflation and it’s very easy to say that there’s no price pressures, but after Friday US annual average hourly earnings are now at their highest since June 2009. A few weeks ago we also showed a graph that suggested US CPI lags growth by around 18 months so it’s possible the soft inflation patch in 2017 reflects weak growth in late 2015/ early 2016. So perhaps the stronger growth since H2 2016 will mean inflation surprises an unprepared market in early 2018. Obviously many people have wrongly called the end of the disinflation trend over the last decade (perhaps longer) and been burnt but we stand by our view in last year’s long-term study that 2016 will mark the multi decade inflection point for inflation and bond yields. From this point on because of demographics, populism and the start of a shift from monetary to fiscal policy we’ve felt the trend is slowly reversing. It won’t be a straight line but for us the start of a trend is already in place.

This morning in Asia, markets are trading broadly higher. Chinese bourses (Shanghai comp +1.24%; CSI +1.85%) are up following the Golden week break, led by the banks (ICBC +2.67%) as a delayed reaction to the reserve ratio cut announced last weekend. The ASX 200 is up 0.60%, but the Hang Seng is down 0.30%, while the Nikkei and Kospi are closed today for holidays. Elsewhere, the September  Chinese Caixin composite PMI came in slightly lower than the prior month (51.4 vs. 52.4 previous).

Turning to Spain’s Catalonia, over the weekend there has been more pressure on Catalan authorities to avoid declaring independence. On Saturday, a business delegation (Cercle d’Economia – with board members from CaixaBank and Banco Sabadell) met with Catalan President Puigdemont and “asked him to directly remove the shadow of a declaration by saying that it won’t happen”. Then on Sunday, crowds reportedly numbering 350k marched through Barcelona chanting “I’m Catalan and Spanish”. That said, President Puigdemont said on Sunday that “what’s happening in Catalonia is real, whether they like it or not…millions of people have voted”. Notably, the Catalan regionalgovernment was supposed to meet today (9th October) to potentially proclaim independence, a meeting which the Spanish Constitutional Court has since suspended. So we shall find out more in the coming days on how this evolves and whether they defy the courts. Finally, for those who may have missed, please refer to DB’s Marc de-Muizon’s “Catalan independence Q&A” note for background.

Over to Brexit, the FT noted that according to European diplomats, Germany and France have demanded more clarity from UK on the Brexit divorce bill before negotiations proceed to talks on a post Brexit transition deal. The fifth round of talks will resume today, so we shall find out more then. Elsewhere, UK’s PM May is apparently busy pondering a cabinet reshuffle, when asked about Foreign Secretary Boris Johnson, she said “I’m the PM, and part of my job is to make sure I always have the best people in my Cabinet.”

Quickly recapping market performance on Friday. US equities softened, with the S&P 500 (-0.11%) and Dow (-0.01%) down marginally while the Nasdaq rose 0.07%. The S&P didn’t therefore add to its run of 8 consecutive days of gains with most sectors modestly in the red (Telco -2.0%; consumer staples -0.95%), but partly offset by stronger tech stocks (+0.29%). European markets also retreated modestly, with the Stoxx 600 (-0.40%) and DAX (-0.09%) both down, but the FTSE rose 0.20%. Elsewhere, the VIX rose 0.46 to 9.65, but remains below 10 for the 8th consecutive day.

Turning to currencies, the US dollar index dipped 0.17%, while Euro advanced 0.16% but Sterling fell 0.40%. This morning, Lira/USD fell 2.96% back to its recent lows in April. Over the weekend, the US and then Turkey have each suspended Visa services for citizens seeking to visit the other country. The move follows the arrest of a Turkish national who works at the US consulate in Istanbul for alleged involvement in the July 2016 coup attempt against Erdogan. In commodities, WTI oil fell 2.95% to $49.29/bbl on Friday, partly in anticipation to potential impacts from hurricane Nate which hit US Gulf  Coast over the weekend. However, early reports suggest damages were less severe than expected, with Oil now trading c0.3% higher this morning. Elsewhere, precious metals were modestly higher on Friday (Gold +0.67%; Silver +1.45%) following higher geopolitical tensions, while other LME base metals (Copper -0.50%; Aluminium -0.85%; Zinc -1.61%) fell slightly.

Away from markets and onto US central bankers’ commentaries where the messaging on rates was a little mixed. On the wait and see side, the Fed’s Kaplan said “I’m open-minded about December (rate hike), but I’m not there yet.” Then the Fed’s Bostic (who votes in 2018), said “If we continue to see strength and that robust energy in the economy, I will be comfortable with a conversation about increasing rates. But we have to wait and see about those things.” Finally, the Fed’s Bullard reconfirmed his more dovish take, noting that “I’m getting more concerned that we might make a policy mistake.”

Conversely, the NY Fed Dudley noted that “even though inflation is currently below our longer-run objective, I judge that it is still appropriate to continue to remove monetary policy accommodation gradually”. Then the Fed’s Rosengren followed up with “prudent risk management would argue for the continued gradual removal of monetary policy accommodation…” and that inflation “is still not at the level that I would expect it to be, but we’re definitely seeing that tight labour markets are causing wages and salaries to gradually go up as well”. Further, he noted that inflation “will be much closer to 2%” a few months into 2018. The odds of a December rate hike is now 78.5% (up c5ppt from Thursday – as per Bloomberg).

Staying in the US, the rhetoric between Trump and Senator Bob Corker intensified over the weekend after Trump tweeted that Corker “didn’t have the guts to run (for a third term), (he) wanted to be Secretary of State, I said No Thanks”. In response, Corker wrote back “it’s a shame the White House has become an adult day care centre”. It will be interesting to see how the normally budget deficit focused Corker will vote on the upcoming tax reforms now that he won’t be running a third term.

Elsewhere, as per Bloomberg, Germany’s Merkel may be one step closer in forming the Jamaica coalition government (with CDU and CSU) after agreeing to cap the annual limit on migration to 200k p.a.

We wrap up with other data releases from Friday. In the US, the September nonfarm payrolls fell for the first time since 2010 and was materially below market expectations at -33k (vs. 80k expected), mainly reflecting the disruptions from Hurricane Harvey and Irma and the difficulties in estimating this impact (consensus ranged from -45k to +260k). In the details, the leisure and hospitality sector posted a 111k fall in jobs, likely the most impacted sector from the storms. Elsewhere, the employment data was solid, with the unemployment rate at a 16 year low of 4.2% yoy (vs. 4.4% expected) and stronger than expected average hourly earnings at 2.9% yoy (vs. 2.6%, coupled with a 0.2% upward revision to previous month). Finally, the final reading of August wholesale inventories was revised slightly lower to 0.9% mom (vs. 1% expected), while consumer credit grew $13.1bln (vs. $15.5bln expected).

In Europe, the macro data was broadly higher than expected. Germany’s August factory orders beat market expectations at 3.6% mom (vs. 0.7% expected) and 7.8% yoy (vs. 4.7%). The increase in August was broad-based, with domestic orders up 2.7% mom and foreign orders up 4.3% mom. In France, the August trade balance deficit was narrower than expected at $-4.5bln (vs. -$5.4bln). Over in Spain, the industrial output for August was stronger than expected at 1.8% yoy (vs. 1%). In the UK, the Halifax house price index also beat expectations at 0.8% mom (vs. 0%) and 4.0% yoy (vs. 3.6% expected). Finally, Italian retail sales were lower than expected at -0.3% mom (vs. 0.2%) and -0.5% yoy (vs. 0.8% expected).

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed up 25.43 points or .76% /Hang Sang CLOSED down 131.45 pts or .46% / The Nikkei closed /Australia’s all ordinaires CLOSED UP 0.48%/Chinese yuan (ONSHORE) closed up  at 6.6240/Oil DOWN to 49,46 dollars per barrel for WTI and 55.54 for Brent. Stocks in Europe OPENED GREEN EXCEPT FTSE .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6240. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.6197 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. CHINA IS VERY HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

SUNDAY/TRUMPS HINTS AT WAR WITH NORTH KOREA

(COURTESY ZERO HEDGE)

Trump Hints At War With North Korea: “Sorry, But Only One Thing Will Work”

When we commented on this morning’s Trump tweetstorm, in which he covered everything from the fake (and not so fake) media, to RNC donors, to reaching out to Democrats on Obamacare repeal, to “late night” comedians and their “one-sided coverage” of Trump, we said that Trump has yet to make a comment on the most cryptic topic of the last week,  his repeated suggestions that the current situation is a “calm before the storm.”

Moments ago, he may have done just that, when in his latest pair of tweets, Trump ominously suggested that following 25 years of failed diplomacy with North Korea, there is “only one thing that will work.”

“Presidents and their administrations have been talking to North Korea for 25 years, agreements made and massive amounts of money paid hasn’t worked, agreements violated before the ink was dry, makings fools of U.S. negotiators. Sorry, but only one thing will work!”

Donald J. Trump 

@realDonaldTrump

Presidents and their administrations have been talking to North Korea for 25 years, agreements made and massive amounts of money paid……

Donald J. Trump 

@realDonaldTrump

…hasn’t worked, agreements violated before the ink was dry, makings fools of U.S. negotiators. Sorry, but only one thing will work!

The tweets prompted profoundly existential questions such as this one:

Bill Bishop 

@niubi

Is trump threatening North Korea from the golf course?

While Trump did not specify what that “one thing” is (at least not yet), it stands to reason that the president is referring to some sort of military intervention, i.e. war, which of course would most likely prompt a retaliation by North Korea, one which according to the 38 North website could result in over 2 million fatalities and nearly 8 million injuries.

For those who missed it, here again is “What Would A North Korean Nuclear Attack Look Like?”

Reports that North Korea is planning to test an ICBM capable of reaching the US west coast opened a trapdoor under stocks this morning, suggesting that investors are taking president’s ominous warnings about “the calm before the storm” seriously.

But in the unlikely event that you’re not sufficiently terrified already, researchers at Johns Hopkins have sought to quantify the horrifying consequences of a North Korean nuclear strike in a new research reportpublished by the university’s 38th Parallel project.

The US carrying out any military option raises a significant risk of military escalation by the North, including the use of nuclear weapons against South Korea and Japan. According to the calculations presented below, if the “unthinkable” happened, nuclear detonations over Seoul and Tokyo with North Korea’s current estimated weapon yields could result in as many as 2.1 million fatalities and 7.7 million injuries.

In the report, author Michael Zagurek calculates that an all-out nuclear strike launched by North Korea against Tokyo or Seoul could kill as many as 2.1 million people and injure another 8 million. Combined, the number of dead and injured would equal 10% of the South Korean population – affirming that a nuclear strike by the North would be – by a considerable margin – the single deadliest attack in human history. By comparison, the US killed a combined 120,000 Japanese civilians when dropped nuclear bombs over Hiroshima and Nagasaki.

To hear Zagurek tell it, investors and ordinary citizens alike are underestimating the likelihood of a nuclear conflict. As Zagurek explains, tipping the world into a potentially civilization conflict could result from an accidental miscalculation by either side. In the most likely scenario, an accidental miscalculation during a missile or nuclear test in the Pacific impacts US military assets in Guam, triggering an overwhelming military response by the US.

With the North Korean regime fearing the imminent destruction of its nuclear arsenal, as the logic goes, the Kim regime would fire off all 25 of its nukes – at least, that was the number upon which Zagurek based his calculations – at either Japan or Seoul.

But ruling out the possibility of an accident like that described above, how much longer can North Korea and the US trade threats before a military conflict becomes inevitable?

If the status quo is unacceptable and diplomacy has been ineffective, then at what point do military responses become probable?  The tension between North Korea, its neighbors and the United States are now extremely high, antagonized further by bombastic exchanges between the US and DPRK during the United Nations General Assembly meetings and continued tweets from Trump. History is replete with “rational actors” grossly miscalculating, especially in crisis situations. It is possible that another North Korean nuclear test—especially if detonated in air or under water—an ICBM test, or a missile test that has the payload impact area too close to US bases in Guam for example, might see Washington react with force. This could include such options as attempting to shoot down the test missiles or possibly attacking North Korea’s missile testing, nuclear related sites, missile deployment areas or the Kim Regime itself. The North Korean leadership might perceive such an attack as an effort to remove the Kim family from power and, as a result, could retaliate with nuclear weapons as a last gasp reaction before annihilation. Therefore, it is worth reviewing the consequences if the “unthinkable” happened.

The following graphs show the results of Zagurek’s calculations for different-sized nuclear payloads:

Here’s a map of Seoul showing four possible blast areas from a 250 kt airbust detonation – 12+ psi, 5-12 psi, 2-5 psi, 1-2 psi…

And the four possible blast areas for Tokyo…

With Sarah Huckabee Sanders telling reporters that President Donald Trump’s ominous hints about a coming “storm” should be taken seriously, it’s possible that a breaking point could be approaching…

…then again, Trump is fond of bluffing. Meanwhile, Steve Bannon’s surprising admission that there is “no attractive military solutions” for dealing with North Korea that wouldn’t result in the deaths of hundreds of thousands of people in Seoul within 30 minutes due to conventional weapons fire continue to haunt the administration

b) REPORT ON JAPAN

end

4. EUROPEAN AFFAIRS

Spain

Rajoy is now ready to trigger the “nuclear option” as hundred of thousands of citizens line the streets in support of Madrid against the Catalans

(courtesy zerohedge)

Spain’s Rajoy Ready To Trigger “Nuclear Option” As Hundreds Of Thousands Protest Against Independence In Barcelona

One week after the historic Catalan Independence Referendum vote reopened Europe’s populist Pandora Box of nationalist secession movements, tens of thousands of people took to the streets of Catalonia’s capital Barcelona on Sunday to express their opposition to any declaration of independence from Spain, which according to Reuters showed “how divided the region is on the issue.”

Last Sunday, more than 90% of the 2.3 million people who voted backed secession, according to Catalan officials. But that turnout represented only 43 percent of the region’s 5.3 million eligible voters as many opponents of independence stayed away. Now its the others’ turn to be heard.

The Spain Report @thespainreport

1. Big march in Barcelona this morning. Rally point already full of Spanish and Catalan flags.@emilialandalucepic.twitter.com/jRzd4F09ag

The Spain Report @thespainreport

5.
– Long live Spain/Cat.
– I am Spanish
– Jail for Puigdemont
– THIS is the people of Catalonia@lasvocesdelpuepic.twitter.com/BIig4ol1Oe

The protesters rallied in central Barcelona, waving Spanish and Catalan flags and banners saying “Catalonia is Spain” and “Together we are stronger”, as politicians on both sides hardened their positions in the country’s worst political crisis for decades.

The Spain Report @thespainreport

1. Big march in Barcelona this morning. Rally point already full of Spanish and Catalan flags.@emilialandaluce

As is typically the case, estimates of the crowd size varied enormously, with the range given as between 350,000 up to a million.

The Spain Report @thespainreport

So now we have three estimates for crowd size this morning:
– 350,000
– 950,000
– “more than a million”

According to Reuters, the demonstration in Barcelona was organized by the anti-independence group Catalan Civil Society under the slogan “Let’s recover our senses” to mobilize what it believes is a “silent majority” of citizens in Catalonia who oppose independence.

“The people who have come to demonstrate don’t feel Catalan so much as Spanish,” said 40-year-old engineer Raul Briones, wearing a Spanish national soccer team shirt. “We like how things have been up until now and want to go on like this.”

The Spain Report @thespainreport

Cries of “THAT’s our police!” from crowd waving Spanish flags outside police HQ in central Barcelona.
Via @RTLbcn

6:42 AM – Oct 8, 2017

It was a second day of protests after tens of thousands of people gathered in 50 cities across Spain on Saturday, some defending Spain’s national unity and others dressed in white and calling for talks to defuse the crisis.

View image on Twitter

The Spain Report @thespainreport

Leading Barcelona march today:
Montserrat (PP, Health Minister)
Enric Millo (PP)
Albiol (PP)
Rivera (Cs)
Arrimadas (Cs)
Mario Vargas Llosa

6:52 AM – Oct 8, 2017

Meanwhile, in an interview with El Pais newspaper, Spanish Prime Minister Mariano Rajoy said he will consider taking the so-called “nuclear option“ – the dramatic measure of suspending Catalonia’s autonomous status – as Catalan leaders escalate threats to declare independence from the country, which could culminate with a parliamentary announcement as soon as Monday.

Asked if he was ready to trigger article 155, Rajoy told El Pais newspaper: “ I am not ruling out anything that the law says. What I have to do is do things at the right time, which is the most important thing right now. The ideal situation would be to not have to take drastic solutions, but for that to happen there would have to be rectifications.

Until this weekend, Rajoy has remained vague on whether he would use article 155 of the constitution  which enables him to sack the regional government and call a local election.

Reverting back to a hardline stance, the conservative prime minister ruled out using mediators to resolve the crisis – something Puigdemont has said he is open to – and said the issue would not force a snap national election. The Prime Minister also added the government would “prevent any declaration of independence from materializing in anything”. “Spain will continue being Spain,” he said.

Rajoy reiterated that until the regional government abandons its intention to proclaim independence, no talks can take place.

“As long as it does not go back to legality, I certainly will not negotiate,” Rajoy said, adding that while the Spanish government appreciates proposals to mediate between the national and Catalan governments, it will have to reject them. “I would like to say one thing about mediation: we do not need mediators. What we need is that whoever is breaking the law and whoever has put themselves above the law rectifies their position.”

Rajoy’s position is understandable: losing Catalonia – Spain’s wealthiest region – is unthinkable for the Spanish government.  It would deprive Spain of about 16% of its people, a fifth of its economic output and more than a quarter of its exports. Catalonia is also the top destination for foreign tourists, attracting about a quarter of Spain’s total.

We are going to stop independence from happening. On that, I can tell you with absolute frankness, that it will not happen. It is evident that we will take whatever decision that we are permitted to by law, in view of how things are unfolding,” Rajoy told El Pais. He also called on “moderate” Catalans to “come back” and move away from “extremists, radicals” as well as the Popular Unity Candidacy party (CUP) spearheading the movement. It is the first time he has reached out to the Catalan people since the referendum.

Rajoy also slammed the independence bid as part of a current wave of populism sweeping across Europe, pointing to the rise of far-right parties in France, Germany and the UK. “Another form of populism, without doubt, is this nationalist populism that we are experiencing, which violates the fundamental principles of the European Union, goes against the rule of law, against law enforcement, and so it is a problem also from Europe.

“And that’s why Europeans have stuck up for us and all the governments have supported the Spanish constitution and the upholding of the law.”

Actually, the reason why European have stuck with Spain, is because if Catalonia achieves independence it will unleash a waterfall sequence of copycat referendums, where other independence movements will pursue their own secession dreams. 

It remains unclear just how the current Spain crisis is resolved: the past week in Catalonia has been nothing short of chaotic. Madrid responded to the vote with force, sending thousands of police to the region to shut down the vote. Catalan leader Carles Puigdemont has threatened to declare independence early next week, and hundreds of thousands of Catalan protesters marched in favor of splitting from Spain this week.

Below is a live feed from the Barcelona anti-independence protest:

end

 

 

Now Rajoy issued a veiled death threat against the Catalan leader if they declare independence

 

(courtesy zerohedge)

 

Spanish Government Issues Veiled Death Threat To Catalan Leader

In a quite shocking escalation of the rhetoric in Spain, a spokesman for the ruling People’s Party just issued a (barely) veiled death threat to the President of Catalonia.

“Let’s hope that nothing is declared tomorrow because perhaps the person who makes the decalartion will end up like the person who made the declaration 83 years ago.”

The Spain Report @thespainreport

1. PP spokesman says Puigdemont might end up like Lluis Companys (in 1934) if he declares independence tomorrow…

The Spain Report @thespainreport

1. PP spokesman says Puigdemont might end up like Lluis Companys (in 1934) if he declares independence tomorrow…pic.twitter.com/II2HGUtUdH

The Spain Report @thespainreport

3. Some people in Spain (here a senior Podemos figure) are interpreting it, though, as Casado suggesting Puigdemont would be shot. https://twitter.com/pnique/status/917367398344294400 …

The Spain Report @thespainreport

1. PP spokesman says Puigdemont might end up like Lluis Companys (in 1934) if he declares independence tomorrow…pic.twitter.com/II2HGUtUdH

The Spain Report @thespainreport

5. Problem is Casado’s use of “acabar como” = “ends up like”. Lots of people reacting with “well [Companys] ended up executed”.

For those whose Spanish history is a little shaky, here’s a reminder:

Lluís Companys i Jover (21 June 1882 – 15 October 1940) was the President of Catalonia (Spain), from 1934 and during the Spanish Civil War.

 

 

He was a lawyer and leader of the Republican Left of Catalonia (ERC) political party. Exiled after the war, he was captured and handed over by the Nazi secret police, the Gestapo, to the Spanish State of Francisco Franco, who had him executed by firing squad in 1940.

 

Companys is the only incumbent democratically elected president in European history to have been executed.

Seems about as clear as it gets from Rajoy’s PP to Puigdemont – Call for Independence and Die!

That does not seem to be the reconciliatory tone the market has been hoping for.

And as TheSpainReport.com reportsCatalan separatists and others in Spain immediately reacted with fury to Mr. Casado’s ambiguous comments.

Republican Catalan Left (Esquerra, ERC) MP Joan Tardà tweeted: “Yes, Pablo Casado, we know how our President Companys ended up, shot by the army. Does it make you happy to remind our defenceless people of it?“.

 

Podemos leader Pablo Iglesias tweeted: “Casado says Puigdemont might end up like Companys, who was tortured and shot. Either he is ignorant or irresponsibly provocative“.

 

Iñigo Errejón (Podemos) called on Mr. Casado to “rectify immediately or resign. They are arsonists“.

END

At the end of the day, the Catalan President stated that he will declare a “gradual independence” tomorrow, whatever that means..

(courtesy zerohedge)

Catalan President To Declare “Gradual Independence” On Tuesday

In the latest twist ahead of tomorrow’s much anticipated “next step” announcement to be made by the Catalan secessionists, which is still to be formalized, Spain’s EFE newswire reports that Catalonian President Carles Puigdemont has reportedly drafted a declaration of “gradual independence”, that will be “gradually effective” and which will plan to start a constituent process.

The declaration, which will cap what El Periodico dubbed “the most critical moment for Catalonia” will allegedly insist on Catalonia’s wish to negotiate with central government and the need for mediation, although in an indication that Puigdemont may be back tracking from his hard-line “binary” stance, EFE adds that the Declaration won’t lead to parliamentary vote, and as such may be non-binding.

View image on Twitter

The Spain Report @thespainreport

El Periódico’s Tuesday front page: “End of the line. Most critical moment for Catalonia”.

4:20 PM – Oct 9, 2017 Twitter Ads info and privacy

The news is the latest development in a fast-paced day, in which as we reported earlier this morning, the ruling People’s Party issued a thinly veiled death threat to the President of Catalonia. “Let’s hope that nothing is declared tomorrow because perhaps the person who makes the decalartion will end up like the person who made the declaration 83 years ago.”

Additionally, perhaps as a Plan B, Catalan secessionists opened a second-front in their campaign against the government in Madrid, urging the opposition Socialists to forge a coalition to oust Spanish Prime Minister Mariano Rajoy, Bloomberg reported and added that while the Socialists have so far refused to sign up to the plan, the Catalan groups pushing it have already persuaded the populist Podemos party to back and accept a Socialist-only government.

Should the Socialists get on board, the alliance would have 172 seats in the 350-strong chamber and would look to add the Basque Nationalists to form a majority. Rajoy heads a minority administration with 134 deputies and can be toppled with a no-confidence motion.

Meanwhile, as reported overnight, Catalan secessionist leader Carles Puigdemont faced increased pressure on Monday to abandon plans to declare independence from Spain, with France and Germany expressing support for the country’s unity. The Madrid government, grappling with Spain’s biggest political crisis since an attempted military coup in 1981, said it would respond immediately to any such unilateral declaration.

A week after a vote on independence which the government did its utmost to thwart, the tension also took its toll on the business climate of Spain’s wealthiest region. Over the weekend and on Monday, another three Catalonia-based companies joined a business exodus from the region that has gathered steam since the Oct. 1 referendum.

Property group Inmobiliaria Colonial and infrastructure firm Abertis both decided to relocate their head offices to Madrid and telecoms firm Cellnex said it would do the same for as long as political uncertainty in Catalonia continued.

 

Publishing house Grupo Planeta said it would move its registered office from Barcelona to Madrid if the Catalan parliament unilaterally declared independence.

Spain’s finance minister said it was the Catalan government’s fault the companies were leaving.

Regional leader Carles Puigdemont is due to address the regional parliament on Tuesday afternoon and Madrid is worried it will vote for a unilateral declaration of independence.

Should Puigdemont declare unconditional independence, it is likely that Spain’s PM Rajoy will trigger Article 155, the so-called “nuclear option” to seize control over the semi-autonomous region, remove Catalonia’s government and call for new regional elections, likely leading to even more social conflict.

Opposition Socialist leader Pedro Sanchez said he would “support the response of the rule of law in the face of any attempt to break social harmony”, but stopped short of explicitly saying his party would back dissolving the regional parliament.

Barcelona Mayor Ada Colau advised Puigdemont against proclaiming independence on the basis of the referendum results and she urged Rajoy to rule out suspending Catalonia’s autonomy.

Now it is the Dutch Central bank that is warning of a “calm before the storm” as they describes problems with the low volatility, huge bubbles forming everywhere and the too high valuations in the stock market and other assets

(courtesy zero hedge)

Dutch Central Bank Warns Of Market Calm Before The Storm:

With one foot out of the door of Germany’s finance ministry, the former head of the German economy, Wolfgang Schäuble, 75, delivered a fire and brimstone warning over the weekend, telling the FT in an interview that there was a danger of “new bubbles” forming due to the trillions of dollars that central banks have pumped into markets. Schäuble also warned of risks to stability in the eurozone, particularly those posed by bank balance sheets burdened by the post-crisis legacy of non-performing loans, something we warned about since 2012, and an issue which remains largely unresolved.

Taking a broad swipe at the current financial regime – which he helped design – Schauble warned that the world was in danger of “encouraging new bubbles to form”.

Economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt. I myself am concerned about this, too,” he said echoing the concern voiced just one day earlier by IMF head Christine Lagarde, who said the world was enjoying its best growth spurt since the start of the decade, but warned of “threats on the horizon” from “high levels of debt in many countries to rapid credit expansion in China, to excessive risk-taking in financial markets”.

And while Schauble’s dramatic warning was not surprising – prominent economists have a habit of telling the truth once their tenure is over, and once they start selling books warning about all the consequences of policies they helped adopt – one day later a more surprising, and just as urgent warning was delivered by the Dutch central bank, DNB, which on Monday said that ultra-loose monetary policy in the euro zone has run its courseand excessive risks seem to be building up in financial markets making the financial sector vulnerable to a sudden correction.

“It increasingly feels uncomfortable to have low volatility in the markets on the one hand while on the other hand there are risks in the global economy,” said Klaas Knot, the president of the Dutch Central Bank, at the presentation of DNB’s biannual financial stability report according to Bloomberg.

Putting the current unstable equilibrium in its temporal context, Knot said that the current picture resembles that of the period before the financial crisis.

Taking a page out of Mark Faber playbook, the DNB labelled the threat of a sudden downturn in markets, brought on by a return of risk aversion, as an “acute” risk for the international financial sector, capable of starting a new financial crisis in weaker euro countries and beyond.

And, according to the Dutch central bank, only one thing could prevent a further build up of risks, eventually resulting in a crash: Knot reiterated a call to fellow board members at the European Central Bank to start phasing out monetary stimulus measures. The “time has come,” he said. “Economic growth has been above potential for months and the threat of deflation is gone.

“The program has achieved what realistically could be expected from it,” Knot said about QE, adding that it supported growth, and reduced investment costs.

Of course, Knot is merely the latest to fall for the paradox of reflexivity, where he sees the product of central bank intervention as the object that was meant to be cured by said intervention – a process which has pushed yields on European junk bonds below the yield on the US 10Y Treasury, among other market distortions. In reality, if one were to reduce or eliminate the tens of trillions in liquidity injections by central banks, the world would find itself right back in the eye of a financial crisis hurricane, prompting central banks to unleash even more “unorthodox” measures, culminating eventually with central banks purchasing equities, as JPM’s Marko Kolanovic previewed last week.

Later this month, the ECB – rapidly running out of German bunds to monetize – is expected to decide on the fate of the central bank’s bond-buying programme, potentially announcing another taper of its current QE which purchases €60 billion in sovereign bonds per month.

Still, even Knot admits that whatever the ECB’s decision, any slow down or restriction in ECB intervention will have to be gradual, confirming that the ECB remains trapped by the market and any sharp, adverse reaction will promptly force the ECB to resume nationalizing the European capital markets.

“Interest rates will stay very low for a very long time, even if we decide to phase out our bond buying program at our next meeting. Nobody at the ECB is talking about raising interest rates yet.”

And, soon enough – once markets get reacquainted with gravity – nobody at the ECB will be talking about any normalization whatsoever.

end

 

So much for Germany’s open door policy on migrants: there will be net limits on refugees

(courtesy zerohedge)

Germany’s “Open Doors” Are Closing: Merkel Seeks New Limits On Refugees

After German Chancellor Angela Merkel admitted late last year that she had “lost control” of Germany’s refugee crisis after adopting an “open door” policy that fueled an unprecedented spike in crime, her weakened ruling coalition announced Monday that it would seek to impose new restrictions on the number of refugees admitted to the country.

Germany famously admitted nearly one million refugees from Syria, Libya, Afghanistan and other war zones in 2015, a five-fold increase over the previous year.

Migrants repaid Germany for its openness by committing 142,500 crimes during the first six months of 2016, including several high-profile sexual assaults.  

And now it seems Merkel has hit a wall and folded…

Merkel announced the policy change on Monday during a joint news conference with Horst Seehofer, leader of the Bavarian Christian Social Union – the more conservative partner to Merkel’s Christian Democratic Union – following discussions in which the two parties sought compromises on a number of issues following poor results in the federal elections two weeks ago, according to CNN.

“We will continue our efforts to reduce, sustainably and permanently, the number of people who flee to Germany and Europe, so that a situation like that of 2015 will not and cannot be repeated,” reads a joint CSU/CDU position paper published Monday. “We guarantee that.”

Last month, the Trump administration took steps to cap the number of refugees admitted into the US at 45,000 annually – a dramatic reduction. However, Merkel’s conservative allies pledged that nobody would be turned back at the German border, according to WSJ, while adding that the German Parliament could suspend the cap in the event of an international crisis.

The bloc agreed to limit to 200,000 annually the number of people allowed to enter Germany for humanitarian reasons. The conservatives pledged at the same time that people wouldn’t be turned back at the German border, expressing their support for the right to seek asylum in Germany and for the Geneva refugee convention, which states that countries should give protection to those who flee war and expulsion, and those who are politically persecuted.

“We continue with our efforts to permanently reduce the number of people fleeing to Germany and Europe in order to prevent a repeat of the situation such as in 2015” when Germany took in 890,000 asylum seekers, Ms. Merkel said Monday, presenting the agreement to reporters.

She said the parties agreed on measures that will ensure that the total number of admissions won’t exceed 200,000 people a year. These include dealing with newcomers seeking asylum in Germany in centralized centers where their claims will be quickly decided. Rejected asylum seekers will then be rapidly deported back to their home countries. With this move, the parties hope to speed up asylum proceedings and increase the number of deportations.

The limit of allowing up to 200,000 migrants entering the country every year could be amended by the German Parliament if an international crisis warrants it, the compromise said.

The stunning capitulation follows an embarrassing showing by Merkel’s Christian Democrats during September’s federal elections.  While the party again received the largest share of the vote, its support declined by more than 8%  from the prior election in Merkel’s worst-ever performance. Meanwhile, the right-wing Alternative for Germany (AfD) party secured an unprecedented 13% of the vote, enough for it to earn representative in parliament – the first time a far-right party had been voted into Germany’s parliament since World War II.

To be sure, WSJ says the policy change is purely symbolic, adding that it would likely be scuttled by the time Merkel’s party successfully forms a governing coalition. Instead of representing meaningful change, the announcement is largely a sop to more moderate-leaning conservatives.

The deal appears to be, however, a largely symbolic concession to Ms. Merkel’s Bavaria allies that may change little in practice, partly because the right to asylum is enshrined in Germany’s constitution.

 

Such an upper limit will also likely be hard to push through in talks to forge a nationally yet untested coalition government with both potential partners, the pro-business Free Democrats and the Greens. Ms. Merkel on Saturday said she would seek a coalition with those parties and would let an extraordinary party convention vote on any coalition deal.

Indeed, Merkel’s Bavarian allies have been calling for an annual limit of 200,000 on refugees since Germany opened its borders in the fall of 2015. In passing the rule, Merkel is acknowledging that her center right party has moved too far to the center, and must now sharpen its conservative credentials.

Ultimately, whether the policy survives the complicated process of coalition building remains to be seen. But if nothing else, Merkel’s reluctant reversal validates countries like Poland and Hungary, which were threatened with EU fines over their steadfast refusals to take in refugees.

end

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

Iran/USA

Iran threatens the USA if new sanctions are passed

(courtesy zero hedge)

Iran Threatens America: If New Sanctions Pass, US Military “Would Be At Risk”

In the coming days, president Trump is expected to announce that he will decertify the Iran Nuclear Deal, a step that potentially could cause the historic Obama-era accord to unravel. Under the 2015 deal, Iran agreed to limit its disputed nuclear program in return for the easing of economic sanctions. Realizing the dire threat that such a move presents for its economy – not to mention Iranian oil exports –  Iran has escalated the rhetoric, and overnight it warned the United States that U.S. regional military bases “would be at risk” if further sanctions were passed or if the US designated its Revolutionary Guards (IRGC) as a terrorist group.

On Friday the Financial Times reported that Donald Trump is expected to designate the Islamic Revolutionary Guard Corps (IRGC) as a terrorist group,  as part of a new hardline strategy against the Islamic republic.

Mr Trump is expected to announce new measures against Iran, including the prospect of additional targeted sanctions, the designation of the Revolutionary Guard Corps as a terrorist organisation and the adoption of a tougher stance on Iranian proxies in Syria, Iraq and Yemen, according to a person briefed on the matter.

 

“It’s an integrated Iran strategy focused on neutralising and rolling back Iran’s malign activities regionally and globally,” the person said.

Iran was not happy:The Americans should know that the Trump government’s stupid behavior with the nuclear deal will be used by the Islamic Republic as an opportunity to move ahead with its missile, regional and conventional defense program,” Guards’ commander Mohammad Ali Jafari said, quoted by Reuters. He then explicitly threatened US presence in the region, warning that “if America’s new law for sanctions is passed, this country will have to move their regional bases outside the 2,000 km range of Iran’s missiles.”

Jafari also said that additional sanctions would end the chances for future dialogue with the United States, and issued a stark warning to American troops.

“If the news is correct about the stupidity of the American government in considering the Revolutionary Guards a terrorist group, then the Revolutionary Guards will consider the American army to be like Islamic State all around the world particularly in the Middle East,” Jafari said according to a IRGC statement.

Iran’s Revolutionary Guards is the nations’ most powerful security force. The Quds Force – the IRGC’s foreign espionage and paramilitary wing – and individuals and entities associated with the IRGC are on the US list of foreign terrorist organizations, but the organization as a whole is not, at least not yet.

 

Members of the IRGC march during a military parade in Tehran September 22, 2007.

IRGC commanders have framed their military involvement in Iraq and Syria, where they are fighting to support the government of President Bashar al-Assad, as a fight against Islamic State.  For the duration of the campaign against the Islamic State, Iran has seen the Sunni Muslim militants of ISIS as an existential threat to the mostly Shi’ite Islamic Republic. Dozens of members of the Guards, including senior commanders, have been killed in Syria and Iraq.

As a reminder, on June 7, Islamic State claimed an attack on Tehran’s parliament and the mausoleum of Ayatollah Ruhollah Khomeini, killing 18 people in one of the nation’s highest profile terrorist attacks in recent years. The Guards fired missiles at Islamic State bases in Syria on June 18 in response.

Last Thursday, Trump again accused Tehran of violating the “spirit” of the landmark nuclear agreement, the Joint Comprehensive Plan of Action (JCPOA), limiting Iran’s nuclear program for fifteen years in exchange for easing pre-existing sanctions. He also included the Islamic Republic in a list of “challenges we should’ve taken care of a long time ago,” which features North Korea, Afghanistan, and IS.

Trump has until October 15 to recertify the deal. If he chooses not to – which now appears the most likely outcome – then it will go to Congress, which will have 60 days to decide whether to re-impose sanctions on Tehran, effectively putting an end to the agreement. Trump has called the agreement the “worst deal ever negotiated,” and pledged to “dismantle” it.

Iran has repeatedly warned against violating and pulling out of the deal, as it would be harmful primarily to Washington’s own interests and jeopardize the security of the whole region. At a ceremony at Tehran University marking the start of the academic year, Iran president Rouhani said that “in the nuclear negotiations and agreement we reached issues and benefits that are not reversible. No one can turn that back, not Mr. Trump or anyone else.”

Rouhani also said on Saturday that if the United States violated the deal then it would hurt its own reputation in the international community.

“If America carries out any violations today, the whole world will condemn America. They will not condemn Iran,” Rouhani said, according to state media. “Then they will say why did you trust America and sign an agreement with them.”

“Even if 10 other Trumps are created in the world, these are not reversible.”

The EU has also voiced concerns over removing the nuclear agreement, which “serves the interests of all parties,” according to EU foreign policy chief Federica Mogherini. She also stressed that the achievement in striking the long-negotiated agreement belongs to the international community, not just the US.

Meanwhile, on Sunday the IRGC navy was carrying out a military exercise on Sunday in the Gulf, an area of tension with the U.S. navy in recent months. More than 110 vessels were involved in the exercise, including some that have rocket and missile capabilities, Reuters quoted a Guards commander as saying.

end

Turkey

the uSA suspends all non immigrant visa services due to the arrest of the USA embassy employee in Istanbul

(courtesy zerohedge)

US Suspends All Non-Immigrant Visa Services In Turkey

On Friday, we reported that in a move that looks suspiciously like retaliation, Turkish police on Wednesday arrested a local employee of the US embassy in Istanbul and charged him with espionage and trying to overthrow the government. The arrest stemmed from the man’s alleged support for Erdogan’s scapegoat for “fill-in-the-blank“, US-based Cleric Fettulah Gulen, who was blamed for 2016’s fake coup attempt and pretty much everything else that’s wrong in Turkey.

Predictably, the US government slammed the crackdown, with embassy officials telling the WSJ that “these allegations are wholly without merit” adding that “baseless, anonymous allegations against our employees undermine and devalue this longstanding partnership.”

And, in a move that suspiciously looks like retaliation to Turkey’s earlier retaliation, on Sunday afternoon the U.S. Embassy in Turkey said in statement on its official twitter account that “recent events have forced the United States Government to reassess the commitment of the Government of Turkey to the security of U.S. Mission facilities and personnel” and as a result “in order to minimize the number of visitors to our Embassy and Consulates while this assessment proceeds, effective immediately we have suspended all non-immigrant visa services at all U.S. diplomatic facilities in Turkey. ”

View image on Twitter

US Embassy Turkey @USEmbassyTurkey

Statement from the U.S. Mission to Turkey

Until this latest, and most severe deterioration in relations, the American embassy had repeatedly railed against unsubstantiated claims made against Washington in the pro-Erdogan press, including of a US hand in the failed coup which the United States has always denied.

Just like in the Kremlin, Turkish officials had expressed hope of a new page in Ankara-Washington relations under US President Donald Trump. But ties strained after members of Erdogan’s security detail were indicted by US authorities after beating up protesters during an official visit by Erdogan earlier this year. Meanwhile American pastor Andrew Brunson, who ran a church in the western city of Izmir, has been held by Turkish authorities since October 2016 on charges of being a member of Gulen’s group. Erdogan suggested last month that Turkey could release him in exchange for Gulen but Washington showed little interest in the proposal.

The US embassy said that the United States will “continue to engage” with Ankara to ensure its employees and US citizens are accorded “due legal process

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The Turkish lira crashes 4% following the visa suspension drama:

(courtesy zerohedge)

 

Turkish Lira Crashes 4%, Biggest Drop Since “Failed Coup” Following Visa Suspension Drama

With tensions between Turkey and the US escalating dramatically and unexpectedly in the past few days, when first Turkish police on Wednesday arrested a local employee of the US embassy in Istanbul and charged him with espionage and an attempt to overthrow the government, which was following on Sunday afternoon by the US embassy in Turkey announcing that “effective immediately” it has
“suspended all non-immigrant visa services at all U.S. diplomatic facilities in Turkey”…

View image on Twitter

US Embassy Turkey 

@USEmbassyTurkey

Statement from the U.S. Mission to Turkey

… only to see a identical Turkish tit to the US tat, when the Turkish embassy in Washington tweeted that it too suspended non-immigrant visa services for U.S. Citizens, echoing almost verbatim the US statement, to wit, “Recent events have forced Turkish Government to reassess the commitment of the Government of the United States to the security of Turkish Mission facilities and personnel. In order to minimize the number of visitors to our Embassy and Consulates while this assessment proceeds, effective immediately we have suspended all non-immigrant visa service at all Turkish diplomatic facilities in the U.S.”

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TurkishEmbassyDC 

@TurkishEmbassy

Statement from the Turkish Mission to the U.S., October 8, 2017

… the market got nervous, and in early – and illiquid – FX trading, the TRY has tumbled to as low as 3.8533 per dollar, a level last seen in January, a drop of as much as 4%, the biggest slide since the fake attempted coup attempt in the summer of 2016.

This is the currency seventh consecutive decline, after dropping 0.8% Friday amid concern Fed tightening would hurt EM currencies, and should it persist may finally have an adverse impact on other EM currencies, not to mention various other local Turkish asset classes when markets reopen in a few hours.

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The rhetoric escalates as Turkey issues a warrant for a second USA consulate worker as the plunge in the Lira accelerates.  We may have an emerging market contagion

(courtesy zerohedge)

Turkey Issues Arrest Warrant For Second US Consulate Worker, Lira Plunge Accelerates

One day after an escalating diplomatic spat, in which both the US and Turkey halted the issuance of non-immigrant visas to each other’s citizens following last week’s arrest by Turkey of a US consulate worker, on Monday Turkey issued another detention warrant for a second US consulate employee, Ahaber newspaper reports.

The market reaction to the rising diplomatic tensions has been dramatic, sending the Turkish lira crashing the most since the July 2016 failed “coup” attempt on Turkey’s president Erdogan, while local stocks and bonds tumbled in sympathy, the local Borsa Istanbul 100 index sliding, and now in correction territory having dropped more than 10% from its late August peak. The news of the second arrest have led to some further weakness in the Lira this morning, which crashed to a record low against a basket of currencies including the euro and the dollar.

Turkish NTV broadcaster reported that the consulate worker is still being sought by security officials, while his wife and child are being questioned by Turkish police. The reason for the arrest warrant has not yet been revealed. The warrant follows the arrest of Metin Topuz, who as we reported last week, was a Turkish citizen who worked at the US general consulate in Istanbul. He is alleged to have ties to exiled Turkish cleric Fethullah Gulen, whom Ankara blames for a failed coup atte