http://maxkeiser.com/2012/07/
“We are talking here about a run on the bullion bank. As this unfolds there will be a failure. These people will only receive the fixed price before trading is halted. This will not be called a default. Then there will be a massive gap in the price of gold and silver.”
http://harveyorgan.blogspot.com/2012/07/spanish-yields-now-over-7united-states.html
Good evening Ladies and Gentlemen:
Gold closed up today to the tune of 9.70 dollars at $1580.10. Silver also followed suit rising by 10 cents finishing the comex session at $27.20. Today we were greeted with news out of Spain that they have no money left in the kitty. With that news, the Spanish 10 yr bond yield finished at 7.02%. The Italian 10 yr bond yield finished the session at 6.0%. The USA reported some pretty dismal news today:
1. A lousy jobless report with a rise in the jobless of 36,000
2. A terrible Philly mfg index report.
3. A big miss for Morgan Stanley in its reporting of earnings. They also reported that due to falling asset prices, they have received a deficient collateral notice. They have supplied only 2.9 billion USA dollars of the 6.3 billion USA request.
Goldman Sachs again drops its forecast for 2nd quarter GDP to only 1.1%.
We will go over all of these reports but first:
Let us now head over to the comex and assess trading today.
The total gold comex OI rose by 3613 contracts despite the fall in gold yesterday. No gold leaves fell from the tree. The front delivery month of July saw its OI fall from 24 to 17 for a loss of 7 contracts. Since we had only 2 delivery notices we therefore lost 5 contracts or 500 oz of gold standing. The next big delivery month for gold is August which is less than 2 weeks away. Here, in this month the OI fell by 6576 contracts from 172,570 to 165,994 as most rolled into October and December. The estimated volume today with the many rollovers was still very light at 146,658. The confirmed volume yesterday was also quite light at 155,893.The total silver comex OI rose by 771 contracts from 121,819 to 122,590. The front delivery month of July saw its OI fall 436 contracts from 563 to 127. We had exactly 436 delivery notices yesterday so we neither gained nor lost any silver ounces standing. Thus the big drop yesterday was accurate and no doubt we must have had a cash settlement. The August silver month ( a non official delivery month) saw its OI rise by one contract to 263. The next big delivery month for silver is September and here the OI rose by 589 contracts from 61,137 to 61,726. The estimated volume today was very light at 33,185. The confirmed volume yesterday was very anemic at 236,600.
* * *
and now for silver:
July 18.2012:
July 18.2012:
| Silver |
Ounces
|
| Withdrawals from Dealers Inventory | nil |
| Withdrawals from Customer Inventory | 924,891.21 (JPM, Scotia,) |
| Deposits to the Dealer Inventory | nil |
| Deposits to the Customer Inventory | 608,904.729 ( Brinks,Delaware) |
| No of oz served (contracts) | 1 (5,000) |
| No of oz to be served (notices) | 126 (630,000) |
| Total monthly oz silver served (contracts) | 1704 (8,520,000) |
| Total accumulative withdrawal of silver from the Dealers inventory this month | nil |
| Total accumulative withdrawal of silver from the Customer inventory this month | 5,254,513.4 |
The CME reported a far amount of silver activity in its vaults.
We had no dealer activity.The customer received the following silver deposit:a) 599,746.46 oz into Brinks
total deposit: 608,904.729 oz
we had the following withdrawal of silver from the customer:
i) out of JPM; 304,930.115 oz
ii) out of Scotia: 619,961.10 oz
total withdrawal from the customer: 924,891.21 oz
we had no adjustments.
The dealer inventory rests tonight at 40.38 million oz
The total of all silver rests at 143.42 million oz.
and news items of interest.....
China Aims To Be "Major Gold Trading Center" With Interbank Gold Trading
Submitted by Tyler Durden on 07/19/2012 08:15 -0400
From GoldCore
China Aims To Be "Major Gold Trading Center" With Interbank Gold Trading
* * *
China has proposed to broaden trading of precious metals in its local market in order to help China become a "major gold trading centre" (see News).
The Wall Street Journal was briefed about China's plans by "a person involved with the matter." The paper reports that "the move could increase liquidity and help Beijing gain stronger pricing power for key commodities like gold".
China is the largest consumer and now the largest producer of gold in the world and has aspirations to become a major gold trading center on a par with London and New York. China is also the fifth largest holder of gold reserves in the world after the U.S., Germany, France, Italy (see table).
Chinese officials have spoken of China’s aspirations to have gold reserves as large as the U.S. in order to help position the yuan or renminbi as a global reserve currency. Indeed, it would be only natural for China to aspire to have their currency become the global reserve currency in the long term.
In the longer term, being a major gold trading center would make China a more powerful financial and economic player and indeed could allow them to influence commodity and other important market prices. Indeed, Reuters reported that becoming a major gold trading center "would boost the country's clout in setting global prices".
The journal reports that “Beijing's tight grip on commodities trading and rigid capital controls are among the obstacles in the way.”
The move is also part of the broader financial reforms that Beijing has launched in recent weeks, loosening some of the restrictions on securities investment and allowing banks to price loans at cheaper rates than in the past, that seek to grant market forces a bigger role in both the economy and the capital market.
The moved proposed by market officials would expand trading of precious metals from designated exchanges to the country's vast interbank market, according to the person involved. The Shanghai Gold Exchange has released draft rules for such interbank precious metals trading, which will include spot, forward and swap contracts for the commodities, said the person.
At the moment, producers, consumers and investors can trade only spot and futures contracts in gold and silver on the Shanghai Gold Exchange and the Shanghai Futures Exchange, respectively.
Due to limited membership on the two exchanges, many investors, including banks, aren't able to directly trade the precious metals on the exchanges.
The draft rules were jointly developed by the Shanghai Gold Exchange, which is the world's biggest marketplace for spot gold trading, and the China Foreign Exchange Trading System, a central bank subsidiary that oversees onshore currency trading.
According to the draft rules, the authorities are aiming to launch the interbank trading on Aug. 31, starting with gold contracts, said the person.
That would make gold the first commodity to trade on the interbank market.
The authorities will introduce a "market maker" system for the planned precious metals trading—the first time the system will be used to trade a commodity on the interbank market—with transactions done on an over-the-counter basis as compared to the exchange-based pricing mechanism.
Market makers are firms that stand ready to buy and sell a product at a publicly quoted price to facilitate trade.
An over-the-counter market would allow investors, in this case banks, to trade in large quantities that far exceed the Shanghai Gold Exchange's current trading volumes, analysts said.
According to the draft rules, banks are allowed to use the new precious metals contracts in the interbank market for proprietary trading only.
The Shanghai Gold Exchange is inviting banks, mostly members of the exchange, to submit applications to take part in the trading, said the person, who expects most major and midsize banks to participate.
The move to let banks become market makers also shows the authorities' desire to give such better-established and more sophisticated institutions more power in setting prices for major commodities, a common practice in developed markets, said Jiang Shu, senior precious metals analyst at Industrial Bank Co.
Current restrictions and capital controls remain an obstacle to China becoming major gold trading center and to the renminbi becoming an accepted global reserve currency.
The move by China to expand precious metals trading to their growingly important and vast interbank market is important and another step towards China becoming an economic power on the world stage and one that will rival European nations and the U.S.
* * *
BILL MURPHY: JPM STOPPED MANIPULATING SILVER FROM JANUARY-JUNE OF 2011
GATA’s Bill Murphy has just publicly released STUNNING new revelations regarding JP Morgan’s alleged silver manipulation.
Murphy states an informed source has advised him that JP Morgan was compelled to stop manipulating the silver market in January of 2011, and that fact is the reason why silver ran from $28 to $50 over the next 6 months.
Murphy states JPM took down silver in the infamous overnight May 2011 raid from an auxiliary account, and began manipulating silver again in June of 2011.
Murphy’s source also states that JP Morgan’s CIO derivatives losses are actually tied to the Bear Stearns short silver positions JPM inherited from the Fed in 2008, and thatthe LIBOR scandal will soon engulf JP Morgan in a SILVER MANIPULATION scandal- likely when the CFTC releases their findings on their silver manipulation in the next 30-60 days!
Murphy states:
It has come to my attention that in January 2011 JP Morgan, for some yet unknown reason, was compelled to stop manipulating the silver market. That is when the price of silver went vertical to the upside…
Silver practically went straight up to $49 an ounce. THEN, it collapsed for no apparent reason. That reason, from my most well informed source, was that JPM came back into the market in June. Now, if that is the case, JPM worked through some sort of auxiliary account to overnight raid silver in the earliest of May in 2011, because that is when The Gold Cartel/JP Morgan went into combative action in earnest to crash the price down…
Monthly silver price
http://futures.tradingcharts.com/chart/SV_/M?anticache=1341620769I hope to be able to explain more of this in the near future, but that is what I can put in the public domain for the moment.
Regarding JPM’s CIO losses:
JP Morgan’s public declaration about being offside on a $2 billion dollar “hedge transaction” was not fully transparent. My sources tell me that was the case, but in addition, that what JPM CEO Jamie Dimon said at the time was camouflaging another serious financial problem. At the time it made little sense that a CEO would talk about a trade loss of that kind when his firm was making $18 billion dollars a year. The smell meter that the situation was much more serious than $2 billion lit up the light bulbs on the GATA camp scoreboard. Since then New York Times has reported the amount of the loss could be as high as $9 billion.
The bottom line here: my well informed source tells me that the Jamie Dimon lament is about a derivatives problem that also involves the silver position JPM took over for the Fed when Bear Stearns went belly up. I hope to have more particulars on this declaration in the near future. The main point is that JPM has some serious issues with their present short silver position and is having difficulty extricating itself from that position. Whether it has to do with coming up with a large amount of borrowed physical silver, I am not sure. We will stay on the case and report on any new developments.
and.....
As far as Greece is concerned, Kathimerini reports that the EU is reluctant to loan them any more money:
(courtesy Kathimerini)
EU reluctant to extend bridge loan: Kathimerini noted that Skai, citing sources, reported that EU officials are reluctant to extend Greece the bridge loan it has requested to cover a €3.2B bond payment that comes due on 20-Aug. It added that officials do not want to grant any flexibility to Greece until the troika issues a widely anticipated report on the country's reform progress.
Coalition leaders identify two-thirds of savings measures: The FT reported that the leaders of Greece's new coalition government have identified €7.5B-€8B out of a total of €11.5B worth of savings demanded by the troika over the next two years. The paper said that the broad agreement includes reductions in central government operating costs, grants to local governments, public sector wages and benefits, and a cap on pensions. It added that a senior finance ministry official said an outline of the remaining measures would be in place ahead of next week's negotiations with the troika.
Coalition leaders identify two-thirds of savings measures: The FT reported that the leaders of Greece's new coalition government have identified €7.5B-€8B out of a total of €11.5B worth of savings demanded by the troika over the next two years. The paper said that the broad agreement includes reductions in central government operating costs, grants to local governments, public sector wages and benefits, and a cap on pensions. It added that a senior finance ministry official said an outline of the remaining measures would be in place ahead of next week's negotiations with the troika.
and.....
Reuters reports the following with respect to wheat:
7:49 Surge in grain prices triggering defaults -Reuters
Reuters reported that grain suppliers are starting to default of previously agreed sales to major importers, including top wheat buyer Egypt, rather than deliver on contracts that are now losing money because of the huge rally in prices sparked by the US drought.
The article noted that traders say some private grain sales to buyers in cereals importing giant Egypt have fallen apart, but they stressed that multinational trading houses will deliver on contracts and the default problem is likely to focus on smaller firms. However, the article added that such firms often put together deals of up to 100k tonnes.
Reference Link http://www.cnbc.com/id/48238188Reuters reported that grain suppliers are starting to default of previously agreed sales to major importers, including top wheat buyer Egypt, rather than deliver on contracts that are now losing money because of the huge rally in prices sparked by the US drought.
The article noted that traders say some private grain sales to buyers in cereals importing giant Egypt have fallen apart, but they stressed that multinational trading houses will deliver on contracts and the default problem is likely to focus on smaller firms. However, the article added that such firms often put together deals of up to 100k tonnes.
and......
Are Postal Workers About To Go Postal On Imminent USPS Benefits Default?
So far the beyond insolvent US Postal Service has been able to avoid outright bankruptcy simply because no major cash outflows were required by the organization. That is about to change in just under two weeks when the USPS is due to make a $5.5 billion payment for retirement accounts. The problem: the USPS does not have the money and needs a bailout. The bigger problem: the USPS needs Congressional action to authorize this latest and so far greatest USPS bailout, however with Congressional recess imminent this won't happen. So are several hundred thousand postal workers about to go postal once they realize that (earmuffs time for all those who love chanting ideological slogans, but have yet to graduate to the abacus) math matters, and every "welfare-funding" entity in the US is ten times broke over? And maybe most importantly: just how will the postal labor union vote in the upcoming election if indeed they suddenly are denied what they had been lied to for years is rightfully theirs?While lawmakers continue to fight over how to fix the ailing U.S. Postal Service, the agency's money problems are only growing worse.The Postal Service repeated on Wednesday that without congressional action, it will default—a first in its long history, a spokesman said—on a legally required annual $5.5 billion payment, due Aug. 1, into a health-benefits fund for future retirees. Action in Congress isn't likely, as the House prepares to leave for its August recess.The agency said a default on the payment, for 2011, wouldn't directly affect service or its ability to pay employees and suppliers. But "these ongoing liquidity issues unnecessarily undermine confidence in the viability of the Postal Service among our customers," said spokesman David Partenheimer.
The agency says it will default on its 2012 retiree health payment as well—also roughly $5.5 billion, due Sept. 30—if there is no legislative action by then.
We have covered the extensive woes of the USPS before, but here they are again in summary:
Most everyone agrees the Postal Service needs an overhaul. It had a loss of $3.2 billion in the second quarter of this fiscal year; it is to report third-quarter results on Aug. 9. The agency blames factors including declining mail volumes and the unusual 2006 mandate by Congress that it annually set aside billions for future retirees. But while the Senate has passed legislation to overhaul the agency, the House says it doesn't expect to take up its own proposal until after August.The two sides remain far apart. Senators voted in April, on a bipartisan basis, for legislation that largely shores up the agency's finances by returning an estimated $10.9 billion overpayment made into the federal employee pension system. The legislation limits the agency's ability to close postal branches and stop Saturday delivery.Republican House leaders support legislation they say would require the agency to operate more like a business, in part by setting up a panel to reduce the network of post offices. Some rural-district House members, from both parties, have been worried about closures in their areas.
And here is where we should pay attention, because if the muppets are unable to come to terms over a modest payment which would ensure a key union vote swing in either direction, what does that leave for the fiscal cliff at the end of the year, which as everyone knows by now, is economic armageddon for the country unless at least partially resolved?
and this additional item of interest today.....
Odyssey Recovers 48 Tons of Shipwreck Silver, Bars Transferred to London
Posted by The Doc on July 19, 2012 11:04
You didn't mention that which country is the Major Gold Trading Center.you only said that that the china is aimed to major gold center.
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