http://www.caseyresearch.com/gsd/edition/rising-gold-imports-in-january-scupper-hopes-india-will-lift-import-restric
inthisissue
¤ YESTERDAY IN GOLD & SILVER
The gold price chopped around the $1,330 price mark until the Comex open on Friday in New York---and at that point gold began to get sold down, with the low coming minutes after the 1:30 p.m. Comex close. From that low, gold rallied a bit, but wasn't allowed to get back to its Thursday close.
The CME recorded the high and low ticks as $1,333.60 and $1,319.30 in the April contract.
Gold closed in New York at $1,328.60 spot, down $3.20 on the day. Net volume was pretty light at around 113,000 contracts.
The silver price didn't do much, either. It's Far East low came around 12:30 p.m. Hong Kong time---and from there it chopped sideways until shortly before 11 a.m. a.m. in London. It's high tick was at the 8:20 a.m. EST Comex open---and it was all down hill from there, with silver hitting its low tick the same time as gold, shortly after the Comex close. From there it rallied quietly into the 5:15 p.m. close of electronic trading.
The high and low ticks, both of which occurred in New York, were reported by the CME Group as $21.43 and $21.105 in the May contract.
Silver finished the Friday session at $21.225 spot, down 3.5 cents from Thursday's close. Net volume was pretty decent at 40,500 contracts.
Platinum traded within ten bucks of its Thursday open for the entire day. It was obvious that the price wanted to rally after the Comex opened, but the price was just as obviously capped. Palladium didn't do a lot. Here are the charts.
The dollar index closed at 80.26 late on Thursday afternoon in New York---and when it opened early Friday morning in Far East trading, it didn't do much until about 9:30 a.m. in London. Then, in the space of an hour, the index dropped 35 basis points, slicing through the 80.00 mark in a flash---and continued drifting quietly lower for the rest of the day. The index closed at 79.78---which was down 52 basis points from Thursday.
The lousy dollar index action had no visible impact on the price of any of the four precious metals yesterday.
***
The CME Daily Delivery Report for Day Two of the March delivery month showed that zero gold and another 635 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. The two biggest short/issuers were Jefferies and FC Stone with 299 and 100 contracts respectively. The third and fourth largest short/issuers were Canada's Bank of Nova Scotia with 67 and JPMorgan with 65 contracts out of its client account. On the long/stopper side was the one and only JPMorgan in it's in-house [proprietary] trading account with 573 contracts.
In the first two days of the March delivery month, JPMorgan has taken delivery on 997 Comex futures contracts of the 1,494 silver contracts that have been posted for delivery so far. That's a hair under 5 million ounces---and two thirds of all the silver contracts posted in March up to this point. And the month is still young! The link to yesterday's Issuers and Stoppers Report is here---and it's worth checking out.
Just to jog your memory, JPMorgan Chase took delivery of 5 million ounces of silver during the December delivery month as well. I'll have more on this in The Wrap further down.
There were no reported changes in GLD yesterday---and as of 9:17 p.m. EST last evening, there were no reported changes in SLV, either.
The U.S. Mint had a sales report on the last day of the month. They sold 4,000 ounces of gold eagles---and 78,500 silver eagles. For the month of February, the mint sold 31,000 ounces of gold eagles---12,000 one-ounce 24K gold buffaloes---and 3,750,000 silver eagles. Based on these sales, the silver/gold ratio for February works out to 85 to 1. Considering the fact that there are 16 ounces of silver mined for every ounce of gold, that sales ratio is astonishing---along with the fact that the current gold/silver price ratio is 60 to 1---it's obvious that silver is outselling gold by a wide margin on a dollar basis as well.
There wasn't much in/out movement in gold at the Comex-approved depositories on Thursday. They didn't report receiving any---and only shipped out 1,464 troy ounces. The link to that activity is here.
It was a lot busier in silver, of course, as 412,680 troy ounces were reported shipped in---and a smallish 6,818 troy ounces were shipped out. The link to that action is here.
I didn't know quite what to expect when I checked out the latest Commitment of Traders Report at 3:30 p.m. EST yesterday. I certainly wasn't expecting the worst, but that's what we got, as the numbers were horrific---and orders of magnitude worse in both gold and silver than either Ted and I were expecting.
In silver, the Commercial net short position blew out by another 6,132 contracts, or 30.7 million ounces. The total net commercial short position is now 194.9 million troy ounces. I can't remember how long it's been since the Commercial net short position has been this high, but I'm sure Ted will have the numbers in his column later today.
Ted said that JPMorgan added another 1,000 contracts to its short-side corner in the Comex silver market. JPM is now net short 18,500 contracts. Almost all the rest of the increase in the Commercial net short position came from the raptors selling about 4,300 long contracts at a profit, with the balance made up with selling by the '5 through 8' largest traders.
In gold, the Commercial net short position increased by a gargantuan 24,912 contracts. The '5 through 8' largest traders bought about 4,500 long contracts, but it was the raptors that did most of the damage, as Ted said they sold almost 29,500 of their long positions at a profit.
According to Ted, the really big surprise was the fact that JPMorgan's 58,000 contract long-side corner in the Comex futures market in gold didn't change from the previous COT Report. They didn't sell any of their position during the reporting week.
The one take-away from this is that despite the huge deterioration in the short positions in both metals, it was mostly raptor selling of long positions [and taking profits] into a short-cover rally that was caused by the technical funds rushing in to cover their short positions as prices rose. The big market manipulator, JPMorgan Chase, did very little during the reporting week---adding only 1,000 contracts to its silver short position and remaining unchanged in gold.
As Ted Butler keeps saying---all eyes should be on what JPMorgan is doing, or not doing, as the case may be. I'll have more on this in The Wrap as well.
I got an e-mail from Joshua Gibbons, the proprietor over at the About.Ag website yesterday---and here's what he had to say about Tulving:
Hi Ed,
I thought you might want to know that it looks like Tulving finally gave up.
I was expecting about 35 new complaints this week to update my webpage about Tulving, but there have been no new complaints from the BCA for over a week now, and only 4 from the BBB (3 of which were re-opening old cases, as Tulving did not ship when he had promised the BBB he would).
But today the BBB website shows 12 complaints this week that they have categorized as "BBB did not receive a response from business."
So as far as I can tell, he has effectively shut down. The only people who were getting their metal were those who made official complaints (e.g. to the BBB or BCA), so it seems likely that at this point nobody will be getting their metal. He isn't even responding to as many complaints as he can handle, he just isn't responding at all. -JG
You can read Joshua's comments on his Tulving webpage headlined "February 28, 2014 - The End."
I have the usual number of stories for a weekend column---and I hope you can find the time in what's left of your weekend to read the ones that interest you.
****
Selected non redundant news and views touching on the precious metals......
Doug Noland: Bundesbankification
For someone deeply engaged in monetary theory and policy, Thursday was special. While CNBC was carrying Janet Yellen’s testimony before the Senate Banking Committee, there was also a live feed available for a panel discussion on monetary policy at the Bundesbank Symposium on Financial Stability. The two discussions were separated by much more than the Atlantic.
The Bundesbank panel included Federal Reserve of Dallas President Richard Fisher. And with Yellen in a dovish mood as she interacted with the Senators, I was listening attentively for any subtle change in tone from the hawkish Dallas Fed head. Mr. Fisher did not disappoint. In an interesting testament to the tectonic shift unfolding in the U.S. monetary policy debate, Fisher went so far as to refer to the Dallas Fed as the “Bundesbank of the United States.” Moreover, he added the comment “we agree on almost everything” as he turned the forum over to the next panelist, Otmar Issing.
It is music to my ears to hear a top Federal Reserve official use the (catchy) word “Bundesbankification” and proudly state his agreement with prior Bundesbank Chief Economist Otmar Issing. It’s been a long wait! Over the years, I’ve chronicled the clash between the (“Austrian”) framework underpinning doctrine at the Bundesbank and an altogether different view of how economies and finance function from the Federal Reserve. I’ve always viewed Otmar Issing as a brilliant thinker and one of the great contemporary experts on monetary policy doctrine. One of my attempts to highlight the opposing economic doctrines dates back to an early-2004 CBB – “Issing v. Greenspan.”
Doug's weekly Credit Bubble Bulletin posted over at theprudentbear.com Internet site every Friday evening is always a must read for me---and I've already devoured this one. I thank reader U.D. for sending it our way before I had a chance to dig it up on my own.
The Bundesbank panel included Federal Reserve of Dallas President Richard Fisher. And with Yellen in a dovish mood as she interacted with the Senators, I was listening attentively for any subtle change in tone from the hawkish Dallas Fed head. Mr. Fisher did not disappoint. In an interesting testament to the tectonic shift unfolding in the U.S. monetary policy debate, Fisher went so far as to refer to the Dallas Fed as the “Bundesbank of the United States.” Moreover, he added the comment “we agree on almost everything” as he turned the forum over to the next panelist, Otmar Issing.
It is music to my ears to hear a top Federal Reserve official use the (catchy) word “Bundesbankification” and proudly state his agreement with prior Bundesbank Chief Economist Otmar Issing. It’s been a long wait! Over the years, I’ve chronicled the clash between the (“Austrian”) framework underpinning doctrine at the Bundesbank and an altogether different view of how economies and finance function from the Federal Reserve. I’ve always viewed Otmar Issing as a brilliant thinker and one of the great contemporary experts on monetary policy doctrine. One of my attempts to highlight the opposing economic doctrines dates back to an early-2004 CBB – “Issing v. Greenspan.”
Doug's weekly Credit Bubble Bulletin posted over at theprudentbear.com Internet site every Friday evening is always a must read for me---and I've already devoured this one. I thank reader U.D. for sending it our way before I had a chance to dig it up on my own.
Ross Norman: Is the London fix fixed?
Ross Norman, CEO of London bullion dealer Sharps Pixley, today defends the daily London gold price fixing against yesterday's Bloomberg News report of another study that has concluded that the fixing likely manipulates the gold price.
There are perfectly good explanations for some of the questions about the London gold fix, Norman writes, and he provides what he thinks they are. He also criticizes Bloomberg News for "a failure to ask the right questions."
But Norman acknowledges that central banks have an interest in the London fix and he presumably would concede that they are involved in the gold market surreptitiously every day. So there are still more questions about the London fix, questions GATA long has been trying to persuade Bloomberg News, the Financial Times, and other news organizations to ask.
Well, dear reader, the London "fixes" are only part of the problem---and the smallest part, actually. As a matter of fact, they are a bit of a red herring. The real elephant in the living room is the question that the main stream media will neverask---and that is what the hell are the three major bullion banks doing with their total domination of the Comex futures market in all four precious metals. They are Canada's Scotiabank, HSBC USA---and the capo di tutti capi---JPMorgan Chase. Once these questions get asked, then we'll be getting somewhere.
This story was posted in a GATA release yesterday---and it's definitely worth your time.
Handelsblatt, London Evening Standard note gold price manipulation study
Yesterday's Bloomberg News story reporting a study that found manipulation likely in the daily gold price fixing in London was reprinted today in the German financial newspaper Handelsblatt, headlined (translated from the German) "Banks Under Suspicion: A Decade of Manipulation in the Gold Market".
Of course Handelsblatt, based in Dusseldorf, is the newspaper that happily got snookered by the German Bundesbank a week earlier when it interviewed a Bundesbank official about the slow pace of repatriation of Germany's gold from the Federal Reserve Bank of New York without asking a single critical question:
While the Bloomberg story and, apparently, the study itself let the Bundesbank and other Western central banks off the hook for their long policy of gold price suppression, at least gold market manipulation seems to be gaining legitimacy as an issue in financial journalism.
I found this commentary by Chris Powell posted on the gata.orgInternet site yesterday.
I found this commentary by Chris Powell posted on the gata.orgInternet site yesterday.
Rising gold imports in January scupper hopes India will lift import restrictions
Gold starved Indians imported 38 tonnes of gold in January, as compared to a low of 3 tonnes in August last year. In December, gold imports rose to 25 tonnes, higher than the 19 tonnes shipped into the country in the previous month.
The increase in imports has been attributed to a rise in domestic demand from the start of the year, as well as more export orders and imports by non resident Indians, who are allowed to bring up to 1 kilogram of gold by paying 10.3% duty.
Traders said the direct import of jewellery has also risen in the last couple of months, all of which could have added up to the current rise.
This gold-related news item, filed from Mumbai, was posted on the mineweb.com Internet site yesterday---and is definitely worth reading. I thank Ulrike Marx for her final offering in today's column.
Top gold ETF adds 10 tonnes in Feb. Is the gold tide turning?
Jan 31, 2014 – 793.16 tonnes. Feb 27, 2014 – 803.7 tonnes. What’s the significance of these dates and figures? They show the tonnages of gold held in the SPDR Gold Trust (GLD), the world’ largest gold ETF, and show that GLD has accumulated just over 10 tonnes of gold in February – the first monthly gain since December 2012 when it put on 1 tonne. Between the beginning of January 2013 and the beginning of February 2014, this single ETF had shed a massive 557 tonnes of gold as investors deserted it in droves, supposedly in favour of the seemingly ever rising general equity markets – in hindsight a smart move over that time period – but with, apparently, all that physical gold so released, and much more, heading to China.
So what’s the specific significance of the February rise in GLD holdings. It looks like it is beginning to represent a turning of the tide which has been diminishing Western gold holdings while washing them up on Eastern shores. If the February GLD level of growth continues through the year this would mean about 100 tonnes of inflows into the ETF – which in turn would mean a reduction of around 650 tonnes of physical gold availability on the global gold market in comparison with 2013. One can probably assume that what we are seeing in GLD figures will be matched in percentage terms in other gold ETFs – perhaps to the tune of a further 200-300 tonnes or so over a full year (if the trend continues), which would effectively mean somewhere between 800 – 1,000 tonnes of supply coming out of the global marketplace for physical gold in 2014.
This commentary by Lawrence Williams was posted on themineweb.com Internet site yesterday sometime---and is certainly a must read.
inthisissue¤ YESTERDAY IN GOLD & SILVER
The gold price chopped around the $1,330 price mark until the Comex open on Friday in New York---and at that point gold began to get sold down, with the low coming minutes after the 1:30 p.m. Comex close. From that low, gold rallied a bit, but wasn't allowed to get back to its Thursday close.
The CME recorded the high and low ticks as $1,333.60 and $1,319.30 in the April contract.
Gold closed in New York at $1,328.60 spot, down $3.20 on the day. Net volume was pretty light at around 113,000 contracts.
The silver price didn't do much, either. It's Far East low came around 12:30 p.m. Hong Kong time---and from there it chopped sideways until shortly before 11 a.m. a.m. in London. It's high tick was at the 8:20 a.m. EST Comex open---and it was all down hill from there, with silver hitting its low tick the same time as gold, shortly after the Comex close. From there it rallied quietly into the 5:15 p.m. close of electronic trading.
The high and low ticks, both of which occurred in New York, were reported by the CME Group as $21.43 and $21.105 in the May contract.
Silver finished the Friday session at $21.225 spot, down 3.5 cents from Thursday's close. Net volume was pretty decent at 40,500 contracts.
Platinum traded within ten bucks of its Thursday open for the entire day. It was obvious that the price wanted to rally after the Comex opened, but the price was just as obviously capped. Palladium didn't do a lot. Here are the charts.
The dollar index closed at 80.26 late on Thursday afternoon in New York---and when it opened early Friday morning in Far East trading, it didn't do much until about 9:30 a.m. in London. Then, in the space of an hour, the index dropped 35 basis points, slicing through the 80.00 mark in a flash---and continued drifting quietly lower for the rest of the day. The index closed at 79.78---which was down 52 basis points from Thursday.
The lousy dollar index action had no visible impact on the price of any of the four precious metals yesterday.
The gold stocks opened in positive territory, but that didn't last. Their low tick came at 3 p.m. EST right on the button. From there they rallied back into positive territory shortly after 3:30 p.m., only to get immediately sold down for a small loss on the day, as the HUI finished lower by 0.49%.
It was more or less the same price action with the silver equities, but their lows came minutes after 2 p.m. EST---and the rally from there didn't quite make it back into positive territory. Nick Laird's Intraday Silver sentiment Index closed down 0.27%.
The CME Daily Delivery Report for Day Two of the March delivery month showed that zero gold and another 635 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. The two biggest short/issuers were Jefferies and FC Stone with 299 and 100 contracts respectively. The third and fourth largest short/issuers were Canada's Bank of Nova Scotia with 67 and JPMorgan with 65 contracts out of its client account. On the long/stopper side was the one and only JPMorgan in it's in-house [proprietary] trading account with 573 contracts.
In the first two days of the March delivery month, JPMorgan has taken delivery on 997 Comex futures contracts of the 1,494 silver contracts that have been posted for delivery so far. That's a hair under 5 million ounces---and two thirds of all the silver contracts posted in March up to this point. And the month is still young! The link to yesterday's Issuers and Stoppers Report is here---and it's worth checking out.
Just to jog your memory, JPMorgan Chase took delivery of 5 million ounces of silver during the December delivery month as well. I'll have more on this in The Wrap further down.
There were no reported changes in GLD yesterday---and as of 9:17 p.m. EST last evening, there were no reported changes in SLV, either.
The U.S. Mint had a sales report on the last day of the month. They sold 4,000 ounces of gold eagles---and 78,500 silver eagles. For the month of February, the mint sold 31,000 ounces of gold eagles---12,000 one-ounce 24K gold buffaloes---and 3,750,000 silver eagles. Based on these sales, the silver/gold ratio for February works out to 85 to 1. Considering the fact that there are 16 ounces of silver mined for every ounce of gold, that sales ratio is astonishing---along with the fact that the current gold/silver price ratio is 60 to 1---it's obvious that silver is outselling gold by a wide margin on a dollar basis as well.
There wasn't much in/out movement in gold at the Comex-approved depositories on Thursday. They didn't report receiving any---and only shipped out 1,464 troy ounces. The link to that activity is here.
It was a lot busier in silver, of course, as 412,680 troy ounces were reported shipped in---and a smallish 6,818 troy ounces were shipped out. The link to that action is here.
I didn't know quite what to expect when I checked out the latest Commitment of Traders Report at 3:30 p.m. EST yesterday. I certainly wasn't expecting the worst, but that's what we got, as the numbers were horrific---and orders of magnitude worse in both gold and silver than either Ted and I were expecting.
In silver, the Commercial net short position blew out by another 6,132 contracts, or 30.7 million ounces. The total net commercial short position is now 194.9 million troy ounces. I can't remember how long it's been since the Commercial net short position has been this high, but I'm sure Ted will have the numbers in his column later today.
Ted said that JPMorgan added another 1,000 contracts to its short-side corner in the Comex silver market. JPM is now net short 18,500 contracts. Almost all the rest of the increase in the Commercial net short position came from the raptors selling about 4,300 long contracts at a profit, with the balance made up with selling by the '5 through 8' largest traders.
In gold, the Commercial net short position increased by a gargantuan 24,912 contracts. The '5 through 8' largest traders bought about 4,500 long contracts, but it was the raptors that did most of the damage, as Ted said they sold almost 29,500 of their long positions at a profit.
According to Ted, the really big surprise was the fact that JPMorgan's 58,000 contract long-side corner in the Comex futures market in gold didn't change from the previous COT Report. They didn't sell any of their position during the reporting week.
The one take-away from this is that despite the huge deterioration in the short positions in both metals, it was mostly raptor selling of long positions [and taking profits] into a short-cover rally that was caused by the technical funds rushing in to cover their short positions as prices rose. The big market manipulator, JPMorgan Chase, did very little during the reporting week---adding only 1,000 contracts to its silver short position and remaining unchanged in gold.
As Ted Butler keeps saying---all eyes should be on what JPMorgan is doing, or not doing, as the case may be. I'll have more on this in The Wrap as well.
I got an e-mail from Joshua Gibbons, the proprietor over at the About.Ag website yesterday---and here's what he had to say about Tulving:
Hi Ed,
I thought you might want to know that it looks like Tulving finally gave up.
I was expecting about 35 new complaints this week to update my webpage about Tulving, but there have been no new complaints from the BCA for over a week now, and only 4 from the BBB (3 of which were re-opening old cases, as Tulving did not ship when he had promised the BBB he would).
But today the BBB website shows 12 complaints this week that they have categorized as "BBB did not receive a response from business."
So as far as I can tell, he has effectively shut down. The only people who were getting their metal were those who made official complaints (e.g. to the BBB or BCA), so it seems likely that at this point nobody will be getting their metal. He isn't even responding to as many complaints as he can handle, he just isn't responding at all. -JG
You can read Joshua's comments on his Tulving webpage headlined "February 28, 2014 - The End."
I have the usual number of stories for a weekend column---and I hope you can find the time in what's left of your weekend to read the ones that interest you.
¤ CRITICAL READS
U.S. Growth at End of 2013 is Revised Downward
The economy finished 2013 on a weaker footing than first thought, the government said on Friday, heightening concern that the United States is in the midst of another of the periodic slow patches that have dogged the recovery over the last five years.
The Commerce Department now estimates the economy grew at an annual pace of 2.4 percent in October, November and December, down from an initial estimate of 3.2 percent. The revised figure also represents a substantial slowing from the pace of growth in the third quarter, which totaled 4.1 percent. The department is scheduled to provide one more estimate of growth during the fourth quarter on March 27.
The downward revision comes after new data showing lackluster retail sales, inventory adjustments and a slightly less impressive trade balance late last year. Disappointing reports on job creation in December and January have also prompted fear of continued weakness into the spring of 2014.
Even the numbers quoted above are massaged to make them look better than they really are. We're in a recession/depression pure and simple. Today's first story is courtesy of reader Ken Hurt---and it's from yesterday's edition of The New York Times.
Wall Street Hates JPMorgan Fee for $1 Trillion Junk Loans
On Wall Street, $3,500 goes further than anyone dared imagine in the 1980s when the predecessor to JPMorgan Chase & Co. charged the fee to trade each non-investment grade loan it sold.
That surcharge remains the same today and helps the biggest U.S. bank dominate the secretive $1.1 trillion junk-loan market while stifling profits for investors and rivals, which mostly stopped charging it years ago. The New York-based bank waives it for exclusive customers: trade with JPMorgan, no fee; trade one of its loans with anyone else, pay up.
JPMorgan can dictate terms because of its size, according to 12 people with knowledge of the matter who are concerned they’d jeopardize their business if their identities were revealed. The bank brings more corporate debt to market than anyone, and competitors and investors say they might be shut out of future deals if they don’t play by JPMorgan’s rules.
This interesting, but not surprising Bloomberg story showed up on their Internet site late on Thursday evening MST---and I thank Manitoba reader Ulrike Marx for her first offering of the day.
Doug Noland: Bundesbankification
For someone deeply engaged in monetary theory and policy, Thursday was special. While CNBC was carrying Janet Yellen’s testimony before the Senate Banking Committee, there was also a live feed available for a panel discussion on monetary policy at the Bundesbank Symposium on Financial Stability. The two discussions were separated by much more than the Atlantic.
The Bundesbank panel included Federal Reserve of Dallas President Richard Fisher. And with Yellen in a dovish mood as she interacted with the Senators, I was listening attentively for any subtle change in tone from the hawkish Dallas Fed head. Mr. Fisher did not disappoint. In an interesting testament to the tectonic shift unfolding in the U.S. monetary policy debate, Fisher went so far as to refer to the Dallas Fed as the “Bundesbank of the United States.” Moreover, he added the comment “we agree on almost everything” as he turned the forum over to the next panelist, Otmar Issing.
It is music to my ears to hear a top Federal Reserve official use the (catchy) word “Bundesbankification” and proudly state his agreement with prior Bundesbank Chief Economist Otmar Issing. It’s been a long wait! Over the years, I’ve chronicled the clash between the (“Austrian”) framework underpinning doctrine at the Bundesbank and an altogether different view of how economies and finance function from the Federal Reserve. I’ve always viewed Otmar Issing as a brilliant thinker and one of the great contemporary experts on monetary policy doctrine. One of my attempts to highlight the opposing economic doctrines dates back to an early-2004 CBB – “Issing v. Greenspan.”
Doug's weekly Credit Bubble Bulletin posted over at theprudentbear.com Internet site every Friday evening is always amust read for me---and I've already devoured this one. I thank reader U.D. for sending it our way before I had a chance to dig it up on my own.
The Bundesbank panel included Federal Reserve of Dallas President Richard Fisher. And with Yellen in a dovish mood as she interacted with the Senators, I was listening attentively for any subtle change in tone from the hawkish Dallas Fed head. Mr. Fisher did not disappoint. In an interesting testament to the tectonic shift unfolding in the U.S. monetary policy debate, Fisher went so far as to refer to the Dallas Fed as the “Bundesbank of the United States.” Moreover, he added the comment “we agree on almost everything” as he turned the forum over to the next panelist, Otmar Issing.
It is music to my ears to hear a top Federal Reserve official use the (catchy) word “Bundesbankification” and proudly state his agreement with prior Bundesbank Chief Economist Otmar Issing. It’s been a long wait! Over the years, I’ve chronicled the clash between the (“Austrian”) framework underpinning doctrine at the Bundesbank and an altogether different view of how economies and finance function from the Federal Reserve. I’ve always viewed Otmar Issing as a brilliant thinker and one of the great contemporary experts on monetary policy doctrine. One of my attempts to highlight the opposing economic doctrines dates back to an early-2004 CBB – “Issing v. Greenspan.”
Doug's weekly Credit Bubble Bulletin posted over at theprudentbear.com Internet site every Friday evening is always amust read for me---and I've already devoured this one. I thank reader U.D. for sending it our way before I had a chance to dig it up on my own.
Optic Nerve: millions of Yahoo webcam images intercepted by Britain's GCHQ
Britain's surveillance agency GCHQ, with aid from the U.S. National Security Agency, intercepted and stored the webcam images of millions of internet users not suspected of wrongdoing, secret documents reveal.
GCHQ files dating between 2008 and 2010 explicitly state that a surveillance program codenamed Optic Nerve collected still images of Yahoo webcam chats in bulk and saved them to agency databases, regardless of whether individual users were an intelligence target or not.
In one six-month period in 2008 alone, the agency collected webcam imagery – including substantial quantities of sexually explicit communications – from more than 1.8 million Yahoouser accounts globally.
Yahoo reacted furiously to the webcam interception when approached by the Guardian. The company denied any prior knowledge of the program, accusing the agencies of "a whole new level of violation of our users' privacy".
This very long, but very interesting news item was posted on theguardian.com Internet site yesterday sometime---and I thank reader M.A. for passing it along.
Heading for the Margins: Why Is Britain Running Away from Europe?
In the aftermath of the Second World War, Winston Churchill called for the creation of a "United States of Europe" to bind France and Germany together. In doing so, he made clear that Britain would be a supportive but independent partner of any such entity. He famously said: 'We are with Europe but not of it."
In the end, Britain did join the European Economic Community but only in 1973, 15 years after the Treaty of Rome was signed. We joined the Social Chapter in 1997, eight years after it was adopted by other member states. And we never signed up to Economic and Monetary Union or the Schengen Agreement on common borders.
In the end, Britain did join the European Economic Community but only in 1973, 15 years after the Treaty of Rome was signed. We joined the Social Chapter in 1997, eight years after it was adopted by other member states. And we never signed up to Economic and Monetary Union or the Schengen Agreement on common borders.
In other words: Britain was always a bit late to the party. But once it found its way to Belgium, Britain had an uncanny knack of winning the big strategic battles. It is therefore a puzzle that the current British government has diverted its attention from winning the next round of key policy debates in Brussels and, instead, focused on a pointless exercise of seeking treaty change to repatriate powers. Britain should stop wasting its time with this futile endeavour and concentrate on aligning the EU's institutions with an agenda of growth and democracy.
This longish op-ed piece was posted on the German websitespiegel.de during the Europe lunch hour yesterday---and it's the first contribution to today's column from Roy Stephens.
Much ado about Greece in Finnish E.U. elections
In Finland the European elections will be about Greece, at least if Timo Soini, chair of the radical right-wing populist party The Finns, previously known as the True Finns, gets his way.
"If Greece isn't the issue, we will make it the issue," Soini told the Finnish daily Aamulehti, a few days after news reports indicated the third Greek bailout package might hit €10-20 billion.
Soini has been a vocal opponent of any Finnish contribution to the two previous Greek bailout packages and to the European Commission's crisis efforts.
These issues are why Finland is likely to contribute to the predicted general rise of the hard right in the May E.U. vote.
This longish news item, filed from Helsinki, was posted on theeuobserver.com Internet site yesterday morning Europe time---and it's another offering from Roy Stephens.
Nine Ukraine-Related Stories
1. Growing Crisis in Its Backyard Snares Russia: The New York Times 2. Economic Woes: The Uncertain Future of Ukraine's Finances: Spiegel OnLine 3. Ukraine Imposes Capital Controls, Limits Foreign Currency Withdrawals: Zero Hedge 4. U.S., NATO, E.U. lecture Russia with 'provocative statements' on Ukraine: Russia Today 5. 'No takeover' at Crimean capital’s airport, ‘self-defense squads’ on nearby patrol: Russia Today 6.Germany: IMF 'central' to Ukraine aid package: E.U. Observer 7.IMF History With Ukraine Leaders May Cloud Aid Negotiations:Bloomberg 8. Russia invades Crimea to 'protect its Black Sea naval fleet' as Ukraine tensions soar: Mirror 9. Ukraine Accuses Russia of Invading Crimea as Airports Seized: Bloomberg
[Stories are courtesy of Roy Stephens, Ulrike Marx and Rob Miller]
Pepe Escobar: Carnival in Crimea
Time waits for no one, but apparently will wait for Crimea. The speaker of the Crimean parliament, Vladimir Konstantinov, has confirmed there will be a referendum on greater autonomy from Ukraine on May 25.
Until then, Crimea will be as hot and steamy as a carnival in Rio - because Crimea is all about Sevastopol, the port of call for the Russian Black Sea fleet.
If the North Atlantic Treaty Organization is a bull, this is the red flag to end all red flags. Even if you're deep in alcohol nirvana dancin' your troubles away at carnival in Rio - or New Orleans, or Venice, or Trinidad and Tobago - your brain will have registered that NATO's ultimate wet dream is to command a Western puppet Ukrainian government to kick the Russian navy out of its base in Sevastopol. The negotiated lease applies until 2042. Threats and rumors of reneging it have already emerged.
Pepe calls a spade a shovel in this must read commentary posted on the Asia Times website yesterday---and it's anabsolute must read for all serious students of the New Great Game. I thank Ulrike Marx for sharing it with us.
Until then, Crimea will be as hot and steamy as a carnival in Rio - because Crimea is all about Sevastopol, the port of call for the Russian Black Sea fleet.
If the North Atlantic Treaty Organization is a bull, this is the red flag to end all red flags. Even if you're deep in alcohol nirvana dancin' your troubles away at carnival in Rio - or New Orleans, or Venice, or Trinidad and Tobago - your brain will have registered that NATO's ultimate wet dream is to command a Western puppet Ukrainian government to kick the Russian navy out of its base in Sevastopol. The negotiated lease applies until 2042. Threats and rumors of reneging it have already emerged.
Pepe calls a spade a shovel in this must read commentary posted on the Asia Times website yesterday---and it's anabsolute must read for all serious students of the New Great Game. I thank Ulrike Marx for sharing it with us.
Five King World News Blogs/Audio Interviews
1. Keith Barron: "Which Stocks Will Make a Fortune For Investors This Year?" 2. Egon von Greyerz: "World to Witness Frightening and Historic Wealth Destruction". 3. Dr. Paul Craig Roberts: "Shocking Piece of U.S. History Revealed". 4. Art Cashin: "Is This Time Bomb Going to Implode the Economy". 5. The audio interview is with Grant Williams.
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]
Mt Gox Files For Bankruptcy After $473 Million In Bitcoins "Disappeared"
For a case study of a blistering rise and an absolutely epic fall of an exchange that i) was named after Magic: the Gathering and ii) transacted in a digital currency which many have speculated was conceived by the NSA nearly two decades ago and was used as a honeypot to trap the gullible, look no further than Mt.Gox which after halting withdrawals for the second (and final time) has finally done the honorable thing, and filed for bankruptcy.
As the WSJ reports, "Bitcoin exchange Mt. Gox said Friday it was filing for bankruptcy protection after losing almost 750,000 of its customers' bitcoins, marking the collapse of a marketplace that once dominated trading in the virtual currency. The company said it also lost around 100,000 of its own bitcoins. Together, the lost bitcoins would be worth approximately $473 million at market prices charted by the CoinDesk bitcoin index, although the price of Mt. Gox bitcoin had fallen well below that index after it stopped bitcoin withdrawals in early February."
The punchline: speaking to reporters at Tokyo District Court Friday after the bankruptcy filing, Mt. Gox owner Mark Karpelรจs said technical issues had opened the way for fraudulent withdrawals, and he apologized to customers.
This Zero Hedge story was posted on their website early yesterday morning EST---and I thank reader M.A. for bringing it to our attention.
Ross Norman: Is the London fix fixed?
Ross Norman, CEO of London bullion dealer Sharps Pixley, today defends the daily London gold price fixing against yesterday's Bloomberg News report of another study that has concluded that the fixing likely manipulates the gold price.
There are perfectly good explanations for some of the questions about the London gold fix, Norman writes, and he provides what he thinks they are. He also criticizes Bloomberg News for "a failure to ask the right questions."
But Norman acknowledges that central banks have an interest in the London fix and he presumably would concede that they are involved in the gold market surreptitiously every day. So there are still more questions about the London fix, questions GATA long has been trying to persuade Bloomberg News, the Financial Times, and other news organizations to ask.
Well, dear reader, the London "fixes" are only part of the problem---and the smallest part, actually. As a matter of fact, they are a bit of a red herring. The real elephant in the living room is the question that the main stream media will neverask---and that is what the hell are the three major bullion banks doing with their total domination of the Comex futures market in all four precious metals. They are Canada's Scotiabank, HSBC USA---and the capo di tutti capi---JPMorgan Chase. Once these questions get asked, then we'll be getting somewhere.
This story was posted in a GATA release yesterday---and it'sdefinitely worth your time.
Handelsblatt, London Evening Standard note gold price manipulation study
Yesterday's Bloomberg News story reporting a study that found manipulation likely in the daily gold price fixing in London was reprinted today in the German financial newspaper Handelsblatt, headlined (translated from the German) "Banks Under Suspicion: A Decade of Manipulation in the Gold Market".
Of course Handelsblatt, based in Dusseldorf, is the newspaper that happily got snookered by the German Bundesbank a week earlier when it interviewed a Bundesbank official about the slow pace of repatriation of Germany's gold from the Federal Reserve Bank of New York without asking a single critical question:
While the Bloomberg story and, apparently, the study itself let the Bundesbank and other Western central banks off the hook for their long policy of gold price suppression, at least gold market manipulation seems to be gaining legitimacy as an issue in financial journalism.
I found this commentary by Chris Powell posted on the gata.orgInternet site yesterday.
I found this commentary by Chris Powell posted on the gata.orgInternet site yesterday.
Alasdair Macleod: Gold in 2013 -- the foundation for 2014
GoldMoney research director Alasdair Macleod summarizes the cracks in the Western gold price suppression scheme that were exposed in 2013 and predicts that this year will bring realization that Western central banks are running critically short on metal.
Macleod's commentary is headlined "Gold in 2013: The Foundation for 2014" and it was posted at the goldmoney.comInternet site yesterday. It's a nice summary and chronology of events---and it's worth reading as well.
Macleod's commentary is headlined "Gold in 2013: The Foundation for 2014" and it was posted at the goldmoney.comInternet site yesterday. It's a nice summary and chronology of events---and it's worth reading as well.
Rising gold imports in January scupper hopes India will lift import restrictions
Gold starved Indians imported 38 tonnes of gold in January, as compared to a low of 3 tonnes in August last year. In December, gold imports rose to 25 tonnes, higher than the 19 tonnes shipped into the country in the previous month.
The increase in imports has been attributed to a rise in domestic demand from the start of the year, as well as more export orders and imports by non resident Indians, who are allowed to bring up to 1 kilogram of gold by paying 10.3% duty.
Traders said the direct import of jewellery has also risen in the last couple of months, all of which could have added up to the current rise.
This gold-related news item, filed from Mumbai, was posted on the mineweb.com Internet site yesterday---and is definitely worth reading. I thank Ulrike Marx for her final offering in today's column.
Publicity about market manipulation will hasten gold's rise, Sprott says
On the weekly market review program at Sprott Money News, Sprott Asset Management CEO Eric Sprott says the increasing publicity about gold market manipulation likely will make gold price suppression harder for central banks and their agents---and hasten a freer market in gold and a much higher price.
Eric also predicts that gold will reach $2,100 the ounce by the end of 2014.
The audio interview is 6:44 minutes long---and was posted on the sprottmoney.com Internet site yesterday.
Eric also predicts that gold will reach $2,100 the ounce by the end of 2014.
The audio interview is 6:44 minutes long---and was posted on the sprottmoney.com Internet site yesterday.
Top gold ETF adds 10 tonnes in Feb. Is the gold tide turning?
Jan 31, 2014 – 793.16 tonnes. Feb 27, 2014 – 803.7 tonnes. What’s the significance of these dates and figures? They show the tonnages of gold held in the SPDR Gold Trust (GLD), the world’ largest gold ETF, and show that GLD has accumulated just over 10 tonnes of gold in February – the first monthly gain since December 2012 when it put on 1 tonne. Between the beginning of January 2013 and the beginning of February 2014, this single ETF had shed a massive 557 tonnes of gold as investors deserted it in droves, supposedly in favour of the seemingly ever rising general equity markets – in hindsight a smart move over that time period – but with, apparently, all that physical gold so released, and much more, heading to China.
So what’s the specific significance of the February rise in GLD holdings. It looks like it is beginning to represent a turning of the tide which has been diminishing Western gold holdings while washing them up on Eastern shores. If the February GLD level of growth continues through the year this would mean about 100 tonnes of inflows into the ETF – which in turn would mean a reduction of around 650 tonnes of physical gold availability on the global gold market in comparison with 2013. One can probably assume that what we are seeing in GLD figures will be matched in percentage terms in other gold ETFs – perhaps to the tune of a further 200-300 tonnes or so over a full year (if the trend continues), which would effectively mean somewhere between 800 – 1,000 tonnes of supply coming out of the global marketplace for physical gold in 2014.
This commentary by Lawrence Williams was posted on themineweb.com Internet site yesterday sometime---and is certainly amust read.
¤ THE FUNNIES
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¤ THE WRAP
In essence, it comes down to how long JPMorgan’s control and manipulation of the silver price can last until some world entity (or entities) decides to take enough of a position in physical silver that creates a shortage. Not only am I convinced that situation must occur; in fact, it had already begun to occur around April 2011, when the world faced the first silver shortage in history. If you remember, one of the key signs of shortage at that time was that the Sprott Silver ETF had to wait for delivery and when it did receive delivery, many of the bars were manufactured after the original order date, indicating no existing bars were available. One other thing that Joshua [Gibbons] pointed out was that of the 8 million oz in 1,000 oz bars that came into the SLV last week (to replace 8 million oz that were removed), 82% were manufactured in 2013 and 18% were made in 2014. We may not be exactly where we were in April 2011 in terms of physical tightness, but there does not appear to be many old silver bars available for sale either.
Therefore, we appear to be not that far away from where the physical silver equation was in early 2011. The big difference is that JPMorgan has positioned itself much better than it was back then. I can’t deny that this puts JPM in better potential control of prices short term as it has sufficient physical supply of both gold and silver to head off any shortage for the time being should it choose to let loose of some of its metal. The March COMEX delivery period which starts Friday should be revealing as to JPM’s intentions. - Silver analyst Ted Butler: 26 February 2014
It was another day where not much happened as far as prices were concerned---and net volume was pretty light in both gold and silver. I don't expect this period of quiet to last very long---and it only remains to be seen whether the current situation resolves itself to the upside, or the downside.
As Ted mentioned in the quote above, JPMorgan's intentions in silver in the March delivery period are very clear now. They're out for every ounce they can get. They took delivery of 5 million ounces of the metal in the December delivery month---and now another 5 million in March. On top of that, they were virtual "no shows" in the COT Report yesterday---only a tiny bit in silver, and not at all in gold.
One has to wonder how much physical gold and silver JPMorgan [and maybe the other U.S. bullion banks] are now sitting on that we don't know about, as there's no law that says they have to store all their metal in the Comex-approved depositories. They can hide it anywhere---and as Ted has mentioned on many occasions, SLV and GLD are ideal candidates. Because as long as they stay under the minimum public reporting requirements for both these ETFs, there's no way to know exactly how much they hold.
Then there was the mysterious silver switch in SLV that Joshua Gibbons told me about earlier this past week---and Ted alluded to in the quote above. I never mentioned it in this column, as I wasn't sure what to read into it---and I'm still not sure. But it involved SLV's custodian directly---and that is JPMorgan Chase---so I'm really suspicious now that I add their March silver deliveries into the mix.
Here's what Joshua had to say. I stole it from Ted Butler's Wednesday commentary to paying subscribers, but I was privy to this information before Ted, so I'm not really stealing anything: "Joshua also told me that JPMorgan was responsible for 8 million ounces of silver moving into and out from the big silver ETF, SLV, last week. That’s a 16 million ounce turnover and only an entity which dominated a market could arrange such a turnover. This info was also highly supportive of my premise that JPMorgan has amassed an unprecedentedly large physical silver position. At some point, JPMorgan’s actions should prove wildly bullish for the long run in silver, but who knows what these crooks will do in the short term."
So, what to make of all this? As I pointed out many times in this space over the years, JPMorgan Chase---either the day before, or the day after the drive-by shooting of May 1, 2011 all of sudden started collecting silver at its Comex-approved warehouse in New York. Now they are within an eyelash of being the largest holder of silver within the Comex-approved depositories---and March's deliveries should put them over the top, if they have to transfer the silver in from another Comex-approved depository.
Too many coincidences for me. Something is up---but what? I'm just unsure of when JPMorgan and the rest of the U.S. bullion banks will spring it on us. I know that Ted has a theory---and I won't steal a decibel of his thunder by mentioning a word of it here. I look forward to reading about it in his weekly commentary which will be posted on this website this afternoon EST.
In closing, it might be worth your while to jump back into, or increase your exposure to the precious metals once again. Your best bets for that are Casey Research's monthly BIG GOLD newsletter---and Casey Research's flagship publication---Casey International Speculator. If you go for Casey International Speculator, it includes a subscription to BIG GOLD at no extra charge. It costs nothing to check them out---and Casey Research's 90-day money back guarantee applies to both.
That it for the day---and the week. I'm off to bed---and I'll see here on Tuesday.
Additional items.....
http://about.ag/tulving.htm
February 28, 2014 - The End?
For the past week, the number of complaints reported by the BBB and BCA has gone down from about 35 per week to nearly zero.
Today, we have found out why: the BBB reported 12 complaints in the past 2 days that Tulving did not respond to!
Although the BBB has occasionally reported that Tulving has not responded to complaints, in the past it appeared to be due to the heavy volume of complaints (an average of 6 per day), and he just missed a few. But this is very different; it seems like he has just dropped the ball and is not responding to complaints anymore.
As far as we can tell, The Tulving Company has gone out of business (and likely just tying up loose ends and/or filing for bankruptcy).
We have had reports that they are still accepting orders/money, so it sounds like they are still trying to make good on old orders, but of course can only do so by taking new orders.
***
In the first half of 2013, he was averaging about 30 orders per day. From July, 2013 through the end of November, 2013, he averaged just 10 orders per day! In December, that went down to about 8 orders per day. In January, it is around 5 orders per day.
The problem here is that complaints are going up (see the chart at the bottom of the page). He is now getting almost exactly the same number of complaints per day as he is orders.
As complaints exceed orders (which happens because he did much more business in the past), he has to push out delivery dates that he promises to the BBB/BCA farther and farther.
And as orders go down drastically, so does your profit and ability to pay fixed costs like employees, insurance, rent, etc.
So at this point it looks like the tipping point may have been hit.
Although the BBB has occasionally reported that Tulving has not responded to complaints, in the past it appeared to be due to the heavy volume of complaints (an average of 6 per day), and he just missed a few. But this is very different; it seems like he has just dropped the ball and is not responding to complaints anymore.
As far as we can tell, The Tulving Company has gone out of business (and likely just tying up loose ends and/or filing for bankruptcy).
We have had reports that they are still accepting orders/money, so it sounds like they are still trying to make good on old orders, but of course can only do so by taking new orders.
***
Tipping Point
We have gotten a ton of data about The Tulving Company. With 450+ complaints, often describing exactly what was ordered and the cost, we can find out a lot.In the first half of 2013, he was averaging about 30 orders per day. From July, 2013 through the end of November, 2013, he averaged just 10 orders per day! In December, that went down to about 8 orders per day. In January, it is around 5 orders per day.
The problem here is that complaints are going up (see the chart at the bottom of the page). He is now getting almost exactly the same number of complaints per day as he is orders.
As complaints exceed orders (which happens because he did much more business in the past), he has to push out delivery dates that he promises to the BBB/BCA farther and farther.
And as orders go down drastically, so does your profit and ability to pay fixed costs like employees, insurance, rent, etc.
So at this point it looks like the tipping point may have been hit.
****
Summary
Hannes Tulving, Jr., owner of The Tulving Company, currently has outstanding orders estimated at as much as $300,000,000 (but in reality likely much lower). It appears that he currently is only able to ship out about $1M of orders per week (every Friday), presumably using money from new orders. According to information from The Tulving Company, it appears that he has taken over $500,000,000 of orders illegally (knowing they would not be delivered within 30 days, violating the FTC Mail Order Rule, CA law, and his FTC consent decree) since April, 2013.
The 400+ complaints we have tracked are all the same: people order, they call to check on the order, are given the run-around (they have an 'unusually high volume of orders', shipping limits, etc.), and never get their order. We have only heard of several people ordering from Tulving since April, 2013 who have received their order in less than 30 days.
We also have a list of the 400+ complaints here.
We also have a list of the 400+ complaints here.
A thorough analysis of gold imports into Mainland China and Hong Kong.
Please use this data and not the data that the World Gold Council provides.
(courtesy In Gold We Trust/Koos Jansen)
A thorough analysis of gold imports into Mainland China and Hong Kong.
Please use this data and not the data that the World Gold Council provides.
(courtesy In Gold We Trust/Koos Jansen)
Please use this data and not the data that the World Gold Council provides.
(courtesy In Gold We Trust/Koos Jansen)
Gold Trade Numbers 2013 Broke All Records
In 2013 the we’ve experienced what kind of extreme buying power China is able to unleash on the physical gold market. Chinese wholesale demand in 2013 was 2200 tons, this excluded PBOC purchases. While the mainstream media is still absolutely clueless on what actually happened and how much gold was distributed across the globe, the facts aren’t that hard to summarize. Let’s have a look at the facts, supplemented with commentary by yours truly.
As most countries disclose their gold trade numbers, by analyzing these numbers we could see a clear gold vein running from the vaults of the the Bank of England (BoE) in London to the 55 vaults of the Shanghai Gold Exchange (SGE) in China mainland. This main vein ran through Switzerland and Hong Kong.
In 2013 the we’ve experienced what kind of extreme buying power China is able to unleash on the physical gold market. Chinese wholesale demand in 2013 was 2200 tons, this excluded PBOC purchases. While the mainstream media is still absolutely clueless on what actually happened and how much gold was distributed across the globe, the facts aren’t that hard to summarize. Let’s have a look at the facts, supplemented with commentary by yours truly.
As most countries disclose their gold trade numbers, by analyzing these numbers we could see a clear gold vein running from the vaults of the the Bank of England (BoE) in London to the 55 vaults of the Shanghai Gold Exchange (SGE) in China mainland. This main vein ran through Switzerland and Hong Kong.
The London Vaults
Most gold in the UK is located at the vaults of the BoE, where gold from the LBMA, GLD, the official reserves from the BoE and official reserves from many other central banks are stored. In response to the drop in the price of gold in April 2013 we have seen significant outflows from the UK; net export broke all records.
The UK net exported 1425 tons of gold in 2013, of which 152 tons net to the United Arab Emirates, 145 tons net to Hong Kong and 1329 tons net to Switzerland. In December total net export was 62 tons, up 68 % from November, while net export to Switzerland dropped to 52 tons. Net export (directly) to Hong Kong was 29 tons.
In 2013 GLD’s inventory dropped by 552 tons.
Most gold in the UK is located at the vaults of the BoE, where gold from the LBMA, GLD, the official reserves from the BoE and official reserves from many other central banks are stored. In response to the drop in the price of gold in April 2013 we have seen significant outflows from the UK; net export broke all records.
The UK net exported 1425 tons of gold in 2013, of which 152 tons net to the United Arab Emirates, 145 tons net to Hong Kong and 1329 tons net to Switzerland. In December total net export was 62 tons, up 68 % from November, while net export to Switzerland dropped to 52 tons. Net export (directly) to Hong Kong was 29 tons.
In 2013 GLD’s inventory dropped by 552 tons.
Through The Swiss Refineries
From refineries in Switzerland we know that all the gold that came from the UK in 400 ounce London Good Delivery (LGD) bars was being refined into 1 Kg bars 99.99 % purity, and sent to the East. Switzerland has never traded and refined as much gold as in 2013; gross import was 3082 tons and gross export 2786 tons.
Switzerland has a long history in gold refining and vaulting, both businesses had to adapt in 2013.Refining exploded as some plants almost doubled their capacity, working in three shifts 24 hours a day to supply the East. From Looking at the chart below we can see Swiss net import decreased to 295 tons in 2013 from an average of 572 tons in 2002 – 2012, which suggests their vaulting business grew less than in recent years.
The Chinese are not only buying unprecedented amounts of physical gold, additionally they strive to have more power in the pricing of the yellow metal. I have published numerous translations – a memo on gold policy from the Chinese government to various ministries, gold institutions, exchanges and the central bank, an interview with the head of the precious metals department of China’s biggest bank on it’s gold aspirations and an article on Chinese gold policy written by one of the most influential leaders of the Chinese gold market – in which this is all clearly exposed. In my opinion the Chinese will eventually take over the entire (paper) gold market.
Swiss refineries are also refining LGD bars for Gulf nations in the new standard 1 K four-nines bars (LGD bars are shipped from the Gulf to Switzerland, 1 K four-nines bars are shipped back). The president of the Peoples Republic of China Xi Jinping has called for better ties for China and Gulf Nations and for an acceleration in talks towards a free trade agreement.
China’s Foreign Minister Wang Yi met with Israeli Prime Minister Benjamin Netanyahu, the Saudi Arabian crown prince, the Iranian Foreign Minister, as well as a multitude of players from the Gulf and North Africa in the last couple of months to develop trade with West Asia. Yi’s goal was to reinforce the oil supply chain from the Middle East, and improve ways to export Chinese goods. Additionally China is investing in large infrastructure projects (railways, harbors, etc) in West Asia to breathe new life into the Silk Road.
At the same time four Gulf nations (Bahrain, Kuwait, Qatar and Saudi Arabia) are planning to setup a new common currency. All developments just mentioned are related as Asian nations seek allies to make a stand in a post US dollar system.
From refineries in Switzerland we know that all the gold that came from the UK in 400 ounce London Good Delivery (LGD) bars was being refined into 1 Kg bars 99.99 % purity, and sent to the East. Switzerland has never traded and refined as much gold as in 2013; gross import was 3082 tons and gross export 2786 tons.
Switzerland has a long history in gold refining and vaulting, both businesses had to adapt in 2013.Refining exploded as some plants almost doubled their capacity, working in three shifts 24 hours a day to supply the East. From Looking at the chart below we can see Swiss net import decreased to 295 tons in 2013 from an average of 572 tons in 2002 – 2012, which suggests their vaulting business grew less than in recent years.
The Chinese are not only buying unprecedented amounts of physical gold, additionally they strive to have more power in the pricing of the yellow metal. I have published numerous translations – a memo on gold policy from the Chinese government to various ministries, gold institutions, exchanges and the central bank, an interview with the head of the precious metals department of China’s biggest bank on it’s gold aspirations and an article on Chinese gold policy written by one of the most influential leaders of the Chinese gold market – in which this is all clearly exposed. In my opinion the Chinese will eventually take over the entire (paper) gold market.
Swiss refineries are also refining LGD bars for Gulf nations in the new standard 1 K four-nines bars (LGD bars are shipped from the Gulf to Switzerland, 1 K four-nines bars are shipped back). The president of the Peoples Republic of China Xi Jinping has called for better ties for China and Gulf Nations and for an acceleration in talks towards a free trade agreement.
China’s Foreign Minister Wang Yi met with Israeli Prime Minister Benjamin Netanyahu, the Saudi Arabian crown prince, the Iranian Foreign Minister, as well as a multitude of players from the Gulf and North Africa in the last couple of months to develop trade with West Asia. Yi’s goal was to reinforce the oil supply chain from the Middle East, and improve ways to export Chinese goods. Additionally China is investing in large infrastructure projects (railways, harbors, etc) in West Asia to breathe new life into the Silk Road.
At the same time four Gulf nations (Bahrain, Kuwait, Qatar and Saudi Arabia) are planning to setup a new common currency. All developments just mentioned are related as Asian nations seek allies to make a stand in a post US dollar system.
The Special Administrative Region Hong Kong
Hong Kong gold trade also broke all records. Net gold import jumped 1500 % from 37 tons in 2012 to 597 tons in 2013. Gross import in 2013 accounted for 2239 tons up 133 %, gross export 1642 tons up 78 %.
The biggest supplier by far was Switzerland, as Hong Kong net imported 913 tons from the Swiss in 2013, up 613 % from 128 tons in 2012 (look at the chart below and spot the record). The Swiss gross exported 1236 tons more in 2013 than in 2012, apparently the bulk of this extra refining output went to Hong Kong.
Hong Kong’s main gold export destination was China mainland. Net export was 1158 tons, up 108 % from 525 tons in 2012. Gross export was 211 tons, gross re-export (gold that passes through Hong Kong without being processed, i.e. 1 K bars) was 1284 tons.
Gross import from the mainland was 337 – this reflects a lot of jewelry fabricated in Shenzhen that is being exported to Hong Kong. Shenzhen is located just across the border from Hong Kong, accommodates the biggest SGE vault and is known for it’s jewelry production industry. The jewelry that is being shipped to Hong Kong is ‘smuggled’ back into the mainland to some extent.
In the mainland there is a 22 % tax on jewelry (17 % VAT, 5 % consumption tax), In Hong Kong there is 0 % tax on jewelry. It’s quite common for Chinese in the mainland to make trips to Hong Kong, buy cheap jewelry and other physical gold products and take this home without being bothered at the border. Customs are very stringent on gold exports from China mainland, on the import side Chinese can easily walk through wearing their new necklaces.
The Chinese jewelry company Chow Sang Sang estimates more than half their products sold in Hong Kong are purchased by mainland tourist. Additionally there are mainland tourists that purchase physical gold in Hong Kong and store it locally in safety deposit boxes at banks as well as vaults outside the banking system. This hidden mainland demand partially explains the unprecedented net gold imports by Hong Kong in 2013 (597 tons by 7 million inhabitants). The other explanation being Hong Kong vaults gold for investors from all over the world.
Hong Kong and the mainland combined net gold inflow in 2013 was 1755 tons.
Please be aware that China mainland can import gold through many other ports than Hong Kong (as I have written bout here). According to my analysis the mainland has roughly imported 2000 tons of gold in 2013 including PBOC purchases.
Koos Jansen: In Gold We Trust
Hong Kong gold trade also broke all records. Net gold import jumped 1500 % from 37 tons in 2012 to 597 tons in 2013. Gross import in 2013 accounted for 2239 tons up 133 %, gross export 1642 tons up 78 %.
The biggest supplier by far was Switzerland, as Hong Kong net imported 913 tons from the Swiss in 2013, up 613 % from 128 tons in 2012 (look at the chart below and spot the record). The Swiss gross exported 1236 tons more in 2013 than in 2012, apparently the bulk of this extra refining output went to Hong Kong.
Hong Kong’s main gold export destination was China mainland. Net export was 1158 tons, up 108 % from 525 tons in 2012. Gross export was 211 tons, gross re-export (gold that passes through Hong Kong without being processed, i.e. 1 K bars) was 1284 tons.
Gross import from the mainland was 337 – this reflects a lot of jewelry fabricated in Shenzhen that is being exported to Hong Kong. Shenzhen is located just across the border from Hong Kong, accommodates the biggest SGE vault and is known for it’s jewelry production industry. The jewelry that is being shipped to Hong Kong is ‘smuggled’ back into the mainland to some extent.
In the mainland there is a 22 % tax on jewelry (17 % VAT, 5 % consumption tax), In Hong Kong there is 0 % tax on jewelry. It’s quite common for Chinese in the mainland to make trips to Hong Kong, buy cheap jewelry and other physical gold products and take this home without being bothered at the border. Customs are very stringent on gold exports from China mainland, on the import side Chinese can easily walk through wearing their new necklaces.
The Chinese jewelry company Chow Sang Sang estimates more than half their products sold in Hong Kong are purchased by mainland tourist. Additionally there are mainland tourists that purchase physical gold in Hong Kong and store it locally in safety deposit boxes at banks as well as vaults outside the banking system. This hidden mainland demand partially explains the unprecedented net gold imports by Hong Kong in 2013 (597 tons by 7 million inhabitants). The other explanation being Hong Kong vaults gold for investors from all over the world.
Hong Kong and the mainland combined net gold inflow in 2013 was 1755 tons.
Please be aware that China mainland can import gold through many other ports than Hong Kong (as I have written bout here). According to my analysis the mainland has roughly imported 2000 tons of gold in 2013 including PBOC purchases.
Koos Jansen: In Gold We Trust
(courtesy Bill Holter/Miles Franklin)
On any given day...
On any given day...and for almost any given reason, the Chinese could "end the game". I am sure that I will receive angry comments telling me that the Chinese would never do anything to "end the game" because they would only be harming themselves. I will hear "who would ever do harm to themselves or upset the apple cart in a good situation?". I have recently written several times that China has "played the game" and basically carried us as a boxer would who had been instructed not to knock their opponent out until a certain round. I also believe that they have improved their "physical" (both monetarily and through infrastructure) position while doing this.
So just "how" could China deliver a knockout punch? The "potentials" are many and as I said "for almost any given reason". China could simply dump their Treasury securities and "make" interest rates rise, this might be the easiest way. Were they to do this, derivatives of all sorts would be ignited into an implosion scenario all over the world. This would also upset uncomplicated and ordinary "carry trades". It would directly effect the U.S. through higher mortgage and auto loan rates. Higher rates would also directly affect the balance sheets of any and all financial institutions.
China could also "go hot" in their disputes with Japan and South Korea. They could initiate or provoke some sort of military action...which would of course also include the sale of Treasuries. How better to injure your opponent than to hit him where it hurts the most...the pocketbook. The outright sale of dollars on the open market is also an option but selling dollars "from" Treasury sales would give them a "two fer". Or, how about the outright purchase of dollars and devaluing their own currency? How would that work out for us?
They might also choose to "court our friends" and allies into business relationships. Personally speaking I saw this with my own two eyes. For what reason would the Chinese build roads, bridges and even the national soccer stadium in Costa Rica? Costa Rica is a country geographically close to the U.S. with banking ties and they even officially use dollars along with their own currency...so why would China even bother? Umm, maybe for a part of CR's agricultural exports? Or because they are a neighboring nation to the Chinese controlled Panama canal? Or maybe to just get their foot in the door and become another thorn in Uncle Sam's side? Who knows but it has become a rather cozy relationship. You must hand it to the Chinese, they have been at least one step ahead of the Americans when it came to locking up raw material deals in resource rich Africa and they have quite large trade deals with both Canada and Australia.
China could, when the time comes, unilaterally blow the price of gold to nearly any price that they wanted. Should they be on the "non" receiving end of a failed delivery this might be exactly what they do. If (mathematically "when") they do not receive metal, all they have to do is make an announcement that will echo and reverberate all over the world. They could easily say "we will pay $4,000 per ounce for any and all gold that anyone wishes to sell us". Why would they "overpay" at such a high rate you ask? Because at the current "made up market prices" they are not getting their fill. A marked up price would be like a final "street sweeping" to part "fools from their real money". You don't think so? Please remember that once their supply IS shut off, they can bid whatever price that they'd like...which immediately becomes the new "market price"...which means whatever they already owned just became worth many multiples of what they paid.
China will absolutely do economically, financially and militarily...whatever is best for China. Did they "fool" the U.S. into thinking that they were "team players" by soaking up much of the debt that our Treasury issued? Yes, they probably sat at a table with Robert Rubin and Larry Summers and just nodded their heads in agreement while seeming financially ignorant. I would also guess that our "delegation" left the dealings laughing at how gullible the Chinese were. While you may not see it yet, the joke is on us because China, whether we like it or not...is our BANKER.
Finally, China has just begun weakening their currency versus the dollar. Can you say "currency wars"? A weaker Yuan means they are trying to protect their manufacturing base. This is good for who? Well China of course which means less U.S. exports to and more imports from China. Does a "less vibrant" U.S. economy make it easier or harder for the U.S. to service its debt to their bankers (the Chinese)? A little more burdensome maybe? And at a time that the U.S. economy looks like it's slowing already? Gee, what a coincidence. Before I finish, for how many years now has the U.S. been "demanding" that China "revalue" their currency higher? At least 10? ...And now all of a sudden China does an about face and begins to devalue? Because it's in China's best interest...and not ours? I guess the old saying "he who has the gold makes the rules" will unfortunately (for us) ring true again! Regards, Bill H.
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