Wednesday, August 15, 2012

MASSIVE IMPORTS OF GOLD INTO CHINA/NY Empire index goes negative for first time since Oct/

Good evening Ladies and Gentlemen:


Gold closed up today to the tune of $4.20 to $1603.70.  Silver finished the session up 5 cents to $27.81
Today it was a lacklustre day with no real activity to report on.  The only big news was the massive importing of gold into China last month.  In the last 6 months they have imported 383 tonnes of gold.
They have been selling treasuries and purchasing gold with the proceeds.  Also for the first time since October, the NY manufacturing area saw a contraction in its index. Early in the session we saw this (if true this will be earth shattering):

The Euro was hit due to the following rumour:


06:29 European market rumor: euro trading lower in reaction to rumor that SNB is diversifying away from the euro
The move lower in the euro is being attributed, at least in part, to a rumor that the SNB is sellng the euro vs. the SEK and GBP
No confirmation on the rumor
€/$ has moved steadily lower from around the 1.2330 level; quoted last at 1.2286 
* * * * *



We will go over all of these stories but first ....


Let us head over to the comex and assess trading there today. The total gold comex OI continues to fall as today's resting position registers 388,187 compared to yesterday's level of 390,062. The gold comex is experiencing a faltering OI coupled with a contracting volume. The August delivery month fell by 329 contracts from 1129 to 800.  We had 207 deliveries so we lost 122 contracts or 12200 oz of gold standing. Blythe had to be a very busy girl today.  The September delivery month saw its OI fall by 213 contracts to 1189.

The next official delivery month is October and here the OI rose by 450 contracts from 28,682 to 29,132.
The estimated volume today was extremely weak at 104,190.  The confirmed volume yesterday was also on the weak side at 126,524.



The total silver comex OI continues to advance to heights not seen in many years.  The total OI for the silver complex rests tonight at 128,993 a rise of a huge 1835 contracts from yesterday's level of 127,158.  The August delivery month saw its OI rise by 10 contracts despite zero delivery notices yesterday.  We thus gained 10 contracts or 50,000 oz of additional silver standing. The next  delivery month is September which is 2 weeks away.  Here the OI remained relatively constant at 44,849 rising by 10 contracts.  The estimated volume today was pretty good at 41,061 compared to yesterday's confirmed level of only 26,581.
The divergence in silver is now very noticeable as certain sophisticated players are willing to play bridge with our crooked bankers.  Let us see who will win..


August 15-.2012   August/gold







Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil 
Withdrawals from Customer Inventory in oz
707.30( HSBC,Manfra)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
100.16 (Scotia)
No of oz served (contracts) today
(339)  33,900 oz 
No of oz to be served (notices)
(461) 46,100
Total monthly oz gold served (contracts) so far this month
(9136) 913,600 oz
Total accumulative withdrawal of gold from the Dealers inventory this month
23,956.16 oz
Total accumulative withdrawal of gold from the Customer inventory this month


 
112,517.58

It is most strange that August is a big delivery month and we are witnessing very little activity in the gold vaults.

The customer at Scotia received the following deposit:

i) into Scotia:  100.16 oz

The customer withdraw the following gold:

i) Out of HSBC  578.70 oz
ii) Out of Manfra;  128.60 oz

total withdrawal:  707.30 oz

we had one adjustment and it was another of those JPMorgan specials:

i) 9969.528 oz was adjusted out of the customer and landed in the dealer account at JPM
in an obvious lease arrangement.

The registered or dealer gold rests tonight at 2.955 million oz or  91.91 tonnes.


The CME reported that we had a rather chunky 339 contracts served upon our longs today for a total of 33900 oz. The total number of notices filed so far this month total 9136 for 913600 oz of gold.  To obtain what is left to be served upon, I take the OI standing for August (800) and subtract out today's delivery notices (339) which leaves us with 461 or 46100 oz left to be served upon our longs.

Thus the total number of gold ounces standing in this delivery month of August is as follows;

913,600 oz served  +  46100 oz (to be served upon) =  959,700 oz (29.85 tonnes of gold)
we lost 12,200 oz of gold standing today.


August 15.2012:  silver  

Silver
Ounces
Withdrawals from Dealers Inventorynil
Withdrawals from Customer Inventory 378,196.144 ( Delaware,Brinks, Scotia  )
Deposits to the Dealer Inventorynil
Deposits to the Customer Inventorynil
No of oz served (contracts)2  (10,000)
No of oz to be served (notices)18 (90,000)
Total monthly oz silver served (contracts)154 (770,000)
Total accumulative withdrawal of silver from the Dealers inventory this month310,045.28
Total accumulative withdrawal of silver from the Customer inventory this month3,226,197.5
 The activity inside the silver vaults was light today.

We had no dealer activity.  We had no deposits today.

The only transactions were withdrawals as such:

i) Out of Brinks;  345,860.56 oz
ii) Out of Delaware:  2073.884 oz
iii) Out of Scotia:  30,261.70 oz

total withdrawal:  378,196.144 oz
we had no adjustment today

Thus the dealer inventory rests tonight at 35.367 million oz
The total of all silver rests at 137.924 million oz.




The CME notified us that we had only 2 delivery notices filed for 10,000 oz. The total number of notices filed so far this month equate to 154 for 770,000 oz.  To obtain what is left to be served upon, I take the OI standing for August (20) and subtract out today's notices (2) which leaves us with 18 notices or 90,000 oz that need to be served upon our longs.

Thus the total number of silver ounces standing in August is as follows;

770,000 oz (served) +  90,000 oz (to be served)  =  860,000 oz (we gained 50,000 oz from yesterday)





The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.


Thus a default at either of the LBMA, or Comex will trigger a catastrophic event.


August 15.2012:



Total Gold in Trust

Tonnes:1,258.15

Ounces:40,450,726.44

Value US$:64,778,361,506.27






august 14.2012:



TOTAL GOLD IN TRUST

Tonnes:1,258.15

Ounces:40,450,726.44

Value US$:64,617,266,568.49





aug 13.2012:




TOTAL GOLD IN TRUST

Tonnes:1,258.15

Ounces:40,450,726.44

Value US$:65,619,128,255.27










The GLD folks neither added nor withdrew any gold from the GLD.


And now for silver:  


August 15.2012: as of 6.pm est

Ounces of Silver in Trust311,578,672.000
Tonnes of Silver in Trust Tonnes of Silver in Trust9,691.18


aug 14.2012:

Ounces of Silver in Trust313,226,434.400
Tonnes of Silver in Trust Tonnes of Silver in Trust9,742.43



aug 13.2012:


Ounces of Silver in Trust313,226,434.400
Tonnes of Silver in Trust Tonnes of Silver in Trust9,742.43



aug 11.2012:



Ounces of Silver in Trust313,226,434.400
Tonnes of Silver in Trust Tonnes of Silver in Trust9,742.43



we had 1.648 million oz of silver removed from the silver SLV vaults.
Somebody needed silver in a hurry.

And now for our premiums to NAV for the funds I follow:



Sprott and Central Fund of Canada. 


(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)



1. Central Fund of Canada: traded to a positive 4.1percent to NAV in usa funds and a positive 4.2%  to NAV for Cdn funds. ( Aug15-.2012)

2. Sprott silver fund (PSLV): Premium to NAV  fell slightly to  3.40% to NAV  august 15 2012   :
3. Sprott gold fund (PHYS): premium to NAV rose smartly to 4.1% positive to NAV August 15 .2012). 

Note:  have you noticed that slowly Sprott's gold fund has been rising in positive to NAV. today it rests at its high point of 4.1%. Also Sprott's silver fund is gaining some traction.  And now the Central fund of Canada is gaining in its positive to NAV.

It looks like England may have trouble in finding gold for its clients.

 


end




Here are your major physical stories:

I guess these two guys will be shocked to death when they find that their GLD does not hold any physical gold.  Just pieces of paper recording their encumbered gold with the real physical bars somewhere else:

(courtesy Bloomberg news)



Bloomberg News

Paulson, Soros Add Gold as Price Declines Most Since 2008

By Debarati Roy on August 15, 2012



Billionaire investors George Soros and John Paulson increased their stakes in the biggest exchange- traded fund backed by gold as prices posted the largest quarterly drop since 2008.
Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a U.S. Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co. increased its holdings by 26 percent to 21.8 million shares.
Gold slumped 4 percent in the second quarter, the biggest such loss since Sept. 30, 2008. Prices fell as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S. Bernanke failed to increase stimulus measures, damping the outlook for global growth and demand for the metal as a hedge against inflation. The price is little changed since end-June.
“It’s all about easing, and people are especially waiting for the Fed since investors expect prices will rise,” if the central bank announces more bond purchases, said Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “People are willing to hold on to gold to see what the Fed will say.”
The metal surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.
Paulson, 56, who became a billionaire in 2007 by bettingagainst the U.S. subprime mortgage market, lost 23 percent in his Gold Fund through July as lower bullion prices and slumping mining stocks contributed to declines. Armel Leslie, a spokesman for Paulson, declined to comment. Michael Vachon, a spokesman for Soros, declined to comment.

Erased Gains

Gold erased its gains this year in May as investors favored sovereign debt and the dollar as economic growth slowed. The U.S. currency gained 3.3 percent against a basket of currencies last quarter.
Hedge funds have cut their net-long position, or bets on higher prices, by 66 percent from a record in August 2011. Their holdings fell to 85,510 futures and options on Aug. 7, according to the U.S. Commodity Futures Trading Commission.
Still, prices have rallied for 11 consecutive years, gaining more than sevenfold, as investors snapped up the metal after government and central bank stimulus programs boosted speculation that inflation would accelerate. The metal is up 2.4 percent this year.

Vinik, Mindich

Vinik Asset Management, the Boston-based hedge fund founded by Jeffrey Vinik, who formerly ran the Fidelity Magellan Fund (FMAGX), cut its entire stake in the gold ETF. On March 30, the fund held 2.3 million shares, SEC data show. Eric Mindich’s Eton Park Capital also sold all of its 739,117 shares last quarter, a filing showed.
Jonathan Gasthalter, a spokesman for Eton Park, declined to comment.
Moore Capital Management LP acquired 120,000 shares of SPDR Gold Trust in the second quarter, a filing showed yesterday. The hedge fund held no shares in the gold fund as of March 31.
Global holdings in exchange-traded products rose to a record 2,417.3 metric tons on Aug. 10, according to data compiled by Bloomberg.
Central banks and the International Monetary Fund are the largest bullion owners with 29,500 tons at the end of last year, or 17 percent of all mined metal, World Gold Council data show. Central banks have been net buyers for two straight years, the council said. Purchases this year will probably exceed the 456 tons added in 2011, the WGC estimates.

Holding On

“People expect prices to rise in the third quarter since historically it has been proved that it’s one of the best periods for gold, and investors who see easing coming in from various central banks are either increasing or holding on to their positions,” Donald Selkin, the New York-based chief market strategist at National Securities Corp., which manages about $3 billion of assets, said by telephone.
Money managers who oversee more than $100 million in equities must file a Form 13F with the SEC within 45 days of each quarter’s end to show their U.S.-listed stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.
To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

end


Here is your early morning gold report from Europe. As we pointed out above both
Soros and Paulsen added to their GLD accounts. Goldcore lists some physical commentaries that may interest you 


(courtesy Goldcore)


From GoldCore
Soros Gold Action Speaks Louder Than Trumpeted 'Bubble' Words
Today's AM fix was USD 1,594.75, EUR 1,293.60, and GBP 1,016.74 per ounce.
Yesterday’s AM fix was USD 1,614.50, EUR 1,305.60 and GBP 1,028.34 per ounce.
Silver is trading at $27.70/oz, €22.65/oz and £17.74/oz. Platinum is trading at $1,401.25/oz, palladium at $571.75/oz and rhodium at $1,060/oz.
Gold dropped $8.70 or 0.54% in New York yesterday and closed at $1,599.60/oz. Silver climbed higher before retreating to $27.64, but it then rallied back higher to end with a gain of 0.14%.
Gold is under pressure today despite the likelihood of more QE from the FED, ECB and other central banks and despite the very uncertain and poor macroeconomic outlook.
Positive US data, retail sales grew for the first time in 4 months, may have led to gold weakness and scaled back hopes that the US Fed will take action soon.
On Tuesday, Gold ETF interest increased to its highest level in nearly a month at 2,190.583 tonnes showing how investment demand in the gold ETF is far more ‘sticky’ and long term in nature.
This means that there is a fundamental pillar of support below the gold market which did not exist in the 1970’s.
An important positive development for the gold market is billionaire financiers George Soros and John Paulson have again increased their allocations to gold as seen in the latest SEC filings.
George Soros more than doubled his shares in the SPDR gold trust ETF.
He increased his position in SPDR Gold to $137.3 million in the second quarter from $52 million previously. SEC filing for the second quarter showed Soros Fund Management more than doubled its investment in the SPDR Gold Trust from 319,550 shares to 884,400 shares at the end of June.
In September 2010 (see chart), Soros called gold "the ultimate bubble" and largely dumped his stake in the ETF before gold recorded annual gains in 2010 and 2011 and rose to a nominal high of $1,920.30 per ounce in September. 
There was speculation at the time that he may have sold the SPDR trust in order to own far safer allocated gold bars.
Another billionaire investor respected for his financial acumen is John Paulson and Paulson & Co increased its holdings by 26% by purchasing an additional 4.53 million shares of the SPDR Gold Trust to bring entire holding to 21.8 million shares. 
It was the first time Paulson & Co had increased its position in the SPDR Gold Trust since the first quarter of 2009, when the investment firm initially acquired 31.5 million shares. It means that Paulson's $21 billion hedge fund now has more than 44% of the company's assets allocated to gold.
Paulson, who became a billionaire in 2007 by betting against the US subprime mortgage market, lost 23% in his gold fund through July as lower bullion prices and slumping mining stocks led to losses.
The increased allocation by Paulson shows that he has much confidence that his allocation to gold will pay off in the long term. 
Gold Prices/Rates/Fixes /Volumes – (Bloomberg)
According to Bloomberg, Vinik Asset Management, the Boston-based hedge fund founded by Jeffrey Vinik, who formerly ran the Fidelity Magellan Fund (FMAGX), cut its entire stake in the gold ETF. On March 30, the fund held 2.3 million shares, SEC data show. Eric Mindich’s Eton Park Capital also sold all of its 739,117 shares last quarter, a filing showed.
Moore Capital Management LP acquired 120,000 shares of SPDR Gold Trust in the second quarter, a filing showed yesterday. The hedge fund held no shares in the gold fund as of March 31. Moore was also aggressive in selling financial and bank shares such as JP Morgan (JPM), Wells Fargo and US Bancorp.
Gold fell 4% in Q2 but the increased allocations show that some of the smartest money in the world continues to see gold as a buying opportunity. With the Fed having bought $2.3 trillion of debt in two rounds of 'quantitative easing' and all major central banks keeping borrowing costs at a record low gold's fundamentals remain very sound. 
Soros' recent renewed allocation to gold has been far less trumpeted than his gold 'bubble' remark and much trumpeted liquidation of gold holdings in May 2011. Some have suggested that Soros was misinterpreted regarding his gold bubble remark and may have meant that gold will in time become the "ultimate bubble".
Cross Currency Table – (Bloomberg)
Alternatively, Soros wishes to accumulate a large position in gold prior to prices rising even further and was happy to help dissuade the retail public from entering the gold market until he owns a significant amount of gold. 
Some hedge fund managers have been known to talk down an investment while in the process of accumulating.
It could simply be that Soros has changed his opinion regarding gold and does not now view it as a "not safe," "ultimate bubble". This seems likely as he has warned that there is a real risk of a euro break up and is on record regarding having deep concerns regarding the US fiscal situation - both of which are of course bullish for gold.
Paulson told clients in February that gold is his best long term bet, serving as protection against currency debasement, rising inflation and a possible breakup of the euro. 
Given Soros awareness of financial risk it is likely that he also owns physical bullion and not just the more high risk shares in the very public SPDR trust.
Other highly respected managers such as Kyle Bass, Greenlight Capital's David Einhorn and Third Point LLC's Daniel Loeb are on record as favouring more discrete ownership of actual physical gold bullion bars - in an allocated format in a secure vault.
We advise our clients – retail, pension and institutional – to do likewise and own physical gold bullion in the safest way possible.
For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS
Gold Fund's Collapse Rattles Poland – Wall Street Journal
COMMENTARY

end 

Wow!! please read the following carefully.  Early this morning it was announced that China has not added any new USA debt paper and actually it contracted from 1.3 trillion usa dollars to 1.15 usa trillion.  Where did this money go?  The answer is now been provided to us...China has bought massive amounts of physical gold. Last month they bought an astronomical 68 tonnes of gold imported through Hong Kong.  In the last 6 months they have hoarded 383 tonnes of gold.  The world produces ex China approximately 2,400 tonnes of gold per year.  At this rate China will be accumulating approximately 31% of annual gold production.  
I will tell you that almost all of this gold is procured through England, the dominant physical supplier of gold.
When the last ounce of gold leaves London, then the Comex and then GLD and then finally the Bank of England will default.

(courtesy zero hedge..also very important)


The Hoarding Continues: China Has Imported More Gold In Six Months Than Portugal's Entire Gold Reserve

Tyler Durden's picture




While the highly "sophisticated" traders that make up the gold market continue to buy or sell the precious metal based on whether the Fed will or will not do the NEW QE tomorrow (or just because, like Bruno Iskil, they have a massive balance sheet, and can create margin position out of thin air with impunity), China continues to do one thing. Buy. Because while earlier today we were wondering (rhetorically, of course) what China is doing with all that excess trade surplus if it is not recycling it back into Treasurys, now we once again find out that instead of purchasing US paper, Beijing continues to buy non-US gold, in the form of 68 tons in imports from Hong Kong in the month of June. The year to date total (6 months)? 383 tons. In other words, in half a year China, whose official total tally is still a massively underrepresented 1054 tons, has imported more gold than the official gold reserves of Portugal, Venezuela, Saudi Arabia, the UK, and so on, and whose YTD imports alone make it the 14th largest holder of gold in the world. Realistically, by now China, which hasn't provided an honest gold reserve holdings update to the IMF in years, most certainly has more gold than the IMF, and its 2814 tons, itself. Of course, the moment the PBOC does announce its official updated gold stash, a gold price in the mid-$1000 range will be a long gone memory.
Here is the latest breakdown of gold reserves by Top 20 countries via the WGC:



 end


 Many of you have asked me if Sprott has received his silver yet.  The following Ed Steer comments tells us that they still have over 1.5 million oz left to fulfill it's mandate:
(courtesy Ed Steer' commentary)


Ed Steer reporting:


I got a call from David Morgan last night...and one of the subjects of our discussion was just how much silver that the Sprott Physical Silver Trust was still owed. A quick e-mail exchange with Nick [Hawkeye] Laird revealed that they'd already received 6,546,513 troy ounces of the stuff, so it appears that they still have a bit over 1.5 million ounces yet to go. I had guessed at 600,000 ounces in this space on Tuesday.

end  



And now our major paper stories.


The only interesting story is from Spain who is considering asking officially for a bailout.
Also Spain extended unemployment benefits to laid off workers for another 6 months. These workers have been collecting unemployment insurance for over 3 years:

(courtesy zero hedge)



Overnight Summary And Look At The Day's Events

Tyler Durden's picture




It's quiet out there, quieter than usual. Perhaps this is becauseMerkel is in Canada today and so hasn't had a chance to crash any dreams of magic money trees yet. The EURUSD however did drop preemptively without any news and touched on 3 day lows moments ago under 1.2280, forcing DraghiFX and his long EURUSD call to pay another margin call. Eventwise, in Europe Spain continues to pretend it does not exist, with its bond yields quietly sliding lower even as the country's economy continues to deteriorate, on expectations that Rajoy will ask for a bailout, when in fact the lower yields go, the more unlikely this event is. Of course, all that needs to happen for the deer in headlight market to snap out of its trance is a reminder of just how broke Spain is before it does need a bailout. In the meantime, Spain is extending unemployment benefits. More importantly, it seems that the Chinese slowdown is about to hit Germany like a brick wall: Hamburg - Europe’s second-largest container harbor - reported its first quarterly decline in container volumes in nine quarter. And now the recession is really coming to Germany.
More key overnights summarized by Bloomberg:
  • Spain’s government is considering a request for a sovereign bailout, European Economic and Monetary Affairs Commissioner Olli Rehn signaled in a Bloomberg Television interview yesterday
  • Spanish Prime Minister Mariano Rajoy risks irking the European policy makers he needs on his side after he extended unemployment benefits to avoid stoking social unrest
  • Hamburg, Europe’s second-largest container harbor, reported its first quarterly decline in container volumes in nine quarters as Europe’s debt crisis reached China, the port’s main trading partner
  • U.K. jobless claims unexpectedly fell in July and a wider measure of unemployment dropped to its lowest in a year as the Olympic Games created jobs in London

  • German bunds lower, Spanish and Italian 10-yr notes higher. BofAML IG Master spread narrows to new low for year. EUR/USD erases gains, slides to session-low $1.2283; European stocks, U.S. equity-index futures lower

opening Spanish 10 yr yield:  8 am est



SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE

Add to Portfolio

GSPG10YR:IND

6.653000.07900 1.17%
As of 06:55:00 ET on 08/15/2012.


opening Italian 10 year bond yield:  8 am est

Italy Govt Bonds 10 Year Gross Yield

 Add to Portfolio

GBTPGR10:IND

5.788000.04300 0.74%
As of 06:55:00 ET on 08/15/2012.


 Here are your early morning currency crosses which will certainly have an effect on the USA markets and our precious metals:

The Euro/usa cross:  1.2288
USA/Can  .9922

and now for our European bourses:  (at 8 am est)

The London FTSE:  down 25 points or .43%
DAX (Germany)  down 27 points or .41%
The Spanish Ibex: down 27 points or .38%
The Paris CAC: down 10 points or .27%



end

The Spanish Prime Minister risked riling up the EU as he extended benefits to the long term unemployed by another 6 months.  These folks have been receiving unemployment benefits for the past 3 years and now they are extended for another 6 months:

(courtesy Bloomberg)


Rajoy Risks Riling ECB In Bid To Avoid Union Ire: Euro Credit

Spanish Prime Minister Mariano Rajoy risks irking the European policy makers he needs on his side after he extended unemployment benefits to avoid stoking social unrest.
Aug. 14 (Bloomberg) -- European Union Economic and Monetary Affairs Commissioner Olli Rehn says Spain's government has an "open mind" about a sovereign bailout and the EU is "ready to act" if there is a request for aid. Sara Eisen reports on Rehn's comments on Bloomberg Television's "Money Moves." (Source: Bloomberg)
Police guard the Finance Ministry as civil servants protest outside, in Madrid, on Aug. 10. 2012. Photographer: Paul White/AP Photo
Spain's Prime Minister Mariano Rajoy. Photographer: Pierre-Philippe Marcou/AFP/Getty Images
Rajoy said yesterday his government will continue to make payments to the long-term unemployed, extending for six months a benefit adopted by his Socialist predecessor three years ago that was due to expire today. Rajoy, who reiterated he may consider seeking European help to tame 10-year bond yields hovering near 7 percent, didn’t say how he’d pay for the measure he described as “just.”
The premier is trying to head off protests from Europe’s largest army of unemployed as his popular support sinks. The plan to increase spending two weeks after European Central Bank President Mario Draghi offered to wade back into bond markets threatens to undermine his best way of bringing down borrowing costs from near levels that prompted Greece,Portugal and Spain to seek bailouts.
“He’s going to provoke an angry response and make the ECB even less willing to provide support,” said Stuart Thomson, afund manager at Ignis Asset Management in Glasgow, who expects Spain to seek external funds by the end of the year. “Why poison the negotiations with resistance and decisions that will annoy the northern Europeans?”

Strict Conditions

Spanish 10-year bond yields dropped 1 basis point to 6.72 percent as of 9:26 a.m. in Madrid today compared with 6.73 percent yesterday and a euro-era intraday record of 7.75 percent on July 25. They have fallen 44 basis points since Aug. 2, when Draghi said the ECB was prepared to buy sovereign bonds to bring down yields if countries applied for similar support from Europe’s rescue fund and accepted strict conditions. Rajoy said the next day he would consider triggering the mechanism if it were “in the best interest” of Spaniards. He reiterated those comments yesterday.
ECB policy makers have complained that previous attempts by the central bank to bring down borrowing costs have led politicians to ease pledges to implement budget cuts and measures to overhaul their economies. The ECB briefly bought Spanish and Italian bonds last year.
“We haven’t forgotten what happened in August of last year: We bought Italian bonds and right after that the Italian government reneged on its pledges,” ECB Governing Council member Luc Coene said in an interview with De Tijd and L’Echo on Aug. 11 “The conclusion is clear: When you take away the market pressure, you take away the pressure on politicians to act.”

Costs Unknown

Under the extension announced by Rajoy, Spaniards who have run through as much as two years of contributions-based jobless benefits will continue to receive 400 euros ($494) per month. The government hasn’t given an estimate of the price tag of extending the program, which cost 642 million euros for six months at its inception in 2009 when the jobless rate was 18 percent. More than 200,000 people were getting the aid as of June, the Labor Ministry said yesterday.
Rajoy popular support is slumping, while the two biggest unions are talking about a “hot autumn,” starting with a nationwide protest march to converge on Madrid on Sept. 15. A poll published July 23 by newspaper El Mundo found that Rajoy’s People’s Party would win 36 percent of the vote, down from 45 percent at the Nov. 20 general election.
Backing for the government, which has an outright majority in Parliament, is declining as Spaniards suffer the third year of spending cuts and a deepening recession that’s pushed theunemployment rate to almost 25 percent, leaving 1.7 million homes with no breadwinner.
The latest package of 65 billion euros of budget reductions, announced after the European Union gave Spain an extra year to meet its deficit goals, included trimming the main jobless benefit and raising the value-added tax in breach of Rajoy’s election pledges.

Deficit Goals

The government risked a “confrontation with the unions” if it didn’t roll over the subsidy, saidGilles Moec, co-chief European economist at Deutsche Bank AG in London. The payment plan “probably isn’t central for Spanish public finances,” as the nation aims to cut the deficit to 6.3 percent of gross domestic product this year from 8.9 percent last year, he said.
“I would hope the ECB wouldn’t focus on that,” he said.
Rajoy’s track record with European colleagues and investors may make the decision more important than it would be otherwise, Ken Wattret, chief European economist at BNP Paribas SA, said in a telephone interview.
Rajoy surprised investors and European allies in March when he unilaterally changed Spain’s deficit target hours after signing a pact on budget coordination in the euro region. Calls from members of his government for the ECB to buy the nation’s bonds have also prompted criticism from central bank policy makers for encroaching on the bank’s independence.
“The problem is that the government’s credibility has been damaged by the way it’s handled a number of issues,” Wattret said. “Something that ordinarily might be seen as unimportant from the ECB’s perspective might be seen as more important now because of the mistakes the government has made in the past.”
To contact the reporter on this story: Emma Ross-Thomas in Madrid aterossthomas@bloomberg.net
To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net

end



Rajoy remains mute as to whether he will proceed with a bailout:

(courtesy UKTelegraph/Ed Steer commentary)


Debt crisis: Mariano Rajoy remains tight-lipped on Spanish bail-out



Spanish prime minister Mariano Rajoy has remained tight-lipped on whether he will make a formal request for a bail-out, as Olli Rehn indicated the ECB and EU were ready to shore up the eurozone.
Speaking in Mallorca after meeting King Juan Carlos, Mr Rajoy repeated that the government would act “in the best interests” of Spaniards. Asked if the pair had discussed the possibility of a second bail-out, he said: "Until we know what decision the ECB has taken on this matter, we aren't going to take one either".
Earlier this month, Mr Rajoy opened the door to a bail-out request, but said he would first need to know the attached conditions as well as the form a rescue would take.
Mr Rajoy also confirmed that the government will renew a six-month jobless subsidy designed for people who have exhausted other jobless benefits.
This is another story from yesterday's edition of The Telegraph...and it was posted on their website mid-afternoon BST yesterday...and it's another story courtesy of Roy Stephens. The link is here.
end


Greece is asking for another two year extension on its debt sustainability:

(courtesy London's Financial times)

Greece's own debt sustainability report calls for two-year extension: The FT reported that a debt sustainability analysis produced by Greece supports a two-year extension of its adjustment program. Yannis Mourmouras, the author of the report, said that an extension would improve Greece's debt dynamics, potentially reducing the debt to GDP ratio to 132% by 2020 compared to 147% under the two-year arrangement. The proposal also suggested that Greece could raise the additional €20B required to fund the slower adjustment without having to seek additional support from its partners. It said that the first €8B would come from Greece's current IMF loan, while another €6-€7B would be raised by continuing to roll over treasury bulls (rather than retiring them over the next two years as required under the current bailout program). The remaining €5-€6B would come from delaying Greece's obligation to start repaying €60B it received under the first bailout until 2020. Note that Greece creditors have repeatedly pushed back against the idea of an extension. Germany said today that Athens should stick to the targets of its current bailout program.



end



Mark Grant discusses with Rick Santelli the transaction of how Greece received its 3.1 billion euros.
The transaction was relayed to you in my commentary from yesterday.  Suffice it to say, it was a circular
transaction where the ECB pays itself the money it is owed.

Mark Grant discusses what the true debt to GDP figures of the various PIIGS nations
We takes the official debt of the sovereign and then:

i) adds the regional debt guaranteed by the sovereign.
ii) adds the corporate debt guaranteed by the sovereign.
iii)adds the bank debt guaranteed by the sovereign..
and then.. adds the derivatives contracts put on by government.

He then divides this by the GDP to get the correct debt/GDP. This is not an opinion. It is real. 

Mark Grant then discusses the USA and thinks that their figures are pretty accurate.

However the Europe numbers are not.  He states that Italy this year will add 115 billion euros to its debt as each month 9.6 billion euros is added to its debt.  The Spanish banks have borrowed over 375 billion euros from the ECB.

Greece has received funding from these facilities:

i) massive borrowings from the ECB
ii) target 2 imbalances (essentially funded by Germany)
iii) direct loans from the IMF
iv) direct loans from the ESFS

they are so far underwater it hurts..
Whether it receives the next batch of 40 billion euros depends on the political scene in Germany and its voters.

again your most important commentary of the day.

(courtesy Mark Grant/Out of the Box and onto Wall Street)



Some Simple Answers - As Requested

Tyler Durden's picture





via Mark E. Grant, author of Out of the Box,
Rick Santelli at CNBC asked the question and he asked me for a simple answer so I gave it to him. Rick wanted to know how Greece had raised almost $5 billion in a Treasury Bill auction and I explained; simply. The debt was almost entirely bought by the Greek banks, who are bankrupt and funded by the government of Greece through the EU and the ECB in various ways, and they pledged the Bills right back to the ECB and they got their money back. It was a Ponzi scheme of sorts, which I stated, which allowed the ECB to lend money to Greece through the Greek banks. Greece is out of money and Germany is deciding what to do about Greece so in the meantime the ECB funded the country. Rick went on to state that “the game was rigged” and he is one thousand percent correct; the game was rigged.
At least we didn’t have to listen to the Greek Prime Minister calling it a great victory for Europe like we did with the Spanish one but that may be the best thing that can be said for the situation. The ECB violated their rules and strictures and did it at the behest of the European Union you may be sure which only proves, once again, that the ECB is about as independent as a three year old is of his mother. You can say the three year old is his own person but I assure you that each and every mother on the planet would roll her eyes at you. This then is one of the main problems with Europe these days; there are laws and regulations that are defined to be exactly what the EU wants them to mean at any point in time so that there are in effect no laws and no regulations and just political expediency.
Fraud
If IBM or GE or if Volkswagen or BMW did not include all of their liabilities on their balance sheet, did not include their promises to pay or their guarantees of other debt or their derivative contracts in their financial statements then they would be tried and found guilty of Fraud and the CEO and the CFO and the Board of Directors would all be in jail. These corporations live under the Law and the Law is that you have to disclose all of your liabilities and not just some of them. In Europe, for the governments of Europe when publishing their debt and their debt to GDP ratio’s this is not the case. They are not required and they do not include all of their liabilities when they give the public the data about their financial condition. This is why I keep stating that the European numbers are phony and I have tried to provide the real ones which is nothing more than counting what the Europeans do not wish to count. In each instance I included the regional debt that the government had guaranteed, the bank debt that the government had guaranteed, the corporate debt that the government had guaranteed and any derivative contracts that any government had taken on. I took all of the data from official sources such as Eurostat and the Bank for International Settlements. I then added up the numbers and divided that by the government’s official GDP and reached the result. There is no “Mark Grant’s opinion” in the numbers; I just counted what Europe does not wish to count or be held responsible for and that was it. Here is another case of “rigging the game” and it is accomplished by what would be termed Fraud for any corporation.
“The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced. The manners of capitalism improve. The morals may not.”
                    -John Kenneth Galbraith
Apples to Apples
I am often asked about the United States and I am specifically asked about our future pension and Medicare payments. When I have calculated the real balance sheet of the European countries I have not included their corresponding pension guarantees or medical payments so I can honestly say that it has been an apples to apples comparison. The stated numbers for America are reasonably correct and our official debt to GDP ratio is reasonably correct and while you could make the argument perhaps about the debts of FNMA or Freddie Mac and some other quasi-government bodies the data would not change much because of the off-set of assets. Therefore, in my opinion, the official numbers for America are basically honest while the official numbers for Europe are not.
In assessing the official European numbers you are likely to reach the conclusion that the European Union is in trouble. When assessing the real numbers it becomes obvious not just that they are in trouble but just how serious the trouble is now. Old debt is being replaced by new debt and the new debts are far larger than the old ones as exemplified by the calculations that I performed yesterday on Italy which will add $141 billion to the sovereign debt this year. The Spanish banks are into the ECB for record amounts while Greece with its massive borrowings at the ECB, the IMF, their Target2 participation and their direct loans from the Stabilization Funds is so far underwater that financially Athens is now buried ten meters under the Mediterranean Sea. Whether Greece is going to be handed another $50 billion in the next few months or whether Germany is finally going to cut the cord is a political question that is highly dependent upon the perceived reaction of the German voters but one way or another, now or later, Greece will eventually default because there is no other way out except debt forgiveness and I see that as a political impossibility in many countries.
Be Careful What You Wish For
Europe hates the ratings agencies. These companies have two distinct set of Masters which are the debtors and the lenders or investors. The ratings agencies have been cajoled, threatened and debased but, in the end, they will arrive at ratings which will be disastrous for Europe. This will happen because the economic data will force it to happen and while it may be eventual; it will happen.
Any scheme such as Eurobonds or any other artifice that produces a unified Europe where national boundaries fade away will result in an average rating for all of Europe at “A” or maybe “BBB+” and the cost of funding and standards of living will also revert to a mean for all of Europe. This is why Germany is in such a perilous state because they know this. You may disregard all of the rhetoric and the jargon; the people in Berlin do not wish to live like the people in Athens and that would be the certain outcome, over time, of blending the national debts. The nations with the money would be forced to disgorge and the nations without money would be the recipients and you would get a harmonized Europe but at a huge price to the wealthier nations who would no longer be wealthy. In the first instance money has rushed to Germany and a few other countries as the safest of the European places to stash cash but in the second instance money will leave all of Europe as influenced by rising debt levels and uncounted liabilities that will become due and severely weaken the national balance sheets and the balance sheets of the European institutions such as the ECB. The ECB may well be forced to print money or a number of other schemes could be employed but the cost to Germany, for any of them, will throw that nation into peril as they just do not have an economy that is large enough to support all of the troubled nations in Europe which is a growing list with each passing day.
This is why I stated yesterday on CNBC that Europe will have a “Lehman Moment” and likely a number of them. The construct is a failing enterprise as the available European capital cannot support the combined debts and as real money investors pull their capital and stop lending because of the continuing deceit. You may be able to “fool some of the people some of the time” as Abraham Lincoln so succinctly put it but you cannot fool all of the people all of the time as I humbly nod to his sage wisdom.
Wise men are instructed in reason;
Men of less understanding by experience;
The most unknowing learn by necessity.
Wise men do in the beginning what fools do in the end.




end

Nigel is back..You will enjoy this tape:

(courtesy Nigel Farage/CNBC/zero hedge)


Farage Blasts Communist Europe And Leaders "Living In Noddy-Land"

Tyler Durden's picture




Nigel Farage, looking tanned and refreshed, is back and as he tells FOX Business in this brief clip "nothing has changed" from his views of Europe as the Titanic and its unelected officials dragging it down to the depths of the ocean. Citing Mario Monti specifically with his concerns over allowing politicians to 'decide' anything he notes the leader's demeanor is "We must not let democracy interfere with our great Grand Project." With European GDP negative, and group-hugs all around as Europeans are herded towards a European social state, Farage analogizes that "we are living in Noddyland" where economic reality and day-to-day life are as distant as they could be as he warns that they are becoming part of something that is increasingly resembling Communism. He dismisses the growing belief that "the state and government creates jobs" noting that "it doesn't, it destroys them!" With two wrongs (Spain ad Italy) not making a right; Farage is clear that breaking up the EU is necessary now and it is critical to recognize that "you don't get something for nothing" as Europe is increasingly de-industrialized.

The ECB Has Two "Hail Mary" Options... Could Either of Them Work?

Phoenix Capital Research's picture





For more market commentary and economic insights, as well as a number of free reports aimed at helped individual investors navigate the markets successfully, come visit us athttp://www.gainspainscapital.com

Mario Draghi claims he can save the Euro.

I don’t buy it… even for one second. As far as I can see the ECB has one of two “Bail Mary” options. They are:

  1. Massive money printing and buying of sovereign debt
  2. The issuance of Euro-bonds along with across the board banking backstops.

As I noted in a recent article, #1 is impossible. If the ECB does this it will implode the bond market, which means GAME OVER for all intervention. Look at the impact QE had on Treasuries and you’ll see what I mean. And that’s Treasuries we’re talking about… not PIIGS debt.

Now let’s consider the ECB’s second “Hail Mary” option: the issuance of Euro-bonds and across the board backstopping of EU banking deposits.

For starters, Angela Merkel has said that there will not be Euro-bonds for “as long as [she] live[s].” This is not a bluff. The issuance of Euro-bonds goes against the German constitution. If Merkel were to even consider this option she would likely be kicked out of office (remember she’s up for re-election next year).

This would also result in Germany losing its AAA credit status. Germany is already approaching the dreaded Debt to GDP level of 90%. And thanks to nearly €1 trillion in back-door bailouts to Europe, the country is already on the hook for potentially tens if not hundreds of billions of Euros worth of losses: money Germany doesn’t have.

As for backstopping EU deposits… no entity on earth has the capital to do this. Total Eurozone deposits stand at €15 trillion. Even deposits at the current EU “problem” countries (Spain, Italy, Portugal and Ireland) are €5.5 trillion. That’s nearly TWO TIMES the size of the ECB’s balance sheet and over FOUR TIMES the size of the various EU bailout funds (the EFSF and ESM, the former of which only has €65 billion in capital left by the way).

Again, in very plain terms, NO ENTITY on planet earth has themoney needed to backstop banking deposits for the PIIGS, let alone the entire EU. So scratch that idea off the list.

What does this leave?

It leaves us precisely where we are today. Where is that?

Bailout Entity
Remaining Firepower
EFSF bailout fund
€65 billion
ESM
€700 billion assuming Germany and Italy ratify it (they haven’t yet)
IMF
€38 billion (maybe)
ECB
Technically, the ECB could print a couple hundred billion Euros, but doing so would have severe political and monetary ramifications so this option is questionable.
Germany
If it ratifies the ESM it’s on the hook for  €190 billion Euros as well as the nearly €1 trillion it’s committed to EU bailouts already. German GDP is only €2. 89 trillion. So the country is already getting close to its own solvency crisis.

The above is not opinion or idle conjecture; these are all verifiable facts, which is why I believe Mario Draghi is bluffing when he says the ECB can act and that its actions be “enough.”

Indeed, as a merely philosophical inquiry, ask yourself, when has a Central Banker said “believe me,” and proven to be correct about anything in the last five years?


Best Regards,

Graham Summers

end


Your closing Spanish 10 yr bond yield:  (looks like Spain is expecting a bailout any minute)

SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE

Add to Portfolio

GSPG10YR:IND

6.642000.09000 1.34%




end


Your closing Italian 10 yr bond yield:


Italy Govt Bonds 10 Year Gross Yield

 Add to Portfolio

GBTPGR10:IND

5.768000.06300 1.08%
As of 12:00:00 ET on 08/15/2012.


end

Your major currency crosses;

Euro/USA 1.2288 closing
USA/Can .9893

stock index closings:

Dow: down 7 points .06% down
FTSE: down .54 %
DAX: down .40%
Paris CAC down 1 point/.03%
Spanish ibex up 4 points  or .06%

end.



And now for some USA stories:

It seems that the mouthpiece for the USA government has just pulled the plug on any QE III
for the year 2012.  Jan Hatzius has now stated that he thinks due to the "stronger" economy
QEIII will not commence before 2013. he cited improvements in the retail sales and employment gains as reasons.

How can anybody believe this garbage?

(courtesy zero hedge)



Goldman Pulls The Plug On More QE In 2012

Tyler Durden's picture




One of the most vocal advocates of a NEW QE announcement next month, at either the FOMC meeting or Jackson Hole - Goldman Sachs - has just pulled the plug. From Jan Hatzius: "The US economic data continue to look a bit stronger. Tuesday’s retail sales report for July beat expectations, while inventory accumulation showed a further slowdown in June. Our Q3 GDP tracking estimate edged up to 2.3%. The recent news also has implications for Fed policy. While QE3 at the September 12-13 FOMC meeting remains possible, our best estimate is that it will take until late 2012/early 2013 before Fed officials return to balance sheet expansion." Just as we have been saying. Which means the Fed is now out of the picture until the end of 2012. And with corn prices where they are, so is the PBOC. As for the ECB - talk to Rajoy, who will do nothing as long as 10 Year yields are under 8%. Which means that, as explained previously, Spain and Italy, and in fact the entire world, must all be destroyed first, before they are saved.
Full Goldman note:
The US economic recovery remains sluggish, but we believe that it will pick up a bit in coming months. Tuesday’s data were generally in line with this expectation:

1.    Stronger retail sales. The July retail sales report showed a clear upside surprise, with a 0.9% gain in sales excluding autos, building materials, and gasoline. The month-to-month strength was broad-based, with sizable gains in most core categories, although it mainly served to reverse some of the declines in the prior month.

2.    Slower inventory accumulation. Inventory accumulation has slowed clearly in recent months, with book-value business inventories up just 0.1% in June, down from a peak of 0.8% in January. We believe that this slowdown has been partly responsible for the disappointing performance in manufacturing surveys such as the ISM and Philly Fed. If it is ending, that should help the manufacturing sector over the next few months.

Our proprietary measures of US economic growth have also picked up a bit further. Our Q3 GDP tracking estimate rose to 2.3% from 2.2%, our current activity indicator (CAI) now stands at 1.2% in July after 1.1% in June, and our US-MAP index of US economic data surprises is moving quickly further toward neutral readings on a 60-day exponential moving average basis.

The recent news on the pace of the recovery also has implications for Federal Reserve policy. To be clear, our own view remains that there is a very solid case for additional accommodation under the Fed’s dual mandate of maximum employment and 2% inflation. And we do believe that Fed officials will ultimately decide to ease policy further.

However, in contrast to a number of other forecasters, we do not expect a move to QE3 at the September 12-13 FOMC meeting. Although Fed officials clearly adopted a strong easing bias at the July 31-August 1 FOMC meeting, we do not think that this amounts to a pre-commitment to QE3. Instead, we believe that continued weakness is necessary to prompt a substantial easing move. And so far, that weakness is not showing up in the data. Among the top-tier indicators released since the meeting, only the July ISM manufacturing index was a (modest) disappointment. In contrast, the July employment report was at worst a split verdict, the July nonmanufacturing ISM was a bit better than expected, jobless claims have surprised on the low side over the past few weeks, the June trade deficit showed an unexpected decline, and the July retail sales report surprised on the upside.

Other factors have also, at the margin, swung against the expectation of aggressive near-term easing. The inflation outlook has become a bit cloudier in the wake of the recent recovery in commodity prices; while Tuesday’s upside surprise on producer prices was largely driven by volatile sectors such as vehicles and tobacco, underlying price pressures were also a touch firmer than we had expected. Moreover, our GS financial conditions index has now fully unwound the tightening seen in the second quarter, and we have found previously that the meeting-by-meeting probability of Fed easing is quite sensitive to financial conditions.

To be sure, the uncertainty around the near-term trajectory of Fed policy remains substantial. Several FOMC meeting participants, specifically Presidents Evans, Rosengren, and Williams, are making the case for additional easing via potentially open-ended balance sheet expansion. And it might well be that Chairman Bernanke will use his speech at the upcoming Jackson Hole Symposium to explain why the Fed’s mandate calls for further accommodation in the near term. We will be receptive to these messages and will review our monetary policy forecasts as needed. But our call remains that the return to QE will not happen until late 2012/early 2013, and at the margin the recent data have made us a bit more confident.

end



Here are 6 USA cities on the edge waiting for the ultimate bankruptcy decision:

1. Miami Florida
2. Fresno California
3. Stockton, California
4. Gary Indiana
5. Compton California
6. Detroit Michigan
7. Rockland County, NY

(courtesy Dan Berman/AdvisorOne/Jim Sinclair)

6 U.S. Cities on Edge of a Fiscal Cliff
With Moody’s recent warnings and downgrades, these municipalities may follow the likes of Stockton and Central Falls into bankruptcy 
By Dan Berman, AdvisorOne
August 14, 2012
Bankruptcy was once a last-ditch act reserved for companies and individuals. Declaring that creditors could not be paid carried a stigma that no one wanted to be associated with. And rarely would a municipality file for Chapter 9, the city version of Chapter 11. How times have changed.
Since 1981, 42 U.S. cities and towns have filed for bankruptcy. The pace has picked up with 10 in the last four years and many others teetering on the brink of insolvency. Recent cities taking the plunge include Mammoth Lakes and Stockton in California, and Central Falls, R.I.
The biggest issue is pension obligations to city workers coupled with a lack of revenue. The boom times of the 1980s and ’90s spurred the awarding of generous benefits to employees.
The Golden State has been hardest hit. The state’s budget woes have toppled governors and forced four cities since 2008 to declare bankruptcy, with more on the brink.
When cities go bankrupt, citizens find basic services slashed, fire and police protection cut to the bare minimum and taxes increased.

end

The Fed's Richard Fisher correctly states that additional QEIII will have no noticeable effect on the economy.

a must see

(courtesy CNBC/zero hedge)


Fed's Fisher Reluctant To 'Bail Out White House' With More QE

Tyler Durden's picture




It was not enough that the Fed's Richard Fisher was 'allowed' on CNBC this afternoon to expropriate himself and his merry-Fed-men from his 'fanatical' colleague nemesis Rosengren; but Maria B., for one glorious moment, asked a question so sensible it was stunning: "Is The Fed Bailing Out The White House?" The notably business-man-background Fisher was wonderfully heretical in explaining that additional stimulus would have little impact, that the Fed's action would indeed 'look political', and that "US lawmakers need to get their fiscal act together." While he doesn't see a high likelihood of a recession in 2013, he comprehends clearly the wait-and-see 'defensive crouch' that businesses are in given the huge uncertainty. On a slow day, with so much print-and-it's-all-fixed hope, the clarifying vision of at least one man on the FOMC is perhaps worth holding onto.

It seems CNBC's Department of embedded honesty did not like it - so here is the direct link...

17 comments:

Anonymous said...

First!!! :D :D

Thanks Harvey! Take care!

Peter said...

Harvey,
At the rate the Chinese are buying physical gold-how long do you think it will be until the LMBA cupboards are bare? The Chinese are smart enough to be taking delivery of the physical gold-yet the CRIMEX paper price does not rise-very strange.

Mark said...

Harvey,

The loss in SLV silver that you reported was from yesterday. Today it gained back 1.357 million ounces. Just an exercise in moving around the yellow sticky's on the pallets of bars in the vault.

Budd said...

Fmb does your mom know what your doing down there in your basement digs!? Obviously not or she would shut off your Internet access! You kids sure say the dimmest things!!!

Anonymous said...

Harvey,you state teh follwoing about Soros and Paulson: "I guess these two guys will be shocked to death when they find that their GLD does not hold any physical gold. Just pieces of paper recording their encumbered gold with the real physical bars somewhere else:

I have to say that these two guys are billionares and they didn get that way being stupid so I'm feel fairly certain that if I had to go by expertise, I would have to say I believe these two guys have you beat hands down. I am cetian they know something you do not. Lets see, I can listen to a nearly retired pharmasist that dont know hia ass from third base about the workings of the Comex or two self made billionares.... hmmm, tough choice.

croc987 said...

Thank you Harvey!!

Peter, where are you? Our troll friends are back!

TROOLLOOOOOO!

croc987 said...

Hey Soros and Paulsen can redeem their shares for fizz through an authorized agent. They had better get busy to be at the head of the line. If not they could be losers in the musical chair game.

Peter said...

croc,
The manipulation has become so blatant-out and out corrupt-they can pick a number in the paper price market and make it happen-what are the odds the CRIMEX can keep it up? Three days in a row the spot market has closed exactly @27.83-@ 5:15 closing of the Globex. Let the TROLLs have their fun-they will be gone soon.

Harvey Organ said...

Monkey you are deleted

Poppers said...

Harvey, Soros & Paulson, now there are two people who can move markets and just maybe that is what they have done. Got in, played it, rode it and now are out while everyone else thinks they are still in. These guys have the ability through their resources and connections to know the timing of major events. Any fool that thinks they can follow them is exactly that, a fool.
Repectfully submitted.

Anonymous said...

Harvey, You are always ready to delete FMB but what about Peter? He posts blatant lies, belittles, degrades other bloggers, not just FMB and yet you do not one thing. Why is that?

Anonymous said...

Poppers, you do realize that you are walking a very thin line by disagreeing with Harvey. You must be a troll!!!! TROOLLOOOOOO!

Peter the II

Peter said...

Troll alert-what a bunch of BUFFOONS-
Disinformation tactic #13.

Hit and Run. In any public forum, make a brief attack of your opponent or the opponent position and then scamper off before an answer can be fielded, or simply ignore any answer. This works extremely well in Internet and letters-to-the-editor environments where a steady stream of new identities can be called upon without having to explain criticism reasoning — simply make an accusation or other attack, never discussing issues, and never answering any subsequent response, for that would dignify the opponent’s viewpoint.

Peter said...

Poppers,
I think you have not done your re
search Soros and Paulson are NOW both BUYING:

From ZH:

"An important positive development for the gold market is billionaire financiers George Soros and John Paulson have again increased their allocations to gold as seen in the latest SEC filings.

George Soros more than doubled his shares in the SPDR gold trust ETF.

He increased his position in SPDR Gold to $137.3 million in the second quarter from $52 million previously. SEC filing for the second quarter showed Soros Fund Management more than doubled its investment in the SPDR Gold Trust from 319,550 shares to 884,400 shares at the end of June.

In September 2010 (see chart), Soros called gold "the ultimate bubble" and largely dumped his stake in the ETF before gold recorded annual gains in 2010 and 2011 and rose to a nominal high of $1,920.30 per ounce in September.

There was speculation at the time that he may have sold the SPDR trust in order to own far safer allocated gold bars.

Another billionaire investor respected for his financial acumen is John Paulson and Paulson & Co increased its holdings by 26% by purchasing an additional 4.53 million shares of the SPDR Gold Trust to bring entire holding to 21.8 million shares.

It was the first time Paulson & Co had increased its position in the SPDR Gold Trust since the first quarter of 2009, when the investment firm initially acquired 31.5 million shares. It means that Paulson's $21 billion hedge fund now has more than 44% of the company's assets allocated to gold.

Paulson, who became a billionaire in 2007 by betting against the US subprime mortgage market, lost 23% in his gold fund through July as lower bullion prices and slumping mining stocks led to losses.

The increased allocation by Paulson shows that he has much confidence that his allocation to gold will pay off in the long term."

Peter said...

Paulson calls GOLD his best long term bet.
Anyone interesting in protecting wealth should buy PHYSICAL PRECIOUS METALS-the end of the "fiat" system is getting closer by the day-today being the 41st anniversary of Nixon taking the US off of the Gold Standard-we are truely "living on borrowed time"

From ZH-

"Alternatively, Soros wishes to accumulate a large position in gold prior to prices rising even further and was happy to help dissuade the retail public from entering the gold market until he owns a significant amount of gold.

Some hedge fund managers have been known to talk down an investment while in the process of accumulating.

It could simply be that Soros has changed his opinion regarding gold and does not now view it as a "not safe," "ultimate bubble". This seems likely as he has warned that there is a real risk of a euro break up and is on record regarding having deep concerns regarding the US fiscal situation - both of which are of course bullish for gold.

Paulson told clients in February that gold is his best long term bet, serving as protection against currency debasement, rising inflation and a possible breakup of the euro.

Given Soros awareness of financial risk it is likely that he also owns physical bullion and not just the more high risk shares in the very public SPDR trust.

Other highly respected managers such as Kyle Bass, Greenlight Capital's David Einhorn and Third Point LLC's Daniel Loeb are on record as favouring more discrete ownership of actual physical gold bullion bars - in an allocated format in a secure vault.

We advise our clients – retail, pension and institutional – to do likewise and own physical gold bullion in the safest way possible."

Anonymous said...

Buffett is in on it.

Thick as thieves they say.

Anonymous said...

Greyerz – Expect Massive Short Covering In Gold Within Weeks.....AND SILVER....It's about time that the individuals who have been making massive amounts of profits off of the backs of the actual owners of precious metals really feel it where it counts.

Trolls go away - your not wanted here !!!

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