Is Bottom In For The Latest Gold Market Paper Attack?

The move by Modi to eliminate large-denomination cash bills from India has set off an unanticipated physical gold buying frenzy that has driven Indian ex-duty import premiums in the mid-$30’s. It’s the widest I’ve seen in them in the many years I’ve been tracking that data (via John Brimelow’s Gold Jottings report). ”I’m getting non-stop calls from unknown numbers from people asking for gold,’ the jeweller told a Reuters reporter in an interview inside his shuttered showroom..’
Ditto for China. The SGE premium last night was $12.59 to spot gold.

This post was published at Investment Research Dynamics on November 16, 2016.

Jeffrey Katzenberg Tells Hollywood “Hope For The Best, Plan For The Worst” After Trump Win

As for many of you, last Tuesday was a very bad day for me. It actually didn’t start out that way. As I boarded a 7 p.m. flight for home, I couldn’t have been more confident. Then I began to get intermittent Wi-Fi and, off and on, I saw results that weren’t supposed to happen. As alarmed emails flooded in, the inconceivable started to become very real. By the time I landed, it was over.
It’s now been a week since this heart-wrenching, devastating event. However, this morning the sun still rose, the world still turned, the flag still waved.
Many times during the past week, I’ve been asked by family, friends and colleagues what I think it all means. So, I thought I’d write down some thoughts in the hope a few might be helpful.
It all comes down to a fundamental, disturbing question: Is our next president a demagogue or democrat?
During the election, Donald Trump found facts inconvenient. But facts are very useful things. They lead to truth. For example, here is Webster’s definition of “demagogue”: “a leader who makes use of popular prejudices and false claims and promises in order to gain power.”
The truth is that this is what we have witnessed during the past year.

This post was published at Zero Hedge on Nov 16, 2016.

Why Donald Trump Must Shut Down The Federal Reserve And Start Issuing Debt-Free Money

If Donald Trump truly wants to fix the economy, he must shut down the Federal Reserve. If he just tries to patch up our current system, he will fail, because it has been fundamentally flawed from the very beginning. A little over a century ago, very powerful forces on Wall Street convinced Congress to completely restructure our financial system. An immensely powerful central bank known as the Federal Reserve was created, and the goal was to transform the U. S. dollar into a debt-based currency that would continuously be inflated and to create an endless debt spiral from which the federal government could never possibly escape. Sadly, they were successful on both counts. Since the creation of the Federal Reserve, the value of the U. S. dollar has declined by approximately 98 percent and our national debt has gotten more than 5000 times larger.
Americans tend to give most of the credit or most of the blame for the performance of the U. S. economy to our presidents, but the truth is that an unelected, unaccountable group of central bankers has far more power over our economy than anyone else does. The Federal Reserve has become known as ‘the fourth branch of government’, but unlike the other branches of government we are told that the Fed’s decisions are ‘above politics’ because they are ‘too important’. Fed officials fiercely guard their ‘independence’, and they fiercely resist any ‘interference’ from Congress, the President, or the American people.
Donald Trump can try to lower taxes and reduce regulations, but what he will be able to do to influence the economy pales in comparison to the immensely powerful tools that the Fed wields. The Fed controls interest rates, the Fed controls the money supply, and the Fed regulates the banks.

This post was published at The Economic Collapse Blog on November 16th, 2016.

Dollar Illiquidity Getting Critical: A $10 Trillion Short Which The Fed Does Not Understand

In the latest report from ADM ISI’s strategy team, ‘Dollar Liquidity Threat is Getting Critical and Fed is M. I. A.’, Paul Mylchreest argues that mainstream economic luminaries (like Carmen Reinhart) are finally acknowledging the evolving crisis due to the dollar shortage outside the US, a topic which even the head researcher at the BIS shone a spotlight on yesterday suggesting that the strength of the dollar, not the VIX is the new “fear indicator”.
The bitter irony is that the institution which appears to have very little understanding of what’s actually happening is the Federal Reserve. We noted Stanley Fischer’s speech yesterday when he argued that liquidity is ‘adequate’…. at least he didn’t say ‘contained.’
Yet Dollar illiquidity has been one thing that central banks can’t control…think SNB and Swiss Franc, BoJ and Yen (full report on this below) and now the PBoC as the RMB looks at 6.90. Mylchreest points out that Fischer could take a look at dollar cross currency basis swaps (chart below) and the dollar liquidity problem would be immediately obvious.

This post was published at Zero Hedge on Nov 16, 2016.

Zero Hedge Targeted On Liberal Professor’s List of “Fake News” Sources

We have a confession to make, everything we’ve said over the past ~7 years has been fake. Well, not really, but that’s what the ultra-liberal, Assistant Professor of Communications at Merrimack College, Melissa “Mish” Zimdars, would like for you to believe.
While it’s unclear exactly what prompted Zimdars to publish a list of “fake news” sources, we have a sneaking suspicion it was a coping mechnism cleverly employed by the New England, liberal arts snowflake to deal with the stunning defeat of her chosen Presidential candidate. Or, perhaps she was simply trying to help the folks at Google and Facebook who have vowed to censor “fake news” sources by cutting off their access to advertising.
But, no matter the reason, below is the full list of information resources that Zimdars, the ultimate arbiter of credibility, has deemed “fake.” Notice that while the list includes numerous conservative news sources like Breitbart, Infowars, Twitchy, The Blaze and Bizpac Review, it excludes the beacon of impartiality known as The Huffington Post.

This post was published at Zero Hedge on Nov 16, 2016.

The War On Cash Goes Nuclear In India, Australia and Across The World

We are living in a world where paper fiat money is becoming a novelty.
In Australia, Citibank has just become the first to declare that it no longer will accept notes or coins. Only digital transactions. This follows on the heels of India banning large cash denominations.
The cash-oriented changes of these two countries are especially troubling in light of the eventual plans to phase out large denomination euro notes and the US 100 dollar bill by 2018. Just as the Economist predicted nearly 30 years ago, the world is going cashless.
A few days ago we wrote (here) about how the Reserve Bank of India eliminated 500 and 1000 rupee banknotes from the money supply. These notes represent 20% of the cash value in circulation and 80% of cash outstanding in the country.
The main reason India has been combating cash in conjunction with selling off gold, is because people in the ‘black’ or ‘free’ Indian marketplace were supposedly circumventing the financial system by conducting business and then slowly buying physical gold with large denomination bills.

This post was published at Dollar Vigilante on NOVEMBER 15, 2016.

Illinois Capital Flight Explained (In 4 Simple Charts)

IRS data show the average income of taxpayers leaving Illinois surpassed the average income of taxpayers entering the state by $20,000 in 2014, a record loss for Illinois in the wake of the 2011 income-tax hike.
Politicians enacted Illinois’ 2011 income-tax hike during a late-night legislative session in January 2011 and raised the state’s personal income-tax rate to 5 percent from 3 percent. This 67 percent income-tax hike lasted for four years, during which time Illinois experienced record wealth flight.
IRS data reveal what happens when politicians choose short-term tax revenue gains over long-term stability. The short-term increase in tax revenue gained from higher tax rates is offset by the long-term loss of substantial portions of Illinois’ tax base.
The average income of taxpayers leaving Illinois rose to $77,000 per year in 2014, according to new income migration data released by the IRS. Meanwhile, the average income of people entering Illinois was only $57,000. 2014’s $20,000 difference in average income between people who left Illinois and people who entered the state is the highest on record. And this divergence between out-migrating and in-migrating income began widening significantly in the wake of the 2011 tax hikes.

This post was published at Zero Hedge on Nov 16, 2016.

Ford CEO Blasts “Huge Impact” Of Automotive Import Tariffs

It is quite clear, at this point, that Trump’s election victory was almost entirely due to support he received from unemployed auto workers in PA, OH, MI and WI, many of whom suffered the devastating consequences of their jobs being exported to Mexico. During the campaigning cycle, many questioned Trump’s decision to repeatedly get on stage and blast auto executives for shipping jobs out of the US but, in hindsight, clearly it worked very well.
And while most auto executives probably took some comfort from Hillary’s “lead” in the polls heading into election day, they’re now terrified that Trump will follow through on a pledge to impose a 35% tariff on imported vehicles. With capital investments already made in foreign countries and U. S. capacity shuttered, there is little that domestic auto OEMs can do in the short-term to offset such massive penalties.

This post was published at Zero Hedge on Nov 16, 2016.

December Fed Rate-Hike Odds Near 100% (Despite Dismal Economic Growth Expectations)

‘The market is expecting an interest-rate hike in December, and there is no fundamental reason for the Fed’ to disappoint according to DZ Bank’s Birgit Figge, and judging by the spike in futures-market-implied rate-hike odds post-Trump, it’s a done deal.
As Bloomberg reports, the odds of a Fed move by December have risen from 68 percent at the start of November as inflation expectations surged to near 100%…

This post was published at Zero Hedge on Nov 16, 2016.

Bond Vigilantes Stir As Trump Team Hints At “Infrastructure Bank”

As part of Donald Trump’s “fluid” proposals and trial balloons on how to implement his economic policies, Trump adviser Steven Mnuchin told reporters on Wednesday that the Trump transition team is weighing an “infrastructure bank” to make investments in America’s aging infrastructure. Mnuchin, who is currently under consideration for Trump’s Treasury secretary, said that a “very big focus is regulatory changes, looking at the creation of an infrastructure bank to fund infrastructure investments’ which to Wall Street was pure poetry, as it heard just two words: “more debt”, and thus greater probability of future QE.
Also, one wonders if maybe Mr. Mnuchin already has a private bank in mind to fast-track the “infrastructure funding” burden – perhaps his former employer?
Ironically, as Bloomberg notes, Trump’s campaign had previously criticized a similar infrastructure bank plan proposed by Hillary Clinton as being ‘controlled by politicians and bureaucrats in Washington’ and funded by a ‘$275 billion tax increase on American businesses.’ Trump’s economic advisers previously said infrastructure spending can be unleashed without creating a government entity. They released a plan in October advocating the provision of as much as $140 billion in tax credits to support $1 trillion in infrastructure investment, which would offset the credits through tax revenue from the projects’ labor wages and business profits.
In the past, outgoing president Obama also proposed a U. S. infrastructure bank to lend at maturities as long as 35 years to fund transportation, water and energy projects.

This post was published at Zero Hedge on Nov 16, 2016.

Saudis, China Dump Treasuries; Foreign Central Banks Liquidate A Record $375 Billion In US Paper

One month ago, when we last looked at the Fed’s update of Treasuries held in custody, we noted something troubling: the number had dropped sharply, declining by over $22 billion in one week, one of the the biggest weekly declines since January 2015, pushing the total amount of custodial paper to $2.805 trillion, the lowest since 2012. One month later, we refresh this chart and find that in last week’s update, foreign central banks continued their relentless liquidation of US paper held in the Fed’s custody account, which tumbled by another $14 billion over the course of a week, pushing the total amount of custodial paper to $2.788 trillion, a new post-2012 low.
Today, to corroborate the disturbing weekly slide in the Fed’s custody data, we also got the latest monthly Treasury International Capital data for the month of September, which showed that the troubling trend presented one month ago, has accelerated to an unprecedented degree.
Recall that a month ago, we reported that in the latest 12 months we have observed a not so stealthy, actually make that a massive $343 billion in Treasury selling by foreign central banks in the period July 2015- August 2016, something unprecedented in size.

This post was published at Zero Hedge on Nov 16, 2016.

Dow Suffers First Post-Trump Loss As Cratering Bond Curve Bruises Banks

Industrial Production contracts for longest non-recessionary period ever, GDP growth expectations are dead on the floor, and rate-hike odds are near 100%…
The Dow closed red as Nasdaq surged… (not teh drop towards the end of day sparked by Carl Icahn’s comments that “stocks have run ahead of themselves since Trump won the election”

This post was published at Zero Hedge on Nov 16, 2016.

Trump And The Markets The Next Four Years

President-elect Donald Trump’s White House victory was a surprise, and so is the ripping sell-off in global bond markets, which has quickly driven US interest rates to the highest levels in a year. The rout has wiped out an estimated $1 trillion from global bond markets
CNBC 11/13/2016
The election of Donald Trump has put added pressure upon already pressured markets. The next four months are going to be extremely consequential. But the next four years are going to be even more so, i.e. the cataclysmic resolution of capitalism’s end game is now in sight.
In free markets, the most important dynamic is supply and demand. In capital markets, the most important factor is the cost of credit; and in capitalism’s end game, the cost of credit is even more important because it’s the cost of credit that determines when the end game will end – and, today, the cost of credit, i.e. the interest rate, is now moving higher, a trend exacerbated by Trump’s recent victory which threatens market stability.

This post was published at GoldSeek on 16 November 2016.

Dundie Awards: Industrial Production YoY Fell For 14th Straight Month (Longest Streak In NON-Recession Period)

And a Dundie Award goes to … Washington DC for the notable achievement of 14 straight months of industrial production decline YoY. The longest string of contraction without a recession in 96 years.
Notice that since 1984, this has been the longest contraction without a recession. Quite an accomplishment!

This post was published at Wall Street Examiner by Caleb Crawdad ‘ November 16, 2016.

DoubleLine’s Gundlach Warns Trump Has No Growth “Magic Wand”

Having nailed the upturn in US Treasury yields, DoubleLine’s Jeffrey Gundlach is now considerably less exuberant on Trumponomics. Speaking on his first webcast post-election, Reuters reports that Gundlach warned that a reversal of support for Donald Trump could take hold as expectations are dashed that the newly president-elect can quickly spur economic and job growth, echoing Goldman’s dysphoria.
Gundlach, who oversees more than $106 billion at Los Angeles-based DoubleLine, said Trump “does not have a magic wand” to rapidly improve the economy. He said federal programs take time to implement, rising mortgage rates and monthly payments are not positive for the “psyche of the middle class and broadly”, and supporters of defeated Hillary Clinton are not in a mood to spend money.

This post was published at Zero Hedge on Nov 16, 2016.

Gold Daily and Silver Weekly Charts – The Fog of Politics

The sugar high of the Trump election seems to be wearing a bit thin on Wall Street. I had said at the time that I thought they would just execute the trading plans they had in place in their supposition that Hillary was going to win. And this is what I think they did, and have been doing.
And so when the thrill is gone, and dull reality starts sinking in, I suspect we are going to be in for quite a correction.
However, I am tuning out the hysteria from the Wall Street Democrats, especially the noise emanating from sources like MSNBC and the NY Times, because they have recently discredited themselves as reliable sources. They may just be joining their right-leaning peers in this, but they still do not realize it, and think of themselves as exceptional, and superior. And the same can be said of many pundits, and very serious people with important podiums in the academy and the press.
We are being treated to rumours that Trump is going to appoint this or that despicable person to some key position. I am waiting for him to show his hand with some actual decisions and appointments.
This is not to say that I am optimistic, not in the least. I am not, and I most certainly did not vote for him (or her for that matter). But the silliness of the courtiers in the media is just too much, too much whining from those who had their candy of power and money by association expectations taken away.
I am therefore very interested in seeing who the DNC will choose as chairperson. Liz Warren came out today and endorsed Ellison, which I believe Bernie Sanders has done as well. He is no insider like Wasserman-Schulz, Brazile, or Dean.

This post was published at Jesses Crossroads Cafe on 16 NOVEMBER 2016.

Fed Rate-Hike Odds Approach 100% in Anticipation of Trumpenomics

The odds of a Fed rate hike in December at the next FOMC meeting is now 96%.
(Bloomberg) – Analysts spent early November warning a Trump victory in the U. S. presidential election would make the Federal Reserve less likely to raise interest rates. What happened instead is that it made a December increase a near certainty.
Traders assign about a 94 percent probability, the highest level this year, to a Fed boost at its final meeting for the year on Dec. 13-14, futures contracts indicate. Trump’s spending plans, and Republican control of Congress, are causing the market to revise higher its outlook for the pace of Fed rate increases.

This post was published at Wall Street Examiner by Caleb Crawdad ‘ November 16, 2016.

BofA Survey Reveals The Biggest Market Risk: A “Stagflationary Bond Crash”

So much can change in just one week: where in the world “before Trump”, every asset manager was prepared for “more of the same” gradual deflationary status quo grind under the Clinton administration, following the dramatic Trump victory everything has turned upside down, and now the overarching consensus – roughly a mirror image of what it was just last Monday – is for soaring inflation, rising US Dollar and risk assets, yet another “great rotation” out of bonds and into stocks, and perhaps an economic revival.
To be sure, in the latest just released BofA fund manager survey in which 177 clients managing just under half a trillion dollars were querried, the results were largely as expected as per the just reset conventional wisdom and as determined by the price action over the past 5 days.
In a nutshell, and as BofA puts it, “Inflation expectations surge”, with global growth and profit expectations rise to one-year highs; inflation expectations soar to 12-year highs; number of investors expecting yield curve steepening surges by record amount… US election result seen as unambiguously positive for nominal GDP. Here are some charts:

This post was published at Zero Hedge on Nov 16, 2016.

Gold Price Skyrockets in India after Currency Ban – Part II

Chaos in the Wake of the Ban
Here is a link to Part 1, about what happened in the first two days after India’s government made Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes illegal. They can now only be converted to Rs 100 (~$1.50) or lower denomination notes, at bank branches or post offices. Banks were closed the first day after the decision. What follows is the crux of what has happened over the subsequent four days.
Today India is on the verge of a major social-political crisis, unless either the government backs off from the decision of banning the currency or some real magic happens. There is chaos in the streets and daily life is slowly but surely coming to a full halt.
What Modi did was not only heavy-handed, hugely arrogant, and of no value, it has been very badly implemented to boot – as everything in India always is – and carries the real potential of escalating and snowballing into something horrific. They could have seen that this was not going to end well by simply using primary school math.

This post was published at Acting-Man on November 16, 2016.