The global financial system continues to groan under the strain of the accumulated weight of trillions of dollars worth of debt and derivatives, which have built up to even more fantastic levels than those that precipitated the near collapse in 2008, thanks to the policy of solving liquidity problems near-term by creating even more debt and derivatives, Quantitative Easing being the most obvious example. However, while the majority consider the situation to be hopeless, there is actually ‘light at the end of the tunnel’.
If only a way could be found to freely tap the funds of savers at will, by imposing duties or taxes on bank accounts, with the additional option to appropriate savers’ funds on occasion as required, then the systemic liquidity problems will be solved. Banks need never fear solvency problems again and they can simply fall back on the account holder’s funds to meet any obligations. There are in fact already names for these restorative operations, they are called ‘bails-ins’ and NIRP (Negative Interest Rate Policy).
Unfortunately, any immediate attempt to implement bail-ins and NIRP on a large scale will backfire because, faced with being charged significant sums for the privilege of keeping their money in the bank, savers will simply withdraw their funds and keep them as cash at home, or maybe even invest in Precious Metals. It is therefore imperative that these escape routes are blocked off.

This post was published at Clive Maund on /December 18, 2016.

The Trump Bump vs. Gold vs. Yellen’s Keynesian Analysis

For much of 2016, gold’s price action was whipsawed by market speculation about whether or not the Fed would raise interest rates in a final, grand gesture to ring out the month of December, as well as the soon-ending Obama administration. In essence, all year, the golden spotlight has been on Yellen.
When pondering the Fed and its impact on gold price trends, there’s one line of questions. Will rates remain the same at the next meeting or will rates increase? If so, by how much?
Earlier this year, as markets perceived low probability of a Fed rate increase, gold prices drifted higher, and lifted mining shares on the rising tide. When probability of a Fed rate increase appeared higher, gold sold down and took mining shares with it.
As of last week, we have our much-anticipated, end of year, quarter-point rate increase, with accompanying guidance to expect three more rate moves in 2017.

This post was published at Wall Street Examiner by Byron King ‘ December 19, 2016.


Gold at (1:30 am est) $1140.50 up $5.20
silver at $16.03: down 12 cents
Access market prices:
Gold: $1139.00
Silver: $16.00
Somehow Shanghai gold fix is not available today
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
MONDAY gold fix Shanghai
Shanghai morning fix Dec 19 (10:15 pm est last night): $ xxx
NY ACCESS PRICE: $1138.20 (AT THE EXACT SAME TIME)/premium $xxx
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ xxxxx
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
London Fix: Dec 19: 5:30 am est: $1137.60 (NY: same time: $1138.25 5:30AM)
London Second fix Dec 19: 10 am est: $1136.25 (NY same time: $1137.60 10 AM)
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

This post was published at Harvey Organ Blog on December 19, 2016.

EIA Admits Huge Decline In U.S. Proved Oil And Gas Reserves

Proved oil and gas reserves down 11.8 percent and 16.6 percent, respectively, from year-end 2014.
EIA has downgraded its estimates of proved oil and gas reserves in the U. S., according to its Crude Oil and Natural Gas Proved Reserves, Year-end 2015 report, released today.
Proved reserves of crude oil in the U. S. declined by 4.7 billion barrels or 11.8 percent from their year-end 2014 level to 35.2 BBbls at year-end 2015. Natural gas proved reserves decreased 64.5 Tcf to 324.3 Tcf, a 16.6 percent decline.
Average oil and gas prices in 2015 dropped 47 percent and 42 percent, respectively, from 2014, resulting in more challenging economic and operating conditions. This caused operators to postpone or cancel development plans and revise their proved reserves downward.

This post was published at Zero Hedge on Dec 19, 2016.

Janet Yellen To Class Of 2016: “You’re Entering The Strongest Job Market In A Decade” – Live Feed

Janet Yellen will deliver a keynote address during the University of Baltimore commencement ceremony this afternoon (when she will receive am honorary Doctor of Laws degree). The speech is expected to focus on the state of the jobs market and traders are watching for any hints on the Fed’s direction heading into 2017.
Before she starts, with 3 hikes expected next year, here is the Fed Funds futures implications currently…
Headlines from her speech:

This post was published at Zero Hedge on Dec 19, 2016.

Italy Seeks Authorization To Raise National Debt To Fund Bank Bailouts, As BMPS Rescue Plan In Jeopardy

While Italy scrambles to conclude a private sector rescue of ailing Monte Paschi, which hopes to raise 5 billion in the form a share sale to anchor and retail investors, while at the same time the bank is underoing a debt for equity swap, moments ago Reuters reported that Italy’s cabinet will meet later on Monday to authorise an increase to the national debt to cover the cost of saving Monte dei Paschi di Siena, should a public bailout be unavoidable, as well as other ailing banks, government sources said cited by Reuters.
As reported yesterday, Monte dei Paschi has launched a 5-billion-euro (4.2 billion pounds) capital increase and must raise the money by the end of the year or face being wound down. If it cannot find takers in the private sector, the government will be forced to step in.
Sources told Reuters last week that the government was ready to pump 15 billion euros – just under one percentage point of gross domestic product – into Monte dei Paschi and other ailing banks. Before it can do that, it needs authorisation to lift national debt levels, which it will do tonight at 7:30pm CET when the cabinet will meet with the Italian parliament to discuss increasing Italy’s public debt to fund bank bailouts.

This post was published at Zero Hedge on Dec 19, 2016.

Donald Trump Seals Electoral College Victory, Officially Becomes 45th US President

It’s finally over: Donald Trump has secured 304 Electoral Votes following the Texas vote (with 2 faithless electors), officially securing the presidency of the United States. Of course, the now official President-Elect Trump took to twitter to confirm the victory:
We did it! Thank you to all of my great supporters, we just officially won the election (despite all of the distorted and inaccurate media).
— Donald J. Trump (@realDonaldTrump) December 19, 2016

This post was published at Zero Hedge on Dec 19, 2016.

“Everyone Is Nervous” – Chinese Bond Bloodbath Reawakens As Hong Kong Stocks Turn Red For 2016

After a brief respite, the bloodbath in Chinese bonds is back, with futures plunging back to lows overnight amid liquidity fears (short-term lending rates are inverted) and growing anxiety over China’s almost unprecedented debtload.
As The Wall Street Journal reports, a gradual tightening of short-term credit by China’s central bank – combined with rumors of liquidity squeezes at brokers – prompted a mini-rout in the country’s $8 trillion-plus bond market last week, forcing authorities to reverse course and inject some $86 billion in short- and medium-term funds.
China’s total debt surged to around $27 trillion this year, or 260% of gross domestic product, compared with 154% in 2008 at the start of a stimulus program to offset the financial crisis. It is continuing to grow at more than twice the pace of the economy.

This post was published at Zero Hedge on Dec 19, 2016.

What Could Derail the Bull Market in 2017?

2016 is coming to an end and it’s doing so with a proverbial bang. It is remarkable really considering 2016 started with a proverbial bust. What lays ahead for certain is unknown to all, yet the capital markets sure do have some predilections about what might unfold in 2017.
Those predilections boil down to two words: stronger growth.
That outlook has been forged on the expectation that President-elect Trump and the Republican-controlled Congress will put their words into action and implement policies that lead to lower tax rates, reduced regulations, infrastructure spending, and a repeal and replacement of the Affordable Care Act.
In brief, there is a presumption that both consumers and businesses will have the capacity to spend more in 2017, driving faster rates of economic growth by way of a pickup in personal spending and business investment.
The question before everyone today is, just how much of that expected growth has been pulled forward into stock market returns already?
The objective data says quite a bit, which is why our baseline – and fundamental – outlook for 2017 isn’t wildly optimistic.

This post was published at FinancialSense on 12/19/2016.

Morgan Stanley Reflects On The Lessons From 2016

The Lessons of 2016
As we are entering the finishing stretch towards the festive season, financial market activity and economic newsflow are likely to slow this coming week. Away from procuring last-minute presents for loved ones and posting belated holiday greetings to far away ones, these calmer days offer a good time to reflect on the year that is about to end and think about what the next year might bring. This reflection about the accuracy of our key calls and the major surprises we encountered form an essential part of the forecasting process, for we aim to constantly improve by learning from our mistakes, reviewing our priors and engaging in a robust debate with our colleagues and clients.
So, here is how our forecasts fared over the last 12 months and what this implies for 2017.
In our 2016 outlook, where we pegged global GDP growth at 3.3%Y, the MS macro team was too optimistic about growth. At about a quarter of a percent, the forecast miss was relatively small though and almost equally due to misses in DM and EM. Our inflation forecasts, by contrast, did less well, in particular in DM, where headline inflation, at 0.8%Y on average, ended up half as high as we projected in November 2015. Our EM teams did a much better job collectively, projecting headline inflation a touch below 4%Y. A considerable part of the inflation forecast error can be attributed to an unexpected fall in commodity prices in early 2016, which the oil futures we base our forecasts on did not reflect. But in some countries, e.g., Japan and the UK, we also had material misses on core inflation.

This post was published at Zero Hedge on Dec 19, 2016.

State Department Urges US Citizens To “Avoid Turkish Embassy”

Ankara, #Turkey – ongoing security incident near US Embassy. All US citizens should avoid area near Embassy compound until further notice.
— Travel – State Dept (@TravelGov) December 19, 2016

Following the shooting death of the Russian ambassador to Turkey, The US State Department has issued a travel ‘Security message’ warning US citizens to avoid the area near the Embassy compound “due to an ongoing security incident.”

This post was published at Zero Hedge on Dec 19, 2016.

Is The System Rigged Against You?

The following video was published by SilverDoctors on Dec 19, 2016
Are the systems of wealth and power rigged for the benefit of a few?
Just before the 2016 Iowa caucuses, a Des Moines Register/Bloomberg Politics poll asked respondents: ‘Do you tend to feel the system works reasonably well for those who work hard to get ahead, or do you think the system is rigged against all but the very rich and powerful?’
The results? 67% of Democrats said the system is rigged while just 38% of Republicans did.

Gold and Silver Market Morning: Dec 19 2016 – Gold and Silver Stabilizing?

Gold Today – New York closed at $1,133.40 Friday after closing at$1,127.4 on the 15th December. London opened again at $1,140.85today.
Overall the dollar is slightly weaker against global currencies today.
– The $: was weaker at $1.0415: 1 from $1.0441: 1 Friday.
– The Dollar index was stronger at 103.09 from 102.95 Friday.
– The Yen was stronger at 117.11: $1 from yesterday’s 118.17 against the dollar.
– The Yuan was much weaker at 6.9510: $1 from 6.9463 $1yesterday.
– The Pound Sterling was weaker at $1.2373: 1 from yesterday’s $1.2430: 1.
Yuan Gold Fix
Shanghai prices were not available when we produced this report.
LBMA price setting: The LBMA gold price setting was at $1,137.60this morning against Friday’s $1,134.85.
The gold price in the euro was set higher at 1,092.11 after Friday’s1,085.31.

This post was published at GoldSeek on 19 December 2016.

It’s Time to Hit the Bid on Bonds! – Doug Casey Interview

The following video was published by FutureMoneyTrends on Dec 19, 2016
Today we have the most famous speculator with advice we couldn’t urge you more to take heed. He’s predicting a gold market rally and bond crash coming under Trump’s presidency. Doug Casey literally wrote the book on Crisis Investing many decades ago and is the most experienced veteran in the space. He discusses the mainstream media propaganda, metals prices, and potential Civil War in America in this interview; a must listen!