Guest Post: “The Heightened Risk Of A Gold Price Reset”, by Andrew Maguire

Well, this is something that you’re definitely going to want to read…
OK, so, it has been a long 3-day weekend and I just got in from the road. I’m clearing out my accumulated emails and I find a note from Andy Maguire. In it, he stated that it was “about time to update everyone” but that there was more to say than just through KWN or TFMR. Therefore, he was going to make public his weekly subscriber commentary…which we’ve turned into this “guest post”.
I’m tired and my head is spinning so even yours truly is going to need to read and re-read this post in order to get my head around all that Andy is stating here. Suffice it to say, however, that I found it so imminently important that I felt I needed to get it posted for all of you as quickly as possible. Since much of this is written in Andy’s “trader lingo”, you may be left with some questions that need clarification so I’ll try to help where I can in the comments section. However, there’s A LOT here and I strongly encourage you to read it thoroughly.
p.s. As noted above, this post is excerpted from Andy weekly commentary for his subscribers and customers. The full link is here: More information on Andy’s invaluable services can be found here: and here: “The Heightened Risk Of A Gold Price Reset”
On Feb 6th I warned of a heightened risk of a gold price reset based upon evidence that the all-important physical markets are increasingly influencing the price setting synthetic markets at time we are experiencing extremely strong physical demand into tight immediately deliverable supplies.
I have been drawing attention the increasing outflows of liquidity from the paper markets into the physical markets for over a year now. The last selloff from 1380 in July to 1130 in December provided clear footprints of a disconnect between the 2 markets and bears all the hallmarks that the rigged decline broke the back of the paper market. By December 2016, an ‘abyss’ had appeared between these 2 distinctly different markets, very visible to wholesale market liquidity providers and takers, but also verifiable by the corresponding reported data.

This post was published at TF Metals Report on February 20, 2017.

Big Bases: Big Moves in the World Stock Markets

Before we look at some of the 2009 bull market uptrend channels there are a couple of more big consolidation patterns I would like to show you on some of the stock market indexes. The $DAX, German stock market, broke out of its 13 year triangle consolidation pattern back in 2012. Late last year it broke out of the blue bull flag with a nice clean backtest to the top rail. The big triangle consolidation pattern also had a smaller triangle as part of its internal structure.

This post was published at GoldSeek on 21 February 2017.

XAU – Retesting the 200 Day Moving Average

Mining stocks have broken their daily cycle trend line and are likely to retest their 200 day moving average over the next week or so. This would potentially allow the daily RSI(5) to push down to an oversold reading near/below 30, give the rising 50 day moving average more time to catch up to price, and trigger the stops of traders who bought the breakout above the 200 day moving average within the past month. This is a normal corrective move that is unlikely to last much more than a week.

This post was published at GoldSeek on 20 February 2017.


When a magician is showing you a magic trick with his or her right hand, you should always watch what the left hand is doing. When it comes to times of war, one should always be skeptical of a government beating the war drum against another government or entity. Ask yourself: Why now, why this entity, and what is at stake?
A good example of this can be seen in Africa. Since 1998, close to 6 million people have been killed in the Democratic Republic of Congo due to fighting over mineral resources, many of which are used in cell phones around the world. This barely receives a mention in the corporate news. In contrast, we were told that Libya, the country with the highest standard of living out of any country in Africa, needed to be bombed in a ‘humanitarian intervention’ to prevent a massacre that may or may not have ever occurred. Although there are clear differences in the style of conflict that besieged the two nations, the fact is the U. S government and media prioritized one over the other based on geopolitical concerns.
For example, Hillary Clinton’s leaked emails confirmed the notion that Libya was destroyed in 2011 not out of humanitarian efforts, but in part because Libya’s former leader Muammar Gaddafi intended to tie Libya’s oil supply with its gold supply and create a unified African currency that would challenge the financial markets’ current power structure.
The same can be said of Syria. As AlterNet notes, the media has ignored a number of leaked U. S. government documents and audio content regarding the Syrian conflict. Ian Sinclair reports:

This post was published at The Daily Sheeple on FEBRUARY 20, 2017.

20/2/17: CESIfo on Potential Gains from EU-EEC Trade Agreement

An interesting study from German’s CESIfo on the potential impact of a Free Trade Agreement between the EU and the Eurasian Economic Community: Top of the line conclusions:
EU side: “According to Ifo’s research results, a comprehensive agreement between the EU and the Eurasian Economic Community could lead to a 0.2 percent increase in real per capita income in the EU, corresponding to an annual EUR 91 upturn in per capita income.” Of these, 31 billion euros in benefits are expected to accrue to Germany (net impact for Germany will be 22 billion euros due to increased Russian exports to Germany.

This post was published at True Economics on February 20, 2017.

French Nuclear Watchdog Gives An Update On Mysterious Radioactive Iodine Blanketing Europe

1/5 [february 20 2017] No health concerns following the detection of #radioactive #Iodine in Europe in January 2017 — IRSN France (@IRSNFrance) February 20, 2017

On Sunday we reported that concerns have spread in Europe about a potential nuclear “incident” following a recent report by a French nuclear watchdog agency – the Institute for Radiological Protection and Nuclear Safety (IRSN), the French national public expert in nuclear and radiological risks – that radioactive Iodine-131 had been observed across much of northern and central Europe. Since the isotope has a half-life of only eight days, the detection was an indication of a rather recent release. As the Barents Observer added, “where the radioactivity is coming from is still a mystery.”
The emission was rumored to have originated close to the Arctic circle, with some speculating that a nuclear test of emergency had taken place in Russia in January and the fallout then spread to Norway and onward to Europe:
“Iodine-131 a radionuclide of anthropogenic origin, has recently been detected in tiny amounts in the ground-level atmosphere in Europe. The preliminary report states it was first found during week 2 of January 2017 in northern Norway. Iodine-131 was also detected in Finland, Poland, Czech Republic, Germany, France and Spain, until the end of January”, the French Institute de Radioprotection et de Sret Nuclaire wrote in a press release.

This post was published at Zero Hedge on Feb 20, 2017.

The Economic Recovery Illusion Is About To Be Exposed Via The Corporate Media – Episode 1209a

The following video was published by X22Report on Feb 20, 2017
hhgregg looking to start closing stores. Demand for gasoline is declining which indicates that we are in a recession. Trump comes out with his economic forecasts which are way above economists. Trumps strategy is to flush out the corporate media and have them report that the economy is worse than reported. The corporate media is very afraid that Trump will start using alternative economic facts. Greenspan admits gold is insurance for a failing economy and failing currency, everyone should own gold for the long-term.

Hedge Funds Have Never Been This Long Crude Oil

Despite record gluts in crude and gasoline amid resurgent US crude production, hedge funds boosted their net long position in WTI last week to a new record high.
The International Energy Agency said the group has achieved a record 90 percent initial compliance with an output accord, and as Bloomberg notes, it seems hedge funds are loving te fact that OPEC has never been more serious.
After some hesitation in the previous week, it was the fifth time this year that they’ve upped their bullish stance, and the third they took it to a new record.
In fact, as Bloomberg reports, for the first time ever, hedge funds hold more than a billion barrels of bets that crude oil prices will rally.

This post was published at Zero Hedge on Feb 20, 2017.

US Shale Production To Soar By 3.5 Million Barrels/Day Over Next Five Years: BofA Explains Why

Two years ago, when Saudi Arabia launched on an unprecedented campaign to crush high-cost oil producers, in the process effectively putting an end to the OPEC cartel (at least until last year’s attempt to cut production), it made a bold bet that US shale producers would be swept under when the price of oil tumbled, leading to a tsunami of bankruptcies, as well as investment and production halts. To an extent it succeeded, but where it may have made a glaring error is the core assumption about shale breakeven costs, which as we reported throughout 2016, were substantially lower than consensus estimated.
In his latest note, BofA’s Francisco Blanch explains not only why a drop in shale breakevens costs is what is currently the biggest wildcard in the global race to reach production “equilibrium”, but also why US shale oil production could surge in the coming years, prompting OPEC to boost production in hopes of recapturing market share. Specifically, Blanch predicts that US shale oil production could grow by a whopping 3.5 million barrels per day over the next five years.

This post was published at Zero Hedge on Feb 20, 2017.

How Many Euro Crises Will This Make? It’s Getting Hard To Keep Track

Every few years, it seems, one or another mismanaged eurozone country falls into one or another kind of crisis. This leads to speculation about the end of the common currency, which in turn spooks the global financial markets. Then the ECB conjures another trillion euros out of thin air, buys up and/or guarantees all the offending country’s bonds, and calm returns for a while.
At least, that’s how it’s gone in the past.
The latest crisis has more than the usual number of flash-points and could, therefore, be something new and different. Currently:
Greece. This charming but apparently ungovernable country only got into the eurozone in the first place because its corrupt leaders conspired with Goldman Sachs to hide the true condition of the government’s finances. It quickly blew up and has been on intensive care ever since. Now the latest bailout has become deal-breakingly messy:
‘From bad to worse’: Greece hurtles towards a final reckoning
(Guardian) – With another bailout set to bring more cuts, quitting the euro is back on the agenda.
The country’s epic struggle to avert bankruptcy should have been settled when Athens received 110bn in aid – the biggest financial rescue programme in global history – from the EU and International Monetary Fund in May 2010. Instead, three bailouts later, it is still wrangling over the terms of the latest 86bn emergency loan package, with lenders also at loggerheads and diplomats no longer talking of a can, but rather a bomb, being kicked down the road. Default looms if a 7.4bn debt repayment – money owed mostly to the European Central Bank – is not honoured in July.

This post was published at DollarCollapse on FEBRUARY 20, 2017.

Is 50% of Western Central Bank Gold gone?

We have recently had some significant news about the sovereign gold market that makes the unclarity even more unclear. Central banks and the BIS in Basel go to great length to tell the world absolutely nothing about their gold dealings. All transactions are carried out covertly and no central bank ever has an official audit of their gold holdings. The last US audit was during Eisenhower’s days in the 1950’s. Ron Paul has been pushing for an audit but to no avail. Will Trump instigate an audit? Well, he might have the intention but when he finds out that a major part of the US 8,000 tons of gold is not there, it will all go quiet. There have been pressures for audits in France and Germany in later years but this has had no effect. No country wants to reveal that the gold isn’t there.
Germany takes 5 years to repatriate 647 tons of gold
Germany has recently pretended that they are totally open about their gold dealings, but what have they actually told the world?
In 2013 Germany announced a plan to repatriate 674 tons of gold from the US and France. In the first year, they only received 37 tons back and were told that they would have the rest in 2020. We have now been informed that the programme has been accelerated. Out of the 3,381 tons that Germany owns, 51% or 1,713 tons will be in Germany by the end of 2017. Over 49% of the German gold will remain abroad with 1,236 tons still in New York and 432 tons in London.
You wonder why it needs to take five years to repatriate 674 tons. Listening to interviews with the chiefs of the Deutsche Bundesbank, they explained what a major logistical exercise it has been. According to the Bundesbank, they have had major problems with transport, insurance, security etc. If we take Switzerland as an example, we both receive and export over 2,000 tons of gold annually. And that excludes major transfers between banks and to private vaults. The same happens in countries like the UK, China, India and the US. So around the world, many 1,000s of tons of gold are shipped annually without any logistical problem. You wonder then why the normally very efficient Germans have problems to ship 674 tons over five years?

This post was published at GoldSwitzerland on February 18, 2017.

Cost Push Inflation

The reason we are looking at this today is because of how the Trump Bump is causing input prices to jump higher already, evidenced in the most recent (December) US ISM numbers, showing the biggest jump since 2011. And this trend will most likely continue with the excitement Trump has created with ‘making America great again’, where even foreign governments are joining the party, which will continue to strengthen employment conditions (already apparent), raising the specter of rapidly rising cost-push inflation. So its understandable precious metals are stirring again, where it appears like inflation, pressure is building for increasing prices.
That said, and in spite of the jobs Trump is destined to create (see here) from his admirable efforts, unfortunately the drag of an over-indebted economy is expected to produce stagflation at best, or if The Donald (and Fed) wants to pull all the stops, some degree of hyperinflation at worse. Therein, if Trump sees his efforts failing as time goes by, again, with the economy continuing to stagnate besides his efforts, America, and the rest of the world, could be looking at a great deal more cost-push inflation in the future if he assigns the Fed the job of fixing the problem. After all, The Donald is a delegator; so such thinking is not a stretch.

This post was published at GoldSeek on 20 February 2017.

Why Toronto (and Other Cities) Inflate Housing Bubbles to the Bitter End

To delay falling into a fiscal and financial sinkhole.
‘Let’s drop the pretense. The Toronto housing market and the many cities surrounding it are in a housing bubble,’ Bank of Montreal (BMO) Chief Economist Doug Porter told clients in a note last week.
Many have called it ‘housing bubble’ for a while, but now it’s official, according to BMO. In January, the benchmark price and the average price were both up 22% year-over-year, with the average price of detached homes up 26%, of semi-detached homes 28%, of townhouses 27%, and of condos 15%. Double-digit price increases have become the rule in recent years.
But this jump was ‘the fastest increase since the late 1980s – a period pretty much everyone can agree was a true bubble – and a cool 21 percentage points faster than inflation and/or wage growth,’ Porter explained in his note, cited by BNN.
Home prices in Greater Toronto have become ‘dangerously detached’ from economic fundamentals and are soaring simply on the belief that they will continue to soar, he wrote. ‘The market is far too hot for comfort.’ BNN:

This post was published at Wolf Street on Feb 20, 2017.

Jimmy Dore and Thomas Frank On What the Democrats Need to Do Next

One more time.
My fear is that people will focus on ‘getting rid of Trump,’ without considering what sort of leadership will replace him.
Hillary Part Deux? Or some other corporatist stooge from the GOP who runs a smoother, more polished con on the working class? Really? How neurotic is that.
The Democrats need to look at themselves and face the reasons for their failures. Not the party faithful so much, but the party leadership.

This post was published at Jesses Crossroads Cafe on 20 FEBRUARY 2017.

Alan Greenspan: Ron Paul Was Right About The Gold Standard

As John Rubino eloquently puts it, “when the history of these times is written, former Fed Chair Alan Greenspan will be one of the major villains, but also one of the greatest mysteries. This is so because he has, in effect, been three different people.” Greenspan started his public life brilliantly, as a libertarian thinker who said some compelling and accurate things about gold and its role in the world. An example from 1966: “This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
Yet everything changed a few decades later when Greenspan was put in charge of the Federal Reserve in the late 1980s, instead of applying the above wisdom, for example by limiting the bank’s interference in the private sector and letting market forces determine winners and losers, he did a full 180, intervening in every crisis, creating new currency with abandon, and generally behaving like his old ideological enemies, the Keynesians. Predictably, debt soared during his long tenure.
Along the way he was also instrumental in preventing regulation of credit default swaps and other derivatives that nearly blew up the system in 2008. His view of those instruments:

This post was published at Zero Hedge on Feb 20, 2017.

Million Dollar Babies: $834,000 Is US Households’ Share Of Federal Debt And Unfunded Liabilities

Not to be confused with the Clinton Eastwood film ‘Million Dollar Baby,’ although the outcome is largely the same.
As of 2016, the US has 125.82 million households. Unfortunately, the US government has borrowed $20 trillion ($158,412.70 per household) and promised entitlements (Medicare Parts A, B and D, Social Security, Federal employee and Veterans benefits) amounting to $85.24 trillion for a combined bill to US households of $105.2 TRILLION. (See US Treasury Report).
Yes, that is $834,000 per household. Or 0.834 million per household. ALMOST a million dollar baby.

This post was published at Wall Street Examiner on February 20, 2017.

Fumbling Towards Collapse

In all the smoke and fog emitted by Trump and his adversaries, it must be hard to make out the actual issues dogging this society, and even when you can, to find a coherent position on them. This was nicely illustrated in Paul Krugman’s fatuous column in Monday’s New York Times, ‘On Economic Arrogance’ – the title describes Krugman’s own attitude to a T.
In it, Krugman attempts to account for the no-growth economy by marshaling the stock-in-trade legerdemain of academic economics: productivity, demographics, and labor metrics. Krugman actually knows zip about what afflicts us in the present disposition of things, namely the falling energy-return-on-energy-investment in the oil industry, which is approaching the point where the immense activity of getting oil out of the ground won’t be worth the cost and trouble of doing it. And since most of the things we do and produce in this economy are based on cheap oil – with no reality-based prospect of replacing it with so-called ‘renewables’ or as yet undiscovered energy rescue remedies – we can’t generate enough wealth to maintain anything close to our assumed standard of living. We can’t even generate enough wealth to pay the interest on the debt we’ve racked up in order to hide our growing energy predicament. And that, in a nutshell, is what will blow up the financial system. And when that department of the economy goes, the rest will follow.

This post was published at Wall Street Examiner on February 20, 2017.

Was The Catalyst Fund Really The Catalyst?

There was a lot of discussion last week about how the $ 3.5 billion Catalyst Hedged Futures Strategy Fund (ticker: HFXAX) was running the entire stock market.
To be frank it is disturbing to me that a fund of this size could be viewed as the key market driver for even a few days, but the chatter was so prevalent that I felt the need to explore it a bit further.
Since it is a mutual fund, as opposed to an ETF, the latest positioning data is not helpful in dissecting what is possible but it does verify that the fund’s policy: buy at the money options and funding those purchases by selling even more out of the money options (this is a simplified view of the fund strategy but close enough for examining whether it could have impacted markets).

This post was published at Zero Hedge on Feb 20, 2017.

About Those “Overly Optimistic” Trump GDP Forecasts, There’s Just One Thing

Staff ordered to project growth will average between 3-3.5% over the next decade eventually settling at 3.2% LOL
— Danny Blanchflower (@D_Blanchflower) February 17, 2017

Last Friday, both armchair and tenured US economists found another reason to lash out at Trump in mockery: as the WSJ reported, the Trump administration had drafted economic growth forecasts in its budget plans that “rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters.” According to the WSJ’ sources, the economic growth forecasts which are presented as part of White House budget submissions to Congress and are due out from the Trump team in the coming weeks, have an important role on projected debts and deficits: obviously, “a fast-growing economy produces more revenue while reducing the need for spending on programs such as food stamps or unemployment insurance. Fast growth estimates can thus hold down projected deficits.”
What are they? “The forecasts, which were initiated before President Donald Trump took office, project gross domestic product – a broad measure of national output of goods and services – growing between 3% and 3.5% a year over the coming decade, with inflation-adjusted annual growth ultimately settling at around 3.2% during the later years of the 10-year forecast.”

This post was published at Zero Hedge on Feb 20, 2017.