• Tag Archives Great Britain
  • Gold Flash Crashes As “Someone” Dumps $2 Billion, “Fat Finger” Blamed

    One minute after 4am EDT, as the European market was warming up for trading, Gold suddenly plunged $18, or as much as 1,6%, to $1,236 an ounce before bouncing, on a massive surge in volume with over 18k contracts, or just over $2 billion notional, trading in a seconds. A total of 18,149 lots were traded on Comex in just a minute, before falling back to 2,334 lots an hour later. As so often happens, the gold plunge dragged silver down with it as well.
    ***
    The total gold sold amounted to 1.8 million ounces of gold in just a minute, roughly $2.2 billion notional, a level not reached even with the surprise election of U. S. President Donald Trump or Britain’s vote to leave the European Union according to Bloomberg.

    This post was published at Zero Hedge on Jun 26, 2017.


  • European Commission Trying to Seize Control of Euro

    I reported previously that the European Commission is seeking to take the clearing of the Euro derivative transactions from London and move them to Paris. The European Central Bank (ECB) is warning that it must secure strong access rights for the supervision of the cross-border settlement of financial transactions after the departure of Great Britain from the EU. About 90%+ of all euro derivatives transactions are settled via clearing houses in London such as LCH. Clearnet. In the middle of a crisis, the ECB would have no power to shut the market to protect the euro from the free market forces. Of course, what they fail to grasp here is trying to seize the euro clearing and move it by decree to Paris will only undermine the euro even more. What will they do next? Forbid the euro to trade in New York, Chicago, or Asia? Do that and the euro will become a massive short.

    This post was published at Armstrong Economics on Jun 26, 2017.


  • Britain on the Edge of Collapse?

    So far, Prime Minister Theresa May has been unable to form a majority government. She is now officially on the clock and being unable to strike a deal means her government will fall apart. Negotiations with the Democratic Unionist Party, a far-right Northern Irish outfit whose support seems necessary for her to win the vote, have not gone well.

    This post was published at Armstrong Economics on Jun 25, 2017.


  • We Need A Public Inquiry Into The Economics Profession

    Britain is preparing to leave the European Union with no real plan and a government in disarray, writes economist, Ann Pettifor. How can we trust economists at the Treasury not to impose more disastrous policies?
    If the British economy crashes as a result of Brexit, it will not vindicate economists. It will simply illustrate once again, their failure.
    I and my colleagues at Policy Research in Macroeconomics (PRIME) believe there is urgent need for an independent, public inquiry into the economics profession, and its role in precipitating both the financial crisis of 2007-9, the subsequent very slow ‘recovery’; and in the British European referendum campaign.
    Financial disarray is not unlikely under Brexit, but whether this turns into anything material depends in the first instance on economic policy. How can we trust economists at the Treasury not to impose more disastrous policies?

    This post was published at Zero Hedge on Jun 21, 2017.


  • Futures, European Stocks Flat As Oil Suddenly Tumbles; Pound Slides

    Maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks. pic.twitter.com/aXkvHOzZMt
    — Jamie McGeever (@ReutersJamie) June 20, 2017

    European stocks were flat after starting off strongly earlier, dragged lower by energy stocks. Asian stocks, U. S. futures little changed as oil tumbled with Brent tumbling as low as $45.85/bbl to the lowest intraday since November 30 and taking out a 38.2% Fib support, after a one-minute spike in volume to a day-high 5,208 lots just after 6am, with WTI mirroring Brent’s momentum, and falling as much as 98c to $43.22, lowest since November 14.
    As Reuters’ Jamie McGeever points out, “maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks.”
    The pound sank for a second day, with the GBPUSD tumbling to 1.2661, alongside gilt yields as Britain central bank governor Mark Carney reversed the earlier BOE “vote split” hawkishness and said he is still worried about the impact Brexit will have on the U. K. economy and said he “now is not the time” to raise rates. Sterling weakened against all of its Group-of-10 peers, and gilt yields declined as Carney said that domestic inflation pressures remain subdued. Speaking at London’s Mansion House on Tuesday, he also highlighted the weakness in the economy and the increased uncertainty as the nation formally starts talks to exit the European Union.

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


  • After Brexit: Germany and the EU Will Look to Asia

    Britain’s general election went horribly wrong, with the Conservatives forced into a putative coalition with the Democratic Ulster Party. Theresa May’s failure to secure a clear majority has provoked indignation, bitterness, and widespread pessimism. The purpose of this article is not to contribute to this outcry, but to take a more measured view of the situation faced by the British government with regards to Brexit, and the consequences for Europe. In the interests of an international readership, this article will only summarise briefly the current situation in the UK before looking at the broader European and geopolitical consequences.
    While it would be wrong to dismiss the precariousness of Mrs. May’s position, there are some positive factors, which are being generally ignored. Most importantly, Brexit negotiations are due to start next week. These negotiations matter more than anything else on the government’s agenda, so are a unifying force. Mrs. May recognises this, which is why she has brought Michael Gove back into the cabinet (as Environment Secretary), and Steve Baker as a minister in the Brexit ministry. Gove is a committed Brexiteer with a track record as a capable minister, and Baker was the motivating influence behind the parliamentary campaign for Brexit.
    All ambitions to replace Mrs May are being put to one side in favour of Brexit. This message of unity has been endorsed by Conservative MPs. They will be regularly updated with developments in future, to keep them onside. There are already signs that the government is reaching out to the opposition as well. This has been read as a separate negotiation, potentially leading to a softer Brexit. While it is dangerous to prejudge the outcome, this is probably incorrect: the purpose is more likely to keep the Labour Party leadership fully briefed on both progress and the rationale behind negotiation tactics.

    This post was published at Ludwig von Mises Institute on June 20, 2017.


  • “Clear As Mud” Brexit Negotiations Officially Begin: Here’s What To Expect

    Today Britain and the EU officially begin the first day of formal Brexit negotiations, “aiming for a constructive, orderly launch that avoids a noisy clash on the big policy differences over Britain’s exit”, according to the FT although the sellside reaction was decidedly less optimistic, as summarized by SocGen’s Kit Juckes who in previewing today’s events said that he expects “nothing because the UK position is as clear as mud’ beyond growing signs that the UK wants free trade without being part of the customs union or conceding grounds on borer controls.”
    To be sure, no breakthroughs are expected on Monday, or indeed for some weeks and possibly months to come. The idea is for the EU and UK sides to meet, exchange views, plan practicalities and set agendas, all ahead of more detailed talks in coming weeks. ‘This is about building trust, nothing more,’ said one senior EU diplomat quoted by the FT.
    Looking at today’s main political event, DB’s Jim Reid writes that the Chancellor of the Exchequer Phillip Hammond suggested yesterday in a TV interview that a gentle departure from the EU should be targeted. The Chancellor indicated that ‘transactional structures’ would be needed to help smooth the process and that ‘we need to get there via a slope, not via a cliff edge’ – suggesting a softer tone in negotiations. In contrast to the PM, Hammond also rejected the mantra ‘no deal is better than a bad deal’. Hammond also said that his position was one of a ‘jobs first’ Brexit which is also a slight shift in tone compared to the PM. Separately, Hammond said that the UK government had ‘heard a message last week in the general election’ and that ways to soften austerity were being looked at with voters seemingly growing ‘weary’ of it.

    This post was published at Zero Hedge on Jun 19, 2017.


  • Conservatives Prepare “Secret Plot” To Oust UK’s May If She Backs Off “Hard Brexit”

    The walls are closing in on UK’s embattled prime minister Theresa May, who after the disastrous outcome in the general election, and following a torrid week in which she faced fierce criticism for her handling of the Grenfell Tower catastrophe, in which 58 people are now presumed dead, is reportedly facing what the Telegraph calls a “secret plot” – well, not so secret any more – involving a “stalking horse” challenge to remove her as prime minister if she caves to Labour demands, and waters down the “Hard Brexit.”
    With the NYT reporting that “’Soft Brexit’ Forces Rise in Britain on the Eve of Talks” scheduled for Monday, (despite 70% of Britons still supporting Brexit according to a Thursday YouGov poll), the Telegraph reports that according to leading Eurosceptic MPs they are prepared to mount an immediate leadership challenge if Mrs May deviates from her original plan. The British publication adds that “conservative MPs – including Cabinet ministers – have concluded that Mrs May cannot lead them into the next election and they are now discussing when she could go.
    Fearing that the chorus of “soft Brexit” demands rising across the UK following May’s sudden weakness, while Germany’s economy minister Brigitte Zypries going so far as telling Reuters that an outright “reversal of Britain’s decision to leave the European Union would be great,” Eurosceptic MPs have warned that any attempt to keep Britain in the customs union and single market or any leeway for the European Court of Justice to retain an oversight function will trigger an ‘overnight’ coup.

    This post was published at Zero Hedge on Jun 17, 2017.


  • The Fate of Britain – Is This Why Cable Goes to Parity?

    We have prepared a very important special report on Britain in the wake of the British election. This special report covers the forecast for the British pound (otherwise known as cable or sterling) against the dollar, euro, and the Japanese yen. Additionally, this covers the long gilts and the share market. We have also addressed the rising tensions once again in Northern Ireland that may reignite violence.

    This post was published at Armstrong Economics on Jun 16, 2017.


  • Mapping Where People Think The Economy Is Rigged The Most (And Least)

    The Brexit vote in Britain and the election of Donald Trump to become President of the United States have shown that there is a deep distrust of the elites in many countries.
    As Statista’s Dyfed Loesche notes, popular anger is directed towards those who are seen to be rigging the economy (or politics) against the hard working common man.
    Just how common this resentment is, if warranted or not, is shown by data provided for by the research institute Ipsos in a recent report.

    This post was published at Zero Hedge on Jun 16, 2017.


  • Brexit, Germany and Asia

    Britain’s general election went horribly wrong, with the Conservatives forced into a putative coalition with the Democratic Ulster Party. Theresa May’s failure to secure a clear majority has provoked indignation, bitterness, and widespread pessimism. The purpose of this article is not to contribute to this outcry, but to take a more measured view of the situation faced by the British government with regards to Brexit, and the consequences for Europe. In the interests of an international readership, this article will only summarise briefly the current situation in the UK before looking at the broader European and geopolitical consequences.
    While it would be wrong to dismiss the precariousness of Mrs May’s position, there are some positive factors, which are being generally ignored. Most importantly, Brexit negotiations are due to start next week. These negotiations matter more than anything else on the government’s agenda, so are a unifying force. Mrs May recognises this, which is why she has brought Michael Gove back into the cabinet (as Environment Secretary), and Steve Baker as a minister in the Brexit ministry. Gove is a committed Brexiteer with a track record as a capable minister, and Baker was the motivating influence behind the parliamentary campaign for Brexit.

    This post was published at GoldMoney on JUNE 15, 2017.


  • The Anatomy of Brown’s Gold Bottom – Precious Metals Supply and Demand

    The Socialist Politician-Bureaucrat with the Worst Timing Ever
    As most in the gold community know, the UK Chancellor of the Exchequer Gordon Brown announced on 7 May, 1999 that HM Treasury planned to sell gold. The dollar began to rise, from about 110mg gold to 120mg on 6 July, the day of the first sale. This translates into dollarish as: gold went down, from $282 to $258. It makes sense, as the UK was selling a lot of gold… or does it?
    We won’t get into the theories of his motivation. However, we note that if he wanted to – pardon the dollarish – push down gold, he was not particularly effective. He squandered half of Britain’s gold to get the price to drop 8.5%. That lasted but a few months.
    By the end of September, the price was not only back up to $282 but rising rapidly on its way past $320. Then it came down with volatility, rose, slowly fell to just under $260 about two years later. The price bottom just about coincides with the end of his selling.

    This post was published at Acting-Man on June 13, 2017.


  • If a ‘soft Brexit’ is back on the table, what are the options for the U.K.?

    The 2017 general election has resulted in a hung parliament – throwing the U.K.’s plans to leave the European Union into disarray.
    Theresa May was hoping for a strong mandate ahead of key negotiations with the European Union on Britain’s departure, but instead it is unclear what the U.K.’s position will be, or who will be leading the talks.
    With calls from business groups and politicians for negotiations to be delayed, there is now talk that the U.K. may be forced to seek a “soft Brexit”.
    But what are the other options available to the U.K. if it steps back from a clean break with the E.U.?

    This post was published at The Telegraph


  • The Anatomy of Brown’s Gold Bottom

    As most in the gold community know, the UK Chancellor of the Exchequer Gordon Brown announced on 7 May, 1999 that HM Treasury planned to sell gold. The dollar began to rise, from about 110mg gold to 120mg on 6 July, the day of the first sale. This translates into dollarish as: gold went down, from $282 to $258. It makes sense, as the UK was selling a lot of gold… or does it?
    We won’t get into the theories of his motivation. However, we note that if he wanted to – pardon the dollarish – push down gold, he was not particular effective. He squandered half of Britain’s gold to get the price to drop 8.5%. That lasted but a few months. By the end of September, the price was not only back up to $282 but rising rapidly on its way past $320. Then it came down with volatility, rose, slowly fell to just under $260 about two years later. The price bottom just about coincides with the end of his selling.
    This is history, and it’s been discussed and analyzed many times. What has not been seen until now is a look at the gold basis and cobasis during this time. Was gold becoming abundant due to selling? Or did something else happen?
    Here is a graph showing the continuous gold basis and cobasis, overlaid with the price of the dollar.

    This post was published at GoldSeek on 12 June 2017.


  • British Election Backfires on May – Exit Polls Show Hung Parliament

    It’s looking like a hung Parliament and the polls got it wrong again in Britain. The Conservatives appear to be 12 seats short of the 326 to rule with a majority vote after a 20 point lead back in April. Theresa May is facing a serious backlash over her shocking election campaign gamble following an exit poll suggested that her snap election roll of the dice has completely failed to pay off. Where before the BREXIT vote was purely conservative, Corbyn had to embrace that position but then he turned to the youth and got a massive turnout in some areas at 75%. London itself is filled with a lot of students. Corbyn appealed to them promising healthcare and tuition deals and thus was tapping into a reservoir of people who would not normally vote.
    This election illustrated the entire problem I have been warning about. We are facing a generational battle. Ironically, the youth do not quite realize that voting Labour was a vote for the very neo-Marxist policies that have created the crisis we have in pensions going forward. It has been this type of promising manna from heaven with assurances to make the rich pay for it. This is exactly the same policies of Hollande in France, which proved so disastrous. Yet the old saying; Ah to be young again, but know what I know now comes to mind. What the youth have done looks very well like fulfilling what our computer has been projecting – the fall of the British pound long-term.

    This post was published at Armstrong Economics on Jun 9, 2017.


  • Gold in Pounds Surges 1.5% To 1,001/oz – UK Political Turmoil Likely

    – Gold in pounds rises 1.5% from 986/oz to 1,001/oz after shock UK election result
    – Gold reaches 7 week high and surges 6% in the last 30 days from 942/oz to 1,001/oz
    ***
    – Very robust gold sales experienced by gold brokers, including GoldCore, in the UK this week and today
    – May’s ruling Conservative party loses overall majority and prospect of hung U. K. parliament
    – PM May vulnerable from within Tory Party and Corbyn has called for her to resign
    – Corbyn and Labour party on the rise which may pose risks to vulnerable London property market and UK economy as investor sentiment towards UK sours further
    – Vote set to boost political turmoil in UK, complicate Brexit talks with EU whose hand is strengthened
    As reported by Bloomberg News this morning:
    Gold priced in sterling surged to the highest level in more than seven weeks as Prime Minister Theresa May failed to win an overall majority in the U. K. election, signaling further political turmoil less than a year after Britain voted to leave the European Union.

    This post was published at Gold Core on June 9, 2017.


  • The OECD predicts Britain will crash out of the E.U. without a trade deal

    U.K. economic growth will slow sharply next year before Britain leaves the E.U. in 2019 without a trade deal, according to the Organisation for Economic Cooperation and Development.
    The influential Paris-based policy group predicts in its latest U.K. forecast that GDP growth will weaken slightly to 1.6% in 2017 then slow dramatically to 1% in 2018.
    The gloomy forecast is driven by the OECD’s assumption that Britain will leave the E.U. without a trade deal and fall back onto restrictive World Trade Organisation (WTO) tariffs, classified as a “most-favoured nation.”
    Economists have warned that that a “cliff-edge” Brexit scenario whereby the U.K. fails to secure a deal would be economically destructive.

    This post was published at Business Insider


  • The New Gold Rush Is All About Vaults

    From safety-deposit boxes in leafy west London to high-security facilities housing gold and silver in Frankfurt, companies that store valuables are expanding to meet demand.
    A rush into haven assets that began during the financial crisis is getting a new lease on life from an upsurge in populist politics and a quickening of inflation. Two firms say they’re planning to open vaults in Europe capable of holding more than 100 million euros ($112 million) in gold, offering customers lower costs than exchange-traded products and protection from rising prices.
    ‘Inflation is a key concern for many of our clients,’ said Ross Norman, chief executive officer of bullion dealer Sharps Pixley Ltd., which operates a gold vault within walking distance of Buckingham Palace. ‘A safe-haven asset isn’t just about what you buy – it’s also about where you keep it.’
    Political surprises like Britain’s decision to leave the European Union and the election of Donald Trump as U.S. president have shaken investors over the past year. At the same time, negative interest rates have persisted across much of Europe and inflation has shown signs of life, threatening to wipe out the fixed coupon payments offered by bonds and increasing the allure of storing wealth in a dark room with walls of tempered steel.

    This post was published at bloomberg


  • May Vows “Enough Is Enough”, Slams “Evil Islamist Extremism” As “One Of Great Challenges Of Our Time”

    After the third deadly terrorist attack on UK soil in less than three months (and one which paradoxically took place just days after the UK lowered its “imminent attack” terror alert), Prime Minister Theresa May – facing a crucial election on Thursday – vowed to (finally?) step up Britain’s fight against Islamist extremism, saying ‘enough is enough’ after Saturday night’s terrorist attacks left seven dead and 48 injured.
    ***
    Calling for the country to unite, which incidentally is what she did after the last two terror attacks in a well-meaning gesture that achieved nothing, the British Prime Minister said in a Sunday statement that “it is time to say enough is enough, everybody needs to go about their lives as they normally would. Our society should continue to function in accordance with our values. But when it comes to taking on extremism and terrorism, things need to change.” It was not immediately clear just what #hashtag campaign on Twitter would embody this particular vow.

    This post was published at Zero Hedge on Jun 4, 2017.


  • Trader: “The Plunge Protection Team Is Happening In Bonds… Right Out In The Open”

    Having lambasted the market’s abhorrent response to the worst terror attack in Britain in 12 years yesterday, Bloomberg’s Richard Breslow takes aim at the flip-flopping consensus rearing its ugly head in bond land worldwide.
    As he writes, it’s become very fashionable to get on the bandwagon that sovereign yields are never, or at least no time soon, going to rise.
    A number of the biggest banks have joined the parade just recently. This relies largely on making the obverse of the assumptions they stated with great assurance for much of this year. It’s also borne out of impatience for this conviction view to start working already. That’s not a great investing thesis.
    Contributing to this capitulation is the fact that U. S. numbers haven’t been nearly what analysts were hoping for. Even if they clearly show an economy that can’t be described as in crisis. But what isn’t accounted for in this line of reasoning is that global growth is improving further and faster than anyone factored in. It was a mistake to look at the U. S. in isolation at the beginning of the year and it’s just as questionable to do so now.

    This post was published at Zero Hedge on May 24, 2017.