Renewed use of gold swaps by BIS indicates strain on price suppression

Recent disclosures in the monthly statement of accounts published by the Bank for International Settlements indicate the bank’s renewed use of a substantial quantity of gold swaps.
The annual report of the BIS for its financial year ended March 31, 2010, disclosed that 346 tonnes of gold were acquired through gold swaps from commercial bullion banks. A review of the previous use of gold derivatives by the BIS reveled that the transactions in 2009-10 were far more substantial than anything done in the bank’s recent history.
Yet in an article published in the Financial Times on July 29, 2010, BIS General Manager Jaime Caruana said the gold swaps were “regular commercial activities” for the bank. Here is a link to the FT article, which requires a subscription to access:
Here are excerpts from the article:
“Some analysts speculated that the swap deals were a surreptitious bailout of the European banking system ahead of last week’s publication of stress tests. But bankers and officials have described the transactions as ‘mutually beneficial.’ …
“‘The client approached us with the idea of buying some gold with the option to sell it back,’ said one European banker, referring to the BIS.

This post was published at GoldSeek on Sunday, 28 August 2016.

Jim Rickards: “There Will Be A War On Gold”

Following a recent keynote presentation at the Sprott Natural Resource Symposium, James G. Rickards, best-selling author and advisor to the U. S. Department of Defense and Intelligence Communities, was kind enough to share a few comments with the Sprott’s Thoughts publication.
It was a fascinating conversation, as Jim noted the world’s monetary structures resemble, ‘Two tectonic plates; there’s the natural tectonic plate – deflation – and then…the policy plate of inflation – which is money printing, currency wars, QE, operation twist, negative interest rates, and zero interest rates…’
‘These [tectonic] forces are not only coming together,’ he explained, ‘[But] they’re getting more powerful and they’re going to snap… When? No one knows… [But] the effect will be dramatic.’

This post was published at GoldSeek on Sunday, 28 August 2016.

The 11 Bone-Chilling Things I Gleaned from Yellen’s Chart

Who says the Fed can’t have fun at our expense? At the Symposium in Jackson Hole, so feverishly anticipated by the entire world, Fed Chair Janet Yellen gave an even more feverishly anticipated speechon Friday, in which she said the same stuff she’d been saying all along, such as these nuggets:
‘And, as ever, the economic outlook is uncertain, and so monetary policy is not on a preset course.’
‘Our ability to predict how the federal funds rate will evolve over time is quite limited because monetary policy will need to respond to whatever disturbances may buffet the economy.’

This post was published at Wolf Street by Wolf Richter ‘ August 27, 2016.

‘I’ve Never Seen Anything Like This Before” – The Housing Markets In The Hamptons, Aspen And Miami Are All Crashing

One month ago, we said that “it is not looking good for the US housing market”, when in the latest red flag for the US luxury real estate market, we reported that sales in the Hamptons plunged by half and home prices fell sharply in the second quarter in the ultra-wealthy enclave, New York’s favorite weekend haunt for the 1%-ers.
Reuters blamed this on “stock market jitters earlier in the year” which damped the appetite to buy, however one can also blame the halt of offshore money laundering, a slowing global economy, the collapse of the petrodollar, and the drastic drop in Wall Street bonuses. In short: a sudden loss of confidence that a greater fool may emerge just around the corner, which in turn has frozen buyer interest.

This post was published at Zero Hedge on Aug 27, 2016.

Fed Up Friday: August 20-26

The Fed’s been looking for new friends this week, tuning out the haters and struggling to convince the public about potential rate hikes. Check out their follies below!
Flip-Flopping Fed Gets No Credibility from Market
A market that doesn’t care about the direction the Fed wants to take us can be a recipe for a firestorm. In 2016, the market’s faith in the Fed seems to be at an all-time low as they tout guidance, yet change course with as little as a single economic report contradicting them. All eyes were on Jackson Hole today as Fed Chair Janet Yellen opened up the annual Economic Symposium.
So what did she say? She stuck to her guns about the (now laughable) potential for another rate hike before the election. Those guns include being as vague as possible and hinting that a rate hike may or may not be coming very soon. All in all, Yellen didn’t really say much at all, other than to continue her standard issue talking points and give very little guidance for the market on the direction of the US economy.

This post was published at Schiffgold on August 26 2016.

Drones Deliver First Pizza for Domino’s

The fast food chain Domino’s has delivered the first deliveries of the world a pizza by drone. The test flight took place in New Zealand on Thursday. Later this year Domino’s will launch a field trial in New Zealand. Europe will be a problem for Domino’s Pizza to deliver from the air. The obstacles regulating the air are very Byzantine.
Armstrong Economics

This post was published at Armstrong Economics on Aug 27, 2016.

Why Do Americans Have Such High Incomes and So Little Savings?

Americans have more disposable income than nearly every other country on earth. The few exceptions include a handful of northern Western European states and some small city states like Monaco.
Even when accounting for government benefits and taxes, Americans still have more income available to spend than almost anyone else.
As this measure from the OECD shows, the US has a median disposable income at $29,100, behind Luxembourg, Norway, and Switzerland. It’s well ahead of of large European states like Germany and France, which show a median disposable income levels of $24,200 and $23,300, respectively.

This post was published at Ludwig von Mises Institute on August 27, 2016.

American Electorate Loses As Partisan Media Coverage Of Candidate Health Turns Outright Bizarre

The recent media frenzy surrounding Clinton and Trump’s health records has accomplished little more than to, once again, expose a “press” that is becoming increasingly partisan with each passing day.
Right-leaning media outlets have spent countless hours reporting on the various health issues experienced by Clinton over the years and pointing to pictures of her falling down on the campaign trail or seemingly zoning out at times as evidence of her frailty. Meanwhile the left-leaning organizations have mostly dismissed the Hillary health concerns as conspiracy theories of right-wing nut jobs.
Like this tweet from a New York Times columnist calling on google to censor commentary on Hillary’s health…
Google should fix this. It shouldn’t give quarter to conspiracy theorists
– Farhad Manjoo (@fmanjoo) August 21, 2016

This post was published at Zero Hedge on Aug 27, 2016.

Jim Rogers Explains What He Is Doing Before “The Next Time The World Comes To An End”

One week after RealVision brought us the latest Jeff Gundlach interview, in which the DoubleLine bond kingexplained why he is now “100% net short”, on Friday Grant Williams interviewed Jim Rogers, in which George Soros’ former partner (the two co-founded the Quantum Fund in 1973), is about as gloomy, warning “the next time the world comes to an end, it’s going to be a bigger shock than we expect.”
Nonetheless, since an interview talking about canned foods, radioactive fallout shelter and guns would be relatively brief, Rogers presents several non-traditional ideas, most notably as relates to various frontier markets he is looking at currently, as well as Russia, a market where he has notoriously been invested since the start of 2015 when he went long Russian stocks, and which recently – and very much under the radar – hit all time highs. So Rogers takes a well-deserved victory lap.

The investing legend, who doesn’t belong to any economic school of thought, also touches on China and reminds RealVision subscribers that ‘Beijing has said we’re going to let people go bankrupt, which I hope they do.’ He then emphasized, ‘they don’t do that in the West. The communist Chinese are going to let people go bankrupt, because they’re good capitalists.’ China has amassed debt and will not be able to help countries as they did the last time the world fell apart in 2008. ‘The next time the world comes to an end it’s going to be a bigger shock than we expect,’ says Rogers. Still, while China will face problems, Rogers assures it ‘will be the most important country in the 21st century.’

This post was published at Zero Hedge on Aug 27, 2016.

It Begins: Barney Frank Tells Yellen Not To Hike Before The Election, “It Risks Destabilizing Markets”

Even as speculation had built up that the “apolitical” Fed would not dare to hike rates ahead of the election to avoid a market swoon, one which would significantly boost Trump’s presidential odds, so far nobody – either on the left or the right – had suggested to Yellen not to hike rates before November 8, for one simple reason: it would immediately crush the scripted narrative of an independent Fed (something which Fed governor Lael Brainard apparently was unaware of when she donated repeatedly to the Hillary Clinton campaign), a narrative which benefits both republicans and democrats who can pretend they are busy in Congress simply by pointing at the all time high in the S&P500, which alas is simply a function of global asset bubbles.
However, that changed earlier today when, just one day after Janet Yellen’s closely watched Jackson Hole speech which may or may not have opened the door to a September rate hike, Barney Frank – one of the architects of the 2010 Dodd-Frank “Wall Street Reform” act – and a staunch supporter of Hillary Clinton, told The Hill it would be a mistake for the Federal Reserve to raise interest rates before the election.
Frank advised the Fed board not to risk destabilizing markets and perhaps the broader economy a few weeks before Election Day.’I think it would be a mistake to do it this close to the election,’ Frank told The Hill. ‘It will be interpreted, over interpreted.”

This post was published at Zero Hedge on Aug 27, 2016.

Dutch Central Bank Refuses To Publish Gold Bar List For Dubious Reasons

My hunt for the gold bar list of the Dutch official gold reserves started in 2015. On September 26 of that year I visited a conference in Rotterdam, the Netherlands, called Reinvent Money. One of the speakers was Jacob De Haan from the Dutch central bank (DNB) Economics and Research Division – you can watch his presentation by clicking here.
In his presentation De Haan repeatedly talked about the importance of transparency in central banking. These statements raised my eyebrows, as I submitted a FOIA request at DNB in 2013 to ask for all correspondence between DNB and other central banks in the past 45 years with respect to its monetary gold, which was not honored. From my experience DNB was anything but transparent.

This post was published at Bullion Star on 27 Aug 2016.

Close All Mosques, Ban Koran; Poll-Leading Dutch ‘Freedom’ Party Unveils De-Islamization Manifesto

Earlier this week, we reported of an daunting predicament facing the dramatically underfunded Illinois Teachers Retirement System (TRS), the state’s largest pension fund which is only 41.5% funded: cut its existing future returns assumption from 7.5% to 7.0% (which was previously lowered from 8.0% in 2014) and suffer the wrath of the state’s governor Bruce Rauner, who would be forced to implement even more unpopular tax hikes, or keep its existing projected returns, and potentially suffer an even greater shortfall – and greater taxpayer funding needs – over the long-run if it was unable to hit its bogey.

Despite tremendous political pressure, on Friday afternoon, the Board of Trustees for the Illinois Teachers’ Retirement System, which serves almost 400,000 teachers, voted to cut the assumed rate of return to 7% from 7.5%. “We have to do what we believe is the right thing,’ Richard Ingram, the pension’s executive director, said during the board meeting in Springfield.

This post was published at Zero Hedge on Aug 27, 2016.

Harvard Professor Demands Ban On $20, $50, $100 Bills

Six months since Larry Summers first suggested “it;’s time to kill the $100 bill,” and three months after The ECB actually killed the 500 Note, another Harvard ‘scholar’ is reinvigorating the war on cash. Amid claims that paper money fuels corruption, terrorism, tax evasion, and illegal immigration, Ken Rogoff (ironically of “It’s Different This Time” infamy) says the US should get rid of the $100 bill (and $50s and $20s) proposing, in his words, “a ‘less-cash’ society, not a cashless one, at least for the foreseeable future.”
According to the esteemed ivory tower academic, paper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. As Rogoff explains in The Wall Street Journal, getting rid of most of it – that is, moving to a society where cash is used less frequently and mainly for small transactions – could be a big help.
Rogoff’s begins by stating factoids as facts…
There is little debate among law-enforcement agencies that paper currency, especially large notes such as the U. S. $100 bill, facilitates crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism. There are substitutes for cash – cryptocurrencies, uncut diamonds, gold coins, prepaid cards – but for many kinds of criminal transactions, cash is still king. It delivers absolute anonymity, portability, liquidity and near-universal acceptance. It is no accident that whenever there is a big-time drug bust, the authorities typically find wads of cash.

This post was published at Zero Hedge on Aug 27, 2016.

A teaching moment on the nature of the gold cult

I wanted to share the following chart with the readers because this is perhaps one of the clearest examples that you will see of what I call, ‘selective outrage’ on the part of those whom I have dubbed ‘the gold cult’.
By ‘the gold cult’ I am referring to those websites and gold promoters whose view of gold is that it must always go higher in price and when it does not, it is because there are ‘sinister, evil powers’ at work who are ‘manipulating its price’ and preventing it from rising.
Just this week, we watched gold experience a sharp selloff on Wednesday. Almost immediately, the gold cult websites (Zerohedge is their leader) were out with their breathless denunciations about ‘sellers smashing the gold price by dumping huge amounts of gold within minutes’. They went on to say that ‘No seller attempting to maximize their profits would sell in this fashion so clearly it was a takedown attempt on the metal by its foes’.

This post was published at Trader Dan on August 26, 2016,.

The Number One Factor Influencing Fed Monetary Policy

Submitted by MN Gordon via,
A brief scan of the financial and economic landscape – both in the U. S. and abroad – offers ample confirmation that we are in the midst of a great reset. From a feint tickle at the turn of the new millennium to a persistent itch a decade ago, the preponderance of evidence in this regard is now much too painful to ignore. There’s no denying that things ain’t right.
Debt is increasing while GDP’s stagnating. Stocks are rising while earnings are declining. Incomes are flat-lining for the majority of workers while growing by leaps and bounds for the 1 percent. Plus there’s over $13 trillion of negative-yielding debt.
With all this going on, what’s become lucidly clear is the frank understanding that there’s nothing that can really be done to reverse it. No executive order. No monetary policy adjustment. No congressional stimulus package. No presidential candidate.
None of these, or any other conceivable command and control options, can really do a thing about it. In fact, at this point, even the most well-intentioned of government programs will likely make the ultimate breakdown and dissolution much, much worse. The hole’s already been dug far too deep to climb out of.

This post was published at Zero Hedge on Aug 27, 2016.