China House Price Bubble Soars Most Ever, Government Freaks out, Preannounces Plunge

The housing market has ‘apparently cooled.’
As a consequence of a dizzying buying frenzy in September, the average price of new homes in China soared 11.2% from a year ago, after a 9.2% jump in August, the National Bureau of Statistics reported today. It was the 12th month in a row of year-over-year gains, and the largest increase on record.
The average price of new homes rose in 63 of the 70 cities in the index. It dropped in six cities and remained flat in one. But all heck broke lose in tier-one cities: In Beijing, the average price skyrocketed 27.8%, in Shanghai 32.7%.
This comes after authorities have unleashed a tsunami of liquidity that triggered a record borrowing binge. In response to the prior deflation of China’s house price bubble, and the social unrest it began to entail as folks saw their life savings evaporate, the People’s Bank of China cut interest rates six times in the eleven months leading up to October 2015. The benchmark mortgage rate dropped to a historic low of 4.9%. Last month, the medium- and long-term loans to households, mostly mortgages, ballooned by 571 billion yuan, as the total value of new homes sold (a function of price and volume), according to Bloomberg calculations, soared 61% year-over-year, nearly double the increase in August.

This post was published at Wolf Street on October 21, 2016.

Gold Bars Go to $6 Premium in China as Yuan Hits Fresh 6-Year Lows on Capital Outflows

Gold prices traded in London’s wholesale market steadied against the rising US Dollar Friday, heading for a solid weekly gain versus all major currencies as the Chinese Yuan hit fresh 6-year lows on the FX market.
Premiums for gold bars settled in Shanghai ended the week $6 per ounce above comparable London quotes, well over twice the typical incentive to new imports of bullion to the world’s No.1 consumer market.
Read Gold: Is the Bull Market Over?
World stock markets meantime stalled while energy prices rose and major government bond prices ticked higher, but the rate of interest offered by Germany’s 10-year government debt continued to hold above zero.
That extended to 2 weeks the longest period of positive Bund yields since they first broke below zero just before the UK’s Brexit referendum on quitting the European Union in late June.
Gold bars meeting trade body the LBMA’s Good Delivery standards rose to 1162 per ounce Friday, almost recovering summer 2016’s post-Brexit floor, lost a fortnight ago.

This post was published at FinancialSense on 10/21/2016.

Gold Green Lights Upleg

Gold’s early-October plunge on futures speculators’ stop losses being run has naturally left this metal mired in battered technicals and bearish sentiment. But that sharp selloff has already accomplished its rebalancing mission. The excessive gold-futures trading positions that triggered that stop running have already reversed, and the investors fueling gold’s bull are starting to buy again. Gold is green lighting its next upleg.
Gold’s price action in recent years has been overwhelmingly dominated by just two groups of traders. Gold-futures speculators effectively control gold’s short-term behavior, as futures’ extreme inherent leverage gives their capital wildly-outsized influence. And investors, specifically American stock investors buying and selling shares in the flagship GLD SPDR Gold Shares gold ETF, have commanded gold’s longer-term moves.
Plenty of traditional gold investors don’t want to believe this, as it’s seen as paper gold overpowering the real physical market. While the gold futures that unfortunately rule gold pricing are definitely paper gold, GLD truly isn’t. This critical ETF acts as a conduit for the vast pools of American stock-market capital to flow into and out of real physical gold bullion. The interplay of gold-futures and GLD trading drives gold.

This post was published at ZEAL LLC on October 21, 2016.

Junior Miners: Gold And Silver Are Ready To Rumble

Massive one-shot selling of non-physical gold on Tuesday, October 4th, appeared to be typical of gold-price-depressing market interventions seen repeatedly in recent years. Those interventions have been orchestrated regularly by central banks… Post-election, the Fed likely will face economic and liquidity circumstance more conducive to expanded quantitative easing, than to meaningful rate hikes. Reverting now to obvious market manipulation of the price of gold could be a leading indicator of pending central-bank policy otherwise shifting towards intensified U. S. dollar debasement. – John Williams,
The Fed was overtly aggressive in its attack on gold and silver during the past few weeks. As John Williams observes in the quote above, it’s probable that the Fed has made every effort to suppress the price of gold ahead of the implementation of more QE in some form (dollar debasement).
Several analysts have been offering up theories with regard to the performance of gold based on the winner of the presidential election. But the truth is, gold and silver will do well for the foreseeable future regardless of which candidate wins. Perhaps this chart created by Twitter @thingtankcharts, with my edits, will explain my view:

This post was published at Investment Research Dynamics on October 21, 2016.

European Taxpayers Now On The Hook For Junk Debt As ECB Bond-Buying Debacle Builds

Back on March 10, when the ECB stunned the world and announced it would monetize corporate debt, we laid out a snapshot of the total size of Europe’s Investment Grade bond market…
And added that “It is unclear what happens to those IG bonds that the ECB has purchased if and when they get downgraded to junk.”
We are about to find out.
“Picking winners” was never a good idea for policymakers – no matter what the economics textbooks say – and now the ‘market’ has given the ECB a big headache. Draghi’s corporate-bond-buying scheme has backfired as the European Central Bank finds itself holding junk bonds in its so-called ‘stimulus’ plan after K S AG was downgraded by S&P (sending its price plunging).

This post was published at Zero Hedge on Oct 21, 2016.

Tesla Now Fully Able to Self-Drive Safer Than Humans

While much of the world remains preoccupied with impotent central bank grandstanding, the US presidential train wreck and reams of counter-productive nonsense, Tesla has now not only made and released the best-rated car in history, that can be fueled for free from the sun with zero carbon emissions and zero air pollution – but now all of its vehicles also have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver.
If you think it’s not a huge leap forward to take humans and all of our many distractions and physical impairments out of the driving equation, then you’ve not been paying attention to the people around you in traffic.

This post was published at FinancialSense on 10/20/2016.

Chlorine Plume Forms In Atchison, KS After Chemical Spill; Evacuation Underway

Picture from Atchison, KS right now – chemical leak. People told to avoid going outside.
— Josh Helmuth (@Jhelmuth) October 21, 2016

In a scene reminiscent of a Stephen King book, a chemical spill in Atchison, Kansas has sent a plume of what is reportedly chlorine fog into the air and spurred evaucation warnings from officials. On social media, emergency officials warned residents to seek shelter and stay inside.
Atchison County officials are closing and evacuating the county courthouse. Benedictine College has been evacuated

This post was published at Zero Hedge on Oct 21, 2016.

Canada Walks Out Of European Trade Talks, “Deal Impossible”

With ‘trade’ at the center of any substantive differences between US presidential candidates, 1000s protesting ‘trade’ deals across Europe, ‘trade’ collapsing in China, and lame-duck Obama trying to push his ‘trade’ agenda, it is perhaps shocking that Canada’s trade minister walked out of talks to finalize a trade pact with the European Union, saying it now seems the bloc is incapable of reaching such agreements and that Canadian officials are returning home.
As Bloomberg reports, Chrystia Freeland spoke to reporters Friday after negotiations with the European Commission and the leadership of Wallonia collapsed. The French-speaking southern Belgian region is the holdout in approving the deal.
‘It is evident to me, for Canada, the European Union is not capable right now to have an international agreement, even with a country that has European values like Canada,’ Freeland told reporters in Namur, Belgium. Her spokesman, Alex Lawrence, confirmed by e-mail that she had walked out.

This post was published at Zero Hedge on Oct 21, 2016.

Fed Up Friday: Oct. 15 – 21

Once again, the Fed is predicting a rate hike by the end of the year. The problem is they’re notoriously bad at predicting their own rate hikes.
The Fed’s Lackluster Success at Predicting Rate Hikes
At the start of 2016, Fed members had predicted more rate hikes than we’ve experience so far. That’s not a surprise to anyone who has followed the Fed for any period of time. Recently, Business Insider posted in-depth dot graph plotting the Fed’s missed marks when predicting its own hikes over the past three years.
Peter Boockvar: ‘The Fed has a Problem’
According to Peter Boockvar of the Lindsey Group, the Fed still has some bad data within their ‘dependency’ model that will likely play a role in whether it’s a go or no go for a December rate hike.

This post was published at Schiffgold on OCTOBER 21, 2016.

Gold Is Near The 2011 Highs

There are a lot of people who are concerned about the performance of gold and the fact that the price after four years of correction is still so far from the high. The mistake that most people make is to measure gold in US dollars. We are seeing currently very temporary dollar strength. But the US$ is a weak currency in a mismanaged economy. Just look at the dollar in Swiss Francs. Since 1970 the dollar has lost 77% against the Swissy. That can hardly be called dollar strength.
The dollar is a very weak currency
If we measure the dollar in real money which is gold of course, the not so mighty dollar has lost 80% in this century.
So to talk about a strong dollar is totally ridiculous. The dollar is in a long-term downtrend which will continue for many years until it reaches zero. The temporary dollar strength gives the appearance that gold is currently weak. But we must remember that gold should be measured in your home currency and not only in dollars. It is pure laziness that makes non-Americans quote gold in dollars. International media don’t make it easier since they always show the dollar price.

This post was published at GoldSwitzerland on October 21, 2016.

Gold and Silver Market Morning: Oct-21-2016 — Gold price consolidating with positive bias!

Gold Today -New York closed at $1,266.10 yesterday after the previous close of $1,269.40 London opened at $1,264.00.
– The $: was stronger at $1.08.82: 1 from $1.0973: 1 yesterday after Draghi’s statements.
– The Dollar index was stronger at 98.58 from 97.95 yesterday.
– The Yen was unchanged at 103.77: $1 yesterday against the dollar.
– The Yuan was heavily weaker at 6.7638: $1 from 6.7395: $1 yesterday.
– The Pound Sterling was slightly weaker at $1.2226: 1 from Friday’s $1.2275 1.
Yuan Gold Fix
After Draghi’s remarks the euro slipped against the dollar, but not to the lowest level seen in the last year or so at 1.07, but it was the direction the E. U. wanted The Yuan is clearly being ‘managed’ lower. But this is in the face of a rising dollar. The Pound continues to slip steadily, something that counters the negative effect of the coming Brexit [in two years]. After all, the Pound is 15% cheaper than before the referendum, against a 10.7% fall in the Yuan since the beginning of this year.
LBMA price setting: The LBMA gold price setting was at $1,263.95against yesterday’s $1,269.75. The gold price in the euro was set higher at1,160.65 against yesterday’s 1,154.63.
Ahead of the opening of New York the gold price was trading at $1,266.45 and in the euro at 1,262.63. At the same time, the silver price was trading at$17.54.

This post was published at GoldSeek on 21 October 2016.

Goldman Sachs Top Lawyer Is Part of a Secret Banking Cabal as CEO Blankfein Denies One Exists

There’s a new mantra making the rounds of Washington and Wall Street. No matter how big the lie you’re caught in, no matter how much documented evidence exists against you, just deny, deny, deny. That’s how Democratic National Committee Interim ChairDonna Brazile handled the email released by WikiLeaks showing that she leaked a debate question to Hillary Clinton; that’s how Hillary Clinton handled revelations about sending classified government material over an unclassified server in the basement of her home; and that’s how Goldman Sachs CEO Lloyd Blankfein is handling the widespread public perception that there’s a banking cabal meeting in secret to plot its continued dominance over the interests of the average U. S. citizen.
Yesterday, CNBC’s David Faber interviewed Blankfein and asked about the suggestion that Donald Trump had made on October 13 in a speech in West Palm Beach, Florida that there is an international banking conspiracy undermining the sovereignty of the United States. Faber asked Blankfein: ‘So am I to take it that you weren’t meeting in secret with international banks and Hillary Clinton to plot the destruction of U. S. sovereignty?’ Blankfein responded: ‘We could parse that clause by clause, but to every clause, the answer is no, we weren’t doing it. We weren’t meeting in secret and we certainly weren’t plotting destruction.’
The first half of Blankfein’s answer is flatly false and he knows it. The big Wall Street banks do meet in secret and have been doing it for decades. His own General Counsel, Gregory Palm, part of the Management Committee at Goldman Sachs, is part of the secret cabal.
Just five days before Blankfein made his false denial, Bloomberg News’ reporters Greg Farrell and Keri Geiger had landed the bombshell report that the top lawyers of the biggest Wall Street banks had been meeting secretly for two decades with their counterparts at international banks. At this year’s secret May meeting at a posh hotel in Versailles, the following were among the big bank lawyers in addition to Palm according to the Bloomberg report: Stephen Cutler of JPMorgan (a former Director of Enforcement at the SEC); Gary Lynch of Bank of America (also a former Director of Enforcement at the SEC); Morgan Stanley’s Eric Grossman; Citigroup’s Rohan Weerasinghe; Markus Diethelm of UBS Group AG; Richard Walker of Deutsche Bank (again, a former Director of Enforcement at the SEC); Robert Hoyt of Barclays; Romeo Cerutti of Credit Suisse Group AG; David Fein of Standard Chartered; Stuart Levey of HSBC Holdings; and Georges Dirani of BNP Paribas SA.

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

The Brutal Truth

Last night there was somewhat of a ritualistic dinner held.
It was the Al Smith dinner, a white-tie affair, and a ritual that Presidential candidates, very late in the game, have usually taken part in. This year was no different, with both Hillary and Trump sporting their white-tie best.
But this is not your usual sort of passe’ thing. No, it’s a benefit, and as are many benefits in New York it was stuffed with priestly types and an extraordinary price tag — but, as is frequently the case when there are so many with a priestly bent headlining the event the money actually goes to a decent cause — in this case Catholic Charities. And, I might add, rumors are that they raised a record amount. Bravo.
This dinner is in fact a roast, and The Donald went first. He served up a menu that began with some self-deprecating humor, as is the usual fare. But then, after getting the crowd nice and warm, with chuckles and even roars of approval, he dropped the hammer:
“Hillary is so corrupt — She got kicked off the Watergate Commission. How corrupt do you have to be to get kicked off the Watergate Commission?”

This post was published at Market-Ticker on 2016-10-21.

Quantitative Easing, Helicopter Money and Gold

To properly understand helicopter money and its potential effects for the gold market, it is necessary to analyze differences between it and quantitative easing. In some senses, both tools are similar as they support the government budget. Some analysts even call quantitative easing in ‘helicopter money in disguise’. However, there are a few important differences between these two monetary policies, as one can see in the table below.
Table 1: Comparison of quantitative easing and helicopter money.

First, financing of fiscal deficits was not the explicit aim of quantitative easing which was generally conducted independently from the fiscal policy. The purpose of quantitative easing was to purchase financial assets and to stimulate the economy by wealth effects (due to higher asset prices), as well as a portfolio rebalancing effect and inflation expectations – the lower borrowing costs for the government were only a by-product (well, at least officially). On the other hand, helicopter drops are overt money finance and their very aim is the direct funding of government spending or tax cuts. Therefore, helicopter money may be regarded as a quasi-fiscal policy, in fact. Here lies one of the biggest risks connected with the helicopter money. You see, helicopter drops require a stronger cooperation between the central bank and the Treasury. Call us skeptics, but it is not difficult to see that ‘cooperation’ could lead to the loss of independence of central banks. Remember the ‘collaboration’ between the Fed and the U. S. Treasury during the World War II? The central bank committed to keep the Treasury rates low to provide the government with cheap debt financing of the war effort. Surely, the WWII was an unusual time that required unconventional moves and perhaps justified such a pledge. However, the Fed did not restore independence until 1951. Last time we checked, the war ended in 1945, six years earlier. It goes without saying that the reduction in the central banks’ independence would support the gold market. It would wipe out any credibility in central banks’ inflation targeting. The inflation expectations could become unanchored at some point, spurring the safe-haven demand for gold.

This post was published at GoldSeek on 21 October 2016.

Is Chicago’s Housing Market Next?

The smart money tries to cash out at the peak, no? Does it always start at the top? Because there’s just no letup in dismal tidbits piling up about big-city high-end condo market: Manhattan, San Francisco, Miami – and now Chicago too?
Just last year, things were still so good on the Magnificent Mile, those tony 13 blocks of Michigan Avenue from the Chicago River north to Oak Street, of landmark towers, shops and restaurants – rents rank among the most expensive in the country – museums, hotels, and high-end condos.
April last year, the 65th-floor penthouse at the Park Tower on 800 N. Michigan Ave sold for $18.75 million, ‘to a firm with ties to ‘Star Wars’ creator George Lucas and wife Mellody Hobson, president of a Chicago investment firm,’ the Chicago Tribune speculated. It was an all-time record. The real estate business was ecstatic.

This post was published at Wolf Street on October 21, 2016.

Market Report: Finding support

After the sell-off of recent weeks, gold and silver found support at $1250 and $17.40 respectively.
In early European trade this morning, gold traded at $1263, up $7 since last Friday’s close, and silver at $17.47, unchanged.
This is small bear, and not much evidence of better conditions. However, with predominantly bearish commentators, excepting of course the gold bugs who are always bullish, it ranks as a credible performance. Furthermore, open interest on Comex has fallen substantially from the peak on July 11, leaving the market moderately oversold. This commentator is also convinced that some portfolio exposure, as opposed to purely speculative trading, is being maintained in rolling futures positions, so we have probably seen most of the contraction of open interest.
Supporting the bullish case is seasonal demand from India, ahead of the wedding season and Diwali. For the first time in months, local gold prices have reverted to a small premium over international quotes, indicating a turnaround in buying activity.

This post was published at GoldMoney on OCTOBER 21, 2016.


On this edition of the ‘Daily News Brief’, Joe Joseph goes over some of the lies that Shillary used during the last debate. The latest Podesta leak has given us some juicy tidbits to talk about, and people all over the country are getting stressed out due to the election drama. Joe concludes with how nuclear war may not be the real threat, but the fall of the petro dollar.

This post was published at The Daily Sheeple on OCTOBER 21, 2016.

Preparing for Post-Election Social Unrest

The 2016 election year is bringing out the worst among some elements of society. From vandalism to physical assaults to large scale race riots to terrorist bombings and mall stabbings, social disorder has become a more prominent feature of life in a polarized America.
It’s easy (and politically convenient) for the establishment media to blame Donald Trump for inflaming the political divide. In reality, Trump supporters have far more often been the victims rather than the instigators of political violence.
Moreover, the forces driving social unrest have been building for years. And they are being encouraged and funded by far-left organizations.
The riotous ‘Black Lives Matter’ movement has received more than $100 million from leftist foundations including billionaire George Soros’s Open Society Institute.
Surveys show that large numbers of Americans – including Republicans and Democrats, blacks and whites – agree that race relations have worsened under President Obama’s watch. The nation’s first half-African president has repeatedly sided with racial agitators and refused to denounce antipolice riots. His attorney general, Loretta Lynch, has given legal legitimacy to vicious racial narratives that have little to no basis in fact.
In addition to leaving the country with fresh new racial wounds, the outgoing Obama administration will leave America with a doubling of the national debt to nearly $20 trillion, a historically low rate of workforce participation, 20 million more people on food stamps, and a shrinking middle class whose earnings aren’t keeping up with surging costs of things like health insurance.
People are frustrated, restless, angry. And officially, we aren’t even in a recession yet. Officially, the inflation rate remains below 2%. What happens when the economy and stock market start tanking? Or when costs for fuel, food, and other consumer goods start taking off again?

This post was published at GoldSeek on 21 October 2016.

Here’s What the Shanghai Accord Means for the Dollar

The Shanghai Accord in its simplest form is a weaker dollar, a weaker dollar for imported inflation, a weaker dollar to stimulate U. S. exports (as noted previously here). It was a way for China to cheapen their currency without breaking the peg to the dollar.
You would cheapen the dollar, and then China would keep the peg, and the Chinese yuan would cheapen along with it. That framework came out at the end of February, and it was a very good guide for policy from February through June or July.
The problem is, and this is really important to understand, all of these processes are dynamic, and a lot of them are in conflict. In other words, the central banks want things that conflict with each other.
For example, the Federal Reserve (Fed) wants inflation. They say so. It’s not a secret. One of the ways to get inflation is a cheaper currency, but they also want to raise rates. Which is why they have to raise rates, so they can cut them in the next recession.
Raising rates makes the dollar stronger. How do you reconcile a weaker dollar, which imports inflation, with a stronger dollar, which creates deflation? You can’t. They’re completely opposite goals, but this is where the approach diverges.

This post was published at Wall Street Examiner on October 20, 2016.