Bannon, Priebus Return To Washington As Trump Trip Continues

For clarification, this is not a Satanic ritual.
— The Church Of Satan (@ChurchofSatan) May 22, 2017

For Trump’s two main White House policy advisors (aside from Goldman Sachs, of course) chief of staff Reince Priebus and chief strategist Stephen Bannon, the confusion over the “orb” event may have been too great.
That, or perhaps there was another fallout between Trump and his two key advisors.
Whatever the reason, according to CNN, both Priebus and Bannon returned to Washington after just the first leg of Trump’s global tour, when the President concluded his visit to Saudi Arabia on Sunday.
“He was planning to come for the first stop and then head back for the budget roll out,” White House spokeswoman Sarah Huckabee Sanders said about the return. To avoid the perception of another breakdown in relations between Trump and the two men, White House officials told CNN that Bannon’s departure was also planned. A Trump adviser said Priebus wanted time to get ready for Trump’s return to the U. S.

This post was published at Zero Hedge on May 22, 2017.

FX Week Ahead: Highlights Include FOMC, BOC And OPEC

Submitted by Shant Movsesian (RANSquawk) and Rajan Dhall MSTA
Weekly FX Outlook:
Politics dominate yet again, as focus on Comey testimony set to determine Trump and USD fate. Fed minutes and OPEC meeting on the same day with the BoC thrown in! EUR on the front foot and leading the pack as growth and inflation stats heighten tapering expectations, greenback flagging.
Late Thursday, social media released a video suggesting the ex-FBI director denied any experience of interference to any ‘bureau’ investigations, but questioning was not inferred on Donald Trump. As such, the president is not off the hook – far from it. Thin market conditions at the time produced some sharp USD moves to the upside, but have been all but reversed in full as US Treasury yields remain on the heavy side.
Based on economic considerations, where the data has been tailing off of late, politics now ‘overlap’ as delays on tax reform will be seen to be exacerbated by the allegations on the head of state. Next week’s schedule picks up midweek, with the Fed meeting minutes making for a volatile North American session at the very least. The FOMC are likely to see recent softness (in growth, inflation and wages) as transient – a popular word of late – so expectations over a June hike may have receded from 90%+ to 74%+, but the yield curve has been wilting in the mid curve to signal market focus beyond next month and 2017.
Of the data releases seen, Friday’s Q1 GDP seconding reading is standout, along with real consumer spending and the price index. Durable goods are also out at this time, with Q1 corporate profits also noteworthy. The day before we get the latest trade data, with housing data and the Markit PMIs set to be ‘lost’ in the Trump and Fed circumstance.

This post was published at Zero Hedge on May 22, 2017.

Asian Metals Market Update: May-22-2017

There are lots of Federal Reserve speakers this week as well as economic data releases. These numbers will be taken seriously by the markets as they are pre FOMC data. The FOMC meet is on 14th June. UK elections are also nearing. Lowering of North Korean risk and other Asian geopolitical risk will be bearish for bullion. Demand is not that much. $1250 is the middle of the road price gold. +/-$50 either side move can happen very quickly. Gold should delink from currency price moves this week (as observed last week).
Silver is stuck between the devil and the deep sea. In the short term, silver is not yet out of the bearish shadow. Low silver demand is preventing silver prices from a rise. The price of silver has been subdued to manipulation by a cartel of large banks. Silver is a great long term investment but I see a big price rise only from 2019. Between now and end 2018, $1470 and $2290 are the key break points. In the short term silver can see rallies. But to attract long term investors silver prices have to show a solid price bottom formation.
Long term copper is also bullish as supplies move into a deficit zone from the last quarter of the year. In the short term copper can see sharp corrections, depending upon moves in the currency markets. As long as copper trades over $236 chances of a rise to $323 will be very high for the rest of the year. The risk to copper prices will be a war with North Korea as it will adversely affect Chinese exports and Chinese demand.

This post was published at GoldSeek on 22 May 2017.

Trump’s Budget Will Slash $1.7 Trillion In Entitlements, Cut Food Stamps By 25%

More details from President Donald Trump’s first budget proposal are trickling out via a flurry of overnight reports from The Washington Post, Associated Press and Bloomberg News.
Here are some of the highlights from the latest batch of trial balloons:
The budget will slash $1.7 trillion in spending on entitlement programs, according to Bloomberg. Trump’s budget will include a massive nearly $200 billion cut to the Supplemental Nutrition Assistance Program, the modern version of food stamps, over the next 10 years – what amounts to a 25% reduction, according to The Washington Post. The food stamp cuts are part of a broader $274 billion welfare-reform effort, according to a report by The Associated Press. The budget calls for about $800 billion in cuts to Medicaid for fiscal year 2018, WaPo reported. The budget also calls for $2.6 billion in border security spending, $1.6 billion of which will be earmarked for Trump’s proposed wall along the U. S.’s southern border. The budget is also expected to propose major domestic discretionary spending cuts – an earlier version of the budget called for $54 billion in such cuts next year alone.

This post was published at Zero Hedge on May 22, 2017.

SWOT Analysis: Can We Expect Further Weakening of the U.S. Dollar?

The best performing precious metal for the week was silver, climbing 2.36 percent and just beating out gold’s price performance as softer economic data emerged. Gold traders and analysts are split on their outlook for gold, reports Bloomberg, with 12 bearish, three bullish and four neutral this week. On May 16 the yellow metal advanced for a fourth day, with Kotak Commodities Services saying gold is supported by ‘mixed U. S. economic data, weakness in the U. S. dollar, geopolitical tensions and uncertainty about Trump’s policy actions.’ On the prior Friday, consumer prices (excluding food and energy) rose 1.9 percent year-over-year for April, the least since 2015, while retail sales were also weaker, reports Bloomberg. Eldorado Gold will ‘gain an operating foothold in its own country with a deal to take full control of Integra Gold Corp,’ reports Bloomberg, offering the equivalent of C$1.2125 for each Integra share. That is a 52 percent premium to Integra’s closing price on May 12, according to a statement on Monday from Eldorado. The proposed acquisition provides Eldorado with its first operating mine in Canada, offering G&A and income tax benefits, along with exposure to a lower political risk project, notes a Viii Capital report.

This post was published at GoldSeek on Monday, 22 May 2017.

22/5/17: U.S. Public Pensions System: Insolvent to the Core

A truly worrying view of the U. S. public sector pensions deficits has been revealed in a new study by Joshua D. Raugh for Hoover Institution. Titled ‘Hidden Debt, Hidden Deficits’ (see the study opens up with a dire warning we all have been aware of for some years now (emphasis is mine): ‘Most state and local governments in the United States offer retirement benefits to their employees in the form of guaranteed pensions. To fund these promises, the governments contribute taxpayer money to public systems. Even under states’ own disclosures and optimistic assumptions about future investment returns, assets in the pension systems will be insufficient to pay for the pensions of current public employees and retirees. Taxpayer resources will eventually have to make up the difference.’
Some details: ‘most public pension systems across the United States still calculate both their pension costs and liabilities under the assumption that their contributed assets will achieve returns of 7.5 – 8 percent per year. This practice obscures the true extent of public sector liabilities.’ In other words, public pension funds produce outright lies when it comes to the investment returns they promise to generate. This, in turn, generates delayed liabilities that are carried into the future, when realised returns come in at some 3-4 percent per annum, instead of promised 7.5-8 percent.

This post was published at True Economics on Monday, May 22, 2017.

Asia Jumps, Europe Stutters As Political Rumblings Return; Oil Nears $51

Global stocks were mixed to start the week, with Asian stocks higher, European stocks initially advancing then fading gains, while S&P futures are little changed after the biggest weekly drop since April (which for those keeping record was -0.4%). European shares, the euro and the pound all stumbled on Monday as rumblings in Spain, Britain and Brussels reminded investors that the region still has plenty of political uncertainty left in the tank.
Oil continued to rise amid short covering and the latest round of “pricing in” that cuts to crude supplies will be extended by up to 9 months when OPEC meets on Thursday. The pound initially fell as the UK threatened to quit talks on its departure from the European Union, however it has since regains most of the overnight losses.
In early trading, a one-month high for oil and bounce in the dollar triggered Asia’s best session in weeks overnight but Europe struggled to maintain the momentum early on. Most Asian stocks and currencies benefitted from positive risk appetite with sentiment buoyed by Wall Street gains and the Indonesia upgrade which has sent local stocks on their best 2-day rally this year.

This post was published at Zero Hedge on May 22, 2017.

Global Markets Near Steady; Big Data Week Lies Ahead

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
(Kitco News) – World stock markets were steady to narrowly mixed in overnight trading. U. S.
stock indexes are pointed toward near-steady openings when the New York day session begins. Major focal points of market watchers this week are the Federal Reserve’s FOMC minutes released on Wednesday afternoon and an OPEC meeting that begins Thursday.
Gold prices are slightly up Monday. The recent depreciation of the U. S. dollar has been bullish for the precious metals.
In overnight news, the Paris-based OECD think tank reported the world’s developed countries had slower economic growth in the first quarter of this year. However, the growth pace of these countries is expected to increase significantly in the second quarter.

This post was published at Wall Street Examiner by Jim Wyckoff ‘ May 22, 2017.

Euro Surges After Merkel Says Euro Is “Too Weak”, Blames ECB

In the early days of the Trump administration, when the world was still worried – unnecessarily – that Trump would single out Europe, and especially Germany, as an unfair trading partner, slamming the Euro as too weak, Germany’s fallback response was to say the currency is where it is due to the ECB’s monetary policy, oh and that the Euro wasn’t weak, but merely reflecting fundamentals. Well, moments ago the conventional narrative appears to have shifted once again after Angela Merkel herself took on the role of chief Euro critic, saying the common currency is “too weak” and blaming the ECB for the record German trade surplus, accusing Draghi’s policies for the weak euro.

This post was published at Zero Hedge on May 22, 2017.

Greek Authorities To Launch Mass Confiscation Of Safe Deposit Boxes, Securities, Homes In Tax-Evasion Crackdown

Last week, the Greek parliament once again approved more austerity to unlock withheld Greek bailout funds in Brussels: a symbolic move, which has little impact without any actual follow through, like for example, actually imposing austerity. And while Greeks have been very good in the former (i.e. promises), they have been severely lacking in the latter (i.e. delivery).
That may be changing. According to Kathimerini, Greek Finance Ministry inspectors are about to start seeking out the owners of all local undeclared properties, while the law will be amended to allow for financial products and the content of safe deposit boxes to be confiscated electronically. The plan for the identification of taxpayers who have ‘forgotten’ to declare their properties to the tax authorities is expected to be ready by year-end, according to the timetable of the Independent Authority for Public Revenue.
What follows then will be a wholesale confiscation by the government of any asset whose source, origins and funding can not be explained.

This post was published at Zero Hedge on May 22, 2017.

TINA’s Legacy: Free Money, Bread and Circuses and Collapse

TINA’s legacy is revealed in this chart of the Venezuelan Bolivar, which has plummeted from 10 to the US dollar to 5,800 to the USD in a few years of rampant money-emission. Every conventional “solution” to the systemic ills of our economy and society boils down to some version of free money: Universal Basic Income (UBI) schemes– free money for everyone, funded by borrowing from future taxpayers (robots, people, Martians, any fantasy will do); debt jubilees funded by central banks creating trillions out of thin air, a.k.a. free money, and so on. Free money is compelling because, well, it’s free, and it solves all the problems created by burdensome debt and declining incomes for the bottom 95%. Just give every household $100,000 of free money that must be devoted to reducing interest, then give every household $20,000 annually for being among the living, and hey, a lot of problems go away. But is creating money out of thin air really truly free? There are two appealing answers: yes and yes. If the Treasury literally prints money, it’s almost “free,” and if the Federal Reserve creates money and buys bonds paying near-zero yields, the money that is borrowed into existence is almost free because the interest due is so minimal.

This post was published at Charles Hugh Smith on SUNDAY, MAY 21, 2017.

21/5/17: Student Loans Debt: The Bubble is Still Inflating

Having covered the latest news on the U. S. household debt continued explosion (see and the ongoing deepening of the long term insolvency within the U. S. Social Security system (here: let’s take a look at the second largest source of household debt (after mortgages): Student Loans.
According to the data from the New York Federal Reserve, 1Q 2017 total volume of student loans outstanding in the U. S. was USD1.344 trillion, up on USD 1.310 trillion in 4Q 2016, marking the highest level of Student Loans debt in history. However, the Fed methodology does not include some of the more predatory types of loans extended to students. This means that other sources report student debt at the end of 2016 to be between USD 1.44 trillion and USD 1.5 trillion (see for example Setting aside the issues relating to data reporting, even by the official U. S. Fed standards, student loans debt is almost double the U. S. households’ credit cards debt, and is more than 10 percent higher than combined credit cards and HE revolving debt volumes.

This post was published at True Economics on Monday, May 22, 2017.

UK Threatens To Quit Brexit Talks Over Excessive ‘Divorce Payment’ Demands

With negotiations between the UK and EU likely to formally begin on June 19, Bloomberg reports that Brexit Secretary David Davis has pre-emptively lashed out at EU officials, threatening that “The UK will quit talks on leaving the European Union unless the bloc drops its demands for a divorce payment as high as EUR100bn.”
Britain’s negotiations would otherwise be plunged into ‘chaos,’ and even a 1 billion-pound settlement would be ‘a lot of money,’ Davis said in an interview published in the Sunday Times.

This post was published at Zero Hedge on May 22, 2017.

James Rickards: Gold’s ‘Decisive Turn Around’ – ‘Next Stop Is $1,300 Or Higher’

James Rickards via Daily Reckoning
But the most important development this week may be the one you never heard about on the news or the internet.
On May 10, gold launched a decisive turnaround from its most recent decline.
This kept intact the pattern I’ve been writing about for weeks of ‘higher highs, and higher lows’ as every retreat finds a footing higher than the one before and each new high reaches new, higher ground.

This post was published at Gold Core on May 22, 2017.

Corporate America’s ‘Reverse Yankees’ Shoot to Record in ECB Absurdity, But Who Are the Losers?

Why do they risk so much for so little? Apple is doing it, everyone is doing it: US companies are issuing record amounts of bonds denominated in euros. On Thursday, Apple announced in an SEC filing that it would issue 2.5 billion in euro bonds, the proceeds of which will be used to fund share buybacks and dividends to be paid in dollars. These bonds will come in two tranches: 1.25 billion of 8-year notes and 1.25 billion of 12-year notes, with coupon payments of 0.875% and 1.375% respectively.
Yields are not yet established since the bonds have not been priced yet. But they will likely not be far off from the coupon. And they won’t even compensate investors for the loss of purchasing power based on the current rates of inflation: 2.2% in the US and 1.9% in the Eurozone.
Yet, demand is hefty in yield-starved euro land, where the ECB has imposed its negative interest rate policy (NIRP) on investors and is buying 60 billion a month in all kinds of paper assets: Underwriters have received over $5 billion in orders for those Apple notes.

This post was published at Wolf Street on May 21, 2017.