Gold Summer Doldrums

Gold has spent most of June grinding lower on balance, damaging sentiment and vexing traders. Usual selling leading into the Fed’s latest rate hike contributed, but the summer doldrums are also in play. Gold has typically suffered a seasonal lull this time of year, on waning investment demand as vacations divert attention from markets. But these summer doldrums offer the best seasonal buying opportunities of the year.
This doldrums term is very apt for gold’s summer predicament. It describes a zone in the world’s oceans surrounding the equator. There hot air is constantly rising, creating long-lived low-pressure areas. They are often calm, with little or no prevailing winds. History is full of accounts of sailing ships getting trapped in this zone for days or even weeks, unable to make any headway. The doldrums were murder on ships’ morale.
Crews had no idea when the winds would pick up again, while they continued burning through their precious stores of food and drink. Without moving air, the stifling heat and humidity were suffocating on these ships long before air conditioning. Misery and boredom were extreme, leading to fights breaking out and occasional mutinies. Being trapped in the doldrums was viewed with dread, it was a very trying experience.
Gold investors can somewhat relate. Like clockwork nearly every summer, gold starts drifting listlessly sideways. It often can’t make significant progress no matter what the trends looked like heading into June, July, and August. As the days and weeks slowly pass, sentiment deteriorates markedly. Patience is gradually exhausted, supplanted with deep frustration. Plenty of traders capitulate, abandoning ship.

This post was published at ZEAL LLC on June 23, 2017.

Meet The Money-Laundering, Nigerian Oil Magnate Behind New York’s $50MM Condo Foreclosure

Last night we noted that yet another luxury condo at Manhattan’s One57 tower, a member of ‘Billionaire’s Row,’ a group of high-end towers clustered along the southern edge of Central Park, had gone into foreclosure – the second in the span of a month. The 6,240-square-foot, full-floor penthouse in question, One57’s Apartment 79, sold for $50.9 million in December 2014, making it the eighth-priciest in the building and likely the largest residential foreclosure in Manhattan’s history.
According to Bloomberg, the owner of the apartment attempted to conceal his/her identity by using a shell company (you know how those kooky billionaires can be) but was able to obtain an ‘unusually large’ mortgage with an even more unusual term: one-year.
In September 2015, the company took out a $35.3 million mortgage from lender Banque Havilland SA, based in Luxembourg. The full payment of the loan was due one year later, according to court documents filed in connection with the foreclosure. The borrower failed to repay, and now Banque Havilland is forcing a sale to recoup the funds, plus interest.
Of course, it was only a matter of time until the mystery man behind Manhattan’s most recent luxury real estate epic fail was exposed. As such, meet Nigerian oil magnate, Kola Aluko.

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

The Forgotten Depression of 1920 – 1921

This is a syndicated repost courtesy of The Daily Reckoning. To view original, click here. Reposted with permission.
The year is 1921…
America is less than three years removed from triumph on the Western Front. It’s the dawn of the Roaring Twenties… and the Jazz Age.
Warren Gamaliel Harding is America’s czar.
And the nation is sunk in depression…
U. S. industrial production plunged 31% between 1920 and 1921. Stock prices plummeted 46%… and corporate profits a crushing 92%.
Unemployment ran as high as 19%. Storefronts everywhere gaped empty.
It was the grand migraine of the day.
Then suddenly it was over. The pain was acute… but the pain was brief.
By 1922 prosperity was finding its legs again.
Welcome to the Forgotten Depression of 1920 – 1921…

This post was published at Wall Street Examiner by Brian Maher ‘ June 24, 2017.

The Unlisted Dead! ECB Deemed Veneto Banca and Banca Popolare di Vicenza Failing or Likely to Fail

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
Two Italian banks, Veneto Banca and Banca (Un)Popolare di Vicenza, have shut down due to lack of capital. Both bank’s stocks are unlisted.
On 23 June, the European Central Bank (ECB) determined that Veneto Banca S.p. A. and Banca Popolare di Vicenza S.p. A. were failing or likely to fail as the two banks repeatedly breached supervisory capital requirements. The determination was made in accordance with Articles 18(1a) and 18(4a) of the Single Resolution Mechanism Regulation.
The ECB had given the banks time to present capital plans, but the banks had been unable to offer credible solutions going forward.
Consequently, the ECB deemed that both banks were failing or likely to fail and duly informed the Single Resolution Board (SRB), which concluded that the conditions for a resolution action in relation to the two banks had not been met. The banks will be wound up under Italian insolvency procedures.

This post was published at Wall Street Examiner by Anthony B Sanders ‘ June 24, 2017.

The EU’s Greatest Achievements, According To Europeans

A year on from the UK’s Brexit referendum, Prime Minister Theresa May is set to visit Brussels today and outline her government’s negotiating position on the future rights of EU citizens living in the UK.
As Statista’s Niall McCarthy notes, a recently released Chatham House-Kantar survey found that freedom to live and work across the EU is considered one of the EU’s top three triumphs by its citizens.
When polled about the EU’s greatest achievements to date, 29 percent of people in the UK said there were none, along with 17 percent in nine other countries.

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

Why The Next Recession Will Morph Into A Decades Long Depressionary Event… Or Worse

Authored by Chris Hamilton via Econimica blog,
Economists spend inordinate time gauging the business cycle that they believe drives the US economy. However, the real engine running in the background (and nearly entirely forgotten) is the population cycle. The positive population cycle is such a long running macro trend thousands of years in the offing that it’s taken for granted. It is wrongly assumed that upon every business cycle downturn, accommodative monetary and fiscal policies will ultimately spur greater demand and restart the business cycle once the excess capacity and inventories are drawn down. However, I contend that the population cycle has been the primary factor in ending each recession…and this most macro of cycles is now rolling over. Without this, America (nor the world) will truly emerge from the next recession…instead it will morph into an unending downward cycle of partial recoveries…contrary to all contemporary human experience.
The evidence for my contention begins with the 25-54yr/old US population, which peaked in December 2007 and remains below that peak ever since (this population is presently about 400k fewer than Dec of ’07). However, total US full time employment is now 3.6 million above the previous peak in 2007. This 25-54 to FT employment relationship is now 1:1…just as it was in 1980 and 1970.

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

Week in Review: June 24, 2017

While the Federal Reserve is desperate to depict an optimistic vision for the global economy, their fellow central bankers aren’t buying it. Earlier this week Mark Carney of the Bank of England shutdown talk of the BOE possibly following the Fed’s lead in raising interest rates. Meanwhile, as Fed officials are openly worrying about whether technological advances are undermining their misguided war against deflation, the ECB is desperately looking for people to blame if Europeans begin to feel the pain from rising prices.
On Mises Weekends, Jeff is joined by Dr. Ed Stringham, a Mises associated scholar and the author of the book Private Governance. More and more Americans are waking up to the reality that the US criminal justice system is hopelessly broken, riddled with bad incentives and bad actors. In the wake of recent police shootings Jeff and Ed discuss how and why private security firms could create vastly better outcomes for crime victims, society, and even perpetrators. This is a fascinating discussion you won’t want to miss.

This post was published at Ludwig von Mises Institute on June 24, 2017.

An Open Letter To The Fed’s William Dudley

Authored by MN Gordon via,
Dear Mr. Dudley,
Your recent remarks in the wake of last week’s FOMC statement were notably unhelpful.
In particular, your excuses for further rate hikes to prevent crashing unemployment and rising inflation stunk of rotten eggs.
Crashing Unemployment
Quite frankly, crashing unemployment is a construct that’s new to popular economic discourse, and a suspect one at that.
Years ago, prior to the nirvana of globalization, the potential for wage inflation stemming from full employment was the going concern. Now that the official unemployment rate’s just 4.3 percent, and wages are still down in the dumps, it appears the Fed has fabricated a new bugaboo to rally around. What to make of it?
For starters, the Fed’s unconventional monetary policy has successfully pushed the financial order completely out of the economy’s orbit. The once impossible is now commonplace.

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

Doug Noland: Washington Finance and Bubble Illusion

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
June 18 – Financial Times (Mohamed El-Erian): ‘In hiking rates and, more notably, reaffirming its forward policy guidance and setting out plans for the phased contraction of its balance sheet, the Federal Reserve signalled last week that it has become less data dependent and more emboldened to normalise monetary policy. Yet, judging from asset prices, markets are failing to internalise sufficiently the shift in the policy regime. Should this discrepancy prevail in the months to come, the Fed could well be forced into the type of policy tightening process that could prove quite unpleasant for markets.’
I’m not yet ready to move beyond the recent focus on global monetary policy. Belatedly, the Fed has become ‘more emboldened to normalise monetary policy.’ Global policymakers may finally be turning more emboldened, though taking their precious time has nurtured alarming market complacency.
Over a period of years, securities markets became progressively more emboldened to the view that higher asset prices were the top priority of global central banks. For years I’ve argued that this is one policy slippery slope. For good reason, markets do not these days take seriously the threat of a tightening of financial conditions. The Fed and fellow central banks will surely seek to avoid what at this point would be a painful development for the global securities markets. When faced with a well-established Bubble, the notion of a painless tightening of financial conditions is a myth.

This post was published at Wall Street Examiner by Doug Noland ‘ June 24, 2017.

A Bloody Collapse

There’s a relatively-common view among certain people, exposed in public by a person who recently registered on my system, claimed to be a retired MD, and promptly got banned.
He was commenting on my 100 Million Dead article — where I laid out the utter impossibility of what the so-called “health system” has been doing on a fiscal basis for the last 30+ years, and what it proposes to continue to do backed by the people in Congress and the President — screw Americans to the wall with an ever-increasing piece of the total economic picture.
Why did he get banned? It started here:
I’m a retired MD and can tell you the current system is a criminal enterprise.
In other words he admits that the current system is a criminal enterprise to which he was a part.
It gets better (as if self-stating that his own profession is a criminal enterprise isn’t enough), and that got him banned:
Tickerguy your timeline on the meltdown is not clear. Why not health care become 30-40% of the economy. We have squandered money on a far worse “noble lie”ie The Cold War.

This post was published at Market-Ticker on 2017-06-24.

EUR/JPY Exchange Rate and Gold

We argued many times that the yellow metal behaves as a currency rather than as a commodity. Hence, macroeconomic factors and currency exchange rates affect the price of gold. In previous editions of the Market Overview, we analyzed the impact of the U. S. dollar and its exchange rate with the Euro and the Yen on the gold market. We pointed out that gold is negatively correlated with the greenback, so it moves in tandem with the Japanese or European common currency, as they are the major rivals of the U. S. dollar.
However, some analysts claim that the cross rate between the euro and the yen affects the price of gold (the term ‘cross’ meaning here that the quote does not involve the U. S. dollar). Are they right? Let’s see the chart below and check it out.
Chart 1: The price of gold (yellow line, left axis, London P. M. Fix, weekly average) and the EUR/JPY (red line, right axis, weekly average) exchange rate from January 1999 to May 2017.

This post was published at GoldSeek on JUNE 23, 2017.

They Can And Should Do More” Australian State Slams Banks With $280 Million Tax

Australian bankers are furious after the country’s smallest state levied a ‘surprise’ tax on the country’s five biggest banks that could siphon off $280 million in profits during its first four years on the books, according to Reuters. The tax was imposed by South Australia, which is struggling with the country’s highest unemployment rate and thanks the banks should be doing more to pitch in.

This post was published at Zero Hedge on Jun 23, 2017.

Russia-Gate Flops As Democrats’ Golden-Ticket

The national Democrats saw Russia-gate and the drive to impeach President Trump as their golden ticket back to power, but so far the ticket seems to be made of fool’s gold.
The national Democratic Party and many liberals have bet heavily on the Russia-gate investigation as a way to oust President Trump from office and to catapult Democrats to victories this year and in 2018, but the gamble appears not to be paying off.

This post was published at Zero Hedge on Jun 23, 2017.

Our Lawless Central Bank

The economic arguments against central banks are numerous to say the least. Through the writings of Ludwig von Mises and Murray Rothbard we have a wide variety of critiques that explain the many ways the central banks distort economies, cause booms and busts, punish savers, and chose winners and losers through monetary policy.
But, even if confronted with these arguments, and one remains supportive of central banks, other non-economic arguments must still be addressed.
For example, it is becoming increasing important – in our current age of “non-traditional” monetary policy – to take note of the fact that central banks, and especially the Federal Reserve, are essentially unrestrained by law.
Economists themselves often defend this total unmooring from legal or political accountability, saying it is necessary for the Fed to have “independence” from elected officials.
In reality, however, this “independence” is best described as “total lack of accountability.”
Writing in today’s Dallas Morning News, Texas Tech economist Alexander William Salter writes:

This post was published at Ludwig von Mises Institute on 06/22/2017.

ECB Declares Two Italian Banks Have Failed

The European Central Bank (ECB) has announced as of June 23rd, that it was declaring two Italian banks insolvent. Veneto Banca SpA and Banca Popolare di Vicenza SpA have failed since the two banks repeatedly violated the regulatory capital requirements. The determination was made in accordance with Article 18 (1a) and Article 18 (4a) of the Uniform Resolution Mechanism Regulation.
The European banking crisis continues.

This post was published at Armstrong Economics on Jun 24, 2017.

Four Reasons Central Banks are Wrong to Fight Deflation

The word ‘deflation’ can be defined in various ways. According to the most widely accepted definition today, deflation is a sustained decrease of the price level. Older authors have often used the expression ‘deflation’ to denote a decreasing money supply, and some contemporary authors use it to characterize a decrease of the inflation rate. All of these definitions are acceptable, depending on the purpose of the analysis. None of them, however, lends itself to justifying an artificial increase of the money supply.
The harmful character of deflation is today one of the sacred dogmas of monetary policy. The champions of the fight against deflation usually present six arguments to make their case.1 One, in their eyes it is a matter of historical experience that deflation has negative repercussions on aggregate production and, therefore, on the standard of living. To explain this presumed historical record, they hold, two, that deflation incites the market participants to postpone buying because they speculate on ever lower prices. Furthermore, they consider, three, that a declining price level makes it more difficult to service debts contracted at a higher price level in the past. These difficulties threaten to entail, four, a crisis within the banking industry and thus a dramatic curtailment of credit. Five, they claim that deflation in conjunction with ‘sticky prices’ results in unemployment. And finally, six, they consider that deflation might reduce nominal interest rates to such an extent that a monetary policy of ‘cheap money,’ to stimulate employment and production, would no longer be possible, because the interest rate cannot be decreased below zero.

This post was published at Ludwig von Mises Institute on 06/22/2017.

Ted Butler Quote of the Day 06-24-17

In silver, I don’t think the actual reduction in this week’s total commercial net short position

should be the main focus. Instead, I think the focus should be on the price action, in that the price decline over the past two reporting weeks has been so deliberately orchestrated so as to signal that we are very close to an important price bottom in silver, almost regardless of what the COT report indicates. I say this knowing full well that silver is the most rigged market of all and one should never underestimate the manipulative power of JP Morgan and the other COMEX commercial crooks in that new price lows can be created at will. Just to be clear, the market structure is now exceedingly bullish in silver and will only get more bullish on any further price weakness.

A small excerpt from Ted Butler’s subscription letter on 21 June 2017.

  More precious metals news & information available at
Ed Steer’s Gold & Silver Digest.

A Rigged Game — Ted Butler

There’s no question that the silver market is the most rigged game in the world because no one would be able to establish a more perfect trading record than what JP Morgan and a few other big shorts have achieved. The only question is what can and will be done to end it. In time, the charade will become clear enough to a sufficient number of people, including the victimized technical funds, to bring changes to interrupt the perfect trading record of the big shorts – knowledge is power and all that.
I still believe a quicker route to end the silver scam could come at the hands of the regulators, including the CFTC’s new Enforcement Director, James McDonald. I don’t think there’s any chance that the agency will ever find JP Morgan guilty of manipulating the price of silver (as this crooked bank sorely deserves) for the simple reason that such an action would leave JP Morgan open to an unlimited number of lawsuits; enough to sink what is thought to be an unsinkable ship. No government agency would ever do that. But that doesn’t mean the regulators are helpless, either.

This post was published at Silverseek