World Gold Council Rectifies 2013 Chinese Gold Demand

Jon

The WGC has revised its estimate of China’s 2013 consumer demand to 1,275 tonnes, up from their initial estimate of 1,066 tonnes.
My research on the Shanghai Gold Exchange and the structure of the Chinese gold market was, inter alia, confirmed in September this year by the work of Na Liu (CNC Asset Management Ltd.). As myself Na concluded Chinese wholesale gold demand equals withdrawals from the Shanghai Gold Exchange and this is far greater than demand reported by the World Gold Council.
The World Gold Council (WGC) has never openly responded to my publications. However, Na met with the WGC Market Intelligence team, the discussion that ensued led the WGC to rectify their 2013 Chinese demand numbers. From CNC Asset Management, November 27 2014:
We are pleased to report that we just had an in-depth discussion with the Market Intelligence team of the World Gold Council (WGC). Our discussion focuses on how to explain the significant gap between China’s consumer demand of gold, as defined and reported by the WGC to be just over 1,000 tonnes in 2013, and China’s wholesale demand, as defined and reported by us to be about 2,200 tonnes based on the Shanghai Gold Exchange (SGE) vault withdrawals during 2013. The following are our takeaways from the discussion:
First, the WGC has revised up its estimate of China’s 2013 consumer demand to 1,275 tonnes, up from their initial estimate of 1,066 tonnes.

This post was published at Bullion Star on 4 Dec 2014.

US Adds 321K Jobs In November, Most Since 2012, Unemployment Rate Remains At 5.8%

Jon

If the Fed needed a flashing red light that the time for a first rate hike is overdue, it just got it moments ago when the BLS reported that in November some 321K jobs were added, a 4 sigma beat to the 230K expected, and well above the revised 243K in October. In fact, this was the biggest monthly jobs addition since January 2012!

From the report:
Total nonfarm payroll employment rose by 321,000 in November, compared with an average monthly gain of 224,000 over the prior 12 months. In November, job growth was widespread, led by gains in professional and business services, retail trade, health care, and manufacturing. (See table B-1.)
Employment in professional and business services increased by 86,000 in November, compared with an average gain of 57,000 per month over the prior 12 months. Within the industry, accounting and bookkeeping services added 16,000 jobs in November. Employment continued to trend up in temporary help services ( 23,000), management and technical consulting services ( 7,000), computer systems design and related services ( 7,000), and architectural and engineering services ( 5,000).

This post was published at Zero Hedge on 12/05/2014.

Free Access To the Sharelynx Chart Vaults of Data Wrangler Nick Laird For One Week

Jon

Nick Laird has decided to have an open house for the subscription side of his site and unique collection of data and charts to visitors. One week free access to Sharelynx’s Gold and Silver Charts. Over 10,000 charts about the precious metals. If you get a little lost in there at first don’t worry. It always seems like Ali Baba’s cave to me. You have to look around.

This post was published at Jesses Crossroads Cafe on 04 DECEMBER 2014.

Commodities and the dollar

Jon

Each commodity market has its own story to tell: oil prices are falling because OPEC can’t agree production cuts, steel faces a glut from overcapacity, and even the price of maize has fallen, presumably because of good harvests. In local currencies this is not so much the case. Of course, the difference between prices in local currencies and prices in US dollars is reflected in the weakness of most currencies against the dollar in the foreign exchange markets. This tells us that whatever is happening in each individual commodity and in each individual currency the common factor is the US dollar.
This is obvious perhaps, but the fall in commodity prices and the rise in the US dollar have to be seen in context. We should note that for most of the global population, the concern that we are facing global deflation (by which is commonly meant falling prices) is not yet true. Nor is a conclusion that the fall in the oil price indicates a sudden collapse in demand for energy. When the dollar price of oil began to slide, so did the exchange rates for all the other major currencies, confirming a significant part of oil’s price move came from dollar strength, which would have also been true of commodity prices generally.

This post was published at GoldMoney on 05 December 2014.

“Good News Is Bad News” Payrolls Reaction: Stocks Stumble, Bonds & Bullion Bashed As USD Surges

Jon

After an initial “good news is bad news” kneejerk lower in stocks, USD strength (and thus JPY weakness) is providing the ammo to ‘prove’ this is good news, but problematically the bounce is fading (of course, there’s a long way and a lot more VIX to sell to manage this narrative green). Oil is up modestly (growth?). Treasury yields are surging (10Y 7bps) and gold and silver and sliding…
USD & Treasury yields UP, Stocks and Gold DOWN

This post was published at Zero Hedge on 12/05/2014.

Cut in India’s gold import duty unlikely before Budget

Jon

Any revision in gold import duty is unlikely to take place before the Budget and there is no proposal as of now to reduce the 10 per duty, a finance ministry official said.
"On import duty (on gold) there is no decision at the moment. Import duty whatever has to be done will form part of the budget. At the moment there is no proposal to reduce import duty on gold," the official said.
There has been widespread expectations of reduction in customs duty on gold due to the improved current account deficit situation. The Commerce Ministry has also been pitching for a cut in import duty on the precious metal.

This post was published at India Times

Hands Up Don’t Shoot Big Lie, US $18 Trillion Debt, Lawsuits Against Obama’s Immigration Order

Jon

The following video was published by Greg Hunter on Dec 4, 2014
It appears the MSM wants to develop a race problem in America. I guess that saying from Joseph Goebbels (WWII Germany) about telling a lie big enough, and to say it long enough, the people will believe it. I wonder if this is why USA Today put this picture on the front page of its newspaper. ‘Hands up, don’t shoot’ did not happen, but USA Today spin doctors put it up without dispelling the myth.
The US is also $18 trillion in debt. It is an economic fact that countries with more debt than GDP suffer financially. Gregory Mannarino told me that the US dollar is in ‘terminal decline.’ You know what that means? Big inflation is coming. In more dreadful US financial news, the Treasury just printed up a fresh $1 trillion to soak up debt that was coming due. This is printing new money to pay off old debt. That’s like paying off one credit card with a new credit card. What could go wrong?
Finally, North Carolina is joining 17 other states in suing President Obama for recently granting amnesty to 5 million illegal immigrants. The White House says it’s just not going to enforce the law, and it will not deport these folks. It’s not that simple. The states’ lawsuits say the President’s executive order, in effect, granted these folks rights and benefits. The states say that they will be forced to pay for it, and it is totally unconstitutional.

Painless Failures

Jon

The River of No Returns E-commerce giant Amazon.com has raised $6 billion in debt financing. Investors readily throw their money into the River of No Returns.
Lenders are demanding a yield of 3.8% for Amazon’s 10-year bonds. That’s 150 basis points over the US Treasury’s 10-year borrowing costs. (A basis point is 1/100th of one percentage point.)
Amazon’s bond buyers worry neither about the return on their money nor the return of their money.
Holders of the company’s stock are even more sans souci. If you look up Amazon’s P/E ratio, you’ll find it listed as N/A – for ‘non-applicable.’ That’s because the company is losing money.
After 20 years, Jeff Bezos’s online marketplace has never learned how to make a profit. The last quarterly report showed it with losses of about $1 a share – or about $2.50 on every hundred dollars of sales.

Photo credit: Amazon.com

This post was published at Acting-Man on December 5, 2014.

Freefalling Yen Levitates Equities Around The World

Jon

Confused why in the lack of any horrible economic news (unless of course someone leaked a worse than expected November payrolls print which would put QE4 right back on the table) futures are higher, especially in the aftermath of yesterday’s disappointing ECB conference? Then look no further than the Yen which has now lost pretty much all control and is in freeplunge mode, rising some 25 pips moments ago on no news, but merely as wave after wave of momentum ignition algos now make a joke of the Japanese currency, whose “Panic Premium” line of 123 (as defined by SocGen) is now just 240 pips away. At this pace, Japan’s economy, which as reported yesterday has just seen a record number of corporate bankruptcies due to the plummeting yen, may well be dead some time next week. Which, with Paul Krugman as its new and improved economic advisor, is precisely as expected. RIP Japan.
The other main focus of today’s session stems from yesterday’s after-market ECB source report which suggested that the ECB are said to prepare broad based QE package in January. This, in addition to the freefalling yen, has helped equities to rebound (Euro Stoxx 1.4%) with out-performance in peripheral equities and fixed income products with peripheral spreads tighter to the German benchmark. Oddly enough, when Draghi spoke yesterday, the market’s reaction was diametrically opposite: one wonders how many BIS trading desks were need to turn sentiment around by 180 degrees. Both ECB’s Weidmann and Nowotny have been on the wires this morning, with Weidmann providing his usual hawkish stance and as such failing to move the market, while Nowotny modestly deviated from his usual hawkish stance by saying that he agrees with Draghi’s stance with regards to QE.
In FX markets, USD/JPY has been buoyed by stronger equities making a firm break of 120 trading at its highest levels since 2007. Polls also suggest that Japan’s LDP party may take a super majority which would further help the Abenomics QQE campaign. EUR/USD has traded sideways and GBP/USD has retraced its overnight losses.

This post was published at Zero Hedge on 12/05/2014.

What Wall Street Expects From Today’s Payrolls Number

Jon

Here is the bogey for today’s NFP number, which consensus expects will print at 230K (on a 300K whisper number), leading to a 5.8% unemployment rate, as some 93 million Americans – driven by millions of Millennials – continue to languish outside of the labor force.
JP Morgan 200K Goldman Sachs 220K Citigroup 225K HSBC 230K UBS 230K Credit Suisse 235K Morgan Stanley 235K Deutsche Bank 250K The full preview of today’s NFP report courtesy of RanSquawk:
US Change in Nonfarm Payrolls (Nov) M/M Exp. 230K (Low 140K, High 306K), Prev. 214K, Sep 256K US Unemployment Rate (Nov) M/M Exp. 5.8% (Low 5.6%, High 5.9%), Prev. 5.8%, Sep 5.9% US Average Hourly Earnings (Nov) M/M Exp. 0.2% (Low 0.2%, High 0.4%), Prev. 0.1%, Sep 0.0% Friday’s NFP report is again expected to show strong growth with most analysts expecting the US to have created over 200K jobs during November. Recent employment data has supported expectations of strong growth, although the weekly jobless data has showed some sign of cooling heading into the holiday period. Throughout November, more Americans had filed applications for unemployment benefits and Initial Jobless Claims crept back above 300K, however Thursday’s reading decreased below 300K again and the 4-week average remains near its lowest levels since 2000. This week’s ADP employment report came in marginally below expectations but the trend of strong employment gains continued with the number at 208K. Other employment indicators have been positive with the employment component in the ISM Manufacturing and Non-Manufacturing readings both firmly above the key 50 threshold, despite falling from the previous month.

This post was published at Zero Hedge on 12/05/2014.

Gold & Silver in the blockchain

Jon

Precious metals and digital money platform, Digital Tangible has partnered with Agora Commodities to allow gold and silver to be stored and verified on the Bitcoin Blockchain.
Digital Tangible, which manages the world’s first Bitcoin precious metals trading platform, has developed Bitcoin 2.0 tokens that are verifiable on the Blockchain and allow investors to now buy and sell silver in addition to gold bullion.
With the integration of verifiable tokens, millions of buyers can now use these digital assets to trade and invest in bullion in real-time. This makes gold and silver now available to anyone anywhere in the world using the Bitcoin network.
Thanks to a promotions agreement between DigitalTangible and Agora Commodities, buyers will be able to purchase select bullion products at wholesale pricing until the end of 2014; paying the lowest price available for physical gold and silver.

This post was published at TruthinGold on December 5, 2014.

Let the serfs pay their rent: Rental income held steady from 2000 t

Jon

Being a landlord is no easy task. In the long run owning a rental property can be a nice addition to your investment portfolio but there is nothing sexy about it. Many small time landlords only start to see the benefits many years into holding the property. For the most part, this is why Wall Street and large hedge funds have avoided owning single family homes in their portfolios. That of course changed in 2007 when the market went into full on implosion mode and the mantra of the day was ‘chase yield anywhere you can find it.’ There is this odd notion that somehow all the great deals went to other families that timed the market perfectly. The excellent deals of 2008 to 2011 were happening at a time when the economy was in crisis mode. Some of the best deals to be had were done via auctions and you needed to have a cashier’s check to play so many regular people had no access to this. 7 million foreclosures and many of these are now in the hands of investors. The homeownership rate is a clear indication of this. It should also be no surprise that we’ve added 7 million renting households. How big of a change have we seen? Rental income which held steady between 2000 and 2007 at roughly $200 billion per year is now up 240 percent coming in at $640 billion. Since few people actually own rentals, this is money flowing into a concentrated group.
Send those rent checks in
How many people in the US actually own rental property? The figures are hard to get but the number is very low. The Fed does an extensive survey on consumer finances and found that in 2013, roughly 13 percent of families had another property outside of their primary residence compared to nearly 50 percent that have some money in retirement funds. Keep in mind however, that this number includes vacation homes so these are not all rentals.
First let us look at the number of households with other real estate besides their own property:

This post was published at Doctor Housing Bubble on December 4th, 2014.

The Ultima Ratio of Central Banking Socialism

Jon

Social Engineers Pleading for Helicopter Money Apparently the mainstream government propaganda organs are on a mission to spread the worst economic ideas possible, so as to bring down what little is left of the free market economy even faster. Recently they are employing an ages old trick: promise people they will get something for ‘free’.
The latest author to take up the baton is one aptly named Vincent Crook at Bloomberg (anyone who has followed the Bloomberg editorial line in recent years should by now be aware that it is an even worse socialistic and statist rag than the Financial Times. The latter at least allows opposing voices to have an occasional say).
Mr. Crook has graced us with a screed entitled: ‘ECB Should Fire Up Its Helicopters’.
The ideas presented in this article are nothing new. Faced with the failure of the post 2008 money printing orgy to bring about any lasting economic improvement thus far – instead, only even bigger, arguably more dangerous asset bubbles have been blown – various economists have proposed that central banks should print yet more money, but instead of buying securities from troubled banks, they should simply send everyone a check (the aforementioned ‘for free’ carrot, a.k.a. ‘helicopter money’). This is usually accompanied by an appeal to authority in the form of the late Milton Friedman who coined the term. Leave it to our modern-day social engineers to dig up the man’s very worst ideas and declare them holy writ.
We already discussed in some detail why the idea is appalling economic nonsense and would be extremely dangerous for Europe’s economy if it were actually implemented (see ‘A Flawed Analysis of What Ails the Economy’ for details). Below are a few excerpts from Mr. Crook’s article with our comments interspersed. He starts out with the usual nonsensical pablum about the alleged ‘danger of deflation’:

This post was published at Acting-Man on December 4, 2014.

Gold Daily and Silver Weekly Charts – Come As You Are

Jon

“But now, in this century of ideologies, the Gods and Destiny have been given new life. ‘Miracles in the world are many,’ Sophocles wrote in the fifth century BC. ‘There is no greater miracle than man.’
Suddenly, at the end of the twentieth century, we discover that no, after all, it isn’t true. Historical inevitability is a greater miracle than man. As is the dialectic. As is the superiority of various groups according to blood type. As is the genius of an abstract mechanism called the market. As is the leadership of inanimate objects – called technology – which worker bees create and then, inevitably, are led by.
These inevitabilities are great leaps backward into the arms of the Gods and Destiny.”
John Ralston Saul
It’s funny but I remember translating that line above from Sophocles as an undergraduate in college. ‘Many are the wonders, but nothing more filled with wonders than man.’
We are much worse than ancient cultures with their superstitions. We are granted enormous amounts of data, with more knowledge of the workings of the universe and nature than any other generations, and we cannot see ‘the big picture’ as well as they might, substituting our own myths and legends of ourselves and our marvelous exceptionalism, while ignoring the greatest forces of God and Nature.
We dissipate, relentless in our doom, to glare at photons, gaping in the light.
Non-Farm Payrolls report tomorrow.

This post was published at Jesses Crossroads Cafe on 04 DECEMBER 2014.

OK, I Get it, the Japanese Government Bond Market Is Dead. And the Yen?

Jon

‘Japan Government Bonds Rise as Market Shrugs Off Downgrade,’ the Wall Street Journal headline said with some astonishment after Moody’s had dared to downgrade Japan’s credit rating to A1 – fifth notch from the top. But there was a big assumption in the headline: that there’s still a market for Japanese Government Bonds.
The last time Moody’s had downgraded Japan was in August, 2011. At the time, JGBs yielded 1.02%; the market was, as the media put it with its usual astonishment, ‘unfazed’ by the downgrade. Since then, every metric of the country’s fiscal health has sharply deteriorated, leading to an ever larger mountain of government debt. Yet the government’s cost of borrowing has dropped to near zero.
This time, Moody’s reasons for the downgrade include the ‘heightened uncertainty over the achievability of fiscal deficit reduction goals,’ along with the swoon of the economy, which raises doubts about the ‘timing and effectiveness of growth enhancing policy measures.’
Presumably, when sovereign bonds get downgraded, their value should fall and their yields should rise as investors suddenly see the additional risks and the overall crappiness of the paper.
Yet the opposite happened. JGBs rose and yields edged down. The 10-year yield wobbled to a ludicrously low 0.41% by Wednesday before edging up again to 0.43% today. The five-year yield hit a new all-time low of 0.07% by Wednesday before ticking up a smidgen to 0.08% today. At these rates, the government can borrow for essentially free. And if inflation is considered – 2.9% overall and 4% on goods – it’s actually making money by borrowing money.
But why the heck would market participants accept a guaranteed loss after inflation on these risky bonds?

This post was published at Wolf Street on December 4, 2014.

‘Near Perfect’ Indicator That Precedes Almost Every Stock Market Correction Is Flashing A Warning Signal

Jon

Are we about to see U. S. stocks take a significant tumble? If you are looking for a ‘canary in the coal mine’ for the U. S. stock market, just look at high yield bonds. In recent years, almost every single time junk bonds have declined substantially there has been a notable stock market correction as well. And right now high yield bonds are steadily moving lower. The biggest reason for this is falling oil prices. As I wrote about the other day, energy companies now account for about 20 percent of the high yield bond market. As the price of oil falls, investors are understandably becoming concerned about the future prospects of those companies and are dumping their bonds. What is happening cannot be described as a ‘crash’ just yet, but there has been a pretty sizable decline for junk bonds over the past month. And as I noted above, junk bonds and stocks usually move in tandem. In fact, junk bonds usually start falling before stocks do. So does the decline in high yield bonds that we are witnessing at the moment indicate that we are on the verge of a significant stock market correction?
That is a question that CNBC asked in a recent article entitled ‘Near perfect sell signal says stocks should drop’…
The S&P 500 and the iShares iBoxx High Yield Corporate Bond ETF are a mirror image since the start of the year, but since the end of October, high yield has diverged to the lower right, and yet the S&P 500 has continued to record highs. Since separating in October, the S&P 500 is up 3 percent, while the high-yield ETF is down 4 percent.
On 10 occasions since 2007, the high-yield ETF dropped 5 percent in 30 trading days. During nine of those instances, the S&P 500 fell as well, with an average return of negative 9 percent, according to CNBC analysis using Kensho.

This post was published at The Economic Collapse Blog on December 4th, 2014.

Could Gold Surprise Us All?

Jon

Let us be honest here for a second. Almost every Wall Street Strategists has been expecting Gold below $1,100 this year and even below $1,000 next year. Every trade has been positioning for the breakdown below the all important support level of around $1,200 per ounce and gross shorts are currently at very high levels. Every media outlet from Bloomberg to CNBC has been talking about how much of a poor investment Gold has been. Many sentiment surveys, including the Daily Sentiment Index, reached record low levels on the recent decline. Even I have been expecting prices towards a $1,000 physiologically important support level.

This post was published at GoldSilverWorlds on Dec 4, 2014.

You Know It’s A Bubble When…

Jon

Because nothing says rational equity markets like a 16-year-old penny-stock-day-trader who turned $10,000 into $300,000 this year…
Meet Connor Bruggermann – the new normal ‘investor’…

The son of a former vice president at JP Morgan who worked on the floor of the New York Stock Exchange, 16-year-old Connor Bruggermann could well be the poster-child for what the Fed has wrought on the American public.
As The Verge reports, while his dad warned that with penny stocks “you could make money or lose money very, very quickly,” Bruggemann, on the other hand, embraced the chaos. For Bruggemann, as for many others, penny stocks were another outlet for that risky reward seeking. “There is a lot of fraud and manipulation, a lot of them are not legitimate companies,” he says. “It could be someone like you or I sitting here saying we have a $5 million deal with Panasonic, when in reality that’s not true.” According to the SEC, penny stock scams have surged over the last two years.
At home, in a room he shares with his older brother, Bruggemann has two monitors set up as a trading station. But most of the time, he tells me, “I prefer to trade on my phone.”
Risk management…?

This post was published at Zero Hedge on 12/04/2014.

SP 500 and NDX Futures Daily Charts – We Come In Peace

Jon

“The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology.”
Michael Parenti
“O Jerusalem, Jerusalem, who murders its prophets, and stones those sent to preserve her. How often I have wished to gather your children with me and keep them safe, as a hen gathers her brood under her wings. And you were not willing.”
Matt 23:37
If you see us coming, better run and hide.
We make a desert, and call it peace. And those chickenhawks are coming home to roost.

This post was published at Jesses Crossroads Cafe on 04 DECEMBER 2014.