I have been following the December Deliveries and posted the following on a Precious metals message board. I thought you might appreciate the potential situation right now on the COMEX that I see…
CIGA Liambert
COMEX DEC GOLD UPDATE:
Still 597K ounces outstanding in position to issue delivery (Tuesday Final).
109K ounces have stood for delivery so far (Including another 35K today), JP Morgan has been the long side on 90% of these ounces, so they are acquiring even more gold.
Outstanding registered gold in the warehouses increased from 590K to 655K. This increase is essential because, as discussed in another post, there wasn’t enough registered ounces to actually assign all the potential deliveries in December.
The shorts at the COMEX have or had a problem for sure. The problem is this – there is not enough registered gold to cover all the warrant transfers. That means shorts must be scrambling to find registered gold, or to find eligible gold they can transfer into register gold. IMO, this is indicated by how few of the outstanding futures have actually been issued for delivery after 3 days into the delivery period (~20%).
This problem does not mean that COMEX has no gold left, it means that there is so little left that it is starting to impact the basic issue for delivery process of COMEX during their biggest month. The cupboard is pretty bare of registered gold to satisfy the December party that is going on. Now, AFTER the issue for deliveries are executed (109K so far) and all the DEC warrants are transferred to the longs, IF these longs start pulling the gold out of the registered category, and the registered ounces drop way down, then I think we can say COMEX is in actual trouble – potentially having this problem again and again for ANY delivery month, not just the big December delivery month. But that is a big IF.
Dear CIGAs,
It’s time to fish. It’s time to buy – get your fishing lines ready…
Boston University Economics Professor, Laurence Kotlikoff, says, “The country is in worse fiscal shape by many miles than Detroit. So, the country is essentially bankrupt.” Dr. Kotlikoff estimates the long term debt and liabilities of America are more than $200 trillion! He is spearheading a bill in Congress called The Inform Act. It is an attempt to wake up the nation to our dire financial situation so something can be done to fix this enormous problem. Dr. Kotlikoff explains, “The bill has been endorsed by over 1,000 economists, including 15 Nobel Prize winners in economics . . .Never in the history of this country have this many top economists from all political persuasions endorsed a piece of legislation like this.” Dr. Kotlikoff and his fellow economists all contend, “The country needs to do honest accounting.” The professor charges the government is “disguising the true problem.” Dr. Kotlikoff says, “The government is printing mountains of money to pay its bills. The Fed is printing 29 cents of every dollar that Uncle Sam is spending.” What happens if this continues? Dr. Kotlikoff says, “Eventually somebody recognizes this and starts dumping the bonds, and interest rates go up, and inflation takes off, and were off to the races.” In closing, Dr. Kotlikoff warns, “This is going to crash, but there are different ways for cancer to kill you. It can be very gradual . . . or it can attack some organ and you can die overnight. Either of those outcomes can happen.” Join Greg Hunter as he goes One-on-One with Professor Laurence Kotlikoff.
Fed’s Williams: Only taper when sure economy on right track December 3, 2013, 6:10 PM
(This blog post has been updated to reflect the fact that Williams is not a voting member of the FOMC in 2013.)
The Federal Reserve should only taper when it is “completely confident” the economy is on the right track, said John Williams, the president of the San Francisco Federal Reserve Bank, on Tuesday.
In an interview with Reuters, Williams said when the Fed reaches that level of confidence, it should announce an end date and a total purchase total for the program.
The Fed began this third round of asset purchases — $85 billion a month in Treasurys and mortgage-related securities — in September 2012.
In the interview, Williams also said he was concerned that markets are not getting the Fed’s message that interest rates will stay low even after the Fed ends the asset purchase program.
Illinois Legislature approves historic fix for $100B pension crisis Published December 03, 2013
SPRINGFIELD, Ill. – The Illinois Legislature approved a historic plan Tuesday to eliminate the state’s $100 billion pension shortfall, with a vote that drew threats of a legal challenge from labor unions but that supporters said was crucial to repairing Illinois’ deeply troubled finances.
The House voted 62-53 in favor of the plan, sending it to Gov. Pat Quinn, who has said he will sign it. The Senate approved the measure 30-24 just minutes earlier.
"The message is this is not a one-sided bill. There will be changes here, much-needed changes, but this bill is a well thought out, well balanced bill that deserves the support of this body, the state Senate and the approval of Gov. Quinn," House Speaker Michael Madigan said at the start of the House debate. "Something’s got to be done. We can’t go on dedicating so much of our resources to this one sector of pensions."
Public employee unions, who oppose the bill, vowed to quickly take legal action. They say the legislation is unfair to workers and retirees who for years made faithful contributions to retirement systems but now will see benefits cut because of government mismanagement. They also argue parts of the measure are unconstitutional.
Illinois’ unfunded pension problem is considered the worst in the nation, primarily because lawmakers failed for decades to make the state’s full payments to the funds. The massive unfunded liability has led the major credit rating agencies to downgrade Illinois’ rating to the lowest of any state in the nation. It’s also siphoned money from education, roads and other areas.
This is too expensive for even the Treasury and Fed to manipulate trend wise. The game will play out right on this chart regardless of all the MOPE and gold manipulation.
80.668 -0.233 (-0.30% 2013-12-03 10:13:15, 30 MIN DELAY
Jim Sinclair’s Commentary
Q&A in Dubai.
China’s yuan surpasses euro as world’s second trade currency
SHANGHAI (AFP) – China’s yuan has overtaken the euro to become the second most-used currency in international trade finance, a global transaction services organisation said on Tuesday.
The market share of the yuan, also known as the renminbi (RMB), in traditional trade finance reached 8.66 per cent in October, surpassing the euro on 6.64 per cent, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) said in a statement.
Global trade remains utterly dominated by the US dollar, which it said had an 81.08 per cent share.
"The RMB is clearly a top currency for trade finance globally and even more so in Asia," said Franck de Praetere, Asia Pacific head of payments and trade markets for SWIFT.
QE to infinity as defined as the US dollar at .70 on the USDX and gold to $3200 to $3500.
US recession is nigh…and the Fed can’t stop it: SocGen’s Edwards Published: Thursday, 28 Nov 2013 | 2:53 AM ET By: Matt Clinch | Assistant Producer
The United States might be posting some promising growth data amid government shutdowns and debt ceiling debates, but Albert Edwards, Societe Generale’s uber-bearish strategist, has predicted a recession is coming for the world’s biggest economy.
"No-one expects a recession is around the corner, but in my experience, they never ever do," Edwards said in his latest note released late on Wednesday.
"The doomsayers who predicted that this recovery was on the verge of faltering have been proved wrong, and like the boy who cried wolf, can be safely ignored by the market. Yet that is exactly what happened in 2006 with the U.S. consumer and housing boom, where the voices of caution had been so wrong, for so long."
Edwards believes his "Ice Age" thesis – a series of economic cycles that deteriorate in ever decreasing circles – is nearing its final stages. With stocks and bond yields showing an inverse correlation, this recession would lead to an equity de-rating to even lower lows, he said.
The "key precursor" to this recession is slowing productivity growth in the U.S., he said. Non-farm business productivity growth in the third quarter was flat compared to the year before, the Labor Department said in mid-November. For many analysts this was a sign that the U.S. Federal Reserve would maintain its $85 billion-a-month bond buying program.
The decision by the Central Bank of China to no longer accumulate foreign exchange reserves in dollar has infuriated the United States, an analyst says.
Finian Cunningham made the remark in a Sunday column for Press TV amid escalation of tensions between US and China over Beijing’s enforcement of an Air Defense Identification Zone (ADIZ).
“The escalation of military tensions between Washington and Beijing in the East China Sea is superficially over China’s unilateral declaration of an air defense zone. But the real reason for Washington’s ire is the recent Chinese announcement that it is planning to reduce its holdings of the US dollar,” he wrote.
Cunningham said China “move to offload some of its 3.5 trillion in US dollar reserves” poses “a mortal threat to the American petrodollar and the entire American economy.”
“China – the second biggest economy in the world and a top importer of oil – has or is seeking oil trading arrangements with its major suppliers, including Russia, Saudi Arabia, Iran and Venezuela, which will involve the exchange of national currencies,” he wrote, warning that the development threatens “the petrodollar and its global reserve status.”
Detroit Eligible To File Chapter 9; Pension Haircuts Allowed Bankruptcy Judge Rules by Tyler Durden on 12/03/2013 10:53 -0500
Update, and it’s official:
JUDGE: DETROIT ELIGIBLE FOR IMMEDIATE BANKRUPTCY PROTECTION
DETROIT TO REMAIN UNDER BANKRUPTCY COURT PROTECTION, JUDGE SAYS
As somewhat expected – though hoped against by many Detroit union workers – Judge Steven Rhodes appears to have confirmed Detroit is eligible for bankruptcy protection (after pointing out that the city’s accounting was accurate and it is indeed insolvent) making this the largest ever muni bankruptcy.
JUDGE RHODES SAYS HE WILL ALLOW PENSION CUTS IN DETROIT’S BANKRUPTCY
DETROIT JUDGE: NOTHING SEPARATES PENSIONS FROM OTHER DEBT
The city will now begin working toward its next major move – the submission of a plan to re-adjust its more than $18 billion in debt – including significant haircuts for pension funds (possibly 16c on the dollar recovery) and bondholders. With Detroit as precedent, we can only imagine the torrent of other cities in trouble that will be willing to fold.
He did provide an "out" though:
RHODES WARNS THE CITY THAT JUST BECAUSE PENSION RIGHTS CAN BE IMPAIRED, DOESN’T MEAN HE WILL APPROVE A PLAN WITH STEEP CUTS
Via Bloomberg,
Before the bankruptcy, Orr proposed canceling $3.5 billion in future pension obligations and at least $1.4 billion in unsecured bonds. The debts would be replaced with a $2 billion note paying 1.5 percent interest.
In Praise Of Gold. Not A ‘Barbarous Relic’ But A Spiritual Value 11/30/2013 @ 11:55PM
Keynes sneered at it. Preachers damn it. Bitcoin dreams of transcending it. But free men inevitably choose it. Gold.
Whenever men have had a free, uncoerced choice of the medium of exchange, gold has won the competition, along with its sister element, silver.
Why? Only in recent times has gold had any utilitarian value. The Ancient Egyptians couldn’t use it in electronics, but they prized it anyway, as did the faraway Aztecs and the Chinese. Men in every place and time have valued gold.
Why? Of what use is gold? You can’t eat it
No, and you can’t eat a Rembrandt either. A Chopin Ballade is not something you can eat, drink, or ride around in.
It may surprise those who damn “the lust for gold,” to hear this but gold, like music and painting, is a spiritual value. The complaint “you can’t eat it” betrays a grossly materialistic view of value. Gold is a value because it is radiantly beautiful. It is the esthetic pleasure gold brings that makes men esteem it.
An appreciation of gold’s esthetic value is deepened by understanding what makes something beautiful–what beauty is.
This will take place all over Western world. It is already signed into law in Australia, New Zealand ,EU, England, Ireland and of course the good ole US OF A. Why do you think they are turning everything into police state with mass surveillance and laws that prohibit demonstrations?
CIGA David
Bail-Ins And Deposit Confiscation Confirmed At ‘Future Of Banking In Europe’ Conference December 3, 2013 By The Doc
A major conference on the future of banking yesterday heard contributions on a European banking union which is being negotiated by Eurozone finance ministers. One of the aspects of that union will be a ‘bail-in’ of deposits when banks fail in the future.Michael Noonan, Ireland’s Minister for Finance confirmed yesterday that bail-ins or deposit confiscation will be used.
Congratulations on your first board meeting! this will change the gold landscape once and for all. Thank you for all you do.
Travel safe, dear friend
BT
PS – We got 3-4 foot drifts here. Yikes! Glad I bought a snowblower last year for my 3pt on my tractor!
BT,
A tractor blower is the only machine to handle that.
Jim
Jim,
The powers that be appear insurmountable. I’m afraid things will not be as you thought , at least not for a considerable number of years.
CIGA Bob
Bob,
We had two 50% plus downside reactions in the gold price in the 1970 bull market and nothing stopped. $200 to $97 then to $887.50 and $887.50 to $450 then to $750. I got hundreds then of the same communications as yours.
This is the end of nothing in gold!
Jim
Jim,
The judge in the city of Detroit default hearing declared Detroit broke and that the city worker’s pensions are fair game for reduction like any other creditor.
One of the most highly respected fund managers in Singapore spoke with King World News about a stunning event that is about to completely alter the war on gold. Grant Williams, who is portfolio manager of the Vulpes Precious Metals Fund, also discussed how this war will ultimately end as well as what all of this means for investors in gold. Below is what Williams had to say in his powerful interview below.
Williams: “You have 5 banks that set the price of gold every day in London. They literally do it over the telephone. And this process takes anywhere from a few minutes to over an hour. Amazingly enough, in this day and age, during that ‘fixing’ time the participants on that call are allowed to trade the metal (gold) and they are allowed to trade derivatives on that metal during the phone call.
Today a former US Treasury Official warned King World News that the Chinese are positioning themselves to dominate the US. He also discussed the desperate situation the US now faces and what all of this means for the battered gold market. Below is what Dr. Paul Craig Roberts had to say in part I of this powerful interview series.
Dr. Roberts: “The United States economy is very ill. They (central planners) don’t have a solution. They are locked into printing money. If they try to stop quantitative easing they have to worry about the bond and the stock markets collapsing, and they have to worry about the balance sheet of the banks…
A new gold convertible currency. It will be interesting if this one get off the ground of gold phobic regulators.
Alderney looks to cash in on virtual Bitcoins with Royal Mint reality By Jane Wild November 29, 2013 9:35 pm
The tiny Channel Island of Alderney is launching an audacious bid to become the first jurisdiction to mint physical Bitcoins, amid a global race to capitalise on the booming virtual currency.
The three-mile long British crown dependency has been working on plans to issue physical Bitcoins in partnership with the UK’s Royal Mint since the summer, according to documents seen by the Financial Times.
It wants to launch itself as the first international centre for Bitcoin transactions by setting up a cluster of services that are compliant with anti-money laundering rules, including exchanges, payment services and a Bitcoin storage vault.
The special Bitcoin would be part of the Royal Mint’s commemorative collection, which includes limited edition coins and stamps that are normally bought by collectors. It would have a gold content – a figure of £500-worth has been proposed – so that holders could conceivably melt and sell the metal if the exchange value of the currency were to collapse.
The hype surrounding Bitcoin has escalated in recent months and its market value has rocketed; the price of a single Bitcoin hit a new peak of $1,242 on Friday on the Mt Gox exchange, established in Tokyo in 2009 as a trading card exchange.
German financial regulator BaFin has started an official investigation of suspected manipulation of benchmark gold and silver prices set by a number of international banks.
The information regarding the investigation was reported by the Wall Street Journal Deutschland. WSJ journalists got an official confirmation from a BaFin spokesman: "Apart from Libor and Euribor, BaFin is also looking into other benchmark setting procedures at individual banks such as for gold and silver prices."
During the last year, the biggest global banks have been found guilty of rigging benchmark lending rates and manipulating the world’s interest rates derivatives market, which involves trading in contracts that have a total notional value of tens of trillions of dollars.
It is not surprising that after finding out that banks rig Libor benchmark rates, Euribor benchmark rates, settlement values for currencies, and a number of reference prices in the energy sector, regulators suspect that the banks may manipulate the gold and silver markets.
The BaFin spokesman mentioned that the German regulator is not alone in its suspicions and that there are similar investigations taking place in the United Kingdom and the United States, without providing further details.
America’s Role as Consumer of Last Resort Goes Missing By Simon Kennedy – Dec 1, 2013 5:00 AM ET
Not long ago, before the financial crisis and the global recession it triggered, economists referred to Americans as the consumers of last resort. When the U.S. grew at a healthy pace, its citizens were buyers, fueling demand for the goods China (CNFREXPY) and other nations produced. They kept the world economy humming.
It may not work that way anymore, Bloomberg Markets magazine will report in its January issue. A rebounding U.S. is giving less support to global growth than in the past. Homegrown demand and production are more important drivers of the world’s biggest economy than they were a decade ago.
The smallest U.S. current-account deficit since 1999 shows the trend, and the discovery of new domestic sources of oil and gas reinforces it. Exploration and production are adding to growth, and the country is spending less on imported energy. Cheaper fuel and raw materials are boosting manufacturing as well, making the U.S. more of a competitor to emerging-markets nations and less a reliable consumer of their goods.
“Global growth is slowly becoming more of a zero-sum game,” says Manoj Pradhan, emerging-markets economist at Morgan Stanley in London and a former International Monetary Fund official. “U.S. growth is not reverting to the pre-crisis model, which created lift for everyone else.”
Greedy bankers STILL don’t get it: Bonus culture returns with a vengeance as, five years after the crash, 2,700 British bankers pocket an average of £1.6million -The figure make’s Britain’s financial elite the highest paid in Europe -These bankers also had pension packages worth at least £830,000 -Average workers saw wages rise by a minuscule 0.8 per cent last year -Flies in the face of the banks’ repeated claims they have scaled down pay By JAMES SALMON PUBLISHED: 16:17 EST, 29 November 2013 | UPDATED: 16:17 EST, 29 November 2013
The astonishing greed of bankers was laid bare last night as it was revealed their salaries soared by more than a third last year.
While the rest of the nation coped with an unprecedented squeeze on incomes, City workers were enjoying the high life, with the top 2,700 taking home an average of £1.6million each.
The figure – which makes Britain’s financial elite the highest paid in Europe – flies in the face of the banks’ repeated claims that they have scaled down enormous pay rewards in the wake of the financial crisis.
Last night there were claims that the sector had learned nothing from the greatest financial crash for decades – a crisis that their own greed and incompetence was in part to blame for.
The figures also follow a string of scandals at the country’s lenders over mis-selling, failing to help struggling small businesses, and rigging lending rates. Campaigners said that while City salaries have soared, ordinary families are still facing the worst squeeze on household income in living memory.
Chart Of The Day: The Fed Now Owns One Third Of The Entire US Bond Market Tyler Durden on 12/02/2013 14:17 -0500
The most important chart that nobody at the Fed seems to pay any attention to, and certainly none of the economists who urge the Fed to accelerate its monetization of Treasury paper, is shown below: it shows the Fed’s total holdings of the entire bond market expressed in 10 Year equivalents (because as a reminder to the Krugmans and Bullards of the world a 3 Year is not the same as a 30 Year). As we, and the TBAC, have been pounding the table over the past year (here, here and here as a sample), the amount of securities that the Fed can absorb without crushing the liquidity in the "deepest" bond market in the world is rapidly declining, and specifically now that the Fed has refused to taper, it is absorbing over 0.3% of all Ten Year Equivalents, also known as "High Quality Collateral", from the private sector every week. The total number as per the most recent weekly update is now a whopping 33.18%, up from 32.85% the week before. Or, said otherwise, the Fed now owns a third of the entire US bond market.
At this pace, assuming Janet Yellen keeps delaying the taper again and again over fears of how "tighter" financial conditions would get, even as gross US bond issuance declines in line with the decline in deficit funding needs, the Fed will own just shy of half the entire bond market on December 31, 2014… and all of it some time in 2018.
