Posted at 6:25 PM (CST) by & filed under General Editorial.

If one offered investors a fat tail put option that never decays or expires, costs about -1% pa to carry, has no counter party risk & no chance of ever becoming worthless, there would be a line out the door. But when one explains that this option is physical gold… no interest.

          S. Mikhailovich

Posted at 1:40 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill.

I thought you might like this.

Dave

Charts Suggest The Dow Index Is Being Painted To Get “New Highs” In The Market
July 12, 2019

By Pam Martens and Russ Martens

What we need today is a real life character like Vinny Gambini in the movie My Cousin Vinny to take over the questioning for the U.S. Senate Banking Committee – like Ferdinand Pecora did in the early 1930s to root out the systemic frauds in the stock market of that era. Gambini would haul the heads of equities trading for each of the major Wall Street banks and their Dark Pools to a hearing, put them under oath, and grill them about the highly suspicious trading activity that is going on in today’s markets.

Let’s start with what happened yesterday. In the face of punk earnings forecasts for the rest of this year and a growing global economic slowdown, the Dow Jones Industrial Average hit a historic milestone, closing above 27,000 for the first time. But the rising tide didn’t lift all boats: eight of the Dow’s 30 stock components closed in the red. Those stocks were Chevron, Verizon, McDonald’s, Apple, Travelers, Johnson and Johnson, Pfizer, and Merck.

There was something else that raises suspicious red flags to veteran chart watchers. A big spurt in some of the Dow stock components magically occurred in the final 15 minutes of trading, like some mystical, invisible hand had decided to levitate these share prices before the closing bell.

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Jim/Bill,

This from our friend at Shadow Stats.

Dave

The Permanent Recession
July 15, 2019

Via The Great Recession blog,

Oops. Worse than pathetic. Using consistent accounting through time, we discover we have actually been in receding GDP (recession) since 2000 with the exception of one little bump in 2004. We don’t want to admit that, so we we’ll just ignore that by saying we improved our accounting methods over time.

And that is why I say “It’s been a great recession” because we never actually left the Great Recession. Rather than the longest expansion in US history, we’ve been enduring the longest recessionin US history ever since the dot-com bust. The above chart shows the GDP growth rate, and the REAL GDP “growth” rate, which has actually been contraction, not growth, for the past two decades if measured by historic standards. So long as GDP is growing, (above 0 on the chart above), we’re in expansion. Whenever GDP is shrinking (below 0 on the chart above), we’re in recession.

So, when you see financial commentators writing or talking about “the longest expansion on record,” this month, translate that in light of this article. It is only the longest expansion on record if you change the way you calculate GDP from the way previous records were calculated. It’s sort of like saying, “This person ran the longest marathon in history,” but not mention that we’ve reduced the length of the kilometer or mile by which we measure marathons.

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Jim,

As you said years ago, countries are moving away from the dollar.

Dave

India & Russia Will Use Their National Currencies For Defense Deals To Bypass US Sanctions – Report
July 15, 2019

Russia and one of the biggest importers of its weapons, India, have decided to use their national currencies to transfer payments for massive defense deals in order to skirt possible US sanctions, according to Bloomberg.

Moscow and New Delhi have been boosting their arms trade in recent months, with Russia selling submarines, ships, tanks and jets to its Indian partners and set to supply S-400 air defense systems to the country. India’s procurement of S-400s, with a contract worth more than $5 billion, has triggered anger from one of the its largest trade partners, the US, which has warned India of possible consequences of the move.

The new payment method through the ruble and the rupee, agreed by the central banks of Russia and India, may avoid Washington’s sanctions threat. It would enable India to make the first payment for two warships built by Russia, Bloomberg said, citing sources. It is not clear what vessels were implicated in this, but last year the two parties inked a deal for four Russian guided-missile frigates for the Indian Navy, two of which are being built in Russia’s Kaliningrad region.

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Posted at 1:27 PM (CST) by & filed under Bill Holter.

Normally I do not respond to attacks but this one needs addressing. Jason Burack posted a YouTube video yesterday (listen at about the 10:30 mark) where he spoke my name in the same sentence with the words “lazy and dishonest”. He “laughed” at our recent interview with Greg Hunter because of my $87,000 per ounce math on gold, but at least he admitted he did not even bother to listen to the interview (lazy?). I spelled out the very simple math; if the current US (on books debt only) debt of $22.5 trillion were to be backed by current purportedly held national gold in US vaults of 260 million ounces, the result is roughly $87,000 per ounce. I say “purportedly” because there has been no audit since the 1950’s. I believe if the gold really is there AND unencumbered, we certainly would have had many audits advertising this…but we have not…and have not for a reason!

He then goes on to say that $87,000 per ounce gold would be a very scary and dystopian world where guns, ammo, and the ability to grow your own food will be at a premium … at least he understands high(er) gold prices do not mean happy days are here again! I did not listen to his entire interview but did hear just prior to where he attacked me, he said re China and their “$50 trillion debt bubble” that even if they had $trillions in gold…it would not help. Jason is making the same mistake that others often do when in essence he is claiming there is not enough gold. There IS enough gold to back all currency and all debt on the planet if gold were priced correctly. Would $87,000 per ounce do it? No, I do not believe it would but at that number, the US (if we actually have the gold?) would be able to settle current on books debt outstanding.

As an FYI to Mr. Burack, trying to put any $ number on gold cannot be done because we do not have enough information to plug in. We have no idea how much future money supply the Fed will be forced to create in order to prevent financial implosion. We also do not have any idea how much future debt the US Treasury will be forced to borrow to keep the lights on and try to keep life “normal”. Lastly and most importantly, we have no idea how much gold the US actually has. If the Treasury has no gold at all, would that not suggest a number of “infinity” which is the mirror image of zero? Trying to forecast any true gold price level is a mugs game because of lack of information. We can however do the math on what info we do have and come up with a minimum number as money supply and debt will assuredly not shrink and more gold held than claimed is highly unlikely…THAT NUMBER IS MULTIPLES OF CURRENT PRICE!

To finish, Jason, you as many others, correctly opine the current situation of too much debt and gross derivatives have created a financial bubble which is unsustainable. The aftermath of which will be very ugly. We have both suggested two separate avenues of financial protection. You suggest crypto currency while I suggest gold and silver. You suggest something non tangible with less than a 10 year track record while I suggest something tangible and a 5,000 year track record. If (when) “we” are correct and the credit bubble bursts, no doubt there will be societal upheaval to the point Mad Max is a very real potential. In a world of total chaos I would much prefer to rely on something tried and true for millennia rather than “hope” something new under the Sun will save my family! “Hoping” Mad Max is not the coming reality (and you personally have made a case it can be the reality) is not a plan, preparing for it is…

Lastly Jason, you do truly owe me a public and personal apology. I worked as a broker for 23 years, 12 of which as a branch manager. Never in all those years or since, retiring and leaving the country in late 2006 (good timing?) was I nor ANY of my brokers ever subject to any legal claim, arbitration or settlement. In today’s world, this is nearly an impossibility. While my wife might agree with you regarding lazy, you piss me off and slander me by speaking “my name and dishonest” in the same sentence. I (all of us) was born with only one thing, my good name. I plan to meet my creator with my name in as good stead as possible. I take this more seriously than anything else in my life and why it is best we don’t meet face to face!

 

Standing watch with elevated blood pressure,

 

Bill Holter

 

Holter-Sinclair collaboration

 

Posted at 7:55 AM (CST) by & filed under In The News.

J. Johnson’s Latest – Precious Metals Is The Best Insurance In A World Of Lost Confidence!
July 15, 2019

Great and Wonderful Monday Morning Folks,   

      We start the week off with a smile after watching some early trading pressure hit the markets right at the Sunday night open but later turned to the highs with Gold at $1,416.90, up $4.70 after reaching to $1,421.60 with the low at $1,411.20. Silver is Silver (stop screaming in the store your making a ruckus) with its trade at $15.345, up 10.9 cents with its high at $15.385 and the low at $15.185. The US Dollar is steady Eddie this morning trading at 96.45, up 2.6 points right smack in the middle of its range between 96.525 and 96.375. All this of course was done way before 5 am pst, the Comex open, and the London close.    

      Venezuela’s Bolivar now has Gold priced at 14,151.29, gaining 69.91 Bolivar over the weekend with Silver at 153.258 gaining 1.897 in Bolivar value. Argentina’s Peso now has Gold pegged at 58,901.14 proving a 103.52 Peso gain with Silver gaining 5.871 A-Pesos with the trade at 637.916. The Turkish Lira now has Gold priced at 8,081.72, showing a gain of 18.61 Lira with Silver at 87.5301 giving us a gain of .8698 in T-Lira value.   

      We have some trades in the July Silver Delivery month showing us a Volume of 4 up on the board with the Open Interest at 533 fully paid for contracts proving a drop of 17 with those spoof/ghost trades still showing up after the last trade was made in the delivery contract “equaling” each other (July and Sept) again at 24, 22, 14, 30, 29, 45, 50, 46, 47, within a blink with the trading range of the “4” purchases at $15.285 and $15.26 with the highest price being the last trade so far. This is not huge demand yet it still is evidence of purchasing at these prices and the waves of ghost trades that occur after. Silver’s Overall Open Interest fell a little over the last trading period with the count now in the early morning at 217,753 Overnighters proving a drop of 369 obligations during Friday’s positive ending.    

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Bill Holter’s Commentary

GATA’s Chris Powell is right on with this writing!  Please read it twice and understand what he is telling you because it’s the absolute truth…

Modern Monetary Theory Is Fact And Practice, And Market Rigging Is Its Consequence
July 14, 2019

Dear Friend of GATA and Gold:

Modern Monetary Theory, which has been getting much attention lately, is so controversial mainly because it is misunderstood.

It is misunderstood first because it is not a theory at all but a truism.

That is, MMT holds essentially that a government issuing a currency without a fixed link to a commodity like gold or silver is constrained in its currency issuance only by inflation and devaluation.

This is a very old observation in economics, going back centuries, even to the classical economist Adam Smith, and perhaps first formally acknowledged by the U.S. government with a speech given in 1945 by the president of the Federal Reserve Bank of New York, Beardsley Ruml. The speech was published in 1946:

http://home.hiwaay.net/~becraft/RUMLTAXES.html

Ruml said:

“The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. Two changes of the greatest consequence have occurred in the last 25 years which have substantially altered the position of the national state with respect to the financing of its current requirements.

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Bill Holter’s Commentary

Whether you believe in a Creator or not, this man is telling the truth when he says “if you take away religion, you can never hire enough police” to voluntarily follow the law.

Posted at 2:04 PM (CST) by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

Legendary geopolitical and financial analyst Martin Armstrong says America’s economy is like being “the prettiest ugly sister in the family” of nations. So, if the U.S. economy is so good, why the rush to cut interest rates? Armstrong explains, “It’s really the world economy which is in serious trouble. You really have to look closely and pay attention to the words (Fed Head) Powell said. The economy is strong, unemployment is fine. Why would you cut interest rates when the stock market is making record highs? Powell said basically because it was things happening outside the country. The Fed, as I have said before, has become the central bank for the world. . . . This is the problem, and Europe is a complete basket case. They don’t get it, and they keep trying to hold onto their power and punish anyone who disagrees with them. . . . Why is the U.S. economy so good? Why is the Dow at a record high? China is in trouble. Europe is in trouble. Japan is a basket case. The capital is coming here.”

Back in February, Armstrong pointed out in an interview on USAWatchdog.com, “Gold has been rallying right along with the U.S. stock market. This is what I’ve said all along. Eventually, towards the end, they have to align. Why? Because at that stage of the game, it’s us against government. So, tangible assets rise.”

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Posted at 12:07 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Maybe I am just old fashioned but I would suggest the University should be “investigated”, not the woman!

University Investigates Feminist Grad Student For Saying Men Can’t Become Women
July 12, 2019

Title IX office is involved

What are the odds a feminist graduate student could be under siege for feminist rhetoric on a California campus?

Under an intersectional framework and evolving definition of “woman,” much higher than you might expect.

University of California-Santa Barbara doctoral students, alumni and “allies” are demanding the administration take action against Laura Tanner, an outspoken critic of transgender ideology and doctoral candidate in its Department of Feminist Studies.

Tanner’s Twitter feed is dominated by discussion of transgender ideology’s threat to women, including young lesbians. She believes that transgender women – biological males – are wrongly appropriating a female identity.

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Bill Holter’s Commentary

I don’t get it? They fly the Mexican flag on US soil, why not just move to Mexico? Oh, that’s right, Mexico will put you in jail if you enter and stay in their country illegally…what a concept!

Crowds Will Protest Outside Aurora Immigrant Detention Facility July 12
July 11, 2019

A large protest set to take place Friday, July 12, from 7 to 9 p.m. outside the immigrant detention facility in Aurora is expected to draw more than a thousand people.

“We want to close down the detention center, and we want them to release these immigrants to their families or sponsors,” says protest organizer Patty Lampman. The facility in Aurora is run by private prison company GEO Group through a contract with Immigration and Customs Enforcement.

The demonstration is tied to a worldwide call to action known as Lights for Liberty; as of July 8, 626 Lights for Liberty protests have been planned across the globe, including hundreds in the U.S. and in at least 25 countries. At 9 p.m. at each location, protesters will simultaneously light candles or shine their cell phones.

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Bill Holter’s Commentary

Maybe more than any other current stupidity, people will look back upon the current era and negative interest rates and ask “what in world were they thinking”?

The Black Hole Engulfing the World’s Bond Markets
July 12, 2019

There’s a multitrillion-dollar black hole growing at the heart of the world’s financial markets. Negative-yielding debt — bonds worth less, not more, if held to maturity — is spreading to more corners of the bond universe, destroying potential returns for investors and turning the system as we know it on its head. Now that it looks like sub-zero bonds are here to stay, there’s even more hand-wringing about the effects for mom-and-pop savers, pensioners, investors, buyout firms and governments.

  1. Why invest in a bond that will lose you money?

Typically, bonds are the safest assets on the market, so many investors seek them out at times of heightened market stress, say a U.S.-China trade war or tensions in the Persian Gulf. A bond can have a modestly positive coupon when issued by a government, institution or company, but once it starts trading, high demand by investors can push its price up — and therefore its yield down — to such an extent that buyers no longer receive any payment. Some funds track government bond indexes, meaning they must buy the bonds regardless of the yield. And some investors can still make positive returns on these bonds when adjusted for currency swings.

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Posted at 10:57 AM (CST) by & filed under In The News.

J. Johnson’s Latest – Is Comex Spoofing the Precious Metals Deliveries?
July 12, 2019

Great and Wonderful Friday Morning Folks,    

     Yes Gold is positive and trading at $1,409.90, up $3.20 after reaching $1,414.20 in the overnight with the low starting point at $1,405.30. Silver is still the most boring trade on the planet and is being dragged along with its price at $15.155, up 9/10ths of a penny after reaching $15.205 with its starting point at $15.12. Even the US Dollar is stagnant with its value at 96.61, down 5.6 points after dipping down to 96.50 before the support mechanism came with the high at 96.735. All this activity being led by Gold, happened before 5 am pst, the Comex open, and the London close.    

     Venezuela’s issues may not be front page news anymore but here, we like to bury the hatchet, so we watch the currencies with this nations Bolivar now pricing Gold at 14,081.38 proving the currency rallied as Gold loses 120.85 in Bolivar value with Silver trading at 151.361 dropping 1.448 Bolivar. Argentina’s Peso, a far more volatile currency (since Venezuela cut off 4 digits to the left of the decimal) now has Gold pegged at 58,797.62 sending Gold down 712.56 Pesos with Silver now at 632.045 taking away almost all of yesterday’s explosive price moves losing 8.252 in A-Pesos value. The Turkish Lira has Gold trading at 8,063.11 showing a minor loss of 3.32 T-Lira with Silver at 86.6603 down .1242 in T-Lira value.  

     July Silver deliveries are chugging along, adding more questions to the fray than any other point, with the demands for physical now at 550 fully paid for contracts proving an additional 9 contracts being added during yesterday’s activities, still waiting for the docs to arrive, and with Zero Volume up on the board so far this morning. With no buy or sells in place, we have no trading range. Our Resolute Longs are getting noticed out there as Alasdair Macleod is using the Whale descriptor to characterize our long term buyer taking on the shorts with the Overall Open Interest in Silver now at 218,122 Overnighters, proving 460 short contracts exited the trade while we observed another anomaly during yesterday’s negative trade.    

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Posted at 9:02 AM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

If we had only a few hundred billion in debt, I would say a little bit of inflation would certainly help whittle that down.

Higher product prices mean higher tax revenues.

Higher wage costs mean higher tax revenues.

These higher revenues for the government would help alleviate the funding pain.

But, we are approaching $23 trillion in debt, with escalating spending and budget deficits to boot!

Add to the mix:

-Global move away from the Dollar as a                 reserve currency (lower Dollar = higher inflation)

-Global move away from funding U.S. Treasury debt.                      (eventually, soaring bond yields will make funding                     our debt impossible)

-Escalating trade wars (soaring domestic consumer                     prices with huge inflationary impact)

-Oil supplies placed at risk from escalating Mideast                     turmoil and threats of tanker blockades (soaring oil                     prices, which some analysts predict could surpass                     $300 bbl, will permeate every facet of our lives                     with massive inflationary impact)

Now we’ve got a scenario whereby the word “implosion” fits the bill.

Only HYPERINFLATION can resolve this problem.

Brace yourself for eventuality.

CIGA Wolfgang Rech

Here Come The China Tariffs: Core Inflation Hotter Than Expected, Headache For Powell
July 9, 2019

Having slowed and disappointed for the last two months, all eyes are on US consumer price index growth (which was expected to slow once again in June) this morning as the next Fed rate-cut narrative confirmation.

The problem for rate-cut-hopers is that the picture is mixed at best. Headline CPI slowed to +1.6% YoY (exactly as expected) – below The Fed’s mandated 2.0% ‘stability’ level; but core CPI rose 2.1% YoY (hotter than the expected 2.0%) and above The Fed’s 2 handle…

 

 

 

 

 

 

 

 

 

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WOW James, great common sense from a Fed nominee!

Bill

Bill,

I don’t know how well a gold standard would work for a welfare state, but maybe we would have fewer “shabby little secrets” as Greenspan spoke of long ago.  Judy Shelton’s write up today gives me goosebumps. It all crescendos into a grand thesis. “Across borders and through time.” I think I understand.

http://www.gata.org/node/19226

CIGA James

 

Jim/Bill,

POTUS: “When you see the Google executives, together, and one of their executives decides to… there he is, stand up please! How good… what a great job… He’s not controversial, he’s truthful. He’s truthful. That was a great job. That was one of many.”

JB

Posted at 8:58 AM (CST) by & filed under In The News.

J. Johnson’s Latest – The Resolute Longs Are Keeping the Board Game Tight
July 11, 2019

Great and Wonderful Thursday Morning Folks,    

      Gold is trading higher with the price at $1,422, up $9.50 after touching the high of $1,429.40 with the current price close to the low at $1,419.40. Silver is following along with the trade at $15.30, 8.3 cents higher than the Comex close and inside a tight trading range between $15.345 and $15.26.  The US Dollar took a 40 point hit during yesterday’s testimony with Jay Powell in front of the House of Representatives with the trade continuing downward with the current value pegged at 96.495, down 20.8 points and close to the low at 96.455 with the high at 96.695. All of this was done way before 5 am pst the Comex open, and the London close.    

      Venezuela’s Bolivar now has Gold priced at 14,202.23 giving us a gain of 250.69 Bolivar with Silver gaining 1.848 Bolivar with its price at 152.809. Argentina’s Peso now has Gold pegged at 59,510.18 as it too added 1,112.12 A-Pesos to the price with Silver adding 8.412 Pesos with the trade at 640.297. Turkey’s Lira has Gold priced at 8,066.34 putting an additional 39.51 Lira into its value with Silver now trading at 86.7845 adding only .0723 in T-Lira value.    

      The July Delivery demands for Silver are now showing the requests at 541 demands and with a Volume of 10 up on the board so far this morning. The count proves a drop in demands of 13 (delivered receipts or EFP’s to London) as we remain curious about the buyer and his real intentions. The trading range within the delivery month is in between $15.23 and $15.205 and with a buy order out there for an additional 57 lot at $15.20, with a single lot sell order at $15.215. This price variance is only a $75 addition to the entire 5,000 ounce purchase, why squabble over table scraps when the table itself is huge and holds all the value? Yesterday’s price rise proved the shorts had to add another 1,134 more paper contracts in order to stay the price as more and more buy orders popped up during the day as the Resolute Longs keep the board game tight with the total count now at 218,582 Overnighters, keeping the shorts up against the wall of deliveries with only one answer to the problem; much higher prices in order to slow demand. Still, the point of contention!     

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