Jim Sinclair’s Commentary
Courtesy of John Williams.
– Estimated Headline U.3 Unemployment Rates: 7.3% in September, 7.6% in October, versus August Actual of 7.3%
– Estimated Headline Payroll Changes, or Jobs Gains/Losses: 181,000 Gain in September, 430,000 Loss in October, versus August Gain of 169,000
– Consumer Credit and Sentiment Show Deteriorating Consumer Liquidity Circumstances
"No. 564: Government Negotiations, Labor Conditions, Consumer Credit and Sentiment "
European Central Bank Gold Sales Lowest Since 1999 Accord
By Claudia Carpenter – Oct 10, 2013 7:53 AM ET
European central banks sold 5.1 metric tons of gold in the fourth year of an accord that originated in 1999, the lowest on record, according to data from the World Gold Council.
Germany sold 5 tons and an unidentified bank disposed 0.1 ton in the year through Sept. 26, the cpuncil, a London-based producer-funded group, said in a report on its website. That’s the lowest annual total since European central banks agreed to limit sales in September 1999. Germany’s Bundesbank sells a small amount each year to mint coins.
Central banks, which own 18 percent of all the gold ever mined, will add as much as 350 tons valued at about $15 billion this year, the council estimates. They purchased 535 tons in 2012, the most since 1964. Gold fell to a 20-year low in August 1999 as Switzerland, Netherlands, Austria and U.K. prepared to sell gold. Gold rose from 2001 through 2012.
“Back in the early 2000’s, this agreement was seen as a real key support for the market,” said Matthew Turner, an analyst at Macquarie Group Ltd. in London. “Now it seems a bit superfluous.”
Gold, which entered a bear market in April, slid 22 percent this year to $1,302.80 an ounce by 12:28 p.m. in London. The metal set a record $1,921.15 an ounce in September 2011.
Jim Sinclair’s Commentary
As and will the US Federal Reserve.
Kuroda Says BOJ Prepared to Do What’s Necessary on Deflation
By Caroline Salas Gage – Oct 10, 2013 10:51 AM ET
Bank of Japan Governor Haruhiko Kuroda said the bank will do what is necessary to defeat deflation, while declining to discuss specific additional measures it might take.
The bank’s asset-purchase program has “been exerting its intended effect, which is quite encouraging,” Kuroda said at the Council on Foreign Relations in New York. “By continuing to pursue” this policy, he said, “we are convinced that we will definitely overcome deflation.”
Japan’s benchmark Nikkei 225 Stock Average has gained 37 percent this year through today as a weakening yen helped boost profits of exporters from Toyota Motor Corp. to Sony Corp.
“The economy is on track,” Kuroda said. “The real economy, prices and expectations — all of them are improving as we intended.” Kuroda said he expects wages to start to rise next year, and an increase in the sales tax to 8 percent from 5 percent starting in April won’t hamper growth.
It would be “premature” to speculate what additional stimulus steps the central bank could take if the economy faltered, Kuroda said. “At this stage, the economy is on track and everything is going on as we intended so I don’t think it’s appropriate for me” to speculate, he said.
Kuroda said the central bank’s policies aren’t aimed at weakening the yen and are trying to boost the domestic economy. “We do not target exchange rates,” he said.
Yuan moves one step closer to global currency status
Published: Thursday, 10 Oct 2013 | 8:33 AM ET
By: Katy Barnato | Associate Producer, CNBC.com
China launched a currency swap deal with the euro zone on Thursday, in the country’s latest push to transform the yuan into a major world currency.
The foreign exchange (FX) swap — an agreement to exchange one currency for another at a set rate at a certain time in the future — will have a maximum size of 350 billion yuan ($57.2 billion) and 45 billion euros ($60.9 billion) and will be valid for three years.
"From the perspective of the euro system, the swap arrangement is intended to serve as a backstop liquidity facility and to reassure euro area banks of the continuous provision of Chinese yuan," said the European Central Bank in a news release.
Benefits of FX swap agreements include improving liquidity for currencies outside the domestic market, helping ensure the stability of financial markets. Plus, there has been a strong growth in China-European trade and investment flows, with Europe as a whole accounting for 14 percent of China trade last year.
The euro zone deal is the latest in a series of currency swaps China has signed this year and last. Recent major pacts include one struck with the U.K. in June, with a maximum value of 200 billion yuan.
"Stop Logic" Gold Slam Was So Furious It Shut Down CME Trading Again
Submitted by Tyler Durden on 10/11/2013 09:49 -0400
It was precisely a month ago when, in "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds" we wrote:
There was a time when, if selling a sizable amount of a security, one tried to get the best execution price and not alert the buyers comprising the bid stack that there is (substantial) volume for sale. Of course, there was and always has been a time when one tried to manipulate prices by slamming the bid until it was fully taken out, usually just before close of trading, an illegal practice known as "banging the close."It appears that when it comes to gold, the former is long gone history, and the latter is perfectly legal. As the two charts below from Nanex demonstrate, overnight just before 3 am Eastern, a block of just 2000 GC gold futures contracts slammed the price of gold, on no news as usual, sending it lower by $10/oz. However, that is not new: such slamdowns happen every day in the gold market, and the CFTC constantly turns a blind eye. What was different about last night’s slam however, is that this time whoever was doing the forced, manipulation selling, just happened to also break the market. Indeed: following the hit, the entire gold market was NASDARKed for 20 seconds after a circuit breaker halted trading!
Moments ago it just happened again. As part of the already noted massive gold slamdown just before 9 am Eastern, when "someone" sold an epic 2 million ounces of gold in one trade, the CME just went dark for 10 seconds, blaming it on an appropriately named "stop logic" event.
What is Stop Logic? Basically, it is a the mother of all stop hunts, which takes out the entire bid stack andcontinues until such time as there is absolutely no liquidity left in the entire market! From the CME:
Shutdown is not the real problem: Ron Paul
Thu 10 Oct 13 | 11:06 AM ET
Well, I think it’s pretty irrelevant, because I think both parties are doing the same thing. they’re grandstanding. They’re politicizing this. They talk about a shutdown, which really isn’t a shutdown. The big stuff continues, and they close down the monuments. And I think it’s all a political game and it’s a blame game. You know, even with the deficit — the deficit limit was met in May. So government goes on. I think that the shutdown is not a real problem. I think the real worry should be the breakdown of the entire system. And as far as default goes, we’re always going to pay the interest. and that’s just — that’s just a fake argument. I’m concerned about the continuation of the default by paying off our bills with money that has less value. That’s where the real problem is, and they’re not even talking about it.
IMF Discusses A Super Tax Of 10% On All Savings In Eurozone
Gold Silver Worlds | October 10, 2013 | Category: Money & Currency
One of the latest reports from the IMF discusses a super taxation of 10% on savings in the Eurozone. That would solve the debt problem in most sovereign countries. It would be an alternative of higher taxes or spending cuts.
The economists who wrote the paper hasten to say that it is a theoretical proposal. Still, it appears to be “an efficient solution” for the debt problem. For a group of 15 European countries such a measure would bring the debt ratio to “acceptable” levels, i.e. comparable to levels before the 2008 crisis.
The report itself is embedded at the bottom of this article. In the last section of the report, on page 58, right before the appendices, it says:
The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and—until he changed his mind—Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax—on bondholders—that also falls on nonresidents)
There is a surprisingly large amount of experience to draw on, as such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II. Reviewed in Eichengreen (1990), this experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital flight – in turn spurring inflation.
Currency swap signed with the EU a ‘landmark’
Updated: 2013-10-11 01:17
By Li Xiang in Paris and Zhang Chunyan in London ( China Daily)
Largest deal outside Asia is big step toward yuan internationalization
China and the European Union signed a currency swap agreement to boost trade and financial stability in a move that also marks a landmark step for the yuan’s internationalization.
The three-year swap line with a maximum value of 350 billion yuan ($57 billion) is the largest the People’s Bank of China has signed with a foreign central bank outside of Asia, higher than the 200 billion yuan agreement with the Bank of England.
The People’s Bank of China said in a statement on Thursday that the deal can help provide liquidity support for the yuan market in Europe and promote overseas use of the renminbi. It is also beneficial for facilitating trade and investment.
Experts said that the agreement with the European Central Bank is a significant step forward for the internationalization of the yuan and is a reflection of the increasing demand for the Chinese currency in financial transactions in the eurozone.
"The amount of the currency swap is significant, and it is an important step to develop the renminbi transactions in the euro area," said Philippe Mongars, deputy director of the market operation department at the Bank of France.
"All the banks based in the euro area will benefit from it and we see it as a backstop to maintain confidence in the Chinese currency in the euro area," he said.
Jim Sinclair’s Commentary
More of a problem than in 2008.
Derivatives and the Government Shutdown: Wall Street Bets One Thousand Trillion Dollars of Everybody Else’s Money
Derivatives Market Worth Over 16 Times Gross World Product
By Glen Ford
Global Research, October 10, 2013
Black Agenda Report 9 October 2013
The clock is ticking, we are told, on the “good faith and credit” of the United States government, which might technically be unable to pay its bills after October 17 if the two corporate parties don’t make a deal on the debt limit. Congressional Republicans and the White House are “playing Russian roulette with the global economy,” says an editorial in the Dallas Morning News, warning of impending “economic Armageddon” as financial markets “crater,” the economy stalls and interest on future federal borrowing skyrockets.
Given that capitalism has entered a terminal stage of acute and escalating crises, the Dallas editorialists may be right; anything could set off another spasm of financial mayhem in a system that is ever more unstable. However, it is the “markets” – a euphemism for the financial capitalist class – that are the ultimate source of instability, the folks who play Russian roulette 24-7 and have dragged humanity to a place where an actual Armageddon is only a twirl of the chamber away. In this game, everybody’s head is in play.
It is proper that the corporate press speak of the impending fiscal threat – a minor one, in the maelstrom of crises that beset the system – in gambling terms. An increase of interest rates by a few basis points (fractions of a percent) on trillions of borrowed dollars amounts to quite a chunk of public money, to be paid directly into the accounts of these very same private “markets” that are supposedly biting their nails with anxiety over the budget. The Dallas Morning News and its fellow corporate propaganda spores spread the myth that the “markets” (bankers, hedge funds, etc.) crave stability, when the vital statistics of the real world of finance capitalism scream the opposite.
Obama withdrawal puts China’s Xi Jinping in APEC box seat
By Geoff Hiscock, Special to CNN
updated 7:56 PM EDT, Mon October 7, 2013
Editor’s note: Geoff Hiscock is a former Asia Business Editor of CNN.com and the author of "Earth Wars: The Battle for Global Resources," published by Wiley.
(CNN) — Courtesy of the U.S. government shutdown, Chinese President Xi Jinping finds himself in the box seat at his first Asia Pacific Economic Cooperation (APEC) forum as leader of the world’s second largest economy.
Usually the United States makes the running at the annual APEC get-together of China, the U.S., Russia, Japan and 17 other Asia-Pacific economies that between them account for half the world’s output, 45% of its trade and 3 billion of its inhabitants.
But U.S. President Barack Obama’s decision to pull out of the APEC forum and leaders’ retreat in Bali, Indonesia this week because of a domestic political brawl leaves Xi and Russian President Vladimir Putin as the two most powerful men in attendance.
U.S. Secretary of State John Kerry now leads the U.S. delegation to Indonesia for APEC and to the East Asia summit and U.S.-ASEAN meetings that follow in Brunei starting Wednesday.
Obama’s cancellation was no surprise. He had already trimmed Malaysia and the Philippines from his Asia itinerary because of the failure of the U.S. Congress to pass a new budget. The possibility that the U.S. government shutdown could escalate into the almost-unthinkable disaster of a debt default later this month prompted him to drop the visit entirely.