Posts Categorized: In The News

Posted by & filed under In The News.

Bill Holter’s Commentary

More good stuff from Erik.

We Are All In This—But Not Together (Political Economics)_001

We Are All In This—But Not Together (Political Economics)_002

Bill Holter’s Commentary

Yes, “just in case”?

After Gold & Oil Contract Chaos, CME Group Secures $7 Billion Credit Line “In Case Of COMEX Member Default”
May 1, 2020

Something unusual is happening in the gold market.

First we had unprecedented dysfunction in the gold futures markets with dramatic paper and physical price divergences amid virus-inspired geographical shortages for deliverables.

“I’ve never seen that before,” said one gold trader who has been in the market for 30-plus years.

Saxo Bank’s head of commodity strategy, Ole Hansen, observed that a lockdown is occurring in two biggest gold hubs in the world, New York and London, so many traders are working from home. “This has caused a breakdown in the marketplace”, he said.

“There is no price discovery in the market right now,” he said Tuesday morning. “If you need to borrow gold in the OTC [over-the-counter] markets right now, you are going to pay a king’s ransom.”

Then we had the even more stunning negative prices for front-month WTI crude futures as prices converged to negative spot prices at expiration/delivery, thanks to a lack of storage and ETF-driven illiquidity issues. This sparked major losses for some very large market brokerages and clearing houses, among them, Interactive Brokers:

CNBC: “Across the industry, do you think there is going to be some really serious pain?”

Peterffy: “There is about another half a billion dollars of losses that somebody is sitting on… and I do not know who those folks are.”

More…

Posted by & filed under In The News.

Bill Holter’s Commentary

Erik on oil.

upporting Insanity With Bailouts (On Economics)_001

upporting Insanity With Bailouts (On Economics)_002

Bill Holter’s Commentary

You mean sovereign nations don’t like the guillotine of having their assets frozen hanging over their heads? A level playing fieild…what a novel concept!

Shanghai Gold Boss Wants Super-Sovereign Currency For Post-Crisis Times
April 28, 2020

HANGHAI (Reuters) – The president of the Shanghai Gold Exchange (SGE) called for a new super-sovereign currency to offset the global dominance of the U.S. dollar, which he predicted would decline long term, while gold prices rally.

Concern has mounted among some market participants over the dollar-denominated system as the U.S. Federal Reserve cut interest rates to near-zero and embarked on unlimited quantitative easing to contain the economic damage of the coronavirus pandemic.

The measures have helped to drive gold prices to more than seven-year-highs this month, while the dollar has been range-bound. Wang Zhenying, who heads the world’s largest physical spot gold exchange, said in an interview the gold gains should be sustained, but ultimately a new kind of currency was needed.

More…

Posted by & filed under In The News.

Bill Holter’s Commentary

The Bank of Japan, the Swiss National bank, the ECB, and now the Fed…what could possibly go wrong?

Gundlach: Fed’s Corporate Bond Buying Program Is Illegal; Fed Says Program Isn’t Operational

April 28, 2020
“The Fed has, effectively, become a hedge fund in drag as a central bank.”

Occupy Wall Street Protesters Outside the New York Federal Reserve, September 17, 2012. The chant was: “Banks got bailed out, we got sold out.”

When the Fed published its weekly H.4.1 data last Thursday, there was no mention of its two, highly controversial, corporate bond buying programs: the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF). We sent an email to the New York Fed to find out if the two programs are operational and if they will be consolidated on the Fed’s balance sheet. A spokesman for the New York Fed replied that “the PMCCF and SMCCF are not yet operational. And, as we note on the websites for each, additional information will be published before the facilities are launched.”

More…

Bill Holter’s Commentary

“Scotia was for years the world’s biggest lender to the physical precious metals industry, with a history stretching to the founding in 1684 of London gold dealer Mocatta Bullion, which it bought in 1997”.

Yes, the world’s biggest LENDER…thanks so much and good riddance!

Scotiabank To Close Its Metals Business – Sources
April 28, 2020

LONDON (Reuters) – Bank of Nova Scotia (Scotiabank) (BNS.TO) told staff on Tuesday it would close its metals business, drawing the curtain on one of the most venerable names in precious metals trading, two sources familiar with the matter told Reuters.

Scotia was for years the world’s biggest lender to the physical precious metals industry, with a history stretching to the founding in 1684 of London gold dealer Mocatta Bullion, which it bought in 1997.

Once a global player with more than 100 staff in offices from New York and London to India and Hong Kong, the bank sharply downsized the business in 2018 after a strategic review and an unsuccessful attempt to find a buyer.

But it remains one of the five banks that settle gold trades and one of 12 market makers that provide liquidity in the London market. It is also a participant in daily auctions that set a globally used gold benchmark price.

“Scotia had a global call with all its metals staff and said it was shutting down its metals business,” said one of the sources.

“The plan is to unwind the metals business,” said another.

A spokeswoman for Scotiabank declined to comment.

More…

Posted by & filed under In The News.

Bill Holter’s Commentary

Yes, a Constitutional Republic…IF you can keep it!

A Constitution—Up For Grabs (Political Economics)_001

A Constitution—Up For Grabs (Political Economics)_002

Bill Holter’s Commentary

“Force majeure” will be a very widely known term by the time 2020 is over…

Oklahoma Asks Trump To Declare Coronavirus An ‘Act Of God’ To Help Oil Producers
April 26, 2020

April 26 (Reuters) – Oklahoma’s governor has called on U.S. President Donald Trump to declare the coronavirus pandemic an “act of God,” a step to help oil-producing states contend with a crude glut that caused futures prices to close below $0 last week for the first time.

“Over-production of oil continues to threaten the economy,” Governor J. Kevin Stitt said in a letter to Trump that Stitt posted on Twitter late on Saturday.

Declaring a “force majeure” or “act of God” would allow oil companies to halt operations without risking that land leases will be canceled for stopping production, Stitt said.

Oklahoma’s energy regulator said on Wednesday that producers could close money-losing wells without losing their leases, the first victory for struggling U.S. oil companies seeking relief from states after the market crash.

U.S. production reached a record-high of near 13 million barrels per day late last year, but the pandemic has cut global consumption by 20% to 30%, or up to 30 million bpd. (Reporting by Alwyn Scott; Editing by Daniel Wallis)

More…

Posted by & filed under In The News.

Bill Holter’s Commentary

Is your gold real or is it “virtual”?  You will soon find out there is a major difference!

GOLD ETFs OFFER ZERO WEALTH PROTECTION

April 22, 2020

In this important interview Egon von Greyerz of Matterhorn Asset Management AG, answers questions of Jan Kneist’s Investor Talk.

Mine closures and selling restrictions are causing shortages of precious metals in the retail sector, but ETFs are experiencing large inflows of funds. Where do they get the gold, if at all? Is it still possible to invest large sums in gold via Matterhorn?

More…

Posted by & filed under In The News.

Revolutionary Times and Systemic Collapse – “The System Cannot Handle It”
April 20, 2020

Some have queried how it could be that President Putin would co-operate with President Trump to have OPEC+ push oil prices higher – when those higher prices precisely would only help sustain U.S. oil production. In effect, President Putin was being asked to underwrite a subsidy to the U.S. economy – at the expense of Russia’s own oil and gas sales – since U.S. shale production simply is not economic at these prices. In other words, Russia seemed to be shooting itself in the foot.

Well, the calculus for Moscow on whether to cut production (to help Trump) was never simple. There were geo-political and domestic economic considerations – as well as the industry ones – to weigh. But, perhaps one issue trumped all others?

Since 2007, President Putin has been pointing to one overarching threat to global trade: And that problem was simply, the U.S. dollar.

And now, that dollar is in crisis. We are referring, here, not so much to America’s domestic financial crisis (although the monetisation of U.S. debt is connected to threat to the global system), but rather, how the international trading system is poised to blow apart, with grave consequences for everyone.

More…