Posted at 10:50 AM (CST) by & filed under Jim's Mailbox.

Courtesy of Wolfgang.


Chief Economist Loses It After Historic Rate Cut, Slams Fed In Epic Rant
July 31, 2019

The following epic rant from MUFG chief economist Chris Rupkey hardly needs any commentary, as it is about as close to a perfect reaction to the idiocy unleashed by the Poiwell Fed as can get.

Congratulations to all of you down in Washington who have lowered the boom on interest rates today. We guess you must be feeling pretty proud of yourselves. US central bank policymakers have learned nothing from the experience of low interest rates in Japan or Europe. The economies of Japan and Europe aren’t going up like a rocket ship and it is doubtful economic growth will see any greater liftoff here in the good old USA.

Go ahead and eliminate interest rates. Wall Street is already eliminating thousands of jobs in sales and trading and more rate cuts mean reduced margins and less volatility and thousands more will be told to go. Hedge interest rate risk. What interest rates?

Countries with low rates have economies with low growth. The Fed’s decision today is like in the days when doctors bled their patients to heal them. Fed officials made a very unwise decision today and buckled to the president’s demands by manufacturing reasons to cut interest rates despite a strong economy with no recession signs apparent anywhere out on the horizon.

The stock market may be partying today, but it will wake up with a huge hangover tomorrow as the Fed alters the way the country saves and spends and borrows and invests forever. I think they are probably proud of themselves, but they should really be more ashamed.

The Federal Reserve threw away their independence today and with each future rate cut they will gradually eliminate their relevance to the economy forever.



Courtesy of JB.


UBS To Start Charging Rich Clients With Negative 0.75% Interest Rate
July 31, 2019

For years, European banks were leery of passing on the ECB’s negative -0.40% deposit rate to their clients for fears of deposit flight and other unintended consequences, in the process being forced to “eat” the difference and impacting their interest income.

However, after five years of NIRP, and with the ECB set to unleash even more negative rates in the immediate future, one bank has finally taken a stand: according to the FT, UBS plans to charge a negative interest rate on wealthy clients, those who deposit more than CHF 2 million with the largest Swiss bank.

While several, mostly smaller, banks in Switzerland and the eurozone already pass on the cost of negative official rates to corporate depositors, most large players have refrained from doing so with individual clients. But with the ECB expected to adopt a “lower for longer” stance as soon as the next central bank meeting, starting in November, UBS Switzerland will charge -0.75% a year on individual cash balances above 2 million Swiss francs, the same rate as the SNB’s rate.


Posted at 1:44 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

This would be the math for you…

Endgame: Starting In 2024, All US Debt Issuance Will Be Used To Pay Only For Interest On Debt
July 31, 2019

hile it is common knowledge that the US budget deficit is soaring even though the US economy is allegedly growing at a brisk, mid-2% pace (and yet the Fed is about to cut rates), resulting in recurring bond trader nightmares about funding the growing twin US deficits (Budget and Current Account), what few people know is the increasingly ominous composition of this budget deficit.

As we first pointed out back in March, when looking at the US ‘income statement’, most concerning by far is that for the first four months of fiscal year 2019, interest payments on the U.S. national debt hit $221 billion, 9% more than in the same five-month period last year, with the rate of increase breathtaking (see chart below). As a reminder, according to the Treasury’s conservative budget estimates, interest on the U.S. public debt is on track to reach a record $591 billion this fiscal year, more than the entire budget deficit in FY 2014 ($483 BN) or FY 2015 ($439 BN), and equates to almost 3% of estimated GDP, the highest percentage since 2011. In fact, as of June 30, US interest had already surpassed $600 billion.


J. Johnson’s Latest – Testing the Resolute(s)
August 1, 2019

Great and Wonderful Thursday Morning Folks!  

     It looks like the Silver signal worked this time with the precious metals trading lower after the Federal Reserve’s partial ¼% rate cut with Gold’s trade at $1,418.30, down $19.50 after being dropped to $1,414.50 with the high at $1,428.60. Silver is leading the decline with its trade at $16.01, down 39.5 cents and close to the low at $15.955 and the high to beat at $16.305. The US Dollar benefited from the actions from the Fed Reserve with the Dollar’s value now at 98.64 up 38.2 points and close to the high at 98.70 with the low at 98.365 (We feel this should have gone in the opposite direction, and it will, in time). All of this activity happened way before my normal time of 5 am pst, the Comex open, and the London close.  

     Another note here is the closing of Silver and Gold’s trades at the Comex. The precious metals get closed out a half an hour before the Federal Reserve announcements, but the US Dollar (and all other currencies) stay open for another hours’ time after the Fed posting. The closing prices between real money and fiat have a 1 ½ hour spread in which the “closing price game” is played. Which is why we see more volatile movements in Silver and Gold, the day after the Federal Reserve’s announcement.    

     Our precious metals markets were not treated well in the emerging currency markets as Gold’s price under the Venezuelan Bolivar lost 251.69 in value with the price at 14,165.27 Bolivar, with Silver losing 4.594 with its price at 159.900 Bolivar. In Argentina, the Peso now has Gold priced at 62,149.20 A-Pesos proving a loss of 1,205.88 with Silver losing 21.362 with the price at 701.558 A-Pesos. Over in Turkey, the Lira now has Gold priced at 7,908.98 it too showing a loss of 68.09 in T-Lira value with Silver also down 1.737 with the Lira price at 89.2941.    


Bill Holter’s Commentary

…and this is only the start!

They Said What? Here Are The 13 Nuttiest Quotes From Wednesday’s Democratic Presidential Debate
July 31, 2019

Are these really the best and brightest that the Democratic Party has to offer? It was going to take a monumental effort to top Marianne Williamson’s level of craziness on Tuesday night, but on Wednesday there were several Democratic contenders that gave it their best shot. Kirsten Gillibrand and Jay Inslee were particularly unhinged, and Joe Biden “repeatedly stumbled over numbers and phrases” during an incoherent performance that will be remembered for a long time to come. The Democrats may have more than 20 candidates running, but none of them looks like a president at this point. Perhaps that will change, or perhaps a stronger candidate will enter the race eventually, but right now Democratic strategists cannot be feeling too good about their chances of winning the 2020 election. Of course Republicans are facing some very serious challenges of their own, but at least they don’t have to worry about a powerhouse candidate on the other side.


Bill Holter’s Commentary

Now rate cuts are bearish for gold? Is there any condition “they” will tell you is bullish for gold? Gold IS money and thus as Ronan Manly claims, “the ultimate asset”!

Gold the Ultimate Asset as Fed Joins Race to the Bottom in Global Rates
July 31, 2019

The US Federal Reserve’s Federal Open Market Committee (FOMC) today announced a 0.25% cut in the influential US federal funds rate from a target range of 2.25% – 2.50% to a target range of 2.00% – 2.25%, a move which was closely watched and widely signaled, but which was the first such fed funds rate cut in over 10 years.

As an official interest rate which affects all other US interest rates including bank-to-bank overnight loans, the US Federal Reserve uses changes in its fed funds rate to manipulate US economic growth, but its impact is even more far-reaching, influencing as it does the relative strength of the US dollar versus other currencies, and the interest rate decisions of the world’s other major central banks.

Confirmation of the cut – officially called a policy action – came at the end of the Fed’s two-day July meeting. In the hours before the Fed announcement, Comex gold dropped a few dollars to the $1420 range and the US dollar went higher, looking very like paint taping to make the market’s reaction to the announcement more muted.

With this current rate cut, its all in the timing, and today’s cut follows a 3 year period in which Fed hiked the fed funds rate 9 times between December 2015 to December 2018 from 0.25% to 2.50%. But those hikes followed an 8 year period in which the Fed held the rate at 0.25% starting with the 2008 financial crisis right up to the end of 2015. As such, this fresh fed funds rate cut is a pivotal point in the US interest rate cycle, and has the markets in consternation over whether it will be a one off easing or the beginning of a new easing cycle.


Posted at 10:28 AM (CST) by & filed under In The News.

J. Johnson’s Latest – FOMC Unleashed Vs. The Resolute(s) Day!
July 31, 2019

Happy Hump Day Morning Folks,  

     Gold is trading higher with its value at $1,443.50, up $1.70 inside a tight trading range between the high at $1,445.40 and a low at $1,440.00. Silver is attempting to signal with its trade at $16.47, down 8.3 cents and close to the low at $16.465 with the high to beat at $16.60. The US Dollar is still holding in there with its value pegged at 97.84 up 3.1 points and close to its high at 97.885 with the low to beat at 97.755. All of this was done before 5 am pst, the Comex open, and the London close.    

     It looks like all the commotions in currencies are within the emerging markets as we observe Gold’s value under the Venezuelan Bolivar now priced at 14,416.96 putting forth a gain of 18.98 with Silver now valued at 164.494 losing .20 of a Bolivar. Gold in Argentina is now priced at 63,355.08 proving a gain of 261.76 A-Pesos with Silver now at 722.920 providing a gain of 1.257 Pesos. Gold under the Turkish Lira continues lower with its value now at 7,977.07 dropping another 36.61 T-Lira with Silver down .6579 with its price now at 91.0311.  

     Today we start the August Delivery cycle for Silver with the delivery count totaling 1,062 requests and with a Volume of 47 up on the board in the early morning inside a trading range between $16.51 and $16.46 with the last trade being the low so far. This is an increase in physical demands of 57 more 5,000 Ounce contracts on our August “First Notice Day” (even though it’s July 31st). The shorts keep piling on with Silver’s Overall Open Interest now totaling 239,266 Overnighters keeping Silver from rising any higher (until?). At the same time they seem to be attempting to rise up and surpass the record breaking OI high at 244,196 Obligations meaning we’re only 4,930 held contracts away from breaking that all time papered high! Go Team Fiat Failure! Team Failure may need a much larger short quantity than the last time just to keep Silver from doing something positive on the FOMC Unleashed Vs. The Resolute(s) day.  


Posted at 10:26 AM (CST) by & filed under In The News.

J. Johnson’s Latest – The Rate Makers Vs. Silver and Gold’s Resolutes
July 30, 2019

Great and Wonderful Tuesday Morning Folks,     

      December Gold continues to gain with the trade at $1,441.60, up $8.30 and right close to the high at $1,442.50 with the low at $1,434.80. The Tag A Long Kid (Silver) is “bringing up the rear” with the September trade at $16.49, inside a tight range between $16.53 and $16.425. The US Dollar continues to gain as well as it seems European traders are starting to get more and more nervous about everything these days with the Dollar trade at 97.815, up 1.9 points with the high at 97.96 and the low close by at 97.800. All of this was done way before 5 am pst, the Comex open, the London close, and before the start of the FOMC meetings.    

      Our Emerging Markets currency watch is mixed with the Venezuelan Bolivar now showing the Nobel metal valued at 14,397.98, giving the first money of all mankind an 88.89 Bolivar jump in value with Silver gaining .699 Bolivar at 164.694. In Argentina, the Peso has Gold valued at 63,093.32 giving us a 1,093.07 A-Peso jump making this a WOW gain. Silver under the same currency received only a whoopee gain totaling 1.1103 in A-Peso value with the price at 721.663. Over in Turkey, the Lira has Gold priced at 8,013.68 going in the opposite direction and losing by 54.08 T-Lira with Silver losing .7788 in value with its trade at 91.6890 T-Lira.    

      July Silver Deliveries are over, with the closing numbers gaining 34 more buy orders but without a price set with the closing count at 56 physical demands for Silver that had to get their receipts by the end of yesterday’s trade and with no trading range given during the day. Also of note the Volume from yesterday’s trade went up to 64 and yet we still have no prices given. The numbers are intentionally incomplete. If this was a spread liquidation, there should be prices given for both sides of the calendar spread. I consider this totally unacceptable because it hides the activities that are generated inside what is supposed to be real price discovery.  August Silver Deliveries are now the focus with tomorrow being the First Notice Day with the Open Interest count now at 1,005 and with a Volume of 53 up on the board with a trading range between $16.44 and $16.37. Thursday will be the starting point for the next month’s delivery system.    


Posted at 11:30 AM (CST) by & filed under In The News.

J. Johnson’s Latest – It Does Seem “The Resolutes” Are Still Holding Strong and Refuse to Budge
July 29, 2019

 Great and Wonderful Monday Morning Folks,     

      Gold is still winning with the trade adding 50 cents to the price (it’s all good when it goes up) with the trade at $1,432.70, with the high to beat at $1,437.00 and the low close by at $1,430.20. Silver is leading with the trade at $16.42, up 2.3 cents with the high at $16.49 and the low at $16.36. Maybe I should be saying the Dollar is leading us higher this time with its trade at 97.845, up 9.4 points close to the high at 97.87 with the low at 97.64. All of this activity had to happen before 5 am pst, the Comex open, and the London close.    

      So far this morning in the emerging markets we see no gains at all with the Venezuelan Bolivar pricing Gold at 14,309.09 giving us a 3 Bolivar drop with Silver at 163.995 Bolivar proving a loss of .999 in Bolivar value. Argentina’s Peso now has Gold valued at 62,000.25 giving us a drop of 99.52 A-Pesos with Silver pegged at 710.560 proving a loss of 5.333 A-Pesos. Over in Turkey Gold is priced at 8,067.76 T-Lira, a drop of 7.01 with Silver at 92.4617 it too losing .6153 in T-Lira value.     

      Today is the last day for July Silver deliveries with the count now showing 22 contracts still waiting for receipts for physicals and with a Volume of 1 up on the board so far this morning. However, we still have no price to attach to this one lone Volume, but we do know the closing price for Friday’s physical delivery and that is $16.325 with the OI count drop of 55. Today’s question; is the buyer going to mess up the delivery numbers again by adding more requests to buy? The next months (August) delivery count for Silver, shows an Open Interest of 1,096 and with a volume of 33 up on the board so far with Wednesday being the First Notice Day for the month’s count.    


Posted at 11:27 AM (CST) by & filed under Jim's Mailbox.

Jim /Bill,

This is a turning point.


Bretton Woods Is Dead: What Next?
July 27, 2019

French Finance Minister Bruno Le Maire has publicly admitted something normally reserved for backroom discussion in the circles of Europe’s governing elite at an event honoring the 75th anniversary of Bretton Woods (the conference which created the foundations for the post WWII world order).

At this event, Le Maire stated ever-so candidly that “the Bretton Woods order has reached its limits. Unless we are able to re-invent Bretton Woods, the New Silk Road might become the New World Order”.

He went onto state that “the pillars of that order have been the International Monetary Fund and its sister institution, the World Bank since their inception at the Bretton Woods conference in  New Hampshire in 1944.”

Were a radical transformation not undertaken immediately, then Le Maire laments “Chinese standards on state and on access to public procurements, on intellectual property could become global standards”.

The finance minister’s statements reflect the growing awareness that two opposing systems operating on two conflicting sets of principles and standards are currently in conflict, where only one can succeed. Yet as much as he appears to be aware of the forces at play between two systems, Le Maire fails miserably to identify what the Bretton Woods System was meant to accomplish in the first place, or what type of “radical transformation” is needed to save Europe from the collapse of its own speculation-ridden system.


Posted at 9:29 AM (CST) by & filed under

By Greg Hunter’s (Early Sunday Release)

Former CIA Officer and whistleblower Kevin Shipp says there are big stories with big implications for America that are unfolding now. One of the biggest earthquakes that is going off will be the high ranking Deep State elite surrounding convicted sex offender Jeffery Epstein. Shipp says, “Oh my goodness gracious, the Deep State is darn well scared, and some of its political top participants, I guarantee you, they want Epstein gone. There is no doubt about that. I don’t know why the Bureau of Prisons put Epstein in a jail cell with a cop that killed four people and buried them in his back yard. Epstein should have been in solitary confinement under watch. So, whoever made that decision, it was a complete error in judgment, if not intentional. That should not have happened in the first place.”

Shipp goes on to point out, “It looks pretty clear to me that the Deep State intelligence Shadow government was involved, and it gets worse. Ghislaine Maxwell, who was Epstein’s alleged recruiter for young girls, was the daughter of  Robert Maxwell, (Correction: Shipp said John by mistake) who was a known Mossad Agent. He bilked pension funds to cover losses in his business. . . . He was found dead floating next to his yacht from an alleged heart attack. So, there are some strange connections to the Deep State. U.S. Attorney (and former Labor Secretary) Alexander Acosta would not have said this if it were not true. It is true. There are intelligence connections. Is this a blackmail operation? We know Epstein has a ‘black book.’ We know Epstein probably has video of massages by young girls of high profile people, including politicians. . . . There are going to be some big names that are going to be connected to Epstein and his pedophile child trafficking ring. There is no question about it.”


Posted at 9:26 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Credit is a double-edged sword!

Mapped: The Countries With the Highest Housing Bubble Risks
July 19, 2019

By Jeff Desjardins