If this scenario plays out – that an economy grows as bank credit stagnates or declines – QE will even officially have zero impact on the real economy since the cheap bank credit it is supposed to make available, when short-term interest rates are already near-zero, won’t be used.
That would remove the fig leaf for QE. And it would bare its raison d’être, namely inflating asset prices to enrich those who hold these assets. But asset prices have been inflated for years, and those few who hold these assets have already been enriched far beyond what they can spend. Whatever little economic impact the illusory “wealth effect” might have had, has already dissipated. Hence, Draghi’s confession to the German lawmakers, even if given under duress: QE won’t be happening anytime soon.
‘If history is any guide, then the high-flying biotechs, Internet plays, and of course the cloud-based software-as-a-service stocks, could still have a long way to fall.’
That’s the conclusion of Jim Cramer after consulting with top technical analyst Tim Collins, who noted similarities between the current decline in momentum stocks and the dotcom collapse back in 2000.
Ominously Collins found that patterns among stocks such as Cisco, Priceline, JDSU, Amazon, ICG and Akamai in 2000 appear to be similar to patterns that are currently emerging in the momentum stocks of 2014…
Silver har permanent dom största kortningarna och det tar 150 dagar att producera lika mycket som dom 8 största handlarna har i korta positioner.
Gold is now extremely oversold, with emotional opinion in paper markets unanimously bearish. Traders tell us the 200-day moving average is well and truly broken and the next support level is $1260. However, when gold broke down through the $1280 level yesterday it rallied sharply to test the $1300 level in a one-day spike reversal.
Market chat and technical analysis are one thing; more important are the motives behind the commentary, revealed by a dispassionate look at Comex figures. And here we see that Producers and Merchants short positions have fallen to an eight-year low at 73,033 contracts, against a long term average of 186,400. This is the primary source of liquidity for all futures markets, and it has simply dried up.
Swap dealers have also cut their shorts dramatically, reducing their net position by 26,582 contracts, and the eight largest traders between them have a level book. In short, the bears have to persuade us to sell, or they will be in trouble.
The figures quoted above are as of 15th April. Since then the gold price confirms this analysis by refusing to go lower and stay there (hence yesterday's spike reversal), while open interest has risen from the post-Lehman crisis low on 4 April. This is shown in the chart below.
The rise in open interest tells us that the shorts, mostly hedge funds, are opening new positions and failing to drive prices lower, so the market is being set up for another bear squeeze. By way of confirmation the gold forward rate in London remains negative up to three months out, indicating an extreme shortage of physical metal at these prices.
In these markets sentiment can change very rapidly. We read this week that the US is on the brink of another housing crisis because sales (demand) have stalled. Last weekend the Ukrainian protagonists met in Geneva and agreed to "de-escalate" the situation. By Monday the situation was escalating again.
Oh, and the best contrary indicator of the lot was also on Monday, when according to the Wall Street Journal's Market Watch blog, for the first time ever all 72 economists polled by the National Association for Business Economics expect the US economy to grow this year. It is usually right to bet against such unanimity in economists.
this year, but the most notable thing about the sad suicide of the 14th, a
52-year-old banker at France's Bred-Banque-Populaire, is she is the
first female. As Le
Parisien reports, Lydia (no surname given) jumped from the bank's Paris
headquarter's 14th floor shortly before 10am. FranceTV added that sources said
"she questioned her superiors before jumping out the window,"
but the bank denies it noting that she had been in therpapy for several years.
Silverefterfrågan ökar och samtidigt faller silverpriset. Hur länge kan man manipulera dessa marknader
Det är svårt att hitta nya guld fyndigheter och det blir inte lättare med ett guldpris under produktionskostnaden
MSCI Index knallar på fast ekonomiska förutsättningarna försämras med bl.a. Baltic Dry Index kraftigt ned senaste månaden.
Initial jobless claims surged from 304k to 329k this week, the biggest weekly rise since mid-December. From exuberance at new cycle lows, we swing to the average of the last 8 months. This is the biggest miss to expectations in over 2 months. Continuing Claims dropped further to new cycle lows at 2.68 million (beating expectations) - its lowest since Dec 2007. So this is as good as it gets for continuing claims - America is back at its best!
Initial claims surges back up to its average of the last 8 months...
Now look at this chart which shows what has happened to existing home sales in the United States in recent months. If you compare the two charts, you will see that the numbers are eerily similar...
New home sales are also following a similar pattern. In fact, we just learned that new home sales have collapsed to an 8 month low...
And this chart shows what has happened to new homes sales during the past several months. Sadly, we have never even gotten close to returning to the level that we were at back in 2007. But even the modest "recovery" that we have experienced is now quickly unraveling...
Every investor understand the principle buy low and sell high. When prices are low, nobody wants to buy. We also had very negative sentiment recently. I am not so sure about asset markets as we could one day after this colossal asset inflation of the last 20 to 30 years, also have asset deflation. But when I compare gold shares and the price of gold to the S&P 500, the S&P is up substantially since 2011 and gold is down.
And I talk about that in Chapter 9 and Chapter 11 in my book, how they’re using the People’s Liberation Army to smuggle gold into China overland, without going through Hong Kong. So they’re getting all the gold they can and so are others. But there’s been a lot of speculation as to why is China getting all this gold.
Well, they must want a new reserve currency backed by gold. It may end up there, but that’s not what they’re doing in the short run. Here’s the way to think about it. They own $4 trillion of reserves today, mostly in paper assets. Most of that is US dollar denominated and most of that are US Treasury notes. So they’re the biggest creditor of the United States of America.
They actually don’t want to gold to skyrocket. What they want is a strong dollar. Nobody wants a stronger dollar more than China because China owns more dollar securities than anyone else in the world. But they’re worried. They’re fearful that we will inflate the dollar and if you do a 10% inflation of the dollar, you reduce the dollar’s value by 10%.
That’s like a $300 billion wealth transfer from China to the US because their assets are worth less, our liabilities go down, so we’re stealing wealth from China and they know it. Now they can’t dump these treasury securities. There are too many of them. But what they can do is buy gold and here’s how it works.
If we have a stable dollar maybe the gold doesn’t go up that much, but they’ll be very happy with that because their securities will be worth what they think they are. But if we inflate the dollar which we’re trying to do, they’re going to lose money on the paper, but they’re going to make it on the gold.
Because we all know that if inflations comes along gold is going to go up very, very significantly. So in effect they’re creating a hedge position. They’ve got paper over there, gold over here. They would like the paper to be valuable, but if the paper drops in value, the gold is going to go up. So they’re actually building a hedge book.
Fargo reported an increase - a tiny $4 billion to be exact - in its loans and
leases portfolio. All the other banks... saw a decline in their loans
and leases holdings.
USA har fortfarande inte godkänt den nya röstfördelningen inom IMF så BRICS funderar på ett eget IMF.
FEDs nytryckta pengar kommer inte ut i samhället utan hamnar för spekulation inom de finansiella marknaderna.
The reason the dollar pressures may be on the verge of exploding is because the sanctions that we threatened the Russians with are forcing them to leave the dollar-based payment system. Meaning, they are going to start selling their energy in rubles, or for gold. They are also making barter deals with Iran.
But given the size of the Russian energy industry, if they remove that from the petrodollar it will mean a huge drop in the demand for dollars. It may well be that the Fed has caught on, and if it can’t get the American sanctions against Russia cancelled it will have to take even more offsetting actions in order to protect the dollar.
I’ve read the reports that say Russia has given us the ‘finger’ and is saying, ‘We are not going to play with dollars anymore. We are simply leaving the dollar system.’ If the Russians are able to do this, if China, India, and Brazil go along with it, then you will have removed a lot of the international payment system from dependancy on the dollar. This will also severely undermine the American SWIFT international payment system. So this could produce a run on the U.S. dollar.
Förändringen av order för varaktiga varor vittnar om att den amerikanska ekonomin står på gränsen till en lågkonjunktur.
Konsumtionen under Q1 2014 var den näst sämsta under de senaste 15 åren. Var är den starkare ekonomin som alla pratar om.
Since the beginning of the year, the Hryvnia has fallen from 8.26 to the US dollar, to 13.16 to the US dollar, a decline of 37.2%
On Monday, the Ukraine central bank pulled out the bazooka with amassive set of rate hikes.
Kiev’s central bank raised the benchmark discount rate from 6.5 per cent to 9.5 per cent and the overnight loan rate from 7.5 per cent to 14.5 per cent on Monday night.
Silver is now dirt cheap and is beginning to trend up. Personally I have been buying US silver Eagles for myself. If it can reach 21, silver will have hurdled both of its moving averages.
My advice, as it has been, is to move to the sidelines while holding large positions in physical silver and gold. Regardless of what the markets do, silver and gold represent eternal wealth, and the bid to sleep undisturbed at night. No amount of money is worth the loss of peace of mind. The power of gold opened the American West and populated Alaska. Men have spent their lives searching for gold. You can own gold by the simple action of swapping Federal Reserve notes for the yellow metal. I advise you to do it.”
So, if we look at the Dow chart again (below), one can see that the silver peaks of the 70s and 30s occurred when the Dow was trading closer to the lower levels of its range. Currently, the Dow is trading at all-time high levels. If the Dow is currently having a “real deal” rally, then it means we are going to have to wait a long time before silver has its real rally.
However, if the Dow is just having a fake rally, then silver will spike as soon as the Dow’s fall gathers steam, and possibly peaks when the Dow hits a level indicated on the chart, as a minimum. One, therefore, has to decide whether this Dow rally is real or fake.
The New Economy Index (NEI) är helt klart på väg ned vilket innebär att FED gör åtstramningar i en vikande ekonomi.
The New Economy Index (NEI) is on the brink of sending its first confirmed sell signal in four years.
The index is a blend of the leading U.S. retail and business service stocks. NEI is based on the concept that these component stocks are accurate reflections of changes within the real-time U.S. economy (as opposed to the lagging economic statistics favored by the Labor Bureau).
Except for a brief period in the spring of 2010, NEI has confirmed a firming economic picture for U.S. retailers since 2009. As you can see in the following graph, though, the index has made a series of lower highs and lows the first in well over two years. Moreover, the important 12-week moving average (red line) has crossed below the 20-week MA (black line) and both moving averages are in the process of decisively turning down.
Låga räntor och nytryckta pengar har bidragit till dagens skuldbubbla. Yellen kommer att fortsätta på den inslagna vägen.
Gold and silver prices gained modestly over the week, during which the latest FOMC minutes were released. These were generally read to be more dovish compared with the previous month.
FOMC members appear from the minutes to be confused. The previous month's conclusion, that if it wasn't for the weather the economy is improving and so interest rates will increase a little earlier than expected, is replaced with renewed anxiety about the outlook now the weather has improved. And who can blame them: after QE1, 2 and 3, some iffy numbers like unemployment have fallen, but where's the price inflation? The overriding concern for all central bankers is still the prospect of deflation.
As an aside the numbers behind the Fiat Money Quantity were released this morning, and they have risen a further $135bn, dismissing any thoughts that tapering QE might be the problem. It's not, because monetary inflation is continuing regardless.
Last Friday I wrote about the divergence in open interest between gold and silver. This has continued into this week and is really unusual. First, gold's chart:
The low point for gold's open interest was last Friday, when gold was already four days into its rally. This signals very low levels of speculative interest: the last seller has turned off the lights and left the building. Therefore, gold appears to have built a short-term base under $1300.
Silver's chart is chalk to gold's cheese.
In this case attempts by market-makers to shake out the bulls have been met by solid demand with open interest rising strongly. The exception is the Money Managers category, which suffers frequent and dramatic changes of mind. The chart below shows the dramatic volatility in Money Managers' short positions.
The long-term average of Money Managers' shorts before 2013 was 6,130 contracts, yet in the last five weeks they have increased them by nearly 16,000 contracts. This increase in shorts should have allowed the bullion banks to reduce their short positions. Not so: according to the most recent Bank Participation Report they are net short of a total of 35,321 contracts, an increase of over 3,000 contracts last month.
Unlike gold, where Comex volume is moderate, silver volume is high indicating very strong support at current levels. The obvious conclusion is that bullion banks trying to balance their silver books cannot do so at current prices. Yet higher prices are likely to trigger a vicious bear squeeze, so it appears the bullion banks with short silver positions will remain trapped either way.
Guldet skall följa ökningen av den monetära basen. Guldet är nu tillbaka på spåret och vi ser framför oss ett betydligt högre pris.
USA köper mindre från Kina och Kina måste då skriva ned valutan. Valuta kriget fortsätter i oförminskad takt.
President Vladimir Putin has told European leaders a dispute over Ukraine's gas debt to Russia could affect supplies of Russian gas to Europe and proposed urgent discussions on the matter, his spokesman said on Thursday.
The remarks were the strongest sign yet that Russia could curtail supplies of gas to Ukraine, which could increase tension between Moscow and Kiev and aggravate the worst crisis in East-West ties since the Cold War.
"The situation is urgent," Putin's spokesman, Dmitry Peskov, said after Putin sent a letter expressing deep concern about Ukraine's $2.2 billion gas debt and warning of a possible impact on the transit of Russian gas to the European Union.
In the letter, Putin proposed "mechanisms of dialogue for urgent discussions of the situation that has developed," Peskov said. He did not give any details about the proposal or say which leaders were addressed.
Dålig statistik från Asien, Japan maskin order sjunker mer än väntat samtidigt som Kinas export och import sjunker.
Marknaden är på topp när det gäller aktieköparnas positiva sentiment till aktier. När alla är positiva vem skall då köpa.
As we have discussed numerous times, nothing lasts forever - especially reserve currencies  - no matter how much one hopes that the status-quo remains so, in the end the exuberant previlege is extorted just one too many times. Headline after headlines shows nations declaring 'interest' or direct discussions in diversifying away from the US dollar... and as SCMP reports , Standard Chartered notes that at least 40 central banks have invested in the Yuan and several more are preparing to do so. The trend is occurring across both emerging markets and developed nation central banks diversifiying into 'other currencies' and "a great number of central banks are in the process of adding yuan to their portfolios." Perhaps most ominously, for king dollar, is the former-IMF manager's warning that "The Yuan may become a de facto reserve currency before it is fully convertible."
The infamous chart that shows nothing lasts forever...
Nothing lasts forever... (especially in light of China's recent comments )
The latest from John Williams’ www.ShadowStats.com.
- Economic Reality versus Illusion: No Recovery, Just Plunge, Stagnation and Renewed Plunge
- Re-Intensifying Downturn Already Underway
- Confluence of Negative Surprises, Including New Business and Systemic Woes, Should Hit U.S. Dollar and Spike Inflation
- Hyperinflation to Intensify Unfolding Depression
- Gold as a Store-of-Wealth and Safe-Haven Remains Primary Hedge for Maintaining Purchasing Power of Wealth and Assets
Below we see the silver/gold ratio. And what's this? The ratio has turned up in favor of silver. I encourage subscribers to take actual physical positions in silver. I think something is quietly brewing in silver. Buy the “monster” pack of 500 ounces of silver. The pack comes in a special green box, put out and packed by the US Treasury.
Bilköpare och studenter är dom som lånar i USA knappast tillräckligt för att hålla konsumtionen i gång.
And here’s how the Fed’s policies have “solved” the unemployment crisis.
The chart shows the Fed’s balance sheet that has ballooned to $4.16 trillion (printed money in green) vs. the Employment Population Ratio (“solved” problem in red). Gray areas are recessions.
Vid 3% ränta i Japan gå alla skatteintäkter till att betala räntan för statens skulder, redan idag är det över 50%.
There is a war taking place in the gold market right now at a very key level. The price of gold held above the 30-week moving average last week (shown below). More importantly, gold hit the 20-week moving average and turned higher. I firmly believe the 20-week (MA) will be a key level to watch if the bull market accelerates.
In the first phase of gold’s bull market, the 70-week moving average was the major support level. Gold stayed above that key moving average until the collapse in the global markets in 2008. After 2008, the 30-week moving average became key support (shown on the left hand side of the above chart). If the gold market is in fact going into an accelerated up-move, the 20-week moving average may be the key support level to watch. Despite the pullback, I believe the latest action in gold is a sign that we are in a new bull market, and the target for 2016 is $3,500 for gold. This would mean a roughly $2,300 advance in gold, which would look like this (see below):
Jobb marknaden tar inte fart fast vintern börjar ta slut och snön smälter i samma takt som ekonomin.
Divergences seen at previous peaks are evident.
The CMF (top panel) indicates money flows.
The RSI (bottom panel) is a measure of momentum.
Alasdair Macleod från GoldMoney anser att efterfrågan på guld från Kina är betydligt högre än tidigare beräknat.
Western gold flows to China
We are now in a position to estimate Chinese demand and supply factors in a global context. The result is summarised in the table below.
Chinese demand before 2013 had arrived at a plateau, admittedly higher than generally realised, before expanding dramatically following last April's price drop. Taking the WGC's figures for the Rest of the World gives us new global demand figures, which throw up a shortfall amounting to 9,461 tonnes since the Lehman crisis, satisfied from existing above-ground stocks.
This figure, though shocking to those unaware of these stock flows, could well be conservative, because we have only been able to address SGE deliveries, vaulted gold and Hong Kong net flows. Missing from our calculations is Chinese government purchases in London, demand from the ultra-rich not routed through the SGE, and gold held by Chinese nationals abroad. It is also likely that demand from the Chinese diaspora in SE Asia and Asian is also underestimated by western analysts.
There are assumptions in this analysis that should be clear to all. But if it only serves to expose the futility of attempts in western capital markets to manage the gold price, the exercise has been worthwhile. For much of 2013 commentators routinely stated that Asian demand was satisfied from ETF redemptions. But as can be seen, ETF sales totalling 881 tonnes covered only one quarter of the west's shortfall against China, the rest coming mostly from central bank vaults. Anecdotal evidence from Switzerland is that the four major refiners have been working round-the-clock turning LBMA 400 ounce bars into one kilo 9999 bars for China. They are even working with gold bars that are battered and dusty, which suggests the west is not only digging into deep storage to satisfy Chinese demand at current prices, but digging a hole for itself as well.
The gold price continued last week's fall into Monday, which was the end of the first quarter of 2014. Since then having reached a low point of $1278 in New York trading, gold rallied to a high of $1294 on Tuesday before weakening on Thursday morning.
The biggest influence was not stories and announcements, but the market-makers' attempts to reduce their exposure by the quarter-end. This can be clearly seen in the chart of gold and open interest below.
The rise on open interest peaked with the gold price three weeks ago. This indicates that buying interest since early February was being accommodated by an increase in market-makers' short positions, instead of being met by genuine sellers, hardly a surprise. Shorts were also closing their positions by transferring them to the market-makers, aka bullion banks. And when there was no follow-through as a result of the Crimean situation, these market makers had to reduce their commitments ahead of their quarter-end report date, 31st March.
The result is open interest has contracted from a rich 427,774 contracts on 17th March to 363,451 contracts on 1st April, the lowest open interest since May 2009, and this week Comex volume has fallen from over 335,523 contracts a week last Thursday to a low of 106,729 yesterday. This tells us that interest in Comex gold is now as low as it is likely to get and further attempts by the market-makers to close short positions are unlikely to succeed.
Silver provides an interesting contrast, with open interest remaining stubbornly high and rising.
The test for silver will come when traders decide whether or not to roll their May contract positions. Until then it appears that rather than be shaken out by falling prices the bulls have held on, increasing their positions on falling prices.
Underlying demand for physical gold remains strong. China so far this year has delivered nearly 560 tonnes to its public, and I believe is building vaulted gold stocks for gold account customers at a similar rate. I publish an analysis of China's gold buying this weekend, which I urge GoldMoney customers to read. The conclusion is that far larger quantities of gold are flowing from western vaults to China and Asia than I originally thought. The implication is that the suppliers of this physical, which can only be western central banks, are on course to run out of leasable gold, unless the price is allowed to rise sufficiently to reduce this demand.
Breakeven priset för silver är ca $24. Hur länge till kan vi handla ca 20% under tillverkningspriset.
Nothing appears to frighten this market -- not Putin, not higher interest rates, not a cessation of quantitative easing. ...Happily I don't manage other people's money, and this allows me to take an unusual stance. I don't gamble in Vegas, and I don't play poker with private local groups. I have what I need and I'm satisfied with what I have. Physical gold equals pure wealth, and I'm satisfied to sit with my physical gold position. Each day millions of words are written, in an effort to uncover the current trend of the market. So far the market appears to be in a strange and eerie stalemate.
Although markets appear stable, experts list seven things that could go wrong: the first is that payrolls could slip, the Crimean situation could unravel, China could slow down, the US dollar index could fall to 78 or lower, inflation could heat up, and gold and silver could start to surge. Lastly, interest rates could suddenly rise, as they levitate to protect the dollar. I continue to advise a position in physical silver and gold as the best and sanest stance in today's nervous and erratic markets.
Dow / Guld handlas runt 13 och om vi skall ned till ca 1 till 2 så måste Dow ned kraftigt eller guldet upp ordentligt.
Why has Facebook’s COO Sheryl Sandberg sold more than half the shares she owned when the social network went public just two years ago?
Now admittedly her holding of 17.2 million shares is now worth just over $1 billion, so she is hardly running away from the company. But the obvious conclusion is that one of the key members of staff at the social network agrees with those who think it’s become massively overvalued.
Ultimate insider sale
This is the ultimate insider sale by somebody privy to the very best information about her key investment. The smart money gets out before valuations crash, not after it.
Has she sold too soon? Inevitably if she has been offloading stock over a prolonged period that is now the case. Then again what will the ‘real’ value of Facebook when the hype is all stripped away and the business has to be valued like any other?
Indeed, can it maintain its lofty position? It is just another media dependent on advertising and if the eyeballs move elsewhere so will the profits.
The Big Time Bomb is Derivatives and Leverage in the Banking System
So the big time bomb is derivatives and leverage in the banking system. We keep getting these comments out of Europe that some country has got to raise $25 billion to boost the capital of the banks. This is in an environment where the paper assets have been allowed to appreciate. Imagine a situation where they start depreciating.
The leverage is just way too high and to me that’s always been the lingering huge fear. We could throw in wars, continuing economic decline, which I think we are having, but a bank collapse would be by far the biggest item in terms of how it would affect the financial markets, and in particular in how it would just blow interest into the precious metals area."