*The large specs reduced their longs by 13,098 contracts and increased their shorts by 1,033.
*The commercials increased their longs by 2,120 contracts and decreased their shorts by 15,559.
*The small specs decreased their longs by 3,667 contracts and reduced their shorts by 119.
The reduction by the commercials was SUBSTANTIAL. What it means is less clear as The Gold Cartel was an aggressive seller on all trades approaching $940 and right above that mark.
The U.S. House of Representatives has passed a bill which included an expanded credit facility for the IMF and effective U.S. approval for the proposed IMF sale of 400 tons of gold.
Author: Lawrence Williams
Posted: Friday , 19 Jun 2009
FUNCHAL, MADEIRA -
The Obama administration has pushed a bill through the U.S. House of Representatives approving $106 billion in supplemental funding, primarily for the Iraq and Afghanistan 'security' efforts, but attached to it was also an expanded credit facility for the International Monetary Fund (IMF) of a massive $108 billion which included an agreement to allow U.S,. members of the IMF Board to agree the proposed $13 billion sale of 400 tons of IMF gold to shore up its finances.
In theory the US. approval of the IMF gold sale, which still has to pass through the U.S. Senate would be the final hurdle in the gold sale actually going ahead. But despite this there was virtually little or no impact on the gold market. In part this may be because of scant publicity being given to this part of the funding approval, but also in that firstly the gold market has largely discounted the IMF gold sale anyway, and secondly in that the IMF has said it will dispose of its gold in an orderly manner through a system such as the Central Bank Gold Agreement which limits sales volumes in a given year.http://www.mineweb.co.za/mineweb/view
/mineweb/en/page72068?oid=85171&sn=Detail-END-
Here is what one commentary stated on this subject:
The Obama administration went to great lengths to get the IMF its billions. Last week, congressional leaders received a letter that made a firm connection between global economics and global security. "We know from the 1930s that a protracted global economic slump can foster undesirable and unforeseeable reactions to hardship and adversity," it stated. "Financial hardship and poverty breed desperation, which helps terrorist networks to attract new recruits with messages of hate, violence and intolerance."
The letter then urged Republicans and Democrats to support the president's request for IMF funding. "We believe that the current instability poses a significant risk to the long-term prosperity and security of the United States." It was signed by Secretary of State Hillary Clinton, National Security Adviser James Jones, and, most notably, Secretary of Defense Robert Gates.
end.
Many of you know my thoughts of this. The gold has never been sequestered and i doubt very much that it exists. I strongly believe that the IMF gold is double counted with official sovereign gold. They will `sell`the gold that has already been leased. The market yawned on this because they know the gold does not exist.
Here are some commodity and currency prices that were traded yesterday:
The yield on the 10 yr T note dropped to 3.78%.
The dollar fell .34 to 80.24.
The euro rose .0039 to 1.3947. The pound was very strong, rising .0145 to 1.6499. The yen went up .53 to 96.16.
Crude oil lost $1.82 to $69.55.
The CRB lost 4.06 to 252.79.
end.
On Thursday, the long bond fell a huge 3 full points.(300 basis points) It gave a little back yesterday.
All printed money yesterday, came in to support bonds and the Dow.
In economic news, the deterioration in California is now alarming. Its unemployment rate jumped to 11.5%. If you were to use Williams, shadow government figures, you would find that there rate exceeds 20%.
First the article:
California's May jobless rate hits record 11.5 pct
SAN FRANCISCO, June 19 (Reuters) - California's unemployment rate jumped nearly half a percentage point in one month to a record 11.5 percent in May, and Governor Arnold Schwarzenegger on Friday warned the economy would not recover quickly.
Led by a drop in government jobs -- a reflection of the state slashing its own payroll to try to cope with a mounting budget gap and the possibility it will run out of cash, the May rate was nearly 2 percentage points ahead of the national 9.4 percent rate, the California Employment Development Department reported.
California's May rate of 11.5 percent compared with a revised 11.1 percent in April, 6.8 percent a year earlier and the previous record of 11.2 percent set in March of this year.
"A full recovery will not happen overnight -- it will take time, which only further underscores the need to continue the economic stimulus measures I fought for in the February budget," Schwarzenegger said in a statement aimed at pressuring lawmakers to hammer out a budget deal.
-END-
During the first few days of July, a huge number of bonds have to be rolled over and there are no buyers for those bonds. California must declare bankruptcy. I was informed by Don Jack, that a state cannot go into Chapter 9, only smaller municipalities or cities. Only companies can go into Chapter 11.
This will be interesting to see how this plays out.
There is another article that shows that 8 states are now in record unemployment:
Eight States See Record Unemployment - AOL Money & Finance
you can read this article if you have time. end
Not only is Washington receiving less money but also the majority of the states.
The states are not getting their sales tax and thus they must lay off workers. This in turn sets off a spiral as demand collapses.
The next problem that is occuring in the market place is the rise in long term mortgage rates. I urge you to read the following article. Press on the blue to get the article:
Mortgages getting more expensive by the day
here's your next leg down in our whole system:http://zerohedge.blogspot.com/2009/06/we-have-mortgage-lift-off.htmlthe first chart shows the "spread" or interest rate differential between the interest on a conventional 10-yr mortgage and the yield on the 10-year Treasury bond. As that spread becomes wider, and today it spiked a lot higher, it means the market is less willing to provide money for mortgages. It also means that any hope of a housing recovery is doomed.
***
We are rapidly approaching June 30.09. On that date, we will see what happens with all the credit default swaps owed on General Motors. It is believed that $1.6 trillion of these derivatives exist.
The second event will be the quarterly matching of the interest rate swaps. This will be the first quarter that we have seen huge swings and a downward spiral in bond prices (upward spikes in interest rates).
Interest rate swaps were done to keep interest rates in the general market artificially low and they have doing this for over 15 years.
The banks must make collateral deposits to offset their negative positions.
The total interest rate swaps are around 410 trillion dollars with JPMOrgan our industry leader at around 66 trillion dollars.
I wish everyone a grand weekend. And I wish all our Fathers out there a happy Fathers day.
speak to you on Monday
Harvey.
"When gold speaks, all tongues are silent." -Italian proverb
Following the chaos of World War II, the heads of the world's 44 industrialized nations gathered in New Hampshire, and made the Bretton Woods agreement. The Bretton Woods agreement made the dollar the world's reserve currency, and stipulated that all member nations' reserves had to consist of either physical gold or currency convertible into into gold (domestically the private ownership of "monetary" gold remained a felony until 1975). These member countries then had a "
50% - United States of America with $135 million, or 120 metric tons
"The announcement on Thursday, December 7, of a $475 million drop [422 metric tons - auth] in the Treasury's gold stock seemed to have been accepted by the markets as about in line with prior expectations of the costs of the gold rush following sterling's devaluation. What the market did not know, of course, was that only a $250 million purchase of gold from the United Kingdom saved the United States from a still larger loss in the face of some foreign central bank buying... The logistical acrobatics of providing sufficient gold in London were performed with a minimum of mishaps, although the accounting niceties were still being ironed out.
THE AFTERMATH OF THE LONDON GOLD POOL
My message is a third American, possibly global, possibly even final, bankruptcy is imminent in the coming years as I first clearly denoted in
Jake Towne is