Monday, April 22, 2013

Gold and silver rise/silver OI rises to 155,815/Arizona 2nd state seeking to legalize gold and silver as currency/The German anti euro party now has 19% support/ Al Qaeda attempts to create havoc on a NY to Toronto passenger train foiled/

Good evening  Ladies and Gentlemen:

Gold closed up $25.70 to $1421.30 (comex closing time).  Silver rose by 36 cents  to $22.32 (comex closing time). 

In the access market at 5 pm gold and silver reversed course and rocketed northbound:

gold: $1425.30
silver: $23.42

At the comex, the open interest in silver rose sharply to 155,815 contracts as it is still  holding firm at elevated levels . The open interest on the gold contract rose by 3019 contracts to 416,833. Generally, I would say that 390,000 OI would be rock bottom for gold but in this environment anything goes.  The total amount of gold ounces standing for April fell slightly to 34.21 tonnes as silver also  had a slight decrease to 3.730 million oz standing.

Today we hear that Arizona wants to be the second state to allow the use of gold and silver as currency.

Andrew Maguire reports that gold into Shanghai has now topped 1000 tonnes of physical gold.  This does not include 25 tonnes per day arriving into China through other ports.

In paper stories we find that there is an excess of $660 billion of bond purchases by our central authorities, Japan and the uSA, and these funds are finding their way into the European periphery especially Italy and Spain purchasing their sovereigns seeking yield.

Barroso today came out and stated that the Europeans are near their end as far as austerity is concerned. There is not much else they can do.

Matt Clinch of CNBC discusses the fact that Cyprus and Greece have no way out and must be asked to leave the Euro.

Many German flights were cancelled today as Lufthansa would not accept union demands. Also in Germany the anti euro party has now 19% of the popular vote.

Today we learn of a foiled Al Qaeda plan to cause havoc on a passenger train ride from NY to Toronto.

And finally the new Chicago's National Federal Manufacturing index faltered.

 We will go over these and other stories but first.........................

Let us now head over to the comex and assess trading over there today:

The total gold comex open interest rose by 3091 contracts today  from  413,814  up  to 416,833,  with gold rising by $3.30 on Friday.  The front April OI fell by 35 contracts from 620 down to 585. We had 0 notices filed on Friday so we lost 35 contracts or 3500  gold oz will not be standing for the April gold contract month. The next non active contract month is May and here the OI rose by 66 contracts to 1505. The next big contract month is June and here the OI fell by 1978 contracts from 252,624 down to 254,602.  The estimated volume today was huge at 182,120 or 18.21 million oz.  The world produces around 70 million oz ex China ex Russia.  Thus Friday's volume equates to around 26% of global annual production. The confirmed volume on Friday was also huge at 209,184 (approx 650 tonnes of gold). 

The total silver comex OI  rose by  2622 contracts from 153,193 up to 155,815. It still looks like we still have some  stoic longs who seem impervious to pain. The front non active delivery month of April saw its OI fall by 2 contract from 30 down to 28 . We had 1 delivery notice filed on Friday, so in essence we lost 1 contract or   5,000 oz of silver  will not stand for delivery in April.  The next big delivery month for silver is May and here the OI fell by 2757 contracts to stand at 44,114. We are less than 2  weeks away from first day notice for the May silver delivery month.   The estimated volume today was big, coming in at 61,934 contracts which equates close to 309 million oz of silver. The world produces 700 million oz per year ex China ex Russia so in essence today's volume equates to 44% of annual silver production. We had confirmed volume on Friday at 59,969 contracts which is a huge volume day . (.30 billion oz or 42.8% of annual silver production)

Comex gold/April contract month:

April 22.2013      April gold.

Withdrawals from Dealers Inventory in oz
14,867.526   (Scotia)
Withdrawals from Customer Inventory in oz
 121,123.492 (HSBC,JPM)
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz
No of oz served (contracts) today
 42  (4,200  oz)
No of oz to be served (notices)
543  (54,300)  oz
Total monthly oz gold served (contracts) so far this month
10,457  (1,045,700 oz) 
Total accumulative withdrawal of gold from the Dealers inventory this month
26,484.136  oz
Total accumulative withdrawal of gold from the Customer inventory this month

407,067.99  oz

We had good activity at the gold vaults.
The dealer had 0 deposits and 1 dealer withdrawal.

Out of the dealer Scotia:  14,867.526 oz was removed

We had 0   customer deposits:

total customer deposit:  nil oz

We had 2  customer withdrawals :

i) Out of JPM:   12,879,39 oz
ii) Out of HSBC:  108,244.102 oz

total customer withdrawal: 121,123.492   oz  

We had 1  adjustment:

Out of the JPMorgan vault:  76,315.108 oz was removed from the dealer's account (registered) and this landed in the customer account.(eligible account)

The following is very scary!!!
Thus the dealer inventory  rests tonight at 2.280 million oz (70.9) tonnes of gold.
The total of all gold at the comex rests at 8.781 million oz or 273.3 tonnes.
The comex is slowly losing its gold both at the dealer end and the customer. 

The CME reported that we had 42 notices filed for 4200 oz of gold today.   The total number of notices so far this month is thus 10,415 contracts x 100 oz per contract or 1,045,700 oz of gold. In order to establish what will be the total number of gold ounces standing, I take the OI for April (585) and subtract out Monday's delivery notices (42) which leaves us with 543 contracts or 54,300 oz left to be served upon our longs. 

Thus  we have the following gold ounces standing for metal:

1,045,700 (served)  + 54,300 oz (left to be served upon )  =  1,100,000 oz or
34.21 tonnes of gold.

we lost 3500 oz  of  gold standing for the April gold contract. This is turning out to be a very big delivery month!1


April 22.2013:  April silver: 

Withdrawals from Dealers Inventory598,655.29 (Scotia)
Withdrawals from Customer Inventory 103,494.03 oz (CNT,HSBC,Scotia)   
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory  nil
No of oz served (contracts)10 contracts  (50,000 oz)  
No of oz to be served (notices)18  (90,000 oz)
Total monthly oz silver served (contracts) 728  (3,640,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month2,473,081.4 oz
Total accumulative withdrawal of silver from the Customer inventory this month4,713,637.4

Today, we  had good activity  inside the silver vaults.

 we had 0 dealer deposits and 1  dealer withdrawals.

Out of Scotia:  598,655.29 oz leaves the dealer and no doubt most of this left all registered comex vaults. 

We had 3 customer withdrawals:

i) Into CNT: 33,134.37 oz 
ii) Into HSBC: 41,011.532
iii) Into Scotia; 29,348.13 oz

Total withdrawals:  103,494.03  oz

We had 0 customer deposits:

total customer deposits:  nil oz

we had 0  adjustments:

Registered silver  at :  39.136 million oz
total of all silver:  165.555 million oz.

The CME reported that we had 10 notices filed for 50,000 oz of silver  for the non active contract month of April. In order to calculate the number of silver ounces that will stand, I take the OI for April silver (28) and subtract out Monday's notices (10) which leaves us with 18 notices or 90,000 oz left to be served upon our longs.

Thus the total number of silver ounces standing in this non active delivery month of April is as follows:

3,640,000 oz served  +   90,000 oz to be served  =  3,730,000 oz

we lost 5,000 oz of additional silver standing.

This is also turning out to be a very good delivery schedule for what is usually a quiet month as April is a non active month for silver.

The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.

Now let us check on gold inventories at the GLD first:

April 22.2013



Value US$50.575  billion.

april 19.2013:



Value US$50.731  billion.

April 18.2013:



Value US$50.752   billion

april 17.2013:



Value US$50.770  billion.

April 16.2013:



Value US$50.827 billion

april 15.2013:



Value US$51.757  billion



Value US$57.181  billion

april 11.2013:



Value US$59.431  billion

april 10.2013:



Value US$59.918   billion

this is now an update.  We have lot a massive 18.35 tonnes of gold today.
In 10 days, we have lost over 80 tonnes of gold.  This gold is feeding the appetite of China.

As a reminder the total comex gold had inventories of around 11 million oz in 2011. Today it broke well below 9 million oz. (8.781 million oz)


And now for silver:

April 22.2013:

Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

april 19.2013:

Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

april 18.2013

Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

april 17.2013

Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

April 16.2013:

Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

april 15.2013

Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

 april 12.2013:

Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

 april 11.2013:

Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

april 10.2013
Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

april 9.2013:

Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

april 8.2013:
Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.

Today we lost zero oz of silver from the SLV.


And now for our premiums to NAV for the funds I follow:

Sprott and Central Fund of Canada. 

(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

1. Central Fund of Canada: traded  at  negative 0.2% percent to NAV in usa funds and a negative 0.1%  to NAV for Cdn funds. ( April  22.2013)   

2. Sprott silver fund (PSLV): Premium to NAV rose to +0.31% NAV  April 22/2013
3. Sprott gold fund (PHYS): premium to NAV  rose to+ .03% positive to NAV April 22/ 2013.


And now for the major physical stories we faced today:

First off, we have your gold trading commentary from  Europe early Monday morning

More and more states are setting up legislation to use gold and silver as currency.
They must know something

(courtesy Goldcore)

Arizona Set To Use Gold & Silver As Currency

Tyler Durden's picture

From GoldCore
Arizona Set To Use Gold & Silver As Currency
Today’s AM fix was USD 1,425.00, EUR 1,092.54 and GBP 935.04 per ounce.
Friday’s AM fix was USD 1,414.00, EUR 1,080.46 and GBP 920.63 per ounce.
Gold climbed $12.90 or 0.93% on Friday to $1,400.90/oz and silver finished up 0.04%. Gold and silver both traded down for the week at 5.86% and 11.39%.
The state of Arizona may become the second state to use gold and silver coins as legal tender. 
Last week, Arizona lawmakers passed a bill that makes precious metals legal tender. Arizona is the second state after Utah to allow gold coins created by the U.S. Mint and private mints to be used as currency. More than a dozen states have legislature underway to pass similar measures. 
The move was launched by people who fear the Federal Reserve is not tackling the federal deficit and is thus debasing and devaluing the dollar. Some even fear, that if the Fed continues on the existing path it could lead to hyperinflation.
Miles Lester, who represents a group called Arizona Constitutional Advocates, said during a recent public hearing on legal-tender legislation that "the dollar is on its way out. It's not a matter of if; it's a matter of when."
The upcoming U.S. FOMC meeting next week is April 30th and May 1st and will be closely watched by investors.
Supporters of the legislation look forward to a day when citizens can make purchases from debit cards linked to gold depositories.
Opponents point to the volatility of gold and silver as currency after the fall in price that occurred last week. However proponents point out that the fall in gold prices last week was due to the speculative raid of Wall Street banks who the Federal Reserve is supporting and works closely with. 
Using gold and silver as currency would protect people from inflation, currency debasement, predatory banks and an increasingly volatile and vulnerable financial system. 
Utah has had the law on the books for the past 2 years and is working on a system for using the precious metals as currency.
The Arizona Senate Bill 1439 would allow the holder of gold or silver coins or bullion to pay a debt.  
However, the coins must be issued by the U.S. government or approved by a court, like an American Eagle Coin. Oddly the government does not require that persons or business must use or accept gold or silver as legal tender in contravention of the U.S. Constitution. 
The sponsor of the bill, Republican Sen. Chester Crandell, would need a final state Senate vote after approval by the House, and if passed the law would not take effect until 2014.
Crandell said, "The whole thing came from constituents".
The debate on whether gold and silver should be used as an alternative currency will continue and deepen as people realise how fiat currencies are set to be devalued in the coming months – potentially sharply.
A 5-10% allocation to physical bullion in your possession or in allocated accounts remains crucial to all wishing to protect their wealth from wealth confiscation. Whether that be by inflation or by pension, brokerage account or deposit confiscation – all of which have been seen in recent months and will be seen again.


Two important Kingworld interviews with William Kaye

1. Fund manager William Kaye discusses the recent attack on gold suggests desperate fear among the central bankers

2. the huge demand for physical purchases at lower prices shows to him that central banks have failed to destroy confidence in gold as superior money

a very important interview

(courtesy William Kaye/Kingworld news)

Fund manager says central bank attack has failed to impugn gold

11:14a ET Sunday, April 22, 2013
Dear Friend of GATA and Gold:
In a two-part interview with King World News, fund manager William Kaye says the recent attack on gold suggests desperate fear among central bankers --
-- and that the public's increased physical purchases at lower prices show that central bankers still have failed to destroy confidence in gold as superior money:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Just get a load of what the World Gold council suggests as the reason for gold/silver's fall last week:

"speculative traders".

What a dimwit organization!!!

(courtesy GATA/Chris Powell)

World Gold Council notices attack on gold, blames 'speculative traders'

12:07p ET Sunday, April 20, 2013
Dear Friend of GATA and Gold:
More than a week after the spectacular attack on gold began, the World Gold Council, nominally the representative of gold mining companies and gold investors, has grudgingly taken note of it with a statement dated Thursday and issued Friday by the council's chief executive officer, Aram Shismanian.
"It has become increasingly clear over the course of the past week," Shishmanian said, "that the fall in the gold price was triggered by speculative traders operating in the futures markets. Their short-term view of generating a trading profit is in stark contrast to the views of long-term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday’s further decline. The surge in gold purchases is spanning markets from India and China to the United States, Japan, and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years.

"Speculative traders?"
Yet the biggest participants in the gold market are not "speculative traders" but central banks. What makes the World Gold Council so confident that central banks were not involved here? Has the World Gold Council ever tried questioning central banks about their surreptitious gold trading, swaps, and leases any more than, say, has been done by the Financial Times, which, also on Friday, published a long story ( purporting to explain gold's fall also without putting a single question to a central bank?
Well, at least maybe the attack on gold has put the World Gold Council on the defensive -- less defensive about gold itself, of course, than defensive of its own irrelevance to the cause of free and transparent markets in the monetary metals.
The full text of the World Gold Council's statement is appended. A PDF copy is here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *


As I reported to you on this most important development, the Swiss has gained enough signatures and will hold a referendum.  They will be voting on:

1. To ban the Swiss National Bank (its central bank) from selling its gold resrves
2. It must keep 20% of its assets in gold.  Thus it must purchase around 1100 tonnes of gold.
3. Repatriate gold held off shore back to Switzerland

The Swiss claim the following:

"today gold is almost the only really valuable asset left on the SNB’s balance sheet." 

(courtesy zero hedge)

Swiss To Vote On Gold Repatriation - "Gold Is The Only Valuable Asset On The SNB's Balance Sheet"

Tyler Durden's picture

A few weeks ago, we wrote of the Swiss People's Party's efforts to gain enough signatures to force the Swiss National Bank (SNB), who 'supposedly' guarantees the price stability in Switzerland, to stop selling its gold reserves. This last week, as the FT reports, they reached the required 100,000 signature mark and on Thursday the federal chancellery confirmed Switzerland is to hold a referendum that would ban the central bank from selling its gold reserves, force it to keep at least 20% of its assets in the metal, and  repatriate gold reserves held abroad and keep them at home. Following Cyprus' forced sales and discussions of the net wealth in other European peripheral nations, proponents of the Swiss measure flatly reject the idea of sales, arguing that disposals of gold reserves at low prices between 2001 and 2006, as well as more recently, have cost Switzerland billions of Swiss francs. The "Save Our Swiss Franc" initiative proclaims, "today gold is almost the only really valuable asset left on the SNB’s balance sheet." The SNB, however, is concerned at, "the monetary policy implications of the demands in the initiative." A date for the referendum has not yet been set - but the FT notes that previous 'referenda' have taken up to several years from acceptance to actual vote.
Switzerland is to hold a referendum on a popular measure that would ban the central bank from selling its gold reserves and force it to keep at least 20 per cent of its assets in the metal.

Under the terms of “Save our Swiss Gold”, which is led by members of the ultra-conservative Swiss People’s party, the Swiss National Bank would have to repatriate gold reserves held abroad and keep them at home.


Governments in the eurozone’s beleaguered southern periphery tend to hold a large part of their total foreign reserves in gold – the Italian central bank holds 2,451 tonnes, more than 70 per cent of its total reserves, while Portugal’s holding of 383 tonnes accounts for 90 per cent.


They insist that the SNB’s gold reserves, which stood at SFr49.5bn at the end of February, accounting for about 10 per cent of its balance sheet, are the best store of value available to the central bank.

..."Today gold is almost the only really valuable asset left on the SNB’s balance sheet,”...


“We have considerable concerns with regard to the monetary policy implications of the demands in the initiative,” the [SNB] said, adding that it would provide a fuller response “in due course”.

A date for the referendum has not yet been set. However, it is not uncommon for the period between an initiative being accepted for referendum and a vote being held to extend to several years.


Two more Kingworld news commentaries with Jim Sinclair and JS Kim

The Kim paper on the physical metals smash is below:

(courtesy GATA/Jim Sinclair/JSKim)

Sinclair, Kim expect gold price smash to backfire

8:45p ET Sunday, April 21, 2013
Dear Friend of GATA and Gold:
Mining entrepreneur and gold trader Jim Sinclair and market letter writer J.S. Kim argue in separate commentaries tonight that the smashing of gold by central banks and their agents will backfire by exposing the fraud of paper gold and jacking up the premium on real metal.
Sinclair's commentary, headlined "Physical Gold Buyers Will Now Crush Central Planners," is posted at the King World News blog here:
Kim's commentary is headlined "Why the Western Banking Cartel's Gold and Silver Price Slam Will Backfire" and it's posted at his Internet site, the Underground Investor, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

The world is moving to gold with the new "Bail in" initiatives by our bankers:

(courtesy Jim Sinclair)

Invest In Gold Insurance And Get Out Of The System

Posted April 22nd, 2013 by  & filed under General Editorial.
Dear Mr. Sinclair,
As you probably already know, the Bail-In has been in preparation officially at least since 2010 with Basel III. It was to become official policy in 2013 and was implemented, according to plan and schedule, in Cyprus.
The rationale for the Bail-In is, of course, that the credit provider, not the taxpayer, is responsible for credit risk.
Why nobody was told of this 180° policy turnaround and why it is being denied even now is very telling, not only as to the character and intention of the policy makers, but also the nature of and risks inherent in the plan.
The Financial Stability Board (FSB) seems to have developed the Bail-In conceptually and has accompanied and monitored its institution and legal implementation around the world.
In case you are not already familiar with FSB publications, please permit me to direct you to the following documents, the final working paper on the Bail-In, "Key Attributes of Effective Resolution Regimes for Financial Institutions" from October 2011:,
and the latest progress report from April 15th, 2013:
I found FSB publications surprisingly concise and easy to understand. They name the Bail-In explicitly and describe it in no uncertain terms. They leave no doubt that central planners consider that they are "managing" crisis.
Thank you for all your help. Reading your blog is a fascinating, if not enlightening experience for me. Should you consider the trouble of holding a Q&A session in Europe, I would most gratefully attend.


Quaintance and Brodsky tackle the question of huge volume at the comex equal to annual gold production..something that has bothered me greatly:  12 -15% more than annual produciton of gold:

long but important.....

(courtesy Quaintance and Brodsky/GATA)

Quaintance and Brodsky: Imperial Constraint

9:40p ET Sunday, April 20, 2013
Dear Friend of GATA and Gold:
In their April letter, Lee Quaintance and Paul Brodsky of QB Asset Management in New York argue that the industrial world's financial system has pretty much detached itself from the real economy, that public policy is merely transferring wealth to favored from disfavored groups rather than fostering growth, and that the recent sensational developments in the paper gold market are fairly questioned.
In that respect, Quaintance and Brodsky write: "Does it matter that total Comex gold futures sales on April 12 and 15 were 12 percent more than total annual gold production? Are we looking for shadowy gold conspiracies where none exist? Are gold's 15 minutes (13 years) of fame finally over with the recent pullback of paper gold, or do the nut-jobs in tin-foil hats have it right? Anything's possible, but it also should not go unnoticed that Kim Kardashian's baby bump receives more accurate critical analysis than the forces behind secular global wealth positioning (not tactical financial asset market flows) and gold's relevance in it."
Anticipating greater inflation, or at least greater recognition of inflation, Quaintance and Brodsky make the case for gold ownership and ownership of gold mining companies. They write: "The bid for physical gold since 2000 has not been from dedicated financial asset investors in the West. It has been from global producers of human and scarce natural resources, and from global savers seeking to protect their purchasing power from expected and manifest central bank fiat currency dilution. It is seen by them as a store of purchasing power value, not as a speculation. Exchanging fiat currencies for physical gold today is exchanging currency used as media of exchange for the object against which that media is being devalued, and that may someday be more formally devalued by monetary authorities."
The QB Asset Management letter is titled "Imperial Constraint" and with the company's kind permission is posted at GATA's Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


From London's Financial times this morning:

(courtesy London's Financial Times/zero hedge)

China Hasn't "Seen This Gold Rush In 20 Years"

Tyler Durden's picture

As we noted last week, all around the world the demand for physical precious metals has soared in the days following paper gold's price collapse. As the FT reports, from Shanghai and Hong Kong to India, one dealer noted, "Older members who have been in the business for 50 years haven’t seen such a thing." Thefeverish buying has left many of Hong Kong's banks, jewelers, and even its gold exchange without enough gold to meet demand. Record volumes on Shanghai's exchange, lines outside Beijing jewelry stores, and the proximity of Hindu festivals drove "Indian physical demand and premiums," higher as the worlds two largest gold buying nations prompted one exchange CEO to note that we hadn't, "seen this kind of gold rush in over 20 years." It would seem the concerted effort to collapse paper prices in London and New York has provided the rest of the world a multi-decade buying opportunity.

Via The FT,
Asia is witnessing one of the strongest waves of physical gold buying in 30 years, with bargain hunters using the drop in prices to secure jewellery and gold bars.

The feverish buying has left many of Hong Kong’s banks, jewellers and even its gold exchange without enough yellow metal to meet demand. In Shanghai, the gold exchange saw volumes – often seen as a proxy for demand – rising to a record on Monday, while queues formed outside some jewellery shops in Beijing.


Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, said the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold products.

“In terms of volume, I haven’t seen this gold rush for over 20 years,” he told the Financial Times on Monday, adding that the exchange only had around twenty 1kg bars, and 100 five-tael bars left in its inventory. “Older members who have been in the business for 50 years haven’t seen such a thing.”


Trading volume on the Shanghai gold exchange jumped to a record high on Monday, reaching 43 metric tonnes, according to data compiled by Bloomberg. The previous record, set on April 19, was just 30.4 metric tonnes.


[In India, traders] reported stronger-than-usual buying as bargain hunters feared that prices had bottomed and would start rising once again.

The proximity of some Hindu festivals, usually trigger points for gold demand, further exacerbated buying. “Indian physical demand and premiums rose,” Suki Cooper, metals analyst at Barclays in London, said in a note to clients on Monday.

Feverish buying demolishes gold inventories in Asia

Submitted by cpowell on Mon, 2013-04-22 17:25. Section: 
Asian Bargain Hunters Pile into Gold
By Josh Noble
Financial Times, London
Monday, April 22, 2013

HONG KONG -- Asia is witnessing one of the strongest waves of physical gold buying in 30 years, with bargain hunters using the drop in prices to secure jewellery and gold bars.
The feverish buying has left many of Hong Kong's banks, jewellers, and even its gold exchange without enough yellow metal to meet demand. In Shanghai the gold exchange saw volumes -- often seen as a proxy for demand -- rising to a record on Monday, while queues formed outside some jewellery shops in Beijing.
"Physical markets have responded to the much cheaper gold price levels," Joni Teves, precious metals analyst at UBS, said in a note to clients. "Our physical flows to Asia have been particularly elevated this week.'
The surge in buying across China, Hong Kong, India, and other Asian countries contrasts vividly with heavy selling last week, when financial investors dumped billions of dollars of gold-related assets. The strong Asian buying has provided support for global gold prices. On Monday, the cost of the metal rose to $1,438.66 per troy ounce, up from 8.1 per cent from the low set last week.

Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, said the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold.
"In terms of volume, I haven't seen this gold rush for over 20 years," he said. "Older members who have been in the business for 50 years haven't seen such a thing."
Gold traders in Asia said that premiums -- the price paid for a particular product over and above the value of the gold it contains -- which are seen as a barometer of physical demand, had more than doubled in recent days.
Chow Tai Fook, the Hong Kong-based company that is the world's biggest jeweller by market capitalisation, said that some stores in areas popular with mainland Chinese tourists had sold out of gold bars. It said demand had not been this strong for gold products since the late 1980s, a view echoed by other vendors in the city.
China is the world's second-largest gold buyer after India. At Beijing's largest gold store, Caibai, the queue to buy gold bars stretched as long as 10 metres on Friday morning, as gold enthusiasts stood in line to buy investment-grade bullion bars.
Trading volume on the Shanghai gold exchange jumped to a record high on Monday, reaching 43 metric tonnes, according to Bloomberg data. The previous record, set on April 19, was 30.4 metric tonnes.
Gold traders said demand has been strong in India, the world's top consumer. However, Indian buyers had not matched the levels of consumption of elsewhere in Asia as they waited for the yellow metal to drop below the key local price point of Rupees 25,000 per 10 grams before entering the market en masse. On Monday local prices were at around 26,500 rupees per 10 grams.
Gold traders, nonetheless, reported stronger-than-usual buying in India as bargain hunters feared that prices have bottomed and will start rising once again. The proximity of some Hindu festivals, usually trigger points for gold demand, further exacerbated buying. "Indian physical demand and premiums rose," Suki Cooper, metals analyst at Barclays in London, said in a note to clients on Monday.


Bud Casey on gold and silver's smash last week

(courtesy Bud Casey/Casey Research)

Casey Research's Bud Conrad: Gold crash likely deliberately engineered

2p ET Monday, April 22, 2013
Dear Friend of GATA and Gold:
Bud Conrad, chief economist for Casey Research, writes today that the recent plunge in gold prices seems to have been engineered by a single large participant in the market.
Conrad writes: "We don't have the name of the entity that did this. However, the way the gold was sold all at once suggests that the goal was not to get the best price. An investor with a position of this size should have been smart enough to use sensible trading tactics, issuing much smaller sell orders over a period of time. This would avoid swamping the market; and some of the orders would be filled at higher prices and thus generate more profit. Placing a sell order big enough to affect the overall market price suggests that someone with powerful backing wanted to drive the price of gold down.

"Such an entity could have been a large speculator who already had a sizable short position and could gain by unloading some of its short position once the market momentum had driven the price even yet lower. Or it could be a central bank -- one that might be happy to have the gold price move lower, as it would provide cover for its printing of more new money.
"Of course, it could be some entity that owned long contracts and wanted to get out of the position all at once.
"We don't know, but this kind of activity, resulting in the biggest drop in 30 years, raises more than just suspicion when we consider how important the price of gold is to many markets around the globe.
"Can markets really be influenced by big players? Well, was the LIBOR rate accurately reported by huge banks? Have players ever tried to corner markets? The answer to all the above, unfortunately, is yes."
Conrad's commentary is headlined "Gold Crash 2013 -- Deliberately Engineered?" and it's posted at Casey Research here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


The normally quiet Perth mint is anything but quiet!!

(courtesy Peter Cooper/Arabian money)

Gold buyers queuing up at the gates of the Perth Mint

Posted on 22 April 2013

Unusual scenes at the normally quiet Perth Mint in Western Australia where buyers queued up for the opening and rushed in to buy gold.
Nigel Moffatt, treasurer at the Perth Mint, talks about the demand outlook for gold. Shoppers in China lined up for gold this week, while in Hong Kong they rushed to buy bracelets and in India sought jewelry for weddings not set until December. The metal’s biggest price drop in three decades provoked the clamor. Nigel speaks with Zeb Eckert on Bloomberg Television’s ‘First Up’
Video LInk



From the USA Mint web site today:

This is from the U.S. Mint site today.
2013 American Eagle One Ounce Gold Proof Coin (GA1)
Product Limit ? 20,000Product will be available for shipping 04/25/2013The United States Mint has sold out of 2012 American Buffalo Gold Proof Coins.
The 2013 American Buffalo Gold Proof Coins will go on sale at 12 noon on May 23, 2013.
2013 American Eagle One Ounce Silver Proof Coin (GA6)
This product is temporarily unavailable for product repricing.Mintage Limit: None


And finally, I will leave you with this excellent piece from J.S. Kim on the mechanics of last week's crash in gold and silver:  Why was it done and what you should do to protect yourself.

This is lengthy but worthwhile...

(courtesy JSKim/zero hedge)

Why the Western Banking Cartel’s Gold and Silver Price Slam Will Backfire - And How You Can Protect Yourself from the Blowback

smartknowledgeu's picture

by JS Kim, Managing Director of SmartKnowledgeU

Currently it seems as if the disinformation about the reasons why gold and silver paper prices have fallen so quickly seem to outnumber the real reasons at least 10 to 1 in the mass media and though there have been some solid commentaries already regarding the real reasons why gold and silver paper prices have fallen (that have zero to do with the rubbish the mass media is selling the public), I feel that one can never have enough articles that try to disseminate the truth, especially when the truth is being bullied into submission by those with captive platforms from which to sell their fake agendas. Thus, in this article, I will discuss the truth about the current banker executed gold/silver raid and why it will ultimately FAIL.
I wish to summarize the facts regarding why this paper gold and silver slam happened, the usual suspects that were behind it, and why this slam will eventually result in massive failure and massive consequent devaluation of fiat currencies anyway. The reason I have opened up this first paragraph by constantly referring to a PAPER gold and silver price slam instead of a PHYSICAL gold and silver price slam is because massive premiums exist on physical silver and significant premiums exist on physical gold over spot prices of gold and silver. For all intents and purposes, the spot price is equivalent to the fake banker engineered price that cavorts across the ticker on your television everyday. But go to a dealer and try to buy at that ticker price and you will discover that it is a delusional fake price that no dealer is willing to kindly grant you. Instead, when I checked prices on 1-troy ounce American Eagle coins on Apmex last week, there was a 5.8% premium on gold coins and when the spot silver price had fallen to $22.99 an ounce earlier in Asia last week, Apmex was still listing their 1-oz American Eagles at $29.01, a whopping 26.2% higher than the spot price. Only a complete buffoon of economics, like Paul Krugman and his zombie followers, would ever believe that the price of real silver was $22.99 at any point and time last week.

How It Was Done and the FACTS About the Banking Cartel-Engineered Gold and Silver Raid
In any event, I will only briefly summarize the facts surrounding the recent gold/silver smash before moving on to the main and more important thesis of this article, and that is the expeditious path of fiat currency destruction that will be the blowback of this false illusory takedown of gold/silver prices that only exists in some hallucinatory world of illusions called the futures markets.
FACT #1: COMEX gold vaults were recently drained of 2 million ounces of physical gold in one quarter, the largest withdrawal of physical gold bullion from COMEX vaults in one quarter during this entire 12-year gold and silver bull. There has been speculation about the reasons that spurred these massive withdrawals of gold from COMEX vaults, but the most reasonable speculation is that no one trusts the bankers to hold on to their physical gold anymore, especially in light of Fact #2. Note below, that both registered AND eligible stocks of gold had heavily declined in recent months. Such an event signals a general distrust of the banking system from everyone holding gold in registered COMEX vaults.


FACT #2: One of the largest European banks, ABN Amro,defaulted on their gold contracts and informed their clients that they would only settle their gold bullion contracts in cash and not in physical. So much for the supposed legality of financial contracts as a "binding" contract. So whether Fact #1 caused Fact #2 or vice versa is irrelevant. What IS apparent is that the level of trust in bankers to safekeep physical gold and physical silver is disappearing, as it should be, and as it should have already been for years now. But truth always takes some time to catch up to banker spread lies and that is what is happening now. I have been warning people never to trust bankers in deals involving gold and silver for years now, as in this article I wrote nearly four years ago informing the public that the SLV and GLD are likely a banker invented scam as well.

FACT #3: Silver fraud whistleblower and London trader Andrew Maguire stated that the LBMA was having trouble settling gold contracts in bullion as well and stated that institutions that asked for physical settlement “were told they would be cash settled instead by a bullion bank.” In plain English, this is a default. So Andrew Maguire reported that the LBMA had already gone into default. In light of Fact #1 and Fact #2, the dominoes were starting to tumble and the house of cards that the bankers had built in gold and silver paper derivatives to deceive and hide the true fundamentals of the physical gold and physical markets from the entire world was rapidly starting to crumble. A financial earthquake of magnitude 2.5 was quickly threatening to evolve into one of the biggest financial earthquakes of all time in which the world’s confidence in all global fiat currencies would effectively have a well-deserved funeral. Just see this video to understand why no bank account is safe today.

Who Did It and Why?
So what was a banker to do? The easiest answer would be to slam the paper gold and silver price so that profitable long contracts would quickly transform into unprofitable ones as a mechanism to stop physical delivery requests that would expose that the emperor indeed had no clothes. In other words, because the Western banking cartel-controlled COMEX and LBMA vaults had insufficient physical gold and silver for delivery and other banks were struggling to make good on the contracts they had signed with clients to deliver physical gold, they needed to stop delivery requests immediately. These are all indisputable facts, not speculation.
So this crisis quickly morphed into the conundrum of “How does one slam gold and silver prices overnight in a rapid waterfall decline?” Bankers needed to solve this puzzle as quickly as possible, and the Obama administration called a meeting of the following 14 bankers just one day prior to the start of the now infamous banker gold and silver raid:

Lloyd Blankfein, Chairman and CEO Goldman Sachs
Jacques Brand, CEO Deutsche Bank
Michael Corbat, Chief Executive Officer Citigroup
Jamie Dimon, Chairman, CEO and President J.P. Morgan Chase
Sergio Ermotti, CEO UBS
James Gorman, Chairman and CEO Morgan Stanley
Gerald Hassell, Chairman and CEO Bank of New York Mellon Corporation
Jay Hooley, Chairman, President and CEO State Street Corporation
Abby Johnson, President, Fidelity Financial Services, Fidelity Investments
Steve Kandarian, Chairman of the Board, President and CEO Metlife
Brian Moynihan, President and CEO Bank of America/Merrill Lynch
John Strangfeld, CEO, Prudential
John Stumpf, Chairman, President and CEO Wells Fargo
Jim Weddle, Managing Partner, Edward Jones
Bob Benmosche, President and CEO American International Group

As you can see, every US banker that you would expect to find at that meeting was in attendance, there to do "God's work" no doubt, as has been Lloyd Blankfein's preferred method of describing Goldman Sachs's work in the past. Was it mere coincidence that one day after this meeting, a gold/silver slam that required the cooperation and participation of all the major banks participating in gold/silver futures markets materialized? I will let you be the judge of the connection between these two events. Yes this raid was likely engineered at the highest echelons of banking, meaning the BIS, the Feds, the ECB, but they also needed their commercial agents in the commercial banking world to carry out their agenda.

In any event, the bankers above had to solve the conundrum of“How does one slam gold and silver prices overnight in a rapid waterfall decline?” Because this would be nearly impossible to accomplish if bankers actually had to sell real physical gold and physical silver to accomplish this, they resorted to massive intervention in their fraudulent paper derivatives futures markets. Anything becomes possible when you can just sell millions and millions of paper ounces of gold and silver backed by nothing but air to trigger stop losses on long contracts. By this time, I’m sure all of you have seen the chart that alleges that Merrill Lynch brokers sold several million ounces of paper gold ounces backed by nothing but air in a few hours, but here is the chart below that demonstrates the massive sale of imaginary gold for the few of you that may not yet have seen it. I don’t know if it has since been confirmed that Merrill Lynch was the agent that executed this dirty takedown, but obviously an agent of the Federal Reserve was used to instigate panic selling in the paper gold markets (and it was no surprise that Brian Moynihan of Bank of America/ Merrill Lynch was at a banking cabal White House sponsored meeting 24 hours prior to the gold/silver slam).


The reason I say it is imaginary is because FACT #4, the 400 tonne sale of paper gold represented above, was not backed by a single ounce of physical gold. It was merely millions upon millions upon millions of paper gold backed by nothing but air that was sold into the market by an agent of the Federal Reserve. If you signed a contract to buy 6 million iMacs from Apple, and then Apple informed you that your only option was to settle in cash and take a multi-million dollar loss because they had just slashed prices of all iMacs because they never had any iMacs in their inventory at the time they singed that contract, would you not call that fraud? Of course the CFTC will tell you that futures contracts were never intended for physical delivery but only as a hedging mechanism, but when you short quantities of a commodity that does not even exist in real life, is that not as fraudulent a hedging mechanism as possible of which even the Devil himself would be proud?
I realize that the Apple example relates to long contracts and that the 6 million ounces of gold that Merrill Lynch brokers sold represented ounces of paper gold sold short into the market (backed by nothing but air), and that these two examples represent opposite sides of the contract, but the examples still very adequately illustrates the concept I wish for people to understand. Whether you are buying or selling something that does not exist is irrelevant. Both trades, one hypothetical (Apple), one real (gold) are still instances of fraud since ounces of air are being traded that present a make-believe picture of real physical supply and demand to the world.
In fact, since 2008, people that used to be honest about these fraudulent and criminal banking raids in gold/silver have now backtracked in their honesty and integrity for reasons only known to them. For example, in 2008, after another banker raid on gold/silver initiated fraudulently in paper markets, Donalde Cox of Coxe Advisors LLP stated that the highest levels of the Federal Reserve and US Treasury deliberately and artificially engineered the collapse in paper markets. He stated verbatim back then, “My attitude is, 'Goddamn it, they're good -- it was brilliant.'" This time around, however, thought the evidence is just as egregious and compelling, Coxe’s explanation of the gold/silver smash was “gold was ready for a pause”, implying, of course, that this smash was a natural event after a run up in gold price that was too high. Of course, just look at the facts, absent of all speculation in this article, and you can easily deduce that Coxe’s explanation is a bunch of rubbish whereas just five years ago, he was willing to relay the truth. This backtracking of integrity by media pundits has also created a lot of confusion regarding the true reasons for this current paper gold/silver price drop as well. So exactly who is buying the rubbish that the likes of Coxe, Krugman, and Blankfein are spouting? From the looks of the gold buying frenzy in Bangkok yesterday as well as reported buying frenzies in India, Hong Kong, China, Australia, the US, and countless other countries, almost no one. Below, is the gold buying frenzy that was occurring in Bangkok, Thailand last week due to the bankers' artificially-engineered low prices in gold last week.


Should Futures Markets Even Exist if its Main Purpose is to Aid and Abet Banking Fraud?
The CFTC states that “futures markets allow commodities producers and consumers to engage in ‘hedging’ in order to limit the risk of losing money as commodity prices change.”Again this is pure rubbish as bankers invented futures markets to manipulate prices of commodities to fleece and rape investors, period. Maybe a hundred years ago, the futures markets actually served this purpose, but today, this clearly is not the purpose of the futures markets. And considering what we know about the mechanisms of how the bankers took down paper prices of gold and silver so easily recently and the starring role that the fraud of futures markets played in this takedown, the larger more vital question is, "Should bankers be able to participate in futures markets and if so, should futures markets even exist?" Outside of precious metals, consider the wild volatility in the price of light crude oil from 2007 to 20ll when the oil price volatility was off the charts and oil went ballistic from roughly $50 a barrel to $150, then crashed to $35 then went ballistic to $120 again, and often with price movements occurring in rapid and stunning fashion. Does any fool actually believe that supply and demand determinants for physical oil were responsible for this massive volatility in crude oil prices within very condensed periods of time?
Furthermore, when bankers already have the price mechanism locked down for a commodity, is it just not a little curious and suspicious that NO futures market exists for such a commodity?
Diamonds are the perfect example of such a commodity. Bankers and diamond dealers already have the price mechanism locked up for this commodity and have destroyed any real secondary market for this commodity with clever marketing schemes like“diamonds are forever” and “diamonds are a girl’s best friend”, so they are unwilling to subject its price to any outside influences with a diamond futures market. Just read this article,“Have You Ever Tried to Sell a Diamond?” to learn why there are no futures markets for such a widely traded commodity such as diamonds.
Thus if prices of commodities are allowed to be manipulated by bankers for personal gain only and if the prices bankers constantly set for commodities have no semblance to the price that a free market would set for them through physical supply/demand determinants (as we can already see with the every widening divergences between physical and paper prices that I also predicted would happen years ago in this 2008 article "JS Kim Uncovers Four Parallel Markets for Gold: Asia Futures, NY Futures, Physical Bullion, Physical Coins"), then I say shut all of the futures markets down in both London and New York!
For people that claim permanently shuttering futures markets would hurt the producers that need to “engage in ‘hedging’ in order to limit the risk of losing money as commodity prices change,” I don't believe producers of commodities would be hurt at all, and here's why. If allowing producers to engage in hedging were the true purpose of the futures markets, then I say keep them open. But to say that is the true purpose of the futures markets is comparable to believing the rubbish that the US Federal Reserve prints on their website of their mission being to establish “price stability” of the US dollar even though they have deliberately engineered a 98% plunge in USD valuation over the last 80 years! If you were to shut down the London, New York and Shanghai futures markets for gold and silver for just three months, and radically higher prices for gold and silver would result as a consequence of their closure (of which I’m positive would happen since the bullion banks are perpetually short millions of paper gold and silver ounces that don't exist in the real world in the futures markets), then what you are forcing producers to do is to use futures markets not to hedge against changes in the prices of their commodities but instead to hedge against the fraud committed by bankers. 

Should hedging against the fraudulent price moves engineered by bankers really be a good reason to justify the existence of futures markets?
If you were to shut down the futures markets and let free market and only supply/demand determinants of the physical commodity set prices instead of supply/demand determinants for paper oil, paper gold, paper platinum, etc. etc. backed by nothing but air, I guarantee that the world would receive not only a radical restructuring of all commodity prices but also commodity prices that would be far more stable and far less volatile, two conditions that would provide great benefits to producers. Thus the best way the CFTC could serve commodity producers at this point would be to completely shut down the COMEX (but of course we all know the probability of this event is less than the revival prospects of a flatlining ER victim).

The Gold & Silver Bull Have Been Sighted In Physical Markets and is Still Strong & Robust
So yes, contrary to the kool-aid the media is selling the public, the gold and silver bull is still fiercely alive and well. Yes, this correction in gold is greater than past 20% corrections, but when collapse of the global fiat Ponzi scheme and loss of control of all financial markets was at hand for the global bankers, desperate times call for desperate measures and thus, using the mechanisms I described above the bankers executed a 5-day price slam equivalent to 7 standard deviations of the 5-day price move in gold over the last 20 years. For those that still incredulously believe all the media rubbish and the big commercial banking lies about gold and silver, just check out this article I wrote all the way back in 2006 in which I called out Morgan Stanley Steven Roach’s pure propaganda announcement that a “commodities bubble” had burst. In fact, these rubbish calls of gold and silver collapsing back then were being made by big global commercial banking firms because of a 20% pullback in gold price from $728 to $583 in a few months. My response? I stated, “I’ve dug deep enough down into the rabbit hole to know that gold will rise much much higher in the future.” So yes, I believe a $817, or 140% increase in the price of gold from $583 to its current price of $1400 is a “much much higher” price and all the people that called me a fool for stating this 7 years ago are the EXACT same people, aka banking shills, calling me a fool for stating that the gold and silver bull are still alive and well.

The Blowback: The Days of Re-hypothecation Coming to an End
But how will the banker price manipulation of commodity prices that have zero basis on the reality of free market dynamics of the real physical commodity in the real world finally backfire in their criminal faces? Here’s how its likely to go down in the gold/silver world. As I wrote more than 4 years ago, the divergences between real physical PM prices and fake banker manipulated spot paper prices will continue to grow. Secondly, if we were to assume that the reason COMEX inventories plunged prior to the gold/silver slam down were attributable to peoples’ deteriorating trust in bankers to hold their physical gold and silver (a very healthy distrust by the way), then we can safely assume that the same entities that withdrew their physical gold and silver from the banking system will not return and store any of their physical gold and silver within the global banking system in the future. This will prevent bankers from re-hypothecating physical gold and physical silver and selling the same gold ounce and the same silver ounce over and over to multiple persons and accounts as they have been doing for decades. Or if instead, the banks up their re-hypothecation schemes and sell the same ounce of gold 10 times instead of 5 times due to their physical gold and physical silver reserves diminishing, then smaller withdrawals of physical PMs from their vaults will result in greater stresses on their abilities to suppress the price of gold and silver in the months ahead.

Thirdly, I really don’t believe the central purpose of this gold/silver takedown was simply so the COMEX and LBMA could replenish their raided physical gold and silver inventories at much lower prices. This could not possibly have been the central purpose of the price raid in my opinion as the bullion banks have unconditional support from the Central Banks to continue their fraud in every capacity. Thus, if they simply needed to buy more inventory, Central Banks would have merely continued their counterfeiting scheme and extended an open credit line to these bullion banks (if they were needed) and thus the raided COMEX and LBMA warehouse could have been easily replenished at even higher gold and silver prices. A more reasonable explanation, in my opinion, is one of the following two explanations:

ONE, the physical gold and silver inventory that the COMEX and LBMA needed to replenish their inventories was not available for sale, i.e. no one was selling physical gold and silver in the large quantities they needed, and since so many entities were asking for physical delivery of PMs that had been re-hypothecated over and over, the COMEX and LBMA could no longer shift physical gold and silver in and out of various vaults to cover all deliveries. Thus, the bankers needed to slam prices to convince holders of physical to panic sell their metals to replenish their inventories. However, since as I’ve explained above, this price slam was executed in paper markets and the only selling bankers accomplished was to force liquidation of long contracts of paper ounces of gold, these actions still would not have released more physical ounces to the market. In fact, all initial reports from regional physical bullion dealers and out of the LBMA pointed to just the OPPOSITE EFFECT of massive decreases in physical supplies of gold and silver due to extremely strong buying from sovereign institutions and retail individuals alike. Even with anecdotal reports of bullion dealers being depleted of their physical silver and gold inventory that can be confirmed by visiting these dealers’ online websites that list nearly all bullion silver and bullion gold as “SOLD OUT”, some bullion dealers may perhaps be listing inventory as “SOLD OUT” when they may just be unwilling to sell at such artificially set low prices.
Thus I’m not buying the story that the banks didn’t want to buy more gold/silver at higher prices because more physical buying would have sent the price higher and that is the reason they slammed prices. If significant physical buying of gold and silver was a catalyst to send spot prices of gold/silver higher, then spot prices of gold/silver would have been steadily and significantly increasing for a steady 12 consecutive months at least. Physical gold and silver buying will eventually stabilize and send even paper gold/silver prices steadily higher but likely only when the disparity between physical and fake paper prices becomes large enough.

Thus, explanation number TWO may be more reasonable, and that is the bankers executed a gold/silver slam to prevent large scale defaults of physical gold/silver delivery on the COMEX and LBMA that would have caused a consequent catastrophic devaluation of all major fiat currencies simultaneously and major global bank failures; and to convince people that gold and silver are no longer safe havens and to keep them pumping their fiat into global stock markets that are likely to catastrophically crash sometime within the next 18 months. However, while the accomplishment of the above two objectives have kept the majority of people compliant within the global financial Ponzi scheme, the subsequent structural damage inflicted upon the global financial system was enormous.
Because the enormity of this most recent price raid in gold and silver will undoubtedly
(1) very significantly contract physical gold and silver supply; and
(2) contract the physical reserves under control of the Western banking cartel to re-hypothecate gold and silver
these two consequences will eventually erupt into a full blown default of the LBMA and COMEX and a realization from all global citizens that the banking emperors of this world indeed have no clothes.
In other words, the current executed banker raid in gold and silver will have the same long-term success rate as a doctor that tries to save his patient from the venom of a Malaysian Blue Krait snake bite by applying tourniquets that redirect the venom from the patient’s heart to the patient’s liver and kidneys. The patient would die within two hours if the venom reached the patient’s heart but may live an additional 4-6 hours before dying if the venom is redirected to his other organs. Not a solution but just a delayed inevitability. This is what the bankers have just done with their recent price slam. They have no anti-venom for the misery they have deliberately created, and the death of their fiat currency system is now inevitable and unavoidable, a consequence of the fact that the bankers have just STRENGTHENED the gold and silver bull by strengthening the bullish dynamics of the REAL PHYSICAL gold and silver markets with their execute raid in THEIR FAKE PAPER gold and silver markets.
In conclusion, the bankers may have delayed the default of the LBMA and COMEX with their ingenious 100% paper executed slam of gold and silver, but the mechanism they used to achieve their success is likely to ensure and expedite the circumstances necessary for the absolute failure of the LBMA and COMEX and the consequent failure of all global fiat currencies. Thus, please never be misled by all the white noise of mass media propaganda or from major commercial banks like Goldman Sachs when the topics of gold, silver and paper money are concerned. It is just a matter of time before the bankers themselves suffer the dire blowback consequences of the recent fraud regarding their slamdown of paper gold and silver prices. However, because one of the blowback effects of the Western banking cartel's gold and silver price slam will be the purchasing power destruction of all major global fiat currencies, best to convert the majority of your fiat currencies into physical gold and silver now, including any holdings in the GLD and SLV, before it is too late. (Copyright: 2013 SmartKnowledgeU. This article may not be re-published on other sites and is subject to the terms of the re-publishing rights published below.)

About the Author: JS Kim is the Managing Director and Founder of SmartKnowledgeU, a fiercely independent research & consulting firm whose mission it is to help Main Street protect their wealth by exposing the lies of Wall Street. Follow us on twitter @smartknowledgeu and subscribe to our YouTube channel by clicking here.


And now for our paper stories


First  your early market sentiment which shaped the trading in NY:.

Overnight sentiment will come from zero hedge

Major points:

1.  Inability of the Japanese Yen to break into the 100 column

2.  Gold, the major story at it traded at $1435 or 100 dollars up from its lows last week.

3.  Italian bonds higher due to election of Napolitano for another term.  Yield on 10 year bond down to 4.11%, a drop of 11 basis points

4.  Key data for this morning:

  • Italian 10Y yield down 11bps to 4.11%
  • BTP/bund 10Y spread -12bps to 285bps; earlier hit 2-mo. tight at 280bps
  • Spanish 10Y yield down 7bps to 4.56%
  • U.K. 10Y yield up 4bps to 1.7%
  • German 10Y yield up 1bp to 1.26%
  • Bund future down 0.03% to 145.98
  • BTP future up 0.82% to 113.93
  • EUR/USD down 0.05% to $1.3046
  • Dollar Index up 0.08% to 82.78
  • Sterling spot up 0.06% to $1.524
  • 1Y euro cross currency basis swap up 1bp to -21bps
  • Stoxx 600 up 0.78% to 287.43

5.  What to expect this week:  Sopc Gen

6. Details from Jim Reid of Deutsche Bank

(courtesy zero hedge)

Gold Surges In Quiet Trading Session

Tyler Durden's picture

With no macro data on the docket (the NAR's self promotional "existing home sales" advertising brochure is anything but data), the market will be chasing the usual carry currency pair suspects for hints how to trade. Alas, with even more ominous economics news out of Europe, and an apparently inability of Mrs Watanabe to breach 100 on the USDJPY (hitting 99.98 for the second time in two weeks before rolling over once more), we may be rangebound, or downward bounce if CAT shocks everyone with just how bad the Chinese (and global) heavy construction (and thus growth) reality truly is. One asset, however, that has outperformed and is up by well over 2% is gold, trading at $1435 at last check, over $100 from the lows posted a week ago, and rising rapidly on no particular news as the sell off appears to be over and now the snapback comes and the realization that Goldman was happily buying everything its clients were selling all along.
Curiously the other outperforming asset class in the overnight market are Italian BTPs, whose yield was slide by another 11 bps to 4.11% on hope the reelection of the 87 year old Napolitano as president on the 6th round of voting will end the gridlock plaguing Italian politics, bring some sort of political compromise to the country as  well as a grand alliance. Yet another one of those "we will believe it when we see it" events, especially with the implosion suffered by the Democratic Party over the weekend.
Speaking of Europe, there was little other good news. ECB's Weidmann told FAZ that monetary policy must focus on inflation, hardly news the Buddhist monetarists (all about the here and now, tomorrow never comes) wanted to hear on a monday morning. Adding to the worries of the EUR bulls, Bonnici echoed Weidmann from last week, adding that a rate cut would have "limited impact", an outcome further justified by Asmussen who said a rate cut is possible if justified by the data. This explains the inability of the EUR to catch any bid in the overnight session. The final hammer in the European economic coffin came from the Bundesbank which said that "sluggish industrial production and cold winter weather" may have delayed Germany's economic recovery. Yep: the weather is to blame again.
Adding substantial pressure on the future of Europe was news overnight from Handesblatt that the German anti-Euro party would gain 19% of the political vote.
Finally, rounding off the picture, was the update that Euro-Area government debt rose to a record 90.6% of GDP in 2012. How did the Keynesians react to this news? "Not Nearly Enough!"
A quick look at European markets:
  • Italian 10Y yield down 11bps to 4.11%
  • BTP/bund 10Y spread -12bps to 285bps; earlier hit 2-mo. tight at 280bps
  • Spanish 10Y yield down 7bps to 4.56%
  • U.K. 10Y yield up 4bps to 1.7%
  • German 10Y yield up 1bp to 1.26%
  • Bund future down 0.03% to 145.98
  • BTP future up 0.82% to 113.93
  • EUR/USD down 0.05% to $1.3046
  • Dollar Index up 0.08% to 82.78
  • Sterling spot up 0.06% to $1.524
  • 1Y euro cross currency basis swap up 1bp to -21bps
  • Stoxx 600 up 0.78% to 287.43
SocGen's summary of key macro events to watch out for:
Headlines from Italy over the weekend are delivering a positive impetus for cross asset markets as the week gets underway, with periphery debt the main beneficiary and 10y BTP yields slipping closer to 4.00%. This has not translated into higher EUR/G10 which says quite a bit over EUR sentiment and a bias to focus on the USD side of the equation especially with a raft of US data including GDP looming this week. The wealth effect is finally helping support the US housing market. After sending long-term rates into a nosedive, now that households have deleveraged (SG report), and as US stock markets recently hit their highest points since 2007, the wealth effect of US households is being rebuilt. This should be reflected in existing home sales today.
This probably creates some hope for the outlook for domestic demand, and thus supports our call on the Fed. However, the Fed is in no hurry to put a stop to its asset buying policy (currently $85bn/month). As a reminder, retail sales reported on 12 April disappointed, but this week's data rush will provide a fresh angle.
The situation is not at all the same in the eurozone, with very different leverage and wealth effects. Given the unemployment rate of 12%, household confidence to be reported today will unfortunately most likely reaffirm the bleak economic situation. Against this backdrop, it is tough to be optimistic on the capacity of European households to boost business morale. Output growth has stalled, thus the ECB is having a hard time finding a satisfactory solution right now in overcoming a fragmented North/South divide. Speculation on another rate cut will not go away especially after Weidmann's comments last week: most participants who have floated this possibility of more stimulus are nevertheless doubtful that it would have a big impact on activity.
That said, this just bolsters our scenario in the medium term for a drop in the EUR/USD, and an underperformance of the US bond markets vs EUR bond markets in H2 2013.
The news cycle from this weekend via DB's Jim Reid
Just over 20% of S&P500 companies have reported earnings thus far, represent about one-third of the index’s market cap, and we’re starting to get a clearer picture of how the reporting season is panning out in the US. As we mentioned in last Friday’s EMR, we are seeing a large divergence in terms of the EPS and revenue performance. Of the firms that have reported so far, the beat/miss ratio for earnings is 71%:27% (2% in line). However the beat/miss ratio for sales is currently tracking under 50% (currently 48%:52%). This is clearly a weaker performance versus the 64% sales beat ratio in Q4 2012 but slightly better than the 42% and 41% in Q3 and Q2 of last year so this is not a new trend. For the record, current Q1 EPS beats are not too dissimilar to what we saw in Q4 (74%), Q3 (72%) and Q2 (71%) of last year. It does seem that the stronger Dollar and perhaps weak European activity are having a drag on top line numbers this time round but our US equity strategist David Bianco also noted that net interest margin pressures (on banks), flattish commodity prices, and still soft capex conditions are all reasons behind the sales weakness. By industry, Financials, Healthcare, Industrial and Tech are having the weakest sales beat ratios this reporting season.
It is still early days for Europe but we are also witnessing a similar trend here. Of the 40-odd Stoxx600 companies that have reported so far, 60% of those have beaten EPS estimates but less than 40% have been able to do so on the top line. Stoxx600 EPS beats have ranged between 55%-58% in the last four quarters so the current run-rate is not far off that. Sales performance has been typically the bright spot though for Europe given a 60%-plus beat ratio (other than Q3 12’s 54%) in the past year so we’ll see how European sales stats unfolds this time round. Our usual earnings tracker table is included in the PDF of today’s EMR. Staying on this theme its worth highlighting that we are also moving into one of the peak reporting weeks in Japan. Over 50 Nikkei firms are lined up to report this week, which represents about 32% of the index’s market capitalisation. Japan clearly has been one of the bigger macro stories this year and with the Nikkei being a global outperformer to date, corporate fundamentals may eventually need to show signs of improvement to support the rally. We’ve seen 8 Japanese firms report so far of which 6 have beaten sales estimates but only half topping EPS consensus. The Nikkei’s sales beat/miss ratio for the corresponding  quarter was an unimpressive 49%/51% although EPS performance was solid at 63%:37%.
Clearly its early days still but we have an interesting few weeks ahead to see what a 9% depreciation of the JPY during the 3 months of 2013 will do to corporate results. For what it’s worth, a 11% decline in the Yen between October-December of last year seemed to have done little for top line. Maybe there's a J-curve impact and the fruits of the Yen devaluation will come through more as we move through the year.
Turning to some of the weekend headlines, perhaps the most significant news of note was the re-election of Giorgo Napolitano as President of Italy. Napolitano becomes the first Italian president to be given a second seven-year term after reluctantly accepting a plea from the Democrat Party along with caretaker PM Mario Monti and Silvio Berlusconi to stand again. DB’s Marco Stringa thinks that markets will react positively, even if Napolitano reflection is a symbol of the fragmentation within the Italian political system. On the positive side, the market should be relieved that the risk of elections in the summer should be avoided and that finally a new government can be formed. Indeed, they see Napolitano’s reelection as an implicit commitment by the centre-left,  centre-right and Monti’s Civic Alliance to support the formation of a grand-coalition government sponsored by Napolitano. On the negative side, the Presidential election process sends a message of political fragmentation. The fragmentation across parties in the Parliament was already well known, but the dramatic fragmentation within the centreleft Democratic Party was a negative surprise. Napolitano’s election comes after Bersani’s other candidates former PM Prodi and Franco Marini faced opposition from within Bersani’s own coalition. Given the political fragmentation, DB’s central case scenario is a government timeframe of just one or two years.
Early elections in October 2013 cannot be excluded, but now they appear much less likely now. The big question for the new administration is whether they have the appetite and political will to push through much needed economic reforms. An interesting few months still await even if the risk of fresh elections should have receded.
The G20/IMF/World Bank meeting wrapped up over the weekend, with the G20 simply reiterating its pledge to avoid competitive devaluation and saying that the BoJ’s monetary policy is “intended to stop inflation and support domestic demand”. Shortly after the meeting the BoJ’s Kuroda told reporters that “Winning international understanding gives me more confidence to conduct monetary policy appropriately. We will continue our qualitative and quantitative easing for the next two years”. The yen is a touch weaker against the dollar this morning (+0.2%) after depreciating 1.4% last Friday. Meanwhile the Nikkei (+2.1%) is off to a strong start to the week as the G20 hasn't really leaned on Japan to be more circumspect.
Elsewhere in Asia, markets are broadly stronger with most equity indices trading about half-a-percent higher overnight. The Shanghai Composite (-0.4%) is the main underperformer as Insurers were led lower by news of the Sichuan earthquake that saw at least 188 fatalities and over 11,000 injuries. The death toll from H7N9 avian influenza has also climbed to 20 (out of 102 confirmed infections) in China. WHO experts suspected human transmission ‘in very rare cases’ but this is clearly still an open issue for markets to keep a close eye on.
As newsflow from the Korean peninsula starts to fade there have been some snippets from the Middle East. In a week-long visit to the Middle East, US Defence Secretary Hagel pressed an American agenda on Sunday focused on deterring Iran (including a new weapons deal for Isreal) coupled with caution that it would be premature for Israel to opt for unilateral strikes on Tehran's nuclear program. Mr Hagel however on Sunday acknowledged that there might be 'minor' differences between the US and Israel on the timeline in which Iran might develop nuclear weapons (NYT).
Looking in more detail at this week’s calendar, in the US the highlight is Friday's advance Q1 GDP reading. Consensus is calling for GDP growth of 3%. Outside of GDP, we have existing home sales today followed by new home sales tomorrow and durable goods orders on Wednesday.
In Europe, tomorrow’s flash PMIs for April will be the most closely watched data point for the week. Outside of that we have advance Eurozone consumer confidence numbers for April later today, Germany’s IFO survey tomorrow and on Friday we have March credit aggregates. The UK will report Q1 GDP on Thursday.
In Asia the BoJ’s meets on Friday – and with all the major announcements last meeting, there should be no major surprises from the central bank this week. However the BoJ will be updating its economic and inflation forecasts for 2013 and 2014 this week. In China, flash manufacturing PMIs are scheduled on Wednesday.


Three developments late Friday which highlights currency trading:

1. The G20 allows Japan to continue with its QE program.  They will not target exchange rates. They will not buy foreign bonds and are only focusing on domestic policies.

2.  Fitch lowered the credit rating of the UK from AAA to AA plus

3.  Italy took the unusual step of re-electing for another term Napolitano.  Bersani resigned.

Contours of the Investment Climate

Marc To Market's picture

The foreign exchange market has begun the new week quietly, but the global bonds and stocks are firm, while gold and oil continue to recover from their recent dramatic slide.  The dollar has traded in narrow ranges just below JPY100.  The euro briefly slipped though the pre-weekend low in early European turnover, but is little changed as North American dealers return.
The Australian dollar remains heavy and has recorded new 5-week lows.  Of note, news that the ultra-dove Svensson will step down from the Riksbank has given the krona a fillip.
Global equities are firmer.   The MSCI Asia-Pacific Index gained about 0.6%, without the help of Shanghai Composite, which eased slightly.  The Nikkei led the move and rose to new five year high.  Korea cut this year's decline by a quarter with a 1% rise led the domestic sectors of health care and utilities.  The Philippine's stock market, however, solidified its position as the second best in Asia this year, with a 2.3% rise, bringing the year-to-date gain to 22.5%.
European bourses are following suit with the Dow Jones Stoxx 600 up 0.75%, led by financials and consumer service sectors.  In terms of countries, Italy continues to lead the recovery more than a 2% gain, giving it a month to date gain of more than 5%.  Most of the other major European (and North American) markets are down on the month.
There were three developments from late Friday that will impact the investment climate this week. First, the G20 was not critical of Japan's efforts to reflate its economy.  We felt that comments from senior US Treasury and IMF officials prior to the meeting hinted at this and we argued that market has misunderstood the US Treasury's semiannual report on the foreign exchange market.  Japan may have violated the spirit of the rules of engagement as they have evolved from the G7/G20, but they have righted themselves by 1) refraining from offering bilateral exchange rate targets, 2) moved away from changing the BOJ's mandate and the earlier notion of buying foreign bonds and 3) focused on domestic policy objectives. 
Second, Fitch cut the UK's credit rating to AA+ from AAA.  This follows a similar cut by Moody's in late February.  Fitch has quickly resolved the negative watch it had placed on its ratings in late March, two days after Chancellor of the Exchequer Osborn cut his growth forecast and raised his debt projections in his budget speech.  Fitch cited the weaker growth and fiscal outlook in its statement explaining the downgrade. The rating agency recognized the strong fiscal financing flexibility, the fact it prints its own currency, which has reserve status and that its debt has a relatively long average maturity.  However, Fitch argued that its vulnerability to adverse developments and fiscal shocks is not consistent with an AAA rating. 
UK gilts are trading a bit heavier today.  Our own models warn of scope for additional pressure on the UK's ratings.  Nevertheless, as we have point out previously, sovereign ratings of large open and relatively transparent countries add little value.  They rely exclusively on publicly available information that investors have largely already taken on board. 
Third, Italy took an unprecedented step this weekend to give the current president another term.  Napolitano will speak to parliament Monday and lay out his strategy.  He favors the establishment of a new (coalition) government rather than a return to the polls.   Although the path seems convoluted, we continue to see a new government with a limited political agenda (rather than a technocrat government) as the most likely outcome. The limited agenda would have to include electoral reform and some pro-growth measures.   Italian markets reacted positively to the developments and the yield on the 2-year note slipped to new record lows, while the 10-year yield is nearing 4%, a level not seen since late 2010.
Meanwhile, PD leader Bersani resigned after he failed to carry a substantial number of deputies in support of Prodi for president.  Many observers who are surprised of Berlusconi's success in Italian politics often fail to appreciate how ineptitude of his opposition.  Bersani snatched defeat from the jaws of victory in the Feb election and played his hand poorly since.  Renzi, Bersani's rival within the center-left, appears to be one of the main beneficiaries of Bersani's resignation.  Ironically, the ascendancy of Renzi, who is a likely PM candidate in the next election,  appears to be part of the evolution of the Italian left away from its communist roots and toward a more centrist position. 
In the week ahead there are a few data points that stand out. The first is tomorrow's flash euro area PMI. March's decline was disappointing and suggests the economy likely contracted by around 0.5% in Q1.  Even if the April reading steadies, a move back above the 50 boom/bust level is unlikely until Q3 at the earliest. 
On Thursday the UK becomes the first G7 country to report Q1 GDP.  A flattish reading is likely, which allows for a +/- 0.1 or 0.2%, which is largely a rounding error.  A negative reading will get some chins wagging about a triple dip, but we find such talk quite vacuous.  This is a unhelpful characterization of what is happening and pretends there has been a recovery in between dips.  Instead, the UK economy is best understood as bouncing along its trough. 
This stands in contrast to the US GDP figures will are reported the following day.  The US economy is expected to have expanded by 3% of more at an annualized clip in Q1. Despite the end of the payroll savings holiday and delays in tax refunds, the US consumer appears to have fared well, though dipping into savings to do so.  In addition, the rebuilding of inventories also is expected to have boost growth. 
To be sure, as the quarter ended the consumer and the economy lost momentum and the early Q2 data warns of another spring swoon.  Growth in the current quarter may be slowing back toward a 2% pace, which is about what it is averaged since mid-2009.
HSBC reports China's April flash PMI on Tuesday and the consensus expects a 51.4 reading down from 51.6 in March.  It seems that the non-performing loan problem is rivaling the economic slowdown for attention.  Non-performing loans rose 20.7% year-over-year in Q1 Separately, the H7N9 flu continues to spread, while not making headlines, is a story many are watching closely.
The Reserve Bank of New Zealand meets on Wednesdayand it will keep the official cash rate steadfastly at 2.5% not just now but the remainder of the year and into 2014.   Australia reports Q1 CPI the day before and is unlikely to deny the central bank scope to ease should the economy slow further.  Separately, there are number of emerging market central bank meet (Hungary, Philippines, Colombia and Mexico) this week.  Only Hungary is expected to change policy by delivering a 25 bp rate cut.
The US is in the middle of earnings season.  Rarely does a particular corporation's earnings have impact in the international capital markets.  However, we note that Apple's earnings are to be reported on Tuesday and shares finished below $400 for the first time since late-2011 amid concerns.  The shares of many of its suppliers in Asia have also sold off as the introduction of the new product cycle (5s iphones) may be pushed into Q3 from Q2.

Barroso: we are near our austerity limit:

(courtesy London's Financial times)

Barroso says Europe near austerity limit

By Peter Spiegel in Brussels and Peter Ehrlich in FrankfurtEurope may have hit the political limits of how far it can go with austerity-led economic policiesbecause of the growing opposition in the eurozone’s recession-hit periphery, the European Commission’s president said on Monday.
José Manuel Barroso said that while he still believed in the need for sweeping economic reforms and drastic cuts in budget deficits, such policies needed to have "acceptance, politically and socially", which was now at risk…


Matt Clinch of CNBC believes both Greece and Cyprus will be graciously asked to leave the Euro:

(courtesy M Clinch/CNBC/the Business Insider)

CITI: We Think Both Greece And Cyprus Will Exit The Euro

Matt Clinch, CNBC
the Business Insider

Major debt restructuring for both Cyprus and Greece will probably force the struggling euro zone countries to leave the single currency, according to Citigroup's latest economic outlook, which warned markets could again be hit by escalating fears.
Stocks on both sides of the Atlantic have remained relatively sanguine in March as the so-called Troika (the European Commission, the European Central Bank and the International Monetary Fund) agreed to give Cyprus a 10 billion euro ($13 billion) bailout. The country also imposed credit controls and a levy on large deposits.
But the story is far from over, according to Citi, with the euro area's economic prospects remaining far from healthy.
"We continue to assume that Greece and Cyprus will leave EMU (European Monetary Union) over time," Citi said in the note published late Wednesday.
"We expect the euro area to stay in recession for this year and 2014 - with deep recessions in most periphery countries - and with further episodic flare ups of financial market tensions."
Cyprus at some stage will probably undergo its first restructuring of sovereign debt, which could put its place in the monetary union in jeopardy, Citi added. This could be prompted by a collective recognition that severe economic weakness will throw the current reform program badly off track or by a political decision in Cyprus to abandon the Troika's plan.
Germany's parliament backed the bailout for Cyprus by a large majority on Thursday but concerns still remain with the Cypriot parliament set to vote on the final package. Cyprus' attorney general, Petros Clerides, released details of an unscheduled vote on Wednesday, according to Reuters, with early signs that nearly half the members of the 56-seat parliament may oppose the bailout.
The Cypriot Greens Party, with just one member in parliament, became the first to openly announce its intentions to reject the deal.
"There are numerous possible triggers that could cause market strains to escalate again. But even if financial tensions do not worsen further, we expect that the ECB (European Central Bank) will soon cut rates again, probably at the May meeting," Citi said.
The bank believes that various "credit easing measures" could come into play as central banks and regulators take a more lenient view on the indebted nations. Strict austerity measures in the euro zone have received growing attention this week with EU Economic and Monetary Affairs Commissioner Olli Rehn telling Reuters on Thursday that budgetary belt-tightening could be slowed to help reinvigorate economic growth.
Spain and Italy won't escape unscathed, according to Citi, with a continuing vicious circle between poor bank credit availability, economic weakness and rising unemployment in most peripheral countries.
"Italy and Spain eventually will enter some form of ESM (European Stability Mechanism) program this year. Some restructuring of government debts and/or bank liabilities remains likely in a range of countries over time, including Portugal, Cyprus, Italy, Spain and Ireland," Citi said.
This story was originally published by CNBC.

Read more:


Many German flights are cancelled as the unions revolted after Lufthansa rejected the flight crews union demands for a 5.2% pay rise.

(courtesy zero hedge)

German Airline Unions Are Revolting

Tyler Durden's picture

While 'the rest of Europe' appears to remain in beggars-can-be-choosers mode with handouts from the core (even if there is a new template), it appears the people of Germany are beginning to want their slice of the cake. Following Lufthansa's rejection of the flight crews' union demands for a 5.2% pay rise(which we should be assured is entirely non-inflationary), the airline faces massive flight cancellations on Monday. As The BBC reports, only 30 of its more than 1700 scheduled flights will take place as Lufthansa looks to cut costs in the face of stiff competition from low-cost carriers. With Frau Merkel facing the recent women's quota setback, and a workforce seemingly becoming increasingly uncomfortable with their status quo, the rise of the 'Alternative for Germany' party makes the elections far from a foregone conclusion despite current majorities.
German airline Lufthansa has cancelled the majority of its flights scheduled for Monday due to a strike.

The airline said about only about 30 of its flights would run as planned on Monday, out of more than 1,700 originally scheduled.

Ground staff have called a one-day strike in a pay dispute.

Last week Lufthansa rejected union demands for a 5.2% wage increase over the next 12 months.

Strikers are also looking for guarantees over job cuts.

Like many airlines, Lufthansa is looking to cut costs in the face of stiff competition from low-cost carriers and big Gulf airlines, as well as rising fuel prices.

Unions staged a similar one-day strike last month. Short "warning strikes" are a common tactic among German unions, designed to put pressure on wage negotiations.

In a statement on its website, Lufthansa said passengers should expect "massive" flight cancellations and delays that will start to affect long-haul flights from Sunday.


The anti-Euro party (Alternative for Germany run by Bernd Lucke) is gaining at the polls.  Now 19% of
Germans in a poll would vote for this party.  They are gaining in strength and this is not good for Merkel.  They advocate Germany to remove itself from the EU monetary system as they re adopt the German mark:

(courtesy zero hedge)  

19% Of Germans Say They Would Vote For Anti-Euro Party

Tyler Durden's picture

In what may come as a shock to an otherwise quiet Germany, which has hardly seen any of the vocal (and actionable) "Euroskepticism" prevalent among its smaller peripheral neighbors, Handeslbslatt reports that a whopping 19% of Germans have said they would vote the anti-euro party Alternative for Germany (AFD). This means Bernd Lucke's party, which appeared as if out of nowhere, has succeeded in taking Germany by storm, and is likely that his success and prominence will merely convert even more people on the fence about Europe's future to those demanding a Deutsche Mark return. And while the AFD has yet to pose a direct threat to Merkel's ruling CDU coalition which has 36.7% of the vote five months ahead of elections, recall that everyone ignored Beppe Grillo as a mere sideshow weeks before his blistering performance to nearly win the Italian election in February.
All that would take for another surge in the Euroskeptic's popularity is another summer of economic discontent and contraction: precisely the kind that is shaping up for Europe for the fifth year in a row.
From Handelsblatt, Google translated:
The new anti-euro party alternative for Germany (AFD) has a good chance to collect in autumn in the Bundestag. The result of a representative survey of online market research company market research on behalf of Handelsblatt Online. 19.2 percent of the 1,003 respondents affirmed therefore the question of whether they would give the party their vote in the general election (24.9 percent of men and 14.8 percent of women).
Their greatest potential voters, the party in the 31 - to 45-year-olds. 19.3 percent of this age group would give their vote for the AFD (in the 18 - to 30-year-olds: 14.2 percent, at the 46 - 65 year olds: 23.1 percent).
54.6 percent of respondents (56.7 percent of men, 53 percent of women) would not choose the AFD on the other hand, 26 percent of respondents stated that they have not made a choice decision (18.4 percent of men, 32.2 percent of women).
In its election manifesto, the AFD calls for "orderly resolution of the euro area". Of the respondents this requirement is viewed critically. In particular, the projects that Germany gets out of the euro and return to the D-Mark, hardly find supporters. 37 percent of respondents want to return to the Deutsche Mark (35.9 percent of men, 38 percent of women). In contrast, 63 percent of respondents are in favor, stick to the euro (64.1 percent of men, 62 percent of women).
On the Handelsblatt prediction markets , the other parties to which the "alternative for Germany" were heard on Sunday at 25 percent - the beginning of the year there were just over three percent, the strongest party was the CDU with 30.5 percent. Together with the FDP (6.2 percent) they would to 36.7 percent. SPD (20 per cent) and the Greens (10.4 per cent) are significantly behind with a total of 30.4 percent. The Left Party would have to fear about 5 percent for a place in the Bundestag.
The prediction markets shows recent changes in opinion very quickly, because there will be traded continuously. On the platform, participants can trade the parties in the general election as a virtual shares. Behind this is the following idea: in the share price, the different personal expectations of participants about the performance of the parties incorporated. At the end of the game is a payoff equal to the result of the parties in the general election.
According to a survey by the polling institute YouGov on behalf of "time-line", the AFD has its greatest potential voters in previous FDP and the Left Party voters. 35 percent of those who voted for the Left in the 2009 parliamentary elections can imagine, therefore, to vote in the fall for the AFD. Under the FDP voters, there are 33 percent of Union and SPD voters 18 per cent, with the Greens voters 16 percent.
Total imagined even 27 percent of the Germans to choose the new party, according to the YouGov survey. But only three percent would give the AFD with certainty their voice when on Sunday would be parliamentary elections. When Allen Bach is, although almost a fifth of the population could imagine to support the party again, the AFD achieved in the concrete choice intentions so far only one to two percent.


It seems that Japan is set to rescue the world with its carry trade.
The yields on the 10 year Italian and Spanish 10 year bonds have collapsed due to excess purchases of bonds by both the USA and Japan.  A total of 660 billion USA excess  ( total QE of 10 year USA and Japan-total new 10 year bonds for Japan and USA=  660 billion USA)

(courtesy zero hedge)

Japan To "Carry" Europe's Rescue

Tyler Durden's picture

Between an 87-year-old Italian, a bearded American, two Japanese sociopaths, and a world in desperate search of 'yield', the yields on Spanish 10Y debt have collapsed in recent days to 4.50% - its lowest since November 2010 (and Italy at around 3.54% also close to 29 month lows). With the backdrop that no harm can ever come to another government, corporate, or high-yield bond ever again, the $660 billion in excess Fed and BoJ liquidity needs to be invested and why not grab the riskiest stuff there is. European stocks ended mixed with Italy and Spain soaring and the rest in the red or unch. Corporate credit rallied, outperforming stocks, but Swiss 2Y rates remained at 3-month lows. Europe, market indications aside, remains very unfixed; but given the leadership's insistence that the market knows best, we assume we should not expect more austerity or belt-tightening as 'investors' are willing to take the bankers' promises as gospel. Just as a reminder - we saw this kind of 'confidence' before in 2011, did not end so well...
The scramble for yield funded by cheap carry continues...

Two of Japan's biggest life insurers said Monday they might increase their purchases of foreign bonds and reduce or keep steady their purchases of domestic bonds this fiscal year, as the central bank's aggressive easing program forces big investors to rethink plans. Nippon Life Insurance Co., Japan's largest life insurer, and Asahi Mutual Life Insurance Co., the eighth-largest, both said they will consider putting more new investment money into foreign bonds if domestic yields remain near historic lows as the Bank of Japan.
We are sure this will end well...


Spanish population declines for the first time as immigrants leave because of no work:

(courtesy zero hedge)

Spanish Population Declines For The First Time As Immigrants Throw In The Spiderman Towel

Tyler Durden's picture

Often times, for the best, closest to the ground perspective on economic opportunities in any given economy, there is hardly any more convincing metric than observing the level of net migration of foreigners into a country, and subsequently out.First, it was Italy, where net immigrants from Afghanistan and Bangladesh came, they saw, and promptly took the first boat back to whereever it was they came from. Then, a year ago we first showed that the endless media propaganda has little to no impact on the marginal cheap worker in the US, as Mexicanimmigrants finally became emigrants after realizing that real demand for their services, even as bargain basement wages, simply does not exist. And now, it was only logical that Europe's economic basket case with unemployment levels so high one literally needs bigger charts, was the next to follow.
As BBC reports, in 2012 the Spanish population of 47.3 million declined by some 206,000 as "immigrants left the country amid a major economic crisis." The actual population change consisted of native Spaniards growing by a token 10,000 more than offset by the 216,000 registered foreign residents who decided to just pack it up and go back, mostly from Ecuador and Colombia. One could say they threw in the proverbial (Spiderman) towel, or at least sold it on Ebay.
This was the first population decline in Spain since the census began in 1990. The good news for all those who are left: all your government-managed pension and retirement money is tucked away safe and sound into the viability of Spanish government bonds. And every one knows those are "money good."
Spain's population fell last year for the first time in decades, as immigrants left the country amid a major economic crisis, officials say.

The National Statistic Institute (NSI) says the number of residents dropped by almost 206,000 to 47.1m - the decline entirely accounted for by foreigners.

Immigrants from Ecuador and Colombia showed the biggest fall.

The figures do not take into account many Spaniards who have left in search of work but are still on the census.

The figures show that the ongoing economic crisis has reversed the country's rapid population growth in the decade before the financial crisis erupted in 2008.

The bursting of the property bubble and high unemployment levels compounded the situation, forcing many economic migrants from South America and Eastern Europe to leave the country.

"Spain is less attractive because there no jobs," Albert Esteve of the Barcelona Centre for Demographic Studies told Spain's National Radio.
At least those who remain can sleep soundly at night, knowing their deposits in the country's domestic, and quite insolvent, financial system, are safe. After all Cyprus is no template. And who can possibly say no to a Spiderman beach towel.

This is not good:

(courtesy zero hedge)

Canada Foils "Terror Plot" Involving Attack On New York To Toronto Railroad; Al-Qaeda Linked

Tyler Durden's picture

Another day, another terrorist attack, this time in Canada, where the mounted police announced they have made arrests relating a "terror plot" planning to attack a New York to Toronto passenger train. And just to keep it really real, the name Al-Qaeda was released a few times. Supposedly this is not the same Al-Qaeda that is linked to the Syrian opposition, which these days is one of America's best friends in the region against Hassad's "evil" regime and so on.
The good news is that the maple syrup is safe. For now. RCMP's bilingual press conference below.

Early Monday morning currency crosses;  (8 am)

Monday morning we  see euro weakness against the dollar from the close on Friday  with this time trading just above the  1.30 mark at 1.3037. . The yen this  morning  resumes its bleeding  against  the dollar for now,  trading well above the 99 column early in the session  at  99.71 yen to the dollar.  . The pound, this morning is a touche stronger against the USA dollar at 1.5241 . The Canadian dollar is a bit stronger  against the dollar at 1.0252.   We have the sentiment this morning with a  risk on situation as all European  bourses are all in the green.   The Nikkei exchange finished strongly in the green on the day  as  it is still pumped up on steroids with the massive QE announced.  Gold and silver are way up  in the early morning, with gold trading at $1432.30 (up $37.00)  and silver is at $23.60 up 64 cents in early morning European trading.

The USA index is up 5 cents at 82.80.

Euro/USA    1.3037  down  .0014
USA/yen  99.71  up .1961
GBP/USA     1.5241 up .0018
USA/Can      1.0252 down .0013


And now your closing Spanish 10 year bond yield: (drop of .13 in yield)



4.490.13 2.84%
As of 12:00:00 ET on 04/22/2013.


Your Italian 10 year bond yield;  (drop in yield of .17)

Italy Govt Bonds 10 Year Gross Yield


4.060.17 3.91%
As of 11:59:00 ET on 04/22/2013.


The Euro strengthened  this afternoon  settling at 1.3063 .  The yen remained constant throughout the day at 99.71.  The pound also remained constant this afternoon  at 1.5227.  The Canadian dollar also remained constant this afternoon  against the dollar closing at 1.0252.

The USA index fell  from the morning session with the final index number down 11 cents to 82.64

Euro/USA    1.3048 down  .0007
USA/Yen  99.71    up  1.235
GBP/USA     1.5241  up .0018
USA/Can      1.0252    down .0013


Your closing figures from Europe today. 

everybody up except Germany. 

i) England/FTSE down 5.97  or .09%  

ii) Paris/CAC up 0.17 or 0.00% 
iii) German DAX:  up 18.15 or 0.24%
iv) Spanish ibex up 112.20 points  or 1.42%

v) Italian bourse (MIB) up  260.93  points or 1.66%

and the Dow up 20.15 (0.14%)  


And now for some USA news:

the following is a very important index as it relates to manufacturing for the entire country.
It went negative:

(courtesy Dow Jonesnewswires)

Chicago Fed National Activity Index Goes Negative for March

The Federal Reserve Bank of Chicago is out with its National Activity Index for the month of March. Unfortunately, this is yet one more reading in negative territory. The index fell to -0.23, versus a positive reading of 0.76 in February. March’s weakness also managed to pull the three-month average from February’s 0.12 down to negative territory at -0.01.
A negative reading signals that broader national activity is below its historical trend. One change noted was that production indicators are still contributing to growth, but only at 0.01, and well under the 0.47 in February. Employment was a real drag and this fell to -0.06, versus February’s above-zero reading of 0.31. Another report from sales, orders and inventories fell into negative territory as well, at -0.02, from a prior 0.13.
Despite this being from a regional , it is a national survey. The Chicago Fed National Activity Index is issued monthly to measure overall economic activity and inflationary pressure. It is a weighted average of 85 existing monthly indicators of national economic activity.
Despite this being yet another negative reading, stocks are not budging and futures are up. The DJIA is up almost 50 points at 14,520 and the S&P 500 is up 6.50 at 1,554 so far this Monday morning.


This excess is what is fuelling the purchases of foreign bonds such as the Spanish and Italian 10 yr bonds.

(courtesy zero hedge)

US GDP Will Be Revised Higher By $500 Billion Following Addition Of "Intangibles" To Economy

Tyler Durden's picture

Those who have been following the US debt to GDP ratio now that the US officially does not have a debt ceiling indefinitely, may have had the occasional panic attack seeing how this country's leverage ratio is rapidly approaching that of a Troika case study of a PIIG in complete failure. And at 107% debt/GDP no explanations are necessary. Luckily, the official gatekeepers of America's economic growth (with decimal point precision), the Bureau of Economic Analysis have a plan on how to make the US economy, which is now growing at an abysmal 1.5% annualized pace, or about 5 times slower than US debt growing at 7.5% annually, catch up: magically make up a number out of thin air, and add it to the total. And it literally is out of thin air: according to the FT the addition will constitute of a one-time addition of intangibles, amounting to 3% of total US GDP, or more than the size of Belgium at $500 billion, to the US economy.
The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development.

Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing the changing nature of US output.

Brent Moulton, who manages the national accounts at the Bureau of Economic Analysis, told the Financial Times that the update was the biggest since computer software was added to the accounts in 1999.

“We are carrying these major changes all the way back in time – which for us means to 1929 – so we are essentially rewriting economic history,” said Mr Moulton.
What exactly will constitute GDP growth going forward? In a word, intangibles: films, books, magazines and iTunes songs.
“We’re capitalising research and development and also this category referred to as entertainment, literary and artistic originals, which would be things like motion picture originals, long-lasting television programmes, books and sound recordings,” said Mr Moulton.

At present, R&D counts as a cost of doing business, so the final output of Apple iPads is included in GDP but the research done to create them is not. R&D will now count as an investment, adding a bit more than 2 per cent to the measured size of the economy.
Nothing like adding intangibles in the fluid, ever-changing definition of what constitutes an economy.
Naturally, the only reason for this artificial "boost" to the US economy which apparently can be any old arbitrary number agreed upon by a few accountants, and which always goes uppost revision, never down, is to make US debt/GDP under 100% once again, if only very briefly. Surely a few months later something else can be "added" to GDP making the US economy appear better than it is once more.
Finally, all of the above is a distraction for idiots.
As most people should know by know (this logically excludes economists), the only factor leading to economic "growth" is the expansion of liabilities of the financial system, whereby new credit (in a healthy environment, not one centrally-planned by several Princeton real-world rejects, where the central bank is forced to create all credit expansion with money that never leaves the banks and the capital markets closed loop) creates new money, creates demand for products and services, and circulates in the economy.
This can be seen in the chart below which shows the nearly perfect correlation between total bank liabilities in the US, as per the Fed's Flow Of Funds report, and total US GDP.
Bottom line: the BEA can capitalize air consumption if it thinks it will make US GDP soar, but unless new credit and bank liabilities are created not due to forced supply but demand, and unless the private financial sector is finally willing to start lending money (which for the entire duration of QE it has not) US growth will stall and then proceed to decline.
Case in point: total US commerical bank loans are still lower than they were the day Lehman filed.
In other words, all the GDP "growth" since the Lehman failure has come on the back of money "created" by the Fed.
And there are still those who think the Fed will ever unwind..


There is a good chance the crooks may bomb silver and gold tomorrow as we saw gold/silver equities not performing with the big rise in gold. Also silver did not rise as much as gold.
Generally, this is a good sign that they may attack.  However the bums have to be mindful of the huge demand for physical every time they raid.

Well that about does it for tonight.
I will see you tomorrow night.
I think you have enough to read

by for now



Mark said...


They just updated the GLD -- a loss of 18.35 tonnes. Holdings now sit at
1104.71 tonnes.

This, along with the withdrawals you noted on the Comex implies a major
market blow-up is possibly in the cards. The big boys have decided the time has
come to where if you don't hold it, you don't own it.

disqus_Rbfqk4GGqp said...

Thanks guys. I can always depend on your following up.

This is getting deadly.

all the best


disqus_Rbfqk4GGqp said...

Guys and Gals:

I have now updated the GLD figures for you.

Needless to say, the LBMA has a problem!!

the LostOne said...

Harvey, is there a reason there's so much huge white space between some of your items? It gets kind of annoying.

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