Wednesday, April 24, 2013

Silver and gold rise/silver OI rises to 158,970/comex gold declines again/German confidence falls again/More Brits receiving food handouts/Potential new PM in Italy/

Good evening  Ladies and Gentlemen:

Gold closed up $14.80 to $1423.40 (comex closing time).  Silver rose by 2 cents  to $22.83 (comex closing time). 

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

gold: $1431.90
silver: $23.20

At the comex, the open interest in silver rose sharply by 1,706 contracts to 158,970 contracts as it is still  holding firm at elevated levels . The open interest on the gold contract fell by 1507 contracts to 415.074. The total amount of gold ounces standing for April rose slightly to 34.36 tonnes as silver remained constant at 3,770,000 oz.

Over at the gold comex inventories we witnessed another huge withdrawal. Tonight the dealer (registered gold) rests at 2.21 million oz or 68.74 tonnes.  I cannot recall this level being so low.  The total of all gold at the comex drops to 8.345 million oz or 259.56 tonnes. 

In other physical news, the British Royal Mint announced that sales of gold coins are running triple to that of last month.

we have a report from India which shows that Indian  gold premiums have been rising fast as demand outstrips supply.

In paper news, big German confidence index the ZEW registered a fall today.
It did not matter, the German Dax was up as was all of European bourses.

In Italy, we have a new Prime Minister, Letta who will try and form a coalition government from all sides. We have two commentaries on this issue.

In England we have a report where there is a huge 170% increase to Brits needing food handouts.

In the USA March durable goods imploded.  The USA has now entered a severe recession.

 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 fell by 1507 contracts today  from  416,581 down to 415,074,  with gold falling by $12.40 on Tuesday.  The front April OI fell by 11 contracts from 559  down to 548. We had 11 notices filed on Tuesday so we gained 33 contracts or 3300   oz of additional gold which will  be standing for the April gold contract month. The next non active contract month is May and here the OI rose by 69 contracts to 1471. The next big contract month is June and here the OI fell by  3755 contracts from 255,004 down to 251,249.  The estimated volume today was fair at 130,206.   The confirmed volume on Tuesday was  huge at 239937 contracts (approx 746 tonnes of gold). 

The total silver comex OI astonishingly  rose by 1706  contracts from 157,264 up to 158,970 despite silver's fall yesterday. It still looks like we still have some  stoic longs who seem impervious to pain as the OI in silver continues to remain elevated despite the constant whacking of this metal. The front non active delivery month of April saw its OI fall by 11 contracts from 26 down to 15 . We had 11 delivery notices filed on Tuesday, so in essence we neither gained nor lost any silver contracts standing for delivery in April.  The next big delivery month for silver is May and here the OI fell by 3625 contracts to stand at 35,335. We are less than 1  week away from first day notice for the May silver delivery month.   The estimated volume today was huge, coming in at  92009 contracts which equates close to 460 million oz of silver. The world produces 700 million oz per year ex China ex Russia so in essence today's volume equates to 65.7% of annual silver production. We had confirmed volume on Tuesday at 115,417 contracts which is a huge volume day . (.577 billion oz or 82.4% of annual silver production)

Comex gold/April contract month:

April 24.2013      April gold.

Withdrawals from Dealers Inventory in oz
70,767.144  (Scotia)
Withdrawals from Customer Inventory in oz
 167,948.938 (HSBC,JPM, Scotia)
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz
852.17 (Brinks)
No of oz served (contracts) today
 42  (4,200  oz)
No of oz to be served (notices)
517  (51,700)  oz
Total monthly oz gold served (contracts) so far this month
10,499  (1,049,900 oz) 
Total accumulative withdrawal of gold from the Dealers inventory this month
97,251.28  oz
Total accumulative withdrawal of gold from the Customer inventory this month

775,832.03  oz

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

i) Out of the Scotia warehouse a huge 70,767.144 ounces of gold was withdrawn from the dealer and out of all registered comex vaults.

We had 1 tiny   customer deposits:

i) Into Brinks:  852.17 oz

total customer deposit:  852.17 oz

We had 3 customer withdrawals two of which were huge :

i) Out of JPM:   103,556.84 oz
ii) Out of HSBC:  199.19 oz
iii) Out of Scotia:  64,192.905

total customer withdrawal: 167,948.938   oz  (5.22 tonnes of gold removed) 

We had 0  adjustments:

The following is very scary!!!
Thus the dealer inventory  rests tonight at 2.210 million oz (68.74) tonnes of gold.
The total of all gold declines again at the comex and rests at 8.345 million oz or 266.9 tonnes.

I cannot recall seeing the registered or dealer inventory in gold this low.
The comex is slowly losing all of its gold.

The CME reported that we had 271 notices filed for 27,100 oz of gold today.   The total number of notices so far this month is thus 10,770 contracts x 100 oz per contract or 1,077,000 oz of gold. In order to establish what will be the total number of gold ounces standing, I take the OI for April (548) and subtract out Wednesday's delivery notices (271) which leaves us with 277 contracts or 27,700 oz left to be served upon our longs. 

Thus  we have the following gold ounces standing for metal:

1,077,000 (served)  + 27,700 oz (left to be served upon )  =  1,104,700 oz or
34.36 tonnes of gold.

we gained 3300 oz  of  gold standing for the April gold contract. This is turning out to be a very big delivery month!1

Dave from Denver  talks about the gold drain:

"Another 237,873 ozs of gold drained from the Comex yesterday. 70k from the registered/deliverable account and 167k from the eligible/not-deliverable account. The eligible account is down to 6.1mm ozs. I can't recall ever seeing it this low, although I'm sure it was at some point in history.

When you put that in the context of the data I sent around yesterday showing the ratios of gold contract open interest vs. the amount of deliverable gold, what's happening at the Comex is quite interesting - almost spooky - especially in light of this commentary:

In other words, it's not just on the Comex where visible stockpiles of gold are disappearing: "One element of truth remains, which is that gold always tells the truth. If it gets up and moves from location to another, you can bet there’s a reason for it" (from the link)


April 24.2013:  April silver: 

Withdrawals from Dealers Inventory9507.000 (Brinks)
Withdrawals from Customer Inventory 8,130.938 ( Delaware)   
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory  1,521,690.191  (CNT, JPM, Brinks)
No of oz served (contracts)0 contracts  (nil oz)  
No of oz to be served (notices)15  (75,000 oz)
Total monthly oz silver served (contracts) 739  (3,695,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month2,482,588.4 oz
Total accumulative withdrawal of silver from the Customer inventory this month4,721,768.3  oz

Today, we  had huge activity  inside the silver vaults.

 we had 0 dealer deposits and 1  dealer withdrawals.

Out of Brinks:  another of those perfectly round withdrawals, 9507.0000 oz leaves the dealer 

We had 3 customer deposits:

i) Into CNT: 597.191.600 oz 
ii) Into Brinks: 351,279.500 oz
iii) Into JPM; 573,219.091 oz

Total deposits:  1,521,690.191  oz

We had 1 customer withdrawal:

i) Into  Delaware:  8,130.938 oz

total customer withdrawal:  8,130.938 oz

we had 0  adjustments:

Registered silver  at :  39.137 million oz
total of all silver:  167.317 million oz.

The CME reported that we had 0 notices filed for nil 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 (15) and subtract out Wednesday's notices (0) which leaves us with 15 notices or 75,000 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:

3,695,000 oz served  +   75,000 oz to be served  =  3,770,000 oz

we neither gained nor lost any silver ounces standing in the April contract month.

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 24.2013



Value US$50.177   billion

April 23.2013



Value US$49.648 billion

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.

We have lost a massive 4.21 tonnes today which followed a 18.35 tonnes of gold lost yesterday.
Ladies and Gentlemen: the ultimate battle ground is the physical gold vaults at the LBMA and GLD.  Everyday we are witnessing massive gold leaving these vehicles as well as the comex.  This is similar to the events where Richard Nixon abrogated Bretton Woods by outlawing any more conversion of gold for USA dollars held in Europe.  We are witnessing the end game being played out before our eyes.  When the last physical ounce leaves for China, the game ends.

As a reminder the total comex gold had inventories of around 11 million oz in 2011. Today it broke well below 9 million oz. (8.345 million oz)


And now for silver:

April 24.2013:

Inception Date4/21/2006
Ounces of Silver in Trust331,757,790.600
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 23.2013:

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 a monstrous 4.25 million oz of silver from the SLV.  They are robbing the last bit of physical in London. 


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 0.4%  to NAV for Cdn funds. ( April  24.2013)   

2. Sprott silver fund (PSLV): Premium to NAV rose to +0.57% NAV  April 24/2013
3. Sprott gold fund (PHYS): premium to NAV  fell to- .19% positive to NAV April 24/ 2013.


And now for the major physical stories we faced today:

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

1. Physical demand continues to rise as the USA mint suspends sales of the smallest denomination of gold coins:  1/10 oz

2. Premiums are rising across the board for physical

(courtesy Goldcore)

US Mint Suspends Sales Of Small Gold Coins - Premiums Rising

-- Posted Wednesday, 24 April 2013 | Share this article | 1 Comment

Today’s AM fix was USD 1,424.50, EUR 1,095.52 and GBP 932.63 per ounce.
Yesterday’s AM fix was USD 1,417.25, EUR 1,091.70 and GBP 931.05 per ounce.

Cross Currency Table – (Bloomberg)

Gold fell $10.50 or 0.74% yesterday to $1,414.90/oz and silver lost 1.8%.
The U.S. Mint is suspending sales of one-tenth oz American Eagle gold coins. The Mint says that sales are suspended as inventories are depleted and need to be replenished.
Demand for one-tenth ounce gold coins is up 118% from a year earlier.

Gold in USD, 1 Year – (Bloomberg)

The Mint’s American Eagle Gold Bullion Coins are offered in four sizes: one ounce, one-half ounce, one-quarter ounce and one-tenth ounce. The Mint confirmed that their sales on all sizes of coins have increased two fold compared to the same period in 2012.
The Mint is still offering other gold coins including 1 oz American Eagle coins, 0.5 oz coins and 0.25 oz coins.

Gold in Euros, 1 Year – (Bloomberg)

Premiums are rising on all gold and silver bullion coins and bars and there are delays developing for certain bullion products – especially silver coins and bars.

Gold in Brittish Pounds, 1 Year – (Bloomberg)

The recent fall in the price of gold has proved to be a gift to other investors as small denomination bars, at the time of writing, are now difficult to source in India, Singapore, Japan, China and Europe.
GoldCore's April Insight
In this month’s edition of Insight Chris Sanders argues that the real issue is that we are not accumulating enough capital to replace depreciating assets, particularly with regard to the production of energy. Accompanying this alarming reality is the apparent reckless abandon with which the banking fraternity in the US is ‘bending’ COMEX’s rules and over in Cyprus, treating depositors’ savings as their own personal safety net.

In this edition of GoldCore Insight you will find out about:
 The Cyprus rubicon - depositors' savings are fair game
 How energy will shape our future
 The importance of owning physical bullion
Download here
Gold Resumes Climb as Physical Purchases Temper Drop in Holdings - Bloomberg

U.S. Mint suspends some gold coin sales after demand surge - Reuters
U.S. Mint Suspends Sale of Smallest Gold Bullion Coin – Wall Street Journal
Indian Jewelers Offer Premium on Gold Imports as Demand Surges - Bloomberg
Video: Gold Market: Who's Buying, Selling and Holding? - Bloomberg

Video: Ron Paul on Gold: No One Knows Value; I’m Buying - Bloomberg
Gold: Three Essential Charts – The Telegraph
Gold rush is silver lining for bullion - IOL


Another important commentary for Jim Sinclair talking to Eric King of Kingworld news.
Basically he is stating that the paper market rigging has created the panic that gold does not exist and that has caused a stampede for the physical across the globe:

(courtesy Kingworldnews/Eric King/Jim Sinclair)

Paper market rig creating panic that gold doesn't exist, Sinclair says

7:40a ET Tueday, April 24, 2013
Dear Friend of GATA and Gold:
Jim Sinclair today tells King World News that by crashing the paper gold price the market-rigging bullion banks and central banks have created a panic among both paper gold owners and the owners of supposedly allocated gold, as no one can be confident that his gold actually exists. An excerpt from Sinclair's interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Here is an example of the huge demand for physical gold and premiums are rising!!

(Biman Mukerji/Nayak/Wall Street Journal/Chris Powell of GATA)

India gold premiums soar as demand outstrips supply

Submitted by cpowell on Tue, 2013-04-23 20:06. Section: 
By Biman Mukherji and Debiprasad Nayak
The Wall Street Journal
Tuesday, April 23, 2013
NEW DELHI -- Indian gold retailers are paying more in order to meet immediate demand, as customers scoop up every gold bar they can lay their hands on in the wake of a plunge in international prices.
Indian retailers say they are paying premiums of $8-$10 an ounce over the international gold price, which is around $1,425 a troy ounce. That's four or five times the premium retailers usually pay for imported gold during periods of peak demand in India, according to traders.
"We have not seen this kind of premium on gold imports in years," said Suresh Hundia, president emeritus of the Bombay Bullion Association.India, the world's biggest consumer of gold last year, imports most of the precious metal it needs. Designated banks and a few trading houses are paying $7-$8 an ounce more to get gold from international suppliers, and they are passing on that cost to Indian retailers, traders said.
The rush for gold began when international gold prices fell 4% on April 12. By April 16, gold for June delivery on the Comex exchange in New York reached $1,321.50 an ounce, the lowest price since Jan. 28, 2011.
Indians crowded jewelry shops and other retailers last week to lock in the lower prices before the start of the wedding season, which runs from the last week of April through June. Gold is traditionally given to brides as a wedding gift.
While prices have risen about $100 from the low, customers are still buying gold.
"Demand is so high that everyone wants delivery of bullion in one day," said a dealer with a multinational bullion-importing bank. "If some overseas supplier agrees to deliver to these impatient customers, then they obviously will charge a higher amount."
Kumar Jain, a partner at Umedmal Jewellers, which has a retail shop at Mumbai's Zaveri Bazar trading hub, said his company is paying about $8-$10 an ounce above global gold prices, but that isn't hurting business.
"Demand is huge and prices have crashed, so we are able to pass on the premiums to the customers, who don't mind paying a little more," Mr. Jain said.
Traders said mini gold bars, which weigh about 100 grams and are popular among small jewelers and bullion investors, have "disappeared" from the market after the price collapse.
"Most of the dealers have run out of stocks due to the surge in sales since last week," said Vijay Khemka, a partner at Ganpati Traders, a New Delhi-based bullion dealer. "Our sales have also increased by 20-30% over the last eight to 10 days."
Jewelers said they were restocking bullion ahead of what they anticipate will be a rise in demand during Akshaya Tritiya, a major gold-buying festival, which is celebrated May 13.
Although gold's availability may be limited in India, it isn't exactly depleted. Vasu Acharya, director at Parker Bullion, said dealers are sitting on as much as nine metric tons of gold that they imported before the selloff, unwilling to part with it at prices that would mean losses, especially when factoring in the 6% import tax, which is based on a price that was calculated before the commodity's price plummeted.

Today we were told that the British Royal Mint announced gold coin sales are running triple from last month.

(courtesy zero hedge)

"Panic" For Physical Gold Spreads To UK Where Royal Mint Sales Of Gold Coins Triple

Tyler Durden's picture

Following the entire "developing" world (where faith in paper money "backed" by $1 quadrillion in derivatives is at timesquestioned, and instead the people, for some inexplicable reason, fall back to hard currency equivalents) scrambling out to their local precious metal dealers to find "out of gold" signs virtually everywhere, yesterday it was the US Mint's turn to announce it had halted shipments of the popular one-tenth ounce gold American Eagle coin as it had run out, following a surge in demand (we expect this shortage will soon spread widely to traditional one-ounce denominations shortly).
Things in the US have gotten so bad, not only are most online dealers backlogged weeks and months in advance for most PMs (as the CEO of Texas Precious Metals explained in detail), but respected bullion vaults are also now on the verge of running out of inventory. As Reuters described, "Michael Kramer, president of Manfra, Tordella & Brookes (MTB), a major U.S. coin dealer in New York, has been inundated by orders from existing and new wholesale and retail customers."It's panic. This is one of the busiest times in quite a while. People think gold's at the lows and they want to take advantage."
It was only a matter of time before the last bastion of paper money, London, also succumbed to the soaring demand for physical, and sure enough moments ago Bloomberg reportedthat the "Britain’s Royal Mint, established in the 13th century, sold more than three times more gold coins this month than a year earlier as prices declined."
Sales are more than 150 percent higher than last month, according to Shane Bissett, director of bullion and commemorative coin at the Royal Mint.
“Since the dip in the price of gold we have seen increased demand for our gold bullion coins from the major coin markets, and this presently shows no sign of abating,” Bissett said by e-mail in response to questions from Bloomberg. “The Royal Mint continues to supply to its customers and is increasing production to accommodate the higher demand.”
Its not only the UK Mint, but a pervasive global "panic" to get as much gold as possible while prices are as low as they are, courtesy of the recent takedown in spot.
Standard Chartered Plc said yesterday its gold shipments to India last week exceeded the previous record by 20 percent and were double the total of the week before.

“The concern is really how long it can last,” said Dan Smith, an analyst at Standard Chartered Plc. “A lot of people surge in on the low prices and then they are likely to back away a bit as prices rally and they’ve restocked.”
Don't worry, Dan: for now the surge is going on, and on, and on, and so on. We will be sure to inform you, however, when physical demand is finally satisfied. Until then, we have several months of backlogged demand to catch up on, and possibly the default of one or two depositories in the meantime.
Finally, for all those confused by the non-linear relationship between paper gold (selling via ETFs and other), and physical gold (buying via retail and corporate channels), here is Bank of America with a quick and dirty summary of how to think about the relationship:
With prices now below $1,500/oz, we expect a pick-up in jewellery demand in the medium term and see considerable pain for miners should prices dip below $1,200/oz. As such, we believe the downside to gold prices may be limited to an additional $150/oz. In fact, we estimate that jewellery demand may become so pronounced by 2016 that prices could trade above $1,500/oz even if investors remain net sellers. Looking at sensitivities from a different angle, investors would need to buy merely 600t of gold to sustain prices at $2,000/oz by 2016, compared to non-commercial purchases of 1,798t in 2012.
So yes - physical demand can and will offset even virtually unlimited paper selling, assuming of course demand for physical persists at the recent pace


And now USA Mint gold sales:

(courtesy zero hedge)

US Mint Gold Sales Surge To Highest Since 2009

Tyler Durden's picture

First it was a tripling of gold sales at the UK Royal mint, and now with just 23 days in the month of April gone, it is the US Mint's turn to reports that more gold has been sold month to date than any month since December 2009 when a record 231,500 ounces were sold. In one day, the mint sold yet another 13,000 ounces of gold, bringing the total to 196,500, or more than triple the 62,000 ounces sold in the previous month.
Will the US Mint be able to sell another 35,000 ounces in the remaining week of April, and surpass the all time monthly record from December 2009? Or will it run out of gold beforehand, and just like it did with the one-tenth ounce A.E. gold coins, will sales of all bullion denominations be halted in the comings days?
Stay tuned for this exciting conclusion.
One thing that is clear is that so far the plan to crush all popular interest in gold (and redirect it into stocks, or simple purchases of Made in China trinkets) conceived by the central-planning academics, scheming in dimly lit rooms, has backfired massively.

Another economist, Thorsten Polleit acknowledges to German financial journalist Lars Schall that the gold market is not free and is constantly manipulated.

(courtesy GATA/Lars Schall)

Economist Polleit acknowledges gold market rigging

4:11p ET Tuesday, April 23, 2013
Dear Friend of GATA and Gold:
Investment banker and economist Thorsten Polleit today acknowledges to financial journalist Lars Schall, writing for Matterhorn Asset Management's Gold Switzerland Internet site, that the gold market is anything but free.
"A free market means that there is a free supply of and a free demand for gold that determines its purchasing power," Polleit says. "However, government-sponsored central banks also play a role in affecting the supply of and demand for gold through, for instance, lease transactions. In that sense market conditions are influenced, and at times greatly so, by government interference -- and therefore do not correspond with the principles guiding a free market."
Schall's interview with Polleit is headlined "It Isn't Capitalism That Has Caused the Crisis" and it's posted at Gold Switzerland here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


I have relayed my fears to all the commissioners on the rapid disappearance of physical gold from all depositories namely the GLD in London and the Comex.

Here is Tekoa Da Silva discussing this recent acceleration of events:

(courtesy Tekoa Da Silva/Bull Market Thinking)

Comex Physical Drain Accelerates—With Over $7.8B In Gold Disappearing From All Depositories

April 24, 2013 | By Tekoa Da Silva

As the headline battle between paper sellers and physical buyers of gold escalates, something eerily strange is continuing behind the scenes.
As first reported here on April 9thComex gold inventories have been plummeting, demonstrating the highest levels of physical removal ever during a single quarter in Q1, 2013.
Most shocking however, is that Comex warehouse inventories are accelerating their downward plunge, with dropping inventories now spreading to the world’s largest fund depositories.
Over the last four weeks alone, total reported inventories of ETFs, funds, and depositories collapsed by over 5.5 million ounces, or in dollar terms, by over $7,000,000,000 dollars.
The largest physical removals were reported by the Comex at about 1.4 million ounces, or nearly $2 billion dollars, and the GLD, which reported total inventory removal of nearly 4 million ounces, or roughly over $5.6 billion dollars.
Here is a chart illustrating the continued gold inventory plunge at Comex warehouses (see initial April 9th. piece for comparison):
(click to enlarge)
Individual reporting by the world’s largest funds and depositories show a spreading phenomenon, with Comex and GLD sticking out like sore thumbs…
(click to enlarge)
This brings to mind important questions, such as…
-Why is there such a panic going on to remove physical gold from Comex registered warehouses and other depositories?
-Why did it begin before the collapse, and why does it now appear to be accelerating? 
-Why is the multi-trillion dollar fund management industry denouncing gold, while it quickly moves inventory out of registered warehouses?
-Where is the gold moving, and what is it telling us?
-Is this wholesale migration signaling an imminent geopolitical or major market event? 
Bottom LineThese are difficult questions to answer, however, one element of truth remains, which is that gold always tells the truth. If it gets up and moves from location to another, you can bet there’s a reason for it.
Furthermore, Hayman Capital’s Kyle Bass is know for having stated that,“We went and looked at the Comex…[they had] $80B in open interest and $2.7B (3.3%) in deliverables at the time…[so] it’s actually an easy decision if you’re a fiduciary…you go get [your gold], and let them worry about the rest.”

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Tekoa Da Silva
Bull Market Thinking
Photo source.


Silver analyst, Jason Hamlin:

(courtesy Jason Hamlin)

Worldwide Silver Shortage as Premiums Reach 40%
Jason Hamlin

COMEX silver prices once again dipped below $23 today. My previous article entitled Ignore COMEX Pricing - Silver Eagles Sold Out at Dealers, $33 on Ebay detailed just how divorced from reality the COMEX price has become. So with another dip Tuesday, I decided to try to get my hands on some more silver coins. I realized before I picked up the phone that it would be difficult, but I have a few dealers in Colorado and California that have consistently been able to find supply at reasonable premiums.
Not anymore. The first phone call that I made was to one of the largest bullion dealers in Southern California, where I have bought a good deal of my physical gold and silver over the past decade. In fact, I had just bought several rolls of silver eagle coins from them last month at around $2.65 over spot price per ounce. I also purchased some for a family member back in January and paid the same premium.
In the past when some analysts were talking about a supply shortage and rising premiums, I was always able to find supply from this particular shop with a reasonable premium that was never more than 10% over the spot price. But today I was told that I could only order for future delivery at some point in late May or June and that the premium was $5 over the spot price.
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In just the past few weeks the premium has nearly DOUBLED, despite the silver price dropping sharply and investor sentiment supposedly at multi-year lows. The manager of the shop told me the silver shortage was worldwide and it was more difficult than ever to secure supply and keep up with demand.
Not one to give up so easily, I proceeded to call a friend and colleague that runs Cornerstone Bullion out of Denver, Colorado. I have purchased bullion from Chad in person several times and have recommended his services to my readers. He has always been able to find supply for me and while the premiums have fluctuated, they have consistently remained within a few percentage points of the lowest-priced online dealers. This was his reply:
Most everything is shipping early June from the Mint. Premiums are $4.99-5.50 right now, depending on quantity. It's pretty crazy out there right now. Junk silver is $5-6 over spot!
I then went online to to see if they had replenished stocks, but all of their popular silver bullion products remain 'Sold Out' including silver eagles. APMEX appears to have inventory, but they are asking around $31 per silver eagle or roughly $8 over spot price. That is a premium of 36% to the spot price.
eBay (EBAY) prices are even higher at around $32 per ounce for silver eagles or $9 over spot price. This is a premium of roughly 40%! Silver eagles from a few years back are selling for $700 or more per roll of 20, which is $12 over the spot price and a premium of more than 50%.
While those trading derivative paper contracts of silver might want you to believe that the price has dropped to $23 per ounce, the real world pricing is quite a different story. If someone has the funds and ability to take delivery from the COMEX anywhere near the current price levels, wouldn't they be doing it?
Not exactly. Several wealthy investors have been reporting that they have been unable to take delivery and are being forced to settle in cash. This action has led many to believe that the physical gold and silver may no longer be in the warehouses.
Whatever the truth may be, the disconnect between paper prices and free-market real-world prices has never been greater. There is definitely something strange happening in order to create an environment where increasing demand and supply shortages somehow results in lower prices. This breaks the most fundamental economic law of supply and demand, supporting claims by GATA and others that gold and silver prices are being manipulated.
One way to purchase gold and silver at the artificially low prices is to purchase shares of the Central Fund of Canada (CEF). The fund has been around since 1961 and holds 95% or more of its assets in unencumbered, segregated and insured, passive long-term holdings of gold and silver bullion. Bullion holdings and bank vault security are inspected twice annually by directors and/or officers of Central Fund. On every occasion, inspections are required to be performed in the presence of both Central Fund's external auditors and bank personnel. Central Fund's chief executive comments:
Our bullion is stored in separate cages, with the name of the owner printed on the cage, and on top of each pallet of bullion it states Central Fund or Central Gold-Trust. This disables the bank from using the asset for any of their purposes. We also pay Lloyds of London for coverage of any possible loss.
The Central Fund of Canada almost always trades at a premium to its net asset value, sometimes as high as 20% over. But shares are currently trading at a discount. This is a rare occurrence for CEF and allows individuals to invest in physical precious metals at or near COMEX pricing. If history repeats, CEF will be bouncing back to a hefty premium in the near future as precious metals rebound. While it is not the same as having the metals in your possession, I view it as the next best thing and think the recent sell off is providing an excellent opportunity to establish or add to positions.This growing divide between the paper silver price and real-world price will have to narrow at some point soon. The more big-money investors realize the huge price gap and act on it, the faster the gap will close or soon COMEX will default or go broke from offering hefty cash incentives to investors to dissuade them from taking delivery. In the meantime, if anyone can find me some silver eagles anywhere near the COMEX price, I have a boatload.


Finally, this excellent paper from Jeff Nielson, on his take of the silver raid 

(courtesy Jeff Nielson)

The Silver Market: An ‘Operation’, Not A Liquidation

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Recent, previous commentaries have focused on the massive liquidation in the paper-gold market; as large investors (in large numbers) have fled that paper in favor of real metal. It has now been established that this flight out of the paper-gold market was in response to theCyprus Steal – and at least to some extent has been a choreographed event.
Naturally this had led to a question from readers: what about the silver market? Indeed, while the silver market has also seen the price for paper-silver plunge; there has been no corresponding liquidation of paper-silver. So what is going on here?
Regular readers have already supplied their own answer to this question, in their mail and in their comments on our Forum: yet another “manipulation operation” in the silver market. When any market exhibits some violent move in prices for no reason; we are justified in suspecting manipulation. When any market exhibits violent price-moves for no reason on a regular basis; we are justified in concluding that manipulation is taking place.
Such has been the case in the silver market not simply for years but for decades. The primary whistle-blower in the precious metals sector has been GATA; the Gold Anti-Trust Action Committee. However, despite its original focus on the gold market it has spent increasing time/energy focusing on the silver market – drawn by the especially blatant/egregious evidence present there.
[chart courtesy of Nick Laird,]
What the chart above illustrates is not a recent phenomenon, or a temporary aberration. It is a permanent, heavy-handed club; being used by the same handful of bullion-banks to perpetually beat-down the silver market.
In both its size and its concentration; it represents a significantly more extreme position in the market than that of the Hunt Brothers – when they were convicted (in 1980) of manipulating the silver market. By itself, it is conclusive evidence of silver manipulation.
Those readers interested in a more detailed, long-term examination of silver-manipulation can refer to an older commentary: Fifty Years Of Suppressing Silver. And for those readers interested in even more historical insights into the silver market there is The Silver Stealers; a detailed chronology of the silver market by Charles Savoie.
Returning to the present, we have a silver market which was already severely depressed, where inventories had already suffered long-term decimation, and where demand remains robust; suddenly plunging lower for absolutely no reason. Defenders of market-manipulation will suggest this was a “sympathetic reaction” to the gold market…except it wasn’t.

Unlike the gold market; there has been no paper-liquidation in the silver market. In fact, while holdings of paper-gold have been plummeting, holdings of paper-silver have been steadily rising. You can’t have a “sympathetic reaction” occurring between markets with opposite dynamics.
So with holdings of paper-silver rising, with demand for physical silver remaining solid, and with there being no “sympathetic reaction” with the gold market; we have the silver market plunging lower for absolutely no reason. Manipulation.
However, the bullion-banks who operate this silver-manipulation scheme are nothing if not obvious. For those readers still skeptical of the notion of market-manipulation – despite all of the financial corruption all around us – the banksters have (as usual) “left their fingerprints” at the scene of the crime.
At Kitco Metals, inquiring minds can see a series of charts like the one below, corresponding with each of the different time periods in the silver “leasing” market:
Much like the recent margin-hike by the CME group telegraphed a deliberate intention to push bullion prices lower; negative lease rates are a virtual signed-confession. Not only does paying traders to borrow silver (and short it onto the market) lead to the market being temporarily/briefly flooded with silver; but the negative lease-rates themselves have become like a “clarion call” to these predators that another bankster operation is underway in the silver market.
What must be at least quickly noted is the strange aberration in the chart above: the very brief and seemingly inexplicable “spike” where lease rates momentarily inched back into positive territory.
One can only engage in conjecture here. However, given that the spike occurred at precisely the same time that precious metals markets began their (staged) “crash”; there is a theory consistent with all these facts. Despite the bullion-banks trying to pay traders to short silver for them (with their negative lease-rates); there were so many “shorts” lining-up at that time that massive demand drove rates back into positive territory in spite of the banksters’ intentions.
We know this could only be massive demand to short silver because of the price action: if these traders had all (or mostly) been leasing silver to go long; prices would have inevitably risen rather than fallen.
Readers need to understand that commentaries of this nature are not intended to frighten them away from the silver market; indeed, they should hopefully have precisely the opposite effect. We have a commodity which is highly coveted by both investors and industrial users, where obvious evidence of price-suppression means we can buy this asset at wonderful “sale” prices.
But what about the manipulation, ask cautious investors? My response to that concern has always been the same: low prices lead to high prices. In the 1990’s; ruthless price-suppression in the silver market drove prices to a 600-year low (in real dollars) – below $4/oz. What did that lead to?
First it led to the extermination of nearly all the world’s silver miners, decimating supply. Simultaneously, the artificially low price for silver led to an explosion in industrial demand – in hundreds of new applications. The simultaneous effect of those two changes was to cause silver inventories to plummet by 90% between 1990 and 2005.
And where did that lead us? To $49/oz in 2011. More specifically, it was the major “operation” in the silver market during the Crash of ’08 – where silver was momentarily tugged below $10/oz near the end of 2008 – which led to the short-term peak of $49/oz in the spring of 2011.
We see a similar, if not identical picture today. What was/is necessary to take the price of silverabove $100/oz (to something approaching a current “fair-market value”)? Dragging the price all the way back down close to $20/oz. Low prices lead to high prices.
Naturally, this ties in with a piece of “good advice” which investors heeded, once upon a time: buy low, sell high. The time for investors to be buying silver is not when prices are soaring higher in yet another meteoric rise. The time to buy is after or even during another bankster Operation in the silver market.
Yes, (as with anything) investors must address the fact that prices could still go lower first. This is why investors (unlike gamblers) do not use margin/leverage in their financial management. However, if prices do go even lower in the short term; supply and demand tells us this means even higher prices in the not-too-distant future.
Buy low and sell high. Ironically, the serial-manipulation of the silver market actually makes this philosophy especially easy to practice for investors. When we see (via prices) that silver is obviously “on sale”, and we see (via bankster behavior) that these are obviously artificial prices; investors then have their cue to buy.

And now for the major paper stories that will have an influence on the price of gold and silver:

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

Overnight sentiment will come from zero hedge

Major points:

1. German confidence falls (the German ZEW confidence falls from 106.2  to 104.4).  It is blamed on the winter weather.  Expectations: 106.2

2. The Euro initially fell 40 basis points on the news but then recovered by 100 basis points with the 
BIS coming to the rescue and bidding on the Euro.  This pushed the USA/Japan higher as well as stock indices.

3.  Japanese money continues to find its way into Spanish and Italian bonds seeking yield.

4.  Napolitano, President of Italy will name Enrico Letta as Prime Minister. He opposed Berlusconi who is now on top of the polls.

5. Insights by Soc Generale

6. Details by Jim Reid Deutsche Bank

Overnight Summary, In Which We Read That The German ZEW Miss Is Blamed On "Winter Weather"

Tyler Durden's picture

It is one thing for the market to no longer pay attention to economic fundamentals or newsflow (with the exception of newsflow generated by fake tweets of course), but when the mainstream media turns full retard and comes up with headlines such as this: "German Ifo Confidence Declines After Winter Chilled Recovery" to spin the key overnight event, the German IFO Business climate (which dropped from 106.2 to 104.4, missing expectations of 106.2 of course) one just has to laugh. In the artcile we read that "German business confidence fell for a second month in April after winter
weather hindered the recovery in Europe’s largest economy
... “We still expect there to have been a good rebound in the first quarter, although there is a big question mark about the weather,” said Anatoli Annenkov, senior economist at Societe Generale SA in London." We wonder how long Bloomberg looked for some junior idiot who agreed to be memorialized for posterity with the preceding moronic soundbite because this really is beyond ridiculous (and no, it's not snow in the winter that is causing yet another "swoon" in indicators like the IFO, the ZEW and all other metrics as we patiently explained yesterday so even a 5 year old caveman financial reported would get it).
And if that wasn't reason enough to breakdown in riotous laughter, one look at the reaction in the EUR, which tumbled 40 pips on the news, only to soar 100 immediately thereafter as the BIS came to the rescue and started lifting every offer to give the impression that all is well, and in the process push the USDJPY and the eMini stock future with it, should be enough.
There were no other major economic news (that could be blamed on the weather), and the next key reporting milestone is the US durables report. Just what idiotic reason will the miss here be blamed on by the MSM we wonder.
In the European fixed income space, the onslaught of Japanese cash continues, with Spanish 5 Year yields sliding under 3% on the back of even more calls for ECB rate cuts, while at the same time Germany auctioned 30 Year bonds at a record low yield of 2.16%. The scramble for yield has never been more acute.
Finally, moments ago we learned that Italy's brand new (and we use the term loosely), second term president, 87 year old Napolitano will name PD depity Enrico Letta as PM of Italy. How Berlusconi will feel supporting an opponent when the latest polls have his coalition far in first place, remains to be seen. For now the market doesn't care and only hope there is no more snow in the winter which apparently explains all that is wrong with the world.
For everything else, there's CentralBankCard.
Some more insights from SocGen:
The pace of decline in peripheral bond yields and the resulting narrowing in spreads over bunds is taking on frightening proportions, and for a change, does not strictly appear to be only sponsored out of Japan (waiting on monthly balance of payments data to confirm that is the case). On a day when the global economy flashed new signs of slowing demand, yesterday's performance across asset classes was very impressive to say the least (iTraxx tighter by nearly 4pts, Eurostoxx +2.5%). The bullish price action has not been reflected in the currency markets (with the exception of the besieged Swiss franc), with the SEK in particular taking a serious knock. With peripheral yields crumbling, gone are the safe haven attractions of AAA currencies like the SEK (or the franc).
But are the moves for real? Harking back to miserable macro fundamentals, it won't be a 2-year extension for Spain to meet its deficit limit that will bring back growth imminently, or a contraction in German GDP that will bring back inflation in Switzerland. Either there is a big reallocation trade going on in Japan (EUR/JPY upside potential) or markets are pinning their hopes on central banks like the ECB (the SNB) to deliver something extra in terms of stimulus (currency intervention). But as our economists point out, this is not seen resolving the underlying issues of credit demand and supply which have dogged the eurozone's recovery. The German IFO survey this morning could be a timely reminder that while there is positive contagion in bonds, the negative ripple effect from southern to northern Europe has not stopped spreading. With the above in mind, predicting the next 1.5% move in EUR/USD is incredibly difficult.
The full recap from DB's Jim Reid:
It was one of those ‘bad news is good news’ days for markets. The disappointing German (and Chinese) PMIs were quickly looked through by investors as expectations of ECB easing rose on the back of softer data. A broad based rally in markets carried the CAC, DAX, IBEX and FTSEMIB +3.58%, +2.41%, +3.26% and +2.93% higher on the day, respectively. Italian and Spanish 10-year bond yields fell by 11bp and 21bp to close at 3.94% and 4.28%, respectively – which also brings them to their lowest levels since November 2010. European credit spreads echoed the move elsewhere although they were a relative underperformer to equities with Crossover only13bp tighter on the day. It was a showdown between fundamentals and hopes of (more) central bank liquidity with latter seemingly gaining an upper hand yesterday.
The European session cleared the way for a positive start in the US which lasted throughout the day, only to be briefly interrupted by a fake Associated Press tweet that two explosions had hit the White House. AP later clarified that its twitter account has been hacked and the tweet was bogus. Nonetheless it caused a short-lived panic which saw the S&P 500 plunge 1% in the afternoon before recovering in the next few minutes to eventually close 1% higher on the day. US sentiment was supported by the better-than-expected new home sales print (1.5% vs 1.1% expected) even though the Markit US PMI Preliminary (52.0 vs 53.9 expected) and Richmond Fed survey (-6 vs +2 expected) for April were both below market estimates. It was also a mixed day for earnings as strong EPS beats was again met by disappointing top line performances. Of the 36 companies that reported yesterday, 26 of those topped EPS consensus but only 10 of those came ahead of sales estimates.
Apple’s quarterly earnings report was the main story after the closing bell. The company delivered better-than-expected earnings and revenue but sales outlook was light. Capital management was a key focus with Apple more than doubling its capital return program from $45bn to $100bn by 2015. For us credit people, it was interesting to see Apple announce plans to put some debt on its balance sheet for the first time since 2003. Apple received its debut credit rating of AA+ (S&P) and Aa1 (Moody’s) yesterday so maybe credit investors are not too far away from taking a bite at Apple after all! Apple stocks closed -0.54% lower in extended hours trading to close at $403.95/share.
Turning to the Asian session, equities are mostly stronger following the positive US lead overnight. The Nikkei (+1.6%) is leading the way again while the Hang Seng and KOSPI are also +1.3% and +0.9% higher as we type. WTI is up +0.3% at $89.5/bbl while Gold is up +0.7% at $1423/oz. Asian iTraxx is about 1bp tighter and the new issue pipeline remains very robust. Australia’s sovereign CDS is 1bp tighter despite S&P’s warning that the country’s AAA credit rating will come under pressure if the government does not show commitment to eliminate the budget deficit. The Shanghai Composite (+0.68%) is up for the first time this week after a 2.6% decline yesterday.
Staying in the region, the WSJ reported China sent eight maritime-patrol ships to the waters surrounding the Senkaku/Diaoyu islands. China said it was responding to the "illegal entry" of boats piloted by Japanese activists into its waters. The Chinese fleet was the largest sent to the area since the island dispute flared up in September last year. Senior government officials from each side demanded that the other withdraw ships from its territorial waters around the islands. This renewed tension came a day after visits to the Tokyo war shrine by top aides of PM Abe which reportedly had set off angry protests from Seoul and Beijing.
Back to Europe, Italy’s President Napolitano is set to announce his choice of PM to form a new government today. Reuters reported that the new coalition government could take office in a matter of days and would be backed primarily by the rivals on the centre-left and centre-right. These are the same parties that had refused to reach a deal since national elections in late February. Former PM Amato is said to be a leading candidate to receive the pole position although the mayor of Florence, Matteo Renzi and centre-left deputy leader Enrico Letta have also emerged as possible candidates. Berlusconi's PDL, the centre-left PD and the centrist Civic Choice movement have all said they would cooperate with whoever Napolitano chooses.
So while we keep a close eye on Italian politics today, ECB’s lending survey and Germany’s IFO survey are also key releases in Europe. As we go to print, Credit Suisse just reported better-than-expected earnings headline. In the US, durable goods orders will be the notable print. We also have a busy day of company earnings with more than 40 S&P 500 firms expected to report.


A discussion of currencies with 3 major central bank rate cuts in the headlights:

i) the ECB
ii) the Bank of Australia
iii) the Central Bank of Norway

Currencies Firm Despite Rate Cut Fever

Marc To Market's picture

The economic reports and official comments have heightened expectations for rate cuts by the ECB, Reserve Bank of Australia, and possibly the Norges Bank. However, the respective currencies have recovered from the initial weakness. Their resilience may be an important tell that the US dollar is set to trade heavier.
Following yesterday's disappointing PMI data, Germany's IFO confirms that the euro zone's largest economy has lost its mojo. The much-watched business climate component of the IFO survey fell to 104.4 from 106.7 in March. The Bloomberg consensus was for a 106.2 reading. The expectations and current assessment measures both fell more than expected. ECB President Draghi's comments at the press conference earlier this month, followed by BBK President Weidmann's comments and now the poorer data fan speculation of a 25 bp cut in the main refi rate (currently 75 bp)at the May 2 ECB meeting.
Officials clearly recognize that such a rate cut will have little material impact. The key rate in the euro area is not really the refi rate cut the deposit rate. It is at zero and there is no indication that the ECB is seriously contemplating bringing this into negative territory. It is that zero deposit rate which is the anchor of EURONIA, which is just above zero.
Nevertheless, the prospects for a rate cut, the EC extending times frames to reach 3% deficit targets, positive developments in Italy's political situation, and confirmation of that Greece will get delayed aid tranche, continues to support investor sentiment. In addition, while the data continues to show Japanese investors have been net sellers of foreign bonds, there remains strong expectations that they will eventually--perhaps after the Golden Week holidays--buy euro-area bonds. After posting strong rallies in recent sessions, European bonds are consolidating today.
If the euro area has moved from crisis to response to complacency and back to crisis, it appears to moving back to complacency since the Cyprus events proved a catharsis. During those complacency phases, there is a virtuous cycle of sovereign bond rallies in the periphery, narrowing premiums over Germany, helping support the banks, who are large holders of sovereign bonds.
The euro has tended to rise during such periods. However, the euro fell to new 2 1/2 week lows today. It's recovery is impressive and to solidify the potential reversal, a close of the North American session today above $1.3030 would be helpful.
Separately, but on the same theme of rate cut expectations, Australia's tame Q1 CPI report, in the current context of softer China data, weaker commodity prices, the recent rise in unemployment and a tightening in credit conditions, help bring back rate cut expectations. The RBA meets on May 7. The market appears to be pricing in about a 40% chance of a cut. Unlike the euro, the Australian dollar haled above yesterday's lows when it was initially sold in Asia. A move a above $1.0310 would lift the tone and signal a near-term move toward $1.04.
There is also increased speculation that the Sweden and Norway's central banks could cut rates soon too. The next string of reports will be important for the outlook for the Riksbank following the recent news of a jump in unemployment. The weakness of the German economy signals a headwind for Sweden. Meanwhile, the Norges Bank meets May 8. Governor Olsen yesterday warned that inflation was "disturbing low". Adjusted for taxes and energy prices, CPI slipped below 1% in February. The Norwegian krone extended its recent losses against the euro. At almost NOK7.7 earlier today, the euro was at its strongest level against the krone since January 2012.
The data feature of the North American session is the March durable goods orders report. The risk seems to be to the downside of the consensus forecast of a 3% decline. Boeing orders are volatile and often drive the headline. Weaker orders were reported. Just as important, after missing the economy's strength earlier in the quarter, economists adjusted their forecasts just as the economy lost momentum. The recent string of data has come out below expectations. That said, the durable goods orders report is the last piece of data for economists fine tuning Q1 GDP forecasts. The US releases its first estimate on Friday. The Bloomberg consensus is for an above trend 3% after a the economy nearly stagnated in Q4 (0.4% annualized).


We see a huge 170% increase in Brits needing food handouts:

(courtesy zero hedge)

"Working Poor" Spark 170% Increase In Britons Needing Food Handouts In Past Year

Tyler Durden's picture

While the dismal news of endlessly rising food stamp recipients in the US seems to be glossed over by most of the media because, well, stock markets are at all-time highs, in Britain, things are becoming increasingly awful. As the FT reports, thenumber of people receiving emergency food rations has surged from 130,000 to almost 350,000 in the past year. As inflation eroded incomes and government austerity pushed hundreds of thousands into crisis, the 'working poor' has emerged. The food bank provider estimates about half of the households it helped has at least one person in work. During the Great Depression, the desperation was graphically evident with long lines of families waiting for soup; in the new depression, the record levels of starving and needy are hidden by a blanket of EBT cards and direct transfers from government. The situation is no less terrible - no matter how hidden from view. As one food bank manager noted, "the fundamental thing is that more and more people are living an increasingly precarious life financially."


The 170 per cent surge in demand for food handouts will fuel debate over the impact of government austerity on poorer households, amid concerns about the effect on demand as consumers cut back on everyday spending.


For policy makers, the high proportion of emergency food going to working households illustrates the wider trend in the post-recession job market, where many new jobs are part time, temporary and low paid – meaning even those in work sometimes struggle to put food on the table.


“There was a real shock with one group [of donors] at the concept of the working poor... We know many people who are doing everything they can; they’re in a job, they can’t find another job that pays more, they’re paying rent, water, council tax, electric, and they honestly struggle to buy food for their family.”


On food bank manager noted... “We are being so pressured to fill the gap that is now being created by the welfare reforms – and we’re not that. We are meant to be short-term help.”


"the fundamental thing is that more and more people are living an increasingly precarious life financially."


We have a new potential Prime Minister in Italy, Enrico Letta and a vote in Parliament is coming.

Italy's President Names PD's Enrico Letta Prime Minister, Vote In Parliament To Come

Tyler Durden's picture

When it comes to Italy, the market may have priced in every possible favorable outcome (the ECB and Kuroda will take care of the rest), but the country still has no Prime Minister and its economy continues to be in freefall with record unemployment and ever higher bank non-performing loans month after month. And while it may have elected a new figurehead president after 6 attempts last week, the choice of Prime Minister will hardly be as simple, especially since as we learned moments ago, the mandate to form a government was just given by president Napolitano to Enrico Letta, deputy of the Democratic Party (which as a reminder is in complete chaos following last week's internal coup and the resignation of its head Bersani over the weekend), at a time when Berlusconi's PDL lead in the polls continues to increase. Why the Bunga veteran would agree to a premiership by his opponents remains unclear, and with a parliamentary vote coming, it is doubtful just how smooth the approval process will be in a country best known for its dysfunctioning political process.
From the WSJ:
Italy's President Giorgio Napolitano summoned Enrico Letta, deputy of the center-left Democratic Party, to a meeting at the president's palace—the first step to naming Mr. Letta prime minister of a new Italian government.

Mr. Napolitano, who was re-elected on Saturday, said this week that he would move quickly to name someone who could run a bipartisan government in the hope of ending a two-month political impasse and setting the country on course for reforms, including changing a dysfunctional electoral law. Mr. Letta is due to see Mr. Napolitano at 12:30 local time.

If, as expected, Mr. Letta is asked to form a new government, he would then proceed to naming his cabinet ministers, and the new administration would have to then win confidence votes in parliament before starting its tenure. If his government were confirmed by parliament, Mr. Letta—who is 46 years old—would become one of the youngest leaders in Europe.
What makes things especially complicated, is that according to the latest Ipsos poll, it is the PDL that should get the PM mandate according to popularity, something Berlusconi is keenly aware of:
  • Centre-right 34.7% (PDL 28.2%),
  • Centre-left 29% (PD 24.7%),
  • M5S 24.1%,
  • Monti/centre 8.9%
Adding insult to injury, Letta is an "anti-austerian", saying austerity measures are no longer sufficient to help with the crisis, which means if he is elected, he and Merkel (and of course Schaeuble) will clash head on, as he picks up the baton where Berlusconi left off in November 2011 - hardly a prescription for a happy ending.
So watch this space: if the vote for Letta is not as smooth as the market anticipates (and this one can't be blamed on the winter weather), expect a prompt return to completely chaotic baseline, which if Belgium is any indication, may just be the best possible outcome for Italy.
Finally, we are confident some may be interested to note that since 2004, Letta has been a Vice-Chairman of the Aspen Institute Italy. The Aspen Institute, of course, is affiliated with the CFT, and the Bilderberg Group.
In other words, instead of a Goldman technocrat, Italy is about to be headed by a globalist technocrat. Out of the frying pan...


And mapping out what is next for  Italy is Marc to Market:

What Next for Italy?

Marc To Market's picture

Italy is getting closer to putting together a grand coalition government. This has always seemed to us the most likely scenario, but the route to it has been circuitously torturous. Three considerations have led to President Napolitano granting the prerogative of forming a government to the deputy leader of the center-left, Letta. 
First, the unprecedented move to grant Napolitano a second term required an agreement between the center-left and center-right.  Second, such an agreement required the resignation of Bersani, the center-left leader.  His attempt to push Prodi's candidacy for President alienated not only the center-right, but also fractured the his own coalition.   Third, Napolitano's leadership to a force coalition government, and in particular his decision not to push Amato's candidacy, which some local press had tipped, was instrumental in breaking the political impasse.   
Amato's nomination would have alienated several of the smaller political parties on the right and left.  In addition, in terms of public support, Amato's tax on all depositors in 1992 has not been forgotten/forgiven and the sensitivity was heightened in light of the recent Cyprus developments, where the initial attempt to tax insured depositors was successfully blocked.
Letta will meet with leaders of other political parties tomorrow and see if he can put together a cabinet that would pass a vote of confidence.  This will require a center-right candidate, though not Berlusconi,  as the deputy prime minister.  Alfano, the previous Justice Minister is a likely candidate.  Monti, the technocrat prime minister, is likely to get a portfolio.  However his austerity program was so unpopular, he is unlikely to get the finance ministry.  He may be of greater service in the foreign ministry. 
Renzi, the Florence mayor and rival of Bersani's is still a rising power and it is probably best he is not too closely associated with the coalition government.  However, the one of most notably characteristics of both Letta and Renzi is their youth.  Letta, if he does success in putting together a government, will be the youngest PM in Europe and Renzi is in the same cohort.    With high levels of youth unemployment and the sense that austerity is about a generation transfer from the young to the old, the transition to younger political leaders is a welcome development.
We expect Letta to succeed in forming a government, which could be in place over the next week or so.   The coalition government will be fragile and the areas of agreement limited.  Electoral reform and some economic stimulus, especially in terms of employment, are two areas of potential common ground. The initial hope is that the government could last into Q1 next year. 
Current polls shows that the center-right would win an election if it were to be called now.  The center-left is in disarray.  Renzi's star is in ascendancy, but will take some time to mend fences.  Grillo's 5-Star Movement continues to play the role of obstructionist and has indicated it will not support Letta.  However, as we have noted, as the debate goes from first principles to specifics, some under the Grillo banner may support individual measures. 
Movements, like 5-Star, needs action and drama.  A coalition government, the decline bond yields (record low 2-year yield and lowest 10-year yields in nearly 3-years) and stronger stock market (6.6% this month)  removes some fodder for the discontents, though the economy itself remains in poor shape.  February retail sales were reported earlier today.  The 0.2% decline was more than expected and extends the streak of the lack of increases to ten months.  The 4.8% year-over year decline is the worst since last April.
Italian banks do not appear to have returned much of their LTRO borrowings.  A new government and the lower market rates could encourage Italian banks to begin returning some funds.  This would add to the pace at which the ECB's balance sheet is shrinking. 


This will be the future template:  the seizing of deposits.

(when you see the word: "forced losses" that is a euphemism for confiscation of deposits)

(courtesy Reuters)

EU Parliament likely to back forced losses on wealthy failed bank depositors

BRUSSELS | Tue Apr 23, 2013 2:23pm EDT
(Reuters) - The European Parliament is likely to back plans to impose losses on wealthier depositors in failed banks while shielding smaller savers, its lead negotiator on the rules said on Tuesday.
Talks are under way to finalize EU rules on crisis-hit banks following the bailout of Cyprus, in which both large and small depositors were originally going to be hit before the plan was changed to charge only the former.
The European Parliament's backing is needed for any proposals to become law.
Gunnar Hokmark, a Swedish conservative in the European Parliament, said most categories of deposits would not be protected under proposals likely to be agreed.
"There is a very clear exception for all deposits below 100,000 euros," Hokmark, who will lead negotiations with European Union member states, told a news conference.
Bigger depositors would only suffer losses once bondholders and shareholders had been hit.
The European Parliament has an equal say alongside countries when deciding who among a bank's creditors - bondholders or depositors, for example - must bear the brunt of failures such as those in Cyprus' banking sector.
Hokmark, however, pledged to protect small depositors in EU legislation. "What happened in Cyprus shall not happen again if this legislation is involved," he said.
The initial EU-Cyprus plan, which would have imposed losses on smaller, insured depositors, prompted a large backlash both from depositors and financial markets.
Although some policymakers have sought to portray Cyprus and the losses suffered by depositors at two of its banks as a one-off, many analysts believe it marks a change in tack in how Europe deals with troubled banks, to spare taxpayers who have been on the hook for previous bailouts.
Jeroen Dijsselbloem, who chairs meetings of euro zone finance ministers, has said that in future, the bloc should ask banks to recapitalize themselves, then look to shareholders and bondholders and then uninsured depositors.
The European Commission has written the first draft of the law about how to share out losses when banks run into trouble, designed to prevent EU countries taking a variety of approaches to deal with struggling banks and bondholders.
It is now up member countries and the parliament to decide whether and when savers should face losses, when a failing bank is being salvaged or shuttered.
The plan would mean that when banks need to be shut, the costs would be lower for their home countries and potentially also for the euro zone's rescue fund, the European Stability Mechanism. But it risks scaring investors away from the multi-trillion-euro market for unsecured bonds as well as prompting depositors to move their money elsewhere.
The ECB, which will start supervising big banks in the euro zone from the middle of next year, is also pushing for a framework with 'bail-in' powers, and has suggested that depositors get preference over other bondholders.


Dr Paul Craig Roberts, Kingworldnews
(courtesy of Jim Sinclair to all of us/Craig Roberts)

By Dr. Paul Craig Roberts
April 24 (King World News)

"The real concern about US bank deposits is that they are denominated in US dollars, and the supply of new dollars has been increasing by about $1,000 billion per year for the last several years.  The demand for dollars has not been increasing by the same amount.  Indeed, as more and more countries implement measures to settle their trade balances in their own currencies, the demand for dollars is falling.

When the supply increases and the demand falls, the price falls.  The exchange value of the dollar in terms of other currencies has escaped sharp declines because of the dollar's traditional role as world reserve currency and safe haven and because the sovereign debt crisis in Europe has caused flight from the euro to the dollar.  The Japanese, the Saudis and the oil emirates have large dollar holdings and no interest in destabilizing the dollar.

The Chinese (who also have large holdings) attitude toward the dollar could be adversely affected by Washington's aggressive "Pivot Asia" policy of surrounding China with military bases.

Nevertheless, the world is watching, and the world sees only feeble efforts by Congress and the White House to balance the $1,000 billion annual operating deficit, a deficit that will rise if the economy turns down.  The world sees the monetization of $1,000 billion in Treasury debt and the banks' mortgage-backed derivatives per year.  The question is unavoidable:  Who wants to hold dollars and dollar-denominated financial assets when the dollar faces such obvious exchange-rate risk?

The Golden Question 

The movement out of dollars has begun.  If the trickle becomes a torrent, a sharp drop in the dollar's exchange value will push up import prices, raising domestic inflation and destroying the Federal Reserve's control over interest rates.  This risk leads to the conclusion that the Federal Reserve has been shorting gold and silver in the paper bullion market in order to protect its policy of Quantitative Easing.... 

Click here to read the full article on 


Early Wednesday morning currency crosses;  (8 am)

Wednesday morning we  see euro strength against the dollar from the close on Tuesday  with this time trading just above the  1.30 mark at 1.3018. . The yen this  morning  continues with its bleeding  against  the dollar for now,  trading above the 99 column early in the session  at  99.59 yen to the dollar.  . The pound, this morning is a touch stronger against the USA dollar at 1.5280 . The Canadian dollar is a bit stronger  against the dollar at 1.0257.   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 up  in the early morning, with gold trading at $1422.90 (up $14.60 cents)  and silver is at $22.90 up 9 cents in early morning European trading.

The USA index is down 16 cents at 82.92.

Euro/USA    1.3018  up  .0018
USA/yen  99.59  up .222
GBP/USA     1.5280 up .0045
USA/Can      1.0257 down .0045


And now your closing Spanish 10 year bond yield: (rise of .01 in yield)

(excess USA, and Japanese funds are finding their way into Spanish and Italian bonds driving down their yield)



4.290.01 0.14%
As of 12:00:00 ET on 04/24/2013.


Your Italian 10 year bond yield;  (rise in yield of .06)

Italy Govt Bonds 10 Year Gross Yield



4.010.06 1.60%
As of 11:59:00 ET on 04/24/2013.


The Euro remained relatively constant throughout the afternoon closing at 13014 .  The yen also remained constant in the afternoon closing at 99.58.  The pound weakened this afternoon  at 1.5264.  The Canadian dollar remained constant this afternoon  against the dollar closing at 1.0257.

The USA index fell  from the morning session with the final index number down 12 cents to 82.96

Euro/USA    1.3014 up  .0014
USA/Yen  99.58    up  .183
GBP/USA     1.5264  up .0029
USA/Can      1.0257  down .0007


Your closing figures from Europe today. 

i) England/FTSE up 25.64  points   or 0.40%  

ii) Paris/CAC up a huge 59.89 or 1.58% 
iii) German DAX:  up 100.82 or 1.32%
iv) Spanish ibex up 100.00 points  or 1.21%

v) Italian bourse (MIB) up  72.66  points or 0.44%

and the Dow down 37.89 (0.26%)  


And now for some USA news:

March durable goods imploded, plunging -5.7%
The USA is now joining Germany and the rest of Europe in a recession:

(courtesy zero hedge)

March Durable Goods Implode, Plunge -5.7%; CapEx Recovery Put On Indefinite Hiatus

Tyler Durden's picture

So much for the great American CapEx recovery. Moments ago the Census department released the March Durable Goodsreport, thanks to which one can lay to rest any hope of a recovery in the US economy, with the headline number printing an absolutely abysmal -5.7%, an epic swing from the +5.7% (revised lower of course to 4.3%) in February, and confirming the recovery is dead and buried. This was the biggest miss in headline data and the biggest drop since August, and the second worst since January 2009.
Although we are confident the propaganda spin is just waiting to be unleashed: after all it is possible that March weather was both too hot and too cold, thereby making the number completely irrelevant - after all it is always the inclement weather's fault when the economy does not act as predicted by some economist's DSGE model of reality and stuff.
This headline number was obviously a huge miss to expectations of -3%, with the misses spreading to all sub headline categories too: Durables ex-transportation was down -1.4%, on expectations of a 0.5% rise, (previous revised from -0.5% to -1.7%). And so much for CapEx with Cap Goods nondefense ex aircraft up just 0.2% (0.3% exp) with the previous revised from -2.7% to -4.8%, while the nondefense orders shipped ex air missed expectations of a 0.8% rise, printing at 0.3%, and the February data revised from 1.9% to 1.2%. In brief, horrifying economic data however one looks at it, and proof that the great CapEx recovery never existed to begin with. So much for 3% Q1 GDP, which is about to be revised by everyone lower across the board.
Finally, if this economic collapse validation doesn't send the S&P limit up, nothing will.
The only two charts needed to show what is really going on in terms of capex and generally spending on core capex:


Brian McNary said...

I loved the comment from the guy who said, "Harvey how come you have all that white area around your posts, it's really annoying."

I don't know how Harvey has attracted hordes of whiners and trolls, but I certainly commend Harvey for his restraint. In my house, I'd dump you out on your ear.

AI said...

Harvey if you would pick one, which of silver and gold right now of all the report of warehouse and minth production stops, seems to have the most problem right now to deliver, gold or silver?

disqus_Rbfqk4GGqp said...

Al; it looks to me like they have a problem with both metals.
In my humble opinion, London England is out of physical in both.
see you tonight

AI said...

Thx for ur reply. I will of course read ur blog as I pretty much always do, skiping all the ZH news though, because those I usually already read:)

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