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Maddening as hell isn't it!
WOW...STELLAR 2Q RESULTS!
.04 EPS
77.335M REVENUE
64,500 OZ PRODUCED
25M CASH
FULLY FUNDED CAPEX
2017 GUIDANCE OF 255-280,000 OZ ON TRACK
http://www.stockhouse.com/news/press-releases/2017/08/01/golden-star-reports-second-quarter-2017-results
Bob, what the heck is Kirklands secret, they are the ONLY stand out miner I have seen that has not been affected by the drop in gold since the highs of last year?
Golds got a hardon this morning on the back of Ol'Yeller's dovishness doublespeak.
“I see roughly equal odds that the U.S. economy’s performance will be somewhat stronger or somewhat less strong than we currently project...”
TRADING IN THE ERA OF CENTRAL BANKS
Monday, July 10 2017
“They are never going away … ever!”
Markets, all of them, are at the “whims” of central banks. The above pic from “Bloomberg” shows the expansion of the ‘balance sheets’ [a/k/a QE or money printing] of the “Big 3” [Fed, BOJ, & ECB]. As I point out in the new version 4 volatility trading manual [about half way done], the FED started actively intervening in markets starting with gold in April 2012, when they came in and “monkey hammered” gold down by more than $100 per Oz. in a day. From their counterparts in crime [BOJ & ECB], they learned quickly that if you desire a short-term policy outcome, the way to get it is to manipulate whatever market achieves that goal. Which, of course, is what they did with crude oil in February 2016, when the “Plunge Protection Team” [PPT] came in and ended the bear market in oil and rescued the industry from the $20’s.
“Oh, and it’s a “coincidence” that since that date, as the graph clearly shows from Bloomberg when the FED began throwing QE money into the markets in “spades”, stock indices “behavior” has changed remarkably with the PPT in the markets [Dow30 & SP500] almost every damn day since then. Outside of Brexit & the U.S. election, which globalist elites did not like and came as a surprise, thus causing mini-market meltdowns, the PPT has made their “fingerprints” known all over every market traded on the MT4”.
And lo & behold, the likes of Citi, BofAML, Vampire Squid, & JPM have all now started to break the news to their clients via “muppet research”, that maybe markets might be a little skittish since the FED’s balance sheet reduction could start in September or December; “right, and Peter Pan is gonna visit me tonight and teach me how to fly”? Like a drug and/or alcohol addict hooked up, there isn’t any way in hell the FED or anybody else is going to go away and allow markets to return to the “good-old-days” when traders called the shots. Of course, their actions distort markets and create “bubbles” in asset prices, but you aren’t supposed to notice cuz you’re too stupid, so STFU and buy moar!
What this leaves us with is nothing short of a gigantic “tug-of-war” between large hedge funds and the banksters, where lately cuz the banksters have pulled back some of the money printing, we are getting more two-way action than the previous couple of months. Simply put, more selling and less overnight upside “vapors” in the wee hours when everybody is sleeping. And what I have noticed lately is an almost schizophrenic bid/offer trading environment, where on down days when the PPT and central bank bids disappear, the market can’t hold a “bid” to save its life, and on up days when the PPT either has done something or given the indication that it might, the market can’t hold the “offer” to save its life either. Throw in slippage from any of the scumbag LP’s, and it makes for a difficult trading environment.
It should come as no secret then, that nothing means anything anymore except what some Twit at a central bank says it means; up bananas one day with nary a downtick, let alone some normal corrective behavior, then “out the window” down the next day with the exact opposite. Trump says, Yellen says, Draghi says, Kuroda says; “the world cares and the HFT’s jump faster than anyone can imagine”. Up/down to some central bank determined level, and everybody can go home now. Wait … what? And that’s the trading world we live in now; everything pre-2016 is useless and meaningless as a result.
Turning to today’s market … no overnight Sunday “vapors” to the upside we have to deal with today … seriously, that gets really annoying when the banksters pull that crap … a little bit softer tone … could see some selling on the open from no follow-through from Friday … After an hour, and outside the total screwjob 20 point slam on the open, that saw somebody not have a very good open, it’s been a “drift higher in mindless chop mode”, and watching my screen, I can see the slippage in fills and the price gaps being handed out only an hour into this clusterfark … can’t wait to see it in 3 hours.
And once again, today brings anther version of the “Flying Wedge of Death” [FWD], where the day starts on the high, goes to a new low on the open, and now after 90 minutes here we are up near the high, about 20 points shy as I write, whereby now we can stall and drift slightly lower trapping longs … you get the idea, and as I have written before, this type of trading activity is almost impossible to make money other than scalping both sides of the market, which I don’t do cuz you are only asking for major league trouble. And of course, with the FWD comes the “doji” daily candlestick, unless something happens which I doubt; whenever the FWD shows up, there is a strong correlation that a “Doji” day is upon us. [Note: which isn’t good, as it is interpreted as “indecision” by most traders.]
“Meanwhile, RIDDLE ME THIS BATMAN”! The SP500 can’t do a thing and the Dow30 drops 20 points, so that the correlation between the 2 indices is “on again” / “off again” depending on which way the central bank wind blows … the Dow30 much easier to manipulate than the SP500. Directly below, first the SP500, then the Dow30 markets in the M1, with the blue area under the “-vegas microscope”.
Ok, ‘splain this? The Dow30 stocks are all included in the SP500, which means [if I’m to believe the LP is “honest & fair” in pricing … (giggles, snort)] if the Dow gets whacked 20 points, how come the SP500 can’t move? These are the largest stocks in the weighted average, so the only thing that could possibly be the answer other than manipulation, is that the other 470 stocks rallied exactly at the same moment while the 30 in the Dow went down … all in 3 minutes in perfect unison? “No Skippy, it was dealer LP manipulation pure and simple and they panicked some longs and got them to puke into a falling market, filling their sell orders underneath the market to 1) take the other side of the trade, and 2) take some price protection with shit fills to guarantee a profit. And when the selling was over, bid it straight back up”! If this isn’t proof, I don’t know what is.
“Caution when entering … may be harmful to trading Newbies.”
Let me enlighten the downtrodden & trading uneducated, on exactly how this LP scam above works; the people that own & operate “LP A”, create another liquidity provider [LP B] that they own as a separate legal entity, often times having said entity be domiciled for legal purposes in a “tax haven” like Panama, Nevis, Gibraltar, British Virgin Islands [BVI], and/or Belize. When it comes time to “pump & dump”, especially dump, “LP A” will fill your order to “LP B” off the market by as much as they can that won’t get them indicted. When you complain [like I’m sure some did today], that you got filled off the market, they will come back and say, “Oh no, our HAL1000 computer system diagnosed itself, and came back and said everything is fine! … Dave? … We don’t have a problem do we Dave”?. When you ask if they took the other side of the trade, you’ll get “of course not, we are STP & ECN, and all orders go to the highest bid, lowest offer, and the closing of positions to the corresponding LP”. Which is all a lie, as initiating orders go, the vast majority of the time, to their “silent partner”, which is themselves; and closing fills get raped even larger cuz you’re closing them and they got to get their “pound of flesh” before you leave in disgust from the position. Modern day financial trading in all its glory.
Meanwhile, the regulators get tons of cash under the table to look the other way cuz nobody really gives a damn, all the while watching porn on their “busy-day-at-the-office” computers; what they know is what you know … you gonna sue them and take them to court over a couple of Dow30 points? And after you spend a large fortune getting it in front of a judge, he/she throws it out cuz it needs to go to “arbitration” first … and that means you’ll never hear about it ever again cuz the “arbitration judge” is 1) a former brokerage house scumbag lawyer, and 2) located in Greece or Albania. Buy a lottery ticket, the odds are better!
All of this leads to massive headaches for traders, cuz you got about 1 second to figure out if it’s “official LP bullshit” [above], or is the Dow30 move simply the start of a waterfall or a move lower? Which is it Skippy? To be sure, there is no “failsafe” way to know for sure, but simply say the SP500 is the vastly bigger futures market, and more than likely the Dow30 is the one being manipulated. Which is fine, as long as you understand the new paradigm of central bank “market manipulation”; if you don’t, you’ll never understand what is going on in this stuff on a day-to-day basis.
One move today, which started one minute after the NY open, and has taken the market straight up, except for a couple of 10 point hiccups, which is hardly a correction or break … again,, like for the umpteenth millionth time, the Dow30 moves some while the SP500 sits … then the SP500 moves like it’s got a fire under its ass while the Dow30 basically sits … One trade today for scratch profits, where I’m down a few points, then I’m up a few points, down again … so when I get up again about 20 minutes later I don’t hesitate to liquidate, thankful to be out of this total mess today. And today at least, both the SP500 & Dow30 are an inactive mess … the entire afternoon, and I don’t think the Dow30 has fluctuated more than a dozen points top to bottom, the SP500 a simple index point … in other words, a perfect central banker day where VIX gets crushed and prices hold steady to slightly higher with zero trading activity. It’s a little less than an hour to the close, and I want no part of this 3 point range crap in the last 30 minutes; this market is dead today.
http://traderzoogold.blogspot.com/
Very strange how most miners are green today, ALL at the same time, with no material rise in gold or other impetus. I guess insiders got the memo that gold has bottomed and is going to be allowed to run. What else would make this move occur simultaneously across the board?
RECENT GOLD PRICE DECLINES = THE CUSP OF A MAJOR UPWARD MOVE
BY AVERY B. GOODMAN
July 8, 2017
I received an email from one of my readers on the July 4th holiday. He expressed dismay at the recent gold take-down that occurred at the end of June and on July 3rd. I am sure he is even more distressed, now, with the huge take down that happened on July 7th. He wondered how bankers can still have the power to pull off big reductions in gold prices whenever they choose? It is a question that is flowing through the minds of many people. They are still doing it, in spite of a relatively successful ongoing lawsuit against manipulation of the London gold fix, and in the face of a gold-friendly Presidential administration.
All I can say is that patience is a virtue that is always rewarded. The people who are orchestrating these market manipulations, in the gold market and elsewhere, are extraordinarily ruthless and well-connected. The bullion banks are deeply enmeshed with governments throughout the Western world, and they’ve been doing this for a long time.
On top of that, they receive an average of about 7 tons of new gold every single day from the mining companies. It can be used to fill the extra demand caused by their shenanigans in the very short term. Also, it seems likely that they will continue to draw gold out of the US Gold Reserve. The fact that the gold market is tight, however, as illustrated by backwardation between the futures and the physical gold price in London, does imply that their access to the US Gold Reserve is not unlimited.
The reason they get 7 tons of new gold to play with, every day, is that mining companies are foolish enough to sell to them, at whatever price is created by the London “fix.” Regardless of the outward trappings, and even when it is cured of whatever corruption recently went with it, the fix is largely determined by manipulations on the paper gold market in New York (a/k/a COMEX). If mining company executives developed a backbone and took joint action to reject the legitimacy of COMEX pricing, the power of the banks over the gold market would end. Miners could refuse to sell their product at a fake price. If they did that, everything would change.
Unfortunately, these same miners also rely on these same banks to finance their operations. The banks are a source of ready cash to pay executive salaries. In addition, a bad recommendation from a major bank’s research department torpedoes a mining company’s stock price and cuts into the personal wealth of mining executives who are paid in part by stock bonuses. Adding to the problem, many of the banks are directly or indirectly represented on mining company boards of directors. In other words, the mining companies are not likely to take a stand against the manipulating banks.
The game would also come to a screeching halt if the flow of sovereign gold from America dried up. The fact that the not-so-elusive “gold supplier of last resort” is the US government is so obvious that it is almost laughable. US Treasury is supplying a huge amount of gold into the world market. No other entity could do it. Someone is supplying the massive gap between supply and demand that has existed since gold prices were taken down from their equilibrium point between $1,500 and $1,600 in early 2013.
I don’t want to get into the details of the gap between supply and demand. Nor do I have space to describe in detail exactly how gold is manipulated. Doing so would make this article too long, and I’ve already done it. My past articles and the thriller novel, “The Synod”, provide the information you need. But, to put things in context, I will say this. The US government is supplying location swaps on gold stored inside the official US gold reserve to the Bank of England. The British central bank, in turn, is releasing gold bars into the market in London. Those gold bars do not belong to the UK. They belong to customers of the Bank of England. That’s why they need the location swaps.
The policy of occasionally using the US gold reserve to suppress gold prices is an old one, going as far back as the 1970s. There is documentation of a huge swap that happened between the US Treasury and Bank of England in 1980, just about a month before the collapse of gold prices from their height of $850. However, the huge gap between supply and demand since 2013 means that the policy was vastly expanded under Obama. Again, I can’t triple the size of this article by going into the specific details here, and you can read my past articles and The Synod to find out everything you need to know.
When the Trump administration finally gets around to reversing Obama’s secret executive order, which began authorizing this liberal gold swap policy in April 2013, the price of gold will soar. At the moment, it seems, that is not going to happen overnight. The attention of the Trump administration has been diverted into a myriad of squabbles. Key players, who might otherwise be active in reviewing matters that would bring an end to this short-sighted foolishness are too busy putting out petty political fires. An enormous flow of American treasure continues to flow out of the United States.
That said, the manipulating banks know that the game ends when US gold swaps end. That means they must allow prices to rise before that happens. Otherwise, they’ll be at risk of holding enormous short positions at the worst possible moment. Right now, they are continuing to make money by painting the tape and trading gold as non-connected people react to it. They are also very busy ridding themselves of legacy short positions. In other words, they are “making hay while the sun shines.” Plenty of money can be made by artificially inducing movements in the paper gold market.
Bullion bankers are getting rid of legacy short positions by carefully orchestrating their price attacks. The basic game is simple. Manipulators initially sell enough additional short positions to cause a price decline sufficient to trigger the stop-loss orders of leveraged speculators. They know the price points at which speculators have concentrated those orders. That’s because the speculators are either directly or indirectly (though a clearing broker) customers of the manipulating banks.
Once the first set of stop-loss orders is triggered, prices are catalytically dropped much further than the manipulators could achieve directly. The bigger fall in prices also catalyzes further drops because it causes more automated stop-loss selling, and finally the triggering of automated margin call selling. This adds to the downward pressure. Prices drop still further. That leads to more stop-loss selling, more declines, more margin call selling and, finally, after the process burns itself out, the tape ends up painted with a spectacular price drop.
The price instability causes panic among speculative long buyers in the futures markets. Secondarily and temporarily, it will also catalyze some physical buyers to lower their bids, in the hope of getting a cheap buy. That relieves some physical demand pressure ordinarily caused by a massive price drop, in the very short run. Meanwhile, in the midst of the chaos, the manipulating entities slowly and deliberately liquidate the new transient short positions and also get rid of huge numbers of the legacy short positions they may have been rolling over for years.
The most recent “Commitments of Traders” report, issued by the CFTC on July 7, 2017, proves that the bankers are doing exactly what I have described. By the end of trading on July 3rd (the date the data was collected) the so-called “commercials” (a/k/a bullion banks) had shed 10,176 and the swap dealers (divisions of those same bullion banks) had shed a whopping 27,701 short positions. That’s a total reduction of 37,877 short positions as of the end of trading on the July 3rd smack-down date!!
The price smash allowed bullion bankers to shed 3,787,700 troy ounces worth of bets that gold will decline. In other words, that one day of “playfulness” allows them to avoid losing more than $1.1 billion dollars on COMEX alone, assuming the price of gold rises by $300 by the end of the year. Indeed, we have no way of knowing what they were doing in the London market, because the information is kept secret. The over-the-counter leveraged forwards market is five times as big as the more visible COMEX. That means that the bullion banks probably avoided more than $6 billion dollars in losses by pulling their stunt on July 3rd.
It didn’t stop there. They did the same thing on July 7th. You can be absolutely sure that they shed tens of thousands of additional short positions on that day, too. That’s because the tape was painted again, in virtually the exact same manner, resulting in the same type of panic and forced liquidation among leveraged long speculators. The so-called “managed money” (a/k/a hedge fund managers) took on a lot of the short positions. Some of them are going to be called upon to deliver a lot of real gold come August. It is gold they don’t have, obviously.
The bullion bankers would not be shedding huge numbers of short positions if they thought the price was going to go down a lot further. They obviously know that prices are about to go up. Meanwhile, the hidden gold flow from America to the rest of the world keeps the scam in play. That hemorrhage of gold, from the USA, is partially illustrated by data that is publicly released. From January to April 2017, for example, a net 88 tons of gold flowed out of the USA, according to the US Geological Survey. If this pace continues, and it has been very steady month to month, a net excess of 264 tons of gold will leave the USA in 2017. That is more gold than all the mines in America will produce!
Note that the vast majority of gold exported from the USA is NOT in the form of gold ore or dore (gold that hasn’t been fully refined yet). Yet, a vast majority of the world’s refining companies are based in Switzerland, not the USA. In spite of that, the United States is mostly exporting pure gold bullion. I believe that part of that comes from deliveries on the COMEX exchange, which may be directly supplied by physical gold in the Federal Reserve’s basement vault in NYC. Once delivered on COMEX, apparently, that gold is probably being shipped overseas. Another part may be gold bars provided directly to big New York banks to fill orders by customers overseas.
At any rate, these statistics ONLY account for visible gold outflows in the form of bars of gold that are leaving the USA because they have been shipped directly to commercial buyers. “Monetary” physical gold transactions (gold passing between central banks) and gold “swaps” are not accounted for. Gold swaps, which are almost certainly the main method by which gold is delivered from the US Gold Reserve to the world market, via the Bank of England, are also absent from the statistics.
A “location swap” is an agreement to supply gold in one location in exchange for a lien on gold in another. The gold upon which the lien is placed is usually located in an inconvenient location (a/k/a Fort Knox, West Point, The Denver Mint etc.). Taking the gold directly out of the US holding areas would involve demobilization of army units, a public spectacle. The public nature would insure a huge political fight and the inability to keep the activity a secret. In contrast, at the Bank of England, gold bar movement can be kept entirely secret under British law, and its vaults are convenient because they are located in London, where all the bullion banks are headquartered.
The gold swaps are a proven fact. In 2009, in responding to a Freedom of Information Act request, the Federal Reserve admitted to having extensive gold swap records, but refused to provide them. It claimed that “exemption 5 of the FOIA” made them exempt “confidential communications with another federal agency.” No doubt, the “other agency” is the US Treasury, which actually owns the gold. In subsequent litigation, a final order was issued by a federal judge requiring the Fed to produce one document which did not directly relate to gold swaps.
The Fed’s successful resistance to the FOIA request does NOT mean that there are no gold swaps. On the contrary, it proves that there are gold swaps. The judge examined them, and the plaintiff’s attorney was not allowed to do so. Apparently, the need to keep the information secret is considered so important that the powers-that-be literally were willing “to make a federal case of it.” But, the bottom line is that the Great Game will end as soon as the very liberal Obama-era gold-swapping policy ends.
In my opinion, the big price drops in late June, July 3rd, and July 7th all revolve around a concerted and coordinated effort to reduce legacy short positions in the gold market. Something big is about to happen. There is panic within the banksters’ ranks. In response, they do what they always do. They launched a coordinated attack, sowed fear into the hearts of non-connected speculators and investors and succeeded in massively reducing their overall short position. Collusion to smash gold prices worked out beautifully. And, working hand in glove with deep state bureaucrats, no regulator will ever question what they did.
Keep in mind that the biggest banks in the world continue to gobble up gold. In June, for example, the Bank of Nova Scotia, one of the biggest bullion banks, bought a net 44,900 ounces or just under 1 and a half tons of pure gold bullion on COMEX alone. That adds to the huge quantities of physical gold already purchased by the likes of Goldman Sachs, JP Morgan Chase, HSBC and Scotia in the past.
CME, Inc., which runs the COMEX exchange, was also a big buyer, again. It bought just under 1/10th of a ton of gold this past June. That is a huge amount of gold for an exchange operator to buy. It is also bizarre for an exchange operator to be buying it. CME has made large purchases in virtually every major delivery month since June 2016. That is NOT normal activity. As recently as 2015, the CME didn’t purchase gold. There is no reason to buy it now because CME, Inc. is not an investor, a bank or a gold dealer. Clearly, the exchange is acting in a manner that implies that a major supply disruption is on the way. Major disruption will be the inevitable result of a cessation of US government sponsored gold swaps.
At the current price, supplying the gap between supply and demand, the “gold supplier of last resort” would have to spend something like 1,000 tons of gold to support the bankers. I don’t think the Trump administration is willing to do that. Even under the Obama administration, the physical market was tight. That implies, as I have said before, that access to the US Gold Reserve is not open-ended. When the American gold swaps finally end, we will start seeing a significant price spike.
From the standpoint of the foolish hedge fund managers who are taking on the short positions, difficult delivery months lie ahead. There will be a cash settlement of non-allocated claims in London. There will be a myriad of delivery defaults by dealers at COMEX. However, CME, Inc. is going to be using the gold it is now accumulating to backstop some of those failures. If they cover most of them, unfortunately, the dishonest price setting mechanism that is COMEX will retain its credibility.
Attempts to control the rising price of gold will periodically continue. “Shock and awe” campaigns facilitate short covering and gold accumulation by insiders. I continue to believe, however, that gold prices will go up this year until they reach the point of natural supply/demand equilibrium, which I estimate to be somewhere between $1,500 and $1,600.
The take-down style we’ve seen in the last two weeks tends to be followed by delivery of large quantities of physical gold to the banks in the subsequent delivery month. I expect some major fireworks by August even if the Trump administration still has not cut off the flow of American gold by then.
Golden Star Reports High Grade In-Fill Drilling Results from Prestea Underground Gold Mine
https://finance.yahoo.com/news/golden-star-reports-high-grade-105500913.html
June 2017 Investor Presentation.
http://s1.q4cdn.com/789791377/files/doc_presentations/2017/06/Investor-presentation-June-2017-FINAL.pdf
Cork, It is very perplexing as to why there is so little conversation or coverage regarding the lack of upward movement in gold after a three day free fall of the dollar back to pre-election lows, using this metric, gold should be well over $1300.
A 50 basis point straight up spike in the dollar...REALLY...who buys this shit? bwa, ha, ha, ha, ha, ha!
Now down -1.10%, this is beyond in your face criminal fraud!!!!!!!
Dollar now down -0.75% and STILL no change in gold.
Dollar now down -0.63% and gold still not moving up, what a joke, if it was the other way around, you can bet gold would have already dropped another $25.
And still dropping with gold being pegged at $1250, gold was $1275 when the dollar was last at this level on June 14th.
Euro Surges, Bunds Tumble On Unexpectedly Hawkish Draghi Comments
So, now we know why they slammed gold yesterday, it was to front run this, knowing gold would have run back to $1290, what a shit show:
The euro surged to its highest in two weeks after Mario Draghi, speaking at the ECB forum in Sintra, Portugal, surprised markets who expected yet another dovish speech from the central banker, who instead signaled that stimulus tapering may be closer than the market anticipated and said factors weighing on inflation in the euro zone were "mainly temporary" and the central bank could look through them.
Speaking at the ECB's annual policy forum, Draghi highlighted a recovering euro zone economy that “the threat of deflation is gone and reflationary forces are at play” and that that the effects that keep inflation subdued are temporary and won’t let inflation deviate from its trend over the medium term. but added that stimulus in the form of the ECB's monetary support was still needed.
The market broadly interpreted his unexpected comments as opening the way for the start of tapering even as core inflation readings fail to reach fresh highs. As Reuters adds, Draghi's comments "sounded to investors like he was ready to give more ground on German demands that the ECB get on with starting to reduce the volume of extra euros it is feeding monthly into the economy."
The euro surged as Draghi spoke, rising as much as half a percent on the day to $1.1255, its highest level since Jun. 14. It had earlier traded around the $1.1187 mark.
In a comparable kneejerk reaction, confirming the market is preparing for an end to the ECB's ultraeasy policy, 10Y Bund yields jumped by 4bps to 0.28%.
Bund futures tumbled with wave of selling seen across 5-10y sector from fast money after Draghi’s speech. Schatz auction met with strong demand. Treasuries slid with bunds.
The Euro strength pulled the dollar index to an eight-day low of 96.973, dropping sharply (-0.5%), as the yuan surged earlier, spurring speculation of central bank intervention.
"Draghi's comments I would say were quite optimistic on the growth outlook, talking about a broadening recovery and even saying growth was above trend," said Niels Christensen, currency strategist with Nordea bank in Copenhagen. "While talking about inflation he said mainly temporary factors were slowing inflation at the moment, so he's not too concerned about the fallback in at least headline inflation."
Draghi's comments contrasted with a dovish tone he took on Monday, saying that super low interest rates create jobs, foster growth and benefit borrowers, while rejecting calls to exit super easy monetary policy quickly.
Separately, traders await speeches by Fed officials for signs on whether the central bank will stick to its guns and raise rates this year; key among these will be Janet Yellen, who addresses the British Academy in London at 1700 GMT (1pm EDT), less than two hours after an address by Philadelphia Fed President Patrick Harker in the same city at 1515 GMT. Fed officials have signaled they will look through a slowdown in inflation and continue on their current trajectory of interest rate hikes - though investors are skeptical and market pricing shows only a 40 percent chance of a rise at the Fed's December meeting
As Dudley noted yesterday, the Fed appears to be intent to keep hiking regardless of the data, in order to burst asset bubbles. As Reuters adds, a positive view from Yellen despite a recent batch of weak U.S. economic data would support the Fed's forecast for another rise in policy rates this year.
"A notion increasingly shared in the market ... is that the Fed is continuing to normalise monetary policy regardless of more muted inflation developments - this is the message which has been provided during the last week by several Fed speakers," said Manuel Oliveri, currency strategist with Credit Agricole in London.
"This suggests that the market-based rate expectations have additional room of adjusting to the upside should this notion become even a bigger one."
Should the BOJ's Kuroda also echo Draghi's hawkish remarks when he also speaks in Sintra, suddenly risk assets may find themselves above a trapdoor as suddenly the global central bank balance sheet expansion that has been the reason for the YTD rally grinds to a halt, and may even goes into reverse.
http://www.zerohedge.com/news/2017-06-27/euro-surges-bunds-tumble-unexpectedly-hawkish-draghi-comments
GOLD SLAMMED! Central Banker Intervention For All To See
Dave Kranzler
Posted on June 26, 2017 by Guest Post
This isn’t some trader’s “fat finger” accidentally overloading the sell button and pressing “sell.” This is unadulterated BIS/ECB/BoE/Fed sponsored market intervention:
At 4:01 EST, a paper gold nuclear bomb was detonated in the Comex Globex computer system. The graph above is just the August “front month” paper gold contract on the Comex. In that contract 1.49 million ozs of paper gold were dumped into the Comex electronic trading system. Zerohedge is attributing 1.88 million ozs. That would include the selling in all of the paper gold contract months.
But that’s not the entire amount of the paper hit. There would have been a large amount of LBMA gold forward paper gold contracts dumped in correlation with the Comex paper avalanche. ZH attributes $2.2 billion in paper gold dumped. But the real number including LBMA forwards dumped was much larger.
“The mysterious plunge has the market spooked,” says some idiot named Bob Habercorn from RJO. This was not “mysterious.” It was intentional – a shock and awe market intervention that was intended to “spook” the market. That quote is from a Bloomberg report full of fake news (caution, this article contains fake news: LINK).
The article claims that China bought less from Hong Kong in May. In fact, the amount of gold exported from Switzerland to India and Hong Kong was up 39% from April, according to Platts. Furthermore, we have no clue how much gold moves into China through Beijing and Shanghai, numbers which are intentionally hidden from the world.
Here’s the reason that today was selected by the BIS et al to attack gold in the paper market in an effort to scare the crap out of the market:
the day was well chosen as the Muslim world including Turkey was closed for the end of Ramadan as was India which has the amiable habit of observing the holidays of religious minorities. – from John Brimelow’s Gold Jottings
The largest buyers of physical gold in the world right now, India + Turkey, were closed for the observance of a religious holiday. And Shanghai closed for the day 31 minutes earlier.
4:00 a.m. EST is one of the slowest, lowest volume trading periods during any 24 hour period. Why would a seller of a large number of contracts sell at that time of day, when the largest buyers of what is being sold are not in the market at the time of the sale?
If it were merely a “fat finger” – the fake news narrative – then the mistake would have been immediately corrected and the price would have quickly recovered. Anyone who buys the “fat finger” story is either tragically ignorant or hopelessly naive.
When India returns tonight to the market, I would expect gold to get a strong bid. Indians have a habit of buying a lot more physically deliverable gold than they might have otherwise when the western Central Banks put gold “on sale” by lowering the price in the paper market. I suspect Turkey and China will increase their appetite as well.
The mining stocks per the HUI barely acknowledge the artificial price take-down. The HUI is down less that 1%. In the past, on a day when gold was taken down to this degree, the HUI would have dropped at least 4-5%. It’s almost as if mining stock traders are laughing at the latest Central Bank antics. I know I am…
Central Banks Buying Stocks Have Rigged US Stock Market Beyond
Recovery
BY IWB · JUNE 26, 2017
by David Haggith
Central banks buying stocks have rigged the stock market to the point of ruin
Central banks buying stocks are effectively nationalizing US corporations just to maintain the illusion that their “recovery” plan is working because they have become the banks that are too big to fail. At first, their novel entry into the stock market was only intended to rescue imperiled corporations, such as General Motors during the first plunge into the Great Recession, but recently their efforts have shifted to propping up the entire stock market via major purchases of the most healthy companies on the market.
Brian Rich, writing for Forbes, describes the economic illusion created by central banks buying stocks during a time of presidential prosecution:
The chaos and dysfunction message is loud, but markets aren’t hearing it. The real story is very different. Stocks continue to surge; stock market volatility continues to sit at ten–year (pre–crisis) lows. The interest rate market is much higher than it was before the election, but now quiet and stable. Gold, the fear–of–the–unknown trade, is relatively quiet. This all looks very much like a world that believes a real economic expansion is underway, and that a long–term sustainable global economic recovery has supplanted the shaky post-crisis (central bank–driven) recovery that was teetering back toward recession.
In other words, political chaos in the regime is not denting the stock market, because central banks buying stocks are eliminating volatility. Indeed, if you were to gauge the economy at this point by the US stock market, everything must be grand because the Trump Rally has been one of our most exuberant stock rallies.
According to Rich, all of that is a central-bank-created slight of hand intended to distract you from what is happening in politics and throughout the macro economy:
Remember, the financial media and Wall Street are easily distractible. Not only do they have short attention spans, but they’ve been trained throughout their careers to find new stories to obsess about…. We have major central banks around the world that continue to print money. These central banks buy assets with that freshly printed money. That means, stocks, bonds and commodities go higher.
Distract you from what? Distract you via the roaring success of stocks from the fact that the central banks’ recovery is failing everywhere. As Rich says, the fate of the world now rests on the successful outcome of these new policies because the banks that are now too big to fail are the central banks, themselves. The Fed and its central proxies are creating a grand distraction from a story that would chill America to the bone … if the truth were told.
Proofs of central banks buying stocks to rig the market
The Federal Reserve already confessed it rigged the stock market last January in hopes of creating a “wealth effect” throughout the US economy. Its plan, confessed by ex-Fed governor Richard Fisher was to front-run the stock market with its forward messaging about bond purchases though which it created massive liquidity that would be invested in stocks.
It worked like this: By promising overnight profits on bonds to its member banks, the Fed knew they would soak up tons of bonds. From there, the Fed hoped the member banks would take the money they made off of buying US bonds and selling them immediately to the Fed for a profit and invest that money in stocks, which they did. (Whether the Fed was just hoping or was secretly directing its member banks to do so could be speculated about endlessly; but they expressed it as “hoping to create a wealth effect.”)
Until now I have been speculating about central banks buying stocks, claiming that was all that was supporting the stock market; but I was also just speculating for years that the Federal Reserve was intentionally front-running the stock market throughout its “recovery.” Now those interventions in the stock market, which fueled the Fed’s recovery throughout the market’s long climb, are a well-known fact, admitted to by the Federal Reserve. My speculation that the long bull market was driven almost entirely by banks was much doubted years ago when I and other writers gathered at Zero Hedge, were claiming that was exactly what the Fed was doing. I couldn’t prove it back then, but everything clearly pointed in that direction, even as many experts denied it.
Last year, I upped my claims to saying that I believed the only thing that terminated the stock crash in January was a move toward even more direct Fed rigging of stock prices via having proxies buy oil (one significant cause of the January crash) and stocks directly. All year long, I speculated that the Fed was merely holding the illusion of recovery together by directly buying select commodities and stocks to drive the markets back up because it was an election year in which they would “pull out all the stops,” In this case that expression doesn’t mean organ stops, but all the market stops, but particularly the biggest stop of all that said central banks should not buy stocks because their capacity to rig the markets is infinite, and they have no investment risk. They can buy and hold forever, and they can create new money to replace any they lose.
As if to confirm my suspicions, the Fed began talking early last year about the possibility of buying stocks directly. However, they implied that would only happen, if at all, in some distant future should the economy crash again. I stated that this thing they would like to be able to do overtly and with everyone’s blessing was something they were already doing covertly. They were merely running the flag up the pole to see if they could move from working through proxies to being able to work openly — testing the nation’s response by putting the idea out there.
Recently Bank of America, the Wall Street Journal and others have begun to state that central banks are buying stocks in huge quantities. The only questions remaining is whether they are doing so at the Fed’s bidding and whether they are doing it primarily to prop up an otherwise failing stock market.
By definition, cornering enough of the market to push it where they want it to go is called “rigging.”
What is the scale of central banks buying stocks?
The Forbes article from May continues,
Among the reports on portfolio holdings yesterday, we heard from the Swiss National Bank…. Switzerland’s central bank has more freshly printed money to put to work every quarter, and has been increasing their allocation to equities dramatically–$80 billion of which is now (as of the end of the first quarter) in U.S. stocks! That’s a 29% bigger stake than they had at the end of 2016. The SNB is the world’s eighth biggest public investor.
In one quarter, they upped their stake in US stocks by almost a third, and they are only the eighth-largest public investor! What are the other big guys doing?
Back in April, Bank of America noted that central banks had purchased $1 trillion in assets this year alone. Now, that includes bonds more than it does stocks; but globally it tells us that quantitative easing continues at a massive scale, even as the Fed is unwinding its stimulus (or says it is). Now, you have to know that a lot of that trillion dollars in less than a year is flowing across the ocean to the United States because the US remains the best looking horse in the glue factory. In fact, Marketwatch summed up BofA’s analysis of the situation by saying, “that might be all you need to know about stock and bond market performance in 2017.”
Indeed, that one fact by itself may sum up everything there is to say about why stocks are still rising and why the Trump Rally was as steep as it was and why it is trying for a third time to push a hole through the ceiling. Market watch notes that central banks have gobbled up a “record amount of financial assets” this year. At the time the research was conducted, this would translate into well over $3 trillion annualized, making this the strongest period of central-bank stimulus since 2007! No small claim, since that earlier period was the most extraordinary stimulus burst history had ever seen.
Ask yourself an honest question if you believe in the Fed’s continual recovery narrative: “Is this what recovery looks like — continued record amounts of stimulus forever?”
Yet, the story only gets richer. (Well, for some.)
The newly created money invested by the Swiss National Bank didn’t attempt to buy important but dying companies. It went predominantly to Facebook, Alphabet (Google) and Apple. Is it any wonder, then, that these stocks, known as the FAANG stocks, are the ones that drove the NASDAQ to new heights?
The Swiss National Bank has gone from having about 9% of its holdings in stocks back in 2007 to currently having 22% of its much larger balance sheet in stocks. Last year, when I speculated about all of this, the SNB had already increased its stock holdings by 41% in a year’s time! By the third quarter of 2016, when I was just speculating the central banks were the major driver, the SNB owned $1.7 billion of Apple, $1.2 billion of Microsoft and $1.08 billion of Exxon. (Remember my speculations on the oil connection?) Reuters reported last year that …
Switzerland’s central bank now owns more publicly-traded shares in Facebook than Mark Zuckerberg, part of a mushrooming stock portfolio that is likely to grow yet further. The tech giant’s founder and CEO has other ways to control his company: Zuckerberg holds most of his stake in a different class of stock. Nevertheless this example illustrates how the Swiss National Bank has become a multi-billion-dollar equity investor due to its campaign to hold down the Swiss franc.
In 2017, it stepped up its purchases!
Is this situation of central banks buying stocks insignificant to US stock prices? Not according to Bank of America:
BofA’s analysts called this “supernova of liquidity” the “only one flow that matters” and the “best explanation” for the double-digit gains in stocks that was happing in the first half of the year. They called it the “the $1 trillion flow that conquers all.” So, now we have moved from my speculating all of last year that central banks buying stocks were the sole factor that was pushing up stocks to Bank of America now proclaiming outright that it is the sole factor that matters in the rise of US stocks — a factor so huge that it dwarfs all other drivers.
More evidence of central banks buying stocks in the US
Is the Fed in bed with the Chicago Mercantile Exchange? I owe the following research to Chris Martenson on his Peak Prosperity website in an article titled “Where There’s Smoke … There’s central bank manipulation” and to Zero Hedge. I’ll summarize Martenson’s findings here, and you can check out the article if you want more detail:
After Hurricane Sandy, the New York Fed moved part of its markets group to Chicago where the CME is located. The Fed reported that the move was being done as a safety precaution so that all US central-banking operations would not be on a hurricane-prone coast. The move received very little coverage. (Only MSM organization reporting it was Reuters.)
Besides selling commodities and derivatives that central banks might naturally want to trade in (such as gold by which they manipulate the price of gold in order to secure their proprietary product — money), the CME sells futures on US stocks. The algorithms used by the bots that now do 80% of the driving in the US stock market peer into futures like a fortune teller looking into her crystal ball. So, the CME offers a lot of leverage for moving stock prices by steering the bots.
The largest investors the CME markets its operations to are central banks. The CME has a program specifically designed to entice central banks and to facilitate their purchases through discounted fees. That program doesn’t even try to hide its purpose as it is called the “Central Bank Incentive Program.” Incentive programs are reserved for the CMEs highest volume traders.
This past January, the CME wrote the following marketing summary of its Central Bank Incentive Program:
The Central Bank Incentive Program (“CBIP”) allows Qualified Participants [notice the caps, indicating the term has a legal definition] to receive discounted fees for their proprietary trading of CME Group Products. (CME Group)
They legally define “Qualified Participants” as
A non-US central bank, multilateral development bank, multilateral financial institution … or an international organization of central banks. [Said institutions must] execute all trades in the Qualified Participants name.
After all, you wouldn’t want a proxy using the name of the ultimate money source if that were the Fed or if it were acting on behalf of the Fed. You wouldn’t want the Fed’s name in any way associated with the trade.
Did the Fed move its markets group to the same place as the CME in order to develop proxy trading relationships with all of the central banks in the world that use the CME for trading in oil and stock futures? Strangely, not a single central bank on earth shows any CME products on its balance sheet; but surely the CME does not have this dedicated program for the sake of serving no one. Since CME incentive programs are reserved for the CME’s highest-volume traders (basically offering a bulk discount), central banks must be purchasing CME products and not disclosing so on their balance sheets. Why the apparent secrecy on the part of central banks as to their participation?
Not long after the Fed’s move to CME Land, Zero Hedge reported finding this little tidbit in one of the job descriptions at the Fed’s new market trading office: “Perform account services to foreign central banks, international agencies, and U.S. government agencies.”
Hmm. The CME group requires that central banks open accounts in their own name but that those accounts must be managed by a …
CME Group clearing firm or FCM (Futures Commission Merchant) for their proprietary trades and/or trades done on their behalf by an asset manager.
I wonder if people working in the Federal Reserves “markets group” engaged in “account services to foreign central banks” could serve as asset managers for a central bank with an account at the CME.” Just wondering. In which case, might they not help manage those central banks’ purchases in a manner that serves the aims of the Federal Reserve? Just a thought.
Maybe the Fed is just nearby to counsel them or urge them or provide incentives to make certain stock trades at certain times. Maybe the Fed’s move to the place where central banks of the world trade at a time when central banks buying stocks in the US has become a new phenomenon is all one big coincidence. Regardless, central banks are clearly engaged in massive US stock trades. You don’t get those bulk fee discounts any other way.
According to the Reuters article above,
The satellite office in the Midwest readies the New York Fed for perhaps the most delicate U.S. interest-rate hike ever. With rates having been near zero for more than six years, and markets flooded with reserves, the Fed will rely on an array of new tools to help it tighten policy, likely later this year.
MAYBE the move had less to do with fear created by Hurricane Sandy than it had to do with establishing the new tools that would help the New York Fed achieve intervention readiness for managing its first interest-rate increase without crashing stocks. I suppose one way to safely avoid a market crash when making your much-feared first interest-rate increase would be to get other central banks to jump in with rescue stock purchases if the stock market dared to respond negatively. Remember how the market leaped upward for a few days after the first increase? Was that the central banks jumping in before their new machine was fully calibrated or maybe giving a more-than-necessary boost just to err’ on the safe side?
We may never know, but we now certainly do know that central banks trade US stocks and a lot of it. We also know the CME’s “incentive” program for facilitating central bank stock futures trades (and other kinds of trade) was created in July of 2013, so it, too, is a recent innovation. Interestingly, the program lists one of its core principles as “Prevention of Market Disruption.” (“Plunge Protection Team,” anyone?)
Another sliver of proof comes from the Bank of Finland, which states that it started buying stocks in 2014, still a recent innovation and that it plans to ramp that up:
“When yields started to get really low and closer to zero in 2014, we decided to start equity investments,” said Jarno Ilves, head of investments at the Bank of Finland, who said he plans to increase his allocation to stocks. (Zero Hedge)
Oh, a couple of other parts of that job description:
Interfaces with market participants to obtain context for asset price movements…. Relates developments in financial markets to issues pertaining to financial stability.… Plans andexecutes transactions in foreign exchange or fixed income markets on behalf of the U.S. monetary authorities, foreign central banks, and other customers.
Would those “market participants” be the central banks that are the “Qualified Participants” in the CME’s incentive program, and would the “asset price movements” be intentionally targeted asset price movements, and not just observations of natural market movements?
Just asking.
Follow the money to see where central-bank rigging of sticks all ends up
The precarious part of this equation is what it shows of the Law of Diminishing returns that I keep harping about as an economic fundamental that cannot be averted even by central banks. The further we have gone into the “recovery,” the greater the amount of global stimulus that has been needed to keep the recovery afloat and the more direct and broad the intervention has had to become. There is no global reduction of stimulus so far. The only thing that has shifted is where the stimulus is coming from.
I have always stated that the recovery program is completely unsustainable and that all signs of life end as soon as the artificial life support is removed. The patient has been dead since 2008. We have gone from the Fed and/or US Treasury buying stocks to save a few key companies (an innovation at the time that was worrisome to many) to numerous central banks buying up large swaths of the market. The stock intervention has become greater, not smaller, because of the Law of Diminishing returns.
You have to ask yourself, as I did about Carmageddon, “What is the end game here?” What happens when central banks need to unwind from these positions and, so, start to flood the market with these stocks. I think the answer is they can no more do that than they can bring their recovery to a successful conclusion (hence the continued massive stimulus a decade after it all began, even as they talk of unwinding). It is absurd that anyone thinks the Fed is unwinding successfully when everyone else has been maintaining or increasing stimulus and when much of that flows to the US.
To see where this all goes, we have only to look at Japan where, again, the Law of Diminishing Returns erodes endlessly at their goals. Japan entered the game of rigging its stock market back in the 1990s, and it is still as desperately stuck in this liquidity trap as ever.
There is no end game. A recent poll of currency reserve managers at reserve banks showed that 80% of the 18 central banks polled plan to increase their investment in stocks. That was almost double the number of those interested in buying corporate bonds.
These people are flying by the seats of their pants to go where no man (or one Yellen) has ever gone before. They are trying to figure their way out as they go, just like Japan, which finds itself endlessly pitched back into new and greater rounds of QE every time it tries to taper. As a result, the Bank of Japan has now become one of the top-five owners in eighty-one companies on the Japan Nikkei 225 index and is close to being the number-one owner in fifty of those companies. (Effectively nationalizing those stocks.)
The Bank of Japan (BOJ) has been purchasing assets including exchange-traded funds (ETFs) and thus, indirectly, company stocks…. From a policy perspective, efforts to weaken Japan’s currency by lowering interest rates to negative levels has not worked and has attracted criticism, particularly from financial institutions. It seems that now the emphasis will be on weakening the yen as well as propping up stock prices. In the parlance of the gambling community, the BOJ has become the biggest “whale” in the market, holding a large share of stocks listed on the Tokyo Stock Market. Therefore, many investors have become increasingly focused not on company fundamentals but on the BOJ’s daily purchases…. It’s estimated that the BOJ now owns about 60% of Japan’s domestic ETFs and it’s expected the BOJ could continue purchasing more ETFs through 2017…. Market bulls are happy with the BOJ purchases, but opponents say the central bank is artificially inflating valuations and ironically discouraging companies from becoming more efficient. Interestingly, Japan’s Nikkei 225 Stock Average is actually down more than 8% year-to-date [diminishing returns, anyone?], although one might argue its fate could have been worse without central-bank buying…. Of course, the BOJ’s program is not unique. The Bank of England has a corporate debt purchase program worth about US$13 billion, and the European Central Bank has a similar program. (Franklin Templeton Investments)
The Bank of Japan is already buying ETFs at an annual pace of 300 billion yen ($2.4 billion), in addition to its existing annual purchase program worth about 3 trillion yen.
The Swiss, Israeli and Hong Kong central banks have also been or are small-scale investors in stock markets, but more aggressive buying may now be called for….
This could mean ramping up purchases of Japanese stocks to 10 percent of the outstanding total, or about 50 trillion yen, from around 0.5 percent currently.
Such a move would contribute to “pushing up equity prices….
“If the BOJ expands its ETF purchasing plan in June or July, then that could be the trigger for the ECB to look more closely at this,” said JP Morgan’s Panigirtzoglou.
Purchasing stocks would also go some way to supporting bank valuations, which have been hammered in recent months by the low and negative yields and a dismal first quarter trading environment. (Reuters)
The hope of central banks is to create a self-sustaining illusion, wherein people will see a market that appears healthy and growing and then jump in and take off where the central bank leaves off. As we can see from Japan, the results are not that positive, and the illusion certainly has never become self-sustaining. It is more of delusion. No central bank has navigated its way out of this so far. China, for having done the same thing, is probably worse off than Japan, truth be known beyond the always-deceptive cover of its double bookkeeping system.
You see, at the end of the day, this is not just stock manipulation; it is CYA time. The Fed’s recovery is a failure because it was never sustainable from its onset. It was a bankrupt idea. For the recovery to be called a success, GDP would have to have improved, and it has done nothing but doggedly follow a downward path for years. CLEARLY NOT A RECOVERY! GDP growth well that is now under 2% can hardly be called “recovery.” The end game was supposed to be that a thriving economy would be able to absorb the Fed’s very gradual unwinding, but that vital economy never emerged.
The central banks have painted themselves into a corner. By their own designs, they get no interest off all the bonds they hold. They cannot sell them without substantially raising the interest on the national debts of the nations they are obligated by charter to serve. (The ECB now owns 40% of Europe’s national debts.) So, they buy stocks to maintain the illusion of recovery and to have someplace to put the money they keep on their balance sheets. Then they cannot sell those without crashing their own stock markets. So, the game continues to spiral upward in terms of the aggregate of CB investments … as seen in Japan and in China and now the US. Some call it the liquidity trap.
History of central banks buying stocks
Twenty years ago central banks didn’t even think of buying stocks. It may have happened in odd instances, but it was an anomaly if it did as a way to save a specific bank or credit union. During our first plunge into the Great Recession, the Federal Reserve and the US Treasury bought up large amounts of stock in order to save companies that were either vital to US employment or to financial markets that were dying from their own mistakes. Those were efforts to save specific key corporations.
In subsequent years, the Bank of Japan and the Peoples Bank of China soaked up stocks in massive amounts more or less across the board, not to save specific vital companies but to save their stock markets. The Chinese seized total central control of their market, even mandating that certain speculators stay out of the market, mandating that various proxies buy large volumes of stocks and locking the stocks that were falling worst out of trading.
As a result, they created a perfectly healthy and real stock market, right? No, they created a centrally controlled illusion that is not a free market at all; it is merely a fatalistically predetermined game in which the government has decided “the market,” a term that now requires air quotes, will do well. To achieve that end, the government or its central bank does whatever it needs to in order to keep stocks up. We all know China’s market became completely rigged. We are just now seeing in the mainstream media that the US stock market is also increasingly rigged by central banks buying stocks.
What about the official reason banks give for central banks buying stocks?
The main reason presented for central banks buying stocks is that all of their economic stimulus has resulted in hugely bloated balance sheets, and they need to invest that money somewhere. To which, I ask, “Why? When did making a profit become an operating objective of central banks, which like to claim they are not about profit making?”
Since central banks are the first to claim they are not about making profits, that is a completely illegitimate reason for buying stocks; but that’s the CYA reason banksters give: According to Bank of America Merrill Lynch, nearly $11 trillion in global assets yielded negative interest last year. Thus, central banks are forced to reach for yield in riskier assets like everyone else. Really? That was all their doing. Central banks created that situation intentionally, and the Federal Reserve has been saying it wants to unwind its balance sheet. If so, why does it want to make bigger profits on the money it supposedly wants to unwind? It’s a completely self-contradictory argument. Yet, the experts are readily buying into it.
If you buy their argument, then you have to admit that central-bank policies are hurting the central banks just like they are hurting retirees and everyone else who needs yield in order to survive But why does the bank, which has the power to print money at will, care about earning it the hard way? No, I think it is really entirely about propping up their own stock markets. We know that is why Japan and China have been doing it. Why would the US be any different, even if the Fed hides behind proxies?
In the National Bank of Switzerland’s case, a different reason altogether is presented, which has some truth to it: The Swiss franc is hugely popular when times are bad. When everyone wants to buy francs, the value of the franc is driven up relative to other currencies, which makes it hard for Swiss companies to compete for international trade. To offset this, the Swiss National Bank tries to buy up other currencies. They have to put the foreign money somewhere, so they are investing it in top US companies. In proportion to the size of its national economy, the Swiss National Bank’s balance sheet is the most bloated of any major central bank … and still growing with no end in sight.
A convenient alignment of Fed interests with francish interests.
The problems with central banks investing in stocks
With central banks having the capacity to create money by decree anytime they want to, investment risk means little to nothing. Lose your money, it ceases to exist. In that case, just crete more of it.
With their ability to create unlimited amounts at zero cost (just add some ones and zeros to an account somewhere), their capacity to move markets they choose to invest in is almost unlimited. Essentially, the only limit on how much they can do is inflation, which throughout the Great Recession has never posed as a limiting factor.
As Zero Hedge wrote at the beginning of this year,
For those few who are still unfamiliar, this is how central banks who create fiat money out of thin air and for whom “acquisition cost” is a meaningless term, are increasingly nationalizing the equity capital markets. As the WSJ puts it “these central banks care relatively little about whether such investments make profits or losses—though they can matter politically—because they can always print more of their currency. So risk is less important, analysts say.” And since risk was no longer part of the equation, leaving only return, central banks started buying stocks….
So between central banks outbidding each other to buy “risky” assets with “money” that is constantly created at no cost, very soon all other private investors will be crowded out but not before every stock is trading at valuations that even CNBC guests won’t be able to justify….
The bad news, is that as more people realize that a free “market” now only exists in textbooks, and that Soviet-style central planning is the only game in town, confident in price formation will evaporate, in turn pushing even more market participants out of the quote-unquote market, until only central banks are left bidding on each other’s otherwise worthless stock certificates.
At the same time, efforts to invest reserve funds more broadly mean that more markets will be subject to what some critics describe as central-bank distortion, as large and often price-insensitive buyers run the risk of driving up prices and reducing prospective returns for other market participants.
For virtually all central banks, however, the grotesque central planning shift of the past decade means that instead of engaging in monetary policy, the world’s central banks are now activist hedge funds, who are focused first and foremost on “investment management.”
… and at the current rate of expansion, within a few years the world’s monetary authorities who are tasked with “financial stability”, will have acquired a majority of the world’s equity tranche, effectively nationalizing it.
Even the Wall Street Journal denies the argument that central banks have to care at all about making a profit. As Russia became more of a free-market economy, the United States has started to look more like the centrally-planned economy of the former Soviet Union. Markets have been centrally manipulated beyond the repair.
Central banks buying stocks applaud their own recovery effortsAs always, the central planners have the arrogance of the elite that causes them to think they have the brilliance to guide and control the markets of entire nations and even the entire world. How can anyone believe that such hubris will not end in total financial collapse?
http://investmentwatchblog.com/central-banks-buying-stocks-have-rigged-us-stock-market-beyond-recovery/
Director Samuel Coetzer acquires 46,500 shares.
https://www.americanbankingnews.com/2017/06/20/golden-star-resources-ltd-gsc-director-samuel-theodorus-coetzer-acquires-46500-shares.html
Your question was already answered f***ing moron.
As much as I hate wasting time responding to you, I feel for the sake of others reading this, your mistakes should be corrected. They made .16 a share. The loss was a non-factor. Had to do with the convertible debs. You really should learn to read the statements before writing drivel. Not sure if you need hand holding or want to argue, but you waste my time.
T
Golden Star Resources's CFO just declared owning 3,000,000 shares of Golden Star Resources.
http://www.conferencecalltranscripts.org/5/summary2/?id=3899755
GDXJ dumps remaining 21,000,000 shares after the close to complete their GSS rebalance of -35,000,000 shares, current GDXJ balance is now 19,000,000. Now that didn't hurt too bad now did it, GSS held up VERY well!
As well as the total number of Dow points added on the year from the almost daily stick saves after 3PM.
I think it proves the REAL state of the economy, not all the fluff and fake numbers that the government feeds the sheeple. I think there are Trillions in unaccounted for printed money over the last 9 years floating around that is propping up the economy and the fake numbers through the back door, it's only a matter of time until it runs out.
Just amazing the stupidity of so called, educated "eCONomists" without commodities there can be no economy.
I do, I don't know why but, not much board activity here or at Stockhouse, most of it is happening here, lots of information and great posts:
https://finance.yahoo.com/quote/GSS/community?p=GSS
https://stocktwits.com/symbol/GSS?q=GSS
I'm sure that money is still bailout money, or some of the $500 billion that Bernanke couldn't and never did account for, when grilled by CONgress 9 years ago, who the f**k knows.
Of coarse NO change in the Dollar facilitates a $10 slam in Gold.
You really should take a close look at GSS, IMO a strong $2 by EOY. Lots of information and quality poster traffic here:
https://finance.yahoo.com/quote/GSS/community?p=GSS
Sold this dead money stock as well as Gran Columbia, put it all into Golden Star (GSS) on Monday.
Great day so far, yuuuge volume, loving it!
Naw, Impeachment isn't gonna happen...fake news again. I think possibly it is rising due to the Bitcoin rise of 200% this year, currently at $2900. Could be the banks battling the Bitcoin with gold, this battle may now be taking precedence over keeping gold suppressed.
S~P, I have the equivalent of a monster box of 2001-2009 silver eagles still in tubes, not sure where they were minted, are the prices on these actually as high now as Apmex and others show them to be? Do these older eagles really demand these higher premiums?
Mr. Snopes, How does your table relate to this earlier table? I believe the "Est GDXJ flow" is the amount they intend to sell (35.3mill), how do we know what the current remaining GSS balance to sell is? Is it 7.7mill?
http://themacrotourist.com/images/2017/04/DeletesApr1917.png
It looks like it may have been the GDXJ starting their re-balance. Their selling continues until 6/17, GSS holding up well though!
Yes, Leverage, by Karl Denninger