Wednesday, 15 February 2017

German Gold Bolts From America.

Baltic Dry Index. 685 -03   Brent Crude 55.71

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

“Curiouser and curiouser!”

Migrant Mad Merkel, with apologies to Lewis Carroll, Alice in Wonderland

We open today with the curious case of German gold bullion. Why did the  Bundesbank accelerate the pace of the golds return from America and France? In the new era of “America First,” it looks like it’s going to be every man (nation) for themselves. I wonder if Germany will share any of its gold with poor Greece?

Germany has got its gold back — They must know something we don't

Matt Clinch | @mattclinch81 14 February 2017
An official announcement last week that the Bundesbank had pretty much repatriated half its gold reserves ahead of schedule has once again sent the rumor mill into overdrive.

Fans of the precious metal - not shy of a good conspiracy theory - have been deliberating over the move ever since Germany detailed it back in 2013. Initially, there was a sense that trust between central banks had broken down with claims that Berlin was effectively questioning the credentials of New York Federal Reserve.

But the talk has now stepped up a notch with the Bundesbank confirming Thursday that it has already moved 583 tons of gold out of New York and Paris. Its plan to hold half its gold in Frankfurt is now three years ahead of schedule.

Reporting the news, Reuters said that some argue the world's second-biggest bullion reserve "may be needed to back a new deutsche mark, should the euro zone break up." This seems pretty far-fetched, especially given that the Bretton Woods system of fixed exchange rates ended back in the 1970s. Could Berlin really be prepping for the fall of the euro?

Then there's the Donald Trump angle. On Thursday, Bundesbank board member Carl-Ludwig Thiele felt the need to speak about the new U.S. president at his press conference - presumably because someone asked him.

"Trump has not triggered a discussion about the storage facility in New York," he said, according to reports. Trump scaring global central banks to repatriate their gold in case he confiscates it? Sounds equally unbelievable.

Then there's the rumors coming from Russia. Sputnik News, which incidentally has strongly denied accusations from NATO that it's a Kremlin propaganda machine, reported that Germany had been given the wrong gold. Quoting Russian economist Vladimir Katasonov, the news site said the U.S. may have sold Germany's gold bars years ago and hurriedly bought some back as the Bundesbank came knocking.

It’s no flash in the pan; stay long on gold: UBS

Huileng Tan | @huileng_tan  Sunday, 12 Feb 2017 | 11:04 PM ET
A rally in gold prices has room to run on risk concerns from politics to interest rates, so hold on to those long positions, a UBS analyst said Monday.

"There's plenty of uncertainty out there," said the bank's commodity and Asia-Pacific commodity head, Dominic Schnider. Top among consideration is the pace of interest rate hikes from the Federal Reserve, he added.

"Inflation is going to accelerate faster than the Fed is going to hike rates; that's good for real assets. On top of it, we are looking for weak dollar on broad basis; that combination has a good tendency to boost prices," he told CNBC's "Squawk Box."

Gold prices took a beating after U.S. President Donald Trump's victory but have since rebounded 7 percent this year-to-date. Spot gold was trading around $1,230 an ounce on Monday morning in Asia.

The yellow metal has further upside to $1,300 an ounce, Schnider said.

In other EUSSR news, Euroland is slowing and “The Donald” hasn’t got close to imposing a Border Access Tax yet. Typical to form, Germany is back threatening tiny Greece again.

“If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?”

JC Juncker, with apologies to Lewis Carroll, Alice's Adventures in Wonderland

Euro zone fourth quarter growth revised down to 0.4 percent, December industry output drops

Tue Feb 14, 2017 | 5:22am EST
The euro zone economy grew less than initially estimated in the last quarter of last year as industrial output recorded the worst fall in more than 4 years in December, estimates from the European Union's statistics office Eurostat showed on Tuesday.
Eurostat said the gross domestic product (GDP) of the 19 countries sharing the euro bloc grew 0.4 percent on the quarter in the last three months of 2016, revising down its earlier estimate, released on Jan 31, of a 0.5 percent rise.
It also revised down its estimate of GDP growth year-on-year to 1.7 percent in the fourth quarter from 1.8 percent.
The revision was partly due to a large fall in industry output in December, which was 1.6 percent lower than in November, the steepest fall since September 2012 when it decreased by 1.9 percent.
Economists polled by Reuters had expected a drop of 1.5 percent.
Compared to a year earlier, euro zone industrial production rose 2.0 percent, slowing from a 3.2 percent year-on-year rise in November. The yearly increase was higher than market expectations of a 1.7 percent rise.
The monthly output drop in December was mostly due to a 3.3 percent fall in the production of capital goods, like machineries, a sign of decreasing appetite for long-term investment.
Output fell also in the energy sector, non-durable consumer goods and intermediate goods.

German investor morale falls as political risks cloud outlook

Tue Feb 14, 2017 | 5:27am EST
The mood among German investors deteriorated more than expected in February, a survey showed on Tuesday, as uncertainties about the outcome of Brexit talks and future U.S. trade policies cloud the growth outlook for Europe's biggest economy.
Mannheim-based ZEW said its monthly survey showed its economic sentiment index fell to 10.4 from 16.6 points in the previous month. This undershot the Reuters consensus forecast for a less pronounced drop to 15.0.
A separate gauge measuring investors' assessment of the economy's current conditions edged down to 76.4 points from 77.3 in January. This was also weaker than the Reuters consensus forecast which predicted a nearly stable reading of 77.2.
ZEW President Achim Wambach said the drop in expectations was probably the result of recent weaker-than-expected figures from industrial production, retail sales and exports.
"Political uncertainty regarding Brexit, the future U.S. economic policy as well as the considerable number of upcoming elections in Europe further depresses expectations," he said.

Audi's China Sales Plunge Amid Dealer Dispute as Rivals Catch Up

by Christoph Rauwald
14 February 2017, 10:00 GMT
Audi’s auto sales in China slumped in January after the Volkswagen AG luxury marque struggled to contain a dispute with dealers in its largest sales region, adding to woes triggered by the German manufacturer’s diesel-emissions scandal.

Deliveries in the country plunged 35 percent from a year earlier to 35,181 vehicles, VW’s biggest earnings contributor said Tuesday in a statement. Global sales dropped 14 percent to 124,000 cars as gains in Europe and the U.S. failed to offset the contraction in China.

“In Europe and North America we managed to reach more customers than ever before,” sales chief Dietmar Voggenreiter said in the statement. “In China, we remain optimistic for the future business development as well.”

January’s decline deepens Audi’s troubles in the world’s biggest auto market, where its lead as the best-selling luxury-car brand is being challenged by rivals Mercedes-Benz and BMW. The conflict with Audi’s Chinese dealers comes at a delicate time for Volkswagen, which relies on profits from the country to stem the unprecedented financial hit it’s taking in the wake of its emissions-test cheating.

Demand in China has been largely unaffected by the scandal that involved some 11 million cars across the
VW group worldwide because diesel models account for only a tiny part of the country’s market.
Dealers in China have been pushing back against Audi’s plan to add SAIC Motor Corp. as a second joint-venture partner and even threatened to suspend sales.

German CSU tells Greek opposition leader reforms must be completed

Mon Feb 13, 2017 | 5:19pm EST
Greece will not receive any further financial support if it fails to fully implement its economic reform obligations, a leader in parliament for the ruling conservative Christian Social Union (CSU) said on Tuesday.
Hans-Peter Friedrich, parliamentary floor leader for the Bavarian sister party to Chancellor Angela Merkel's Christian Democrats (CDU), told Reuters that he had told the leader of Greece's conservative opposition Nea Demokratia party, Kyriakos Mitsotakis, in Berlin the reform obligations must be fulfilled.
"We told Mitsotakis that there should be no doubt whatsoever that the conditions for the reform program must be completely fulfilled," Friedrich said. "Without implementing the structural reforms agreed upon there will be no further release from the third bailout."
Earlier on Monday, the German government had voiced support for Greece to stay in the euro zone while the European Commission dispatched a senior official to Athens to persuade it to take on further reforms to salvage its bailout accord.
---- But months of wrangling over changes to labor and energy markets have been compounded by differences between the IMF and Greece's European lenders over fiscal targets for Greece, struggling to emerge from years of recession.
A mission of experts from the lenders was expected to return to Athens this week to give their latest state of play report, EU officials said. European Commissioner for Economic and Financial Affairs Pierre Moscovici said he would travel to Athens on Wednesday to help conclude the review.
A deal would release another tranche of funds from this bailout, worth up to 86 billion euros ($91.12 billion), and facilitate Greece making a major 7.2 billion-euro debt repayment this summer.
But it is a process fraught with difficulty, raising fears of a re-run of the high drama of mid-2015 when Greece teetered on the verge of falling out of the euro zone.

We end with more on America’s civil war. Scalp one to the Obama-Clintonista fifth columnists, though I suspect that a “Saturday night massacre” house cleaning purge will soon be underway.

“Who in the world am I? Ah, that's the great puzzle.”

General Michael Flynn, with apologies to Lewis Carroll, Alice in Wonderland

Former Obama Officials, Loyalists Waged Secret Campaign to Oust Flynn

Sources: Former Obama officials, loyalists planted series of stories to discredit Flynn, bolster Iran deal

February 14, 2017 3:26 pm
The abrupt resignation Monday evening of White House national security adviser Michael Flynn is the culmination of a secret, months-long campaign by former Obama administration confidantes to handicap President Donald Trump's national security apparatus and preserve the nuclear deal with Iran, according to multiple sources in and out of the White House who described to the Washington Free Beacon a behind-the-scenes effort by these officials to plant a series of damaging stories about Flynn in the national media.

The effort, said to include former Obama administration adviser Ben Rhodes—the architect of a separate White House effort to create what he described as a pro-Iran echo chamber—included a small task force of Obama loyalists who deluged media outlets with stories aimed at eroding Flynn's credibility, multiple sources revealed.

The operation primarily focused on discrediting Flynn, an opponent of the Iran nuclear deal, in order to handicap the Trump administration's efforts to disclose secret details of the nuclear deal with Iran that had been long hidden by the Obama administration.

Insiders familiar with the anti-Flynn campaign told the Free Beacon that these Obama loyalists plotted in the months before Trump's inauguration to establish a set of roadblocks before Trump's national security team, which includes several prominent opponents of diplomacy with Iran. The Free Beacon first reported on this effort in January.

Sources who spoke to the Free Beacon requested anonymity in order to speak freely about the situation and avoid interfering with the White House's official narrative about Flynn, which centers on his failure to adequately inform the president about a series of phone calls with Russian officials.

Flynn took credit for his missteps regarding these phone calls in a brief statement released late Monday evening. Trump administration officials subsequently stated that Flynn's efforts to mislead the president and vice president about his contacts with Russia could not be tolerated.

However, multiple sources closely involved in the situation pointed to a larger, more secretive campaign aimed at discrediting Flynn and undermining the Trump White House.

"It's undeniable that the campaign to discredit Flynn was well underway before Inauguration Day, with a very troublesome and politicized series of leaks designed to undermine him," said one veteran national security adviser with close ties to the White House team. "This pattern reminds me of the lead up to the Iran deal, and probably features the same cast of characters."

“Why, sometimes I've believed as many as six impossible things before breakfast.”

 Donald Trump, with apologies to Lewis Carroll, Alice in Wonderland

At the Comex silver depositories Tuesday final figures were: Registered 30.14 Moz, Eligible 152.92 Moz, Total 183.06 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, it’s those dodgy international commodities dealers again. The return of forged, multi-hypothecated warehouse receipts in Asia. While copper jumped to a 20 month high as the wheels flew off at two of the world’s largest copper mines. Without copper, the world’s auto industries future won’t be electric.

Fake receipts at Glencore warehouse unit triggered sector credit freeze, Qingdao shivers: sources

Mon Feb 13, 2017 | 4:30am EST
Some global banks briefly froze credit lines for Singapore metal traders last month after a unit of commodities giant Glencore uncovered fake warehousing receipts, people familiar with the matter said, reviving the specter of a $3 billion scandal that rocked the trading world three years ago.
Though the impact has proved limited so far, the "forged" receipts for nickel stocks that Glencore's Access World unit said it found still set alarm bells ringing - even though regulation and scrutiny have been tightened across the business since the 2014 Qingdao port scandal in China.
Two people who have metal storage dealings with Access World said the company told them the receipts were from a third party, not issued internally. At Qingdao, a firm allegedly duplicated notes pledging metal as collateral for multiple bank loans.
"We checked with (Access World) and all our stock was in good order," said one of the people, an official at a Singapore trading house. But the firm did have its credit lines temporarily frozen by several banks while they investigated, the person said, speaking on condition of anonymity.
Metals traders told Reuters that a raft of international banks involved in providing finance to the sector, including Australia's ANZ, France's Natixis and Rabobank of the Netherlands, temporarily froze some credit lines before for the most part resuming business.
Natixis declined to comment. Rabobank said it was aware of the news on forged warehouse certificates circulating in the name of Access World, and was "assessing the situation," but could not comment further.
ANZ said that its "warehouse commodity financing was a small business within (the bank's) institutional division with only a handful of customers", and declined to comment further.
In its statement disclosing the incident, Access World said it had become aware of "forged warehouse receipts" and urged holders of its warehouse receipts to authenticate them. Last week it said it would provide authentication for clients' certificates on Feb. 10-15, after which it would honor "duly authenticated original warehouse receipts".
The warehouse receipts concerned applied to stockpiles in Singapore, people said. Reuters was unable to confirm the volumes involved, nor whether finance had been advanced against them, or which, if any other locations were affected.
Glencore itself declined to comment.

Copper jumps to 20-month high on double mine closure; analyst react

13 Febraury 2017.
London copper hit its highest levels in 20 months Monday as closures of two of the world's biggest mines amplified concerns of a supply shortage.

In early trading Monday, the three-month London Metal Exchange contract rose 0.10 percent to $6,097 per metric ton, its highest level since May 2015 and a continuation of the upwards trend seen since last week, when production was halted at two key sites.

Miners in Chile's BHP Billiton site, the world's largest copper mine, last week walked out over a wage dispute, prompting the firm to announce Friday that it would not meet its upcoming contractual obligations on metals shipments. Meanwhile, an export ban has caused Freeport-McMoRan to cease work in Indonesia after it failed to reach an agreement on a new mining permit with the government.

Prices leapt 4.4 percent Friday as tensions heightened, taking the metal to a 17-month high.

Since then, Reuters reported over the weekend that more than 300 vandals broke into property at BHP Billiton and forced contracted workers to stop working, causing the metal to rise to $6,204 a tonne in volumes of around 8,000 lots in Asian trading Monday.

But does this signal the start of a chain reaction for base metals or, rather, does it say precious little?

According to a press note from Kit Juckes, macro strategist at Societe Generale, it's a sector worth watching, "given the tendency for commodity prices to correlate."

“Off with their heads!”

Lewis Carroll, Alice in Wonderland

Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

New platform to study graphene's electronic properties

Date: February 13, 2017

Source: Institute for Basic Science

Summary: Graphene's unusual electronic structure enables this extraordinary material to break many records of strength, electricity and heat conduction. Physicists have used a model to explain the electronic structure of graphene measured by a new spectroscopic platform. These techniques could promote future research on stable and accurate quantum measurements for new 2D electronics.

Graphene's unusual electronic structure enables this extraordinary material to break many records of strength, electricity and heat conduction. Physicists at the Center for Theoretical Physics of Complex Systems (PCS), in collaboration with the Research Institute for Standards and Science (KRISS), used a model to explain the electronic structure of graphene measured by a new spectroscopic platform. These techniques, published in the journal Nano Letters, could promote future research on stable and accurate quantum measurements for new 2D electronics.
Recently, interest in 2D materials has risen exponentially in both academia and industry. These materials are made by extremely thin sheets, which have different physical properties compared to conventional 3D materials. Moreover, when different 2D sheets are stacked on the top of each other, new electrical, optical, and thermal properties emerge. One of the most promising and much studied 2D materials is graphene: a single sheet of carbon atoms. In order to study the electronic properties of both single and double layer graphene, the team constructed a nanodevice with graphene sandwiched between two layers of an insulating material known as hexagonal boron nitride (hBN). On top of this device they placed graphite as electrode. Graphite is essentially made up of hundreds of thousands of layers of graphene. The bottom layer consisted of one layer of silicon and one of silica.
By tuning the voltages applied via the graphite and the silicon, the scientists measured the changes in the conductance of graphene, which reflects its electronic properties. The electrons of graphene have a particular energy structure, represented by the so-called Dirac cone, which is actually made by two cones that look like a sandglass, with only an infinitesimally small point in between (Dirac Point). You can think of it as an unusual cocktail glass shaped liked a sandglass, where the drink plays the function of the graphene's electrons. At temperature close to zero Kelvin (-273 degrees Celsius), the electrons pack into the lowest available energy states and fill up the double-cone glass from the bottom up, until a certain energy level, called Fermi level, is reached. Applying a negative voltage via the silicon and graphite layers is equivalent to drinking from the glass, while a positive voltage has the same effect as adding liquid to the glass. Through modulating the applied voltages, the scientists could deduce the electronic structure of graphene by following the Fermi level. In particular, they noticed that when the voltage applied to graphite is around 350 milliVolts, there is a dip in the conductance measurement, by which the Fermi level matches with the Dirac point. This is a well-known property of single layer graphene.

The monthly Coppock Indicators finished January

DJIA: 19864  +92 Up NASDAQ:  5615 +95 Up. SP500: 2279 +95 Up

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