Daily Digest

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Daily Digest 3/10 - Russia's Endgame In Ukraine, Capital Controls Coming To U.S.

Tuesday, March 10, 2015, 9:24 AM

Economy

Europe is being torn apart – but the torture will be slow (Terry)

These different national experiences will be reflected through elections, creating more tensions of the kind we have already seen between Germany and Greece. Eventually something will give, but that process may take a long time. “There is a great deal of ruin in a nation,” said Adam Smith. Given the extraordinary achievements of the 70 years since 1945, and the memories and hopes still invested in the European project, there is a lot of ruin still left in our continent.

U.S. declares Venezuela a national security threat, sanctions top officials (jdargis)

"We are deeply concerned by the Venezuelan government's efforts to escalate intimidation of its political opponents," he added.

Venezuela called home its charge d'affaires in Washington for consultations, and Maduro accused Obama of a "colossal mistake" and "imperialist arrogance" similar to his predecessors Richard Nixon and George W. Bush.

Prepare Now for Capital Controls Coming to the U.S. (Kevin J.)

Capital controls are actually pretty common. Right now, they're being used in Argentina, Venezuela, Ukraine, Iceland (it's been six years already), India, and China, to name a few. Even Russia recently instituted "soft capital controls," by instructing a number of state-owned exporters to sell their foreign currency reserves to help support the ruble.

But given the problems being faced by the European Union's southern members, some of those could well be next to take such drastic measures.

More And More Americans Look To Protect Their Wealth Offshore (Taki T.)

The US government and its various agencies – with the IRS certainly in the lead – are desperately trying to keep their wealthy taxpayers in check, putting offshore constructions under their regulatory microscope in hope of maximizing tax revenues. This hunt for tax cheats has been loudly publicized and employed to create the impression that every offshore account must be a scam.

Russia's Endgame In Ukraine (jdargis)

More than a year after the crisis began in eastern Ukraine, Russia remains undeterred in its goal of keeping Ukraine from moving closer to the West. Russia has backed the violent separatist uprising and taken a pivotal role in the talks about Ukraine’s future.

More Good News on the Deficit, This Time Because of Private Insurance Health Premiums (jdargis)

Insurance companies are also probably contributing to those changes. To reduce costs, more have switched to products that either charge customers higher deductibles and co-payments for their care or that limit the number of doctors and hospitals they can see. The health care reform law, known popularly as Obamacare, may also be playing a supporting role by encouraging more efficient care, though most of its cost-saving programs are still small and relatively new.

How Debt Has Caught Up With U.S. Shale (Evan K.)

Whiting Petroleum is the latest victim of the flawed U.S. shale play business model. The shale and tight oil play model is based on large-scale acreage acquisition at any price and massive over-production to satisfy growth targets. In Whiting’s case, it also involved debt-based acquisition of Kodiak Oil and Gas, another large Bakken player. The $3.8 billion deal closed in December 2014 when WTI oil prices averaged $66 per barrel, down from $106 per barrel in June. Whiting’s demise shows that location isn’t everything. The company is looking for a buyer despite having a premium position in the Bakken Shale play in North Dakota. Whiting discovered the Sanish Field in 2006 that began the Bakken-Three Forks play and that has been the centerpiece of activity for the past several years. The map below shows Bakken commercial areas at $45 WTI oil price based on an average well EUR (estimated ultimate recovery) of 650,000 barrels of oil equivalent.

Mass Government Surveillance Is No Joke (jdargis)

Before Congress calms down enough to let go of Section 215, there should be a real debate about mass surveillance’s documented tendency to lead to a more anxious and submissive citizenry. But even getting at what Section 215 is used for is harder than it should be right now, because the FBI is hiding a legally required report on that very topic.

Gold & Silver

Click to read the PM Daily Market Commentary: 3/9/15

Provided daily by the Peak Prosperity Gold & Silver Group

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5 Comments

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2237
HSBC Closing 7 Gold Vaults in London...anyone know about this?

I was checking out various sites, and found a story on King World News (KWN) that I don't think I have seen here yet.  So I wanted to post some links about the story to see if anyone here knows about this yet, and to find out what people think.  Andrew Maguire apparently broke the story.  I know KWN tends to sensationalize news (although I still get a lot out of many of their interviews).  -So my intent here is not to throw gas on a fire so much as to find out if this is big news or not.

 

1. From Seeking Alpha, "HSBC, Custodian Of GLD's Gold, Is Closing 7 London Vaults

"Summary

  • HSBC, custodian for the SPDR Gold Trust's gold, is closing its 7 gold vaults.
  • SPDR Gold Trust investors should be aware that their gold might be on the move and that they are not necessarily protected if it is lost or stolen en route."

 

 

2. Here's the original (I believe) Andrew Maguire story on 3/6/15:

http://kingworldnews.com/andrew-maguire-smashed-gold-today-hsbc-shocks-clients-closing-london-gold-vaults/

"The other big news this week was HSBC giving only 2 months’ notice to clients that they are closing down all 7 of their London gold vaults! This is an unprecedented move. Why do you think this is? It is because transparency is coming. There is no profit in plain, vanilla bullion banking any longer.

I also suspect given the lack of warning and lack of any press release that the majority of these clients will be unable to make other vaulting arrangements in time. HSBC will no doubt make it easy for these clients to sell the bullion back to HSBC, who will then use this bullion inflow to repay some underwater positions. So something is brewing behind the scenes, Eric, and this is one more sign major changes are coming.

3. And here's another article today from Andrew Maguire, "BREAKING NEWS: Andrew Maguire – HSBC Forced To Come Clean On London Gold Vault Closures!" @  http://kingworldnews.com/andrew-maguire-stunning-update-hsbc-london-gold-vault-closures/

"But, Eric, there is more to this decision to eliminate retail gold clients than is presently being openly discussed.  Giving just 60 days notice has indeed forced some HSBC clients into selling their gold bullion.  Is the timing of this decision a ‘coincidence’ right after a takedown, while the price of gold is well below $1,200?  I think not.

reflector's picture
reflector
Status: Gold Member (Offline)
Joined: Aug 20 2011
Posts: 267
hsbc

i was just reading about the hsbc story as well on jim sinclair's jsmineset.com, where he reposted from the miles franklin blog:
http://blog.milesfranklin.com/trust-and-john-exters-pyramid

"I hesitated yesterday to write about HSBC allegedly deciding to close their London Gold vaults because as of yet, we still do not have public confirmation.  As you know by now, Andrew Maguire made the allegation and Ned Naylor-Leyland tweeted several times over the weekend.  Gerald Celente followed with King World News and also made comments.  It is not my intention to be long winded on this subject because even if true, it is only a small chapter in John Exter’s debt pyramid theory which is what I would like to talk about today.  Specifically, the role of gold and “why”.  If true, it would however be a very important clue signaling something has changed in the London gold market.

Briefly, if Andrew’s HSBC news is true, more questions are raised than are answered.  As for the several theories I have heard, some believe the short notice of only two months would be a way for HSBC to cash settle some customers and obtain some gold.  It is believed in this manner, HSBC might be able to cover some of a short gold position.  I find several problems with this whole thing.  First, wouldn’t some of the customers have paid storage (in advance) for positions being held?  Could HSBC just break a contract on their own?  Could HSBC really tell GLD they have only two months to move their metal?  If I were a director of GLD, my fiduciary responsibility would point me toward engaging lawyers to put a retraining order to buy enough time to ensure an orderly and safe transfer.  My next thought would certainly be that of a complete audit!

Another thought of mine is this, why is there no other information on this anywhere to be found?  So Andrew Maguire and some of his clients received letters, are they real?  The shorts would love nothing better than to discredit Andrew and any other bloggers who write about the alleged HSBC move if it turns out to be false.  Is it possible Andrew is being set up?  …Along with the rest of the gold blogging world?  I believe Andrew to be very thorough in what he does and give him the benefit of the doubt in my own mind.  Maybe I am just paranoid but I hate to hear things like this without any other confirmation and particularly nothing from HSBC itself.  I will say this, the more time passes without some sort of confirmation of Andrew’s allegations, the more I am inclined not to believe them.  Enough said for now and until we have some hard data to look at."

i like bill holter's approach of lets-not-rush-to-judgement until we get confirmation of the facts. a rare thing these days.

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2237
Thanks for your response, Reflector!

I hadn't found the JSMineset article you found.  The article and the points you make in your post are interesting.  So this is either big news or not, real or manufactured... Very frustrating; I am still very curious to learn more!!

ronpoitras's picture
ronpoitras
Status: Member (Offline)
Joined: Feb 21 2010
Posts: 23
Closing gold vaults in London

 

 Big wheels are in motion. Recently Alasdair Macleod wrote a piece titled The New London Gold Fix and China. In it he explained how the four London fixing banks will be handing control over to the International Commodity Exchange on March 20, 2015.  This means that the London gold market will become partially regulated. This is one step among many to establish Special Drawing Rights (SDR's) as a way to bring stability to an  increasingly shaky global financial system. See J.C. Collins Philosophy Of Metrics site for all the details http://philosophyofmetrics.com/2015/03/11/the-real-reason-the-swiss-peg-ended/  

andeee's picture
andeee
Status: Member (Offline)
Joined: Nov 28 2009
Posts: 21
Russia's Endgame In Ukraine (jdargis)

I tend to read most of the articles offered here in Daily Digest so as not to narrow my views. I'm sure most here are well educated beyond the obvious simple view presented by "Russia's Endgame..." Any chance a better vetting process can be implemented so I can spend my time more productively? Fewer articles is preferable over useless articles.

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