In Case You Missed It – Week Ended January 9, 2016.

Stories from the week ended January 9, 2016.

It was a big news week after two relatively quiet ones. The main news stories involved the tensions between Saudi Arabia and Iran after the former executed alleged Iranian terrorists. Korea claimed to have set off an underground nuclear test and Obama cried during the announcement of his executive action on gun control. Saudi Arabia also attacked Yemen

The main economic news of the week was the plummeting global stock markets. Stocks opened lower and went lower all week. Last week’s dismal equity showing followed the worse year for the U.S. Stock market since 2008. China’s stock market led the declines with a 7% drop on the first trading day of the year. Two days later, Chinese stocks cratered another 7% and the market was closed within twenty minutes of its opening.

Stock markets were “volatile” all week (CNBC speak for “lower”) while Fed officials and talking heads tried to decouple the Chinese crash with the state of the U.S. economy and its stock market.

Gold and silver

Gold closed last week at $1061.00 and closed this week at $1104.60

Silver closed last week at $13.82 and closed this week at $13.93

The gold and silver ratio is approaching 80:1

Here are the stories we wrote, followed or commented on.

WE Missed it!

From the week ended January 2, 2015:

Banking services at the post office?

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January 2, 2016

Gold

What would the new year be without an anti gold story. Bloomberg served up the goods to start the year.

Bloomberg: Gold likely to remain tarnished in 2016 cites “weak demand”

Iranian Gold Rush – U.S companies to miss out

1/10 Oz Canadian Maple Leaf Gold Coins

January 3, 2016

Saudi Arabia and Iran

Iranian/Saudi Tensions Flare after killing of cleric

Oil

Russian oil output hit record in 2015

Russia also set a record for the amount of gold it added to its reserves in 2015..

Russia continues to add to its gold hoard even as the Rouble collapses.

Euro Politics

Attempted Assassination attempt on Nigel Farage?

Government Intervention

Bank of Japan, already dominant in its own bond market turns to intervention in its equity markets

Fed Chatter

Fed Vice Chairman Stanley Fisher talks negative interest rates, the same Fed official who also alerted us to U.S. Bank bail in plans.

Buy 2015 American Silver Eagle Coins

January 4, 20165

Geo-Politics

UAE downgraded diplomatic relations with Iran, following Saudi Arabia, Bahrain and Sudan severing ties with Tehran

Chinese stock market down 7% – halts trading

Fed Chatter

Fed’s Mester supports more rate hike, cites “confidence in the economy”

San Francisco Fed President offered these thoughts on CNBC:

China is pivoting away from manufacturing and will see slower growth. Not concerned with this development as “We have strong fundamentals in terms of consumer spending. We are in good shape” Williams expects 2pct GDP 2.5 million new jobs and 5 pct unemployment rate in 2016 “because we took aggressive monetary policy”

He also expects three to five rate hikes in 2015.

Gold

WSJ notes: Investors go for gold as market tumbles

Yamana Gold rallies as investors seek safety in gold

Government Intervention

China Pumps $20 Billion into markets

Smaulgld noted the absurdity of some stock market valuations: Tesla delivered 50,580 cars in 2015 and has a market cap of $30 BILLION-Market valuing Tesla at $593K per car delivered

Tesla delivered 50,580 cars in 2015 and has a market cap of $30 BILLION-Market valuing Tesla at $593K per car delivered

— Smaulgld (@Smaulgld) January 4, 2016

U.S. Economic Data

More poor U.S. economic data:

ISM Index 48.2 Exp 49.0 Prior 48.6
Construction Spending -0.4% Exp +0.8% Prior +0.3%

New Car sales plunge. Low interest rates have managed to stimulate new car sales in 2015 to a record. But the pace of sales appears to be letting up:

December US domestic auto sales were 13.46 million vs an expectation of 14.15 million and light vehicles were 17.34 million vs an expectation of 18 million.

Atlanta Fed Downgrades 4th Quarter GDP to just 1%

Last week we reported on Argentina’s Statistical Emergency

Looks like the US has one too but would never declare one.

January 5, 2016

Gold

From Smaulgld.com

China warns foreign banks to particpate in the upcoming Yuan gold fix, or else

Geo-politics

Iran breaks treaty!

Obama issues Teary Gun Control Executive Order

1/10 Oz American Gold Eagle Coins

Fed Chatter

Fisher admits Fed front loaded market rally

Government Intervention

China intervenes to try and stop stock market rout

January 6, 2016

Gold

From Smaulgld.com

We reported on the increased interest in gold consumables- does it indicate a peak in the stock bubble and bottom for the gold market when people are rich enough to eat gold and its cheap enough for them to do so?
Gold to Munch and Smoke

Asian Geo Politics

Koran Confirms Nuke Test

Fed Chatter

Fed Vice Chairman says more rate hikes coming – four or more this year

Fed Vice Chairman Fisher comments on China, North Korean and Fed rate hike path

Gold

Indian considering setting up Gold Board

Petro Dollar

Saudi Arabia wants stronger ties with Russia

Global markets continue to crater and the argument for decoupling Chinese economic weakness from U.S. weakness, weakens.

.@WorthWray starting not to believe that. Crash in China highlights artificial highs of stock mkts everywhere due to CB interventions

— Smaulgld (@Smaulgld) January 6, 2016

U.S. Economic Data

ADP employment 257K Exp 190K Prior 211K

Factory Orders -0.2% Exp 0.2% Prior 1.3%

ISM Services 55.3 Exp 56.4 Prior 55.9

Reuters propaganda

Strong U.S. private payrolls data point to economy’s resilience

Two days after projecting U.S. GDP for the fourth quarter of 2015 to be 1%, the Atlanta Fed downgrades again:

Atlanta Fed Downgrades 4th Quarter GDP to just.08%

Real Estate

Mortgage applications plunge 27%

Fed Minutes from December rate hike meeting released

December Minutes Released – indicate plan for four rate hikes in 2016, an noted this gem; “Several upside risks to the U.S. outlook also were noted, including the possibility that declining energy prices could spur consumer spending more than currently anticipated [emphasis added].”

January 7, 2016

U.S Econommic Data

Challenger December Job Cuts Dec layoff intentions 23,622 vs. Nov 30,953

Initial Jobless Claims 277K exp 275K prior 287K

After Mastercard reporting last week that holiday says were up, we got this news from Macy’s today:

Macys lays off 4,000 after poor holiday season

Fed Chatter

Atlanta Fed President Lacker” “We will be watching closely, any China developments”. The Fed cross talk continues as Fed President Williams said earlier in the weak that China is contained.

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Gold

US Jewelry Imports hit seven year high

From Smaulgld.com

China reported its gold reserves increased 19 tonnes in December

Chinese gold reserves 2015

January 8, 2016

Government Intervention

China Intervenes and the Shanghai Exchange closes higher

Chinese Market Crashes- Is A Yuan Devaluation Coming?

Gold

China’s ICBC Standard Bank buys Deutsche’s London bullion vault

South African Mines scavenge for gold

US Economic Data

Non Farm Payroll 292k Est 210k; Unemployment 5% est 4.9%; wage growth sputters. October and November payrolls revised higher

Report is touted as the strongest year since 1999.

CNBC jumps on the non farm payroll number to dismiss a weak US economy. Steve Liesman gushes “It’s not weakening it’s STRENGTHENING!!”

Goldman Sachs economist on CNBC: other than industry, the economy is in “solid” growth, jobs accelerating, no recession, rate hike in March, four rate hikes in 2016.

Fed Chatter

SF Fed President says it will take six years to normalize the Fed’s balance sheet

Silver

Bloomberg comments on the high gold silver ratio

“Silver Seen Beating Gold”

The Gold Silver Ratio approaches all time highs

The gold silver ratio is approaching 80:1.

Oil
Reuters catches on to the impact of lower oil prices on the U.S. fracking industry

We identified the problem in December 2014 and identified Saudi Arabia’s true motives in driving the price of oil down and why low oil prices would be bad for the economy (would NOT act as a “tonic” for consumer spending), persist and eventually lead to busts in shale oil companies and their lenders.

Gold

From Smaulgld.com

The Shanghai Gold Exchange ended the year with 2597 tonnes of gold withdrawn

The Shanghai Gold Exchange set a new record for withdrawals in 2015.

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