Friday, March 28, 2014

Jim Rickards: Study Will Show That Gold Is Being Manipulated on the Comex (Again)

"If I were running the manipulation I would be embarrassed at this point, it is so blatant...The regulators have been asleep at the switch."

Jim Rickards

As an aside, and in case you wondered, I do not take Rickards at face value. I sift what he says, carefully. And that is enough said about that. 

No one listens because the US regulators don't want to see it,  Wall Street traders make money off it, the mainstream media ignores it, and the shills deride anyone who brings it up. So I do not expect anything to come out of this latest version of a study that I have seen several times before, unless it is somehow associated with more undeniable smoking gun evidence uncovered through the London Fix investigation, and a 'limited hangout'operation. But I can doubt that as well, because it requires too much self-awareness for the masters of the universe.

The real smoking gun will more likely be tied to be an unanticipated default somewhere in the system.  And then people will ask, 'how did we not see this coming?'  And the hunt for a scapegoat or patsy will be underway. God will not forgive us if we once again allow some of the old and shameful persecutions of the weak and innocent and the other to carry that burden of guilt yet again.

The public will be trimmed and skinned in yet another bailout, or should I say 'bail-in,' to replace what had been rehypothecated. Possession will be nine-tenths of the law. And the big crooks will throw the shills, stooges, and the little crooks to the mob, without a second thought. 

It is different this time, because we are different. It can't happen here. The most delusional words ever spoken."


Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold

"As we reported yesterday, the world's most clueless prime minister, Japan's Shinzo Abe, has suddenly found himself in a "no way out" situation, with inflation for most items suddenly soaring (courtesy of exported deflation slamming Europe), without a matched increase in wages as reflected in the "surprising" tumble in household spending, which dropped 2.5% on expectations of a 0.1% increase in the month ahead of Japan's infamous sales tax hike. How does one explain this unwillingness by the public to buy worthless trinkets and non-durable goods and services ahead of an imminent price surge? Simple - while the government may have no options now, the same can not be said of its citizens who have lived next to China long enough to knowprecisely what to do when faced with runaway inflation, and enjoying the added benefit of a collapsing curency courtesy of Kuroda's "wealth effect." That something is to buy gold, of course, lots of it.
According to the FT, "Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this monthAt the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history."
Of course, while the Japanese consumers know what is the best defense against runaway inflation and purchasing power destruction, the government also knows that just like in India, where massive gold imports to satisfy local demand so skewed the current account deficit that India spent most of 2013 imposing gold capital controls, it simply needs to make gold purchases impossible in order to redirect spending into moreKeynes-approved products and services.
However, for now Japan is happy just to crush its population's meager disposable income with soaring energy prices. Which also means the locals can allocate their personal capital in the most efficient way: one which discounts a very unpleasant future.
Investors are being drawn to the metal not just because of higher taxes, said Itsuo Toshima, an adviser to pension funds.“Slowly and steadily, people are preparing for the worst, which is the failure of Abenomics." “To protect the value of wealth, gold comes into play as an inflation hedge, and if the economy goes back to deflationary circumstances then, again, money seeking safe havens would flow into gold.”
Wait, did someone in Japan finally admit the inevitable, i.e., that Abenomics will crash and burn in a pyre of runaway inflation and a crashing economy? Well, good. The problem is that when that moment happens, the response to the government's "all in" bet to led its population into the slaughter will mean that one will need lead far more than gold.
But we'll cross that bridge when we get to it. For now, we eagerly look forward to yet another major buyer of gold emerging on the global landscape, alongside China, India, and all other countries not transfixed by the dulcet tunes of central-planning and nominal paper profits.
Japan’s hunger for gold bars is at odds with general sentiment towards the precious metal, the price of which fell 28 per cent last year, bring an end to a 12 year bull run. Yet Yuichi “Bruce” Ikemizu, head of commodities trading at Standard Bank in Tokyo, said retail buyers had been tempted into purchases by lower prices.

The Fruit of Gold ETF managed by Mitsubishi UFJ Trust and Banking, the country’s most popular bullion-backed investment vehicle, saw its assets rise from 5.6 tonnes, when Mr Abe assumed power in December 2012, to 6.9 tonnes now – even as the US dollar price of gold fell by more than a fifth over that period.

Individual investors in the fund numbered 15,243 in mid-January, a sharp increase from 9,849 a year earlier, said general manager Osamu Hoshi.

At Tanaka’s third-floor store in Ginza, one 33-year trader at a foreign-owned brokerage, who did not want to be named, said the tax increase represented a “good opportunity” to buy more gold as he was worried about holding too many yen-denominated assets.

“I plan to hold it for a long time until there is a good time to sell when the yen collapses or something,” he said.

Even a strong rise in Japanese gold purchases is unlikely to affect the global bullion market. Last year consumer demand in Japan was 21.3 tonnes, according to the World Gold Council, compared to 1,066 tonnes in China and 975 tonnes in India.
Unlikely? Really - lets see what happens when 100 million Japanese suddenly decie half a kilo of gold is precisely what the doctor ordered. Then again, this is the FT, the same media outlet that recently, and inexplicably, pulled an article discussing gold manipulation without any explanation."


Richard Russell - I Am Buying Physical Silver Right Now

"With continued chaos and uncertainty in global markets, today KWN is publishing another important piece that was written by a 60-year market veteran.  The Godfather of newsletter writers, Richard Russell, says that he is buying physical silver right now.  He gave the reasons why he is buying silver, and also discussed the Federal Reserve’s disgraceful activities in the gold and silver markets..."


Thursday, March 27, 2014

UBS: China's Shadow Banking Sector Is Actually Pretty Small

"Investors are worried that defaults in China's shadow banking system could trigger a financial crisis. 
Chinese policymakers have also grown increasingly cautious, issuing a new set of guidelines this year, known as Document No. 107 to curb the shadow banking sector.
Shadow banking refers to financing activities that occur off-balance sheet and largely goes unregulated.
But in a new report titled 'Why China Is Not Facing A Lehman Moment', UBS' Tao Wang writes that China's "shadow banking system is much smaller relative to the size of its overall financial system when compared with many developed economies such as the US."
She thinks China's shadow banking system was about 50-70% of GDP at the end of 2013. This compares to a global average of 117%, and 170% for the U.S. at the end of 2012 according to data from the Financial Stability Board.
Here's the chart that shows that China's shadow banking system is small compared to other countries. The Netherlands, UK, Switzerland, and the U.S. have much bigger shadow banking systems than China. and they also account for a larger part of their total credit system.
The growth in shadow banking in these countries was largely attributed to the proliferation of synthetic financial products ahead of the financial crisis. 
The large size of the Netherlands' shadow banking sector is because of "the large number of special financial institutions (SFIs)," according to a report from DNB — The Dutch Bank.
china's shadow banking system
While China's shadow banking system is the fastest growing, its size is still manageable. Wang also thinks it's manageable because "lack of leverage and securitization, and mark-to-market mechanism in China's shadow banking system."


US Gold Bullion Reserves not enough to back the Dollar

""I don't know that it's there," Jim Rogers said. "I have no reason to assume it's not, except that there's not been a proper audit of America's gold in decades, if ever."
Even if the US government does indeed hold the 8,133 tonnes of gold bullion reserves it reports, "It's not nearly enough to back the Dollar," he went on.
"Because we're the largest debtor nation in history – trillions and trillions of dollars."


This Is What Is Going To Destroy The World’s Financial System

"In yesterday’s article by Art Cashin, he references another article titled “Money Creation In The Modern Economy” written by employees of the Bank of England.  We must admit that, like most economic treatises, it can be quite quite complex, but what was truly astonishing, and we should give credit to the Bank of England for this, was the public confession that money is loaned into creation...."


Gold - 7 Astonishing Charts Exposing The Big Picture For Gold

"King World News note:  This shocking chart below illustrates the stock market performance compared to the real stock market (vs. gold).  Despite all of the mainstream media hype touting new highs on stocks, the reality is that stocks have collapsed vs. gold since the late 1990s/2000 time frame and are well off their gold-adjusted highs (see chart below).  The rest of these amazing charts are presented with no comment.  








Wednesday, March 26, 2014

Welcome to the Currency War, Part 14: Russia, China, India Bypass the Petrodollar

"As it tries to punish Russia for the latter’s dismemberment of Ukraine, the West is discovering that the balance of power isn’t what it used to be. Russia is a huge supplier of oil and gas — traded in US dollars — which gives it both leverage over near-term energy flows and, far more ominous for the US, the ability to threaten the dollar’s rein as the world’s reserve currency. And it’s taking some big, active steps towards that goal. As Zero Hedge noted on Tuesday:

Russia Prepares Mega-Deal With India After Locking Up China With “Holy Grail” Gas Deal

Last week we reported that while the West was busy alienating Russia in every diplomatic way possible, without of course exposing its crushing overreliance on Russian energy exports to keep European industries alive, Russia was just as busy cementing its ties with China, in this case courtesy of Europe’s most important company, Gazprom, which is preparing to announce the completion of a “holy grail” natural gas supply deal to Beijing. We also noted the following: “And as if pushing Russia into the warm embrace of the world’s most populous nation was not enough, there is also the second most populated country in the world, India.” Today we learn just how prescient this particular comment also was, when Reuters reported that Rosneft, the world’s top listed oil producer by output, may join forces with Indian state-run Oil and Natural Gas Corp to supply oil to India over the long term, the Russian state-controlled company said on Tuesday..."


The West’s War On Gold Is Raging & There Are New Casualties

"As the Western central planners continue their obsessive war against gold, today James Turk told King World News there are fresh casualties.  As he exposes the West’s war against gold, Turk discusses the end game, and also tells investors and traders exactly to profit from the fierce battles.

Turk: “There was an interesting news item reported by Bloomberg today, Eric.  A $120 million managed-futures fund run by Tudor Investment Corp., which is one of the best fund managers in the business, is closing and returning money to its clients because of three years of losses....

This report follows closely on the heels of managed futures funds that were closed by John Henry & Co., which up until the years before its closure had a great track record.  Also, reported losses are being incurred by one of the largest managed-futures companies, the Man Group and its flagship AHL Fund, which until recently had a successful track record going back to the early 1980s.

There is an interesting story here because there is a similarity to these funds.  All of them are managed by ‘black-box’ mathematical models.  These models are designed to spot price trends of commodities.  So the fund buys futures contracts when trends are rising, and sells the long position (and some aggressive funds, at the same time, even go short) when the price trend reverses.

These models were very successful and generated outsized returns from the time they were first developed in the late 1970s up until the last several years.  So they key question is what caused their change in fortune?  The answer is simple.  It is provided in the Bloomberg article.

“Such funds have posted losses for the past three years as money managers say government intervention in global markets have skewed price trends that their models follow.”

Even though each company's mathematical models are proprietary, there is not any rocket science here.  All one has to do is look at a chart to know when a commodity’s price is rising or falling.  As a result, these models can easily be reverse engineered, enabling a market manipulator to know when the fund is buying or selling - which the market manipulator can obviously then use to its advantage.  The money in the fund provides rich pickings to the market manipulator.

Although gold is not specifically mentioned in the Bloomberg article, these black-box funds traded gold futures.  So for example, look at what happened to gold over the last several days: On the way up to $1390, ‘black-box’ funds were buying (and covering short positions) and the gold open interest exploded.  Who was selling into this rising price?  It was the gold manipulators.  They were following government instructions, and sold as the gold price climbed higher, and kept selling as evidenced by the rise in Comex open interest.

The manipulators could sell without regard to risk because they are backed by essentially unlimited government money.  Their selling onslaught was enough to turn the market lower, forcing the funds to sell their long positions.  The market manipulators bought what the funds were selling as the gold price dropped.  So the manipulators covered their shorts with a profit while the funds took a loss.  The huge drop in Comex open interest corroborates this outcome..."


Tuesday, March 25, 2014

CHART OF THE DAY: The Rise Of The $156 Trillion Market For Global Financial Assets

"The rise of the global financial markets has brought both wealth and risk to almost every crevice of the world.
"There have been huge fluctuations in asset prices over the past decade," write the analysts at the World Gold Council. "Despite the volatility, financial assets have almost tripled during that period."
Here's more:
"Currently at a striking US$156tn, the size of financial assets are a multiple of global GDP (Chart 1). This growth has been primarily led by fixed income markets. Between 2000 and 2013, debt markets have grown three-fold, from US$33tn to US$90tn, as a result of ageing demographics in many developed countries, heightened risk aversion, low interest-rate policies and record government spending to boost ailing economies. In particular, outstanding US treasury debt more than doubled from US$4.5tn in 2007 to US$11.9tn in 2013 – a large portion of which is held by foreign investors. At the same time, global stock markets have also grown – at a relatively more modest pace of 35% – from US$49tn in 2000 to US$66tn in 2013, partly driven by economic growth in emerging markets, better prospects for economic recovery in developed markets and an increase in initial public offerings (IPOs)."
The analysts note that if you include the market for securitized products, that number climbs from $156 trillion to around $200 trillion. And this doesn't even consider the over-the-counter derivatives market, whose notional value is estimated at around $693 trillion.
cotd global financial assets
World Gold Council


Russian military holds exercises in breakaway Moldova region: agency

"(Reuters) - Russia's military staged training exercises on Tuesday in Transdniestria, a breakaway sliver of Moldova that is a focus of tension following Russia's annexation of Ukraine's Crimea region..."


There is huge Artificiality in the World

"There is huge artificiality in the world, some of it its in Asia but its everywhere. And when that artificial sea of liquidity starts drying up, everybody is going to suffer including Asia. But I would rather be with the creditors and the dynamic people on the rise than with the debtors at a time like that."


Monetary Base Skyrocketing & Bail-Ins Already Well Under Way

"On the heels of some chaotic trading in key markets, today a 40-year market veteran sent King World News a powerful piece which warns that the monetary base is skyrocketing and bail-ins are already well under way.  Included are 3 incredibly powerful charts.  Robert Fitzwilson, founder of The Portola Group, put together the following piece exclusively for King World News...

There are a few charts, however, that continue to give us long-term direction that we are in unsustainable waters and that we are heading toward economic disaster.  One of the most visually disturbing is the Monetary Base shown below.

We find it useful as a reliable navigational tools.  The chart is disturbing. While the Fed takes our focus to tapering, the monetary base grew by $105 billion just in the month of February.  Through March 5th, the year-over-year increase has been a staggering 36 percent.  Bank loans have been increasing at an annual rate over about 9% for the past 14 weeks.  Perhaps this is the moment that at least some of that “dry tinder” is ignited.

The Fed also announced the results of the bank stress tests this week.  We have come to expect it, but even this announcement was revised within a few days.  While the results were good news on the surface, It reminded us of the talk surrounding the potential need for bank bail-ins.  The truth is that the bail-ins have already occurred and have been implemented continuously since the meltdown in 2008.

Instead of a Cypress-style bail-in whereby deposits are skimmed or confiscated, the bail-ins we have had so far were a combination of the confiscation of hundreds of billions if not trillions of dollars of income around the world by the zero interest rate policy as well as the maintenance of extremely high rates of interest on loans and credit card balances.  What makes it more painful is that the banks were receiving free money with which to lend.  The charts below give a sense of the magnitude of the deposits and the loans just for the U.S.


The wealth transfer from the borrowers and depositors was just the same as if the money had been overtly confiscated along the lines of Cyprus.  If the stress tests are to be believed, the result was due to an ocean of money flooding the banking system, the transfer of toxic assets to the Fed via purchases done under QE 3, regulatory policies such as “mark-to-fantasy” accounting as well as the income and payment transfers suggested above..."


Leeb - There Is A Conspiracy In The Silver Market

"On the heels of the recent weakness in the gold and silver markets, today an acclaimed money manager told King World News that there is a conspiracy in the silver market.  Stephen Leeb also said that price of silver should be at least 50% higher than it is today.  He also discussed Ukraine, Russia, China, as well as what is happening in the gold market in this timely interview..."


Friday, March 21, 2014

Gold Completes Golden Cross

"For the first time in 13 months, gold's 50-day moving-average is above its 200-day moving-average. This so-called "golden cross" occurred in Feb 09 before gold surged over 100% in the following years (but also occurred 'falsely' in September 2012.

Some technicians are reflcting on the last big run that gold had...


James Montier: "The Market Is Overvalued By 50%-70%" And "Nothing At All" Is Attractively Valued

"A month ago we presented a must read interview by Swiss Finanz und Wirtschaft with respected value investor Howard Marks, in which, when explaining the motives driving rational investing he summarized simply, "in the end, the devil always wins." Today, we are happy to bring our readers the following interviewwith one of our favorite strategists, GMO's James Montier, in which true to form, Montier packs no punches,and says that the market is now overvalued by 50% to 70%, adding that there is "nothing at all" that has an attractive valuation, and that he sees a "hideous opportunity set."
Still, despite the clear bubble in stocks, he is unsure what to do since financial repression could last very long with "the average length of periods of financial repression in history is 22 years. We’ve only had five years so far." Finally on the topic of Japan and Abenomics, "for me, there is too much hope and expectation embedded in Abe, not unlike Obama in 2009: There was so much hope projected into Obama that he could only disappoint." He did, well... everyone but the 0.001% billionaires. Then again in a world in which there is only hope left, what happens when that too is removed?..."


Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China

"If it was the intent of the West to bring Russia and China together - one a natural resource (if "somewhat" corrupt) superpower and the other a fixed capital / labor output (if "somewhat" capital misallocating and credit bubbleicious) powerhouse - in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely "going according to plan."
For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead... and quite a few steps east.
While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may regain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.
Here is what will likely happen next, as explained by Reuters:
Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow's seizure of the Black Sea peninsula from Ukraine would be counter-productive.

The underlying message from the head of Russia's biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. 

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.
More details on the revelation of said "Holy Grail":
State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world's largest producer of conventional gas to the largest consumer.

"May is in our plans," a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: "It would be logical to expect the deal during Putin's visit to China."


Jim Rogers skeptical about US Energy Boom

"Q: What are your thoughts on developments in recent years that have unlocked shale oil and gas? Some have said the U.S. energy boom is the most important development in political economy in decades.
Jim Rogers : I would urge people to go out and see what’s happening in the field. Yes, it was all very exciting in the beginning. But now we’re finding out that those wells are very short-life wells. Production dropped by 40 to 60 percent in the first year, and the demand for rigs to drill in the shale fields is down 75 percent in the last couple of years. The demand for pumps is down 50 percent.

So it’s not as much fun as we’d hope it would be. In some countries such as Poland, people have given up their shale leases, because they’ve realized it’s just not so simple. I read all the hype, but again I’d urge people to go into the fields and see what’s actually happened, rather than reading what journalists hype.

Natural-gas prices have quadrupled since the bottom. They’re not quadrupling because this is the most important thing in several decades. - in"


Maguire - An LBMA Default Was Delayed, But It’s Coming

"Today London metals trader Andrew Maguire told King World News that an LBMA default was delayed by Western central planners, but it is coming, despite the West’s frantic efforts to avoid it.  Below is what Maguire had to say in Part I of an incredibly powerful series of interviews that will be released today.

Maguire:  “The net result of all of this (gold) leasing activity means that the bullion which is still showing on the central banks’ books as an asset has more than one claim on it.  Worse, the bullion banks don’t have the gold to repay them....

“And as they’ve sold this bullion into the market, and it’s now vaulted outside of the closed loop of the LBMA system, never to return, this is a real problem.

Now this activity over the years has created a major mismatch.  This has placed these LBMA bullion banks in jeopardy, particularly now that it’s clear they are not getting this touted and relied upon dip into the $1,000 range that they keep trying to talk into existence.  The level of rigged discount would be the minimum amount needed to even partially bail them out of this ever-growing position mismatch.  

It’s now inevitable that there will be an LBMA bullion bank default -- it’s just been delayed.  And as I’ve noted now for over 18 months, the Bank for International Settlements (BIS) is no longer providing any real bullion to the bullion banks.  They are just issuing them credit by way of a book entry to sell bullion bank ‘owned’ gold, unallocated gold, on the spot market.  And when deliveries are demanded, they are actually forced to borrow gold from their own unallocated inventories.

And courtesy of a lack of regulatory oversight, they are able to rehypothecate bullion from their clients allocated accounts.  Even in the unlikely event that gold were driven to the bullion banks’ target of $1,050, the resulting discount would only cause China, Russia, India, and all of these other countries to take all (of the physical gold) that was offered, allowing very little bullion to be repaid.  So that would be a lose/lose situation.

They (the bullion banks) are not going to allow what happened last year, when a Fed sanctioned raid resulted in a mass exodus of bullion to China.  Either way, discount or not, we are approaching a forced LBMA cash settlement (which they will try to call a ‘non-default’).

Western central banks are increasingly being forced to compete against each other to look after their own interests now.  It’s become apparent that the BIS and the Fed don’t have the gold they claim to have, despite the paper claims to gold being shown as a physical asset (on their books).  This very act neuters the Fed’s ability to control the gold leasing.

In short, the bullion banks will be forced to mark paper gold positions to market, creating a (massive) gap up in the gold price as true supply/demand fundamentals are finally realized.”


Thursday, March 20, 2014

Man Who Predicted Every Tapering Now Forecasts QE-Infinity

"Today the man who, astonishingly, correctly predicted every single Fed tapering is now forecasting QE-to-infinity.  Gerald Celente, the man many consider to be the top trends forecaster in the world, also predicted that when the Fed reverses course it will have a tremendously negative impact on the U.S. dollar and send the prices of gold and silver soaring.  Below is what Gerald Celente, founder of Trends Research, had to say in this remarkable and timely interview..."


Wednesday, March 19, 2014

Moscow 'Concerned' Over Treatment Of Russians In Estonia

"Russia signaled concern on Wednesday at Estonia's treatment of its large ethnic Russian minority, comparing language policy in the Baltic state with what it said was a call in Ukraine to prevent the use of Russian..."


Richard Russell - Silver Is The Greatest Buy In The World Today

"With continued chaos and uncertainty in global markets, today KWN is publishing another incredibly important piece that was written by a 60-year market veteran.  The Godfather of newsletter writers, Richard Russell, just purchased more physical gold and silver himself, and said that silver is the greatest buy in the world today.  He also discussed stocks, China, inflation, and dared the U.S. Treasury to audit the United States’ gold reserves..."


Tuesday, March 18, 2014

Meet The Brand New, And Shocking, Third Largest Foreign Holder Of US Treasurys

"Something hilarious, and at the same time pathetic, happened earlier today: at precisely 9 am the US Treasury released its delayed Treasury International Capital data (which was supposed to be released yesterday but was delayed because it snowed) which disclosed all the latest foreign Treasury holdings for the month of January. Among the key numbers tracked and disclosed, was that China's official holdings increased from $1.270 trillion to $1.284 trillion, that Japan holdings declined by a tiny $0.2 billion, that UK holdings increased by $7.8 billion to $171 billion, and that holdings of Caribbean Banking Centers, aka hedge funds, declined by $16.7 billion. Here is Reuters with the full data summary (save it before this article is pulled).
So why is it hilarious and pathetic? Because just three short hours later, the Treasury that organization that has billions of dollars at its budgetary disposal to collate, analyze and disseminate accurate and error-free data - admitted that all the previously reported data was in effect made up!
Of course, it didn't phrase it as such. Instead, what TIC did was release an entire set of January numbers shortly after it had released the "old" numbers, which differed by a small amount but differed across the board - in other words, not a small typo here and there: a wholesale data fudging exercise gone horribly wrong. For example:
  • Instead of a $14 billion increase, China's revised holdings were only $3.5 billion higher.
  • Instead of unchanged, Japan's holdings suddenly mysteriously increased by $19 billion in January.
  • Instead of plunging by $17 billion, the Caribbean Banking Centers were down by a tiny $1 billion.
  • And instead of the previously reported increase of just under $1 billion, the all important Russia was revised to have sold $7 billion, bringing its new total to just $132 billion ahead of the alleged previously reported dump of Fed custody holdings in mid-March.
That this glaring confirmation that all TIC data is made up on the fly, without any real backing, and merely goalseeked is disturbing enough. For what it's worth, the latest TIC data is here. Feel free to peruse it before it is revised again
However, what was perhaps more disturbing than even that was the revelation that as of January, the US has a brand new third largest holder of US Treasurys, one which in the past two months has added over $100 billion in US Treasury paper, bringing its total from $201 billion in November, to $257 billion in December, to a whopping $310 billion at January 31.
The country? Belgium
The same Belgium which at the end of 2013 had a GDP of just over €100 billion, or a little over one-third what its alleged UST holdings are.
And somehow the Treasury expects us to believe that tiny Belgium - the center of the doomed Eurozone which is all too busy running debt ponzi scheme of its own - bought in two months nearly as much US Treasurys as its entire GDP?
Apparently yes. However we are not that naive.
So our question is: just who is Belgium being used as a front for?
Recall that for years, the "UK" line item on TIC data was simply offshore accounts transaction on behalf of China. Of course, since China hasn't added any net US paper holdings in the past year, the UK, and China, are both irrelevant in the grand scheme of things.
But not Belgium. Because with Russia (or someone else) rumored to have sold or otherwise reallocated $100 billion in US Treasurys in March away from the Fed, we wouldn't be surprised if the Belgium total holdings somehow soared to over $400 billion when the March data is revealed some time in May. Courtesy of the excel goalseeking function of course.
Needless to say, this all ignores the initially confirmed fact that all the data presented above is made up gibberish, goalseeked by a bored intern at the Treasury, and whose work got zero error-proofing before its released to the entire world earlier today.
So... just what is going on with this most critical of data sets - official foreign holdings of US paper, and how long before an Edward Snowden emerges from the depths of the US Treasury building and reveals that behind all the data manipulation and unaudited figures was none other than the Fed, whose holdings, far greater than represented, are all that matter, and everything else is merely one grand, theatrical plug?"