Richard Postma – The Doctor Is In – Tue 30 Jan, 2018

By Cory More Than Just The Metals Price To Consider Looking Forward

Doc is back from his trip and shares some comments on the metals. We start off with a quick comment on uranium then quickly move over to gold. We look at some of the stocks and related sectors.

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Source:: The Korelin Economics Report

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CHART: Hedge funds have never been this bullish about oil

By analyst

CHART: Hedge funds have never been this bullish about oil

By Frik Els

Better prospects for crude oil is nowhere more evident than on derivatives markets and the shift in positioning of large-scale derivatives speculators such as hedge funds.

Hedge funds have pushed long positions – bets on higher prices in future – to all-time record levels across five energy markets including US benchmark West Texas Intermediate crude, Brent international oil futures, and US gasoline and diesel fuel.

Source: Bloomberg

According to the CFTC’s weekly Commitment of Traders data up to January 23 so-called managed money investors on Nymex in New York and ICE Futures in Europe now hold the equivalent of more than 1 billion barrels of oil on a net basis. That compares to lows of just over 200m barrels in 2014 and similar dips in 2015 and the start of 2016.

WTI and Brent have added roughly $25 a barrel from lows struck in June last year with Brent, which usually trades at a premium to the US benchmark, recently topping $70 a barrel for the first time in more than three years.

Ole Hansen, chief commodity strategist at Saxo Bank, says that so far calls for a crude oil correction have been left unheard “despite the increased risk of such a one-sided position”:

The fact however remains that funds will continue to buy into strength until the music stops. This past week gave the bulls no cause for concern as the dollar weakened, worldwide growth was cheered in Davos and US crude stocks continued to decline.


Canadian crude challenges

The surge in the WTI price has been boosted by a fall in oil stocks held at the Cushing hub in Oklahoma, the price point for the contract. Stocks have fallen to below 40m barrels from 64m barrels in November last year.

In a note to investors Capital Economics points out that the slump in inventories is due in large part to the supply constraints hampering Canadian producers:

Pipelines are running at full capacity because a number of new projects have been held up in recent years and even additional rail capacity is being fully utilised. The upshot is that stocks of crude oil in Canada have been rising rather than falling and, while global prices have been climbing, the price of Canadian heavy crude oil has remained stagnant.

The discount for Western Canada Select, the price obtained by most producers in the province of Alberta, has widened to $27.70 a barrel from $9.40 in May last year.

The largest gap between Canadian crude prices and WTI was recorded in November 2013, when it averaged just under $40 a barrel for the month.

The record low for Western Canada select was in January 2016, when Albertan oil fetched only $16.30 a barrel (compared to $30.60 for WTI at the time).

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Source:: Infomine

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This Bond Bull Market Still Has Legs


By James Rickards

This post This Bond Bull Market Still Has Legs appeared first on Daily Reckoning.

I started in the Treasury bond business in 1985 after a 10-year career in commercial banking. I retired as a senior officer of Citibank that year at a relatively young age and made the move to Wall Street.

My firm was Greenwich Capital Markets, one of a select group of “primary dealers” allowed to transact directly with the Federal Reserve. Monetary policy is conducted through open-market operations run by a trading desk at the Federal Reserve Bank of New York.

Being a primary dealer just means you have passed rigorous screening by the New York Fed in terms of credit, capital, operations, management and other criteria.

Importantly, as a primary dealer you have to make a continuous two-way market in all maturities of U.S. Treasury and government-backed mortgage securities across the yield curve. You are expected to buy when others are selling and to sell when others want to buy.

That market-maker role is how the Fed insures liquidity in the Treasury market and is the price a firm must pay for the privilege of being named a primary dealer.

Greenwich Capital was small but mighty. We did not have the capital size of other primary dealers like Goldman Sachs or Morgan Stanley, but we did have a reputation as having some of the smartest sales and trading staff around. We punched above our weight as a market maker.

As the firm grew, we were frequently ranked in the top five and sometimes No. 1 in certain parts of the yield curve, particularly 10-year Treasury notes. Our customers were the biggest firms in the world such as PIMCO, MetLife and giant foreign banks based in Japan and Germany.

As a member of the executive committee at Greenwich, part of my job was staying in the good graces of the Fed and making sure nothing jeopardized our primary-dealer status. If the Fed had ever pulled our name off the primary-dealer list, our customers would have abandoned us the next day.

I became a regular in meetings at the Federal Reserve Bank of New York. That experience served me well years later, in 1998, when I had to negotiate the bailout of Long Term Capital Management sponsored by the New York Fed.

There was something else highly memorable about my time at Greenwich Capital. It was a money machine! The firm typically had returns on equity of 20–40%.

That was partly because we were smart, savvy and hardworking. But there was another reason. Our firm had caught the wave of the greatest bond bull market in history. It was hard not to make money.

This 30-year chart below shows the declining path of interest rates on the 10-year Treasury note from 1988–2018.

This bull market in bonds actually began in 1981 after Paul Volcker pushed short-term interest rates over 20%, the highest since the Civil War, to kill the runaway inflation of the late 1970s and early 1980s.

Although there were rallies and drawdowns along the way, and …read more

Source:: Daily Reckoning feed

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REVEALED: The Date of the “Big Credit-quake”

By Brian Maher

This post REVEALED: The Date of the “Big Credit-quake” appeared first on Daily Reckoning.

The old signposts can no longer be trusted, we noted in Friday’s reckoning.

Like Nazi saboteurs redirecting road signs during the Battle of the Bulge, the Fed sent investors off in the wrong direction…

After the crash of 2008, interest rates would have soared.

Marginal companies dependent on low interest rates and cheap credit would have gone the way of all flesh.

The pain of bankruptcy would have been acute… but the pain of bankruptcy would have likely been brief.

From the wreckage of the old a new, healthier economy would have emerged on sounder footings.

But instead of letting markets take the hard but necessary road to Reality…

The Fed twisted the road signs… and pointed investors toward Shangri-La, the mythical land of perpetual boom.

It conjured trillions of dollars in phony money since 2009. And for years kept interest rates nailed to the floor.

Thus did the Fed destroy all honesty in markets, all price discovery.

As we claimed Friday:

“The old road signs that used to point south… now point north. Or east. Or west. No one really knows.”

The Fed has taken markets so far down the false road, Shangri-La now hovers into view…

Stocks are “melting up.”

The Dow went from 24,000 to 25,000 in record time.

It required even less time to pass from 25,000 to 26,000.

Meantime, the market hasn’t suffered a 5% drop in some 400 trading days — another record.

Retail investors are now rushing into stocks at a gait unseen since just prior to the 2008 wreck.

But will they soon discover they’re chasing a central bank-spun fantasy?

The Fed has begun to “normalize” interest rates.

And it’s begun cutting into its $4.5 trillion balance sheet — if only slightly.

The European Central Bank has also pledged to withdraw stimulus.

Yet records continuing falling by the day.


We suggested recently that large asset purchases by the People’s Bank of China may be the hidden source of credit fueling the “melt-up.”

So has Zero Hedge:

This “intervention”… which has seen retail investors unleashed across stock markets, buying at a pace not seen since just before both the 1987 and 2008 crashes, helps explain why stocks have — for now — de-correlated from central bank balance sheets.

But analysts at Citi have spotted a pothole on the road to paradise…

Despite China’s recent spree, the decline in central bank assets is beginning to tell in the credit markets…

Longer-term interest rates are beginning to rise.

The yield on the bellwether 10-year U.S. Treasury, for example, has risen to 2.7% — its highest rate since 2014.

As bond yields rise, bond prices fall (as a seesaw, they move in opposite directions).

High-yield bonds are especially sensitive to rate changes.

And the “smart money” is now rushing out of these high-yield bonds.

Zero Hedge:

Positioning among institutional investors has turned markedly more bearish recently… There has been a surprisingly sharp and persistent outflow from U.S. high-yield funds in recent weeks… it is becoming increasingly apparent that a big credit-quake is imminent, and Wall Street is already positioning to take …read more

Source:: Daily Reckoning feed

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Exclusive KE Report Commentary – Mon 29 Jan, 2018

By Cory Anaconda Mining – The Overall Strategy In Atlantic Canada

We have been following Anaconda Mining for the past few months due to some of your comments and emails to me. The Company has a lot going on with a mine in production and a growing number of exploration assets. I had the chance to sit down with the Chairman of Anaconda Jonathan Fitzgerald to get a better idea of the big picture plans.

Please email me directly at with any followup questions or comments for Jonathan.

Click here to visit the Anaconda Mining website for more information.

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Source:: The Korelin Economics Report

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Exclusive Comments from Marc Chandler – Mon 29 Jan, 2018

By Cory More Treasuries Coming This Year With Less Buyers

Marc Chandler, Head Of Global Currency Strategy at Brown Brothers Harriman joins me while on a trip in Europe to recap what to look forward to this week in terms of data and news. We discuss the upcoming treasury announcement outlining the total treasury issues this year which is expected to be nearly double from the prior years. Also the State Of The Union and FOMC meeting are considered.

Click here to visit Marc’s blog.

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Source:: The Korelin Economics Report

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Introducing Technology Profits Daily

Ray Blanco

By Ray Blanco

This post Introducing Technology Profits Daily appeared first on Daily Reckoning.

In 2009, the financial world was in full meltdown.

Ironically, weeks before the S&P 500 bottomed at 666, the genesis for one of the biggest current trends in tech and finance kicked off.

It happened when the first block of bitcoin, called the genesis block, was issued by its elusive inventor Satoshi Nakamoto.

Months earlier, Nakamoto wrote a paper describing how a new digital currency could be used as a replacement for traditional currency. The catalyst for the innovative idea was the obvious failure of our centralized current monetary system.

The financial crisis had inspired a technological alternative that could function like currency without the need for a central authority.

With Nakamoto’s bitcoin, the trust in a central authority would be replaced by strong encryption. It would be designed to accommodate a fixed maximum number of coins, preventing debasement.

A decentralized peer-to-peer network would contain an immutable ledger of every transaction to prevent double spending of coins.

That ledger is commonly called blockchain. The ledger consists of records called blocks, linked together cryptographically in a chain.

Almost no one knew what it meant back then, and many of us haven’t fully grasped it now.

Yet investing in blockchain tech today will be like investing in internet stocks at the beginning of the tech boom.

The profits will be unbelievable!

Blockchain Tech Reaches Far Beyond Cryptocurrency

Today, the total cryptocurrency market capitalization of the top 100 cryptocurrencies is over half a trillion dollars.

In a way, these competing cryptocurrencies are a technology-enabled blast from the past. We haven’t always had a central bank in the United States. The Federal Reserve is barely over a century old. By the 20th century, we nationalized our currency — although that wasn’t always the case.

During early decades in United States history, banks were free to issue their own competing currencies. They had to compete for customers by issuing quality money. Prices were stable and the U.S. economy boomed for decades.

Bitcoin is competing with not only fiat, but alternative cryptos. The common idea behind cryptocurrencies, however, remains the same. Just as an airplane — whether it’s the Wright Flyer or a Boeing 747 — needs wings and an engine to stay aloft, all major cryptocurrencies rely on the blockchain idea to work.

That’s the really big development behind crypto. And the basic blockchain technology can be extended much further than just currency — with huge results.

In fact, the impact blockchain will have on our lives will one day be as big as the internet.

Blockchain Has Innumerable Applications

Emerging blockchain applications include securities exchanges, voting systems, cryptographically secure property registries, peer-to-peer insurance, supply chain management, smart contracts and anti-counterfeiting payment and remittance systems much cheaper than anything we use today.

Almost any process in which many parties need a common, trusted, transparent and auditable record could one day be improved with blockchain tech.

Right now most of the exciting blockchain technologies are still in private and venture capital stages. I recently visited a cryptocurrency conference to talk to and learn …read more

Source:: Daily Reckoning feed

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Company News – Mon 29 Jan, 2018

Figures for New Permit in the Abengourou Project Area (CNW Group/Awale Resources)

By Cory

AWALE RESOURCES – New Permit Granted in Côte d’Ivoire

Here is the latest news from Awale Resources. As a shareholder I excited to see what comes out of this property that the Company can now drill. I will be having Glen Parsons, Awale President and CEO on the show to provide some more details on this property and update us on when we can expect drill results from the Bondoukou Project.

Please comment or email me ( if you have any other questions for Glen.

Click here for the most recent interview with Glen.

VANCOUVER, Jan. 29, 2018 /CNW/ – Awalé Resources Limited (“Awalé” or the “Company“) (TSXV: ARIC) is pleased to announce the granting of a new prospective gold permit ‘Amélékia’, in the Comoé district of south eastern Côte d’Ivoire. The permit is the first granted of three Awalé applications, forming the Company’s Abengourou Project (Figure 1).

Glen Parsons CEO commented today:

“The granting of the new gold prospective Amélékia permit in the Abengourou Project area is an important step for Awalé. It complements the Company’s strategy of amalgamating permits to form project areas with significant exploration scale and potential, combined with a broader focus on the east of Côte d’Ivoire. In close proximity, to the north, we have the more advanced Bondoukou Project where initial scout drilling has recently been completed.

The key for Awalé is ensuring and managing a pipeline of gold projects in Côte d’Ivoire offering district scale, which has now been achieved.

We look forward to keeping the market informed of our progress and pending drill results from Bondoukou.”

Background on Amélékia

The 375km2 permit is prospective for gold mineralisation and forms the south western ‘Côte d’Ivoire’ extension of the Sunyani Basin from Ghana, interpreted extensions the Sefwi Belt contacts lie close to the permit area. Newmont’s Ahafo gold mining district is located on the Sefwi Belt, close to the Sunyani Basin contact. Parts of the permit area were formerly held by Golden Star Resources and legacy data on this project area has been retrieved by the company. Data retrieved from this period of activity includes over 100 stream sediment samples, over 7,000 soil and auger geochemistry samples along with rock chip sampling and limited pitting. The work completed covers the greater portion of the Amélékia permit area revealing anomalous gold geochemical trends and soil anomalies that are parallel to the regional structural trends as seen in geophysics and government mapping (Figure 2). Strike lengths of these anomalies trace up to 10km in the south of the permit area and 6km in the northeast, other shorter strike length anomalies are also apparent.

The permit is 100% held by Awalé through its local subsidiary Awalé Resources Côte d’Ivoire.

Original lab reports for the data obtained and details on quality control sampling are not yet available to be verified by Awalé. However, the data gives the Company initial focus areas to assess and complete due diligence sampling and geological mapping in order to verify the anomalies in the legacy data. If the data is found to be robust then drill targets can be …read more

Source:: The Korelin Economics Report

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John Rubino over at Dollar Collapse – Mon 29 Jan, 2018

By Cory US GDP Up But Savings Rates Are Down

Recently economic growth has continued but it has been slow. When we look a the US we are seeing decent GDP but savings are diminishing. John Rubino from shares his insights on the increased debt in our system and how the US is only going further down the debt hole.

Click here to visit John’s site.

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Source:: The Korelin Economics Report

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Chris Temple from The National Investor – Mon 29 Jan, 2018

By Cory The New Higher Rates Paradigm

Chris Temple joins me today to take look at the new normal which is increasing interest rates. Around the world we are seeing rates creep up. Everyone should be asking what level the markets and economies can withstand but this is an impossible answer to know for sure. We also discuss how the USD is playing a roll in markets and metals.

Click here to visit Chris’s site, it’s worth your time.

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Source:: The Korelin Economics Report

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