Bank of England

We have a few things to say about the recent debunking of established monetary theories. Effectively, the BoE joined forces with the rebels in economics who’ve long argued that standard models are bunk. Moreover, the BoE’s report discredits many well-known pundits, some more so than others. We’ll pick on one from the “more so” category: Paul Krugman.

Last week, for the first time ever, in "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" Zero Hedge shone a spotlight on the mysterious, and "without any permanent employees" company known as The London Gold Market Fixing Limited which for 117 years has served as the corporate face of the London bankers who "fix" the price of gold twice daily. Since then, more than one of the LinkedIn pages we profiled of the bankers among the 5 gold fixing banks has quietly been taken down. However, the biggest surprise took place moments ago when none other than the head of spot gold trading at Barclays, Marc Booker, did what so many heads of spot FX trading in the past few months have done over fears of being caught in the ongoing manipulation probe: he exited stage left from Barclays HQ at One Chruchill Place.

• "May?" New Cold War May Emerge in Ukraine Crisis, Medvedev Says (BBG)
• Wristslaps will be fast and furious: EU Commission charges HSBC, JPMorgan, Credit Agricole with rigging (Reuters)
• Credit Suisse Rises as U.S. Guilty Plea Ends 3-Year Probe (BBG)
• After Martial Law Declaration, Thailand Waits for General's Next Move (WSJ)
• China property slowdown spells trouble for Asia bonds (FT)
• Russia Close to $400 Billion Gas Pipeline Deal in Pivot to China (BBG)
• Dimon-by-the-Sea Shows London Banking’s Engine of Growth (BBG)
• Modi Faces Greece-Sized Snag to Economic Revival (FT)
• U.K. Inflation Accelerates on Airfare Surge (BBG)

The ECB, the Swiss National Bank (SNB) and the Riksbank of Sweden announced a new gold agreement this morning. They announced they have no plans to sell significant quantities of gold and reaffirmed the importance of gold bullion as a monetary reserve asset.

Dispassionate discussion of the investment climate.  

Deutsche Bank, which most recently has been in the spotlight for hightailing it out of the silver and gold fix (because it is clearly innocent of any precious metals manipulation as an "independent, impartial and extensive" inquiry by the Bank of England will surely prove), has a message for its traders: stop bloody swearing.

• Bank of England sees 'no housing bubble' (Independent)
• ‘If the euro falls, Europe falls’ (FT)
• India's pro-business Modi storms to historic election win (Reuters)
• Global Growth Worries Climb (WSJ)
• Bitcoin Foundation hit by resignations over new director (Reuters)
• Blackstone Goes All In After the Flop (WSJ)
• SAC's Steinberg loses bid for insider trading acquittal (Reuters)
• Beats Satan: Republicans Paint Reid as Bogeyman in 2014 Senate Races (BBG)
• Tech Firms, Small Startups Object to Paying for Internet 'Fast Lanes' (WSJ) - but they just provide liquidity
• U.S. Warns Russia of Sanctions as Ukraine Troops Advance (BBG)
• Major U.S. hedge funds sold 'momentum' Internet names in first-quarter (Reuters)

• More than 20 dead, doctor says, as anti-China riots spread in Vietnam (Reuters)
• Russia's Gazprom plans Singapore stock exchange listing (Reuters)
• Inside Europe’s Plan Z (FT)
• Ukraine slides deeper toward war as Russia warns to vote (BBG)
• Fast-Food Protests Spread Overseas (NYT)
• BOJ Beat, Officials Could Upgrade Outlook for Capex (WSJ)
• Euro-Zone Economy Shows Weaker-Than -Expected Expansion (WSJ)
• Yahoo to YouTube Ads Spreading Viruses Rile Lawmakers (BBG)
• New York Times Ousts Jill Abramson as Executive Editor, Names Dean Baquet (BBG)
• NYT Publisher Said to Always Have Clashed With Abramson (BBG)
• Google gets take-down requests after European court ruling - source (Reuters)

And in Cyprus when it happened, the authorities said it was a once-off, because of all of the hot Russian money that is in Cyprus, and this will not happen anywhere else...but meanwhile they are planning for that scenario in most of our countries. People need to be aware of that and they need to prepare.

Q. What will happen after 14 August 2014? Will the Silver Fixing cease to exist?

A. With effect from the close of business on 14 August 2014, the Company will cease to administer a Silver Fixing, and a daily Silver Fixing Price will no longer be published by the Company.

Overnight Europe got two mini lessons: i) that rumors spread by conflicted French banks about "imminent" ECB QE don't always, if ever, come true, after the ECB spent a decent portion of the overnight session explaining, via Reuters, that while the central bank would engage in "some stimulus for the euro zone economy but falls short of the large-scale effect the ECB could unleash with a major program of quantitative easing (QE) - money printing to buy assets. Such a QE plan is still some way off." Precisely as we warned. The other lesson is that when QE or even hopes of QE fade, bonds get bid due to rotation out of equities into "safe haven" assets. As a result, German Bund yields tumbled with stops taken out (and Goldman stopped out on their Bund short) through the 12 month lows of 1.4% with 10 Year yields following lower and dropping to 2.565% hours ago, or a level not seen since November 1.

More Reasons QE Is a Dud

• Goldman’s Andrew Wilson Says QE in Europe a 2015 Story If at All
  
• European economy would have to weaken significantly before QE comes into play, said Andrew Wilson, co-head of Global Fixed Income and Liquidy management team at Goldman Sachs Asset Management.
• Says Draghi has foreshadowed policy easing at next meeting, expects ECB to cut rates 1-2 times before they look to other methods such as an LTRO
• Says if other methods don’t work it would “ultimately have to be QE”

The New York Fed's historical appreciation society has looked back at what was likely the US' first crash and foud that Alexander Hamilton's actions in 1792 which they claim "appears to have effectively managed the crisis with little or no long-term spillover to the economy," has now become the blueprint for manipulative intervention until this day by the central planners who know far better than 'us' collectively... but there are some lessons that Bagehot has that are worth remembering...