JP Morgan et al Take No Prisoners on Friday

12 November 2016 — Saturday


The gold price traded a few dollars either side of unchanged through all of Far East and most of London trading on their Friday — and that lasted until `da boyz` showed up at 9:15 a.m. in New York yesterday morning.  By the time they were done, with the low tick of the day set minutes after the close of COMEX trading, the gold price had been clocked for about 39 dollars.  From there it crawled higher, gaining back about 6 bucks of its losses going into the 5:00 p.m. EST close.

The high and low ticks were reported by the CME Group as $1,265.00 and $1,218.70 in the December contract.

Gold was closed in New York on Friday at $1,227.60 spot, down $31.00 on the day.  Net volume was over the moon once again at 353,000 contracts, as JPMorgan et al slammed the Managed Money traders once again.161112gold

Brad Robertson had to leave the office early on Friday, so I’ve only got partial 5-minute tick charts for both gold and silver — and they both end 35 minutes before the COMEX close.  However, they do show most of the volume, but not the low ticks of the day.

In the 5-minute gold chart below, most of the volume that mattered came between 7 and 10 a.m. Denver time, which was between 9 and noon in New York.  There was some notable volume in morning trading in the Far East on that interim low tick of the day.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ is a must for this chart.161112-5-minute-gold

The silver price had rallied about 20 cents by 3:20 p.m. China Standard Time on their Friday afternoon, but less than two hours later at 9 a.m. in London, it was down 18 cents the ounce.  It rallied back above unchanged in less than an hour — and didn’t do much until JPMorgan et al put in an appearance twenty minutes after the COMEX open.  The low tick of the day was set at 1:45 p.m. in the thinly-traded after-hours session and, like gold, it crawled a bit higher from there into the 5:00 p.m. EST close.

The high and low ticks in this precious metal were recorded as $18.85 and $17.17 in the December contract, which was an intraday move of just about 9 percent. ‘Da boyz’ were ruthless.

Silver finished the Friday session at $17.365 spot, down $1.22 from Thursday’s close.  Net volume was monstrous as well, at just over 134,000 contracts — and there was decent roll-over volume out of December as well.161112silver

Here’s the partial 5-minute silver tick chart, which ends at 10:55 a.m. MST, which is 12:55 p.m. in New York.  As you can see, there was some volume around the down/up/down price shenanigans in late Far East/early London trading on their Friday — and it then died off to nothing until the powers-that-be appeared at 6:45 a.m. Denver time, which was 8:45 a.m. in New York.  Volume was huge during the $1.30 engineered price decline — and by 1 p.m. in Denver, which is the far right-hand side of this chart, volume had dropped off considerably.

Like the 5-minute gold tick chart, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ is a must here as well.161112-5-minute-silver

After trading mostly lower in the Far East on their Friday, the platinum price began to chop quietly higher — and was up 9 bucks when JPMorgan et al showed up at 8:45 a.m. in New York, which was the same time that they began to engineer the silver price lower as well.  And also like silver, the low tick came around 1:45 p.m. EST — and it also crawled quietly higher for the rest of the day from there.  Platinum was closed down an even $30 dollars.161112plati

For the second day in a row, the palladium price wasn’t allowed to rise above the $695 spot mark and, like the other three precious metals, began to get sold off shortly after 3 p.m. China Standard Time on their Friday afternoon.  Its various rally attempts after that always ran into the usual suspects, with the last sell-off starting around 1 p.m. in New York.  Palladium was closed at $671 spot, down 15 bucks from Thursday.161112plad

The dollar index closed very late on Thursday afternoon in New York at 98.82 — and sold off about 20 basis points in the early going in Far East trading on their Friday morning.  It chopped and flopped around until a rather suspicious looking ‘rally’ developed at 9:01 a.m. on Friday morning in New York.  That ‘rally’ topped out at the 99.13 mark shortly after the London close, which was 11 a.m. EST.  It hung in there for a couple of hours before chopping lower, falling back below the 99.00 mark in the process.  The dollar index finished the day at 98.95 — up 13 basis points from Thursday.161112intraday-gif

Here’s the 6-month U.S. dollar index chart — and you’ll excuse me for thinking this, but the ‘rally’ in the dollar index stinks to high heaven just as much as the engineered price declines in the precious metals that have been occurring at the same time.161112-6-month-usd

And, for fun, here’s the 5-year U.S. dollar index chart — and if it wasn’t for the powers-that-be, it would have returned to values posted on the left-hand side of the chart ages ago.161112-5-year-usd

The gold stocks headed south the moment that trading began in New York at 9:30 a.m. yesterday morning.  The absolute low tick came at 3:30 p.m. EST — and they rallied just enough so that the HUI didn’t close on its low tick of the day.  However, down 8.02 percent was bad enough.161112hui

Not surprisingly, the silver equities got shot to pieces as well — and as incongruous as it may seem, they actually open in positive territory briefly.  By the time the bloodletting was over, Nick Laird’s Intraday Silver Sentiment/Silver 7 Index was down 9.82 percent — and that’s on top of the 9 percent hit they took on Thursday.  Click to enlarge if necessary.161112silver-7

And here’s the long-term Silver 7/Silver Sentiment Index chart, so you can get the macro view of things.161112lt-silver-7  Click to enlarge.

Of course the World Gold Council and the Silver Institute should be pounding on the gates of the CME Group and the COMEX over what’s happening with the precious metals [I shan’t breath a word about the goings-on in copper at the moment] — but that won’t happen, as the the sole purpose of these organizations is to prevent this very type of uprising from occurring.  The miners on their own certainly won’t do anything, or say anything.

I urge/dare you to phone the I.R. department of just about any precious metal producer you own shares in — and ask them for an explanation of why silver and their stocks are down so much in the last few days.  You won’t believe the bulls hit answer you’re going to get.  Even though most know fully well what’s happening, it will never be mentioned publicly, not even to stockholders, although they do whisper it amongst themselves.

And here are the usual three charts from Nick that tell all.  The first one shows the changes in gold, silver, platinum and palladium for the past week, in both percent and dollar and cents terms, as of Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index.  They are not pretty to look at this week — and the Click to Enlarge feature really helps on all three.161112weekly

And the chart below shows the month-to-date changes as of Friday’s close.161112month-to-date

And below are the year-to-date changes as of the close of trading yesterday.161112year-to-date

The CME Daily Delivery Report showed that 146 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  There were 5 short/issuers in total, but the most important bit was that Canada’s Scotiabank was the only long/stopper of note, picking up 142 of those contracts for its own account — and ADM got the other four.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in November rose by a very chunky 149 contracts.  Gold open interest is now up to 185 contracts, minus the 142 mentioned above. [I’d guess that the 149 contract number is directly rated to the 142 contract number – Ed] The CME Daily Delivery Report on Thursday showed that 19 gold contracts were posted for delivery on Monday, so that means that 19+149=168 gold contracts were added to the November delivery month.   Silver o.i. in November rose by another 19 contracts, leaving 113 left.  Thursday’s Daily Delivery Report showed that zero silver contracts on Monday, so that means the obvious.

There were withdrawals from both GLD and SLV again on Friday.  An authorized participant took out 228,828 troy ounces of gold out of GLD — and 1,328,242 troy ounces of silver were removed from SLV.

There was no sales report from the U.S. Mint yesterday — and I would suspect that had something to do with the Veteran’s Day holiday in the U.S.

It was another quiet day in gold over at the COMEX-approved depositories on Thursday.  Nothing was reported received once again — and only 3,215.000 troy ounces/100 kilobars [U.K./U.S. kilobar weight] was shipped out of Canada’s Scotiabank.  I shan’t bother linking this activity.

It was somewhat busier in silver, as nothing was reported received there either — but 654,443 troy ounces were shipped out the door for parts unknown, with about 95 percent of that amount coming out of CNT.  The link to that activity is here.

It was another big day over at the COMEX-approved gold depositories in Hong Kong on their Thursday.  They received a very healthy 9,280 of them — and shipped out 1,265.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

Because yesterday was Veteran’s Day in the U.S., there was no Commitment of Traders Report data posted, as the CME Group was closed in remembrance.  Needless to say, neither Ted nor I were happy about that.  It will be posted on their website at 3:30 p.m. EST on Monday — and I’ll have all the details in my Tuesday column.

It was another slow news day again yesterday, so I don’t have much.  Included are two items that I posted in my weekly columns that I said I would repost in today’s missive, if you didn’t have time for them then.


ObamaTrade is Dead: White House Abandons TPP as E.U. Halts Trade Talks After Trump Victory

It appears the entire ‘ObamaTrade’ farce is collapsing under the weight of its secrecy and corporatocracy in the immediate aftermath of Trump’s triumph. First this morning, Bloomberg reported that E.U. Trade Commissioner Cecilia Malmstrom said E.U.-U.S. negotiations on a free-trade agreement are on hold, and now the WSJ reports that the Obama administration on Friday gave up all hope of enacting its sweeping Pacific trade agreement, denting American prestige in the regions at a time when China is flexing its economic and military muscle.

Just days after Donald Trump won the election, all of Washington’s major trade deals are dead or dying. 

As Joe Joseph reports, both Mexico and Canada have agreed to re-negotiate the North American Free Trade Agreement (NAFTA) signed under President Clinton.

“With the new president-elect, we don’t really know what will happen,” Malmstrom told reporters on Friday in Brussels. “There is strong reason to believe that there will be a pause in TTIP, that this might not be the biggest priority for the new administration.”

“Whether it makes sense to have new rounds — well probably not,” Malmstrom said on Friday.

 Just days after Donald Trump surprise victory, U.S. officials said Republican congressional leaders had made clear that they wouldn’t consider the 12-nation Trans-Pacific Partnership in the remainder of Mr. Obama’s term. The White House had lobbied hard for months in the hope of moving forward on the pact if the Democratic nominee, Hillary Clinton, had won.

This Zero Hedge article appeared on their Internet site at 6:25 p.m. on Friday evening EST — and another link to it is here.

Trump bucks protocol on press access

Donald Trump is keeping Americans in the dark about his earliest conversations and decisions as president-elect, bucking a long-standing practice intended to ensure the public has a watchful eye on its new leader.

Trump on Thursday refused to allow journalists to travel with him to Washington for his historic first meetings with President Barack Obama and congressional leaders. The Republican’s top advisers rebuffed news organizations’ requests for a small “pool” of journalists to trail him as he attended the meetings.

The decision was part of an opaque pattern in Trump’s moves since his victory Tuesday. He was entirely out of sight on Wednesday. His aides said he was huddled with advisers at his offices in New York. His team has not put out a daily schedule, or offered any detailed updates on how he has spent his time. They have not acknowledged phone calls or other contact with world leaders.

As a candidate, Trump railed against the press as “disgusting” and “dishonest.” He refused to allow a pool of campaign reporters and photographers to fly on his plane to events, sometimes starting his rallies before his press corps had arrived. The practice did not extend to his running mate, Mike Pence, who was followed by a traditional pool of journalists.

This decision could leave Americans blind about his whereabouts and well-being in the event of a national crisis,” said Jeff Mason, White House correspondent for Reuters and the group’s president. “Not allowing a pool of journalists to travel with and cover the next president of the United States is unacceptable.

Unacceptable?”  Well, excuse me!  The way the main stream media has treated Trump since his road to the White House began, is good enough reason for me to use as an excuse to never talk to them again.  The AP story, filed from Washington, put in an appearance on their Internet site on Friday sometime — and it comes from Zero Hedge via Brad Robertson.  Another link to it is here.

Trump staff line up for White House jobs

The political castoffs, never-have-beens and backbench legislators who surround Donald Trump were warned that their work for the nominee would forever stain their résumés. Now they’re in line for the most influential jobs in Washington.

Résumés are rolling in from operatives looking for administration work — offering one of the surest signs that whatever wound was opened during the ugly GOP primary has been healed by Tuesday night’s stunning victories that handed both the White House and Congress to the Republican Party.

“He couldn’t even staff the campaign because no one wanted to be associated with him,” said one Trump ally. “It’s different now, but there’s going to have to be a lot of forgive and forget. A lot of people who stayed away from this campaign could be a lot of help now, and both sides will have to get over it.”

Now, as the president-elect prepares to fly to the capital to meet with President Barack Obama, the Republican is closing in on several crucial appointments.

This interesting behind-the-scenes story was posted on the Internet site at 5:09 a.m. on Thursday morning EST — and I found it embedded in a GATA release.  Another link to it is here.

John Pilger: “The Truth is…There Was No One to Vote For

Afshin Rattansi goes underground on the U.S. election results.  Author and documentary filmmaker John Pilger tells us what has been revealed by Trump winning the U.S. election.

Plus, what does a Donald Trump presidency mean for the Middle East?

This 28:19 minute video interview was posted on the Internet site on Wednesday — and in my opinion its worth watching.  Another link to it is here — and I thank Ifan Williams for bringing it to our attention.

Trump elected as President: Risks and opportunities — The Saker

So it has happened: Hillary did not win!  I say that instead of saying that “Trump won” because I consider the former even more important than the latter.  Why?  Because I have no idea whatsoever what Trump will do next.  I do, however, have an excellent idea of what Hillary would have done: war with Russia.  Trump most likely won’t do that.  In fact, he specifically said in his acceptance speech:

“I want to tell the world community that while we will always put America’s interests first, we will deal fairly with everyone, with everyone — all people and all other nations. We will seek common ground, not hostility; partnership, not conflict.”

And Putin’s reply was immediate:

“We heard the statements he made as candidate for president expressing a desire to restore relations between our countries. We realise and understand that this will not be an easy road given the level to which our relations have degraded today, regrettably. But, as I have said before, it is not Russia’s fault that our relations with the United States have reached this point.

Russia is ready to and seeks a return to full-format relations with the United States. Let me say again, we know that this will not be easy, but are ready to take this road, take steps on our side and do all we can to set Russian-US relations back on a stable development track.

This would benefit both the Russian and American peoples and would have a positive impact on the general climate in international affairs, given the particular responsibility that Russia and the US share for maintaining global stability and security.”

This exchange, right there, is enough of a reason for the entire planet to rejoice at the defeat of Hillary and the victory of Trump.

This rather brief commentary was posted on the Internet site on Wednesday sometime — and it’s a must read for any serious student of the New Great Game.  I thank Larry Galearis for pointing it out — and another link to this article is here.

Helicopter Money President’ Trump to Create Inflation — and Gold Will Rise

James Rickards, economic and monetary expert, joined Francine Lacqua on “Bloomberg Surveillance” yesterday to discuss Trump and whether he will be good for markets, the economy and for gold.

Rickards said that Trump’s Presidency , which he predicted, will be good for gold as he will be the ‘Helicopter Money President’ and he will spend dollars on U.S. infrastructure and the U.S. military. This will cause inflation which will benefit gold:

“Trumps individual policies sound attractive. Who does not want better infrastructure? Who does not want better defense?

But when you add them all up, this is going to mean much larger deficits.

He is the ‘Helicopter Money President’ … the irony is that people like Larry Summers and Paul Krugman are bashing Trump and Summers compared Trump to Mussolini and yet Trump’s policies are Larry Summer’s policies – more deficits, fiscal spending, helicopter money …”

Rickards is a regular commentator on finance, and is the author of The New York Times bestseller Currency Wars: The Making of the Next Global Crisis, published in 2011, The Death of Money: The Coming Collapse of the International Monetary System, published in 2014, and The New Case for Gold, published in 2016.

Bloomberg has split the interviews into two – Watch here and here

This Bloomberg interview with Jim was embedded in a post over at Mark O’Byrne’s website on Friday — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

Peso crisis could trigger next dollar-debt crisis in Mexico

Within hours of Trump’s electoral triumph, the Mexican peso, which has become the number-one hedge against a Trump victory, had slumped a staggering 13{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to its lowest point in history and its steepest intraday dive since 1994-5, when the Tequila Crisis came within a hair’s breadth of bringing down Mexico’s financial system, and with it some of the biggest names on Wall Street, including Citi and Goldman, before the Federal Reserve, US treasury, IMF, and Bank of International Settlements hastily intervened.

By the end of Wednesday’s trading, it recovered a little to close at 19.84 pesos to the dollar, down 8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} for the day. Today, the peso fell another 4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, ending the day at 20.67 to the dollar. A hurricane — as Mexicans are fond of calling Donald Trump — is approaching. Thanks primarily (but not only) to Trump’s march on the White House, the peso has lost 18{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of its value against the dollar this year, more than any other major currency except for the pound sterling. But the peso’s current woes began long before Trump announced his intention to run for president.

At the beginning of 2014, it took just over 13 pesos to buy a dollar. Now it takes more than 20. According to some analysts it could soon be 25.

Since Tuesday, Mexico’s monetary authorities have been on red alert but as yet have done nothing to staunch the peso’s decline, largely because there’s embarrassingly little they can actually do, as Mexican Secretary of Finance José Antonio Meade Kuribreña all but conceded just days before the election.

The northern peso, the Canadian dollar, isn’t doing so hot, either.  This article appeared on the Internet site on Thursday — and I thank Richard Saler for sharing it with us.  Another link to it is here.

Trump Spells End of Normality for Europe

Donald Trump’s election has put establishment politicians in Europe in a state of panic. In Berlin, nobody knows what the U.S. president-elect intends to do. In Brussels, fears are growing he will put wind into the sails of the growing anti-E.U. populist movement.

Angela Merkel has no lack of experience in dealing with egocentric men. The chancellor has known Russian President Vladimir Putin for years and she speaks regularly with Turkish President Recep Tayyip Erdogan on the phone.

After the surprising victory of self-made politician Donald Trump in the U.S. presidential elections, another member of this species will now be added to the group. No wonder, then, that the German chancellor wanted to call the new U.S. president-elect as quickly as possible on Wednesday.

The only problem was that no one in the German government had a number to call. It was only after the Chancellery in Berlin requested assistance from the German Embassy in Washington that they were able to reach a contact close to Trump.

The election victory of Trump, literally the embodiment of the new wave of angry voters, creates fresh challenges for the German political elite, not just when it comes to the phone directory. Most leading politicians among both the center-right Christian Democrats (CDU) and the center-left Social Democrats (SPD) had been convinced that Democratic rival Hillary Clinton would prevail in the election. Now they are all facing the same difficult question. How do you react when the incoming occupant of the most powerful position in the Western world sees himself as a populist and is threatening to end traditional Western alliances?

This 2-part essay by the staff writers over at the German website put in an appearance on the Internet site at 8:06 p.m. Europe time yesterday evening, which was 2:06 p.m. in Washington — EST plus 6 hours.  Another link to this article is here — and I consider it worth reading.  I thank Roy Stephens for finding it for us.

Trump and the Kremlin: John Batchelor interviews Stephen F. Cohen

Americans will hear in this foreshortened podcast what the repercussions of a Trump victory will mean to their foreign policy and that of Russia. That subject has been studiously avoided, for the most part, in the American MSM this Wednesday morning.  Please understand the podcast was recorded before the Trump victory became reality. For the limited appeal of a post election joke: Trump and Putin won the presidency yesterday.

Cohen begins with describing the alarm in the Kremlin over American threats to commit a cyber-attack on Russia – a threat that Russians take as an act of war and hence are very upset. And, Cohen expands that Clinton’s presidential efforts have been not just against Trump, but against Trump and Putin.  He is also of the opinion that her dual opposition treatment did not find much voter support with the people. In this he is certainly correct. It would seem that Americans want to cooperate with Russia against ISIS in Syria, even as the majority are anti-Russian.  Again the Clinton campaign has done damage to limit public discussion about Russia, and Cohen maintains a speculation that Putin gets blamed for Trump winning.  But Cohen is correct that the damage done to the electoral process in the United States was done by Hillary Clinton, So far the blame is not falling far from that nest either – and I think that is significant.

As I write these words I have the benefit of hindsight and some of the post-election discussions on American MSM – not pro Trump networks either – do not mention Putin. In fact there was even a mention that Clinton likely ran the worst campaign in American History. This is probably important as a media distancing move to what they perceive as a shift in foreign policy from Trump come January. In other words I was surprised by how fair the discussions were about Trump’s victory from MSM networks formerly very hostile towards him.

But what Cohen sees ahead is a chance for a different relationship with Russia. It won’t be easy, as the status quo will resist any moderation of the NCW [New Cold War]. The elites have accomplished that much. It will be most interesting to see how much Trump compromises in his dealings with the Pentagon and whether his moderate statements about a new foreign policy will be acted upon.

This 40-minute audio interview was posted on the Internet site on Tuesday — and I thank Ken Hurt for sending me the link.  But, as always, the biggest THANK YOU of all goes to Larry Galearis for providing the above executive summary.  Another link to it is here.

China’s Yuan Set for Steepest Weekly Loss Since January Turmoil

China’s currency headed for its steepest weekly drop since January, when a series of weaker fixings roiled global financial markets, as Donald Trump’s election victory boosted the dollar and raised the threat of a more protectionist America. Bonds tumbled.

The yuan fell 0.05 percent to 6.8121 per dollar as of 5:33 p.m. in Shanghai, approaching the 6.83 level at which China pegged its currency after the 2008 global financial crisis. The exchange rate fell 0.9 percent this week to a six-year low as Trump’s unexpected win spurred a tectonic shift in fund flows. There was a flurry of activity in the evening, with the yuan erasing the day’s losses amid speculation of central bank intervention. The 10-year yield on government debt climbed 10 basis points this week, the most since May 2015.

Bloomberg’s dollar index held near an eight-month high amid speculation the Federal Reserve will boost interest rates to cap inflation as a Trump-led administration steps up spending. Trump has also threatened punitive tariffs on China’s imports. Accelerating declines in the yuan are a turnaround from the August-September period, when policy makers were suspected of propping up the currency before its entry into the IMF’s reserves basket.

This story was posted on the Bloomberg website at 7:14 p.m. Denver time on Thursday evening — was updated about eight hours later.  I found this news item on Doug Noland’s website — and another link to it is here.

Doug Noland: What a Week!

From my perspective, it was anything but a so-called “bullish” week. I saw alarming evidence of dysfunctional markets. There was also further confirmation of a bursting bond Bubble. Indeed, there was strong support for the view of a faltering global securities Bubble – even in the face of surging U.S. stock prices.

Let’s return to election late-night. I doubt traders and the more sophisticated market operators will easily forget what almost transpired. It’s worth noting that while S&P500 futures and the Mexican peso were collapsing, the yen was in melt-up. In just over two hours, the dollar/yen moved from 105.47 to 101.22 – an almost 4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} move. Meanwhile, EM and higher-yielding currencies were under intense selling pressure – the Brazilian real, South African rand, Turkish lira, Colombian peso, Australian dollar and New Zealand dollar (to name a few). At the same time, gold surged from $1,270 to $1,338. Crude sank 4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. Global markets were on the brink of a serious episode of speculative de-leveraging.

There had been significant hedging across global markets going into the U.S. election. Especially after Monday, the markets viewed a Trump win a low probability. With markets shaky of late, along with an approaching historic political event, enormous derivative positions had accumulated in various markets. In the event of a surprising outcome, those that had written (sold) market “insurance” would be forced to aggressively (“dynamically”) hedge their losses by selling/shorting into already weak markets – perhaps even with major markets highly illiquid (or already halted limit down).

When a marketplace significantly hedges against a perceived low-probability event – and the unexpected actually occurs – contemporary markets face dislocation. Markets simply can’t hedge themselves. To offload risk, someone has to be on the other side of hedging trades – and these days that someone generally has a sophisticated trading model requiring selling/shorting to ensure positions capable of generating the necessary cash-flow to offset derivative losses. Significant derivative-related selling risks a (“Black Monday” 1987) portfolio insurance debacle of selling betting selling, begetting illiquidity and panic.

Tuesday’s election outcome was at the cusp of creating a very serious test for global derivatives markets. It was not, however, meant to be, as another one of those well-timed miraculous reversals transformed potential panic selling into manic buyers’ panic. Instead of those on the wrong side of derivative trades forced to sell into illiquid markets, it became a frenzy of bearish hedges and speculations unwinds. Another memorable short squeeze.

This must read Credit Bubble Bulletin by Doug put in an appearance on his Internet site just after midnight Denver time — and another link to it is here.

Bullion Star’s Torgny Persson explains fraud of bullion banking and its defense of fiat money system

In his address last month [October 19] to Bullion Star’s precious metals seminar in Singapore, the firm’s proprietor, Torgny Persson, gave a masterful description of the fraud of bullion banking — its manufacture of imaginary gold — and explained how this fraud is crucial to the defense of the fiat money system.

If only Persson could be invited to give the speech at mainstream financial conferences. It’s titled “Bullion Banking 101” and it was posted at Bullion Star’s internet site on Thursday sometime.

It’s longish, but certainly worth reading — and I thank Chris Powell for the above paragraphs of introduction.  This was posted in yesterday’s column — and I said I would repost it in today’s column if you didn’t have time for it on Friday — and here it is.  Another link to it is here.

Kirkland rejects C$1.44 billion Gold Fields, Silver Standard offer

Canada’s Kirkland Lake Gold Inc said on Friday it rejected a previously unreported takeover offer from South Africa’s Gold Fields Ltd and Silver Standard Resources valuing the business at C$1.44 billion ($1 billion).

Reuters reported earlier on Friday that Gold Fields and Silver Standard had made three joint, unsolicited bids for Kirkland and recently sweetened their offer to about C$1.4 billion. The names of the bidders had not been previously disclosed.

Kirkland said that after advice from its legal advisers and three separate financial advisers, it concluded the proposal was “not financially superior” to its own plan to acquire Newmarket Gold Inc for about C$1 billion in stock.

“As a result Kirkland Lake Gold is precluded by the terms of the arrangement agreement with Newmarket from engaging in any discussions with Gold Fields or Silver Standard concerning the revised proposal or providing any due diligence access to them,” Kirkland said in a statement.

It also “strongly recommended” shareholders vote in favor of the Newmarket deal.

Well, dear reader, I thought it was just politics that made for strange bedfellows…but now we have this!  This Reuters story, co-filed from Toronto and Vancouver, showed up in revised form on their Internet site at 4:52 p.m. EST on Friday afternoon — and I found it embedded in a GATA release.  The original Reuters headline was “Gold Fields, Silver Standard offer C$1.4 billion for miner Kirkland Lake” — but the offer was rejected after the story was originally filed — and that’s why it has been changed to reflect that.  Another link to it is here.

Rick Rule on BNN for 45 Minutes: Taking questions on precious metal stocks

Rick Rule, president and CEO, Sprott U.S. Holdings Inc. takes your questions on precious metals stocks.

This 46:16 minute video clip appeared on the Internet site yesterday sometime — and it’s certainly worth your while if you have the time.  I thank Ken Hurt for sending it along.

Chris Martenson Interviews Silver Analyst Ted Butler

Ted and Chris hooked up about a week ago for this audio interview.  It runs for 60 minutes — and it certainly falls into the absolute must listen category.

This was in my Thursday column.  But as I said at the time, because of length reasons, it was also going to appear in today’s column — and here it is.  If you want to know exactly what’s been happening in the precious metals for the last week, especially yesterday, you have to listen this.   End of story.


Here are two more photos that Bob Anthony took while walking along the ocean around Cape Town, South Africa.  Along with the African penguin photos in Thursday’s column, he also came across this small troupe of baboons, plus this ostrich.  To see them, plus the ocean in the same shot I thought rather incongruous, because that’s certainly not the normal environment we always envision that they would be in.161112image005  The Click to Enlarge feature really helps here.



Today’s pop ‘blast from the past’ commemorates the passing of Canadian singer/songwriter/poet/legend Leonard Cohen.  Although I was well aware of who is was all my adult life, I was never a huge fan of his music — and don’t know it all, as it just wasn’t to my taste.  But my taste means nothing in the grand scheme of things.  So onto I went — and I came up with this number, which is approaching 50 million views — and the link is here.  May he rest in peace.

Today’s classical ‘blast from the past’ comes from early 20th century England.  It’s been years since I’ve posted this work — and the main reason is because of its length.  It took me twenty plus years to appreciate this composition for what it is — and now it’s certainly in my Top 5 favourite violin concertos of all time.  It’s Edward Elgar’s Violin Concerto in B minor, Op. 61.

It’s one of his longest orchestral compositions, and the last of his works to gain immediate popular success.

The work was started in 1905, and was officially commissioned in 1909 — and was composed for violinist Fritz Kreisler, who gave the premiere in London on 10 November 1910, with the composer conducting — that’s 106 years ago this month.  Plans by the recording company His Master’s Voice to record the work with Kreisler and Elgar fell through, and the composer made a recording with the teenaged Yehudi Menuhin that has remained in the catalogues since its first release in 1932.

And as good as this performance by violinist Tasmin Little is, the recording itself is only just so-so.  It pales when compared to hearing it live and in concert.  The link is here.

Well, dear reader, yesterday’s price action during the COMEX trading session in New York yesterday should leave no doubt in your mind that JPMorgan et al are loaded for bear — and the brain-dead/black-box Managed Money traders are the victims as always.

They’re also appear to be in a hurry as well, as they were taking no prisoners on Friday, especially in silver, as that’s the biggest 1-day engineered price decline I can remember since the May 1, 2011 drive-by shooting.  They took out silver’s 50 and 200-day moving averages in one go, just like they did in gold the other day.

I would suspect that this is the beginning of the final flush in the precious metals that Ted Butler has been predicting since earlier this year.

Here are the 1-year charts for all four precious metals, plus the 6-month charts for copper and crude oil, so you can survey the damage for yourself.161112-1-year-gold


But how far down in price for the precious metals from here, you ask?

Well, I know in part what Ted will say in his weekly review today — and that 1] it’s not the price, it’s ‘The Count’ that is important now.  How many long positions can ‘da boyz’ get the Managed Money traders to puke up — and how far on the short side can they get them in process and, 2]  at what point will JPMorgan decide that it has covered enough of its short position in silver [and possibly in gold as well] that it can let prices rip to the upside with little or no financial damage to itself — and leave the remaining Big 7 and the Managed Money traders et al on the hook for losses in the short-covering rally that is sure to follow.

Of course all of this can only happen, as Ted also said, on sharply lower prices — and well below their 200-day moving averages, especially for gold and silver.  Don’t forget…it’s ‘The Count’ not ‘The Price’ that matters from hereon in.

This week’s COT Report, when it finally shows up on Monday, will be ‘yesterday’s news’ in most respects.  But Ted is hoping it will reveal important clues about what that Big 4 in silver are up to during the reporting week — and by that he means the ‘Big 1’ — JPMorgan.

They are, as this month’s Bank Participation Report shows, the only U.S. bank that is net short in silver in the COMEX futures market, as the remaining 4 U.S. banks are either market neutral, or net long by a bit.

So we wait some more.

But I’ll tell you in advance that I’ll be a buyer on Monday, as First Majestic Silver — along with a whole raft of other silver equities — looks pretty tasty at its current price.

That’s all I have for the day — and the week — and I’ll see you here on Tuesday.


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