Ted Butler: Has the Worm Turned?

04 March 2017 — Saturday


The gold price didn’t do much in morning trading in the Far East on their Friday — and began to head lower starting at 1 p.m. China Standard Time.  That sell-off ended very shortly after London opened — and then it traded sideways until about thirty minutes before the COMEX open.  The smallish rally that developed at that point got capped and then sold lower starting right at the open, with the low tick of the day coming a few minutes after 11:30 a.m. in New York.  It rallied in rather choppy fashion until the COMEX close, then away it went to the upside, as the dollar index cratered.  By minutes before 2:30 p.m. in the thinly-traded after-hours market, it was up 10 bucks — and back above Thursday’s close by a dollar or so.  From there it chopped quietly lower into the 5:00 p.m. close.

The low and high ticks were reported as $1,223.00 and $1,236.70 in the April contract.

Gold finished the Friday session in New York at $1,234.30 spot, up 30 cents on the day.  Net volume was, as always, over the moon at 242,000 contracts, which is about the same volume as Thursday’s.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson.  There wasn’t much volume in Far East trading, but it began to pick up around 23:00 Denver time on Thursday evening, which was 1:00 p.m. the following afternoon in Shanghai.  The real action got underway starting around 6:00 a.m. MST/8:00 a.m. in New York, when the price began to rally after trading flat in London for most of the day.  But the big surprise was the monstrous 12,000 contract volume spike at 11:00 a.m. Denver time/1:00 p.m. EST, which is also visible in the price action on the Kitco price chart above.  The low tick of the day in the April contract actually occurred at that point.  Once the post-COMEX close rally was done, volume faded, but did not get back to background until the last hour of trading before the 5:00 p.m. close.

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‘ feature is a must.

Except for a tiny down/up spike about forty minutes before the COMEX open on Friday morning, the silver price really didn’t do much, or wasn’t allowed to do much yesterday, until its rally began after the COMEX close as well.  It blasted back through unchanged in an instant, but then ran into ‘resistance’ — and was finally capped at the $17.95 level shortly after 3 p.m. EST.  It traded mostly flat from there for the rest of the Friday session.

The low and high tick in silver was recorded by the CME Group as $17.66 and $18.01 in the May contract.

Silver was closed at $17.945 spot, up 22.5 cents from its Thursday close.  Net volume was very heavy at just under 75,000 contracts.

And here’s the 5-minute tick chart for silver, courtesy of Brad as well.  There’s not a lot to see, although you should note that there was a volume/price spike at the same 11 a.m. MST/1 p.m. EST moment that there was for gold.  Volume was back to background by 1:30 Denver time/3:30 p.m. in New York.

Like for the 5-minute tick chart for gold, 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‘ feature is a must as well.

Like the other three precious metals, the platinum price also rallied a bit in the very early going once trading began at 6:00 p.m. EST in New York on Thursday evening.  It was sold very quietly lower like silver and gold, with the low tick coming at the Zurich open.  It rallied until around noon CET — and then drifted lower into the London p.m. gold fix.  The price traded flat until noon EST — and then rallied like the other three precious metals, with most of the gains of the day in by around 2:30 p.m. in the after-hours market.  Platinum closed on its high tick of the day at $996 spot, up 11 bucks from it’s close on Thursday.

Palladium traded a dollar or two higher throughout the Friday session in the Far East — and right up until about 10 a.m. CET in Zurich.  It began to quietly sell off from there — and about thirty minutes before the COMEX open, it collapsed to its $753 low tick of the day at around 9 a.m. in New York.  It was ‘rally time’ after that — and it ran out of gas/was capped around 3 p.m. in after-hours trading.  Like platinum, it traded flat from there into the close.  Palladium finished the Friday session at $772 spot, up 7 dollars on the day.

The dollar index closed very late on Thursday afternoon in New York at 102.13 — and continued heading lower once trading began at 6:00 p.m. EST.  It was back to a hair above the 102.00 mark by shortly after 11:30 a.m. in Shanghai.  It made it back to unchanged by the London open, but then headed lower for good starting at 10:30 a.m. GMT.  It got ‘rescued’ at the COMEX open — and chopped very unsteadily higher until the 1:30 p.m. COMEX close…then down it went, finishing the Friday session almost on its low tick of the day at 101.34 — and down 79 basis points from its Thursday close.

Here’s the 6-month U.S. dollar index chart, which you can read into whatever you wish.

The gold stocks opened unchanged — and chopped around either side of that mark until shortly before 2 p.m. in New York.  They shot higher from there, with most of the day’s gains in the bag by 2:30 p.m.  Then they sagged a bit from there into the close.  The HUI finished higher by 1.77 percent.  I should point out the unusual price action in the shares, followed the unusual price action in the metal itself that occurred around 1 p.m.

The silver equities opened down a hair, rallied into positive territory briefly, then headed back into negative territory even before the London p.m. gold fix.  They chopped lower until around noon EST — and then began to edge higher, complete with the 1:00 p.m. EST down/up price action.  Once the silver price began to head higher after the COMEX close, the silver shares followed with great enthusiasm — and Nick Laird’s Intraday Silver Sentiment/Silver 7 index closed higher by 2.13 percent.  Click to enlarge if necessary.

And here are three charts from Nick that shows the unhappy news for the week, month — and year-to-date.  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.   The Click to Enlarge feature really helps on all three.

And the chart below shows the month-to-date changes as of Friday’s close — and there are only 3 days of reporting in it, so it doesn’t mean a lot.

And here are the year-to-date changes…

You should note on the year-to-date chart above, that the metal has outperformed the shares — and I’m still looking for a reason why that is so.

The CME Daily Delivery Report showed that 1 gold and 343 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In silver, the only short/issuer worthy of the name was Macquarie Futures out of its own account, with 315 contracts — and Citigroup was an “also ran” with 19 contracts out of its client account.  The largest long/stopper by a country mile was…drum roll please…JPMorgan with 366 contracts in total:  249 for its own account, plus 87 for its client account.  Morgan Stanley picked up the remaining 6 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

So far in March, after five days of posted deliveries, JPMorgan has stopped 1,479 silver contracts…1,092 for its own account, plus 387 contracts for its clients.  I know that Ted will have lots to say about this in his weekly review later today.

The CME Preliminary Report for the Friday trading session showed that gold open interest in March rose by 1 contract, leaving 46 still open, minus the 1 contract mentioned above.  Thursday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery on Monday, so that means that 5+1=6 more gold contracts were added to the March delivery month.  Silver o.i. in March declined by 319 contracts, leaving 2,633 still around, minus the 343 contracts mentioned two paragraphs ago.  Thursday’s Daily Delivery Report showed that 302 silver contracts were actually posted for delivery on Monday, so that means that 319-302=17 silver contract holders covered their positions and departed the March delivery month.

Not surprisingly, there was a very decent sized withdrawal from GLD yesterday, as an authorized participant removed 152,365 troy ounces.  There was also a huge withdrawal in SLV as well, totalling 2,368,200 troy ounces.  Whether or not this was a ‘plain vanilla’ withdrawal based on Thursday’s price action, or a conversion of shares by Ted’s favourite bank, remains to be seen.  Whatever he has to say about it in his weekly review later today should be taken as the definitive answer on that.

For the third day in a row, there was no sales report from the U.S. Mint — and zero sales month-to-date.  There were sales this past week, but all were in February — and I’ve already done the wrap for that month already.

It was fairly quiet in gold over at the COMEX-approved gold depositories on Thursday.  There was 1,607.500 troy ounces/50 kilobars [U.K./U.S. kilobar weight] deposited at the Manfra, Tordella & Brookes, Inc. depository — and they shipped out 1 kilobar as well.  There was also some ‘out’ activity at Canada’s Scotiabank — 16,075.000 troy ounces/500 kilobars [U.K./U.S. kilobar weight].  The link to this small amount of activity is here.

After nothing in Wednesday’s report, it was a pretty busy day in silver on Thursday, as 1,740,385 troy ounces were received — but only 112,253 troy ounces were shipped out the door.  There was a container load into Brink’s, Inc., CNT and Scotiabank — and 90 percent of the ‘out’ activity was from Scotiabank as well, with the rest out of Delaware.  The link to that action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 452 kilobars — and shipped out 615 of them.  All of the activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, certainly showed increases in the commercial net short positions in both silver and gold.  In silver, it wasn’t quite as bad as I feared it might be, but in gold it was far worse than I was expecting.

But in almost every respect this COT Report is already “yesterday’s news” after what ‘da boyz’ did to the precious metals on Thursday and Friday.  So what I have to say below, should be looked at in an historical context.

In silver, the commercial net short position increased by 5,777 contracts, or 28.9 million troy ounces of paper silver.  The commercial net short position in silver is now up to 540.1 million troy ounces — and within a few thousand ounces of its all-time record high of last summer.  They arrived at this 5,777 contract number by selling 1,853 long contracts, plus they picked up 3,924 short contracts…all of these courtesy of the Managed Money traders.

Ted said that the Big 4 traders added about 2,000 contracts to their already obscene short position — and he attributed all of the increase to JP Morgan — and pegs their short position at 30,000 contracts.  The ‘5 through 8’ large traders added about 700 contracts to their short positions — and Ted’s raptors, the commercial traders other than the Big 8, added around 3,100 contracts to their ever-increasing short position.

Under the hood in the Disaggregated COT Report, it was all Managed Money trader activity, plus more.  They purchased 6,323 long contracts, plus they covered 1,090 short contracts, for a total reporting week swing of 7,413 contract.  As usual, what the traders did in the other two categories…the Other Reportables and the Nonreportable/small trader category…was irrelevant.

Here’s the 3-year COT chart so you can see that last twelve month period in more detail — and how close yesterday’s COT short position in silver is to its record high back in the summer of 2016.  Click to enlarge.

In gold, the commercial net short position blew out by an astonishing 40,343 contracts, or 4.03 million troy ounces of paper gold.  The commercial net short position in gold is now up to 17.99 million troy ounces.

They arrived at the 40,343 contract number by selling 3,681 long contracts, plus they added a whopping 36,662 short contracts.  Ted said that the Big 4 traders increased their short position by only 7,500 contracts — and the big ‘5 through 8’ traders by only 7,200 contracts.  The really heavy lifting was by Ted’s raptors, as they sold their remaining 19,700 long contracts, plus they added about 5,900 contracts on the short side.

Under the hood in the Disaggregated COT Report, it was almost all the Managed Money traders during the reporting week as well, as they purchased 23,798 long contracts — and decreased their short position by 12,406 contracts, for a total swing of 36,204 contract.  The other approximately 4,000 contracts came courtesy of the traders in the Other Reportables category.

Here’s the 3-year COT chart for gold — and because it was never allowed to break above its 200-day moving during this rally, it’s hard to say how much improvement occurred since the Tuesday cut-off.  And despite the big increase in the commercial net short position during the reporting week, the COMEX futures positioning in gold is still bullish.  Click to enlarge.

As I said at the start of my discussion on the COT Report, it’s already yesterday’s news — and how much improvement we had in both silver and gold since the cut-off is not knowable, as we still have two more trading days left in the current reporting week.  As usual, I’ll have a ‘guess’ for you in my Wednesday column next week.

Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 155 days of world silver production—and the ‘5 through 8’ traders are short an additional 57 days of world silver production—for a total of 212 days, which is seven months of world silver production, or about 515.1 million troy ounces of paper silver held short by the Big 8. [In last week’s report the Big 8 were short 207 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 495.1 million troy ounces.  So for the third week in a row, the commercial net short position is larger than the short position held by the Big 8 traders — to the tune of 540.1 – 515.1 = 25.0  million troy ounces…give or take.  What that means in plain English is that Ted’s raptors, the commercial traders other than the Big 8, have gone net short in silver, after being net long for what seemed like forever.  This is never a bullish sign.

In my conversation with Ted yesterday, he pegs JP Morgan’s short position at around 30,000 contracts, or 150 million ounces, which is up from the 28,000 contracts/140 million ounces they were net short a week ago.  150 million ounces works out to around 61 days of world silver production that JPMorgan is short.  That’s compared to the 212 days that the Big 8 are short in total.

The approximate short position in silver held by Scotiabank works out to around 54 days of world silver production.  For the third week in a row, JP Morgan is back as the number one short holder in silver in the COMEX futures market.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 115 days of world silver production between the two of them—and that 115 days represents 74 percent of the length of the red bar in silver in the above chart…three quarters of it!  The other two traders in the Big 4 category are short, on average, about 20 days of world silver production apiece.  The four traders in the ‘5 through 8’ category are short, on average, a bit over 14 days of world silver production apiece.

The short positions of Scotiabank and JP Morgan combined, represents about 54 percent of the short position held by all the Big 8 traders combined.  How’s that for a concentrated short position within a concentrated short position?

The Big 8 are short 52.2 percent of the entire open interest in silver in the COMEX futures market — and that number would be close to 60 percent once the market-neutral spread trades are subtracted out.  In gold it’s 39.0 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 42 days of world gold production, up from 39 days last week — and the ‘5 through 8’ are short another 20 days of world production, which is up from 18 days from the prior week, for a total of 62 days of world gold production held short by the Big 8.  Based on these numbers, the Big 4 in gold hold about 68 percent of the total short position held by the Big 8.  How’s that for a concentrated short position within a concentrated short position?  At least it’s not quite as bad as silver in that regard, but close enough to be considered the same, which is outrageous.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 73, 75 and 71 percent respectively of the short positions held by the Big 8.  All these percentages are virtually unchanged from last week’s COT Report — and the week before that, as well.

Even adding in the one or two stories that I’ve been saving for my Saturday column, I don’t have much for you again today — although several of them will take up some of your time.   They’re certainly worth it, if you can find it.  And if you’re looking for the Batchelor/Cohen interview this week, there wasn’t one.


It’s Trump’s Party, Now — Patrick Buchanan

Before the largest audience of his political career, save perhaps his inaugural, Donald Trump delivered the speech of his life.

And though Tuesday’s address may be called moderate, even inclusive, Trump’s total mastery of his party was on full display.

Congressional Republicans who once professed “free-trade” as dogmatic truth rose again and again to cheer economic nationalism.

We’ve lost more than one-fourth of our manufacturing jobs since NAFTA was approved,” thundered Trump, “and we’ve lost 60,000 factories since China joined the World Trade Organization in 2001.”

Yet a Republican party that embraced NAFTA and voted MFN for China every time it came up gave Trump standing ovations.

This commentary by Pat showed up on his website at 8:54 p.m. EST on Thursday evening — and I thank Roy Stephens for sharing it with us.  Another link to it is here.

What Is To Be Done? — Paul Craig Roberts

The question in the title is V.I. Lenin’s question. His answer was to create a revolutionary “vanguard” to spread revolutionary ideas among the workers, the economic class that Karl Marx had declared to be the class rising to the ascendency of political power. Finally, democracy, frustrated by upper class interests in its earlier manifestations, would become reality. The workers would rule.

Given the presence of evil and human failing, it did not work out in that way. But Lenin’s question remains a valid one. Americans whose economic life and prospects for their children have been destroyed by the offshoring of American manufacturing and tradeable professional skills jobs, such as software engineering, answered the question by electing Donald Trump.

The Americans, dispossessed by the offshoring corporations, elected Trump, because Trump was the only American running for a political office who called attention to the problem and declared his intention to fix it.

By standing up for Americans, Trump alienated the global corporations, their executives and shareholders, all of whom benefit from stealing the economic life of Americans and producing abroad where labor and regulatory costs are lower. Neoliberal junk economists describe this labor arbitrage, which reduces the real incomes of the American labor force, as the beneficial working of free trade.

This commentary by Paul was posted on his website on Friday sometime — and I found it embedded in a Zero Hedge article.  Another link to it is here.

Doug Noland: Reality vs. the Neutral Rate

How about a cursory look at recent economic data: February’s 57.7 ISM Manufacturing reading was the strongest since August 2014. New Orders at 65.1 matched the strongest level (Dec. 2013) since 2009. Prices Paid at 68 was only slightly below January’s 69, the strongest since 2011. February’s ISM Non-Manufacturing Index rose to 57.6, the highest since October 2015 (58.1). Auto sales in February were just below record levels. Last week’s Initial jobless claims (223,000) were the lowest since March 1973. Weekly mortgage purchase applications bounced back to near seven-year highs. Trade deficits are running at the widest level since before the crisis.

The PCE (Personal Consumption Expenditure) Deflator was up 0.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in January, increasing y-o-y gains to 1.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. This matched the highest y-o-y reading in almost five years. Core PCE was up 0.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} for the month, pushing y-o-y gains to 1.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

The Conference Board’s February Consumer Confidence reading rose to the highest level since July 2001. At 133.4, the Conference Board Present Situation index jumped to the high since July 2007 – and is now only five points away from a 15-year high. Personal Income added 0.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in January, increasing y-o-y income growth to 4.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

After incredible 2016 inflows of $305 billion, Vanguard has attracted flows of $80 billion in just the first two months of the year.

Doug’s weekly Credit Bubble Bulletin showed up on his Internet site very late last night Denver time — and another link to it is here.

Venezuela is down to its last $10 billion

Venezuela only has $10.5 billion in foreign reserves left, according to its most recent central bank data.  For rest of the year, Venezuela owes roughly $7.2 billion in outstanding debt payments.

In 2011, Venezuela had roughly $30 billion in reserves. In 2015, it had $20 billion. The trend can’t persist much longer, but it’s hard to know exactly when Venezuela will run completely out of cash.

The question is: Where is the floor?” says Siobhan Morden, head of Latin America fixed income strategy at Nomura Holdings. “If oil prices stagnate and foreign reserves reach zero, then the clock is going to start on a default.

According to the country’s recently released 2016 financial report, about $7.7 billion of its remaining $10.5 billion of reserves is in gold. To make debt payments in the past year, Venezuela shipped gold to Switzerland.

The thinning reserves paint a scary financial picture as the country faces a humanitarian crisis sparked by an economic meltdown. Venezuelans are suffering massive food and medical shortages, as well as skyrocketing grocery prices.

This news item appeared on the money.cnn.com Internet site at 12:09 p.m. on Wednesday afternoon EST — and I thank Swedish reader Patrik Ekdahl for bringing it to our attention.  Another link to it is here.

Climate Change HOAX exposed by Geologist straight to the U.K. Government

Never have I heard a more lucid, forthright and honest depiction of the fraud that global warming/climate change has become.  He’s the British equivalent of Nigel Farage against all this bulls hit.  I’m not sure how old this video is, but it runs for 14:46 minutes and it’s an absolute must watch.

Ellen Hoyt sent it our way on Thursday — and for obvious reasons, had to wait for today’s column.  I ‘borrowed’ it from the armstrongeconomics.com Internet site.

Eurozone Capital Flight Intensifies: Target2 Imbalances Widen Again

A quick perusal of Target2 Balances for January shows capital flight from Italy and Spain to Germany intensified again.

German target2 imbalances exceed levels hit in the Eurozone crises in 2012. Things improved considerably after ECB president Mario Draghi made his famous statement “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro.  And believe me, it will be enough”.

The ECB claims this action is due to its bond-buying program.  I strongly disagree.

Note that Italy is on ECB life support.  Should Draghi halt QE asset purchases, demand for Italian bonds will plunge.

I had a story about this in my column a few days ago, but here’s an update from Mish Shedlock.  It showed up on his Internet site during the Thursday lunch hour EST.  It’s the second offering of the day from Roy Stephens — and another link to it is here.

Peninsula of Terror“: Putin Forced Millions of Russians to Enjoy All-Expense-Paid Trips to Crimea

We chanced upon one of the great classics of State Department propaganda, and just couldn’t resist sharing it with our readers.

Feast your eyes upon this triumph of western journalism, which was terrifying news consumers shortly after Russia “annexed” Crimea….[embedded…a rough translation of this beauty: “Russia sent 700,000 people to Crimean resorts against their will“.

The source for this shocking and outrageous claim is some sort of ex-Ukrainian minister of tourism — and like all good propaganda, this crime against humanity is based on a shred of truth.

Allegedly, security service chiefs across Russia were “pressured” into offering their officers subsidized trips to the peninsula.  However, we know stories of ordinary Russians with government jobs who were offered essentially free trips to Crimea.

This is of course a direct violation of the Geneva Convention and the The Universal Declaration of Human Rights.

Subsidized trips to seaside resorts? How do Russians live under so much cruelty and oppression?

I’d LOVE someone, anyone, to subsidize a trip to the Crimea for me.  I’d be on the next plane.  This news item, which is worth your while, was posted on the russia-insider.com Internet site on Friday sometime –and it’s another contribution from Roy Stephens.  Another link to it is here.  And in case you’re wondering what the situation in Crimea is really like, with all the Western bulls hit stripped away, there’s a rt.com video titled “Crimea For Dummies” that’s a must watch — and I’ve posted it before.

A surge of Taiwanese caught smuggling gold ingots into Japan

The Ministry of Foreign Affairs (MOFA) has called on Taiwanese not to engage in illicit activities abroad, saying a rising number of nationals were reportedly found smuggling gold bars into Japan.

According to Japanese regulations, visitors to Japan have to make a customs declaration if they bring in gold bullion (not less than 90 percent purity) exceeding 1 kilogram (kg).

Many Taiwanese, however, were found bringing over 1 kg of gold bars into Japan without declaring it at customs, Chou said.

Chou said he believed the Taiwanese were smuggling gold on behalf of gangsters for the purposes of tax evasion or money laundering.

According to Japanese media reports, gold bar smuggling into Japan has surged since Japan’s consumption tax was raised from 5 percent to 8 percent in April 2014, hitting gold purchases alongside other items.

In 2016, 250 kg of gold were confiscated at Kansai Airport in 53 cases of gold smuggling, a 20 percent increase from 2015, media reports said.

This short gold-related news item put in an appearance on the chinapost.com.tw Internet site back on February 7 — and I found it on the Sharps Pixley website last night. Another link to it is here.

Germany’s gold remains a mystery as mainstream media cheerleads — Ronan Manly

The German Bundesbank’s account of its repatriation of the nation’s gold reserves remains full of holes and unanswered questions, gold researcher Ronan Manly writes on Friday.

His verrrry long analysis is headlined “Germany’s Gold Remains a Mystery as Mainstream Media Cheerleads” and it’s posted on the Singapore-based Internet site bullionstar.com — and I found it embedded in a GATA dispatch yesterday.

Marin Katusa Interview Frank Giustra at the Vancouver Resource Investment Conference

Even though Frank has a rather checkered and somewhat ‘colourful and clouded’ past, this 27:35 minute interview with Marin easily falls into the absolute must watch category.  I found it amazing that when Marin asked Frank why gold wasn’t already at $5,000 the ounce because of all the bad news out there, Frank said in no uncertain terms that the U.S. banks, Wall Street brokerage firms — and most likely the U.S. government, were sitting on the price.  That admission comes in the first couple of minutes of the video.  My thanks go out to Scott Otey for sending it along.

And as I said just above, Frank has a “somewhat ‘colourful and clouded’ past” — and you get a hint of it in this breitbart.com news item from May 2015 headlined “Devastating Timeline Reveals the Transfer of Half of U.S. Uranium Output to Russia as Hillary Clinton’s Foundation Bags $145 Million“.  It’s worth reading — and this item comes to us courtesy of Bill Moomau.

Gold and silver holed by the Fed…again — Lawrie Williams

Just when precious metals bulls were beginning to think that gold and silver prices were headed onwards and upwards, US Fed officials, in concert it seems, came out with statements to dampen their enthusiasm.  It was a case of “déjà vu all over again“.  The threat of an imminent Fed rate rise took the wind out of the gold and silver sails and knocked the former back well below $1,230 – when it had seemed to be headed towards $1,260 and up while silver is now back well below the $18 it had previously seemed to have breached comfortably.

The consensus among analysts had been that the Fed would not start raising rates until June, but following the various statements from Fed heavy hitters like John Williams of the San Francisco Fed, William Dudley of the New York Fed, Robert Kaplan of the Dallas Fed and Fed Governors Jerome Powell and Lael Brainard all seemed to be pointing to an early rate increase.  The icing on the cake will probably come today at 1pm ET when Fed Chair, Janet Yellen is due to speak in Chicago.  The odds of a March interest rate increase are now put at over 80{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} – up from around 20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} only a week ago!

Almost alone among high profile gold and geopolitics commentators, Jim Rickards had long been predicting an early rate increase in March, despite no flesh yet being available on President Trump’s tax cutting and stimulatory agenda.  However it should be noted that Rickards was also suggesting any rate increase would be shortlived, saying “They will raise (rates) in March and then something will hit the wall, either the economy or the stock market or both. Then the Fed will backpedal from there, starting with a forward guidance then perhaps a rate cut later in the year.”

This commentary by Lawrie showed up on the Sharps Pixley website on Friday sometime — and another link to it is here.

Ted Butler: Has The Worm Turned?

A timely question from a long-time subscriber resulted in crystalizing an idea that was on the distant periphery of my conscious thought. The great thing about the idea is that it fully incorporates all the data points up until now as I have been presenting them. But please be forewarned, even though all the important factual dots seem to be connected, the premise must still be considered speculative at this point. On the other hand, should the premise prove to be accurate, it could amount to no less than the game-changer in silver (and gold).

Alejandro’s question concerned whether the managed money technical funds who refused to add to short positions in silver back in the fall had to have cooperated in some way in reaching that decision. You’ll remember that for the first time in years, the technical funds didn’t add to COMEX silver short positions as they always had on similar previous price declines. I opined at the time that some type of cooperation was likely, seeing how the managed money technical funds were a subset of the investment industry that involved hundreds of billions of dollars of investor assets under management and there existed well-known industry trade associations in which mutual concerns were addressed.

Alex asked his question in such a way that it dawned on me that the funds must have cooperated in some way. Cooperation was not just likely, it was required in order to explain the technical funds’ sudden change in behavior. That’s when the light bulb went off in my head – the failure to go short silver a few months ago could only have come from collective deliberation and cooperation on the part of a number of managed money technical funds. Let me add some background and then dissect the simple observation that some managed money traders collectively agreed to forgo shorting silver a few months ago (a decision that seems wise in hindsight).

This was the main topic de jour in Ted’s mid-week commentary on Wednesday — and I’m glad to see it in the public domain, because it was impossible to steal all of it.  It was posted on the silverseek.com Internet site on Friday — and another link to it is here.


Humpback whale feeding on krill” by South African photographer Jean Tresfon took second place in the “Behavior” category of the Underwater Photographer of the Year 2017 contest. The image was shot a few miles offshore from Hout Bay, Cape Town.  Click to enlarge to get the full visual effect, which is quite startling.


Today’s pop ‘blast from the past’ appears somewhat apropos considering all the comments about how Russia seems to have done everything to everybody.  Of course, they didn’t, as there isn’t a shred of evidence for any of these accusations, but the Deep State is pulling out all the stops to make it appear that way.  So here’s a little oil on troubled waters from Matt Munro from the second James Bond movie way back in 1963.  The link is here.

Today’s classical ‘blast from the past’ is Beethoven’s Piano Sonata No. 23 in F Minor ‘Appassionata’ which he composed in fits and start over a two or three year time period starting in 1804.  It’s one of his greatest and most technically challenging piano sonatas — and I can vouch for that, as I used to own the sheet music for it.  This youtube.com video was posted on their website back in December of 2012 — and the incomparable Daniel Barenboim does the honours.  The link is here.

Apparently Janet Yellen gave a speech yesterday afternoon — and that may or may not have been what ignited the rallies that began at the close of COMEX trading on Friday.  That’s not my take on it, as the dollar index did a face plant at that time, although both events could have been related.

We sort of sit in ‘no-man’s land’ right now.  There’s no way of knowing if JPMorgan et al are through to the downside, or if there’s more pain to be handed out in the form of further engineered price declines.  They certainly set a new low for this move down in gold on Friday — and barely did in silver — and if they were serious, you’d think that they would have hit them harder than they did.

Any comments on future price action in any of the precious metals is, as I said in my Friday missive, rank speculation until after the FOMC meeting and the budget ceiling debacle, so I’ll just hold my tongue until then.

Here are the 6-month charts for all four precious metals — and because a lot of the positive price activity came after the COMEX close, the dojis for Friday do not show the entire price move during the New York trading session.  Click to enlarge helps a bit with the first four charts.

I must admit that I had no idea that this slow-motion train wreck the world is facing from an economic, financial and monetary point of view, would take so long to resolve itself.  This game of ‘make believe’ has been going on every since the stock market ‘correction’ of 1987 when the powers-that-be first intervened in the markets.  Of course they’d been active in the gold market since January 1, 1973 — and that, along with rampant money printing during the last decade, has produced this Frankenstein situation we find ourselves in today.

Listening to Frank Giustra interview with Marin Katusa posted in the Critical Reads section above, I got the distinct impression that not only was he not telling everything he knows, but from his position he can see much further than we can — and he’s not at all happy with what’s out there.

Him, along with people like Jim Rickards and David Stockman et al, who have vantage points that we will never have, have all been saying more or less the same thing for many years now — and if you aren’t scared to death by that, you’re obviously not paying attention.

These guys are emissaries that can see further into the future than any of us — and when they’re talking, I’m listening.  So should you.

At some point in the future — and not very far in the future I would think — the denouement will manifest itself — and most likely with little or no warning.  If you aren’t prepared at that point, with whatever survival plans you have, you will…as the late and very great Zig Ziglar once said…”get cooked in the squat.

That’s all I have for today — and I’ll see you on Tuesday.


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