JP Morgan Stops 88 Percent of March Silver Deliveries So Far

10 March 2017 — Friday


After trading flat for two hours or so after the gold market opened in New York at 6:00 p.m. EST on Wednesday evening, the selling pressure began — and by 1 p.m. China Standard Time on their Thursday afternoon, the price was down 3 bucks or so.  From there it traded pretty flat until the noon silver fix in London.  Thirty minutes later — and about fifteen minutes before the COMEX open, the gold price poked its nose above unchanged — and that was high as ‘da boyz’ would let it get.  They sold it down until ten minutes after the London close, which was 11:10 a.m. in New York.  It rallied a bit for the next twenty minutes, before chopping sideways until 2 p.m. in the thinly-traded after-hours market.  The price pressure began anew at that point — and the low tick of the day, a dollar or so below $1,200 spot, was set at exactly 4:30 p.m. EST.  It rallied a few dollars into the 5 p.m. close from there.

The high and low ticks were reported by the CME Group as $1,208.90 and $1,199.00 in the April contract — and I’m only posting these numbers because JPMorgan et al set the low tick below the $1,200 spot mark.  The intraday move on Thursday was only ten bucks.

Gold was closed in New York yesterday at $1,200.80 spot, down another $7.20. Not surprisingly, with a new low for this move down, net volume was huge at around 196,000 contracts, as the Managed Money traders dumped longs and went short in droves.

Here’s the 5-minute tick chart for gold courtesy of Brad Robertson as usual — and it barely caught the low tick of the day at the very right-hand side of the chart — and as you can see, there was very little volume on that quick spike down.  I don’t call the after-hours market “thinly-traded” for no reason.  Most of the volume occurred during the COMEX trading session as usual, but there was no background levels to speak of anywhere on Planet Earth on Thursday.

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.

The silver price action was very similar to gold’s, up to and including the noon silver fix in London.  The rally after that was allowed to carry on until 9:15 a.m. EST before ‘da boyz’…their algos and spoofing tactics appeared.  From there it was sold quietly lower until 3 p.m. in the thinly-traded after-hours market — and it traded pretty flat from there into the close.

The high and low in this precious metal were reported as $17.31 and $16.955 in the May contract — and the spread between March and May is still 5 cents which, as Ted Butler has pointed out on several occasions, is a lot — especially this time of month.  I would presume that this is because that the March silver delivery period is as tight as the proverbial drum.  More on that later.

Silver was closed in New York yesterday at $16.94 spot, down another 27 cents.  Net volume was pretty heavy at just under 61,000 contracts.

Here’s the 5-minute tick chart for silver, courtesy of Brad as well.  There were a few higher volume spots in Far East and morning trading in London, but the volume didn’t pick up appreciably until a bit after the noon silver fix, which is 5:00 a.m. Denver time on the chart below.  It didn’t really drop off to background until after 13:00 MST, which was 15:00 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.

The platinum price was handled in about the same manner as the gold price, complete with the rally beginning at the noon silver fix in London — and by 1 p.m. EST in New York, most of the price damage had been done.  It traded flat for the remainder of the Thursday session.  JPMorgan et al close platinum down another 10 bucks at $933 spot — and miles below its 200-day moving average.

The palladium price was down 2 dollars by the Zurich open yesterday morning — and it began to head lower from there.  It really got smacked to the downside starting just before noon CET — and any and all rally attempts after that were capped in short order.  Shortly before the Zurich close, more price pressure appeared — and the low tick of the day came at the 1:30 p.m. EST COMEX close.  The price didn’t do a thing after that.  Palladium was hit for 22 bucks, finishing the Thursday session at $746 spot.

The dollar index closed very late on Wednesday afternoon in New York at 101.12 — and chopped a bit higher in early Far East trading, with the 102.15 high tick coming about thirty-five minutes before the London open.  It sank back to unchanged by 8:50 a.m. in New York — and then dropped like a rock.  ‘Gentle hands’ were there at the 101.70 low tick — and shoved it higher until a minute or so after the 11 a.m. London close.  It sank back to the 101.80 mark shortly after the COMEX close, but ‘rallied’ from there — and back above the 102.00 mark by a handful of basis points.  It finished the day at 102.03…down 9 basis points from Wednesday’s close.

I would suspect that the waterfall decline in the dollar index had something to do with what Mario Draghi had to say yesterday, as a lot of markets were affected by what he said — and I have a story about that in The Wrap.

But you’ll carefully note that despite the fact that the dollar index was in retreat all through the Thursday trading session, it mattered not in the COMEX futures market for the precious metals, as ‘da boyz’ had them in their iron grip again yesterday.  Nothing was going to slow down their engineered price decline sequence that we’re living through at the moment…not even a 40+ basis point decline in the dollar index in the space of fifteen minutes.

And here’s the 6-month U.S. dollar index — and I’m posting it for the usual entertainment purposes.

The gold stocks opened down about a percent, but quickly rallied into positive territory, as it was obvious that the bargain-hunters were out and about again.  That didn’t last, of course — and they chopped lower until about 2:35 p.m. in New York trading — and rallied a bit off that low into the close.  The HUI finished down another 1.30 percent.

The silver equities opened a hair below unchanged — and were up over a percent in short order.  They fell hard from there, but began to rally shortly after 11 a.m. EST.  That state of affairs lasted until minutes before 1 p.m. — and they chopped lower from there, closing virtually on their lows of the day, as Nick Laird’s Intraday Silver Sentiment Index finished down another 1.54 percent.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that 2 gold and 135 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  The issuers and stoppers in gold aren’t worth commenting on — and in silver, the largest short/issuer by far was International F.C. Stone with 119 contracts out of its client account.  Deutsche Bank was an ‘also ran’ with 9 contracts.  Of course the biggest piggy at the long/stopper trough was JP Morgan once again, picking up 106 contracts for its own account, plus another 24 for its clients.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in March dropped by 39 contracts, leaving just 31 left, minus the 2 contracts mentioned just above.  Wednesday’s Daily Delivery Report showed that 10 gold contracts were actually posted for delivery today, so that means that 39-10=29 gold contracts were closed out in the March delivery month.  Silver o.i. in March dropped by 717 contracts.  Wednesday’s Daily Delivery Report showed that 708 silver contracts were actually posted for delivery today, so that means that 717-708=9 March silver contracts were closed out without a delivery taking place.

Month-to-date, JP Morgan has stopped 1,855 March silver contracts for its own account, plus another 569 for it’s ‘client’ account…for a total of 2,424 contracts.  That represents 88 percent of the 2,748 silver contracts issued and stopped so far this month — and there are still 1,280 contracts left open in March!  This is both unprecedented — and outrageous.  Why is only Ted — and by extension myself, the only ones talking about this?

Up until several years ago, the nut-ball lunatic fringe used to scream about COMEX default in silver during every delivery month.  Now that deliveries are, as Ted said, the tightest he’s ever seen in his memory, not a peep out of these guys.

There were with withdrawals from both GLD and SLV yesterday.  Authorized participants removed 85,699 troy ounces from GLD — and another 1,136,637 troy ounces from SLV.

The folks over at the Internet site updated their short interest data for SLV and GLD as of the close of trading on Tuesday, February 28 — and this is what they had to report.  The short interest in SLV dropped from 12.74 million shares/troy ounces, down to 10.95 million shares/troy ounces, which is a decline of 14.0 percent.  The short interest in GLD was also down.  It declined from 645,250 troy ounces, down to 494,900 troy ounces, or 23.4 percent.

It was another day where there was no sales report from the U.S. Mint.

There was almost no gold movement at all, either in or out, at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Once again, there was nothing reported received — and only 835.926 troy ounces/26 kilobars [SGE kilobar weight] were shipped out.  Those bars came out of Brink’s, Inc. — and I shan’t bother linking this tiny amount.

It was busier in silver, of course.  Nothing was reported received there, either — and a container load…619,168 troy ounces…was shipped out of Canada’s Scotiabank.  There was also a transfer from Eligible to Registered at Scotiabank as well…and that totalled 870,451 troy ounces.  That’s probably in preparation for a delivery in the March contract — and it was Ted’s opinion that they were probably none to happy about having to cough it up.  A link to that action is here.

It was quiet over at the COMEX-approved gold kilobar depository in Hong Kong on their Wednesday.  They didn’t report receiving any, but shipped out 1,096 of them.  All of this activity was at Brink’s, Inc. — and a link to that activity, in troy ounces, is here.

Here are some more charts that Nick Laird passed around during the last couple of days.  The first two show gold and silver imports into India, updated with January’s data.  They imported 53.878 tonnes of gold — and 362.607 tonnes of silver.  That tonnage of silver translates into 11.7 million troy ounces.  The click to enlarge feature works wonder with both charts.

This last chart shows gold imports into China via Hong Kong, updated with January’s data as well.  During that month, they used H.K. as a conduit for 31.791 tonnes.  Click to enlarge.

I have a decent number of stories for you today — and I hope you can find the time to read the ones that interest you.


MNUCHIN to CONGRESS: Raise the debt ceiling

In a letter to House Speaker Paul Ryan sent on Wednesday, Treasury Secretary Steve Mnuchin “the outstanding debt of the United States will be at the statutory limit” at midnight on March 16. At that point, Treasury will have to utilize “extraordinary measures” for the federal government to keep paying its bills.

Mnuchin told Ryan at that point “Treasury will suspend the sale of State and Local Government Series (SLGS) securities“….”until the debt limit is either raised or suspended.”

Here’s a copy of the full note from Mnuchin to Ryan…

This news item was posted on the Internet site on Thursday sometime — and I thank Swedish reader Patrik Ekdahl for sending it along.  Another link to it is here.

Bill Gross: Show Me the Money

Recently I also explored with them the concept of financial leverage – specifically that of fractional reserve banking, which has been the basis of credit and real economic growth since the system was blessed by central banks over a century ago. “It still mystifies me,” I told them, “how a banking system can create money out of thin air, but it does.” By rough estimates, banks and their shadows have turned $3 trillion of “base” credit into $65 trillion + of “unreserved” credit in the United States alone – Treasuries, munis, bank loans, mortgages and stocks too, although equities are not officially “credit” they are still dependent on the cash flow that supports the system.

But I jump ahead of myself. “Pretend,” I told the “fam” huddled around the kitchen table, that there is only one dollar and that you own it and have it on deposit with the Bank of USA – the only bank in the country. The bank owes you a buck any time you want to withdraw it. But the bank says to itself, “she probably won’t need this buck for a while, so I’ll lend it to Joe who wants to start a pizza store.” Joe borrows the buck and pays for flour, pepperoni and a pizza oven from Sally’s Pizza Supplies, who then deposits it back in the same bank in their checking account. Your one and only buck has now turned into two. You have a bank account with one buck and Sally’s Pizza has a checking account with one buck. Both parties have confidence that their buck is actually theirs, even though there’s really only one buck in the bank’s vault.

The bank itself has doubled its assets and liabilities. Its assets are the one buck in its vault and the loan to Joe; its liabilities are the buck it owes to you – the original depositor – and the buck it owes to Sally’s Pizza. The cycle goes on of course, lending and relending the simple solitary dollar bill (with regulatory reserve requirements) until like a magician with a wand and a black hat, the fractional reserve system pulls five or six rabbits out of a single top hat. There still is only one dollar bill but fractional reserve banking has turned it into five or six dollars of credit and engineered a capitalistic miracle of growth and job creation. And importantly, all lenders of credit believe that they can sell or liquidate their assets and receive.

This slightly longish, but very worthwhile commentary by Bill, put in an appearance on the Internet site yesterday — and I thank Richard Saler for pointing it out.  Another link to it is here.

Dividend Paying Stocks: Part of the Solution? — Dennis Miller

All dividend-paying stocks are not equal. Some may be very high risk; some will putter along, while others may be the salvation for those desperate for income. Why consider them? How do you pick the right ones?

Since the 2008 bank bailouts, even with the recent increases, interest rates have been at historically low levels. Many who thought they had bulletproof retirement plans learned a bitter lesson. The interest rates they anticipated from CDs and ultra-safe bonds no longer exist. Retirement plans for all generations had to be revised in light of today’s reality.

I contacted good friend and former colleague Lee Campbell who is now with Investors Alley. They publish a number of advisories specializing in dividend paying stocks.

Lee directed me to their in-house expert, Tim Plaehn. Tim focuses exclusively in research on dividend payers, and how to properly utilize them for generating passive income for several research services for Investors Alley. Tim, a former stockbroker and Certified Financial Planner, has kindly agreed to share some of his strategies with our readers.

DENNIS: Tim, on behalf of our readers, thanks for making time for our benefit.

This Q&A session between Tim and Dennis showed up on Dennis’s website on Thursday morning — and another link to it is here.

The fateful date — Alasdair Macleod

Caesar: What sayest thou to me now? Speak once again.

Soothsayer: Beware the ides of March.

Caesar: He is a dreamer; let us leave him: pass.

This famous advice, according to Shakespeare, was ignored with fatal consequences for Julius Caesar. Markets may be being similarly complacent ahead of this anniversary date next week. The Fed has signalled that it will raise interest rates at the FOMC’s March meeting, timed for the same day. It so happens that this fateful date coincides with the end of the suspension of the US debt ceiling. Dare Janet Yellen raise rates at such a sensitive juncture?

We shall see. But it is worth pointing out that gold rose strongly following the last two rate rises. It is likely that it was a “sell the rumour, buy the fact” response, and was also impelled by being the other side of the dollar trade. And the last time debt brinkmanship came up was with an agreement between the President and congress to suspend the debt ceiling in end-July 2011, following which gold rose $200 in the ensuing weeks.

As all the investment brochures say, past performance is not a guide for the future. But if the Fed raises the Fed funds rate this month by ¼{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, there could be a third relief rally for gold. If the increase is more than that, which it should be to begin the process of normalising rates, gold would probably be marked down heavily. However, given the fragility of the Eurozone and the President’s desire to see a lower dollar, a half per cent raise would be a very aggressive move.

This commentary by Alasdair showed up on the Internet site yesterday morning sometime — and I found it in a GATA dispatch.  Another link to it is here.

Record Number of Americans Forfeit Citizenship As Hope For Near-Term Tax Relief Fades

Obama warned everyone back in 2009 that “elections have consequences.”  Now, eight years later, we learn that apparently the “consequences” of running around the country for nearly a decade threatening to raise taxes, “spread the wealth around” and pursue any number of other socialist policies are a record number of people renouncing their U.S. citizenship.

As Fortune points out, the United States, unlike almost every other country in the world, taxes people on the basis of citizenship rather than residency.  So even if you spend all of your adult, wage-earning years on a remote tropical island with a 0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} tax rate, if you were born in the United States, you still owe Uncle Sam your “fair share.”

U.S. expats also face the burden of annual filings with the IRS with the prospect of stiff penalties if they fail to comply.

According to international tax attorney Andrew Mitchel, those who deliberately fail to report foreign accounts to the IRS can face a fine of $100,000 or half the value of the account—whichever is greater. Meanwhile, there are a range of other penalties for small business owners abroad and for those with assets of more than $30,000.

The IRS has been very gracious in saying they won’t take more than 100{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of your money,” says Mitchel, ironically. “These people are terrified they will go bankrupt because of the United States. They just want to get out of the U.S. tax system.”

No surprises here, dear reader.  Even if you don’t read this Zero Hedge story, the two embedded charts are well worth your time.  I thank Brad Robertson for sharing this with us — and another link to it is here.

Deutsche Bank Tries to Stay Alive — Wolf Richter

One of the hardest things to do is to shrink your way to profitability.”

Let me say this upfront: When an at-risk too-big-to-fail bank raises fresh capital from investors, it’s a great thing for affected taxpayers. When push comes to shove, every dollar thus extracted from investors lowers the burden on taxpayers.

Since the Financial Crisis, Deutsche Bank has been raising capital in large waves — $20 billion so far. And now, its new efforts to raise another $8.5 billion by selling shares would bring the total to $28.5 billion, and it would nicely dilute existing shareholders further, and it would be a great thing for affected taxpayers.

Not that taxpayers would be off the hook: The assets on Deutsche Bank’s opaque balance sheet equal 58{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of Germany’s GDP. That $8.5 billion in new capital would nevertheless lower both the risks for affected taxpayers. So I’m all for it. But I just love the way they’re going about doing it.

So Deutsche Bank CEO John Cryan came out this week to persuade existing shareholders (not taxpayers) that diluting their stakes by selling $8.5 billion of new shares would be a good thing for them. If they wanted to maintain their stakes, they could buy into the offer. He supported this with a new emergency turnaround plan. No one can remember how many emergency turnaround plans Deutsche Bank has been trotting out over the years.

This worthwhile commentary appeared on the Internet site yesterday — and my thanks go out to Roy Stephens for finding it for us.  Another link to it is here.

Euro, Bund Yields Spike As Draghi “No Longer Sees Urgency in Taking Further Actions”

ECB President Draghi said the “balance of risks to growth has improved” and noted that The ECB had “removed reference to signal a sense of urgency.” This combined with the removal of references to the use of all instruments has sparked EUR strength and Bund weakness.


Sent EUR higher…and Bunds started to tumble…

This very brief Zero Hedge news item appeared on their website at 9:01 a.m. EST yesterday morning — and if you have the interest, the two embedded charts are worth a quick look.  I thank Richard Saler for his second offering in today’s column — and another link to it is here.

Massive Cascade of Eurozone Defaults Coming Up — Mish Shedlock

German Target2 Surplus is fast approaching the one trillion

Each month, Germany’s Target2 surplus has been rising. The Bundesbank yesterday published the data for end-February, showing a new record of €814bn, up by a further €20bn during the month. This level is now significantly higher than it was during the peak of the eurozone crisis. We would assume that the rise in the German surplus will be offset by parallel rises in the deficits of Spain and Italy, which were €350bn and €364bn in January. The rise is in part explained by the ECB’s asset purchasing programs – the sales of Italian bonds by London-based investors often clear through Frankfurt, but the investors generally do not reinvest in Italy, but elsewhere. In other words, the QE program is the direct cause but it hides an underlying trend of capital flight out of Italy of the same scale as during the crisis.

Frankfurter Allgemeine, which watches over the Target2 surpluses like a hawk, has a revealing comment by Jens Weidmann. The Bundesbank has generally tried to distance itself from the position of some German economists, who have emphasised the importance of the Target2 system. That’s still the official position. Weidmann said that he agreed with Mario Draghi that a country that exits should settle its Target2 liabilities in euros. But then he made an important qualification:

What that looks like in practice, and whether a government was willing or able to meet these claims, is a wholly different issue altogether.”

We see it exactly the same way. Any exit would cause so much financial stress, and give rise to such political recriminations on both sides, that it is inconceivable that these balances would ever be paid up. This is why a euro exit invariably constitutes a series of massive defaults – without parallel in economic history.

Another Target2-related story — and it’s more than worthwhile if this sort of thing is your bailiwick.  It certainly is mine.  It appeared on the Internet site at 5:30 p.m. on Thursday afternoon EST — and I thank Roy Stephens for sending it along.  Another link to it is here.

WikiLeaks trove fails to shift dial on Trump-Putin narrative — Pepe Escobar

The massive WikiLeaks Vault 7 release is an extremely important public service. It’s hard to find anyone not concerned by a secret CIA hacking program targeting virtually the whole planet – using malware capable of bypassing encryption protection on any device from iOS to Android, and from Windows to Samsung TVs.

In a series of tweets, Edward Snowden confirmed the CIA program and said code names in the documents are real; that they could only be known by a “cleared insider;” the FBI and CIA knew all about the digital loopholes, but kept them open to spy; and that the leaks provided the “first public evidence” that the US government secretly paid to keep U.S. software unsafe.

If that’s not serious enough, WikiLeaks alleges that “the CIA has lost control of the majority of its hacking arsenal;” several hundred million lines of code — more than what is used to run Facebook.

Someone among the former U.S. government hackers and contractors ended up leaking portions of the CIA archive (Snowden II?). WikiLeaks also stressed how the CIA had created, in effect, its “own NSA” – maximum unaccountability included.

This very interesting commentary by Pepe was posted on the Asia Times website at 12:36 a.m. China Standard Time on their Thursday morning, which was 11:36 a.m. on Wednesday morning in Washington — EST plus 13 hours.  I thank Ellen Hoyt for bringing it to our attention — and it’s very much worth reading.  It also sports a new headline which reads “Oh, that traitorous WikiTrump” — and another link to it is here.

Russia’s Largest Bank Confirms Hiring Podesta Group to Lobby For Ending Sanctions

Russia’s largest bank, Sberbank, has confirmed that it hired the consultancy of Tony Podesta, the elder brother of John Podesta who chaired Hillary Clinton’s presidential campaign, for lobbying its interests in the United States and proactively seeking the removal of various Obama-era sanctions, the press service of the Russian institution told TASS on Thursday.

The New York office of Sberbank CIB indeed hired Podesta Group. Engagement of external consultants is part of standard business practices for us,” Sberbank said.

Both Sberbank and VTB Capital have faced severe cash shortages due to plunging oil prices, plus the U.S. sanctions. If Obama’s sanctions were lifted, however, both banks could legally seek funds from American financial institutions. The lobbying campaign targeted Congress and the executive branch, with Podesta and other lobbyists arranging at least two meetings between Sberbank officers and Department of State officials, according to Elena Teplitskaya, Sberbank’s board chairman, who spoke to House aides in August.

The Democrats are sitting there trying to convince us that the Russians are trying to throw the election to Trump,” a congressional aide who requested anonymity and met Teplitskaya told TheDCNF.

And then they’re with us here in the House and meeting directly with the administration behind closed doors on the issue of the sanctions. The hypocrisy could not be any richer,” he said.

Yep, hypocrisy is the operative word here, that’s for sure.  This news item appeared on the Zero Hedge website at 12:22 p.m. on Thursday afternoon EST — and I found it in this morning’s edition of the King Report.  Another link to it is here.

South Korea Removes President Park Geun-hye

A South Korean court removed the president on Friday, a first in the nation’s history, rattling the delicate balance of relationships across Asia at a particularly tense time.

Her removal capped months of turmoil, as hundreds of thousands of South Koreans took to the streets, week after week, to protest a sprawling corruption scandal that shook the top echelons of business and government.

Park Geun-hye, the nation’s first female president and the daughter of the Cold War military dictator Park Chung-hee, had been an icon of the conservative establishment that joined Washington in pressing for a hard line against North Korea’s nuclear provocations.

Now, her downfall is expected to shift South Korean politics to the opposition, whose leaders want more engagement with North Korea and are wary of a major confrontation in the region. They say they will re-examine the country’s joint strategy on North Korea with the United States and defuse tensions with China, which has sounded alarms about the growing American military footprint in Asia.

This news story, filed form Seoul, was posted on The New York Times website sometime last night — and it comes to us courtesy of Roy Stephens.  Another link to it is here.

Toshiba’s Westinghouse calls in U.S. bankruptcy lawyers: sources

Westinghouse Electric Co LLC, the U.S. nuclear power plant developer owned by troubled Japanese electronics giant Toshiba Corp, has brought in bankruptcy attorneys from law firm Weil Gotshal & Manges LLP, people familiar with the matter said on Wednesday.

The move comes after a $6.3 billion write down at Westinghouse last month wiped out Toshiba’s shareholder equity and caused it to seek divestments to create a buffer for any fresh financial problems.

A Chapter 11 bankruptcy filing by Westinghouse in the United States could help limit Toshiba’s losses, two people said, cautioning that the retainment of the debt restructuring lawyers from Weil is just an exploratory step, and that no decision about a bankruptcy filing had yet been taken.

A Westinghouse spokeswoman declined to comment on Weil’s role, but said that Westinghouse has hired Lisa Donahue of advisory firm AlixPartners LLP as its chief transition and development officer, to lead “an operational restructuring and financial rebuilding.

Toshiba said it is not aware of any intention for Westinghouse to file for Chapter 11 bankruptcy.

This Reuters news story put in an appearance on their Internet site at 8:41 p.m. EST on Wednesday evening — and it’s from Zero Hedge via Brad Robertson.  Another link to it is here.

There are reports a lot of Chinese buyers are struggling to settle on their Australian apartment purchases

It’s little wonder that many are warning about a potential correction, or worse, in apartment prices in Australia’s eastern capitals right now.

There’s a lot being built, going up faster than at any point in the past, fueled by record-low interest rates, strong price growth, renewed investor activity and an influx of foreign buyers.

All one has to do is look skywards in Sydney, Melbourne and Brisbane to get a sense of just how big in scale the high-rise building boom is.

With so much stock hitting the market, at a time when Australian population growth is slower than what it’s been in much of the past decade, simple supply and demand alone suggests there’s some risks to where prices will head next.

Throw in the potential for changes towards the tax treatment of housing, higher interest rates and the increased likelihood of tighter macroprudential measures being introduced to slow investor activity, and those risks, seemingly, are amplified.

This longish, but very interesting real estate story from ‘down under’ was posted on the Internet site at 2:49 p.m. AEDT [Australian Eastern Daylight Time] on their Thursday afternoon — and my thanks go out to Australian subscriber Robert Higgs for passing it along.  Another link to it is here.

Arizona Senate Committee Passes Bill to Treat Gold As Money, Remove Capital Gains Tax

On Wednesday, an Arizona Senate Committee passed a bill that would eliminate state capital gains taxes on gold and silver specie, and encourage its use as currency. Final approval of the legislation would help undermine the Federal Reserve’s monopoly on money.

Former US Rep. Ron Paul testified today in the Senate Finance Committee in support of House Bill 2014 (HB2014). The legislation, which previously passed the state House by a 35-24 vote, would eliminate state capital gains taxes on income “derived from the exchange of one kind of legal tender for another kind of legal tender.” The bill defines legal tender as “a medium of exchange, including specie, that is authorized by the United States Constitution or Congress for the payment of debts, public charges, taxes and dues.” “Specie” means coins having precious metal content.

In effect, passage of the bill would, as Paul noted, “legalize competition in a Constitutional fashion.

HB2014 now moves to the Senate Rules committee for further consideration.

It’s a step, but it ain’t the law yet.  This rather long news item was posted on the Zero Hedge website at 8:35 p.m. on Wednesday evening EST — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

CEO Profile: The James Rickards Projects

EG: The Chinese yuan has recently been added to the International Monetary Fund’s Special Drawing Rights and the Chinese are known to favour gold. While the value of gold seems to be on a downward slope, there is a thought that it still may supplement the influence of the petrodollar in the coming years. If that were to become reality, how would that affect the American economy?

James Rickards:  The inclusion of the Chinese yuan in the SDR calculation base, and Chinese acquisition of gold are closely related developments. Both involve efforts by China, and other countries to move away from the U.S. dollar as the benchmark global reserve currency.

Today the dollar comprises about 60{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of global reserves and 80{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of global payments. This gives the U.S hegemonic power in terms of imposing economic sanctions, freezing assets, cutting off access to dollar payments systems, and using other means of weaponising the dollar to dictate foreign policy outcomes. The only potential rivals to the dollar are special drawing rights, and gold. China is expanding in both markets.

China has more than tripled its gold reserves in the past ten years and likely has far more gold than its official figures indicate. This creates a natural hedge for its Treasury holdings. If the U.S. inflates the dollar, the Treasuries will lose value but gold will gain value. China has created a hedge against U.S. inflation by buying gold. The next financial crisis will be larger than the ability of central banks to reliquify the system. The only source of liquidity will be the issuance of SDRs by the IMF. This will cause global inflation. Lost confidence in dollars will mean the end of the petrodollar also. The new global benchmark currency will be the SDR.

Effects on the U.S. economy will be devastating. Lost growth, and lost wealth will lead to money riots and a neofascist response resulting in martial law. Events in recent years in Cyprus, Greece, India and Venezuela are all previews of what is coming to the U.S.

This written Q&A session with Jim spends a lot of the time talking about gold, so I thought I’d stick it in this part of the Critical Reads section, rather than further up.  It appeared on the Internet site.  There’s no dateline on it, but would assume that it’s recent — and I thank Harold Jacobsen for sharing it with us.  Another link to it is here.

Perth Mint’s gold, silver sales plunge in February

The Perth Mint’s sales of gold products dipped in February to the lowest in six months, while silver sales more than halved from the previous month, the mint said in a blog post on its website on Wednesday. Sales of gold coins and minted bars slumped about 65 percent in February to 25,257 ounces from 72,745 ounces a month earlier, the mint said on its website.

Silver sales dipped about 59 percent in February to 502,353 ounces from 1,230,867 ounces in January, according to the blog post. “In line with the worldwide trend, demand for Australian bullion coins and bars was significantly quieter in February,” the mint said in the blog post.

This tiny Reuters story was posted on their website at 5:33 p.m. IST on their Wednesday — and I found it on the Sharps Pixley website.  A link to the hard copy is here, but there’s not a lot else to see.  I’ll have the charts on this in my Tuesday column.

India’s gold sales won’t fall any more, says WGC

After witnessing a steep fall in demand for gold following the ban on high denomination currency notes, the industry body World Gold Council (WGC) on Wednesday said that the gold demand is unlikely to fall further from the current levels and large jewellery retailers in the organised sector are likely to grab a larger market share in the coming days.

Demonetisation is also boosting large jewellery retailers, and they will continue to grab a larger share of the market. Over time, consumers will move away from cash towards digital payments, and organised players should benefit from this trend. This change in market dynamics will result in more transparency and a better deal for consumers, protecting them from shady practices such as under carating,” WGC said in its report.

In 2016, a month-long jewellers strike against excise duty and new norms making PAN card mandatory for purchases above Rs 2 lakh, coupled with higher prices and the note ban led to gold demand dropping to a seven-year low.

During the year, Indians consumed 675.5 tonnes of gold, 21 per cent lower than the previous year. According to WGC, Indian consumers are likely to buy between 650 tonnes and 750 tonnes of gold in 2017.

This news story, filed from New Delhi, appeared on the Internet site at 3:26 a.m. IST [India Standard Time] on their Thursday morning — and it’s another gold-related news item that I found on the Sharps Pixley website last night.  Another link to it is here.



“As far as Friday’s COT report, without putting actual numbers on it, I will be surprised if we don’t see the biggest reductions in managed money long and commercial short positions in months. Additionally, Friday’s Bank Participation Report should help clarify JPM’s silver short position. While I’m sorry I didn’t sidestep this blatantly engineered sell-off, the truth is I would have also reentered just as quickly given the signs emanating from the March silver delivery month and my still open premise about a partial managed money liquidation. At least there should be no question about why we’ve moved lower.”Silver analyst Ted Butler: 08 March 2017

It’s pretty obvious now that JP Morgan et al have unleashed the “Full Meal Deal” in this current engineered price decline in all four precious metals — and they certainly aren’t taking any prisoners, as both gold and silver, along with palladium, were closed well below their respective 50-day moving averages yesterday.  That’s one of the reasons that volumes in both silver and gold were as heavy as they were.

Since their respective prices are declining every day, it’s obvious…as Ted said on the phone yesterday…that the Managed Money traders are in full retreat.  They’re puking up their long positions and adding to their shorts positions, while the commercial traders stand there and happily cover their short positions, plus go long themselves.  In the process they make boat-loads of money — and keep prices in check at the same time.  It’s a ‘win-win’ for them — and a ‘lose-lose’ for everyone else.

Here are the 6-month charts for all four precious metals, plus copper, once again — and the salami slicing continues unabated, although they took a cleaver to palladium yesterday.  And because gold’s low tick occurred after the COMEX close, that doesn’t show up on the Thursday doji.  The click to enlarge feature helps a bit with the first four charts.

And I thought I’d add the 6-month chart for WTIC as well, as it was hit pretty hard again yesterday.

And as I type this paragraph, the London open is less than ten minutes away and I note that the gold price was under a bit of selling pressure up until around 3 p.m. China Standard Time on their Friday afternoon.  At that point, the price was sold down a bit more firmly — and is lower by $5.80 an ounce.  Silver was sold down about a nickel or so in the first hour of trading once New York opened at 6:00 p.m. EST yesterday evening.  Then, like gold, the price pressure began a few minutes before 3 p.m. CST — and silver is down 12 cents the ounce at the moment.  Platinum has been trading a dollar or so either side of unchanged during the Far East session — and is down a dollar an ounce currently.  The palladium price followed a similar path as silver and gold — and is now down 6 bucks as the Zurich open looms.

Net HFT gold volume is pretty decent already — and right at the 43,000 contract mark, with little roll-over/switch volume.  Net HFT volume in silver is fast approaching 10,000 contracts.  With new lows for this move down being engineered by ‘da boyz’ during Far East trading, these volume levels come as no surprise.

The dollar index began to edge lower the moment that trading began in New York at 6:00 p.m. EST on Thursday evening — and was down around the 101.86 mark by around 11:35 a.m. in Shanghai.  It has been chopping quietly higher since, but is still down 7 basis points as London opens.

Today we get the latest Commitment of Traders Report, plus the companion Bank Participation Report.  I know that Ted will be checking to see what the Managed Money traders did during the reporting week — and how aggressively they sold down their long positions — and how much they added to their short positions.  I will be as well.

Of course, this COT Report is already yesterday’s news in most respects because, as I just said above, their respective 50-day moving averages were taken out with some authority — plus lower closes have been recorded in the three trading days since the Tuesday COMEX close cut-off.

Although Ted will be able to recalibrate JP Morgan’s silver short position from today’s Bank Participation Report data, it’s a given that they’ve been reducing their short position every day since the cut-off as well.  But how aggressively they’ve been doing that, remains to be seen.

And as I post today’s column on the website at 4:01 a.m. EST this morning, I see that after an hour of trading in London and Zurich, gold is off its pre-London open low tick — and is ‘only’ down $4.80 an ounce.  Silver is down 8 cent.  Platinum is now up 4 dollars — and palladium is only down 2 at the moment.

Net HFT gold volume is just under 51,000 contracts — and that number in silver is up to 12,500 contracts.

The dollar index made it back up to the 101.97 mark about twenty minutes before the London open, but has rolled over since — and is now down 21 basis points from Thursday’s close.

I would suspect that there’s a bit more downside price pain still to go — and as I said in yesterday’s column, I also suspect that we’ll most likely see the final capitulation before the smoke goes up the chimney at the Fed at 2 p.m. EST on Wednesday.

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


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