A Bullish COT Report: But the Mystery Deepens

18 March 2017 — Saturday


It was a nothing day in gold yesterday.  The price traded within a dollar or so of unchanged all through Far East trading — and only showed signs of life shortly before 9 a.m. GMT in London.  It rallied to its high tick, such as it was, at 10 a.m. in New York.  It crawled lower by a dollar and a bit during the rest of the New York session.  Absolutely nothing to see here.

Needless to say, the high and low ticks aren’t worth looking up.

Gold finished the Friday session at $1,228.80 spot, up $3.00 on the day.  Net volume was pretty quiet at just over 116,000 contracts — and roll-over/switch volume out of April and into June and more distant months, was very respectable.

Silver traded lower by as much as five cents or so in Far East and early London trading on their Friday.  It managed to make it back above unchanged by around 10 a.m. GMT — and crawled a few more pennies higher going into the COMEX close.  That was it.

Silver closed yesterday at $17.37 spot, up 8 cents on the day.  Volume was pretty quiet in this precious metal as well at just over 35,500 contracts.

By 9 a.m. CST in Shanghai, the platinum price was down 3 bucks — and it then traded sideways until shortly before 10 a.m. CET in Zurich.  It was back to unchanged an hour and a bit later — and then added a few dollars, not only in the COMEX trading session, but in the thinly-traded after-hours market as well.  Platinum finished the Friday session in New York at $963 spot, up 8 dollars from its close on Thursday.

Palladium also traded lower by 3 dollars in the early going in Far East trading on their Friday. It rallied quickly back above unchanged by the same amount starting around 2:20 p.m. in Shanghai — and chopped quietly higher until a brief spike up shortly after the COMEX open.  That was summarily dealt with — and from there it traded more or less sideways for the rest of the New York session, closing at $775 spot, up 9 bucks on the day.

The dollar index closed very late on Thursday afternoon in New York at 100.25 — and traded pretty much ruler flat until 1 a.m. China Standard Time on their Friday afternoon.  Its 100.14 low tick came around 10 a.m. or so in London — and the 100.47 high tick came at precisely 8:00 a.m. EDT in New York.  It chopped a bit lower from there — and finished the Friday session at 100.37…up 12 basis points on the day.  Nothing to see here, either.

And here’s the 6-month U.S. dollar index chart — and you can read into it whatever you want.The gold stocks opened about unchanged — and then hit their respective high ticks at the London p.m. gold fix.  By shortly after 11 a.m. EDT, they were back in negative territory to stay and, like on Thursday, they chopped quietly sideways for the rest of the Friday session.  For the second day in a row the HUI closed lower, even though gold closed higher…this time by 0.34 percent.

The trading pattern was virtually identical for the silver equities — and they couldn’t squeeze a positive close, either, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down a tiny 0.03 percent.  Call it unchanged.  Click to enlarge if necessary.

And here are three charts from Nick that shows what’s going on 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 it certainly ain’t looking that hot.

And here are the year-to-date changes.  Despite the gains in the underlying metals so far this year, the equities have performed abysmally, with Friday and Thursday being the two latest cases in point.  All the reasons I’ve heard why this is so, don’t cut it with me.  The possibility exists that the powers-that-be are dicking with share prices, as precious metal equities began to decline on February 9…which was long before the precious metals got smacked.  But if they are, how are they doing it would be my first question.  However, laying all that aside, there’s something not right about what’s going on, even though they are in the green this year.

The CME Daily Delivery Report showed that 13 gold and zero silver contracts were posted for delivery on Tuesday within the COMEX-approved depositories.  In gold, Morgan Stanley was the sole short/issuer out of its client account — and Canada’s Scotiabank was the largest long stopper with 10 contracts for its own account.  ADM picked up the other 3 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

I must admit that I was somewhat taken aback by the fact that no silver contracts were issued for delivery on Tuesday.  As I mentioned in yesterday’s column, this delivery month in silver is really dragging out — and this lack of deliveries on Tuesday just adds to the situation.

The CME Preliminary Report for the Friday trading session showed that gold open interest in March dropped by 6 contracts, leaving 32 still open, minus the 13 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that zero gold contracts were posted for delivery on Monday.  Silver o.i. in March declined by 67 contracts, leaving 553 still around.  Thursday’s Daily Delivery Report showed that 72 silver contracts were actually posted for delivery on Monday, so that means that 72-67=5 more silver contracts just got added to the March delivery schedule — and with deliveries this tight, I find that rather amazing.

I would suspect that Ted will have something to say about ‘all of the above’ in his commentary later today.

For the second day in a row, there was a withdrawal from GLD, as an authorized participant took out another 95,214 troy ounces.  And as of 8:14 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was no sales report from the U.S. Mint yesterday.

Month-to-date mint sales have to be close to the worst on record, as so far in March the mint has sold only 10,000 troy ounces of gold eagles — and 500,000 silver eagles — but not one 24K gold buffalo as of yet.  What a difference it makes when JP Morgan isn’t there to buy everything that isn’t nailed down.  But they’re certainly making up for it in the March delivery month.

It was another zero in/out day for gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.

It was only a little better in silver, as nothing was reported received — and only 204,087 troy ounces were shipped out, with 98 percent of that amount coming out of CNT.  I shan’t bother linking this activity, either.

It was another busy day at Brink’s, Inc. over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 7,839 kilobars —  shipped out only 210.  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, showed the expected improvements in the commercial net short positions in both silver and gold.  The changes in the headline numbers were far more impressive in gold than they were in silver.

In silver, the commercial net short position declined by 7,863 contracts, or 39.3 million troy ounces of paper silver.  The commercial net short position in silver is down to ‘only’ 490.0 million troy ounces.  On its face, that’s a wildly bearish number, unless you’re prepared to look beyond that.

During the reporting week, the Big 4 traders covered approximately 2,300 short contracts — and Ted attributes all of it to JPMorgan, bringing their short position down to around 27,000 contracts.  He also pointed out that their short position is probably more improved than even that number shows — and that’s because of all the contracts they’ve taken in delivery so far this month.  The ‘5 through 8’ large traders also reduced their short position…they by about 1,600 contracts  — and Ted’s raptors, the commercial traders other than the Big 8, covered about 4,000 of their short contracts, leaving them just 400 contracts shy of being market neutral.

But it was quite the scene under the hood in the Disaggregated COT Report.  The Managed Money traders reduced their long position by 13,905 contracts, leaving a core Managed Money long position of 80,582 contracts.  They also added 1,980 short contracts during the reporting week as well, for a total weekly swing of 13,905+1,980=15,885 contracts…which was double the size of the reduction in the commercial net short position.  Ted was hoping for a number in the 5-10,000 contract range, but it’s certainly not the end of the world that he was out by this much, as what happened in the Other Reportables and Nonreportable/small trader categories made up for it.  Both groups not only added to their long positions, they also covered a lot of their short positions during that reporting week as well.  That’s amazing because they would normally be running for the hills as well, because the 50-day moving average in silver was taken out to the downside with some authority during the reporting week.  What’s up with that?

Since the December 2016 low in silver, the Managed Money traders have added about 23,000 long contracts to their core holdings — and if they haven’t been flushed out by the penetration of the 200-day moving average two weeks ago, plus the 50-day moving average during this reporting period, Ted figures that they aren’t likely to sell on any further price declines, either.   And that may also apply to the approximately 5,000 long contract holders that suddenly popped up in the Other Reportables/Nonreportable/small trader categories in this week’s report.

Ted’s “Has the Worm Turned?” premise is still very much alive, but with some new twists added in the two other reporting categories to keep things interesting — and probably more bullish.

Here’s the 3-year COT chart for silver.  As you can see, there was a noticeable ‘improvement’…even though it’s still wildly bearish on its face.  But under the hood, things are not what they appear.  Click to enlarge.

In gold, things were much more ‘traditional’ in both COT Reports…at least in most respects.  The commercial net short position in that precious metal dropped by a chunky 29,361 contracts, or 2.94 million troy ounces of paper gold.  The commercial net short position is down to about where it was at gold’s December low — and that’s 12.33 million troy ounces.  Ted says that this a very bullish figure.

Ted said that the Big 4 traders reduced their short position by a sizeable 13,600 contracts…the ‘5 through 8’ large traders by around 3,600 contracts — and Ted’s raptors, the commercial traders other than the Big 8…added about 12,200 contracts to their ever-growing long position.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders activity — and then some.  During the reporting week they sold 29,098 long contracts, plus they added 14,775 short positions, for a weekly change of 43,873 contracts — which was about 14,300 contracts more than the change in the commercial net short position.  All of that difference, plus more, was made up by a huge increase in the long positions of the Other Reportables traders, plus a huge decrease in their short position as well…over 16,200 contracts in total.  Like my comments in silver about this change in the Other Reportables category in silver during the reporting week…”What’s up with that?”

Only the Nonreportable/small trader category did what it was supposed to, as on a net basis they increased their short position by around 1,700 contracts.  But even then, their long position rose by 441 contracts during the reporting week.

It’s getting more intriguing all the time — and I can hardly wait to see what Ted has to say about all this in his weekly review this afternoon, now that he’s had a day…and night…to think about what it all means.

Here’s the COT Report for gold — and you can tell, it’s looking great.  But, like silver, it’s what you can’t see in this bar chart that makes it even more bullish that it appears.  Click to enlarge.

I would suspect that a decent chunk of the Managed Money longs that sold their positions during the reporting week, have been put back on.  But whether they’ll stay there if we get another engineered price decline in the future, remains to be seen.  Of course there’s certainly been in an increase in the commercial net short position since the Tuesday cut-off — and it will be interesting to see which traders are on the other side of the changes.  But that won’t be known until next Friday’s report — and there are still two more days left in the reporting 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 148 days of world silver production—and the ‘5 through 8’ traders are short an additional 53 days of world silver production—for a total of 201 days, which is just under seven months of world silver production, or about 488.4 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 208 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 490.0 million troy ounces.  So for the fifth 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 490.0 – 488.4 = 1.6 million troy ounces…give or take.  The difference between those two numbers is the approximately 400 contracts/2.0 million ounces that the raptors still hold net short…as mentioned in the above COT Report.

As also stated in the above COT Report, Ted pegs JP Morgan’s short position at around 27,000 contracts, or 135 million ounces, which is down from the 29,000 contracts/145 million ounces they were net short a week ago.  135 million ounces works out to around 55 days of world silver production that JPMorgan is short.  That’s compared to the 201 days that the Big 8 are short in total.

The approximate short position in silver held by Scotiabank works out to around 53 days of world silver production.  For the fifth week in a row, JP Morgan is the number one short holder in silver in the COMEX futures market, but only by a few days worth now.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 108 days of world silver production between the two of them—and that 108 days represents 73 percent of the length of the red bar in silver in the above chart…just about 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 13 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 34.2 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 35 days of world gold production, down from 40 days last week — and the ‘5 through 8’ are short another 17 days of world production, which is down from 18 days from the prior week, for a total of 52 days of world gold production held short by the Big 8.  Based on these numbers, the Big 4 in gold hold about 67 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 Big 4 and Big 8 in gold now hold the smallest short positions that I can remember — and as you can see from the chart above, gold has slipped to 6th place from it’s usual 4th place spot.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 73, 73 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.

It was another slow news day yesterday once again, although I do have a few that I’ve been saving for today’s column for the usual length/content reasons — and I hope you have enough time left in your weekend to spend it on the ones that interest you the most.


The Debt Ceiling Deadline Has Passed, And Now the Biggest Test of Donald Trump’s Presidency Begins…

On Wednesday, the temporary suspension of the debt ceiling ended, and so now the federal government is not going to be able to go into any more debt until the debt ceiling is raised.  For the moment, the Trump administration can implement “emergency measures” to stay under the debt limit, but it won’t be too long before we get to a major crisis point because the federal government is quickly running out of cash.  Already, the U.S. Treasury has less cash on hand than Apple or Google, and that cash balance is going to keep on dropping until the debt ceiling is finally lifted.

You may remember that the debt ceiling became a major issue a couple of times during the Obama years.  Last time around, Barack Obama and the Republicans in Congress agreed to a horrendous deal which suspended the debt ceiling until several months after the 2016 election…

Since President Barack Obama signed the “Bipartisan Budget Act” on Nov. 2, 2015 there had been no legal limit on the amount of money the federal government could borrow until now. That law included a section entitled “Temporary Extension of Public Debt Limit.” It said that the law imposing a limit on the federal debt “shall not apply for the period beginning on the date of the enactment of this Act and ending on March 15, 2017.”

During the 16 and a half months between the signing of that deal and today, the U.S. national debt rose by a whopping $1,414,397,000,000.

But now the U.S. national debt will not be allowed to rise by another penny until the debt ceiling is raised or suspended once again.

This somewhat longish commentary put in an appearance on theeconomiccollapseblog.com Internet site on Thursday — and I plucked it from a Zero Hedge article.  Another link to it is here.

Another ‘Hard’ Data Disappointment: U.S. Industrial Production Misses, Stagnant in February

After a brief jump in December, U.S. industrial production was unchanged in February (thanks to tumble in utilities which offset modest manufacturing gains). Industrial Production peaked in the U.S. in Nov 2014, as the U.S. equity market took off after the end of QE3.

February saw Industrial production unchanged against expectations of a 0.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} MoM rise (and January was revised modestly higher).

But then again, when has real economic data mattered?

This brief Zero Hedge article, complete with an excellent chart, was posted on their Internet site at 9:25 a.m. on Friday morning EDT — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

More Hedge Funds Shut Last Year Than Any Time Since the 2008 Crisis

More hedge funds closed in 2016 than in any year since the financial crisis as investors moved money to larger firms and withdrew assets.

Liquidations totaled 1,057 last year, the most since 2008, according to data released Friday by Hedge Fund Research Inc. Though assets managed by the industry rose slightly to $3.02 trillion during 2016, at the end of the year there were 9,893 funds managing that cash, including funds of hedge funds — the fewest since 2012.

The data rounds out a sobering year for hedge funds, which have come under fire from pension funds objecting to their high fees and poor performance. The average fund hasn’t beat the S&P 500 Total Return Index, a measure that includes reinvested dividends, since 2008.

The underperformance has continued into 2017. The HFRI Fund Weighted Composite Index rose 2.2 percent in the first two months of the year, lagging behind the 5.9 percent gain for U.S. stocks.

This Bloomberg story, showed up on their Internet site at 7:52 a.m. MDT on Friday morning — and was subsequently updated an hour later.  I found it on Doug Noland’s website at 9:32 p.m. Denver time last night — and another link to it is here.

Trump’s Drain-the-Swamp Budget Puts GOP Lawmakers to the Test — Editorial

Fiscal Policy: President Trump has clearly brought his business acumen to bear when crafting his first budget proposal, producing the most gimmick-free, strategic, focused — and deeply conservative — spending plan we’ve ever seen.

The White House had already revealed the basic outline of Trump’s budget plan: He intended to cut domestic program by $54 billion so he could fund a much-needed boost in military spending.

The “skinny budget” he released on Thursday provides details as to where those spending cuts will come from. Every agency except Defense, Homeland Security and Veterans Affairs is targeted for reductions that range up to 31{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

These are, it should be noted, real spending cuts. They aren’t cuts against some “baseline” of expected spending increases, a gimmick that has let politicians on both sides of aisle claim to be reducing spending while actually increasing it. When Trump says the EPA’s budget would be slashed by $2.6 billion, and that he’s lopping $11 billion out of federal foreign aid programs next year, he means it. After decades of scandalous Washington budget obfuscation, the clarity of this document is refreshing.

The budget plan is also remarkably strategic. These aren’t mindless, across-the-board cuts. To free up money for defense, Trump wants to refocus the mission of several agencies that have grown horribly bloated over the decades — most notably the EPA. Programs outside this new focus would get the ax.

This editorial was posted on the investors.com Internet site on Thursday — and I found it in yesterday’s edition of the King Report.  Another link to it is here.

Doug Noland: Another Missed Opportunity

Yes, markets had begun fretting a bit that a sense of urgency might be taking hold within the Federal Reserve. But the FOMC’s two-day meeting came and went, and chair Yellen conveyed business as usual. Policy would remain accommodative for “some time.” The focus remains resolutely on a gradualist approach, with Yellen stating that three hikes a year would be consistent with gradualism. And three baby-step hikes a year would place short rates at 3.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in early 2020 (the Fed’s “dot plot” sees 3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} likely in 2019). It’s not obvious 3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} short rates three years from now will provide much restraint on anything. As such, the Fed is off to a rocky start in its attempt to administer rate normalization and a resulting tightening of financial conditions.

Yellen also suggested that the committee would not be bothered by inflation overshooting the Fed’s 2.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} target: “…The Fed is not inclined to overreact to the possibility that inflation could drift slightly — and in the Fed’s view temporarily — above 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the coming months.” There would also be no reassessment of economic prospects based on President Trump’s agenda of tax cuts, infrastructure spending and de-regulation. “We have plenty of time to see what happens.” Moreover, the Yellen Fed did not signal that it is any closer to articulating a strategy for reducing its enormous balance sheet.

Bloomberg had the most apt headlines: “Yellen Calms Fears Fed’s Policy Trigger Finger Is Getting Itchy;” “Yellen Faces New Conundrum as Conditions Defy Hike;” “The Market Is Acting Like the Fed Cut Rates.

Ten-year Treasury yields dropped 11 bps on FOMC Wednesday to 2.49{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the “largest one-day drop since June.” Even two-year yields declined a meaningful eight bps to 1.30{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. The dollar index fell 1.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, with gold surging almost $22. The GSCI commodities index rose more than 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. EM advanced, with emerging equities (EEM) jumping 2.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to the high since July, 2015.

Doug’s Credit Bubble Bulletin commentary was posted on his website late last night EDT — and it will be the first thing I read when I check my column later this morning.  Another link to it is here.

CIA Clinton ally trashes ‘Russiagate’/’Trump Dossier’: admits ‘no collusion’ between Trump and Russia

The ‘Russiagate’ scandal received another body blow today when Hillary Clinton’s own pick for CIA Director admitted there was no evidence behind it.

Michael Morell, the former acting CIA Director, who would have been in line to become CIA Director if Hillary Clinton had won, has publicly admitted a point The Duran has repeatedly made: there is no evidence that Donald Trump and his campaign colluded with Russia.

Morell’s comments, spoken to an event sponsored by the Cipher Brief, an intelligence web site, could not have been more forthright.

On the question of the alleged collusion between the Trump campaign and Russia, he is reported to have said the following:

On the question of the Trump campaign conspiring with the Russians here, there is smoke, but there is no fire, at all.  There’s no little campfire, there’s no little candle, there’s no spark. And there’s a lot of people looking for it.

This commentary by Alex Mercouris showed up on theduran.com Internet site on Thursday — and I thank Larry Galearis for bringing it to our attention.  Another link to it is here.

How Does Big Ben Keep Accurate Time?

This very interesting 3:01 minute youtube.com video clip appeared in my in-box courtesy of Saskatchewan subscriber Steve Buttinger on Monday — and had to wait for today’s column.  It’s certainly worth your while if you have the interest.

U.S. Pressures IMF to Walk Away From Greece: Déjà Vu, All Over Again

Greece is in reverse.  Greek Unemployment Rose to 23.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, GDP contracted 1.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} last quarter, and now the U.S. is pressuring the IMF to back away from continued bailouts.

A bill introduced on Thursday by Bill Huizenga, a Michigan conservative who was first elected to Congress with Tea party backing in 2011, calls for the Trump administration to oppose any further IMF participation in a Greek bailout. Should the US fail to achieve that aim, the bill would also require the US to oppose any broader IMF quota reforms until Greece had repaid all of its debts to the IMF.

The IMF is supposed to be a lender of last resort, not a fig leaf of first resort for eurozone members,” Mr. Huizenga said.

The IMF isn’t a fund to rescue political parties in creditor nations, nor should it be a junior partner to outside organizations that lack the commitment to do their work,” he said. “For seven years now, the IMF has been used to shield eurozone officials from their voters, which has tarnished the fund’s reputation, prolonged Greece’s misery, and put off hard choices about Europe’s future that must be made regardless.”

This article was posted on the mishtalk.com Internet site at 1:57 p.m. on Friday afternoon EDT — and I thank Roy Stephens for finding it for us.  Another link to it is here.

New Cold War Eve of the New HUAC — John Batchelor Interviews Stephen F. Cohen

Batchelor opens the discussion with some news bombshells surrounding Putin. And as Cohen quips, at the same time “Washington is going in circles” over the get Trump campaign. The major news items involve Putin being given a Russian base in Egypt to address the Libya problem, includes a very productive meeting with the Israeli Prime Minister, Benjamin Netanyahu, and finally next week the U.S. House Intelligence Committee begins its investigation of Russian influence in the recent U.S. elections. Cohen then explains what his expectations will be from this closed-door operation. Meanwhile the media is energetically front running its own expectations about outcomes – in a theme we are all used to. In addition Cohen brings up the formation of a new institution, the Global Engagement Centre, aimed at individuals and groups that are seen as dissidents and functioning as a “counter propaganda group” – like the John Batchelor Show.

The discussion then shifts back a few degrees to details of the US House Intelligence Committee led by Devin Nunes and  Ranking Member, Adam Schiff – the committee that wants to “investigate” the Putin/Trump connection. What is quite bizarre is that even the organization’s stated objectives already seem to assume guilt even as there is no evidence for any of it. This may well indicate what level of veracity will be seen in its conclusions, and we are reminded that this is, after all a “closed door” operation. That is also Cohen’s theme, and he lists all the possible “findings” for the “investigation” including a mention of  the WikiLeaks Vault 7 disclosures and a “fake” Russian “fingerprint” found in the “hack” of the DNC.  He even discusses the possibility that there really is a relationship with Russia in the election. In regards to the DNC “hack”, he mentions the expert opinion from the US group, Veteran Intelligence Professionals for Sanity, that there was no hack, but there was a leak. While Cohen states that Trump’s opposition is already assuming their victory in removing Trump, Cohen opines that Trump may be wiser than he appears and may be planning an end around play against his foes. To this end Cohen notes the choice of Jon Huntsman for American ambassador to Russia is an indication that détente may well be proceeding but under the radar. I agree with this. This choice for ambassador is very important and Cohen goes into great detail to explain a speculation that Trump is continuing with his stated agenda as president to pursue détente. And something later mentioned by the pundits is the cooperation between Russian forces and new American troops in Syria against ISIS. This seems to indicate some support for Trump out of the Pentagon – and it also indicates serious divisions within the deep state and its captured minions in the military establishment.

But, of course Trump is not the only target of the deep state foes. Secretary of State, Tillerson is also under attack for simply meeting with Putin in the Kremlin and for  having received an award from the Russian state called the Order of Friendship. There is nothing unusual about any of this. But Cohen answers the question everyone is asking: “Why is he being so silent [on the subject of Russia]”? Cohen maintains that when diplomacy occurs, it is done quietly. This is also normal and is a positive sign that things are happening. For Cohen this is the best news of the week, that the Trump administration may be very quietly following through with stated goals.

This 40-minute audio interview was posted on the audioboom.com Internet site on Tuesday and, as always, has to wait for my Saturday missive.  I thank Ken Hurt for providing the link, but the biggest Thank Yous are reserved for Larry Galearis for his always excellent executive summaries.  It’s always a must listen for any serious student of the New Great Game — and another link to the interview is here.

Trump Slams North Korea For “Behaving Very Badly“, Blames China

Following Secretary of State Tillerson’s clear warning of the potential for a first strike against North Korea this morning:

I think it’s important to recognize that the political and diplomatic efforts of the past 20 years to bring North Korea to the point of denuclearization have failed,” Tillerson said. “Let me be very clear: the policy of strategic patience has ended. We are exploring a new range of security and diplomatic measures. All options are on the table,” Tillerson told a news conference in Seoul and added that any North Korean actions that threatened the South would be met with “an appropriate response.”

Stirring the pot at both ends, just as China relations were starting to heal a little (even with the THAAD deployment).

Meanwhile, as previewed one week ago, the odds of an unexpected North Korean WMD attack are rising.

According to the Predata-Beyond Parallel consultancy’s prediction model, there was a 43{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} chance of North Korean WMD activity taking place in the next 14 days (as of last Friday), while in the next 23 days, there is a 62{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} chance for North Korean WMD activity. Beyond Parallel defines WMD activity as nuclear tests and ballistic missile launches. A military response by the U.S. now looks increasingly probable.

This news story put in an appearance on the Zero Hedge website at 9:16 a.m. on Friday morning EST — and I thank Richard Saler for pointing it out.  Another link to it is here.

Musk’s bold offer of Tesla batteries won’t solve Australia’s power problems: Russell

Australia is becoming an interesting microcosm on how to, or how not to, transition an economy from being predominantly powered by coal to more climate-friendly alternatives.

The dramatic intervention by Tesla Inc Chief Executive Elon Musk last week is just the latest twist in an ongoing saga that pits business, government, farmers, government and environmentalists against each other.

Musk, in an exchange of tweets with software billionaire Mike Cannon-Brookes, chief executive of Atlassian Corp, offered to fix the electricity supply problems of South Australia state within 100 days of signing a contract.

Musk’s plan is to install 100 megawatts (MW) of grid-connected battery storage, which would be available to meet peak demand and would be charged with surplus electricity from other generating sources in periods of low demand.

It’s a bold offer and would most likely provide a quick fix to Australia’s fourth-largest state, which suffered a blackout last November and has been dealing with power shortages over the peak summer period.

Businesses like BHP Billiton, which operates the giant Olympic Dam copper mine in the state, have been pushing for the government and other stakeholders to ensure stable electricity supply, saying the cost of blackouts runs into millions of dollars in lost output.

This very interesting, but longish Reuters story, filed from Launceston, Tasmania in Australia on Tuesday evening EDT, was another article that had to wait for my Saturday column.  I thank West Virginia reader Elliot Simon for sharing it with us — and another link to it is here.

Sierra Leone pastor finds huge 706-carat diamond

The discovery was made by Pastor Emmanuel Momoh in an artisanal mine in the village of Koyadu in eastern Kono district, a government statement said on Thursday.

A 706-carat diamond was presented to President Dr Ernest Bai Koroma yesterday evening,” the statement said.

Receiving the diamond President Koroma thanked the chief and his people for not smuggling the diamond out of the country,” it added, referring to the Tankoro chiefdom where Momoh uncovered the gem.

The diamond will be sold in Sierra Leone with a “transparent” bidding process to the benefit of the community and country, the statement said.

I have to help the government and my people, so all of us can benefit,” presidential spokesman Abdulai Bayraytay quoted the pastor as saying.

This very interesting news item appeared on the aljazeera.com Internet site on Thursday sometime — and the photo alone makes the story worth reading.  I thank Ellen Hoyt for bringing it to my attention — and now to yours.  Another link to it is here.

Silver Seen Climbing Faster Than Gold as Yellen Wakens Bulls

Investors may be better off with silver rather than gold. The Federal Reserve’s pledge to stick to its dovish outlook on U.S. monetary policy has fueled a rally in precious metals and silver usually beats its more valuable peer in a rising market.

After the Fed raised interest rates by a quarter percentage point Wednesday, Chair Janet Yellen said the central bank was willing to tolerate inflation temporarily overshooting its 2 percent goal and intended to keep its policy accommodative for “some time.” UBS Group AG said the gradual pace of tightening means negative rates will deepen, the dollar weaken and gold rise.

Silver is substantially undervalued compared to gold and has plenty of space to appreciate both in dollar terms and relative to gold,” Gregor Gregersen, founder of Singapore-based Silver Bullion Pte, said in an e-mail. “Currently the move into silver is a trickle, but it might very well become a flood once the mood of the market at large shifts.”

This rather brief Bloomberg story was posted on their Internet site at 2:05 a.m. Denver time on Thursday morning — and was subsequently updated a bit over two hours later.  I found it in a GATA dispatch yesterday — and another link to it is here.

China gold premiums rise on limited supply

Gold premiums rose in China this week as traders said supply of the precious metal was limited due to tightening import restrictions to stem currency outflows.

Premiums climbed to over $20 an ounce against the international benchmark from $15-$17 last week.

“The imports are happening, but with some restrictions. The government has been doing this since November to control the capital outflows. Now, it is becoming a bit aggressive with stringent reviews,” said a Hong Kong-based executive with a precious metals trading firm.

The quotas are reviewed regularly and extended on a case by case basis. The demand has been more than supply.

China gold premiums surged to their highest in nearly three years late last year as traders saw Beijing’s efforts to restrict import licences impacting supply.

This Reuters article, co-filed from Bengaluru and Mumbai, was posted on their website at 5:26 p.m. India Standard Time [IST] on their Friday afternoon — and it’s something I found on the Sharps Pixley website last night.  Another link to it is here.

Accurate account of Klondike Gold Rush turns mythology on its head

Nothing in northern history is as heavily romanticized as the Klondike Gold Rush. The era has been mythologized as the last great leap in westward expansion, when thousands flooded north and a culture of greed, gambling and gun-play swept over the Last Frontier.

The popular narrative makes for good novels and movies, but apart from the exploits of Soapy Smith, it didn’t happen that way. As we learn from “All for the Greed of Gold,” a recently published firsthand account of life on the trail to Dawson City in 1898, what mostly transpired was a lot of hard work. It’s not the stuff of Hollywood productions, but it’s actually fascinating for what it tells us about the people who went and what their experiences required of them.

Will Woodin was 24 years old in 1898 when he went north. Born in Michigan, he had moved to Seattle with his family as a child. Editor Catherine Holder Spude, author of “Saloons, Prostitutes and Temperance in Alaska Territory” and an astute historian of Alaska’s gold rush era, explains that Woodin and his father Jay were part of an emerging middle class that left farming in the late 19th century and migrated to cities, seeking a better life.

Woodin’s memoir, written more than a decade after his journey, was never published, and along with his other papers — including a diary of the trip — eventually fell to his great-niece, Sandra Bixby Dunn. Dunn learned of Spude’s work during the 1980s as an archaeologist and historian based out of Skagway and brought her in as editor. The result is this book, which largely follows Woodin’s memoir, with diary entries inserted as needed both to expand on the story and highlight some of Woodin’s complaints and hardships that he omitted from what he intended to be a published book.

What readers are presented with is a detailed account of what traveling to the gold fields was like. Woodin was a skilled writer whose language and descriptive abilities bring his expedition to life. Though he did not attend college, he was clearly well educated. Spude writes in her introduction that he was prone to chronic spelling errors and misstated a few facts, but his narrative skills were nonetheless remarkable.

This amazing story/book review was posted on the adn.com Internet site last Sunday — and it’s another article I found on the gata.org Internet site.  It’s definitely worth your while — and another link to it is here.



Today’s pop ‘blast from the past’ was a slam-dunk for me.  Leonid and Friends, the Russian musicians that do covers of Chicago’s greatest hits, released another one this week.  Like the one before it, this cover is as good as, if not better than the original.  One has to wonder how long it takes these guys to deconstruct one of these numbers into its constituent instruments…lead and rhythm guitar, bass, piano, drums, the brass section…then learn it, record it, mix it, and do a video that pretty much buries the original.  This one certainly does the job — and the link to it is here.  Most of their other covers are in the right sidebar.  Enjoy!

Today’s classical ‘blast from the past’ is similar to this Chicago piece in that the orchestral sheet music was destroyed before this British film was released during WW2 — and musical historians had to reconstruct the orchestration from the film’s sound track, as it was a monster hit when the movie was released in 1941.  Dangerous Moonlight, also known as Suicide Squadron in the USA, is now best known for it score written by Richard Addinsell, with orchestrations by Roy Douglas, with the best-remembered scenes involving the Warsaw Concerto.

The success of the film led to an immediate demand for the work, and a recording was dutifully supplied from the film’s soundtrack (at nine minutes, it fit perfectly on two sides of a 12 inch disk playing at 78 rpm) along with sheet music for a piano solo version. Such unexpected success had another consequence. The off-screen piano part was played by Louis Kentner, a fine British musician known for his performances of Franz Liszt, but he had insisted that there be no on-screen credit, for fear that his participation in a popular entertainment would harm his classical reputation. He lost his qualms when the recording sold in the millions, and Douglas notes that he even asked for royalties (they were granted). Ultimately the Warsaw Concerto was such a hit that it made the then unusual journey from movie screen to concert hall.

And it’s still there to this day.  This video recording isn’t the greatest, but the sound is superb — and that’s all that matters.  The link is here.

There certainly isn’t much to talk about regarding yesterday’s price/volume action in either gold or silver yesterday — as precisely nothing happened.  I found it rather surprising, as that was not what I was expecting, but it is what it is.

Here are the 6-month charts for all four precious metals, plus copper once again.  Gold has been trading above its 50-day moving average for a couple of days, but silver has come up short — and I’m sure that it’s not accidental.  The click to enlarge feature helps a bit with the first four charts.

I must admit that I don’t know what will happen with the precious metals going forward.  I know that Ted says that the set up for gold in COMEX futures market is very bullish — and to add to that is the current COMEX structure in silver.  On its face — and only looking at the COT chart further up, there’s certainly nothing bullish about silver when you look at it in an historical sense.  But that belies what’s happening under the hood in the Disaggregated COT Report — and that can be said about gold in some respects as well.

I get the sense that a shift of historical proportions is taking shape, mostly hidden from all but the most knowledgeable of prying eyes.  If it wasn’t for Ted, I wouldn’t have been any the wiser.  Just looking at all the public commentary on the COT Reports these days, it’s obvious that these intricacies are lost on the so-called ‘analysts’ who are just now coming to grips with the influence that is the tango between the commercials and the managed money traders.  As I said yesterday — and again today in my COT discussion on silver, his “Has the Worm Turned?” hypothesis is still very much alive and well.

If this is, in fact, what is happening, then at some point in the very near future it will become very evident in the price action, as the Big 8…sans JP Morgan, will be in a world of hurt.  And whether it happens before the March delivery month in silver is complete, is certainly open for debate at the moment.

As I’ve mentioned to Ted on more than one occasion, when JP Morgan does finally stand back and walk away as short buyer and long seller of last resort, it will not occur in a news vacuum.  The price moves that Ted has been talking about for decades now will be pinned on the news events of the day — and I would think that they will have a whiff of Armageddon about them when it, or they, occur.

This budding confrontation between the U.S. and North Korea has possibilities in that regard — as a 9/11-style nuclear ‘event’ that could easily be blamed on North Korea, would meet all of those aforesaid requirements.   I certainly hope that it doesn’t come to that, but any government that could pull off a false flag event on the scale of 9/11…is certainly capable of far worse, if necessary.

And on that happy note, I’m done for the day — and the week — and I’ll see you here on Tuesday.


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