JP Morgan’s Appetite For Physical Silver Continues Unabated

25 March 2017 — Saturday


There wasn’t much in the way of price activity in gold on Friday, although the scale of the Kitco chart makes it appear that there was.  The low tick was printed shortly before 8:30 a.m. in London — and it chopped quietly higher until 3:15 p.m. EDT in the thinly-traded after-hours market.  At that point it certainly appeared that the market was about to go ‘no ask’ — and the short buyers and long sellers of last resort not only capped the price, they also closed gold for a loss on the day.

The low and high ticks were recorded as $1,240.70 and $1,251.90 in the April contract.

Gold was closed in New York yesterday afternoon at $1,242.90 spot, down $1.70 from Thursday.  Net volume wasn’t overly heavy at just over 140,000 contracts — and roll-over/switch volume out of April was very chunky.

The silver price traded a few pennies either side of unchanged until the low tick of the day was printed just before 8:30 a.m. GMT in London…the same as it was for the gold price.  It chopped quietly higher from there, but really caught a bid around 9:45 a.m. in New York.  That was rolled over by 11:15 a.m. EDT — and it inched higher for the rest of the Friday session — and the tiny spike higher in the thinly-traded after hours market was summarily dealt with as well.

The low and high ticks in this precious metal were reported by the CME Group as $17.54 and $17.80 in the May contract.

Silver finished the day at $17.735 spot, up 18 cents from Thursday’s close.  Net volume was about average at just a bit under 40,000 contracts.

Platinum traded mostly lower in Far East and early morning trading in Zurich and, like silver and gold before it, its low was also set at around 8:20 a.m. GMT/9:20 a.m. in Zurich.  It crawled quietly higher until its $967 high tick was set shortly after 3 p.m. in New York — and then also like gold and silver, got sold off into the close.  Platinum finished the Friday session at $962 spot, up a dollar on the day.

Palladium traded flat until around 10 a.m. CET in Zurich.  It inched higher for the next three hours — and then really began to sail.  It ran into ‘da boyz’ and their algos shortly after the COMEX open, but continued to crawl higher until shortly after 12 o’clock noon in New York — and by the 5:00 p.m. EDT close, half of its gains had been taken away.  Palladium was closed in New York yesterday at $807 spot, up 7 bucks on the day.  And for the second day in a row would have finished at heaven-only-knows what price if allowed to trade freely, which it obviously wasn’t…just like the other three precious metals.

The dollar index closed very late on Thursday afternoon in New York at 99.76 — and then traded flat until 8 p.m. EDT once trading opened in New York at 6:00 p.m. EDT.  Then it took off towards the 100.00 mark — and although it touched it briefly a minute or so before 1:30 p.m. in Shanghai, that’s the best it could do.  Then at precisely 3:00 a.m. CST it began to head lower, with most of the decline that mattered in by shortly before 11:30 a.m. GMT in London.  It rallied a bit into the London p.m. gold fix — and then chopped lower from there, with the 99.53 low tick coming minutes before 3:30 p.m. EDT.  ‘Gentle hands’ appeared to have shot it higher from there and, within 15 minutes, was back at precisely unchanged on the day…to the tick — and that’s where it closed.

And for entertainment purposes, here’s the 5-year U.S. dollar index to give you some idea how big a fall from grace that it may have going forward.  And the 80.00 level would be just ‘jacks for openers’ I would think.

The gold stocks opened lower by a bit — and then chopped around either side of unchanged for a while, before sinking back into negative territory shortly after 12:30 p.m. in New York.  They began to edge higher starting around 2:10 p.m. EDT — and shot into positive territory briefly on gold’s price spike in the after-hours market.  Once ‘da boyz’ capped it and drove it lower, the shares followed — and the HUI closed down 0.38 percent.

The silver equities also opened down a bit — and were back in positive territory briefly by 10 a.m. EDT. Fifteen minutes later they were on their way back into negative territory — and their respective low ticks were set shortly after 2 p.m. in New York. Then, like the gold stocks, they rallied swiftly into the green on the tiny silver price spike in the thinly-traded after-hours market, but sank back into the red even though the silver price closed up a percent on the day.   Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down another 0.40 percent.  Click to enlarge if necessary.

The shares continue to stink up the place — and the silver equities are rapidly turning into the ‘Rodney Dangerfield’ of the precious metal market.  Why this is the case…I don’t know.  Nor does anyone else — so don’t believe any of the reasons why they may offer.

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.  The possibility exists that the powers-that-be are managing 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 quite right about what’s going on, but I just don’t know what it is.

Today’s CME Daily Delivery Report showed that zero gold and 149 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  It was Scotiabank as sole short/issuer again and, also once again, it was JP Morgan as the biggest long/stopper…picking up 107 contracts for itself — and another 22 for its ‘client’ account.  In distant second place was the CME Group with 17 contracts — and those [17×5=85] good delivery bars were used to fill all 85 of the E-mini Silver Futures contracts for March.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in March declined by 10 contracts, leaving just 17 left.  Thursday’s Daily Delivery Report showed that 10 gold contracts were actually posted for delivery on Monday, so those numbers work out the way they should.  Silver o.i. in March dropped by 139 contracts, leaving 196 still open, minus the 149 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 137 silver contracts were actually posted for delivery on Monday, so that means that 139-137=2 short/issuers were let off the March delivery hook…most likely by JP Morgan.

Ted mentioned something on the phone yesterday which I would have certainly missed if he hadn’t pointed it out.  That was the fact that there were 244 silver contracts ‘traded’ in March on the CME’s ‘Silver Futures Settlements‘ webpage.  And what made it interesting, was the fact that the numbers in Thursday’s Preliminary Report in my column yesterday showed that there were only 198 silver contracts still open in March.  Ted also mentioned the obvious fact that there were no prices reported with these transactions — and it had all the hallmarks of an arranged trade of some kind.  I see no signs of it in the above numbers — and I’ll be interested in what he may have to say about it in his column this afternoon.

There was a withdrawal from GLD yesterday, as an authorized participant took out 57,124 troy ounces — and as of 8:13 p.m. EDT yesterday evening, there were no reported changes in SLV.

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

Month-to-date the mint has sold 19,000 troy ounce of gold eagles — 7,000 one-ounce 24K gold buffaloes — plus 1,295,000 silver eagles.  Only the big sales report from earlier in the week saved March from being a total disaster.  Of course there’s still a week of selling left to go — but unless something goes bump in the night, it will be another quiet sales month now that JP Morgan has left the building.

It was another very quiet day for gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Only 1,000 troy ounces was received — and all of that went into Brink’s, Inc.  Nothing was shipped out.  I won’t bother linking this.

It was only marginally busier in silver.  Nothing was reported received — and only 121,780 troy ounces were shipped out…split up between three different depositories.  I won’t bother linking this small amount of activity, either.

Of course it wall ‘all sail set’ once again over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, as 4,000 were reported received — and another 8,173 kilobars were shipped out.  All of this action was at Brink’s, Inc. of course — 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, was a big surprise for both Ted and myself.  I was expecting a reasonably negative number in both silver and gold, considering the fact that both precious metals were not only up on the week, but also both also closed above their respective 50-day moving averages as well.

Not only was the increase in the commercial net short position in gold very small, but there was a decrease in the commercial net short position in silver!

In silver, the commercial net short position declined by 4,265 contracts, or 21.3 million ounces of paper silver.  They arrived at that number by increasing their long position by 1,721 contracts, plus they covered 2,544 short contracts.  The commercial net short position in silver now sits at 468.7 million troy ounces.

Ted said that the Big 4 traders decreased their short position by around 800 contracts, all of which he attributes to JP Morgan.  He pegs their short position at 26,000 contracts…or maybe a bit less.  The ‘5 through 8’ large traders collectively decreased their short position by about 400 contracts — and Ted’s raptors, the other 28 traders on the short side in the commercial category, not only covered their remaining 400 short contracts, but also added around 2,700 contracts on the long side during the reporting week as well.

Under the hood in the Disaggregated COT Report, it was mostly a Managed Money affair, as they sold 1,668 long contracts, plus they added 1,063 short contracts, for a total reporting week change of 2,731 contracts.  The approximately 1,500 contract difference between that number — and the change in the commercial net short position, was split up between the traders in the other two categories…the ‘Other Reportables’ and the ‘Nonreportable’/small traders.

Even after talking with Ted yesterday afternoon, I’m still trying to figure out how we had about a 60 cent rally in silver over the reporting week based on the actions of the Managed Money traders during the reporting week just past.  Maybe the price rose precisely because the Big 8 were somewhat aggressive in covering short positions during the reporting week?  The Managed Money long position is down a bit to around 78,900 contracts, which is hardly any change at all — and there were tiny changes in the long positions in the other two categories as well.  One went down a bit — and the other was up a bit.

This was a very bullish COT Report in silver — and despite what the 9-year COT chart below indicates, the set-up for a monster rally is in place, particularly if Ted’s “Dead Men Walking?” scenario comes into play — and we may have seen the beginning of that this past week.  Click to enlarge.

In gold, the commercial net short position rose by an almost insignificant 5,710 contracts, or 571,000 troy ounces of paper gold.

[I was expecting/praying for only about double that amount, or maybe a tad more.  Ted’s number was 30,000 contracts…plus or minus 10,000.  And if you think our guesses here were out to lunch in gold, I shan’t bother telling you what are estimates were for silver.]

They arrived at that number by reducing their long position by 1,253 contracts, plus they added 4,457 short contracts…all courtesy of the Managed Money traders, of course.  The commercial net short position is now up to 12.90 million troy ounces.

Ted said that the Big 4 traders added a whopping 13,300 contracts or so to their short positions, while the ‘5 through 8’ largest traders reduced their short position by about 2,700 contracts — and Ted’s raptors…the 42 small commercial traders on the short side that remain after you subtract out the Big 8…added around 4,900 contracts to their ever-burgeoning long position.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders — and then some as they added 9,080 long contracts, plus they reduced their short position by 741 contracts, for a weekly reporting week change of 9,821 contracts.  The difference between that number and the commercial net short position came almost exclusively from the Nonreportable/small trader category.

Here’s the 9-year COT chart for gold — and what could have been an ugly and negative report has turned out to be very bullish.  Click to enlarge.

So, with a 60 cent rise in the silver price — and about 30 bucks in gold during the reporting week — and with the 50-day moving averages being broken to the upside in both metals…what do we have?  Only a tiny increase in the commercial net short position in gold — and a noticeable decrease in the commercial net short position in silver.  And to top it off in silver, there was no appreciable deterioration in the long positions of the Managed Money/Other Reportables/Nonreportable [small trader] categories.

This is not only bullish beyond belief, it is also unprecedented.  I’ll leave it up to Ted in his weekly commentary later today to flesh this out, as he’s the real authority — and I know he likes to sleep on it before he writes anything.  Where we go from this point is anyone’s guess.  It’s definitely uncharted waters from hereon in.  I’ll be more than interested in Ted’s take on all this.

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 147 days of world silver production—and the ‘5 through 8’ traders are short an additional 51 days of world silver production—for a total of 198 days, which is six and a half months of world silver production, or about 481.1 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 201 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 468.7 million troy ounces.  So for the first time in about six weeks, the short position held by the Big 8 traders is larger than the entire commercial net short position — to the tune of 481.1 – 468.7 = 12.4 million troy ounces…give or take.  The difference between those two numbers is the approximately 2,700 contracts/13.5 million ounces that the raptors [the commercial traders other than the Big 8] are now net long…as mentioned in the above COT Report.

As also stated in the above COT Report, Ted pegs JP Morgan’s short position at around 26,000 contracts, or 130 million ounces, which is down from the 27,000 contracts/135 million ounces they were net short a week ago.  130 million ounces works out to around 53 days of world silver production that JPMorgan is short.  That’s compared to the 198 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.  So these two banks are short about the same amount of silver in the COMEX futures market.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 106 days of world silver production between the two of them—and that 106 days represents 72 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, a bit over 20 days of world silver production apiece.  The four traders in the ‘5 through 8’ category are short, on average, a bit under 13 days of world silver production each.

The short positions of Scotiabank and JP Morgan combined, represents about 53 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 50.5 percent of the entire open interest in silver in the COMEX futures market — and that number would be over 55 percent once the market-neutral spread trades are subtracted out.  In gold it’s 35.0 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 40 days of world gold production, up from 35 days last week — and the ‘5 through 8’ are short another 16 days of world production, which is down from 17 days from the prior week, for a total of 56 days of world gold production held short by the Big 8.  Based on these numbers, the Big 4 in gold hold about 71 percent of the total short position held by the Big 8…which is getting close to what silver’s concentration is.  And it should be noted that gold is back in its usual #4 slot on the ‘Days to Cover’ chart above, after being in sixth place last week.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 74, 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 fairly 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.


Ignore This Durable Goods Chart…

It’s gone nowhere in five years…

A very different picture to the never-ending surge in the stock market.

It’s the “new economy” stupid! You just don’t get it!

The last two times that Durable Goods Orders slumped like this, the stock market collapsed… But, it must be different this time?

This 1-chart Zero Hedge article was posted on their website at 10:32 a.m. EDT yesterday morning — and the chart is certainly worth a quick look.  I thank Brad Robertson for this — and another link to it is here.

PwC settles with MF Global over Corzine brokerage’s collapse

PricewaterhouseCoopers LLP has settled a $3 billion negligence lawsuit over the October 2011 collapse of MF Global Holdings Ltd, the futures and commodities brokerage once run by former New Jersey governor Jon Corzine.

Terms were not disclosed, but the malpractice case was “settled to the mutual satisfaction of the parties,” representatives for PwC and MF Global’s bankruptcy administrator said in separate statements on Thursday.

The accord ends the last major piece of litigation that the administrator, hedge fund founder Nader Tavakoli, has been pursuing on behalf of MF Global creditors.

It also ends a trial that began on March 7 in the U.S. District Court in Manhattan, where several witnesses including Corzine had already testified.

PwC has denied wrongdoing. It blamed Corzine’s business strategy and the market’s reaction to it for MF Global’s demise.

This Reuters article from 12:03 p.m. EDT on Thursday afternoon, showed up on the Zero Hedge website early yesterday morning.  It comes to us courtesy of Brad Robertson — and another link to it is here.

Doug Noland: Discussions on the Fed Put

Writing flood insurance during a drought is an alluringly profitable endeavor. The “Fed put” has encouraged Trillions to flow into the risk markets. Trillions of “money” have gravitated to “passive” trend-following securities market products and structures. Yet the most dangerous Fed-induced market distortions may lurk within market hedging strategies. The above Financial Times article ran under the headline “Rise in New Form of ‘Portfolio Insurance’ Sparks Fears.” Fear is appropriate. To what degree has it become commonplace to seek profits “writing” various types of market “insurance” in a yield-hungry world confident in the central bank “put.” How much “dynamic hedging” and derivative-related selling waits to overwhelm the markets in the event of a precipitous market sell-off (concurrent with fear that the Fed has stepped back from its market backstopping operations)?

The speculative bull market confronted some Washington reality this week. The S&P500 declined 1.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the worst showing in months. The banks (BKX) were slammed 4.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, with the broker/dealers (XBD) down 4.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. The broader market was under pressure, with the mid-caps down 2.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} and the small caps 2.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. It’s worth noting the banks, transports and small caps are all now down y-t-d. Curiously, bank stocks underperformed globally. Japan’s Topic Bank index was hit 3.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. The Hong Kong Financial index fell 1.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, and Europe’s STOXX 600 Bank index lost 0.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

Ten-year Treasury yields dropped nine bps to a one-month low (2.41{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}), as sovereign yields declined across the globe. Just when the speculators were comfortably short European periphery bonds, Spanish 10-year yields sank 19 bps, Italy fell 13 bps and Portugal dropped 15 bps. Crude prices traded this week to the low since November. The GSCI Commodities Index declined to almost four-month lows. Time again to pay attention to China? This week saw a “super selloff” in Chinese iron ore markets. Copper fell 2.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, and the commodities currencies (Australia, Canada, Brazil) underperformed. Meanwhile, precious metals outperformed, with gold up 1.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} and silver rising 2.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

Doug’s weekly Credit Bubble Bulletin was posted on his website late last night EDT — and another link to it is here.

Misconduct rife in derivatives: ex-CFTC enforcement chief says

There is “massive amount of misconduct” in futures, options and swaps markets goes undetected because of insufficient data mining, Aitan Goelman, who until last month was enforcement chief for the top U.S. derivatives regulator, said in an interview.

Goelman said a lack of resources meant the U.S. Commodity Futures Trading Commission (CFTC) did not have the sophisticated software and staff necessary to uncover many of the suspicious trading patterns within the 325 million records filed each day.

Goelman said there is much more manipulation, insider trading, front-running and Ponzi scheming in the markets than is being prosecuted, even though the CFTC receives the data from industry participants and exchanges and gained enhanced enforcement authority under a 2010 financial reform law.

One of my regrets is there’s such a massive amount of misconduct in the market we’re just not pursuing,” said Goelman, who left the CFTC after the change to a Republican administration and nearly three years as enforcement chief.

We could do a lot more manipulation cases. We have all these new enforcement tools and this vastly expanded jurisdiction and data,” Goelman said in the interview. “But you have to be acutely conscious about the limited resources.

Cry me a river, Aitan.  Your mea culpa sucks.  This Reuters news item, filed from New York at 9:46 a.m. EDT on Friday morning also came to us from Brad Robertson, for which I thank him.  Another link to this article, which is actually worth reading, is here.

What’s Going to Happen to the Value of the Dollar? — Dennis Miller

President Trump wants to increase exports and says the dollar has to come down. Janet Yellen and the Fed are hell-bent on raising interest rates, which should increase the value of the dollar. Historically the economy slows down when rates begin to climb yet the stock market is soaring.

High inflation affects all of us and generally signals a weakening of the currency. Kiplinger forecasts, “Core inflation, which excludes food and energy, will end 2017 at a 2.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} annual rate.”

For those who don’t eat or drive, that doesn’t sound too bad. They also predict, “Overall prices of groceries will be nearly flat next year but the cost of dining out will rise.”.

Gasbuddy reports, “Motorists to spend $52 billion more at the pump in 2017, yearly average to be 36-cents higher.” They anticipate the average price will rise 16.9{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to $2.49/gallon.

When you fill your tank on the way to your favorite restaurant, you’ll likely agree with Shadowstats. If inflation were calculated in the same manner it was in 1990 the published rate would be around 6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

This commentary by Dennis was posted on the Internet site on Thursday sometime — and another link to it is here.

Bro, I’m Going Rogue“: The Wall Street Informant Who Double-Crossed the FBI

On the night he cut a deal with the FBI, Guy Gentile was on his way to a Connecticut casino for his cousin’s bachelor party. He’d jetted up from the Bahamas, where he was running an online stock brokerage that cleared a million dollars a year without much effort on his part. Then 36, he was a working-class kid who’d finagled his way into the dicier edges of finance, and he dressed the part, with neatly trimmed stubble, designer jeans, a silver Rolex, and sunglasses that hung from the collar of his tight T-shirt, just below a few tufts of chest hair.

Gentile was feeling edgy about traveling stateside. It was July 2012, and regulators had been making calls about a stock play he’d been involved with a few years earlier. He’d been part of a group that the FBI suspected had suckered investors out of more than $15 million by manipulating the market for shares in a Mexican gold mine and a natural gas project in Kentucky.

As Gentile’s plane landed in White Plains, N.Y., he saw the flashing lights of police cars on the tarmac, confirming his fears. Before passengers could disembark, uniformed men came on board. Gentile dialed his lawyer, but the men grabbed the phone out of his hands, handcuffed him, and marched him off the plane.

Soon, two FBI agents picked him up from an airport detention room and drove him to a neon-lit diner in Newark, N.J., near their office. They bought Gentile a bacon cheeseburger and a Diet Coke and told him he had two options: Either they could throw him in jail, seize his assets, and hand his case to a prosecutor with a 95 percent win rate, or he could help them catch a bigger fish—and maybe make his problems go away. Gentile didn’t need to think it over. Whatever you want, he said, I’ll do it.

This feature article showed up on the Internet site at 3:00 a.m. Denver time on Thursday morning — and for the usual length and content reasons, had to wait for my Saturday column.  I thank Roy Stephens for passing it along — and another link to it is here.

Dr. Paul Craig Roberts Interviewed by GoldSeek Radio

This 24-minute audio interview, with host Chris Waltzek, was posted on the Internet site yesterday sometime — and I thank Judy Sturgis for bringing it to our attention.

Paul has no happy news about the job numbers, the economy or for what’s happening between Trump and the ‘Deep State’.  Judy say’s it’s “excellent“…but I must admit that I haven’t had to time to listen to more than a few minutes of it.

The FBI’s Conspiracy Theory of a Trump/Putin Collusion Has No Clothes — Paul Craig Roberts

Unable to provide an ounce of evidence that a Trump/Putin conspiracy stole the presidential election from Hillary Clinton, the corrupt US “intelligence” agencies are shifting their focus to social media and to Internet sites such as Alex Jones and Breitbart. Little doubt the FBI investigation will trickle down to Glenn Greenwald at The Intercept, Zero Hedge, the Ron Paul Institute, Nomi Prins, Naked Capitalism, Lew Rockwell, Global Research,, and to others on the PropOrNot, Harvard Library, and Le Monde lists, such as top Reagan administration officials David Stockman and myself. It is extraordinary that the FBI is so desperate to protect the budget of the military/security complex that it brings such embarrassment to itself. Who in the future will believe any FBI report or anything a FBI official says?

Those behind this “investigation” understand that it is so ridiculous that they must give it gravity and credibility. They selected two reporters, Peter Stone and Greg Gordon, in the McClatchy News Washington Bureau, who fit Udo Ulfkotte’s definition of “bought journalists.” Hiding behind anonymous sources—“two people familiar with the inquiry” and “sources who spoke on condition of anonymity”—the presstitutes fell in with the attack on independent media, reporting that one former US intelligence official said: “This may be one of the most highly impactful information operations in the history of intelligence.”

Wow! A totally ridiculous “investigation” is one of the most important in history. The implication is that the Russians are operating through scores or hundreds of independent media sites to control how Americans vote.

This commentary by Paul appeared on his Internet site on Wednesday — and I thank ‘aurora’ for pointing it out.  Another link to it is here.

Juncker Puts Price on Brexit as Italy Offers Early Trade Talks

The U.K. will have to pay a bill of about £50 billion ($62 billion) when it leaves the European Union, Commission President Jean-Claude Juncker warned as Britain prepares to trigger the start of Brexit negotiations.

While there is no desire to punish Britain for leaving the bloc, the E.U. must deter other countries from following, the head of the EU’s executive arm told the BBC in an interview broadcast on Friday. British Prime Minister Theresa May’s government knows they’ll have to pay what they owe, he said.

We have to calculate scientifically what the British commitments were and then the bill has to be paid,” he said. Asked if the bill will be 50 billion pounds, which is about 58 billion euros, Juncker replied: “It’s around that.”

May plans to launch Britain on a two-year process of negotiations to quit the E.U. on March 29, by triggering Article 50 of the bloc’s Lisbon Treaty. The size of Britain’s exit bill will be among the first — and most contentious — topics for discussion, with British ministers indicating they do not believe the U.K. is liable for such a large sum.

Good luck with that, Mr. Juncker!  This Bloomberg story showed up on their website at 1:56 a.m. MDT on Friday morning — and was updated about three hours later.  It’s another contribution from Brad — and another link to it is here.

Italy’s Multi-Headed Hydra Predicament

For the last three years, the political establishment in Italy and beyond have had a field day attacking, ridiculing, and vilifying Beppe Grillo’s 5-star movement. Europe’s media have tarred him with the brush of populism. In 2013 The Economist labelled him a clown on its front cover. Yet his party still leads the polls. And that lead is growing.

A new Ipsos poll in Corriere della Sera newspaper has put Beppe Grillo’s 5-Star Movement on 32.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} – its highest ever reading. It placed 5.5 points ahead of the governing PD, on 26.8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, after the PD dropped more than three percentage points in a month, as former prime minister Matteo Renzi battles to reassert his authority following a walkout by a left-wing faction.

Internal political battles are nothing new in Italy. The country enjoys a hard-earned reputation for political instability and paralysis, having seen 63 governments come and go since 1945. The problem this time around is that internal weakness and strife in Italy’s traditional center-left and center-right parties could end up gifting the next election to a party that refuses to play by the book.

If it wins the next elections, which could be brought forward to as early as June this year, 5-Star Movement has pledged to hold a referendum of its own — albeit a non-binding one — on Italy’s membership of the euro. As polls have shown, there is much broader public apathy toward the single currency than in just about any other euro zone nation. Grillo’s plan could also receive the backing of former prime minister Silvio Berlusconi who is determined to pull off a political comeback and is talking of restoring the Italian Lira.

This commentary was posted on the Internet site yesterday — and I thank Richard Saler for sharing it with us.  Another link to it is here.

Putin Meets Marine Le Pen, Vows “Not to Influence” French Election In Any Way

With just one month to go until the French presidential election, President Vladimir Putin met the leader of the National Front, Marine Le Pen, in the Kremlin on Friday, and as Reuters summarized, “handed her a potential boost to her campaign to win next month’s presidential election in France.”

Putin told Le Pen Moscow reserved the right to meet any French politician it wanted and that she represented “quite a fast-growing element of European political forces.”

Of course I know that the election campaign in France is actively developing,” said Putin who sarcastically commented on ongoing allegations that Russia is behind the final outcome of western elections in the past year saying  “we do not want to influence events in any way, but we reserve the right to talk to representatives of all the country’s political forces.

As Reuters adds, a meeting with Putin is a coup for Le Pen and could help her burnish her foreign policy credentials. While increasingly popular in France, she has struggled to get any backing abroad apart from support offered by other far-right parties.

With Russia now the designated bogeyman to be used in parallel all populist candidates, we expect that her competitors will scramble to portray Le Pen in a Trumpian light, pitching her as just another Putin puppet should she become president.

This Zero Hedge spin on a Reuters story from yesterday showed up on their Internet site at 9:12 a.m. EDT yesterday morning — and it’s another contribution from Brad Robertson.  Another link to it is here.

No reason for Cold War, both Russia and U.S. are great powers” – Le Pen

I don’t see any good reason to engage in a Cold War in any form. Russia as well as the US is a great power. It’s very important for France to build up balanced relations with both of these countries. I think we could do that with Vladimir Putin and Donald Trump,” Le Pen told RT.

The National Front leader noted the importance of restoring and strengthening trade and cultural ties between the two countries, as well as boosting cooperation in the energy industry and in the fight against terrorism.

I believe France shouldn’t put limits on itself when it comes to improving relations with Russia. First of all, we should lift the sanctions [against Russia] that actually have been forced upon us by the European Union.”

When touching upon the accusations of Russian meddling in the French election campaign, Le Pen said the claims were groundless.

I hear all the time [French President] Hollande talking about it, but I have never seen any proof to these accusations,” Le Pen said.

This interview put in an appearance on the Internet site at 2:50 p.m. Moscow time on their Friday afternoon, which was 7:50 a.m. in Washington — EDT plus 7 hours.  Another link to it is here — and I thank Roy Stephens for pointing it out.

How the New McCarthyism grows stronger:  John Batchelor interviews Stephen F. Cohen

One word to describe this weeks news concerning the New Cold War is “harrowing”. The House Intelligence Committee hearings have begun and they are already afflicting the Trump administration on the diplomatic field – with Russia, of course. We note that Sec. State, Tillerson has postponed a meeting with NATO heads (a meeting at home with China’s head of state is the stated reason), and he is also going to Moscow in early April. Europeans are in an uproar over his alleged shirking of NATO responsibilities. But the major news about the first public statements of the House Intelligence Committee, aka the “Russia Gate” hearings dominates the podcast discussion. We should be appraised of the mandate of these hearings and understand that the mandate is biased toward an outcome. Note from the House Committee web site:

  • What Russian cyber activity and other active measures were directed against the United States and its allies?
  •  Did the Russian active measures include links between Russia and individuals associated with political campaigns or any other U.S. Persons?
  • That was the U.S. Government’s response to these Russian active measures and what do we need to do to protect ourselves and our allies in the future? [The syntax is theirs not mine.]
  • That possible leaks of classified information took place related to the Intelligence Community Assessment of these matters?

Cohen is understandably upset with many of the public statements coming from the heads of the FBI, NSA, and Senator Schiff that Batchelor describes as sounding like the “first chapter of a Frederick Forsythe novel”.  Cohen’s comments are also worthy, for example, in describing “FBI Director, Comey morphing into J. Edgar Hoover.” Cohen concludes that full “McCarthyism is upon us.” He notes that even Americans visiting Russia are now under suspicion – we now see guilt through association.  Cohen maintains that the new McCarthyism is unfolding a lot faster than the previous one – and now Americans are fearful of transgressing the narrative and almost everyone in government is a parrot in voice if not in mind.

The second half of the discussion opens with the item of the “Trump bribe”, i.e. funded support by Russia for Trump’s election campaign (also allegedly to change the Republican policy outlook about Ukraine). Cohen uses this and other “tawdry” items to show how low Schiff intends to take this investigation.  Trump’s foreign policies, on re-arming Ukraine also came under attack (as supporting Putin) even as Obama was following the same policies. The hypocrisy is astounding and yet these people are confident because guilt of being seen or labelled Putin apologist will be dangerous. But Cohen maintains that the national security risks for the United States are seen in how the “hack” of the DNC is being touted as an act of war by Russia. That this is central to the hysteria means that the lie is also central to the Deep State’s war aims with Russia in the future.

Early on in the discussion Prof. Cohen mentioned that at the height of Joe McCarthy’s fear campaign even then president Truman was wary of intervening against McCarthyism. The motives of this deplorable man were to create a power base for himself – as director of a new watchdog ministry within government. We should recall that President Eisenhower finally said enough is enough to this madness. But this time we have a potentially much more dangerous situation in that the goal of a the group known as the “Deep State” is to destroy a president in order to pursue a bellicose foreign policy with Russia. If lies are acceptable as evidence and can be acted upon with impunity for people like Senator Schiff, then any madness of foreign policy is possible for that government. We might speculate that if the conclusions “found” for Russian involvement in the election hold up, then we are watching a process whereby a president can be impeached in the same way. These are the stakes! The Deep State, in other words, will have become mainstream in control. To the greater extent this group is halfway to the surface already in that the MSM is an important component – and there may be no going back to a less rabid norm from here. Every self-inflicted demolition committed against government institutions and citizens by these people will determine or at least influence how much tolerance Washington will treat the rest of the world.

This 40-minute audio interview was appeared on the Internet site on Tuesday — and as is always the case, it had to wait for today’s column.  I thank Ken Hurt for the link, but BIG KUDOS go to Larry Galearis for the above executive summary.  Another link to this interview is here.

North Korea: The really serious options on the table — Pepe Escobar

The National People’s Congress in Beijing made it clear that China in the 21st century as led by Xi Jinping now relies, as a state, on the  “core” leader’s “four comprehensives” as the letter of the law.

The “four comprehensives” are to build a moderately prosperous society; deepen economic reform; advance the law-based governance of China; and strengthen the Communist Party’s self-governance.

No foreign-policy adventure/disaster should be allowed to interfere with the “four comprehensives,” which, extrapolated, are also linked to the imperative success of the New Silk Roads (One Belt, One Road), China’s ambitious outreach across Eurasia.

But then there’s supremely unpredictable North Korea. And the notorious Lenin line resurfaces: “What is to be done?”

Pyongyang has successfully tested land-based, mobile, solid-fueled intermediate-range ballistic missiles. When operational, this development translates into a North Korean first-strike capability difficult to track, as well as the means to absorb an initial foreign attack and retaliate with – nuclear-tipped? – missiles.

Four North Korean missiles recently – and deliberately – aimed at the Sea of Japan constitute a clear message: We are able to hit U.S. military forces in Japan and we can defeat any missile defense deployed or to be deployed by the U.S., Japan and South Korea.

This long commentary/opinion piece by Pepe was posted on the Asia Times website on Thursday — and for both length and content reasons, had to wait for my Saturday missive.  I thank Ellen Hoyt for bringing it to my attention — and now to yours.  Another link to is here.

Into the green land: Emerald mining in Colombia

The struggle over land is Colombia’s oldest conflict.

For decades the mines of Muzo – widely known as the “emerald capital of the world” – have produced great fortunes for their owners.

In the so-called “Green Wars” during the 1980s, territorial disputes escalated into full-blown conflict as the country’s leading mining families fought over territory.

In those days, the “barequeros” – emerald seekers who dig through debris – gathered by the thousands around the Muzo Valley, hoping that emeralds would arise from the dark soil to rescue them from extreme poverty.

While the Green Wars are over, there is still a low-level conflict of assassinations and murders as rival groups vie for access to the gemstones.

This excellent and very worthwhile in-depth photo essay put in an appearance on the Internet site on Monday — and for the usual reasons, had to wait for my Saturday column.  It’s the second contribution in a row from Ellen Hoyt — and another link to it is here.

Rosetta comet orbiter films deep-space landslide

Landslides are not unique to Earth, researchers revealed on Tuesday.

In 2015, Europe’s Rosetta spacecraft witnessed—and photographed—a big one on the surface of a comet in deep, dark space, they reported in the journal Nature Astronomy.

The cliff side collapse created about 2,000 tonnes of rubble, 99 percent of which settled at the foot of the precipice.

The rest was ejected in a spectacular jet of dust.

In the first direct evidence for cometary landslides, Rosetta captured before and after images of a wall giving way along a crack 70 metres (230 feet) long and one metre wide on the edge of a cliff named Aswan.

If you’re a space junkie like me, this is a must read — and the embedded 1:38 minute video clip is certainly a must watch.  This news story appeared on the Internet site on Tuesday — and I thank ‘aurora’ for sharing it with us — and another link to it is here.

GLD vs. Physical Gold: Which Is The Better Investment Now? — Olivier Garret

Gold ETFs are rising in popularity due to their convenience. They’re easy to trade, there’s no need to store anything, and no one is going to break into your house to steal your GLD shares.

But there are a lot of hidden dangers inherent in the structure and operation of gold ETFs that few investors are aware of—and these risks are more pronounced than ever, as the threat of another financial crisis is always around the corner.

Considering the public’s waning trust in the banking system, many investors find themselves wondering how GLD stacks up to owning the real thing. When you look at both assets more closely, it’s clear that gold ETFs and gold bullion are very different investments.

SPDR Gold Trust (GLD), the largest, most popular gold ETF, is an investment fund that holds physical gold to back its shares. The share price tracks the price of gold, and it trades like a stock, but the vast majority of investors don’t have a claim on the underlying gold.

The reason for this is that you can only request physical delivery of metal if you own a minimum of 100,000 GLD shares (most investors don’t: at $1,000 gold, 100,000 shares is more than a million dollars). Even if you do own enough shares, the GLD ETF reserves the right to settle your delivery request in cash.

This must read commentary by my friend Olivier was posted on the Internet site at 9:30 a.m. on Wednesday morning EDT — and I found it on Mark O’Byrne’s website very late last night Denver time.  Another link to it is here.

The Gold Chronicles: March 2017 Interview with Jim Rickards and Alex Stanczyk

Topics Include:

*Commentary on FOMC and Rate Hike
*How VAT may enable a revenue neutral solution to allow Trumps fiscal and tax cuts plan
*One of the dangers to VAT is that it is prone to a creeping rise in the tax rate
*Scenarios for consumer reactions to VAT perceived as price inflation
*How increasingly fragile markets combined with highly leveraged financial services institutions are leading to amplified risk levels for the entire financial system
*Market fragility from Jim’s view is a function of system scale – if you double the size of the system the risk increases exponentially
*The system has not deleveraged since 2008, but has increased leverage and concentrated in an even fewer number of banks
*The derivatives market is approaching one quadrillion dollars in size, approximately ten times the size of global GDP

This hugely long audio interview with Jim runs for 1 hour and 49 minutes.  It was posted on the Internet site on Monday — and I thank Harold Jacobsen for bringing it to my attention — and now to yours.  I posted it in my Thursday column, I believe, but said at the time I’d stick in today’s column as well — and here it is.  Another link to it is here.


The click to enlarge feature does not help with these photos.


Today’s pop ‘blast from the past’ dates from 1968, which was the year after I graduated from high school.  The ‘British Invasion’ was in full cry — and this groups made a big, but brief splash when they first appeared on the Pop-40 charts across the nation in 1964.  This tune was their last big hit — and a classic in every sense of the word…enjoy!  The link is here.  There other big hit, the one that got them started, is linked here.

Today’s classical ‘blast from the past’ will be instantly recognizable if you’ve ever watched the movie Amadeus.  This is his Symphony No. 25 in G minor K.183/173dB, was composed in 1773 when Mozart was but 17 years old — and although he didn’t know it at the time, half his life was already over.  This one was his second symphony in G minor…the other being his No. 40…which I posted here about a month ago.

Surprisingly enough, the work wasn’t performed in the U.S until 1899 — and not again until 1937.  One can only wonder why.  Here’s the Weinberger Chamber Orchestra serving it up on 31 January 2016 in Zurich.  It’s first rate from start to finish — and full screen is a must.  The link is here.

With March going off the board next Friday — and options and futures expiry on deck next week, it would be a mistake to read too much into yesterday’s price activity…although it is tempting.

As far as Ted is concerned — and I’m in total agreement — all eyes should be on what remains of the astonishing and unprecedented goings-on as the March delivery month in silver comes to a close.   The other thing that bears watching with both eyes is the ongoing drama in the COMEX futures market, as what happened with silver and gold in yesterday’s COT Report was astonishing as well.

Not that I want to read too much into this, but if I had to bet the usual ten bucks, it would be on the fact that the price management scheme in silver — and in the other three precious metals as well — is on its last legs.  The only question being is how long these “last legs” will continue to function.

Here are the 6-month charts for all four precious metals, plus copper, once again — and there’s not a hint of the drama going on under the surface in either gold or silver by looking at them, or the COT charts further up in today’s column.  I’m certainly more than interested in what Ted will make of all this once he’s had the opportunity to sleep on it.  The click to enlarge feature helps a bit with the first four charts.

So now what?

Like you, I’m just sitting here waiting for whatever fate awaits us.  Myself, along with just above every other commentator out there, has talked themselves to a standstill about how and when this is all going to end.  But as you already know, it’s taking it’s sweet time in getting there.

Of course with the central banks of the world keeping everything afloat with endless money printing, it’s hard to tell when the whole thing either melts down in the case of all things paper, or blows sky high in the world of physical commodities…precious metals included.

I’ve posted the three paragraphs below countless times in this space over the last decade — and what’s contained in these what I state as the “three most important paragraphs ever written“…has been ongoing since even before they written — and are still in play today.  Contained in them, is the very essence of what has kept the financial system afloat long after the world was “temporarily” taken off the gold standard by Richard M. Nixon back in 1971.

I’m sure that Peter Warburton, when he wrote this commentary back in April 2001…sixteen years ago now…could not have imagined that this paper game would still be going on at this late date, but it is.  His essay is headlined “The Debasement of World Currency: It is inflation, but not as we know it“. Under the subheading “Central banks are engaged in a desperate battle on two fronts” he had this to say…

What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies. Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.

It is important to recognize that the central banks have found the battle on the second front much easier to fight than the first. Last November I estimated the size of the gross stock of global debt instruments at $90 trillion for mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably, no more than $200 billion, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world’s large investment banks have over-traded their capital [bases] so flagrantly that if the central banks were to lose the fight on the first front, then the stock of the investment banks would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.”

“Central banks, and particularly the U.S. Federal Reserve, are deploying their heavy artillery in the battle against a systemic collapse. This has been their primary concern for at least seven years. Their immediate objectives are to prevent the private sector bond market from closing its doors to new or refinancing borrowers and to forestall a technical break in the Dow Jones Industrials. Keeping the bond markets open is absolutely vital at a time when corporate profitability is on the ropes. Keeping the equity index on an even keel is essential to protect the wealth of the household sector and to maintain the expectation of future gains. For as long as these objectives can be achieved, the value of the U.S. dollar can also be stabilized in relation to other currencies, despite the extraordinary imbalances in external trade.

It’s this battle, which will be spectacularly lost at some point in the future, that is going on in real time all around us right now — and I’m wondering out loud at this early hour on Saturday morning, if JPMorgan’s accumulation of physical silver — and the strange goings-on inside the COMEX futures market, may in some way be related to that upcoming event.

This economic, financial and monetary bubble that’s been blown up to Biblical proportions in the last almost-fifty years, awaits its pin.  I’m not sure what event will trigger it, but I’ll recognize it when it happens — and so will you.

I’m done for the day — and the week.

See you on Tuesday.


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