Another Dramatic Day For Silver in the COMEX Depositories

01 April 2017 — Saturday


The gold price traded up a bit for a few hours once trading began at 6:00 p.m. EDT on Thursday evening in New York.  It was sold down to its low of the day…such as it was…around 10:30 a.m. China Standard Time [CST] on their Friday morning.  By 9 a.m. GMT in London it had crawled back to unchanged — and then did nothing until about twenty minutes before the COMEX open.  It slid a few bucks until 9 a.m. EST, before popping a quick 6 bucks just before the open of the equity markets in New York.  It chopped quietly higher, in fits and starts, for the rest of the Friday session.

The low and high ticks were reported by the CME Group as $1,241.50 and $1,252.80 in the June contract, which is now the new front month for gold.

Gold finished the Friday session in New York at $1,249.20 spot, up $6.70 from Thursday — and it should be carefully noted that all three attempts that the gold price made to break above the $1,250 spot mark, were quietly turned aside.  Net volume was moderate at 144,000 contracts.

With some very minor price variations, the price pattern in silver yesterday was almost the same as it was in gold — and it came very close to finishing the day on its high tick.

The low and highs in this precious metal were reported as $18.06 and $18.29 in the May contract.

Silver was closed in New York yesterday at $18.225 spot, up 14 cents.  Net volume wasn’t overly heavy at around 42,500 contracts — and roll-over/switch volume out of May was impressive.

The platinum price was weaker by a few dollars in Far East and Zurich trading on Friday.  It rolled over to its $938 low tick around 9 a.m. in New York — and then rallied quietly back to finish the Friday session up a buck at $948 spot.

The palladium price traded a dollar or two lower until the Zurich open — and at that point began to head higher.  That rally ran out of gas/got capped at the $800 spot mark shortly before noon in Zurich.  It traded pretty flat until 11:30 a.m. EDT in New York — and was sold down another few dollars from there.  It finished the day $797 spot, up 3 dollars from Thursday’s close.

The dollar index closed very late on Thursday afternoon in New York at 100.53 — and had a 10 basis points or so up/down rally that ended shortly after 9 a.m. in London.  From there it rallied to its 100.65 high tick — and the 100.25 low tick was set around 12:35 p.m. in New York.  It chopped quietly higher from there into the close — and the dollar index finished the Friday session at 100.57 — and up 4 basis points from Thursday.

And although there wasn’t much to see in the dollar index movements yesterday, there was…for the second day in a row…little or no correlation between what it was doing — and what was going on with silver and gold prices.

And here’s the 6-month U.S. dollar index and, as always, you can read into it whatever you see fit.

The gold stocks opened a hair above unchanged — and dipped into negative territory almost right away, with the low tick coming at the 10 a.m. EDT London p.m. gold fix.  From there they rallied to their respective highs, which came a minute or so before 1 p.m.  It was all down hill from that point right into the close, as the HUI finished up only 0.41 percent.  I was underwhelmed once more.

It was almost an identical price path for the silver equities, but once their respective high ticks were in minutes before 1 p.m. EDT, their sell-off into the close wasn’t nearly as precipitous.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 1.56 percent.  Click to enlarge if necessary.

And here are three charts from Nick that show 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 here are the year-to-date changes.

Despite the gains in the underlying metals so far this year, their associate equities continue to vastly underperform.  And as I mentioned in commentary earlier this week, the short positions in a lot of the silver and gold miners are pretty chunky — and that would certainly explain part of what has been happening since the shares began to disconnect from their underlying precious metals starting around February 9.

The CME Daily Delivery Report showed that only 57 gold and an even more surprising zero silver contracts were posted for delivery within the COMEX-approved gold depositories on Tuesday.  The only short/issuer worth mentioning was ABN Amro with 32 contracts — and there were no outstanding long/stoppers amongst the 13 posted.  These weren’t the numbers I was expecting to see on Day 2 of the April delivery month…or one Day 1, either.  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 April took another big hit, as it fell 2,661 contracts to 2,789 still open, minus the 57 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that only 164 gold contracts were actually posted for delivery on Monday, so that means that 2,661-164=2,2497 gold contracts were closed out without making or taking delivery in April.  Silver o.i. in April declined by 261 contracts, leaving 474 still around.  Thursday’s Daily Delivery Report showed that 271 silver contracts were actually posted for delivery on Monday, so that means that 271-261=10 silver contracts were actually added to the April delivery month.

The April delivery sequence is only two days old — and it has already developed an intrigue all its own.  Why are the short/issuers in gold being so shy — and even in a non-delivery month, the demand for physical silver is enough that anyone who knows anything about the delivery process should be standing up and taking notice.

I await Ted’s weekly review this afternoon with great interest.

There were no reported changes in GLD yesterday, but an authorized participant took 568,148 troy ounces out of SLV.  If that was a fee payment, it was pretty chunky.

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

For the month of March, now complete, the mint sold 21,000 troy ounces of gold eagles — 8,500 one-ounce 24K gold buffaloes — and 1,615,000 silver eagles.  Gold coin sales were down substantially from February, but silver eagles sales were higher by 400,000 month-over-month.  The retail bullion market just doesn’t exist at the moment.

There wasn’t much gold movement over at the COMEX-approved warehouses on the U.S. east coast on Thursday.  There was only 4,552 troy ounces received — and nothing at all was shipped out.  Of that amount, there was 3,620 troy ounces received at Brink’s, Inc. — and 25 kilobars were received at Manfra, Tordella & Brooke’s, Inc. — plus another 4 at Scotiabank.  All 29 were of the U.K./U.S. kilobar weight variety.  I shan’t bother linking this small amount.

It was another eye-opening day at the COMEX silver depositories on Thursday, which is the second day in a row of incredible changes.  On the physical side, there was another container load…600,695 troy ounces…dropped off at CNT.  That was all the silver received.  There was 361,074 troy ounces shipped out in total.  Of that amount, there was 300,614 troy ounces shipped out of Brink’s, Inc.  — and the rest came out of Scotiabank.

But, once again, it was the transfers between categories that was the stand-out feature in yesterday’s silver depository report.  The first was a transfer of 1,337,506 troy ounces from Eligible to Registered over at CNT…the second was a 1,441,231 troy ounce transfer from Registered to Eligible at Delaware.  But the big prize was over at Canada’s Scotiabank, as 4,536,048 troy ounces were transferred from Registered to Eligible at that warehouse.

During the last two business days, in this case Wednesday and Thursday, there has been 13.4 million troy ounces of silver transferred from the Registered to the Eligible category in various COMEX warehouses.  Without doubt, all the Registered to Eligible transfers were related to the big deliveries of physical silver to JP Morgan and its ‘client’ during March.  It only remains to be seen if JP Morgan keeps it stored in the cheaper Eligible category at the these depositories, or brings it it into its own warehouse where it can store it for free — and drive its COMEX silver inventories to over 100 million troy ounces.  The link to all this action is here — and it’s certainly worth a quick look if you have the interest.

It was a pretty busy day in the gold kilobar market over at Brink’s, Inc. in Hong Kong on their Thursday.  They received 7,288 of them, plus they shipped out another 2,150.  The link to that activity, in troy ounces, is here.

The Commitment of Traders Report, for positions held in both silver and gold at the close of COMEX trading on Tuesday, was about as bad as I was expecting it to be in the Legacy COT Report, but much worse under the hood in the Disaggregated COT Report.

In silver, the commercial net short position rose by 8,033 contracts, or 40.1 million troy ounces of paper silver.

They arrived at this number by selling 341 long contracts, plus they picked up 7,692 short contracts…all courtesy of the Managed Money traders who went long in droves.  The total of those two numbers is the change for the reporting week.  The commercial net short position in silver is now up to 508.8 million troy ounces.

Ted said that the Big 4 added around 4,000 contracts to their short position, all of which he attributes to JPMorgan — and he pegs their short position at about 30,000 contracts.  The ‘5 through 8’ large traders basically sat on their hands and did nothing during the reporting week, as the rest of the heavy lifting was done by Ted’s raptors, the 30 small commercial traders other than the Big 8…as they sold out their entire 2,700 contract long position, plus they added 1,500 contracts on the short side as well.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus much more.  They not only added 14,086 long contracts, but they also covered 2,299 short positions, for a total weekly swing of 16,385 contracts, which was more than double the change in the commercial net short position.  The 8,000+ contract difference for the reporting week was split up between the Other Reportables and the Nonreportable/small trader categories — and the pulled they same stunt as the commercial traders in the Legacy COT Report…selling longs and going short in a big way.  Both Ted and I were wondering out loud about this trading action, as it’s certainly counterintuitive considering the silver price action during the reporting week — and I know for a fact he’ll have lots more to say about it in his weekly review later today.  His comments should be taken as definitive.

Here’s the 3-year COT chart for silver — and although it still appears wildly bearish, things are not [as you know] as they seem…as Ted has been pointing out for the last few months.  Although the price could certainly blast higher from here, it wouldn’t surprise me in the slightest if ‘da boyz’ arranged an engineered price decline to eliminate some of these newly-minted Managed Money long contract holders that just showed up during this past reporting week.  If that in fact does happen, it will be interesting to see just how many actually sell out, as the core long position in the Managed Money category is in the 78-80,000 contract range — and the current long position in this category is 93,000 contracts, so there’s not a lot of room to the downside from a contract perspective, which is the way you have to look at this…and not the spot price.  Click to enlarge.

In gold, the commercial net short position increased by 23,117 contracts, or 2.31 million troy ounces of paper gold.  They arrived at this number by purchasing 3,478 long contracts, plus they added 26,595 short positions…all of this coming from the brain-dead/Pavlovian traders in the Managed Money category.  The difference between those two numbers is the change for the reporting week.  The commercial net short position in gold is now up to 15.21 million troy ounces.

Ted said that the Big 8 traders added around 7,400 contracts to their short positions — and the big ‘5 through 8’ traders increased their short position by about 2,900 contracts.  The heavy lifting this reporting week was by Ted’s raptors…the remaining 47 commercial traders on the short side, once you subtract out the Big 8…as they sold approximately 12,800 long contracts.

Under the hood in the Disaggregated COT Report, it was…like in silver…strictly a Managed Money affair once again, as they not only increased their long position by 20,620 contracts, they also covered 14,228 short contracts as well, for a total weekly change of 34,848 contracts.  The approximately 11,700 contract difference between that number and the change in the commercial net short position was, like in silver, made up by the traders in the Other Reportable and Nonreportable/small trader categories.

Here’s the 3-year COT Report for gold — and as you can tell, the chart is not even remotely close to being bearish.  Click to enlarge.

Although there certainly was deterioration in gold during the report week just past, on an historical basis the set-up is still very bullish from a COMEX futures market perspective.  But, as in silver, if we do rally from here, an engineered price smash in advance of that event would come as no surprise to me.

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

For the current reporting week, the Big 4 are short 155 days of world silver production—and the ‘5 through 8’ traders are short an additional 51 days of world silver production—for a total of 206 days, which is a hair under seven months of world silver production, or about 500.5 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 198 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 508.8 million troy ounces.  So, for the moment, the commercial net short position in silver is larger than the short position of the Big 8 traders by 508.8 – 500.5 = 8.3 million troy ounces.

As also stated in the above COT Report, Ted pegs JP Morgan’s short position at around 30,000 contracts, or 150 million ounces, which is up from the 26,000 contracts/130 million ounces they were net short a week ago.  150 million ounces works out to around 62 days of world silver production that JP Morgan is short.  That’s compared to the 206 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, for the moment, JPMorgan is back as the biggest silver short in the COMEX futures market.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 115 days of world silver production between the two of them—and that 115 days represents 74 percent of the length of the red bar in silver in the above chart…three quarters of it.  The other two traders in the Big 4 category are short, on average, about 20 days of world silver production apiece.  The four traders in the ‘5 through 8’ category are short, on average, a bit under 13 days of world silver production each.

The short positions of Scotiabank and JP Morgan combined, represents about 51 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 49.7 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 37.1 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 42 days of world gold production, up from 40 days last week — and the ‘5 through 8’ are short another 17 days of world production, which is up from 16 days from the prior week, for a total of 59 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.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 75, 74 and 66 percent respectively of the short positions held by the Big 8.  Silver and platinum are higher by one percentage point from the prior week’s report — but palladium tumbled 6 percentage points.

I have a very decent number of stories for you today, including a lot that I’ve been saving for Saturday’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.


Animal Spirits? Americans’ Spending Disappoints as Savings Rate Jumps to 4-Month Highs

For 12 months in a row, Americans’ spending has grown faster than their incomes.

Income growth YoY is the highest since May 2015 as spending growth slowed… with real disposable personal income seeing its first YoY increase since July.

February personal spending disappointed modestly, rising just 0.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} MoM while incomes grew at 0.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} MoM, as the savings rate rose to its highest since October 2016.

Not exactly the animal spirits everyone is expecting.

This brief 2-chart Zero Hedge piece was posted on their website at 8:41 a.m. EDT yesterday morning — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

Right on Cue Atlanta Fed Cuts Q1 GDP Forecast After Poor Consumer Spending Report

Following today’s disappointing consumer spending data, we forecast that a downward revision to the Atlanta Fed’s most recent 1.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} Q1 GDP forecast was imminent…

… and moments later it did not disappoint, announcing that “the GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.9 percent on March 31, down from 1.0 percent on March 24.

The catalyst was as expected: “after this morning’s personal income and outlays release from the U.S. Bureau of Economic Analysis, the forecast for first-quarter real consumer spending growth fell from 1.4 percent to 0.8 percent. The forecast of the contribution of net exports to first-quarter real GDP growth increased from -0.49 percentage points to -0.16 percentage points after Tuesday’s Advance Economic Indicators Report from the U.S. Census Bureau.”

Putting the move in context, the Atlanta Fed Q1 GDP has declined from 3.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in late January to below 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} two months later.

This brief 1-chart news item was posted on the Zero Hedge website at 10:11 a.m. on Friday morning EDT — and I thank Richard Saler for sharing it with us.  Another link to it is here.

James Rickards, ‘Dr. Tail Risk,’ Takes Us on a Tour of ‘The Road to Ruin

Meet James Rickards, “Dr. Tail Risk.”

Some people loathe Jim Rickards. Some adore him, giving him a large cult following.

Rickards was the general counsel of Long-Term Capital Management, a notorious precursor to the great financial panics of our era.

Rickards is certain that another, bigger, world financial crisis is imminent.

Rickards reports that he has been right in the past. He, also, has frequently been wrong … at least about its imminence.

This 2-page commentary appeared on the Internet site on Thursday — and it comes to us courtesy of Harold Jacobsen.  Another link to it is here.

Prepare For “Manias, Panics and Crashes“: An Ominous Warning From Bank of America

Bank of America’s Michael Hartnett is back with another controversial note overnight, reminding readers that “it ain’t a normal cycle” for one overarching reason: central banks.

As Hartnett explains, the catalyst for bull in equity and credit markets since 2009 was the “revolutionary monetary policy of central banks” who, since Lehman, “have cut rates 679 times and bought $14.2tn of financial assets.” And, once again, he warns that this central bank “liquidity supernova” is coming to an end, as is “the period of excess returns in equities and corporate bonds, as is the period of suppressed volatility.

With an entire generation of traders having grown up “trading” in centrally-planned markets, few can make sense of the fundamentals that accompany the market. As a result, Harnett writes that “risk markets continue to climb a wall of worry, defying bearish structural trends in the financial industry, taunting skittish skeptics by paraphrasing Margaret Thatcher…”You turn if you want to. The market’s not for turning.

Demonstrating how insane just the past year has been in markets, Hartnett reminds us that just eight months ago belief in debt deflation and secular stagnation induced lowest interest rates in 5,000 years.

This longish chart-filled commentary showed up on the Zero Hedge website at 6:35 p.m. EDT on Friday evening — and another link to it is here.

Nomi Prins: Financial System Worse Now Than 2007

Financial analyst, author, and former Goldman Sachs Managing Director, Nomi Prins sits down with EIR’s Paul Gallagher to discuss just how rotten the current financial system is, making a sobering case that we are far worse off today than we were before the 2007-08 crisis.

Prins refers to her political and financial road map for 2017, and discusses the important, combined role China and Japan can play in bringing the U.S. back from the brink and into the new paradigm of investment in the real economy.

This long 1:02 hour video interview was posted on the Internet site back on March 16 — and it arrived in my in-box on Monday.  I thank Judy Sturgis for sending it along — and for obvious reasons, it had to wait for my Saturday column.  Another link to it is here.

Doug Noland: Q1…Sure Bets That Weren’t

As a market analyst, I saw during Q1 the unprecedented Crowded Trade Phenomenon deepen further. Way too much “money” playing the securities market game – became only more so. And while a strong quarterly gain in the indexes is celebrated by the bullish Crowd, the undercurrents must be troubling to many.

The reality is that too much “money” spoils the game. When everyone is Crowded on one side of the king dollar trade, the boat rocks over. When the Crowd gets short the yen, it’s squeeze higher. Short the metals, here comes a squeeze. Heavily long the banks (slam dunk trade), watch out below. Underweight the emerging markets, the Crowd is forced to chase a big rally. Long the small caps versus the big caps, and the Crowd has no choice but to unwind the trade and jump aboard the S&P500 index. Run long/short strategies with similar factors to everyone else, and the Crowd is left to pull its hair out. Most importantly, focus on risk and you had no chance of outperforming the market or the passive “investing” Crowd.

And it’s “funny” how this all works nowadays. Inflation has turned up, while central bank monetary stimulus is being turned down. Shorting Treasuries (and sovereign debt) should be a Sure Bet. Yet there’s that Lurking Financial Fragility issue, the Elephant in the Market. So, the bigger global Bubbles inflate, the greater the systemic vulnerability to rising market yields (among other things). Yet the more susceptible risk market Bubbles become to trouble the greater the safe haven bid – and the more downward pressure on market yields. Artificially low yields then work to spur speculation and excess, exacerbating global Bubbles and associated fragilities.

All the “money” slushing around in markets dominated by Deviant Market Dynamics continues to make it difficult for most active managers to perform. And the biggest consequence of this troubling market dilemma? Just more enormous self-reinforcing Bubble flows into ETF index products. For the most part, investors are pleased with Q1 returns. What’s not appreciated is the amount of risk that must be accepted to continue playing this game.

Doug’s Credit Bubble Bulletin appeared on his website early in the morning Denver time — and it’s always worth reading.  Another link to it is here.

Desperately Wanted: python hunters to tackle Florida’s unwelcome intruder

Bill Booth struggles to recall the last time he saw a raccoon, a fox or a rabbit on one of his frequent hunting excursions deep into the swamps of the Florida Everglades. An outdoorsman all his life, he knows as well as anyone how the native wildlife once abundant across the vast wilderness has been all but wiped out by an invasion of a deadly species he is trying his hardest to remove: the Burmese python.

By some estimates, up to 150,000 of the unwelcome intruders are swimming through the state’s 1.5m acres (600,000 hectares) of waterways, reproducing uncontrollably and consuming almost every living creature in their path, sometimes taking on even the previously undisputed king of the Everglades, the American alligator.

It’s a growing problem that has led wildlife officials to conceive ever-more colourful attempts to try to eradicate, or at least contain, the giant snakes. With varying success, efforts have included training dedicated sniffer dogs, bringing in snake hunters from India’s mountain-dwelling Irula tribe, and, most recently, advertising for minimum-wage civilian python-catchers on a two-month contract for a hunt beginning in April.

I posted a story about this unwelcome critter about a month ago.  But another story about them popped up on Internet site on Monday — and it too had to wait for today’s column.  I thank Roy Stephens for finding it for us — and another link to it is here.

Venezuela ‘coup’: Alarm grows as court takes power

There have been demonstrations in Venezuela after the Supreme Court took over legislative powers from the National Assembly.

Critics say the development takes the country closer to one-man rule under President Nicolas Maduro.

The Organisation of American States (OAS) described the move as the “final blow to democracy in the country“.

The ruling effectively dissolves the elected legislature which has been dominated by the president’s opponents.

The secretary general of the OAS, Luis Almagro, described the move as a “self-inflicted coup” by Mr Maduro’s government.

This news item appeared on the Internet site early on Friday morning GMT — and it arrived about ten minutes too late for my Friday column, so here it is now.  I thank Swedish reader Patrik Ekdahl for pointing it out — and another link to it is here.  It was originally headlined “Venezuela court takes over National Assembly functions“.

Salt at the source: A day in a Lake Huron mine

We visited the world’s largest salt mine, following the mineral from the tunnels under Lake Huron to our dinner tables and driveways.

Here’s a funny thing about road salt: In its rawest form, it is as slippery as ice.

They know this down in the world’s largest operating salt mine, a four-hour drive from Toronto in the pretty town of Goderich.

The mine is 533 metres beneath the surface of the Earth, almost as deep as the CN Tower is high, and tunnels 7 kilometres underneath Lake Huron. It’s owned by Sifto Canada. Visitors are rare.

It’s a strangely beautiful environment, a crystal catacomb of glittering walls and surprisingly sweet air. Salt is everywhere, as thick pillars holding up the 20-metre ceiling and as floating particles that coat the skin and lips.

Salt is also thick underfoot. The exposed seam is rink slick. Miners lay down crushed salt for traction.

This amazingly interesting story, with lots of great photos and an embedded video clip, showed up on Internet site…but there’s no dateline.  It’s definitely worth reading if you have the interest — and I thank Doug Clark for pointing it out.  Another link to it is here.

E.U. offers Brexit trade talks, sets tough transition terms

The European Union offered Britain talks this year on a future free trade pact but made clear in negotiating guidelines issued on Friday that London must first agree to E.U. demands on the terms of Brexit.

Those include paying tens of billions of euros and giving residence rights to some 3 million E.U. citizens in Britain, the proposed negotiating objectives distributed by E.U. summit chair Donald Tusk to Britain’s 27 E.U. partners showed.

The document, seen by Reuters, also sets tough conditions for any transition period, insisting Britain must accept many E.U. rules after any such partial withdrawal. It also spelled out E.U. resistance to Britain scrapping swathes of tax, environmental and labor laws if it wants to have an eventual free trade pact.

The guidelines, which may be revised before the EU27 leaders endorse them at a summit on April 29, came two days after Prime Minister Theresa May triggered a two-year countdown to Britain’s withdrawal in a letter to Tusk that included a request for a rapid start to negotiations on a post-Brexit free trade deal.

This Reuters article co-filed from Valletta and Brussels, was posted on their Internet site very early Friday morning, but has been updated since, as it’s down datelined 2:33 p.m. EDT.  I thank Brad Robertson for finding it for us — and another link to it is here.

Jewellery and cars seized as Dutch trigger multi-country tax raids

Dutch prosecutors say they have launched co-ordinated raids in several countries against suspected money-launderers and tax evaders.

They are investigating about 3,800 Dutch-linked accounts in an unnamed Swiss bank following a tip-off they could contain undeclared assets.

Paintings, a gold bar, cash, a luxury car and jewellery have been seized.

As well as the Netherlands, there have been searches in France, Germany, the UK and Australia.

The Dutch government has passed information to the other countries about more than 50,000 suspect accounts at the bank.

This news story appeared on the Internet site on Friday sometime — and it’s the second contribution of the day from Ellen Hoyt.  Another link to it is here.  There was a Bloomberg story about this as well.  It was headlined “Credit Suisse Taken by Surprise in Five-Nation Tax Probe” — and it comes courtesy of Patrik Ekdahl in the wee hours of Saturday morning EDT.

So, Who Annexed the Crimean Peninsula Then?

Due to the international media’s continued claims about the «annexation of Crimea», it’s been difficult for the citizens of the US and Europe to make sense of the details of the peninsula’s recent history. Exactly three years ago, on March 16, 2014, the Crimeans were offered a choice: to rejoin Russia or to return to the constitution of 1992 that proclaimed Crimea a legal, democratic, secular state whose relationship with Ukraine was based on bilateral agreements. That constitution was unilaterally abolished by Kiev on March 17, 1995, and here’s what’s surprising: no one at that time in the West demanded that the Ukrainian government stop violating the provisions of international law and the rights of the inhabitants of the Crimean peninsula. And then in 1995, special ops forces from the Security Service of Ukraine (SBU) and the Armed Forces of Ukraine (ZSU) landed in Crimea and Sevastopol in order to establish «Ukrainian law and order», seizing the building housing the Supreme Council of the republic, where the administration of the acting president of Crimea, Yuriy Meshkov, was also headquartered, and demanding that he be turned over. Since Meshkov refused to vacate his office, they tried to poison him. Much later he described how his drink had been poisoned, and that later in the hospital he was refused proper medical care. Only an emergency evacuation to Moscow miraculously saved his life.

In this manner, the real annexation of Crimea by Ukraine, which no one condemned, was completed in 1995. It all began in 1991 with a power grab by the Ukrainian parliament, which annexed the Crimean Autonomous Soviet Socialist Republic, forcibly joining it to Ukraine despite the results of the January referendum about reestablishing Crimea’s autonomy. The annexation by Ukraine culminated in the revocation of the constitution and the liquidation of the office of the president of Crimea. However, no one in Europe or America introduced sanctions against this new Ukrainian state that had flagrantly trampled on the right of nations to self-determination: according to the 1989 census, three-quarters of the population of Crimea were not ethnic Ukrainians.

From standpoint of the overwhelming majority of Crimea’s residents, a historical injustice was redressed in March 2014: Ukraine was stripped of what it had obtained illegally between 1991 and 1995 using deception and military force. In the eyes of Crimeans, Ukraine’s claims to the peninsula and the support of those claims by the West look very odd. In the 1990s, the world «overlooked» Ukraine’s annexation of Crimea, and no one was concerned that the rights of the inhabitants of the Crimean Autonomous Soviet Socialist Republic had been violated. But when those citizens again took it into their heads to determine their own destiny in 2014, an international scandal blew up that still burns today.

This history lesson about Crimea certainly falls into the must read category as far as I’m concerned.  It was posted on the Internet site on Tuesday — and I thank Roy Stephens for sharing it with us.  For obvious content and length reasons, it had to wait for my Saturday column — and another link to it is here.

Investment Maverick to Justice Fighter:  Bill Browder tells his epic story of investment, corruption and murder in Putin’s Russia

It’s certainly an intriguing headline — and I must admit that I haven’t watched this 1:06 hour video interview hosted by Grant Williams.

It was posted on the Internet site, but there’s no date…although I expect it’s rather recent.  I thank Ellen Hoyt for sharing it with us — and for obvious reasons it was a perfect candidate for today’s column.

Is Putin the ‘Preeminent Statesman’ of Our Times? — Patrick Buchanan

If we were to use traditional measures for understanding leaders, which involve the defense of borders and national flourishing, Putin would count as the preeminent statesman of our time.

On the world stage, who could vie with him?

So asks Chris Caldwell of the Weekly Standard in a remarkable essay in Hillsdale College’s March issue of its magazine, Imprimis.

What elevates Putin above all other 21st-century leaders?

When Putin took power in the winter of 1999-2000, his country was defenseless. It was bankrupt. It was being carved up by its new kleptocratic elites, in collusion with its old imperial rivals, the Americans. Putin changed that.

In the first decade of this century, he did what Kemal Ataturk had done in Turkey in the 1920s. Out of a crumbling empire, he resurrected a national-state, and gave it coherence and purpose. He disciplined his country’s plutocrats. He restored its military strength. And he refused, with ever blunter rhetoric, to accept for Russia a subservient role in an American-run world system drawn up by foreign politicians and business leaders. His voters credit him with having saved his country.”

Well, you can put my name on this list, as he and Lavrov are the only two real world leaders/statesman out there in my opinion.  This commentary by Patrick put in an appearance on his Internet site at 8:35 p.m. EST on Thursday evening — and I found it embedded in a Zero Hedge piece from last night.  It’s worth reading — and another link to it is here.

Dissent, and the New Cold War — John Batchelor Interviews Stephen F. Cohen

Batchelor this week begins with an interesting discussion of how Joe McCarthy was finally considered a threat to the Eisenhower presidency as his power base grew. McCarthy’s goal was to be a very viable presidential candidate and he was succeeding. Cohen finds this interesting in that Russians would call McCarthyism a “living history” event and uses the introduction to compare the Russian experience to the American counterpart. The Soviet system eventually did moderate and became less invasive after Stalin’s reign of abuses, but censorship in the Russian media was the norm (almost to the end of the Soviet Era) and Cohen finds the present controls in the US MSM very similar to those extremes. Cohen also muses that détente efforts may have been serious problems for other presidents. But this time around the goals of the new McCarthyism are geared to both destroying détente and a president. And, Cohen remarks, for those who depend on the MSM for their news it is working.

How were the Soviet “efforts to safeguard its orthodoxy and preserve its narrative similar or different from the present state of the American MSM? Cohen maintains there were some close similarities. Some of these mutual efforts are obvious – like exclusion of alternate points of view – in US mainstream print media. Suppression of dissidents (Andrei Dmitrievich Sackharov is a Soviet example) is also in play in the United States with labels such as “Putin Apologists” who find themselves stigmatized with criticism. Both Cohen and Batchelor have experienced this. Cohen describes this new McCarthyism as a kind of “cancer, metaphorically” such that this harangue of a narrative restrains people like Sec. State, Tillerson from performing their functions. The Soviets also misrepresented facts to maintain their narrative for Russians. The bottom line for both regimes that indulge in this kind of propaganda is that deceit is hugely damaging on multi-levels.

One of the facts left out, Cohen mentions, is a huge one involving how the DNC handled the “hack”, that it did not call the FBI but a private investigation agency (Crowdstrike). This bunch labelled the problem as being due to Russian involvement. And so the narrative began. The FBI never investigated these findings! Other groups looked at these findings and nothing was found to implicate Russia. No facts whatsoever. It was all deceit. These facts have been excluded. In the Soviet system the KGB was used as the expert sources for spin propaganda. In the US, however, the heads of agencies have stood up and supported the narrative – like James Comey, Director of the FBI did very recently. Cohen is still unsure whether the FBI ever looked closely at the DNC situation. He suspects that Comey was told not to.

The last segment deals with how one resists “the big lie” narrative. The answer is not clear in that both systems, Soviet and American, essentially required the outspoken dissident to suffer the consequences. For the Russian citizen, there was a certain understanding, according to Cohen, of reading between the lines of the narrative and deducing the truth. Americans have alternative media (as do Russians now). But the most alarming indication of how the American system works is ironically shown by Devin Nunes, chairman of the House Intelligence Committee coming under attack by the top Democrat on the Committee, Adam Schiff for discussions ( read suspected interference) at the White House. The purpose of this Committee is to investigate Russian Involvement in the US political process, and Mr. Nunes was not satisfied with the testimony of James Comey (nor should he be given the nature of the testimony) and wanted to recall the FBI director for additional questions concerning the intelligence gathering around the Trump transition team. Schiff does not recognize that infighting at this public level within the House Intelligence Committee also undermines the legitimacy of any conclusions in this process. Essentially Schiff is demanding that Nunes step down, recuse himself as the chairperson. Earlier comments by Mr. Nunes also indicated that he was going to be requireing evidence showing Russian involvement in the American political process. If no evidence is to be found, then that puts Mr. Nunes at odds with the narrative. Such people are inconvenient to the kangaroo court function, and especially if they have integrity. Ironically this story is turning into a scandal useful to Trump as no evidence of a Russian connection was noted, and Nunes is refusing to step down.

This weekly 40-minute audio interview appeared on the Internet site on Tuesday — and I thank Ken Hurt for sending us the link.  But, as always, the biggest kudos and ‘attaboys’ are bestowed upon Larry Galearis for his incredible executive summaries.  Another link to this interview is here.

Russian Foreign Minister Sergey Lavrov’s interview to the National Interest Magazine on March 29

Question: I’d like to start by asking you about your forthcoming meeting with U.S. Secretary of State Rex Tillerson, we’ve read in the press that the two of you may be meeting soon.

Sergey Lavrov: So they say.

Question: Could you perhaps tell us about your expectations and goals in dealing with Secretary Tillerson?

Sergey Lavrov: Well, after the American election, soon after Election Day President Putin and President-elect Trump talked over the phone. It was a good but very general discussion touching upon the key issues in our relations, and of course the key international issues. And they agreed that they would continue being in touch and after the inauguration they talked again, and they reconfirmed the need to look for ways which would be effective in handling international problems. And of course to see what could be done to bring the bilateral relations to normalcy. They also agreed that Mr. Rex Tillerson and I would look into the agenda in some more details, and would also discuss the preparation for the presidential meeting which should take place when both countries, both leaders feel comfortable.

And we met with Rex in mid-February in Bonn on the margins of the G-20 ministerial meeting, and covered quite a lot of the bilateral agenda. I briefed him about the relationship on bilateral issues with the Obama administration, the problems which accumulated during that period. We did not go into the substance of this, I just briefed him so that his team, which is still being assembled, could take a look at these issues and determine what kind of attitude they would have on them. And we discussed Syria, Iran, the Korean Peninsula, the Middle East in general, relations between Russia and the West, it was a very general, but rather substantive discussion, obviously it was the first contact and Mr.Rex Tillerson is just getting into the shoes of his new capacity. We discussed the possibility of personal meeting and have been continuing these discussions. As soon as we finalize them it will be announced.

But my feeling is that from the point of view of personal relationship, we feel quite comfortable. I feel quite comfortable, I believe Rex had the same feeling, and our assistants should work closer but of course this could only be done when the team in the State Department is complete.

This longish interview put in an appearance on Internet site on Wednesday — and it had to wait for today’s column as well.  It’s certainly a must read for any serious student of the New Great Game — and it’s another contribution from Roy Stephen.  Another link to it is here.

Russia’s 2-year-long recession is over

Russia has finally returned to growth.

The economy grew by 0.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} year-over-year in the fourth quarter of 2016 after shrinking by 0.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the third, according to the Federal Statistics Service.

This marks the first time Russia has seen positive growth in year-over-year terms since the fourth quarter of 2014.  The Russian economy contracted by 0.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} over the full year.

Looking beneath the headline figure, the improvement was due to the recent lighter declines in consumer spending and stronger inventory investment, said William Jackson, senior emerging markets economist, at Capital Economics, in a note.

These trends are likely to continue in the coming quarters and we expect growth to be stronger than most anticipate both this year and next,” he added.

This is a news story from the Internet site.  This one showed up around 1 p.m. Europe time on their Friday afternoon — and its courtesy of Patrik Ekdahl.  Another link to it is here.

Nikki Haley says U.S. “no longer focused” on ousting Assad

Hours after U.S. Secretary of State Rex Tillerson said during a visit to Turkey that the fate of Syrian President Assad should be decided by the Syrian people – reversing the Obama administration’s demand that Assad must go as part of any Syrian peace settlement – Nikki Haley, the U.S.’s ambassador to the U.N., has confirmed that there has indeed been a change in U.S. policy, and that the U.S. is indeed no longer ‘focused’ on getting President Assad to go.

Previously, when discussing Secretary Tillerson’s comment, I had warned that it might be a slip.  Haley’s comment shows it was not, and that US policy has indeed changed.

Haley’s comments were made in a meeting with reporters in New York on Wednesday.  This is how Reuters reports them.

A word of caution is in order.  The fact that the unnamed Trump administration official is reported to have told Reuters that President Assad “is never going to have sufficient force to reassert control over the whole country” strongly suggests that the policy in Washington, now that regime change in Damascus has been abandoned, is to partition Syria, so as to create pro-U.S. enclaves in Syria’s northern and eastern regions.

I posted a story similar to this earlier this week, but this news item from Alex Mercouris makes it official.  It showed up on Internet site on Thursday sometime — and my thanks go out to Roy Stephens for his final offering in today’s column.  Another link to it is here.

The Pentagon is no longer going to tell the public how many troops are in Iraq and Syria

The Pentagon is no longer going to disclose how many troops are in Iraq and Syria, a sharp departure from an Obama administration policy that kept the public abreast of increased troop deployments to the region.

Though the U.S. military has increasingly deployed conventional ground forces in its fight against ISIS in recent months, to include U.S. Army Rangers and US Marine artillerymen, neither were announced by the Department of Defense.

In order to maintain tactical surprise, ensure operational security and force protection, the coalition will not routinely announce or confirm information about the capabilities, force numbers, locations, or movement of forces in or out of Iraq and Syria,” Eric Pahon, a Pentagon spokesman, told the Times.

The U.S. military seems to be taking on a larger role in the coalition effort to topple ISIS, with special operations forces already in the region being augmented by more traditional U.S. troops. In early March, a convoy of U.S. Army Rangers riding in armored Stryker combat vehicles were seen crossing the border into Syria to support Kurdish military forces in Manbij. The convoy, identified by SOFREP as being from 3rd Ranger Battalion of the 75th Ranger Regiment, was the most overt use of U.S. troops in the region thus far.

This news item was posted on the Internet site around 2 p.m. Europe time on their Friday afternoon — and it comes courtesy of Swedish reader Patrik Ekdahl as well.  Another link to it is here.

Pentagon – and Daesh: Target Iran — Pepe Escobar

CENTCOM commander Army Gen. Joseph Votel channeled his full Dr. Strangelove in front of the U.S. House Armed Services Committee this past Wednesday.

We need to look at opportunities where we can disrupt [Iran] through military means or other means.”

As Orwellian as our times may be, this still ranks as a declaration of war. With the inbuilt consequence of smashing to bits the U.N. nuclear deal struck with Iran in the summer of 2015.

Joseph Strangelove did not bother to chainsaw his words.

Iran is one of the greatest threats to the U.S. today (Pentagon official doctrine; number four after Russia, China and North Korea). Iran has increased its “destabilizing role” and poses “the greatest long-term threat to stability” in the entire Middle East.

This commentary by Pepe put in an appearance on the Internet site at 2:35 p.m. Moscow time on their Friday afternoon, which was 7:35 a.m. in Washington — EDT plus 7 hours.  I thank Larry Galearis for finding it for us — and another link to it is here.

China’s Record Iron Ore Glut: Enough To Build 13,000 Eiffel Towers

Earlier this week we discussed the reason for the recent drop in iron ore prices, which had been attributed to the discovery of massive data fabrication and misrepresentation of commodity production cuts in China (think OPEC), whose biggest steel-producing province was found lying about mandatory output reductions, and instead of curbing was in fact accelerating production.

As Reuters reported at the time, Hebei, China’s biggest steel-producing province, launched a probe into steel overproduction in the city of Tangshan “amid concerns that firms have continued to raise output despite mandatory capacity cuts.

Tangshan is the heartland of Chinese steel production. The city is home to the headquarters of the state-owned Tangsteel Group, which in 2006 merged with other companies to form Hebei Steel Group, the second-largest steel producer in the world. Located around 100 miles east of the capital Beijing, Tangshan is on the frontline of the country’s “war on pollution”, and was seventh on the list of China’s ten smoggiest cities in the first two months of this year.   

    Hebei was ordered by China’s central government to investigate firms in Tangshan that have “restricted but not cut production, restricted production but not actually cut emissions, and cut capacity but actually increased output,” the provincial dated March 25 said, and circulated by traders on Monday.   

    The notice, sent on Saturday, cites orders from President Xi Jinping and Zhang Gaoli, the vice-premier, for Tangshan to investigate the problem of falsely reported plant closures and rising steel output.

This longish Zero Hedge article is their spin on a Reuters story from Monday.  It was posted on the ZH website at 12:50 p.m. EDT on Friday afternoon — and it’s the final contribution of the day from Brad Robertson.  Another link to it is here.

Jim Rickards: China Very Worried About President Trump

During this 43:09 minute interview, Jason starts off by asking Jim about his recent trip to mainland China and if he learned on his trip if physical gold demand in China is still strong.

Jason also asks Jim if China is worried about President Trump starting a trade war by putting a very high tariff on Chinese goods, why Keynesian predictive models with extremely poor long term track records are still given any credibility and whether Janet Yellen and the Federal Reserve will raise interest rates anymore in 2017?

This audio interview, which is very much worth your while, was posted on the Internet site on Thursday — and the first person through the door with it on Friday was Ken Hurt.  Another link to it is here.

To Save Albatross From Sea Level Rise, an Experimental Colony Lifts Off

In Hawai’i, conservationists dutifully tend to downy Laysan Albatross chicks at a new nesting colony created to ensure the species’ future.

Earlier this month, inside a retrofitted shipping container on Oahu’s north shore, the drone of a high-powered kitchen mixer and stench of fish punctuated the air. Robby Kohley, an avian ecologist sporting an albatross-embellished trucker hat, was macerating a slurry of squid, sardines, and salmon oil with a liquid electrolyte, calcium supplement, and multivitamin—all the nutrients a growing albatross chick needs.

I call myself a glorified bird janitor,” Kohley said when the Vitamix quieted. He’s understating his role, but his point is well taken. The biologist has spent his life hand-raising birds, starting with parrots in grade school, before transitioning to endangered Hawai’ian species like the `Alalā (Hawaiian Crow), Hawai’ian Petrel, Newell’s Shearwater, and now the Laysan Albatross. So he knows that most of the labor required to save a species—like prepping food and sterilizing equipment—is unglamorous. “It’s not as fun and interesting as feeding the chicks,” he said.

The chicks were 18 downy Laysan Albatross, and the slurry, divvied up into a few dozen 100-milliliter syringes, was for them. They’ve found themselves under Kohley’s care after a long journey that started at a U.S. Navy airfield on Kauai, where their eggs were laid. Then, as part of the egg translocation project I reported in January, they were flown to Oahu and adopted out to foster albatross parents. After hatching, they were brought here, to James Campbell National Wildlife Refuge (JCNWR) on the northern tip of Oahu, to found a new albatross colony high above the ocean’s waves that may prove vital to the survival of the species.

This very interesting story was posted on the Internet site on Wednesday — and it’s the second offering of the day from Ellen Hoyt — and another link to it is here.

India gold imports cross 560 tonnes in 10 months of FY17

India has imported 560.32 tonnes of gold during April-January period of the current fiscal, Parliament was informed on Friday.

Gold imports aggregated to 968.06 tonnes in the entire 2015-16 fiscal and 915.47 tonnes in 2014-15, minister of state for finance Arjun Ram Meghwal said in a written reply to the Lok Sabha.

As per rough estimates, he said, gold demand in the country is 800-900 tonnes per annum. Meghwal also said that with an aim to reduce demand for gold coins minted outside India and to recycle the gold available in the country, government has introduced India Gold Coin in 2015.

According to the provisional data of the commerce ministry, India’s gold imports fell by about 32.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to $19.74 billion during the April-January period of 2016-17.

This brief gold-related PTI news item, filed from New Delhi, showed up on the Internet site at 3:03 a.m. IST [India Standard Time] on their Friday morning — and it’s something I found on the Sharps Pixley website at midnight last night EDT.  Another link to it is here.


These two photos are of dragon-headed caterpillars.  There are hundreds of species, of which these are two of the most dramatic I could find.  Click to enlarge.


Today’s pop ‘blast from the past’ was written in the swamp rock style of Creedence Clearwater Revival, in terms of the vocal, rhythm, and melodic style. It came out in the spring of 1972 (the same year Creedence split up). Clarke imitated John Fogerty’s vocal style, which was based on the Creedence song “Green River“.  According to Clarke, the song was written “in about five minutes“.  Well, 45 years later, it’s still around — and the link is here.

Today’s classical ‘blast from the past’ is one that I was playing on my stereo while I was bottling wine earlier this week — and I thought it would be a good choice.  It’s Mozart’s Requiem Mass in D minor…but not the whole thing…just the Introitus and Kyrie…both of which featured prominently in the renowned 1984 Miloš Forman film spectacular, Amadeus.

Here are the English Baroque Soloists and the Monteverdi Choir…all directed by John Eliot Gardiner.  Although excellent, It’s not my favourite recording, but I don’t have the time to look for something else at this hour.  The link is here.

It wasn’t an overly dramatic week for either silver or gold as March came to a close — and the April contract went off the board.  The most interesting developments occurred in COMEX silver inventories on Wednesday and Thursday — and it remains to be seen if there is more to come when Friday’s silver COMEX movements are reported on Monday.

There certainly has to be a reason why all this silver is being accumulated by JPMorgan and, as Ted has mentioned on numerous occasions, it’s all been done in the open during the March delivery month for the whole world to see.  And on top of that, there was a big conversion of SLV shares for physical earlier this week as well — and it’s a reasonable assumption that JP Morgan now owns that, too.

The ‘why’ is most likely because they’re going to make a boat load of money when silver sports a shiny news 3-digit price.  I don’t know how you feel about it, but with their stash closing in on 600 million troy ounces according to Ted, you’d think they have enough by now.

Here are the 6-month charts for all four precious metals, plus copper, as always.  Silver is still above it’s 200-day moving average — but gold has a bit to go before its back above its 200-day.  The ‘click to enlarge’ feature helps a bit with the first four charts.

So where we go from here from a price perspective is not known.  Down first to flush out the new longs that have been placed recently…or higher from here without that engineered sell-off first?  Beats me.  If it’s down first, ‘da boyz’ could easily peal $40 off the gold price, plus a buck or so off silver.  But as I hope I made clear in the COT Report above, it’s not the price that matters, but the number of contracts.

The ‘doom and gloomers’ are still out there preaching that the world’s financial economic, financial and monetary systems are soon to collapse — and I have to count myself amongst them.  Only the timing is uncertain, but sooner or later the end will come.

The only thing I’m not sure of is whether it will come by accident, or design.  If the Deep State want to hang Trump out to dry once and for all, this would be the way to do it.

So we wait some more.

I’m done for the day — and the week — and I’ll see you here on Tuesday.


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