Another Record Commercial Net Short Position in Silver

15 April 2017 — Saturday


With the markets closed, there’s no current price activity to comment on.

Only the currency markets were open — and here’s the dollar index for Friday.  There’s not a lot to see.

But I do have the following.  I could have posted these in Friday’s column, but thought I thought I’d follow my usual weekly format — and wait for Saturday’s missive.

Here are the 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 trading week, in both percent and dollar and cents terms, as of their Thursday’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.

Here are the month-to-date changes…

And year-to-date…

There were obviously no reports from the U.S. Mint, or either of the precious metal ETFs — and no warehouse stock updates from the COMEX but, there was, as I said yesterday, a Commitment of Traders Report.  Here are all the gory details.

In silver, the commercial net short position increased by 2,068 contracts, or 10.3 million troy ounces of paper silver.  The commercial net short position is at another new record high of 572.1 million troy ounces.  I believe that Ted mentioned that there was a new record high for the short positions of the Big 4 traders as well.

They arrived at the 2,068 contract number by decreasing their long position by 739 contract — and they added 1,329 short contracts.  The total of those two numbers was the change for the reporting week.

Ted said that the Big 4 traders added about 800 contracts to their short position — and attributes all of that to JP Morgan — and pegs their current short position around the 34,000 contract mark.  The ‘5 through 8’ large traders added a chunky 2,300 short contracts — and Ted’s raptors, the 31 commercial traders other than the Big 8, actually covered around 1,000 contracts of their short position.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders — and much more.  They added 6,424 contracts to their burgeoning long positions, which now at another new record…114,249 contracts.  But the also added 934 short contracts.  The difference between those two numbers…5,490 contracts…the weekly change, is far in excess of the change in the commercial net short position.  And, as always, the difference was made up by the traders in both the ‘Other Reportable’ and ‘Nonreportable’/small trader categories…as they decreased their long positions, plus added to their short positions as well.

Without doubt, there have been further increases in the commercial net short position in silver since the cut-off at the COMEX close on Tuesday.  This situation is now so far beyond obscene and criminal, that I’ve run out of adjectives to describe it.

Here’s the 9-year COT chart for silver — and I have nothing left to add to what I’ve already said.  Click to enlarge.

In gold, the commercial net short position increased by only 16,348 contracts, or 1.63 million troy ounces of paper gold.  Ted was expecting about double that number, so it was a relief for it to be ‘only’ this bad.  The commercial net short position is now up to 18.74 million troy ounces.

The commercial traders arrived at that 16,348 contract number by increasing their long position by 2,004 contracts, but they also added a very chunky 18,352 short contracts — and, like in silver, all of these coming courtesy of the traders in the Managed Money category who were going long in droves.

Ted said that the Big 4 traders added another 10,800 contracts to their short position — and the ‘5 through 8’ large traders added about 2,900 contracts to their short positions as well — and Ted’s raptors, the remaining 51 commercial traders on the short side, decreased their long positions by around 2,600 contracts.

Under the hood in the Disaggregated COT Report in gold, it was also a Managed Money affair all the way.  They added 16,413 long contracts — and they decreased their short position by 7,472 contracts, for a total weekly change of 23,885 contracts, which was much more than the change in the commercial net short position.

Unlike silver, the COT structure in gold is still in [mostly] neutral territory, but heading in the wrong direction in a big hurry.  But, like silver, it should be obvious that prices are set by the interaction between the Managed Money traders on one side — JP Morgan et al on the other.

Here’s the COT chart for gold for the last nine years as well — and we’re nowhere near an overbought situation.  Click to enlarge.

Of course, if the powers-that-be can arrange it, they would certainly be happy to pull the pin on all these new Managed Money longs that have been piling in for the last three weeks or so — and ring the cash register for fun, profit — and price management purposes.  But can they or will they?  This is particularly true in silver, where the prospects that ‘da boyz’ could get over run is beginning to look like one of only two ways out for all the shorts…excluding JPMorgan, of course.  So we wait some more.

I’m eager to see what Ted has to say in his weekly commentary when he posts it on his website this afternoon.

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 162 days of world silver production—and the ‘5 through 8’ traders are short an additional 60 days of world silver production—for a total of 222 days, which is a bit over seven months of world silver production, or about 539.4 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 216 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 572.1 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 572.1 – 539.4 = 32.7 million troy ounces.

As I also stated in the above COT Report, Ted pegs JP Morgan’s short position at around 34,000 contracts, or 170 million ounces, which is up from the 33,000 contracts/165 million ounces they were net short a week ago.  170 million ounces works out to around 70 days of world silver production that JP Morgan is short.  That’s compared to the 222 days that the Big 8 are short in total.  JPM is short about one third of the entire short position held by the Big 8 traders.

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 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 123 days of world silver production between the two of them—and that 123 days represents 76 percent of the length of the red bar in silver in the above chart…a hair more than 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, 15 days of world silver production each.

The short positions of Scotiabank and JP Morgan combined, represents about 55 percent of the short position held by all the Big 8 traders.  How’s that for a concentrated short position within a concentrated short position?

The Big 8 are short 49.1 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 now up to 41.7 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 47 days of world gold production, up from 43 days last week — and the ‘5 through 8’ are short another 21 days of world production, which is up from 20 days from the prior week, for a total of 68 days of world gold production held short by the Big 8.  Based on these numbers, the Big 4 in gold hold about 69 percent of the total short position held by the Big 8.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 73, 71 and 63 percent respectively of the short positions held by the Big 8.  These numbers are little changed from last week.

I have an average number of stories for you today, including a few that I’ve been saving for today’s column.


Falling U.S. retail sales cast doubt on further Fed interest rate rise

Falling retail sales and lower inflation in the U.S. have added to signs that the world’s biggest economy has lost momentum in recent months, casting doubt over how many more times the Federal Reserve will raise interest rates this year.

Stronger takings at clothing and electronics stores in March were not enough to offset a continued drop in demand for cars, according to figures from the U.S. government. As a result, retail sales fell for the second month running.

The 0.2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} drop was deeper than forecasts in a Reuters poll of economists and followed a bigger than previously reported decline of 0.3{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in February.

Sales were also hurt by lower demand for building materials in March, chiming with a sharp slowdown in construction hiring as parts of the US were hit by severe snowstorms. Petrol station takings also dipped in March as fuel prices fell.

The few bright spots were a 2.6{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} rise in takings at electronics and appliance stores and a 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} rise in clothing sales.

This news item was posted on Internet site at 5:34 p.m. BST on their Friday afternoon — and it comes to us courtesy of Swedish reader Patrik Ekdahl.  Another link to it is here.

Atlanta Fed Slashes Q1 GDP Forecast to Just 0.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, Lowest in Three Years

Just over two months ago, the Atlanta Fed “calculated” that Q1 GDP was going to be a pleasant 3.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, confirming that the Fed had made the correct decision by hiking not only in December, but also last month. Since then, the Fed’s own GDP estimate has crashed in almost linear fashion, and as of this morning – after the latest disappointing retail sales report – it had plunged to just 0.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, which if accurate would make Q1 the weakest quarter going back three years to Q1 2014.

From the regional Fed:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.5 percent on April 14, down from 0.6 percent on April 7. The forecast for first-quarter real consumer spending growth fell from 0.6 percent to 0.3 percent after this morning’s retail sales report from the U.S. Census Bureau and the Consumer Price Index release from the U.S. Bureau of Labor Statistics.

Putting the Atlanta Fed’s forecast in context, a 0.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} GDP would mark the weakest quarter in 37 years, or going back to 1980, in which the Fed hiked rates. Then again, considering today’s abysmal CPI and retail sales data, the narrative to focus on next is not so much hiking, or balance sheet normalization, but when the Fed will resume easing, cut rates (as per Donald Trump’s recent suggestion) and/or launch QE4.

This brief 2-chart Zero Hedge article appeared on the Zero Hedge website at 11:36 a.m. EDT on Friday morning — and another link to it is here.

Heavily Armed Swamp Critters — Bill Bonner

By our calculation, it took just 76 days for President Trump to get on board with the Clinton-Bush-Obama agenda.

Now there can be no doubt where he’s headed. He’s gone Full Empire.

Not that it was unexpected. But the speed with which the president abandoned his supporters and went over to the Deep State is breathtaking.

Here’s the outlook: no real change to O’care. No cutbacks in entitlements. No attempt to balance the budget. No belt-tightening at the pudgy Pentagon. (Instead, it will get more money.)

And now this: The wars in the Middle East will not only go on…they will accelerate.

This absolute must read commentary by Bill showed up on the Internet site yesterday — and another link to it is here.

Pentagon awards contract to United Airlines to forcibly remove Assad

The Pentagon announced Tuesday it had awarded a sole-source contract to United Airlines for work related to the forcible removal of President Bashar al-Assad from Syria.

The contract, worth $2.1 billion, tasks the airline company with locating Assad, grabbing him from his seat in the presidential palace, and “dragging him out of Damascus by his arms.” The contract also notes that Assad should be “asked several times, politely” to give up his seat of power, though if he refuses, United workers should bloody his nose up a bit, according to the posting at FedBizOpps.

The award comes just days after President Donald Trump authorized the launch of cruise missiles at a Syrian air base, in response to Assad’s use of chemical weapons. Two Navy ships launched 59 Tomahawk missiles into Syria, which destroyed roughly 20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of its operational aircraft and a Green Beans Coffee shop being used by the Russian army.

Though U.S. military officials have struggled in recent months with a plan for removing Assad, United Airlines cleared its final hurdle for the military’s request for proposal on Monday, when it ordered police officers to forcibly remove a passenger from a flight that was overbooked.

Monday’s test run was “more successful than we could have hoped,” said Charlie Hobart, a spokesman for United.

This amusing bit of nonsense appeared on the Internet site on Tuesday — and it’s something I found in Thursday’s edition of the King Report.  Another link to it is here.

Britain’s Royal Mail to close pension scheme due to “unaffordable” ballooning costs

Royal Mail will close its final salary pension scheme next year as it faces costs ballooning to more than £1bn a year.

The company has said it cannot afford to keep the pension plan open, and will close it at the end of March 2018.

The decision, which will affect around 90,000 workers, follows a consultation process that ended last month.

The move has been condemned by the Communication Workers’ Union (CWU), which vowed to respond with the “strongest possible” opposition, including a ballot for strike action.

Royal Mail said: “The plan is currently in surplus but we expect the surplus will run out in 2018.”

The company’s annual pension contributions are currently around £400m. If no changes are made, the contributions could more than double to over £1bn in 2018.”

A problem that will only continue in all the welfare/socialist Western societies today…including right here in Canada at some point.  This news item was posted on the Internet site at 7:40 a.m. BST on Thursday morning, which was 2:40 a.m. in New York — EDT plus 5 hours.  It’s the second offering of the day from Patrik Ekdahl — and another link to it is here.

Solar power crisis blamed on U.K. Tory Government as number of new installations plummets 80{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

The number of solar panels being installed in the U.K. has fallen by more than 80 per cent, according to an analysis of new figures in the latest sign that the industry is being strangled by government policies despite being one of the cheapest sources of electricity.

The Solar Trade Association (STA), which produced the figures based on recently released government statistics, found the first three months of this year had seen a catastrophic collapse in the number of solar panels being put up following the withdrawal of virtually all subsidies, a stunning business rate hike of up to 800 per cent and the imposition of “red tape”.

No form of energy generation – renewable or fossil fuel – can currently be built without some form of subsidy and the STA stressed it was simply seeking a “level-playing field”.

The number of people putting solar panels on their homes is now at a six-year low.

This very interesting article put in an appearance on the Internet site around 3:30 p.m. BST on Friday afternoon, which was around 10:30 a.m. in New York — EDT plus 5 hours.  It’s another contribution from Patrik Ekdahl — and another link to this story is here.

Credit Suisse bosses slash their bonuses by 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to head off revolt

Credit Suisse bosses have cut their bonuses by 40{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in the hope of avoiding an embarrassing protest by shareholders and politicians at the bank’s annual meeting.

The bank’s executives, led by chief executive Tidjane Thiam, had proposed paying themselves bonuses totalling 78m Swiss francs (£62m) even though the Swiss bank lost SFr2.7bn last year and has been fined $5.3bn (£4.2bn) by the US authorities for its role in the subprime mortgage crisis.

Institutional investors and Swiss politicians had publicly criticised the bumper payouts – including a total of SFr12m for Thiam – and vowed to vote against the awards at the bank’s AGM later this month.

The bank, which had defended the planned bonuses as recently as Thursday, announced it was reducing the awards early on Friday morning. “I hope that this decision will alleviate some of the concerns expressed by some shareholders and will allow the executive team to continue to focus on the task at hand,” Thiam said in a letter to investors published on the bank’s website. “My highest priority is to see through the turnaround of Credit Suisse which is under way.”

This is another story from The Guardian.  This one appeared on their website at 4:10 p.m. BST on Friday afternoon — 11:10 a.m. in New York.  It’s yet another offering from Patrik Ekdahl, for which I thank him — and another link to it is here.

Here’s Italy’s Latest Plan B Where Desperation Meets Insanity

Nerves are beginning to fray in Italy’s banking sector, as pressure rises on the worst hit banks to remove the most noxious elements off their books — most likely at big discounts that will further impair their balance sheets. On Saturday Italy’s finance minister, Pier Carlo Padoan, begged the ECB for more time for the banks to clean up their act.

We cannot demand that suddenly banks offload their NPLs, because this could be potentially destabilizing, especially if the problem involves several banks in the same banking system,” Padoan told a news conference.

By “several banks,” Padoan means perhaps the 114 banks, of the close to 500 banks in Italy, that have “Texas Ratios” of over 100{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}. The Texas Ratio, or TR, is calculated by dividing the total value of a bank’s non-performing loans by its tangible book value plus reserves — or as money manager Steve Eisman put it, “all the bad stuff divided by the money you have to pay for all the bad stuff.

If the TR is over 100{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the bank doesn’t have enough money to “pay for all the bad stuff” and tends to fail. In Italy, 24 banks are estimated to have ratios of over 200{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

On Tuesday it was the Governor of Bank of Italy Ignazio Visco’s turn to plead for more time. “The majority of bad loans are held by banks whose financial position does not require to sell them immediately,” he told European Union lawmakers.

This story showed up on the Internet site on Thursday sometime — and I thank Richard Saler for bringing it to our attention.  Another link to it is here.

Maria Zakharova tells the U.S. State Department, BBC where to go — and how to get there!

Maria Zakharova, Russia’s Foreign Affairs Spokesperson, has come out in sharp criticism over a BBC article, published by a certain Paul Wood on 30 March 2017. In the article titled “Trump Russia dossier key claim verified” – Wood asserts that a key Russian diplomat, Mikhail Kalugin, has been verified to have been a Russian spy, and not a simple diplomat. “If anyone looks like a harmless economist, rather than a tough, arrogant KGB man, it is the bland-faced Kalugin.” – writes Wood. “In addition, State Department staff who dealt with Russia, did not come across Kalugin, as would have been expected with a simple diplomat.” “Nobody had met him …it’s classic. Just classic [of Russian intelligence].”

Zakharova responded that it is highly questionable whether “the U.S. State Department ever knows anything at all”; whether it is Toner, Kirby or the ever-entertaining Psaaki back in the Obama administration – the answer is always, “no comment can be made at this time.”

Therefore, if the U.S. State Department really didn’t know of Mr. Kalugin, the incompetency of the staff is not all that surprising. Wood continued; “But sources I know and trust have told me the U.S. government identified Kalugin as a spy while he was still at the [Russian] Embassy.

What sources?” – asks Zakharova, in light of the lack of actual professionals able to deal on matters of Russia and the Ukraine inside the State Department. In 2014, the Obama Administration had wrapped up almost every avenue of bilateral relations between Russia and the U.S.

Wherever Wood found his ‘reliable sources’, they certainly are in short supply at the highest levels of U.S. government.

This is diplomacy with the gloves off — and as they say…hell hath no fury…and Maria has the U.S. State Department and the BBC for breakfast.  Good on her…as they richly deserve it.  This 7:13 minute video clip was posted on their Internet site aback on April 2…but still worth watching if you have the interest.  I thank Roy Stephens for sharing it with us — and another link to it is here.

Tales of the New Cold War: Trump, Syria & Russia’s Red Lines — John Batchelor interviews Stephen F. Cohen

What a week it has been! Batchelor introduces it as a shift from the “McCarthyism” circus over Russian subversion in the USA to the real military/diplomatic crisis with Russia in Syria. Damage control is heard from Sec. Defense, Mattis assuring that events with Russia “will not spiral out of control”, and Sec. State, Tillerson has now spoken with Russian Foreign Minister and (belatedly) we now understand with Putin on Wednesday. We have often heard Cohen state that today’s New Cold War is more dangerous than the previous one and in this podcast, he states that Syria has failed as the new Cuban Missile Crisis.  And there is a new narrative of proof surfacing against Assad using gas against civilians in the form a formal report from “intelligence” sources – as credible as all these reports of late. Cohen explains in detail how there was no motive for Assad to use gas, but a very real one for Washington to accuse him of using it. But, as Cohen states, Washington knows that the U.N. saw to and documented the destruction of Assad’s poison gas supplies (except those in ISIS held territory), and one can see that the pattern of stating falsehoods and basing American foreign policy responses on them is still very much alive. How can any country work diplomatically with a Washington that does this? This is Russia’s problem in most basic terms. We should again be reminded that political in fighting in Washington has the same format as foundation for its geopolitical policies – falsehoods and accusations. The Deep State wants Trump gone. Period. It seems to matter not how ludicrous the process looks.

The Russian point of view is next examined. Batchelor opens with: The Russians have now stated “any more missile attacks will be unacceptable”. Was the missile attack done before the U.N. could be moved to investigate the gas attack? (Why would Trump, while in the company of the Chinese leadership have authorized the missile attack when this would have been profoundly humiliating to the Chinese?) In Russia the pro U.S. faction element in Russian politics has also been profoundly altered. To add weight to the seriousness of these consequences for Washington, Putin maintained the false flag argument by stating that their intelligence resources had found the evidence. And most worrisome, Cohen then stated, most significantly, that a red line had been crossed, and some profound changes will happen in Syria to ensure protection for its allies. Readers are urged to listen to this discussion for the details. It defies belief that Trump could be this misguided to use missiles in Syria to relieve political attacks on him in Washington. But this is what the Kremlin believes too.  Cohen mentions the word “psychosis” to describe the American motives in this. It is a good word to use. A point not discussed is that while Trump may have done this attack for shallow political purposes, it was unconstitutional (no congressional debate) and may have given his adversaries some ammunition to impeach him in the future. He is now also a major war criminal.

That brings the discussion to how much the Tillerson visit to Moscow would be a useful diplomatic one.  Cohen thinks the Russians will be asking some tough questions about what is going on in Washington. Who are the policy makers, for example? There are many others listed by Cohen.  This is a critical crisis in world history and I have left out many details revealed in the discussion. Again, listening to this podcast is vital to understanding how serious the war risks are now. From my own point of view the unanimous level of incompetence and deceit in Washington gives less hope for a positive outcome, and TPTB seem impervious to understanding Russia, or the dangers of treating this nuclear power with disdain, deceit and hostility. It still looks like Washington, including Trump, have lost all common sense or have never had the enlightenment, and therefore the scope of vision to differentiate their political careers from the damage they do that can very easily lead to war. We are being led to war by those with the smallest of minds and little understanding or caring of how other nation states should interact together.

This 40-minute audio interview was posted on the Internet site on Tuesday.  I thank Ken Hurt for the link, but biggest THANK YOU goes to Larry Galearis for the outstanding executive summary posted above, which is a must read in my opinion.  And even if you’re not a serious student of the New Great Game, the interview is a must listen as well.  Another link to it is here.

Tillerson’s Bad Hand in Kremlin Showdown

The Russian media offered no complete account of what may have been accomplished during Secretary of State Rex Tillerson’s two-day visit to Russia, but there were hints of what the Russian negotiating position would have been behind closed doors and what may have justified Vladimir Putin making two hours available for Tillerson in what was otherwise a very busy day for the Russian President relating to domestic concerns.

Before Tillerson’s arrival Russian media reported widely on his failure the day before at the G7 meeting to win support for imposing more sanctions on Russia for backing Syrian President Bashar al-Assad in light of the chemical weapons event in Idlib on April 4. That proposal was raised by U.K. Foreign Minister Boris Johnson and affirmed by Tillerson but rejected by all other G7 members. With that resounding defeat, Tillerson had no sticks from “the international community” to wield as an ultimatum against the Russians, telling them to get behind a U.S.-imposed “regime change” in Syria or suffer the consequences of further economic isolation from the West.

Tillerson also carried little in the way of carrots, given President Trump’s retreat on his campaign pledges to improve relations with Russia. Tillerson’s empty diplomatic bag was a topic discussed on Russian prime-time television the evening before his arrival. Senior Duma member and United Russia Party leader Vyacheslav Nikonov rhetorically demanded of Tillerson on the Evening with Vladimir Solovyov talk show: “So, make us an offer of what it means to go with America, what it brings us, and then we will consider it.”

In effect, Nikonov was calling the Trump administration’s bluff. He and the Russian elites understand perfectly that Donald Trump has no political capital to spend to get Congressional approval of normalized relations with Russia.

This commentary by Brussels-based political analyst Gilbert Doctorow appeared on the Internet site on Thursday — and it’s the second offering in a row from Larry Galearis.  Another link to it is here.

Vladimir Putin to meet Chinese President

Just days after Chinese President Xi Jinping met US President Donald Trump in Florida, Zhang Gaoli, the First Vice-Chairman of China’s State Council (ie. China’s deputy prime minister) has arrived in Moscow where he has had a meeting with Russian President Putin.

This visit had been set up well in advance, and is not connected to the recent events in Syria.  It is intended to prepare for President Putin’s long announced trip to China next month, where he will meet with Chinese President Xi Jinping, as part of a major Russian-Chinese summit.  Importantly however Zhang Gaoli confirmed President Xi Jinping is planning a follow-up trip to Russia in July.

Perhaps what was even more striking than the confirmation of the continuing strong interaction between the Chinese and the Russians and the succession of summits being planned between them was the effusive words Zhang Gongli used to describe President Putin and the present state of Russian-Chinese relations.

The Chinese President must have found his recent meeting with US President Trump a strange affair.  Much of it was taken up with social engagements.  No important agreements were reached, and it doesn’t seem as if any really substantive discussions – for example on trade issues – took place.

The Chinese President must also have been bemused – and cannot have been at all amused – to be told without any advance notice over chocolate cake and without his aides available to advise him that the U.S. President had just launched a missile strike on Syria.

This news item showed up on Internet site on Thursday — and it’s the second contribution of the day from Roy Stephens.  Another link to it is here.

China Warns North Korea War “Could Break Out At Any Moment

North Korea is a problem,” Trump told reporters at the White House on Thursday. “The problem will be taken care of.”  Which prompted North Korea’s rebuke of U.S. President Trump’s “aggressive words,” overnight.

Both China (“The situation now is similar to the time before a storm, and this kind of dangerous situation worth of our attention and we must be alert,”) and Russia (watching the developments around North Korea with “great concern“) have weighed in on the increasingly tense saber-rattling occurring between the two nations.

As Bloomberg reports, China warned that a war on the Korean Peninsula would have devastating consequences and “one has the feeling that a war could break out at any moment.”

These concerns were echoed by a senior Russian lawmaker who, as A.P. reports, says the U.S. is a greater threat to global peace than North Korea…

Konstantin Kosachev, the head of the Foreign Affairs Committee in the upper house of Russian parliament, said Friday “the most alarming thing about the current U.S. administration is that you can’t be sure if it is bluffing or really going to implement its threats.”

He says “America objectively poses a greater threat to peace than North Korea,” adding that “the entire world is scared and left guessing if it strikes or not.”

This Zero Hedge news item is now datelined 1:19 p.m. EDT on Friday afternoon —  but has obviously been updated since it was first posted, as I received it from Richard Saler at 10:28 a.m. EST yesterday morning.  Another link to it is here.

India gold prices slip to discount for first time in six weeks

Gold was sold at a discount to official prices in India this week for the first time in six weeks, while demand elsewhere in Asia remained subdued as surging bullion prices turned off buyers.

Physical buying was very weak as prices jumped from around $1,250 this week. People are not interested in chasing prices at these levels and retail buying will pick up only around $1,200 levels,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

The holiday mood also weakened buying ahead of Easter.

Dealers in India, the world’s second-largest consumer of the metal, were offering a discount of up to $1 an ounce this week over official domestic prices. Dealers were charging a premium of $1 last week. The domestic price includes a 10 percent import tax.

In the last week of April, Indians will celebrate Akshaya Trititya, when buying gold is considered auspicious.

Sentiments have improved after the shock of demonetisation. We are expecting good demand during Akshaya Trititya,” said Aditya Pethe, a director at Waman Hari Pethe Jewellers in Mumbai.

This Reuters article, co-filed from Bengaluru and Mumbai, was the only gold-related story that I could find worth posting.  It appeared on their Internet site sometime on Thursday IST — and I found it on the Sharps Pixley website.  Another link to it is here.


Badgers are short-legged omnivores in the family Mustelidae, which also includes the otters, polecats, weasels, and wolverines.  The first photo is of a European/Eurasian badger — and the second is of the North American variety.  There are 11 different species of these critters.


Compared to war, all other forms of human endeavor shrink to insignificance.” – General George S. Patton Jr.

Today’s pop ‘blast from the past’ is one I’ve posted several time before, but I’m in the mood for it in the wee hours of Saturday morning — and I hope you are as well.  This Bach-derived tune, along with the British group that performs it, are instantly recognizable.  The orchestration of the introduction to this work is the best I’ve ever heard.  The link is here…enjoy!

Today’s classical ‘blast from the past’ was one I was listening to on the radio when I was in my car today — and I knew in an instant that it would grace today’s column.  I’ve posted it before, but never at Easter, the time of year that it was originally composed for.

Miserere mei, Deus, Latin for “Have mercy on me, O God“) is a setting of Psalm 51 (50) by Italian composer Gregorio Allegri.  It was composed during the reign of Pope Urban VIII, probably during the 1630s, for use in the Sistine Chapel during matins, as part of the exclusive Tenebrae service on Holy Wednesday and Good Friday of Holy Week.

The story about this composition is the stuff of legend — and Mozart’s part in this work is legendary as well.  This recording by the Tallis Scholars is from 1994 — and is considered the definitive version of the work.  I’ll happily agree with that assessment.  The link is here.

Here are three charts that formed part of my presentation at the Cambridge Resource Conference in Vancouver in January.  They’ve been updated as of last week‘s COT Report, not the current one.

The first chart is exactly the same as the ‘Days to Cover’ chart posted in my discussion about it below the COT Report in the first section of today’s column…the same one that shows up in every Saturday column.  The difference with this one is that the blue bars show the total open interest in days of world production for each physically traded commodity on the COMEX.

It’s easy to see how much control the 4 and 8 largest traders, who mostly work in collusion, have on the short side of each commodity again the hundreds or thousands of other traders who trade independently.  Click to enlarge on all three charts — and I urge you to take the time to study them for a few minutes.

The second chart breaks out the 4 precious metals on their own, but this time the COMEX open interest is shown MINUS all known spread trades which, be definition, are market-neutral — and they are considerable, when you check their corresponding open interest numbers on Chart #1.  There are no spread trades reported for either the Commercial category or the Nonreportable/small trader category.  If they were, the net open interest, particularly in gold and silver, would be even smaller then shown here.

The dialogue box on this chart shows the percentage of total open interest that the Big 4 and Big 8 are short each precious metal vs. total net open interest…the blue bars.  It’s obvious why Ted Butler calls them “concentrated short positions” — and the CFTC pretends that these numbers don’t exist.  Click to enlarge.

The third chart is the killer chart.  It’s for silver only.  In the COT Report from two weeks ago, the ‘5 through 8’ traders were short 55 days of world silver production — and the Big 8 were short 161 days so, mathematically, the short positions of the first four traders on the left-hand side of the chart, must add up to 55 days in total.  The number I’ve assigned each trader are arbitrary, but they can’t…also mathematically…be out by much.  The four largest traders…the four larger bars on the right must…also mathematically…add up to 161 days of world silver production.  Ted knows what JPMorgan’s short position is within a few percent — and we both know that Scotiabank’s short position hasn’t changed much over the years.  And since the trader in the #5 spot, must be larger the biggest trader in the ‘5 through 8’ category, then computing the other two traders in the Big 4 category is pretty easy, but are estimates nonetheless.

I’ll bet my personal reputation [such as it is] on the fact that if we knew what the actual short positions of each of the Big 8 traders was, I’ll guarantee you that the resulting chart would be within 90-95 percent of the one shown here.  It’s not mathematically possible for it to be any different.  Click to enlarge.

As I said in last Saturday’s column — and repeated several time during the Dave Janda interview the following day…”Donald Trump is now Deep State road kill“.  And as others, including Bill Bonner in today’s column — and David Stockman in Thursday’s, have said — Trump’s conversion to the Dark Side of The Force is now complete — and he’s totally controlled by The Empire.  And as Bill Bonner pointed out, it only took about 76 days from the day he became president.

The Deep State is desperate to go to war…any war.  Their ‘false flag’ attempt in Syria didn’t go ‘according to Hoyle’…so it’s now North Korea, where their nuclear capabilities have been pumped up to frightening proportions by the main stream U.S. propaganda machines.

I can’t shake the feeling that if there is some sort of military action taken against North Korea, nuclear or otherwise, it will give the New World Order crowd the reason that it’s been looking for — and they will allow the world’s economic, financial and monetary systems to implode on top of it…complete with the perfect alibi.

I’m hoping that I’m spectacularly wrong about this, but as Rahm Emanuel, then Chief of Staff for President-Elect Obama, said in an interview with The Wall Street Journal back on February 9, 2009…”You never want a serious crisis to go to waste.  What I mean by that is that it’s an opportunity to do things you think you could not do before.

The inside job that was 9/11…easily fell into that category…and look what’s happened since.

All bets are off from this point onwards.

How, as I like to say, did it come to this.

Happy Easter!


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