JP Morgan’s COMEX Silver Stash Now at 103.2 Million Troy Ounces

22 April 2017 — Saturday


The gold price was sold down a few dollars in early morning trading in the Far East — and then traded flat until the low tick of the day was set just minutes after the London open.  It chopped quietly higher from there, but it was obvious that the price wasn’t being allowed to get too far to the upside.  The high of the day, such as it was, was printed about twenty minutes before the COMEX close.  It was sold down a bit from there until shortly after 2 p.m. EDT — and it didn’t do much after that.

The gold price traded within a ten dollar price range on Friday, so I won’t bother with the low and high ticks once again.

Gold finished the Friday session in New York at $1,283.90 spot, up $2.20 on the day.  Net volume was very high once again at around 217,000 contracts.

The silver price was down a nickel by 11 a.m. CST on their Friday morning — and it traded more or less sideways until shortly after the noon silver fix in London.  The low tick of the day came shortly after the London p.m. gold fix at 10 a.m. EDT in New York.  The subsequent rally lasted until around 12:20 p.m. and, like gold, didn’t do much after that.

The low and high ticks in silver aren’t really worth looking up, either…but here they are anyway.  The high was reported by the CME Group as $18.02 — and the low was $17.785 in the May contract.

Silver was closed in New York yesterday afternoon at $17.895 spot, down 10.5 cents from its close on Thursday.  It was also sold down below — and was closed below, its 50-day moving average.  Net volume was pretty heavy at just over 49,500 contracts, which was not anywhere near as heavy as the volumes of the prior three days.  Roll-over/switch volume out of May was enormous once again.

Here’s the 5-minute tick chart for silver courtesy of Brad Robertson.  The volume began to pick up about thirty minutes  before the COMEX open…around 06:00 MDT on the chart below…as that was the time that the engineered sell-off began.  Volume really didn’t back off to what I would call background levels until 1 p.m. Denver time, which was 3 p.m. EDT in after-hours trading in New York.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ feature is a must.

Platinum traded quietly lower until around 11 a.m. CST on their Friday morning, the same as silver — and began to inch back towards unchanged from there, but was still down 3 bucks or so by the COMEX open.  The price took off at the point, but ran into the short buyers and long sellers of last resort almost the moment the price broke above the unchanged mark.  JP Morgan et al had the price down 8 dollars by shortly before noon in New York — and the tiny rally from there was turned lower as well — and platinum ended up closing on its $970 low tick, down 8 bucks on the day.

The palladium price was forced to follow a very similar path as platinum, almost to the tick in most cases  — and it finished the Friday session at $794 spot, down 8 dollars on the day as well.

The dollar index closed very late on Thursday afternoon in New York at 99.85 — and then traded pretty flat until around 2:25 p.m. China Standard Time [CST] on their Friday afternoon, which was thirty-five minutes before the London open.  It headed sharply lower for an hour — and it appeared that the usual ‘gentle hands’ saved it minutes before 8:30 a.m. in London at the 99.65 mark, which was the low tick of the day.  It ‘rallied’ up to a few basis points below the the 100.00 mark by 11:30 a.m. BST — and then chopped sideways mostly below that mark until it finally gave up the ghost around 2:15 p.m. EDT in New York.   Down it went from there, finishing the Friday session at 99.74 — and up 9 basis points on the day.

And here’s the 5-year U.S. dollar index chart to put everything in a longer-term perspective.  If it weren’t for the intervention by those constant ‘gentle hands’…this index would have crashed and burned a long time ago.

The gold shares opened about unchanged — and then traded sideways in a very tight range all day long.  The HUI managed a positive close at up 0.19 percent.

The silver equities traded in a similar fashion up until a few minutes before 2 p.m. — and at that point they sank into the red to stay.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.59 percent.  Click to enlarge if necessary.

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 Friday 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 as well…

The CME Daily Delivery Report showed that 10 gold and 14 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. In gold, the only significant number was that JP Morgan stopped 8 of those contracts for its client account.  In silver, ADM issued all 14 contracts — and stopped them all as well…all for their client account.  The link to yesterday’s Issuers and Stoppers Report is here.

Despite the fact that April is a traditional delivery month for gold, only 728 contracts have been issued and stopped so far this month.  But so far in silver, for which April is non-traditional delivery month, there have been 906 contracts issued and stopped…with a few more yet to go.

I just know that Ted will have something to say about this in his weekly review later today.

The Preliminary Report for the Friday trading session showed that gold open interest in April declined by a chunky 219 contracts, leaving 553 still around, minus the 10 contracts mentioned just above.  Thursday’s Daily Delivery Report showed that 51 gold contracts were actually posted for delivery on Monday, so that means that 219-51=168 gold contracts disappeared from April without either making or taking delivery.  Silver o.i. in April rose from zero to 25 contracts still around, minus the 14 mentioned above.  Thursday’s Daily Delivery Report showed that zero silver contracts were posted for delivery on Monday, so that leaves 25-14=11 contracts still open in April.

After a very large deposit on Wednesday, followed by a big withdrawal on Thursday…there was another deposit in GLD on Friday…as an authorized participant added a very decent 142,767 troy ounces.  And for the third time this week there was a withdrawal from SLV, as an a.p…mostly likely JP Morgan…took out 946,565 troy ounces.

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

Month-to-date the sales have been worse than awful, as only 4,000 troy ounces of gold eagles — 2,500 one-ounce 24K gold buffaloes — and 600,000 silver eagles have been sold so far in April, with only one week left in the month.  The absence of JP Morgan as Ted’s “big buyer” could not be more obvious, as is the fact that the public has almost totally vanished as buyers as well.

It was yet another day of almost no gold activity over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Once again, there was nothing reported received — and only 514.416 troy ounces/16 kilobars [SGE kilobar weight] were withdrawn.  All that ‘activity’ was at Brink’s, Inc. — and I won’t bother linking this tiny amount.

It was another monster day in silver, as 1,698,416 troy ounces were received — and 1,428,054 troy ounces were shipped out.  Two container loads totalling 1,098,460 troy ounces were received at Canada’s Scotiabank — and another container…597,943 troy ounces…was dropped off at JP Morgan’s vault.  A couple of good delivery bars were left at the Delaware depository as well.  In the ‘out’ category, there was also 759,658 troy ounces taken out of Delaware, plus another 668,395 troy ounces out of Canada’s Scotiabank.

JP Morgan’s COMEX silver stash is now up to 103.2 million troy ounces, or 53 percent of the total silver held in all eight COMEX depositories.  Here are two charts that puts all this in perspective.  In the first chart, JP Morgan opened their silver depository about a week before they engineered the drive-by shooting back on April 30, 2011 when Far East trading began in New York at 6:00 p.m. on Sunday evening.

This second chart is the same as the first chart, except the vertical scale is slightly compressed, plus it includes the warehouse stocks of not only JP Morgan, but the activities of the other five major COMEX silver depositories over the last six years, as well.  There are now seven depositories in total, to be sure, but the holdings — and in/out activities associated with the missing depository — is irrelevant in the grand scheme of things.  Both this chart, plus the one above, start on January 1, 2011 — and run up to and including the close of business yesterday.

What should be obvious from the chart above, is that total stocks in all of the other five major silver depositories are, without exception, not only lower than they were on January 1, 2011…but all of them are off their peak inventories levels by mostly significant amounts.

It was another busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, as 1,112 were received — and 3,986 were shipped out the door.  All of that activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

The numbers in Friday’s Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, were almost exactly what Ted said they would be…including another increase in the commercial net short position in silver to another new record high.

In silver, the commercial net short position rose by 2,418 contracts, or 12.1 million troy ounces of paper silver.  They arrived at this number by selling 22 long contracts, plus they added 2,396 short contracts — and the sum of those two numbers is the change for the reporting week.  The commercial net short position is now up to 584.1 million troy ounces of paper silver.

It was “all for one, and one for all” as the commercial traders acted as one on the short side.  The Big 4 added 500 contracts to their short positions, but Ted left JP Morgan’s short position unchanged from last week at 34,000 contracts.  The ‘5 through 8’ large traders added about 800 short contracts to their short position — and the short positions of the Big 8 were at new all-time record highs after this reporting week.  Ted’s raptors, the 32 commercial traders on the shorts side other than the Big 8, added around 1,100 contracts to their short positions, which are higher now than they were last summer.

Under the hood in the Disaggregated Report there was a bit of a surprise.  The Managed Money traders reduced their short positions by a decent amount, as expected…but they also reduced their long position by 3,960 contracts as well, which was a big surprise.  Ted was certainly expecting an increase in this number, as was I.  Almost all of the heavy lifting was done in the Nonreportable/small trader category for a change.

Here is the 9-year COT chart for silver — and as I’ve said on Friday, it’s already ‘yesterday’s news’ — and I would suspect that because of the ‘surprise’ mentioned above in the Disaggregated Report, that not all of last Tuesday’s trading data actually made it into this report, so all the above data is mostly for entertainment purposes.  Next week’s report will add some clarity, which is not obvious in this week’s.  Click to enlarge.

In gold, the commercial net short position rose by 23,700 contracts, or 2.37 million troy ounces of paper gold…as it was “all for one, and one for all“…as they traded as one entity once again, just like they did in silver.

They arrived at this number by selling 350 long contracts, plus they added 23,350 short contracts as well.  The total of those two numbers is the change for the reporting week.  The commercial net short position in gold is now up to 21.11 million troy ounces…the highest it’s been in a while.

Ted said that he wasn’t happy to see that it was the Big 4 traders that did the heavy lifting for the reporting week, as they added a massive 15,500 contracts to their short position — and the ‘5 through 8’ big traders increased their collective short positions by 3,100 contracts.  Ted said that the raptors, the 52 commercial traders other than the Big 8, sold their remaining 2,700 long contracts, plus they went short another 2,400 contracts as well.

Under the hood in the Disaggregated COT Report, it was mostly the Managed Money traders on the other side of the commercial traders.  They went long by 19,160 contracts, plus they also added 935 short contracts — and the difference between those two numbers…18,225 contracts…was the change for the reporting week.  The rest of the weekly change between that number and the change in the commercial net short position…5,475 contracts…came almost exclusively from the traders in the ‘Other Reportables’ category.

Here’s the 9-year COT chart for gold — and I would guess that, unlike silver, these numbers are a more accurate representation of what happened during the reporting week.  But these numbers are already ‘yesterday’s news’ to some extent as well.  Click to enlarge.

Without doubt, a COT Report for silver as of Friday’s close would look radically different that the one that was generated as of the close of COMEX trading on Tuesday…and there are still two more trading days left in the ongoing reporting week.  Anything can happen between now and then — and it wouldn’t surprise me in the slightest if ‘da boyz’ continued to pound away at the prices.  But as I mentioned to Ted on the phone yesterday, ‘da boyz’ don’t seem to be trying that hard so far during this engineered price decline, but maybe that effort is yet to come.

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 163 days of world silver production—and the ‘5 through 8’ traders are short an additional 62 days of world silver production—for a total of 225 days, which is seven and a half months of world silver production, or about 546.7 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 222 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 584.1 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 584.1 – 546.7 = 37.4 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 unchanged from what 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 225 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 75 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 — and those numbers hardly ever change.  The four traders in the ‘5 through 8’ category are short, on average, a bit over 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 48.0 percent of the entire open interest in silver in the COMEX futures market — and that number would be about 55 percent once the market-neutral spread trades are subtracted out.  In gold it’s now up to 44.2 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 53 days of world gold production, up from 47 days last week — and the ‘5 through 8’ are short another 21 days of world production, which is unchanged from the prior week, for a total of 74 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.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 72, 71 and 63 percent respectively of the short positions held by the Big 8.  These numbers are virtually unchanged from last week.

I have very few stories for you again today, even including the few that I’ve been saving for today’s column.


U.S. clothing retailer Bebe announces closure of all 175 of its stores

The company said Friday it expects to shutter all of its brick-and-mortar locations by the end of May. The chain had previously said it was committed to closing 21 locations, which represented roughly 12 percent of its total outlets. California-based Bebe had 180 stores at the end of 2016, according to its website.

This news came as Bebe explained it was in the process of exploring strategic alternatives for its business, amid much speculation the company would transition to an online-only model.

Bebe said Friday it expects to recognize an impairment charge of approximately $20 million, net of deferred rent and other credits, as a result of closing the remainder of its stores. This impairment charge will be recorded in the third and fourth quarters of this year, according to the SEC filing.

Bebe’s stock initially fell more than 4 percent Friday morning in pre-market trade on this news, after closing at $3.76 per share on Thursday. The stock closed over 6 percent higher at $4 per share on Friday.

This news item is datelined mid-afternoon on Friday on the Internet site.  But I received it from Richard Saler at 8:53 a.m. EDT on Friday morning, so it has obviously been updated since it was first posted.  Another link to it is here.

Independent Strategy’s David Roche Sees Overvalued Equities

Independent Strategy Founder, President and Global Strategist David Roche discusses his outlook for the markets and talks about U.S. and China relations. He speaks on  “Bloomberg Markets.”

This 4:07 minute video clip showed up on the Internet site at 9:43 p.m. on Thursday evening EDT — and it’s the second contribution in a row from Richard Saler.

Paul Tudor Jones Has a Message For Janet Yellen: “Be Terrified

Legendary macro trader Paul Tudor Jones, who runs the $10 billion Tudor Investment hedge fund, says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the NASDAQ tumbled 75 percent over two-plus years.

That measure – the value of the S&P relative to the size of the economy – should be “terrifying” to a central banker, Jones said earlier this month at a closed-door Goldman Sachs Asset Management conference, according to people who heard him.

While the billionaire didn’t say when a market turn might come, or what the magnitude of the fall might be, he did pinpoint a likely culprit.

Just as portfolio insurance caused the 1987 rout, he says, the new danger zone is the half-trillion dollars in risk parity funds. These funds aim to systematically spread risk equally across different asset classes by putting more money in lower volatility securities and less in those whose prices move more dramatically. Because risk-parity funds have been scooping up equities of late as volatility hit historic lows, some market participants, Jones included, believe they’ll be forced to dump them quickly in a stock tumble, exacerbating any decline.

Risk parity,” Jones told the Goldman audience, “will be the hammer on the downside.

This Zero Hedge piece is their spin on a Bloomberg story that’s linked further down in this article that was posted on their website at 11:31 a.m. on Friday morning EDT.  It’s courtesy of Brad Robertson — and another link to it is here.

Doug Noland: Liquidity Supernova and the Big Ugly Flaw

The $1 trillion of financial assets that central banks in Europe and Japan have bought so far this year is the best explanation for the gains seen in global stocks and bonds despite lingering political risks, Bank of America Merrill Lynch said on Friday. If the current pace of central bank buying, dubbed the ‘liquidity supernova’ by BAML, continues through the year, 2017 would record their largest financial asset purchases in a decade…

From the report authored by BofA Merrill’s chief investment strategist Michael Hartnett: “The $1 trillion flow that conquers all… One flow that matters… $1 trillion of financial assets that central banks (European Central Banks & Bank of Japan) have bought year-to-date (= $3.6tn annualized = largest CB buying in past 10 years); ongoing Liquidity Supernova best explanation why global stocks & bonds both annualizing double-digit gains YTD despite Trump, Le Pen, China, macro.

A strong case can be made that Q1 2017 experienced the most egregious monetary stimulus yet. No financial or economic crisis – and none for years now. Consumer inflation trends have turned upward on a global basis. Stock prices worldwide have surged higher, with U.S. and other indices running to record highs. At the same time, global bond yields remained just off historic lows. Home prices in many key global markets have spiked upward. Meanwhile, central bank balance sheets expanded at a $3.6 TN annualized pace (from BofA) over the past four months.

With U.S. bond yields reversing lower of late, there’s been a fixation on weaker-than-expected Q1 U.S. GDP. Meanwhile, recent data have been stronger-than-expected in China, Europe and Japan. EM has been buoyed by strong financial inflows and a resulting loosening of financial conditions. Thus far, Fed baby-step normalization efforts have been overpowered by the “liquidity supernova”.

Doug’s Credit Bubble Bulletin commentary appeared on his website very late last night Denver time — and it’s always a must read for me.  Another link to it is here.

Voting for Trump — The Saker

Now that Trump has already comprehensively betrayed all his campaign promises and his 100 first days in office are marked by nothing else but total chaos, incompetence, betrayals of his closest friends and allies, recklessly dangerous and utterly ineffective grandstanding in foreign policy, there are a lot of people out there who say “I told you so!”, “how could you take this clown seriously!” and “are you now finally waking up from your delusional state?”. Yes, a superficial survey of what Trump did since he got into the White House could appear to make these nay-sayers look right. But in reality, they are completely wrong. Let me explain why.

First, what these nay-sayers apparently ignore is that there are innumerable examples in history of the elites turning against each other, usually in times of crises. In the case of Trump, I submit that there overwhelming empirical data out there that a good part of the world elites really and truly were terrified of a possible Trump victory. The kind of hysterical, completely over-the-top hate campaign in which the US Ziomedia engaged in against Trump is something which I have never seen before and which, in my opinion, proves that the Neocon-run propaganda outlets (the Ziomedia, Hollywood) saw Trump as a major danger to their interests. Now, whether Trump had any chance against such powerful “deep state” actors or not is immaterial: Trump was a chance, a possibility and, I would argue, the only option to try to kick the Neocons in the teeth. And don’t give me Sanders or Stein as possible options, they were both 100{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} fake – just look at how both of them did Hillary’s dirty job for her (Sanders with his endorsement of her even though he was cheated out of a victory and Stein with her ridiculous recount). Even if Trump had just a 1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} chance of prevailing, voting for him was an opportunity to achieve regime change in the USA and the American people grabbed it. They did the ethically and pragmatically correct thing. Trump was really the only choice.

This rather short commentary from The Saker appeared on the Internet site on Friday sometime — and I thank Larry Galearis for sharing it with us.  Another link to it is here.

Receding glacier causes immense Canadian river to vanish in four days

An immense river that flowed from one of Canada’s largest glaciers vanished over the course of four days last year, scientists have reported, in an unsettling illustration of how [climate change] can dramatically change the world’s geography.

The abrupt and unexpected disappearance of the Slims river, which spanned up to 150 metres at its widest points, is the first observed case of “river piracy”, in which the flow of one river is suddenly diverted into another.

For hundreds of years, the Slims carried melt water northwards from the vast Kaskawulsh glacier in Canada’s Yukon territory into the Kluane river, then into the Yukon river towards the Bering Sea. But in spring 2016, a period of intense melting of the glacier meant the drainage gradient was tipped in favour of a second river, redirecting the melt water to the Gulf of Alaska, thousands of miles from its original destination.

The continental-scale rearrangement was documented by a team of scientists who had been monitoring the incremental retreat of the glacier for years. But on a 2016 fieldwork expedition they were confronted with a landscape that had been radically transformed.

This very interesting news item was posted on Internet site on Monday afternoon BST — and had to wait for today’s column.  I thank Patricia Caulfield for pointing it out — and another link to it is here.

Fitch Downgrades Italy To BBB From BBB+

Having largely disappeared from the market’s scope for the past 6 months, ever since Europe “bent” its rule allowing the bailout of Monte Paschi and several smaller banks despite Italy having the greatest amount of disclosed NPLs of any European nation, moments ago Fitch decided to drag Italy right back in the spotlight when it downgraded Italy to BBB from BBB+, citing “Italy’s persistent track record of fiscal slippage, back-loading of consolidation, weak economic growth, and resulting failure to bring down the very high level of general government debt has left it more exposed to potential adverse shocks. This is compounded by an increase in political risk, and ongoing weakness in the banking sector which has required planned public intervention in three banks since December.

With France – and much of Europe – already on edge due to populist tensions, is Italian sovereign – and bank – risk about to make a grand reappearance? For the answer, check in when Europe opens on Monday.

Meanwhile, Italian CDS trades at 190bps, wider than Russia, Croatia and almost as wide as South Africa.

Let’s call all Western world debt what it really is — and that’s junk across the board.  Oh, to be as financially solvent as Russia!  This Zero Hedge story appeared on their Internet site at 4:17 p.m. EDT yesterday afternoon — and it comes courtesy of Brad Robertson.  Another link to it is here.

Tales of the New Cold War: False narratives, phony Trump dossiers & Demon Putin — John Batchelor Interviews Stephen F. Cohen

The John Batchelor introduction in the podcast is a long one as he lists “theatre stages” that have happened with Russia, a political event in Russia that show a new level of concern over an ever more unpredictable Donald Trump, and new issues emerging in Washington that reveal the “war on Trump” is far from over.  In fact Jill Stein, the Green Party candidate has been added as a new “Putin Stooge” target.  Also the FBI has now changed its policy on issuing surveillance warrants; they can now be based on smear campaigns. Batchelor considers this all a new level of chaos in Washington. Cohen is in agreement, as he is offended that Washington appears to want to go to war based on unsubstantiated misinformation.  For this writer the system is going “for broke” in a policy that is now pure nihilism.  This is rather suggestive of a “hail Mary” bunker mentality for the Deep State.  And Cohen notes with dismay that the Russian interference hysteria is spilling over into E.U. elections, and is just as prevalent in reporting on the war in Syria, as well as how the American effort in Iraq is comparatively handled.

Cohen then moves the discussion to the alleged Assad gas attack and how the accusations against Assad can be used to implicate Russia. To balance this unproven “fact” he mentions the MIT report by Professor Theodore Postal who denies the validity of the White House report. Cohen notes that apparently Trump did not get his information of the gas attack from “his” intelligence sources, but rather from his National Security Advisor, H.R. McMaster. Trump then rushed to that missile attack response ignoring protocols like consulting the U.N.  That attack, maintains Cohen (and gleeful members of Trump’s opposition in Washington), ended any hope for détente with Russia. Cohen goes on to add details  and the repercussions for the New Cold War.  For examples, Tillerson’s visit to Moscow was not all bad news, and the deconfliction agreement in Syria was reinstated by Putin – arbitrarily (and much to the relief of the American military and allied fliers in Syria).

Cohen next turns to the question he has often posed before: What is the main threat to the national security of the United States, Russia or international terrorism? The justification he makes for this is that the process is a dynamic one, and needs to be looked at again to see what changes there are , if any.  One new narrative raised is that Iran or North Korea are contenders. In Syria, however, a false narrative is added that the war is all about Putin supporting Assad against rebels, not a fight against terrorism.  Cohen discusses in great detail how the public position in Washington is at least misguided. For me this is a red flag that the emphasis is going to shift back to getting rid of Assad.

In my mind there is another greater threat to U.S. national security that has never been mentioned by pundits. The threat is an internal one to the Washington government that we label as the Deep State. It illegally controls the political process internally and foreign policy externally, is not elected, is subversive to the constitutional integrity of the country, and is arbitrarily set on a war policy with any country that it considers worthy of military attention. For me this is not a real government in the same way as terrorist groups and their movements cannot be seen as governments even as both adversely control or destructively impact societies for their own benefit.   Both have agendas; both are nebulous and often ill defined and, unlike terrorism the Deep State is far more dangerous to the whole world because of the powerful military that it already has used to support its activities. So the Deep State within the United States should be considered in the same way as a terrorist group. It becomes somewhat understandable to see therefore the Deep State partner secretly with terrorist groups and why the US government does such a lacklustre job at moving against an entity like ISIS. This is all a speculation, but I think a valid one, and no different than lumping the many terrorist movements as a similar threat generalization. As such Cohen would not discuss the Deep State because it, unlike most terrorist groups, it cannot go public, and a historian deals only in facts. The Deep State is almost certainly a fact, but one that will likely never truly surface entirely from its buried existence. And therein lies its strength.  It will never name itself; it does not have to because it already has won Washington and we should really call it “the government”.  I realise that this is somewhat the extreme view, but observing what this hidden group has wrought in the world has also defined it as the real threat. It too probably can have international  members.Terrorist groups are often nihilistic and committed to victory at all costs. If the Deep State did not exist, we would not be in crisis with a New Cold War as we are today with Washington pushing for war against a strong nuclear power.  As for the national security threat level, Americans are probably already living with the consequences, not the threat.  There will be more consequences.

This 40-minute audio interview put in an appearance on the Internet site on Tuesday — and for obvious length and content reasons, had to wait for my Saturday column.  I thank Larry Galearis for the link — and always first rate executive summary.  Another link to the audio interview is here.

Doug Casey on Trump’s Attack on Syria

Justin: Doug, the U.S. just launched a major attack on Syria.

Are you surprised Trump did this? Keep in mind, he publicly criticized Obama for wanting to attack Syria in 2013. He also said that the President should get approval from Congress before attacking Syria. He didn’t do that, either.

Doug: I’m actually not too surprised. The problem with Trump is that he doesn’t have any core philosophical beliefs. He apparently has no idea what’s right or wrong, good or bad, other than the way he feels. And what he feels doesn’t reflect a well thought out worldview, but just his background or the way he’s been brought up. Like most people, he’s a creature of his emotions, not his intellect. So, he’s capable of doing absolutely anything on the spur of the moment.

Now, I supported Trump because he wasn’t Hillary. The fact that he said he wanted to “drain the swamp” told me that he wanted to change the ways of Washington. But it appears that his idea is simply to make Washington more efficient, which is a mistake. He has no clue that the essence of government is coercion—or maybe he does, which would be even worse. When you have institutionalized coercion, the last thing you want to do is make it more efficient.

But one thing is certain: he won’t succeed in making government “better.” Sure, he wants to decrease the amount of regulation from dysfunctional agencies like the EPA. But he’s just going to trim them. He doesn’t see any principles involved. Trimming these destructive agencies is like pruning a plant: it just allows them to grow back even stronger. They have to be pulled out by the roots, and the ground they grow in should be salted. Or sprayed with Roundup. Or maybe flooded with Agent Orange.

This interview was posted on the Internet site back on April 11, but it’s definitely worth reading, if you haven’t already.  I thank Kathmandu reader Nitin Agrawal for bringing it to our attention — and another link to it is here.

Assad’s wife faces calls to be stripped of U.K. citizenship, but what about Blair and Cameron?

Just when you thought the hypocrisy and mendacity of the British political establishment could not sink any lower, up pops the proposal to strip Asma Assad, wife to Syria’s President Bashar Assad, of her British citizenship.

In arriving at a suitable rendering of this proposal, the starting point has to be that it comes from within the belly of the colonial beast that is the British state.

Colonialism, as is well known, was a historical malady responsible for an ocean of human suffering and injustice. When it comes to the history of British colonialism, the suffering and injustice are compounded by the retention within the country’s current political class of the same ‘born to rule ethos’ that was asserted as moral justification for the plundering of a large swath of the developing world over centuries. Thus we have British politicians such as Tom Brake – foreign affairs spokesman for the U.K.’s Liberal Democratic Party saying, “the first lady of Syria has acted not as a private citizen but as a spokesperson for the Syrian presidency,” before going on to demand the Syrian President’s wife should “either stop using [her] position to defend barbaric acts, or be stripped of [her] citizenship.

Placing to one side for a moment the obvious question of precisely which “barbaric acts” Mr. Brake is referring to in the context of a conflict involving a secular, multi-religious and multicultural country fighting for its survival against medieval barbarism and religious extremism, surely there is nothing more contradictory than British politicians unleashing a ‘j’accuse‘ against anyone when it comes to barbarism?

The blood-soaked history of the British political and ruling class is of unparalleled magnitude. And lest anyone be tempted to dismiss it as a historical footnote – though only those who’ve spent the last 15 years on a different planet could possibly do so – Britain’s role in the chaos and mayhem that has engulfed countries such as Syria in recent years is proof that it is a history that continues unabated.

Wow!  It’s amazing to see how low that British establishment has stooped with this idea.  How juvenile can you get?  This very worthwhile op-edge piece by John Wight showed up on the Internet site at 1:45 p.m. Moscow time on their Friday afternoon, which was 6:45 p.m. in Washington — EDT plus 7 hours.  I thank Roy Stephens for bringing it to our attention — and another link to it is here.

Why Washington is Terrified of Russia, China — Pepe Escobar

The Russia-China strategic partnership, uniting the Pentagon’s avowed top two “existential” threats to America, does not come with a formal treaty signed with pomp, circumstance – and a military parade.

Enveloped in layers of subtle sophistication, there’s no way to know the deeper terms Beijing and Moscow have agreed upon behind those innumerable Putin-Xi Jinping high-level meetings.

Diplomats, off the record, occasionally let it slip there may have been a coded message delivered to NATO to the effect that if one of the strategic members is seriously harassed — be it in Ukraine or in the South China Sea – NATO will have to deal with both.

For now, let’s concentrate on two instances of how the partnership works in practice, and why Washington is clueless on how to deal with it.

This must read commentary/news item by Pepe appeared on the Internet site at 7:54 p.m. Moscow time on their Friday afternoon, which was 12:54 p.m. in Washington — EDT plus 7 hours.  Another link to it is here.

In GoldSeek Radio interview, GATA secretary reviews gold price suppression policy

GoldSeek Radio’s Chris Waltzek interviewed Chris Powell about many of the details of the longstanding policy of Western governments to suppress the price of gold, policy that is documented in many places in government archives but remains a prohibited subject with mainstream financial news organizations.

The interview is 27 minutes long — and was posted on the Internet site on Thursday sometime.  I haven’t had the time to listen to it yet, but I certainly will before the weekend is out.

Past few days a fractal event for the gold market — Mike Kosares, USAGold

In the absence of a credible monetary standard, we expect no escape from the treadmill of rising debt, both US and globally, that outpaces economic growth. Income inequality, wage stagnation, overvaluation of financial assets, and speculation instead of productive investment are likely to be prolonged under the current monetary regime. Whether or not policy makers take a proactive approach to address monetary reform, the fact remains that gold is massively underpriced in all paper currencies. It would be preferable if the necessary adjustments could occur without a repeat of a 2008-like financial crisis. We give this possibility a chance, albeit slim. In any event, we expect a significant repricing of gold higher during the current administration, either by design or because of market events. Whenever a repricing happens, we expect broad grassroots support for that outcome.” – John Hathaway, Tocqueville Funds

The gold price is determined in the futures markets, but the effects of that determination are in the physical market, i.e., the price for bullion, coins, jewellery, etc. Those who feel that the gold market price is controlled solely by forces within the paper market do not fully understand the constraints on paper imposed by physical supply and demand.

In a nutshell, if the paper market is successful in suppressing the price for too long and at too low a rate, the physical demand globally will eat up the physical supply and threaten the existence of the primary source of the metal – the mines. That is why top-level analysts like John Hathaway (Tocqueville Funds) often talk about the inevitability of one-off repricing events. As long as gold can be freely owned, the market at some point finds the real price of gold, reconciles the books and exposes the power of price manipulators for what it is – a temporary, staying action rather than a successful long-term program. It is the time period before that happens which presents the best buying opportunities – times like the present. The events of April 19th through today illustrate the point in a microcosm.

This commentary by Mike appeared on the Internet site on Friday — and another link to it is here.

India’s Gold Buying ‘Strong’ for Akshaya Tritiya

Demand to buy gold in India – now the No. 2 consumer nation behind China – has rebounded in early 2017, driving imports higher from last year’s slump as dealers re-stock and local prices rise back above international quotes ahead of a key Hindu festival.

Smaller than the autumn festivals of Diwali and Dhanteras, sales of jewellery for the Hindu festival of Akshaya Tritiya have become key to India’s annual gold buying.

Coming from the Sanskrit for “indestructible” and widely celebrated across southern states, this auspicious day for buying gold falls in 2017 in the last week of April.

This gold-related story showed up on the Internet site at 11:54 a.m. BST on their Friday morning, which was 6:54 a.m. in New York — EDT plus 5 hours.  I found it on the Sharps Pixley website — and another link to it is here.

What would you choose? Aussie mother-of-six faces $2 million decision

If you had to choose between a $2 million dollar property or $2 million in gold, what would you pick?

That’s the tough but not-so-tough decision facing an Aussie grandmother.

Lynne Mitchell received the news she’d won the first prize in the RSL Lotteries latest draw this week.

The Maitland mother-of-six now has to decide between a $2 million luxury penthouse in Sydney’s inner west and $2 million in gold bullion.

Mrs. Mitchell, who initially thought the phone call she received was a scam, took a tour of the three-bedroom, two-bathroom apartment this morning.

The 200sqm Camperdown property comes with $100,000 worth of furniture and appliances and a rooftop terrace with views of Sydney’s skyline.

This news item was posted on the website in Australia on their Friday afternoon — and it comes to us courtesy of Philip Muller.  It made it too late for the e-mail version of my Saturday column, but I decided to include it in the website version, although an hour or so after I’d posted it.  Another link to it is here.  Thanks Philip!


My next-door neighbour was cleaning out his birdhouses this afternoon while the weather was nice — and before the forecasted rain arrived…which it has as I write this.  One birdhouse that always has an occupant in the summer is the northern house wren.  It’s not an exciting bird to look at it, but it’s a regular visitor next door…which one hears, more than sees…so I thought I’d feature it today.


Speaking the Truth in times of universal deceit is a revolutionary act.” — George Orwell

Today’s pop ‘blast from the past’ certainly dates me.  It was originally performed back in 1937…but I certainly wasn’t around then.  It’s the cover of the that tune by The Platters back in 1960 that is most familiar — and the link to that is here.

Today’s classical ‘blast from the past’ is Mozart’s Piano Concerto #21 in C Major, K.467…which he composed within four weeks of his previous D Minor piano concerto, K.466 [which is my personal favourite of all his piano concertos].  The second movement was featured in the 1967 Swedish film Elvira Madigan — and as a result of that, the piece has become widely known as the Elvira Madigan concerto.  Here’s South Korean pianist Yeol Eum Son doing the honours at the 2011 Tchaikovsky Competition in Moscow.  The link is here — and she is wonderful!  Full screen viewing is a must!

It was another strange day in the precious metals.  Gold wanted to rally right from the open in London, but there was always someone there to make sure that things didn’t get out of hand to the upside — and once the COMEX closed, they took away over half of the gains that were allowed.  But it was a different story entirely in silver.  It almost seemed like it was trading in some parallel universe compared to gold, as JP Morgan et al were determined not only to set a new low for this move down, but also close it below its 50-day moving average.  Their mission was accomplished.  But as I mentioned in my COT discussion on silver, I’m somewhat surprised that ‘da boyz’ haven’t been more forceful than they have during this engineered price decline sequence, because I’m sure they could do far more damage than they’ve done to date, if they really put their HFT buddies on it.

But as I also said in my COT commentary, maybe that pounding is yet to come…or maybe not.

Here are the 6-month charts for all four precious metals, plus copper as usual and, except for what’s happening in silver, there’s not a lot to see.  The click to enlarge feature helps a bit with the first four charts.

I believe that options expiry is Tuesday of next week — and I know that all the large traders that aren’t standing for delivery in May, have to be out of their remaining futures contracts by the close of COMEX trading on Wednesday — and the smaller traders have to be out by the same time on Thursday.  First Day Notice for delivery into the May silver contract will be posted on the CME’s website around 8 p.m. on Thursday evening.

And as I said the other day, it will be interesting to see who the issuers and stoppers are when the numbers are posted.  My eyes will be entirely focused on what JP Morgan does, or doesn’t do.

I spend most of my weekdays glued to my computer, watching what’s going on fairly closely…sometimes too closely, some have said.

My distinct impression is that if it wasn’t for the powers-that-be involved in not only the precious metals market, but also the U.S. equity markets…plus the usual ‘gentle hands’ in the U.S. dollar index…that any attempt to return to anything resembling free markets, would instantly destroy the world’s financial system.

I know that my expression…that if they weren’t intervening in the markets, that “the world’s economic, financial and monetary systems would be a smouldering ruin within five business days” is getting a little stale after a decade of use.  However it’s never been more apropos than now.

In the Critical Reads section above, I see that both David Roche and Paul Tudor Jones have also thrown their respective hats into the ring on this issue.  And as Chris Powell said back in April of 2008 at the GATA conference in Washington…”there are no markets anymore, only interventions.“…all this will end only when the Deep State “Powers That Be” either lose control, or give it up…voluntarily, or otherwise.

The only reason that it hasn’t happened in the last thirty years…since the “Crash of ’87″…is that Wall Street and the banking system, with the blessing of the Fed and U.S. Treasury, have done “whatever it takes” to keep the biggest financial bubble the world has ever seen, continually growing larger.

And as you already know, dear reader, this bubble has spread like the cancer it is, from the U.S. — and has now engulfed the entire planet.  So the world’s central bankers et al have a vested interest in keeping this particular apple cart up and going around the track for as long as possible.

But it’s becoming more obvious with each passing week, that this economic and financial Frankenstein that they’ve created is about to breath its last somewhere in the very near future.  At some point some particular snowflake will fall — and Jim Rickards’ avalanche will begin.  And once started, there won’t be thing that the powers-that-be will be able to do about it.

But as to exactly when that date is…who knows?  Two more potential pins are the election in France on Sunday, plus the debate on raising the U.S. debt ceiling starting next week.  How many more body blows can be landed before the inevitable end arrives?

There can be no happy ending to all of this.

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


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