So…Are JP Morgan et al Done Yet?

06 May 207 — Saturday


The gold price traded ruler flat until noon in Shanghai on their Friday — and then rallied five bucks in the next forty-five minutes or so.  It chopped quietly sideways from there until the COMEX open.  At that point, ‘da boyz’ appeared — and by the London p.m. gold fix, had the price back to unchanged.  It didn’t do a lot after that.  The job numbers yesterday appeared to have minimal effect on the precious metal prices.

The low and high ticks definitely aren’t worth looking up.

Gold finished the Friday session in New York at $1,227.90 spot, down a dime on the day.  Net volume was extremely heavy once again at just over 227,000 contracts.

For the most part, the silver price traded in similar fashion to gold, but only up until the noon silver fix in London.  Once that was put to bed, it was sold quietly lower until shortly after the London p.m. gold fix.  From there it chopped equally quietly higher until 4 p.m. in the thinly-traded after-hours session — and didn’t do a lot after that.

The high and low ticks in this precious metal were reported by the CME Group as $16.53 and $16.23 in the July contract.

Silver was closed in New York on Friday afternoon at $16.31 spot, up one whole penny on the day.  Net volume was monstrous once again at 83,000 contracts.

The platinum price also traded pretty flat until noon China Standard Time on their Friday — and the rally that developed at that point topped out very shortly before noon in Zurich.  The price declined from there, with the New York low coming shortly after 10 a.m. EDT.  It rallied unsteadily higher from there until 4 p.m. — and then slid sideways into the 5:00 p.m.  close.  Platinum finished the Friday session at $912 spot, up an even 10 bucks from Thursday.

The palladium price also traded flat until noon in Shanghai — and then began to inch steadily higher from there right into the COMEX close.  After that it traded sideways for the remainder of the Friday session.  Palladium finished the Friday session at $815 spot, up 13 dollars on the day.

The dollar index closed very late on Thursday afternoon in New York at 98.78 — and rallied a handful of basis points until mid-morning in Shanghai.  It then declined to just below unchanged by minutes after 12 o’clock noon CST.  From there it rallied quietly higher until its 98.98 high tick was printed around 12:20 a.m. BST in London.  It headed lower from there — and the 98.54 low print came at 4 p.m. in New York.  It didn’t do a lot after that.  The index closed yesterday at 98.57…down 21 basis point from Thursday.

Once again the precious metals price activity had virtually no correlation with what was happening with the dollar index.

And here, as always, is the 6-month U.S. dollar index chart, which is meaningless from a precious metal price perspective when JP Morgan et al are stomping around in the COMEX futures market.

The gold shares gapped up a bit at the open — and rallied to their respective high ticks shorty before noon EDT.  They then gave up a bit of their gains by around 12:30 p.m. in New York trading — and then chopped quietly sideways into the close from there.  The HUI finished higher by 2.60 percent.

And as I stated in this space yesterday…the Intraday Silver Sentiment/Silver 7 Index chart is no more.

Here are the three charts from Nick that show what’s been happening 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, plus the changes in the Silver Sentiment/Silver 7 index, which is still available in this form.  The Click to Enlarge feature really helps on all three.

I won’t bother with the month-to-date changes, as the chart is the same as the weekly chart.

And here’s the year-to-date graph as well.

Both these charts are pretty ugly compared to what they were a few short weeks ago.  But considering how badly the underlying metals got hammered, their associated equities did very well for themselves all things considered — and that’s a very positive sign that the bottom is either in…or close.

The CME Daily Delivery Report showed that 15 gold and 99 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, there were no stand-out issuers or stoppers once again — and JP Morgan was a ‘no show’ for either of its accounts.  In silver, the only short/issuer worth mentioning was ABN Amro with 88 contracts — and in the long/stopper category they were the largest as well, with 54 contracts for their client account in both cases.  The other long/stopper of note was ADM with 27 for its client account as well.  JP Morgan stopped 1 for its client account.  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 May declined by 23 contracts, leaving 61 still around, minus the 15 mentioned just above.  Thursday’s Daily Delivery Report showed that 27 gold contracts were actually posted for delivery on Monday, so that means that another 27-23=4 gold contracts were added to the May delivery month.  Silver o.i. in May dropped by 311 contracts, leaving 295 still open, minus the 99 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 382 silver contracts were actually posted for delivery on Monday, so that means that another 382-311=71 silver contracts were added to the May delivery month.

So far this month, there have been 4,107 silver contracts issued and stopped — and during the first six delivery days in the May delivery month, there have been 863 silver contracts added.  That’s a lot.  But as Ted said the other day, the stand-out feature this delivery month is the fact that JP Morgan was a no-show as a stopper for its own account, which is the first time in more than two years.

Once again there was no withdrawal from GLD, which one would think should be happening considering the price action in the last few days.  That event[s] are yet to come, or perhaps JP Morgan and their ilk are buying up the shares in this ETF as fast as their being sold — and we’re going to get one or two days where there are big conversions of shares into physical metal.   Since Ted pointed out this phenomena in SLV several years ago, I’ve become sensitive to the fact that it may occur in gold at some point as well.  Time will tell.  And as of 5:52 p.m. EDT yesterday afternoon, there were no reported changes in SLV.

And there have been almost no redemptions in SLV either.  As a matter of fact, since April 25, there have been 7.4 million ounces of silver added to SLV, which certainly indicates that there has been massive short covering, most likely by JP Morgan.  I would expect we’ll see more of Ted’s “conversion of shares for physical” as time moves along.

I expect that Ted will have lots to say about “all of the above” in his weekly review this afternoon.

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

Month-to-date, which in reality is the last five business days, mint sales have been awful…as usual.  Only 2,000 troy ounce of gold eagles — 1,000 one-ounce 24K gold buffaloes, plus 530,000 silver eagles have been sold.

It was all zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday, as nothing was received, or shipped out.

It was a pretty big day in silver, as 579,098 troy ounces were received — and 1,151,191 troy ounces were shipped out.  All of the ‘in’ amount was at Canada’s Scotiabank.  In the ‘out’ department, there was 734,522 shipped from CNT…415,671 troy ounces came out of Scotiabank — and 1 good delivery bar was shipped out of Delaware.  There were also some transfers as well.  There was 509,568 troy ounces switched from Registered to Eligible at CNT, plus 5,225 troy ounces switched from Eligible to Registered at Brink’s, Inc.  The link to all of that activity is here.

And here’s what’s going within the six COMEX-approved silver depositories that really matter — and JP Morgan’s 107.9 million ounce silver stash stands out like the sore thumb that it is.  Click to enlarge.

It was fairly quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 1,254 of them, plus they shipped out another 614.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

Yesterday’s Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was everything that Ted was hoping for — and then some.

In silver, the Commercial net short position declined by a whopping 21,515 contracts, which was one of the largest one-week declines on record.  This amount represents 107.5 million troy ounces of paper silver, or about 44 days of world silver production that was sold by the Managed Money traders — and purchased by ‘da boyz’.  As Ted said on the phone yesterday…look no further for the reason why the silver price cratered during the reporting week.

The Commercial traders arrived at that 21,515 contract number by adding 316 long contracts, plus they covered an eye-watering 21,199 short contracts.  The total of those two numbers is the change for the reporting week.  The Commercial net short position in silver now stands at 432.8 million troy ounces

Ted said that the Big 4 traders reduced their short position by around 7,800 contracts — and he attributes all of that change to JP Morgan, which brings their short position down to about the 24,000 contract mark.  The ‘5 through 8’ large traders didn’t do much during the reporting week, only reducing their collective short position by about 800 contracts.  The really big buyers were Ted’s raptors, the 27 Commercial traders other than the Big 8.  They not only covered their 3,600 contract short position…at huge profits I might add…but they also went long 9,300 contracts.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders and then some, as they sold 21,306 long contracts…plus they added 4,529 contracts to their short position, which was certainly something that Ted was happy to see.   The long position held by the Managed Money traders is now back to the 78,000 contract mark, which is where it was back in mid-March when the last rally began — and it’s obviously lower than that now.  The other surprise was the fact that the traders in the ‘Other Reportable’ and ‘Nonreportable’/small trader categories, actually added to their long positions [and for the most part, covered shorts] during the reporting week.  You have to ask yourself why, as a group were they doing that, while the Managed Money traders were running for the hills.  We’ll find out soon enough I would think.

Here’s the 9-year COT chart for silver — and as you can tell, there’s been a huge change.  But as I said in my Friday column, this report is already “yesterday’s news”…as the changes since Tuesday’s cut-off are  most likely equal in magnitude to the changes we saw in this report.  Click to enlarge.

In gold, there was improvement as well, but not as much, as most of the price/volume action that mattered occurred after the Tuesday COMEX close cut-off.  The Commercial net short position declined by 10,594 contracts, or 1.06 million troy ounces of paper gold.  The Commercial net short position in this precious metal is down to 20.40 million troy ounces.

They arrived at that 10,594 contract number by reducing their long position by 1,281 contracts, plus they also covered 11,875 short contracts — and the difference between those two numbers is the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by about 6,700 contracts…the ‘5 through 8’ large traders also reduced their short position by 2,900 contracts — and Ted’s raptors, the 50 small commercial traders on the short side other than the Big 8 actually added 1,000 contracts to their long position.

Under the hood in the Disaggregated COT Report, it was all a Managed Money show, plus more there as well.  They sold 12,063 long contracts, plus they added 4,706 contracts to their short position, for a total weekly swing of 16,769 contracts.  And, like in silver, the difference was made up by the ‘Other Reportable’ and ‘Nonreportable’/small traders, as they reduced short positions and went long…which was more than counterintuitive.

Here’s the COT chart for gold — and it shows a decent improvement but, like silver, this data is somewhat irrelevant.  Click to enlarge.

Without doubt, there’s been massive improvements in the COMEX futures market in both silver and gold since the Tuesday cut-off — and unless something goes ‘bump’ in the night between now and next Tuesday’s cut-off, we’ll have to wait until next Friday’s COT Report to get an accurate lay of land.  I’d pay a pretty penny for a COT Report generated at the close of trading on Friday.

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 143 days of world silver production—and the ‘5 through 8’ traders are short an additional 54 days of world silver production—for a total of 197 days, which is about six and a half months of world silver production, or about 478.7 million troy ounces of paper silver held short by the Big 8.  [In last week’s report the Big 8 were short 215 days of world silver production.]

In the COT Report above, the Commercial net short position in silver is 432.8 million troy ounces.  So, we’re back to the situation in silver where the short position of the Big 8 traders is larger than the total Commercial net short position by 478.7 – 432.8 = 45.9 million troy ounces.

As I also stated in the above COT Report, Ted pegs JP Morgan’s short position at around 24,000 contracts, or 120 million ounces, which is down from the 32,000 contracts they were net short in the previous week’s report.  120 million ounces works out to around 49 days of world silver production that JP Morgan is short.  That’s compared to the 197 days that the Big 8 are short in total.  JPM is now only short about 25 percent 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, after this week’s bloodbath, Scotiabank is back to being the number one silver short in the COMEX futures market.  Not by much in this report, but that has changed dramatically since the Tuesday cut-off.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 119 days of world silver production between the two of them—and that 119 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 21 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, 13.5 days of world silver production each.

The short positions of Scotiabank and JP Morgan combined, represents about 52 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 50.7 percent of the entire open interest in silver in the COMEX futures market — and that number would be a bit over 55 percent once the market-neutral spread trades are subtracted out.  In gold it’s 44.9 percent of the total open interest that the Big 8 are short.

In gold, the Big 4 are short 51 days of world gold production, which is down from the 53 days that they were short last week — and the ‘5 through 8’ are short another 23 days of world production, which is down 1 day 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 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, 69 and 64 percent respectively of the short positions held by the Big 8.  The numbers are mostly down a percent or so in silver and platinum — and up a hair in palladium.

The May Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders Report.  It shows the COMEX futures contracts, both long and short, that are held by all the U.S. and non-U.S. banks as of Tuesday’s cut-off.  For this one day a month we get to see what the world’s banks are up to in the COMEX futures market, especially in the precious metals—and they’re usually up to quite a bit.

In gold, 6 U.S. banks are net short 92,391 COMEX contracts in the May BPR.  In April’s Bank Participation Report [BPR], that number was 70,869 contracts, so they’ve increased their collective short positions by a fairly decent 21,522 contracts during the last month.  Three of the five banks would certainly include JPMorgan, HSBC USA and Citigroup.  As for who the fourth, fifth and sixth banks might be—I haven’t a clue, but I doubt very much if their positions, long or short, would be material.

Also in gold, 30 non-U.S. banks are net short 69,022 COMEX gold contracts, which isn’t much per bank.  In the April BPR, 32 non-U.S. banks were net short 60,651 COMEX contracts, so the month-over-month change showed an increase of 8,371 contracts.  And it’s still a mystery as to which non-U.S. bank in the Big ‘5 through 8’ category got bailed out of their huge short position in gold in July of last year.  I’m suspecting it could be Canada’s Scotiabank, but I could be wrong about that.  However, having said that, I suspect that there’s at least one large non-U.S. bank in this group that might hold as much as 25 percent of this short position — and the remaining contracts, divided up by the 29 banks left, would be immaterial.

As of this Bank Participation Report, 36 banks are net short 34.9 percent of the entire open interest in gold in the COMEX futures market, which is a fairly large increase from the 30.8 percent they were short in the April BPR.

Here’s Nick’s chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank’s COMEX gold positions [both long and short] were outed in October of 2012.  Click to Enlarge.

In silver, 5 U.S. banks are net short 26,462 COMEX silver contracts—and it was Ted’s calculation from yesterday that JPMorgan holds around 24,000 of those silver contracts net short on its own — which is 90 percent of the entire net short position shown in this month’s BPR.  This means that the remaining 4 U.S. banks aren’t net short by much — and a couple of them might actually be net long.  In April’s BPR, the net short position of these five U.S. banks was 35,761 contracts, so there’s been a huge decrease of 9,299 contracts in the net short positions of the U.S. banks since then — and JP Morgan probably owns all of that decrease.  As Ted says, JPMorgan is the ‘Big Kahuna’ in silver as far as the U.S. banking system is concerned.

Also in silver, 22 non-U.S. banks are net short 33,211 COMEX contracts—and that’s down 6,037 contracts from the 39,248 contracts that these same non-U.S. banks held short in the April BPR.  I’m still prepared to bet big money that Canada’s Scotiabank is the proud owner of the lion’s share of this short position—somewhere between 65 and 80 percent of the above number.  That most likely means that a number of the remaining 21 non-U.S. banks might actually be net long the COMEX silver market by a bit as well.  But even if they aren’t, the remaining short positions divided up between these remaining 21 non-U.S. banks, are immaterial — and have always been so.

As of this Bank Participation Report, 27 banks are net short 31.6 percent of the entire open interest in the COMEX futures market in silver—which is down a bit from the 34.2 percent that they were net short in the April BPR — with much more than the lion’s share of that held by only two banks…Canada’s Scotiabank and JP Morgan.

Here’s the BPR chart for silver.  Note in Chart #4 the blow-out in the non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank was brought in from the cold.  Also note August 2008 when JPMorgan took over the silver short position of Bear Stearns—the red bars.  It’s very noticeable in Chart #4—and really stands out like the proverbial sore thumb it is in chart #5.  Click to enlarge.

In platinum, 4 U.S. banks are net short 9,490 COMEX contracts in the May Bank Participation Report.  In the April BPR, these same banks were short 10,769 COMEX platinum contracts, so there’s been a drop of  in the U.S. banks’ short position of 1,279 contracts from the prior month.

I suspect that, like in silver and palladium, JP Morgan holds virtually all of the platinum short position of the 4 U.S. banks in question.

Also in platinum, 16 non-U.S. banks are net short 7,331 COMEX contracts, which is down 805 contracts from the 8,136 contracts they were net short in the April BPR.  Their short positions are most likely immaterial compared to the short positions held by the 5 U.S. banks…or, more likely, 1 or 2 U.S. banks.

If there is a large player in platinum among the non-U.S. banks, I wouldn’t know which one it is.  However I’m sure there’s at least one large one in this group.  The reason I say that is because before mid-2009 when the U.S. banks showed up, the non-U.S. banks were always net long the platinum market by a bit—see the chart below—and now they’re net short.  The remaining 15 non-U.S. banks divided into whatever contracts are left, isn’t a lot, unless they’re all operating in collusion—which I doubt.  But from the numbers it’s easy to see that the platinum price management scheme is an American show as well, with one big non-U.S. bank possibly involved.  Scotiabank perhaps.

And as of May’s Bank Participation Report, 20 banks are net short 23.4 percent of the entire open interest in platinum in the COMEX futures market, which is down from the 29.7 percent they were collectively net short in the April BPR.  Click to enlarge.

In palladium, 4 U.S. banks were net short 6,336 COMEX contracts in the May BPR, which is down 608 contracts from the 6,944 contracts they held net short in the April BPR.

Also in palladium, 13 non-U.S. banks are net short 6,512 COMEX contracts—which is an increase of 1,062 contracts from the 5,450 COMEX contracts that these same banks were short in the April BPR.  When you divide up the short positions of the non-U.S. banks more or less equally, they’re mostly immaterial, just like they are in platinum.

But, having said all that, as of this Bank Participation Report, 17 banks are net short 35.0 percent of the entire COMEX open interest in palladium.  In April’s BPR, the world’s banks were net short 36.6 percent.

Here’s the palladium BPR chart.  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013.  I would still be prepared to bet big money that, like platinum and silver, JP Morgan holds the vast majority of the U.S. banks’ short position in this precious metal as well.  Click to enlarge.

As I say every month at this time, there’s a maximum of three U.S. banks—JPMorgan, HSBC USA and Citigroup—along with Canada’s Scotiabank—that are the tallest hogs at the precious metal price management trough.

However, it’s also a fact that one of the non-U.S. banks in the Big ‘5 through 8’ category got bailed out of its COMEX short position in gold in July of last year.

But JP Morgan and Canada’s Scotiabank still remain the two largest silver short holders on Planet Earth in the COMEX futures market, with Scotiabank back in the #1 spot by a small amount, but by a much larger amount now as of Friday’s close.

But, sadly, like the COT Report above from which this data sprang, this Bank Participation Report is also pretty much “yesterday’s news” as well.

I have a decent number of stories for you today, including a fair number that I’ve been saving for today’s column.


Where The April Jobs Were: It Was All About Minimum Wage Again

April was a month of economic recovery: after a disappointing March, jobs rebounded strongly last month, rising from a downward revised 79K to 211K, providing some validation to Yellen’s claim that the recent economic weakness was transitory. And yet, wages once again disappointed, with annual hourly earning growth declining to 2.5{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} from 2.7{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

How is it that with the labor market supposedly near full employment, and the unemployment rate sliding to another post-recession low of 4.4{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, wages simply can not rise?

The answer was once again to be found in the quality of jobs added, because despite the poor headline payrolls print in March, the quality of jobs added that month was actually quite better than recent trends. This is where April disappointed: according to the BLS, the bulk of jobs added were once again in low or minimum-wage sectors such as leisure and hospitality, which added +55,000 jobs of which food services and drinking places workers, aka waiters and bartenders, added another +26,000. Another low-paying sector – education and health – added 41,000 jobs in April.

Surprisingly, of the 39K professional and business services – traditionally a well-paying job category – for the second month in a row employees providing “services to buildings and dwellings”, aka “doormen” dominated the category, with 9.9K jobs added.

This is the first of three-in-a-row stories from the Zero Hedge website.  This one appeared there at 9:57 a.m. EDT yesterday morning — and another link to it is here.

With 86 Months of Consecutive Job Gains, This is the “Best” Job in the U.S.

Well over five years ago, we first dubbed the economy under Barack Obama as the “Waiter and Bartender recovery”, because while most other job categories had grown at a moderate pace at best, the growth in the category defined by the BLS as “Food Service and Drinking Workers” has been nothing short of spectacular.

How spectacular? As the chart below shows, starting in March of 2010 and continuing through April of 2017, there have been 86 consecutive month of payroll gains for America’s waiters and bartenders, an unprecedented feat and an all time record. Putting this number in context, total job gains for the sector over the past 7 years have amounted to 2.345 million or just under 15{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of the total 16.3 million in new jobs created by the U.S. over the past 86 months.

As a tangent, putting the “waiter and bartender” recovery in the context of America’s manufacturing sector, the following chart shows that while nearly 800,000 “food service and drinking places” jobs were created since 2014.

This brief 2-chart Zero Hedge article showed up on their Internet site at 11:03 a.m. on Friday morning EDT — and another link to it is here.

U.S. Student, Auto Loans Hit New All Time High of $2.6 Trillion

One month after we, and every other financial media, reported that U.S. credit card debt had risen back over $1 trillion for the first time since January 2017, the Fed demonstrated just how meaningless such reports are when in its latest consumer credit report it revised the total stock of revolving debt back under $1 trillion for the month of March, while boosting December’s amount to $1,000.1 billion, meaning that all those “$1 trillion in credit card” debt headlines were about 4 months late.

Fed screwing around with the financial reporters aside, the latest monthly report showed that total consumer credit rose by $16.4 billion, more than the $14 billion expected, an increase which was offset by a downward revision to the February consumer credit number from $15.2 billion to $13.8 billion. Revolving credit accounted for $2 billion of the increase with the rest, or $14.4 billion, in the form of auto and student loans.

And speaking of student and auto loans, the Fed also released its latest quarterly estimate for the two series as of March 31, and as one would expect, the numbers rose to new all time highs, and as of the end of the first quarter, US consumers owed $1.44 trillion in student loans, an increase of $32 billion for the quarter and $80 billion for the year, as well as $1.12 trillion in auto loans, an increase of $8 billion Q/Q and $73 billion Q/Q. This means that as of March 31, Americans owed two and a half times as much on their auto and student loans, as on their credit cards, a new all time high.

This Zero Hedge story was posted on their Internet site at 3:29 p.m. EDT on Friday afternoon — and another link to it is here.

John Kiriakou: The ex-CIA officer turned whistle-blower talks about the U.S.’s use of torture and his time in prison

For 14 years, John Kiriakou worked as an analyst and case officer for the CIA, leading the team that captured senior al-Qaeda member Abu Zubaydah in Pakistan in 2002. Then, in a television interview in 2007, three years after he had resigned from the US intelligence agency, he became the first current or former member of it to publicly acknowledge that the CIA used torture, and that its use was official policy under the administration of President George W Bush.

In 2012, the Barack Obama administration filed espionage charges against him.

Those charges were eventually dropped in October of that year, but Kiriakou did plead guilty to violating the Intelligence Identities Protection Act by confirming the name of an officer involved in the then-secret CIA rendition programme that transferred CIA detainees to secret prison facilities around the world.

He was sentenced to 30 months in prison and released in 2015 after serving almost two years.

Kiriakou, who has written the soon-to-be-released book, Doing Time Like a Spy: How the CIA Taught Me to Survive and Thrive in Prison, talks to Al Jazeera about the U.S.’s use of torture and his time in prison.

This very interesting article was posted on the Internet site on Thursday sometime — and I thank Ellen Hoyt for bringing it to our attention.  Another link to it is here.

The changing landscape of Bolivia’s salt flats

Salar de Uyuni is the world’s largest salt flat. For generations, local salt gatherers – or “saleros” – have extracted salt from the Bolivian flat, scooping the raw mineral into mounds to let it dry before it is transported to processing plants and turned into table salt. But today, the profession is on the brink of extinction as Bolivia is steadily modernising and new sources of income are taking over.

About half of the world’s reserves of lithium are buried beneath the Salar. The lightest metal on the periodical table is used in batteries for mobile phones, laptops and electric cars. As the demand for lithium-ion batteries continues to grow, commentators have asked if Bolivia could become “the Saudi Arabia of lithium“. President Evo Morales has said the value of lithium is the “hope of humanity“.

The discovery of lithium has caused a societal split in Bolivia, particularly in the communities bordering the Salar. As the mining operation grows in size, the new infrastructure it comes with – including electrical lines, water pipelines and paved roads – are transforming the region, aiding other industries including tourism.

While there are many people in the area who long for a more modern lifestyle, some – like the saleros – cannot easily part with their old profession and their connection to the land. For them, it remains to be seen if tradition can co-exist with modernisation.

This wonderful photo essay put in an appearance on the Internet site on Wednesday at 6:58 a.m. BST — and it’s certainly worth your while if you have the interest.  It’s the second contribution in a row from Ellen Hoyt — and another link to it is here.

Brad Birkenfeld: Lucifer’s Banker…a whistle-blower’s account of exposing massive fraud at UBS

Just how bad is the ongoing fraud in the banking system? Get ready for a mind-bowing exposé by a former insider at UBS.

Brad Birkenfield, author of Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy, recounts the efforts he uncovered by his employer to help its clients cheat the U.S. government out of tens of billions in taxes.

But despite his working with the government closely to expose the gigantic conspiracy between U.S.-based tax cheats and the giant Swiss bank, UBS, the so-called Justice Department went after Mr. Birkenfeld for abetting tax evasion by one of his clients. After spending thirty months in Federal prison, he was released and three weeks later, received a whistle-blower check for $104 million, the largest such check ever from the IRS Whistle-blower Office.

This 45-minute audio interview with host Chris Martenson is depressing to listen to.  The corruption at the top levels of banking, finance and government is frightening.  It was was conducted by Chris Martenson over at the Internet site at the end of March — and was posted on that website on April 15.  I posted this in my Wednesday column, but said I would include it in my Saturday missive as well — and here it is.  It’s an absolute must listen for sure — and I thank Scott Otey for sending it our way.  Another link to this interview is here.

Italy Dependent on ECB “Buyer of Last Resort” as Foreign Investors Dump Bonds Amid Capital Flight

Italy is increasingly dependent on the ECB to hold down bond yields as foreign investors dump Italian bonds like mad.

Eurointelligence bills this as “Further Evidence of Capital Flight in Italy“.

In a column earlier this week, Federico Fubini notes that, according to the Bank of International Settlements, in 2016 international banks reduced their exposure to Italy by 15{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, or over $100bn, half of it in the last quarter of the year.

The counterpart to this exposure reduction is the increase in the negative Target2 balance of Italy, which the ECB has already attributed to foreign investors selling into its asset purchase programs, and reinvesting the proceeds away from Italy.

As a result of all this, Italy’s financial stability is increasingly dependent on the ECB.

This is what Alasdair Macleod was talking about in his interview with Max Keiser that I posted in Friday’s column.  This commentary on the situation comes from Mike Shedlock via Zero Hedge at 7:51 a.m. EDT on Friday morning.  I thank Richard Saler for sharing it with us — and another link to it is here.

“[Europe’s] Holy Wars Will Soon Begin

Turkey’s foreign minister didn’t mince words.

He recently said that Europe’s politicians are “taking Europe toward an abyss.

He added, “Soon religious wars will break out in Europe. That’s the way it’s going.”

This was not an idle warning from a fringe politician. In fact, the Turkish minister is in a unique position to understand where Europe’s migrant crisis is headed.

Turkey plays a critical role in this crisis. In many ways, it holds the European Union’s very life in its hands.

This commentary by Nick Giambruno, senior editor over at the Internet site, was posted there on Friday sometime — and it comes courtesy of Brad Robertson.  Another link to it is here.

Trump and Putin chat Detente: What can go wrong and why — John Batchelor interviews Stephen F. Cohen

This podcast begins with some modest good news; Putin and Trump are speaking with each other over the phone. Somewhat more sinister in balance is  NATO commander, Curtis Scaparrotti’s  request for more US troops in Europe. But Cohen is mildly pleased with what looks like détente beginning, and comments from the White House imply that something substantial was achieved between the two leaders. (This effort may be a last surviving remnant of his election platform.) Also on the good news front, Cohen continues, is the revelation that Sec. State, Tillerson has been talking to Russian Foreign Minister, Lavrov at least three times. And the loose cannon, Nikki Halley, US Ambassador to the U.N., has been told to clear all her proposed statements with Tillerson before opening her mouth. This is a severe smack down by the White House.

All of the good here has understandably caused a frothy reaction in Trump’s opposition forces. Senator McCain, as usual led the charge with a statement that Russian sanctions would remain, and other senators have now voiced support of keeping these sanctions. At this point Cohen raises an interesting point that what really needs to be investigated is not Kremlingate, but what he calls “Intellgate”. He proposes that there have been serious problems with cozy alliances between senators, like Senator McCain, and the Intelligence and military sectors of government.  Specifically the results have been the plethora of allegations, some treasonous, leaks and phoney dossiers and reports from the Intelligence sectors, and downright sabotage levelled at the Trump regime and specifically against détente with Russia.  Cohen singles out some of Trump’s own people, his National Security Advisor, H.R. McMaster as untrustworthy. With more formal investigative hearings ahead, Hillary Clinton is still making accusations for extending Kremlingate, and people like a compromised Director,Comey are still heading the FBI – one of a list of similar elites of Washington that should have been fired  – and our pundits see no end of this campaign in sight. Essentially it is clear that Trump does not think he has the power to get rid of this opposition regardless of the extremes of provocation from them. So he has compromised himself with cosmetic actions – his cruise missile attack in Syria – that have put him many steps behind, with only a possibility of détente as the only step forward.

The worry for Cohen is for some event that will sabotage Trump’s latest efforts for détente. Something always happens during these times to ratchet up tensions and torpedo discussions between the major powers. The latest may have been the so-called sarin gas attack in Syria, and Cohen suspects there will be another incident in that country over his current approach to Putin. Ukraine is also mentioned where a total economic blockade has been imposed on the breakaway provinces. Clearly the only reason for this is to increase tensions with Russia. Will Trump support Kiev? We like to think that Washington will not support that sad excuse for a government, but when we look at the antics in Washington, the quality of government and its level of corruption is certainly not a factor for support or shunning policies either internally or internationally. The very opposite is being proven every day in both countries. In other words there is no moral high ground in the West and government behaviour is determined by goals of the elites at the expense of virtually everyone else, and the methodology is reduced to lawlessness and chaos. All countries in the West seem to be redefining themselves in these terms. For Americans, for example, who are paying attention, they watch their country turn into a mockery of itself. This process is accelerating. Cohen says as much himself in his last statements in the podcast.

This week’s 40-minute audio interview was posted on the Internet site on Tuesday but, as is usually the case, had to wait for my Saturday column.  I thank Ken Hurt for the link, but the largest kudos and thank yous are reserved for Larry Galearis for his usual excellent executive summary.  Another link to the interview is here.

The Saker interviewed by Bonnie Faulkner for her show “Guns and Butter” on Pacifica Radio

Ever since I moved to the USA in 2002 I have been listening to Bonnie Faulkner and her amazing show “Guns and Butter”.  If you don’t know who Bonnie Faulkner is, then just go through the archives of her show.

When Bonnie contacted me to ask me to be interviewed I was nothing short of elated: she was a real hero of mine (she fought for 9/11 Truth with tremendous courage) and I immediately accepted.  We recorded two shows.  I am posting the first one today and I will post the next one as soon as it is mixed and available.  I am very, very happy with the result, and so is Bonnie.  We agreed to to this more often.

I must admit that I haven’t had the time to listen to this 59-minute audio interview, so I have no idea what’s in it.  But since I’ve been posting his commentaries in my column for a long time now…I thought it time to put a voice to a name.  I thank Larry Galearis for sharing this with us — and another link to it is here.

Russia is now in charge of Syria’s air space: America is shut out

America is on the verge of officially losing its war on Syria. Russia is not interfering in American domestic policy, Russia is interfering with America’s foreign policy.

Russia’s lead negotiator at the Astana Peace Talks, Alexander Levrentyev has confirmed that U.S. coalition planes will be banned from flying over the Syrian safe-zones established in a key Memorandum at the Astana Peace talks.

As for [the U.S. led coalition] actions in the de-escalation zones, starting from now those zones are closed for their flights

He continued,

As guarantors we will be tracking all actions in that direction,” he remarked. “Absolutely no flights, especially by the international coalition, are allowed. With or without prior notification. The issue is closed”.

This rather brief news item showed up on the Internet site around 9:30 a.m. EDT on Friday morning — and I thank Roy Stephens for sharing it with us — and another link to it is here.  There was also a UPI article about this headlined “Russia: U.S. prohibited from flying over Syrian ‘de-escalation zones’” — and that’s courtesy of Roy as well.

China finance minister skips summit with Japan, Korea to attend emergency meeting

Chinese Finance Minister Xiao Jie skipped a trilateral conference with his Japanese and South Korean counterparts on Friday to attend an emergency domestic meeting, a senior Japanese finance ministry official said.

The Japanese official told reporters at a ministry press briefing that Xiao’s absence was not related to any diplomatic matters, adding that Xiao was expected to attend the Japan-China finance dialogue in Japan scheduled for Saturday. He did not elaborate on the nature of the minister’s emergency meeting.

The Chinese-minister’s non-attendance came as commodity prices took a beating, and Chinese stocks fell to three-month lows as concerns about tighter financial regulations weighed on banking shares.

At the trilateral meeting, the finance leaders agreed to resist all forms of protectionism, taking a stronger stand than G20 major economies against the protectionist policies advocated by U.S. President Donald Trump.

The senior Japanese finance official said he did not see any diplomatic implications from Xiao’s absence, saying the minister was likely to arrive in Yokohama Friday evening.

This Reuters article, filed from Yokohama, appeared on their website at 5:49 p.m. India Standard Time on their Friday afternoon — and my thanks go out to ‘Tom’ for sending it our way.  Another link to it is here.

Why Do North Koreans Hate Us? One Reason — They Remember the Korean War

It’s a question that has bewildered Americans again and again in the wake of 9/11, in reference to the Arab and Muslim worlds. These days, however, it’s a question increasingly asked about the reclusive North Koreans.

Let’s be clear: There is no doubt that the citizens of the Democratic People’s Republic of Korea both fear and loathe the United States. Paranoia, resentment, and a crude anti-Americanism have been nurtured inside the Hermit Kingdom for decades. Children are taught to hate Americans in school while adults mark a “Struggle Against U.S. Imperialism Month” every year (it’s in June, in case you were wondering).

North Korean officials make wild threats against the United States while the regime, led by the brutal and sadistic Kim Jong-un, pumps out fake news in the form of self-serving propaganda, on an industrial scale. In the DPRK, anti-American hatred is a commodity never in short supply.

The hate, though,” as longtime North Korea watcher Blaine Harden observed in The Washington Post, “is not all manufactured.” Some of it, he wrote, “is rooted in a fact-based narrative, one that North Korea obsessively remembers and the United States blithely forgets.”

This commentary/history lesson is your only must read of the day.  It showed up on Internet site at 5:32 a.m. on Wednesday morning EDT — and it’s the third and final offering of the day from Ellen Hoyt — and I thank her on your behalf.  Another link to it is here.

How I funded my studies by digging for Sierra Leone diamonds

In my teens, I worked as an artisanal miner, waist deep in water, sieving the gravel to find a diamond.

Growing up in diamond-rich eastern Sierra Leone, it was the natural thing to do.

Jobs were, and still are, few and far between, so the gemstones were a magnet. They persuaded many to drop out of school, but I worked as a miner mostly during school holidays and sometimes at weekends.

The Kono District was densely populated because the sparkling stones could be found virtually everywhere, sometimes through sheer luck.

My parents joined thousands of people from across the country, as well as The Gambia, Mali, Senegal and even Lebanon, to go to Kono in the hope of making a quick fortune.

This very interesting news item, filed from Freetown in Sierra Leone on Wednesday, had to wait for today’s column as well.  I thank Swedish reader Patrik Ekdahl for finding it for us — and another link to it is here.

Chinese demand for gold rises 8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in Q1

China’s consumer demand for gold rose 8 percent year on year to 282.4 tonnes in the first quarter of 2017, compared with an 18 percent drop in global demand due to a slower pace of central bank buying and a previous high base, the World Gold Council said yesterday.

China’s investment in gold bars and coins jumped 30 percent to 105.9 tonnes in the first quarter, the fourth-highest on record, while jewelry demand fell 2 percent year on year.

Global demand for bars and coins rose 9 percent to 289.8 tonnes in the same period, said the WGC in a report.

Chinese investors reignited their passion for bullion in the past two quarters, as “concern over the weakness of the yuan lingers, outlook for the property market is gloomy, and the stock market looks weary,” said Roland Wang, WGC’s managing director for China.

Gold was one of the few investment options for Chinese investors under the circumstances,” Wang added.

This news item, complete with a photo of gold-plated rocks, was posted on the Internet site a minute after midnight China Standard Time on their Friday morning.  Another link to it is here.

Gold Imports by India Climb to Highest in More Than Two Years

Gold imports by India, the world’s biggest market after China, jumped to the highest level since 2014 in the first three months of the year, spurred by jewelers restocking for weddings and improving cash flow in the financial system, the World Gold Council said.

Net inbound shipments more than doubled to 270.1 metric tons from 127.4 tons a year earlier, council data showed Thursday. That’s the biggest amount since the 279.5 tons imported in the fourth quarter of 2014.

Domestic demand gained 15 percent to 123.5 tons in the first quarter, and “if this trend continues and there are no sharp changes in prices,” purchases may be at the upper end of the range of 650 tons to 750 tons estimated for 2017, according to P.R. Somasundaram, the council’s managing director in India.

Consumption is recovering after plunging to a seven-year low of 666.1 tons in 2016. Imports last year tumbled 39 percent to 557.7 tons after buyers reduced spending on jewelry because of higher prices, the government’s measures to increase transparency in the financial system and a crackdown on black money.

I posted a story about this before, but this one has far more clarity — and the eye candy is nice too.  It appeared on the Bloomberg website on Wednesday — and was updated on Thursday.  I found it on the Sharps Pixley website — and another link to it is here.

Keiser Report: Peak Gold, Silver on a Small Finite Planet — Max interviews Mark O’Byrne from

Peak gold and silver and the case for peak precious metals on “our small, finite planet” was the topic for discussion on the latest episode of the the Keiser Report.

This video interview was posted on the Internet site yesterday — and I must admit that I haven’t had the time to watch it yet.  But from the list of ‘topics covered’, it should be a good one.


The turkey vulture would never win any beauty contests anywhere in the world, but it is one of the ‘critters’ that inhabits the very southern reaches of Alberta.  I’ve certainly seen them when in that region, circling high over head, but these two photos are up close and personal.  Click to enlarge…or not!


Today’s pop ‘blast from the past’ comes courtesy of the United States Marine Corps — and was the #1 song on Billboard’s Hot 100 back in 1963.  Written by Larry Huff and William Linton, two U.S. Marines who said that the beat was inspired by the sound of multiple teletype machines pounding out copy in the base’s communications room, which is a sound that I’m personally familiar with from my years in the Canadian arctic.  It was recorded in a mere 20 minutes — and the rest, as they say, is history.  The link is here — and the link to their second biggest hit is here.  I remember them both all too well, I’m afraid.  The back story on this is linked here.

Today’s classical ‘blast from the past’ dates from 1924 and is a musical composition by American composer George Gershwin for solo piano and jazz band.  Now its a concerto staple with orchestras around the world.  At the time, the editors of the Cambridge Music Handbooks opined that “The Rhapsody in Blue (1924) established Gershwin’s reputation as a serious composer — and has since become one of the most popular of all American concert works.”  That pretty much sums it up.  Here’s Lang Lang doing the honours with an unknown orchestra — and the link is here.

After careful thought, I’m not sure if yesterday’s price action indicates a bottom, or a temporary lull in the action before the beatings continue.  Only the powers-that-be know that for sure — and they certainly won’t be telling anyone.

But if I had to put a stake in the ground on this, I’d say that we’re done, although there may be a bit more to go in gold.  However, it was never overbought to start with — and after the last three trading days since the COT cut-off on Tuesday, it’s knocking on the door of being oversold as well.  Silver hasn’t been this oversold since October of 2014…something that was pointed out to me by First Majestic’s I.R. guru, Todd Anthony yesterday.  So if you were looking to invest, Friday would have been a good day to lay your money down.

Here are the 6-month charts for all four precious metals, plus copper and crude oil once again…the Big 6 as I call them.  Control the prices of these six commodities — and you can easily keep the prices of all the other commodities in line as well.  The ‘click to enlarge‘ feature helps a bit with the first four charts — and you should note that new closing or intraday lows were set in gold, silver and WTIC in their respective front months.

So where to from here, you ask?  A good question with no answer at the moment.  But as silver analyst Ted Butler said in a paragraph in his Wednesday column — which I posted in part in my column on either on Thursday or Friday — and which I quote in full here:

Very recent developments, moreover, point to JP Morgan being at the end of its epic silver accumulation, meaning that it may no longer participate in capping future silver price rallies. These developments include JP Morgan backing off from trying to stop or demand delivery on COMEX futures contracts for the first time in a traditional delivery month in more than two years. This follows the bank stepping back from acquiring Silver Eagles some months back. Very recent mega deposits in SLV as prices fell sharply are of the “man bites dog” variety pointing to short covering on a scale that could only involve JPM. More unusual and out of pattern developments in silver suggest to me that JP Morgan is putting the finishing touches in place for a silver price liftoff.

Of course the “very recent developments” that Ted refers to would now include this smash to the downside in silver.  The approximately 8,000 COMEX silver contracts that JP Morgan covered during the reporting week [plus heaven only knows how many more since Tuesday] represents 40 million ounces of physical silver that they don’t have to use from their physical stockpile to cover what’s left of their short position.

Of course when silver goes, so will everything else in the commodity complex.  Now all we have to do is wait and see if that’s what’s allowed to develop.  Will JP Morgan be there as short buyer and long seller of last resort to cap the next rallies in the precious metals or not?  As Ted so correctly points out…that act alone will determine how high silver [and gold] prices go from here.

But — and it’s a big but — if this is in fact how things unfold — and I’ve said on several occasions, I can absolutely guarantee you that it won’t occur in a news vacuum.  The powers-that-be/Deep State will have something else happening to keep the masses attention distracted — and I must admit that I’m somewhat fearful of what it might be.  I’m of the opinion that North Korea is being set up as the “fall guy”.

So please do not underestimate the psychopathic personality types that now control the levers of power in Washington…and the Pentagon.

That’s it for another week — and I’ll see you here on Tuesday.