The U.S…the U.K…and China Were All Closed on Monday

30 May 2017


If I’d remembered on Friday that Monday was a holiday in the U.S…plus in China and the U.K…I certainly wouldn’t have had  column today — and I’m only posting it as a vehicle for the stories that I’ve accumulated over the weekend.

It was a ‘nothing’ day for gold yesterday, as it traded within a dollar or so of unchanged in the GLOBEX futures market yesterday — and it closed up a dime on the day at $1,266.80 spot. Net volume was just under 12,200 contracts, which isn’t even fumes and vapours, but it was all in the August delivery month, or later.It was mostly the same in silver, however the price pattern had a bit more shape to it.  It rallied until 9 a.m. in Tokyo — and then was sold quietly lower until 3 p.m. JST.  At that point it began to inch steadily higher — and began to rally a bit more aggressively after the London p.m. gold fix…if there was one, that is.  The ‘rally’ wasn’t allowed to get higher than a few pennies above $17.40 spot.  It was up a dime or so during the New York lunch hour, but half those ‘gains’ vanished by the 1 p.m. EDT close.  Silver finished the holiday-shortened Monday session at $17.37 spot, up 6 cents from Friday’s close.  Net volume was only 10,400 contracts.

Platinum traded a few dollar lower until 9 a.m. EDT, then was sold down going into the London p.m. gold fix at 10 a.m. EDT.  It popped a few dollars higher from there, but still finished down 6 bucks on the day at $953 spot.

Palladium spent most of the Monday session creeping unsteadily higher.  It touched the $800 spot market at precisely noon EDT — and was sold down a few bucks from there.  It finished the Monday ‘trading session’ up 9 dollars at $798 spot.

The U.S. dollar index closed very late on Friday afternoon in New York at 97.41 — and when trading began at 5 p.m. EDT on Sunday afternoon it chopped sideways in a 15 basis points range for the entire Monday trading session.  Here’s the 3-day dollar index chart.

Since nothing was open in the U.S. yesterday, there are no reports from either the CME Group or the mint.

I don’t have all the many stories today, but my laptop is having spacing and font issues once again when coding in WordPress, so the Critical Reads section in the website version doesn’t look all that hot, although I’m able to repair it in the e-mail version.



“This Market Is Crazy”: Hedge Fund Returns Hundreds Of Millions To Clients Citing Imminent “Calamity”


While hardly a novel claim – in the past many have warned that Australia’s housing and stock market are massive asset bubbles (which local banks were have been forced to deny as their fates are closely intertwined with asset prices even as the RBA is increasingly worried) – so far few if any have gone the distance of putting their money where their mouth was. That changed, when Australian asset manager Altair Asset Management made the extraordinary decision to liquidate its Australian shares funds and return “hundreds of millions” of dollars to its clients according to The Sydney Morning Herald, citing an impending property market “calamity” and the “overvalued and dangerous time in this cycle”.

Giving up management and performance fees and handing back cash from investments managed by us is a seminal decision, however preserving client’s assets is what all fund managers should put before their own interests,” Philip Parker, who serves as Altair’s chairman and chief investment officer, said in a statement on Monday quoted by the SMH.

The 30-year investing veteran said that on May 15 he had advised Altair clients that he planned to “sell all the underlying shares in the Altair unit trusts and to then hand back the cash to those same managed fund investors.” Parker also said he had “disbanded the team for time being“, including his investment committee comprising of several prominent bears such as former Morgan Stanley chief economist and noted bear Gerard Minack and former UBS economist Stephen Roberts.

Parker said he wanted “to make clear this is not a winding up of Altair, but a decision to hand back client monies out of equities which I deem to be far too risky at this point.”

“We think that there is too much risk in this market at the moment, we think it’s crazy,” Parker said with a candidness few of his colleagues are capable of, at least when still managing money.

Valuations are stretched, property is massively overstretched and most of the companies that we follow are at our one-year rolling returns targets – and that’s after we’ve ticked them up over the past year. Now we are asking ‘is there any more juice in these companies valuations?’ and the answer is stridently, and with very few exceptions, ‘no there isn’t’.”

This is the Zero Hedge spin on a story that appeared in The Sydney Morning Herald yesterday.  It was posted on the ZH website at 2:39 p.m. EDT on Monday afternoon — and I thank Brad Robertson for pointing it out.  It’s certainly worth reading — and another link to it is here.

You Can Look Stupid Now, or Look Stupid Later“:  Greg Hunter interviews Chris Martenson


Resource analyst and futurist Chris Martenson says, “I’d rather look stupid now than look stupid later.” Martenson thinks the stock market rise since the last crash is mostly manufactured by central banks.  Martenson explains, “What in the heck is going on is real simple.  We have central banks who have now taken over everything in the markets.  Let’s be clear, markets go up when they are really well supplied with liquidity.  We have $200 billion or more a month coming into these markets  . . . these central banks are dumping $200 billion, sometimes as much as $250 billion a month into the markets.”

Martenson thinks what the central bankers are doing will not go on forever. Martenson contends, “The mantra of the entire system in D.C. and Wall Street has been let’s just borrow more.  Let’s just kick the can down the road.  I don’t know when that ends or when that breaks, but it’s mathematically impossible that this all gets paid off at this point.  So, the question remains, who’s going to eat the losses?  In times past, the banks have been very good at heads they win and tails you lose or we lose. . . .  I think this ends badly because it’s very, very unfair.  That unfairness will bring social consequences.  People are primates, and we don’t like unfair. . . . That level of injustice is building.  If you don’t understand that base level of injustice, you don’t really understand why Trump got elected.  You don’t understand why populism is rising all over the globe.  It’s because “We the People” are starting to figure this out.  It’s a scam, and if it looks and smells like a fraud, it’s a fraud.  The markets are highly fraudulent at this point.  They’re very, very rigged.”

Martenson thinks many people will be devastated when their paper wealth disappears in a coming market crash.  Martenson explains, “We have these things call wealth destructions.  Markets crash and people lose money they thought they had.  If you watch carefully, what really happened was the claims that got out of balance came crashing back to reality.  So, you might as well own some reality.  I am a big fan of people owning tangible wealth.  This is land, productive enterprises, investing in yourself, investments you make in your home if you own it.  Things that will help you spend money on food and fuel down the road.  These are the kinds of investments that make sense to me right now.  If you look at stocks and equities right now . . . and these valuations are so stretched, at this point in time, the only way you can make a case to further buying into financial assets at this point is because you believe . . . the central banks are just going to keep buying these assets.  If that’s the case, feel free to do that.   Please let’s remove the word investing from that statement and say I am going to speculate on the idea that the central banks are so deep down this rabbit hole that they have no other course of action, and they will have to keep doing this. That’s a guess.  It’s speculating and not investing.

This is one of your must watch/listen interviews of the day.  It was posted on Greg Hunter’s Internet site on Sunday sometime — and it’s the second offering in a row from Brad Robertson.  Another link to the interview is here.

Baltic index hits lowest since early March on tepid demand


The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, on Thursday fell to its lowest since early March as demand slowed across all vessel segments.

The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down 16 points, or 1.71 percent, at 918 points.

The capesize index lost 59 points, or 3.57 percent, at 1,595 points.

Lack of fresh cargoes especially from South America and a growing tonnage list is again putting pressure on the freight rates (for panamaxes),” ship brokerage firm Fearnleys said in a weekly report on Wednesday.

With China off Monday and Tuesday next week there are some expectations for further rate drops, while the north Atlantic seems to have reached a floor but unlikely there will be much improvement in the coming days.”

This short Reuters story from last Friday found a home over at the Internet site — and it’s the third contribution in a row from Brad Robertson.  Another link to it is here.

Donald Trump’s unhappy NATO visit as US and Europe drift apart


European leaders annoyed by Trump’s calls to increase defence spending, making NATO look too obviously like a protection racket.

Having been showered with compliments in Saudi Arabia and Israel, Donald Trump’s visit to Europe where he has met the US’s formal allies in the NATO and G7 formats, have gone unhappily.

Despite efforts on both sides to patch things up, it is impossible to avoid the sense that Trump and his erstwhile “allies” don’t like each other very much.  Not only has Trump had uncomfortable meetings with Merkel and Macron, and not only did his shoving aside the Prime Minister of Montenegro look like a snub, but I doubt that Trump himself realises how irritated most of his European allies are by his constant calls that they increase their defence spending.

There is no doubt that Trump himself sincerely believes all this, and doubtless from his point it is obvious that it is simply unfair for the U.S. to pay such a disproportionate amount of the Western alliance’s defence burden.

However the US’s NATO allies will have noticed that these words contain no reciprocal pledge from the US to ‘defend’ them come what may, and they are bound to see Trump’s calls for them to increase defence spending as a form of blackmail, implicitly threatening them that unless they increase their defence spending the U.S. will stop ‘defending’ them.

This commentary by Alex Mercouris showed up on Internet site on Friday sometime — and I thank Larry Galearis for sending it our way.  Another link to it is here.

Europe May Finally Rethink NATO Costs — Ray McGovern


By dunning NATO nations to chip more money into the military alliance, President Trump may inadvertently cause some Europeans to rethink the over-the-top anti-Russian propaganda, says ex-CIA analyst Ray McGovern.

President Donald Trump’s politically incorrect behavior at the gathering of NATO leaders in Brussels on Thursday could, in its own circuitous way, spotlight an existential threat to the alliance. Yes, that threat is Russia, but not in the customary sense in which Westerners have been taught to fear the Russian bear. It is a Russia too clever to rise to the bait – a Russia patient enough to wait for the Brussels bureaucrats and generals to fall of their own weight, pushed by financial exigencies in many NATO countries.

At that point it will become possible to see through the West’s alarmist propaganda. It will also become more difficult to stoke artificial fears that Russia, for reasons known only to NATO war planners and neoconservative pundits, will attack NATO. As long as Russian hardliners do not push President Vladimir Putin aside, Moscow will continue to reject its assigned role as bête noire.

The existential threat to NATO comprises a different kind of Russian “threat,” which owes much to the adroitness and sang froid of Russian President Vladimir Putin, who flat-out refuses to play his assigned role of a proper enemy – despite the Western media campaign to paint him the devil incarnate.

Over time, even the most sophisticated propaganda wears thin, and more and more Europeans will realize that NATO, in its present form, is an unnecessary, vestigial organ already a quarter-century beyond its expiration date – and that it can flare up painfully, like a diseased appendix. At a time when citizens of many NATO countries are finding it harder and harder to make ends meet, they will be reluctant to sink still more money into rehab for a vestigial organ.

This commentary by Ray falls into the absolute must read category, even if you’re note a serious student of the New Great Game.  It was posted on the Internet site last Friday — and it’s the second offering in a row from Larry Galearis.  Another link to it is here.

A Trans-Atlantic Turning Point: What Was Merkel Thinking?

An historical turning point or mere campaign bluster? Chancellor Angela Merkel’s Sunday speech on relations with Donald Trump’s America has raised eyebrows the world over. What did she mean?

A “potentially seismic shift”  wrote The New York Times. A “new chapter in U.S.-European relations,” proclaimed The Washington Post. German Chancellor Angela Merkel’s comments made in a beer tent in Munich on Sunday have made headlines around the world. It was the kind of appearance the likes of which she will make hundreds of times ahead of Sept. 24 parliamentary elections in Germany. But in this speech, she clearly distanced herself from U.S. President Donald Trump. And she urged Europe to prepare for a future in which it has to be much more self-reliant.

The times in which we could completely rely on others are over to a certain extent. That is what I experienced in the last few days,” Merkel said. “That is why I can only say: We Europeans must really take our fate into our own hands.”

She went on to say: “Of course in friendship with the United States of America.” She emphasized friendship with the U.S. on a few other occasions in her remarks as well. But then said: “We have to fight for our own future, as Europeans, for our destiny.”

Merkel’s comments were unusual on several levels. It’s not just what she had to say that was interesting, but also why and when: at a folk festival following a series of summits during which she spent extensive amounts of time with Trump. The chancellor made direct reference to her strenuous week, during which the U.S. president managed to alienate his partners on several occasions.

This news item on the German website might as well have been written by the folks over at The New York Times, as is basically the German version of that American propaganda sheet.  Obviously they’re none too happy with what Merkel had to say.  It was posted on their website at 5:19 p.m. European Summer Time, which was 11:19 a.m. in Washington — EDT plus 6 hours.  I thank Roy Stephens for pointing it out — and another link to it is here.

Putin the wise man meets Macron the ignoramus boy


The contrast between the two leaders could not be greater.

Today, Russian President Vladimir Putin meets newly elected French President Emmanuel Macron. There is perhaps no greater contrast between well known world leaders. The meeting will almost certainly be less remembered for its substance than for the governing differences between one leader and one boyish man born to follow.

Vladimir Putin is in many ways the penultimate intelligent, informed pragmatist. His years in Soviet intelligence gave him an understanding of how the world works both in terms of public perception and in respect of the private and covert phenomena that in many cases shape if not dictate major events.

Putin’s time in power has seen Russia rise from the hellish ashes of the 1990s to reclaim its position as an undisputed superpower along with China and the United States. His greatest international accomplishments are overseeing the peaceful reunification of Russia’s historic Crimea and the Federal City of Sevastopol with the rest of the Russian Federation. His other great feat in international affairs remains his ongoing commitment to helping Russia’s Syrian partners fight violent Wahhabist/Salafist terrorism in the Middle East.

In terms of diplomacy, Putin has cultivated new alliances and re-cast old ones. After decades of disquiet between Beijing and Moscow after the death of Stalin, Putin has consecrated a new Russia-China alliance that is among the most important in the world, if not the most important. Russia’s active participation in China’s One Belt–One Road trade and infrastructure project holds the potential to reshape the very nature of modern world trade.

This news item appeared on Internet site early on Monday morning EDT — and it’s the second contribution in a row from Roy Stephens.  Another link to it is here.

We Have Told Each Other Everything” – Highlights From Macron’s First Meeting With Putin


Just a few days after the young French president made headlines for his white-knuckled, “not innocent” handshake with Donald Trump, Russian president Vladimir Putin was prepared for his first meeting with Emanuel Macron, with the result captured on the following clip.

What followed was talks in private between the two leaders in Versailles that lasted for almost three hours during which the two leaders discussed a number of topics ranging from bilateral relations to the situations in Syria, Ukraine, Libya and the Korean Peninsula, and culminated with a press conference in which Macron said the “Franco-Russian friendship” was at heart of his meeting with Putin and called for improved ties with Russia but warned he would hold tough positions on sanctions and the civil war in Syria.

I want us to win the fight against terrorists in Syria and build together lasting political stability. We have laid the ground for that work together today.” Macron said. “I believe we’ve had an extremely frank and direct exchange. We have told each other everything.”

Macron also admitted he has “some disagreements” with his Russian counterpart, but said that the two leaders discussed them openly. The French president concede that serious international problems cannot be resolved without Moscow, as he stressed the importance of the role Russia plays in the modern world.

This news item put in an appearance on the Zero Hedge website at 2:04 p.m. EDT on Monday afternoon — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

Dems crippling Trump’s plans to cooperate with Russia out of own ambitions –- Stephen F. Cohen


The presidency of Donald Trump is off to a rough start. It seems the president’s every move breeds scandal, and mainstream media outlets are unrelenting in their attacks. At the center of the anti-Trump narrative is Russia, with Trump accused of working with Moscow to steal the U.S. election and blamed for leaking state secrets to Russian officials. With an ongoing investigation into the barrage of allegations, calls are growing louder for the president’s impeachment. How will these scandals affect Trump’s presidency? And is the White House even capable of operating in this atmosphere of media hysteria? We ask contributing editor of the Nation magazine, professor emeritus at Princeton University – Stephen Cohen.

Sophie Shevardnadze: Dr. Stephen Cohen, professor emeritus at the Princeton University, the Nation magazine contributing editor, welcome to the show one more time. It’s really great to have you back.

Stephen Cohen: Thank you, Sophie.

This 28-minute video interview with Sophie, complete with a full transcript, showed up on the Internet site back on May 19 — and I thank Larry Galearis for bringing it to our attention.

Bitcoin sees $4bn in value wiped out as price of cryptocurrency falls 20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

On Monday, bitcoin was trading at $2,179, down $612 from last Wednesday’s all-time high of $2,791, according to CoinDesk data.

The correction was actually quite brief, the prices today are still higher than that of a week ago,” Bobby Lee, CEO of BTCC, a major bitcoin exchange, told CNBC.

I think the pullback was just a profit taking, a correction from the skyrocketing prices of last week,” he added.

Bitcoin’s market cap fell from $40.49 billion on Thursday to $36.48 billion.

Analysts’ forecasts for bitcoin differ significantly. While some predict a major correction, others say it’s going to hit $6,000.

There is a lot of fresh liquidity flowing into bitcoin, thanks to a surge in interest among investors in Asia, notably Japan and Korea, coupled with a resolution to the scaling debate. I would not be surprised to see the bitcoin price doubling again to around $6,000 by the end of the year,” Aurelien Menant, CEO of Gatecoin, a regulated cryptocurrency exchange, told CNBC.

This cover of a CNBC news story was posted on the Internet site at 2:37 p.m. Moscow time on their Monday afternoon, which was 7:37 a.m. in New York — EDT plus 7 hours.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.

Australian gold output slumps 8 percent in first-quarter due to cyclone, rain

Heavy rains and a cyclone led to an 8 percent, or six-tonne drop in Australian gold production in the first quarter, a survey released on Sunday showed.

Output for the quarter from the world’s second-biggest gold mining nation after China totaled 71.5 tonnes versus 77.5 tonnes in the previous quarter, according to the survey by Australian mining consultancy Surbiton Associates.

This year heavy rain in Western Australia, which accounts for about three-quarters of Australia’s gold output, plus the effects of Cyclone Debbie in Queensland in late-March, played havoc with gold production at many operations across the country,” Surbiton director Sandra Close said.

First quarter output was in line with levels in the first quarter of 2016, Close said.

He said output is typically higher in the remaining three quarters as seasonally drier weather sets in the Southern Hemisphere.

This cover of a Reuters gold-related article was picked up by the Internet site on Sunday — and I thank Australian reader Garry Robinson for sending it our way.  Another link to it is here.

China’s net gold imports via Hong Kong fall by a third in April

China’s net gold imports via main conduit Hong Kong dropped 33.5 percent in April from the previous month, data showed on Thursday, as high prices turned off buyers in the world’s top consumer of the precious metal. Buying interest also slowed after imports hit a 10-month high in March.

Net gold imports fell to 74.202 tonnes from 111.647 tonnes in March, according to data emailed to Reuters by the Hong Kong Census and Statistics Department.

Total gold imports slid to 81.475 tonnes in April from 116.68 tonnes in March. “I think high prices hurt gold imports. March imports were already too much…The economy in mainland China has also slowed down,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Net gold imports by China through the port of Hong Kong more than doubled month-on-month to 111.647 tonnes in March, the most since May 2016.

This brief Reuters article was picked up by the Internet site last Thursday — and I found it on the Sharps Pixley website late on Monday afternoon EDT.  Another link to it is here.



Here are the last two shots from my trip to the pond from a week ago.  This is a pair of green-winged teals, or they could be common teals, as the species are very similar in appearance — and they are North America’s smallest dabbling duck.  They make mallard ducks look like giants — and even in these two photos, the blades of grass give some hint of scale — and the female is considerably smaller than the male.  I got within 7 meters or so of this pair — which is point blank range for my 400mm lens — and I didn’t have to crop them by much.  The ‘click to enlarge‘ feature is a must here, especially for the drake.


But what about the increase in short selling by JPMorgan this past reporting week? Assuming it was JPM selling short around 3,000 contracts, there may be an explanation that I just can’t shake. The explanation is quite speculative, but very much in keeping with recent price action. The biggest difference between gold and silver at this point is that gold has decisively broken above its key moving averages amid clear indications of heavy technical fund buying and commercial selling, while silver has yet to do so. That setup won’t last for long. Sooner or later, silver will penetrate its key moving averages as well and the technical funds will buy or try to buy aggressively, same as they’ve just done in gold and on countless past occasions in silver. 

I can’t help but think that the apparent new short sales by JPMorgan were primarily intended to keep silver below its key 50 and 200-day moving averages. At yesterday’s close, silver prices are closer to the 50-day moving average ($17.45) and the 200 day moving average ($17.69) than at any time in the past month. But if I am correct about JPM’s short selling, it is a short term ploy at best, merely buying some time before silver does penetrate these moving averages. And that might be JPM’s intent, namely, temporarily delaying that penetration so that when the inevitable penetration does occur, it occurs more spectacularly than otherwise.


Let’s face it – what will determine how dramatically (or not) silver penetrates its moving averages is a function of the degree of aggressiveness in commercial selling, not the aggressiveness of technical fund buying which is already baked into the cake. I think it possible that JPMorgan or whoever in the big 4 that sold may have been delaying the inevitable burst of technical fund buying in order to control the timing of the buying burst in order to make it more dramatic.Silver analyst Ted Butler: 27 May 2017

Having forgotten about the fact that Monday was Memorial Day in the U.S…I now understand why gold and silver volume on Friday was as heavy as it was.  The large traders in the COMEX futures market for June,  had to roll those positions over, or sell them, before the close of trading on Friday, as Monday was a holiday.  The rest of the traders in the June delivery month, regardless of the commodity, have to be out by the close of COMEX trading this afternoon…unless they’re standing for delivery, of course.

First Day Notice for delivery into June gold [and silver] will be posted on the CME’s website around 10 p.m. EDT tonight — and I’ll have all of that for you in my column tomorrow.

And as I post today’s column on the website at 4:00 a.m. EDT, I see that gold rallied a few dollars in morning trading in the Far East, but that was easily turned aside — and gold was up about 30 cents an ounce when London opened.  But about forty-five minutes later JP Morgan et al appeared — and they have it down $3.20 an ounce at the moment.  Silver didn’t do much in morning and early afternoon trading in the Far East on their Tuesday — and its tiny rally after the afternoon gold fix in Shanghai…if it was open, that is…was dispatched in short order.  Now ‘da boyz’ have it down on the day as well — and all of Monday’s ‘gain’ has vanished, plus a few pennies more.  Platinum has been sold lower as well — and is down 9 bucks from Monday’s close.  Palladium has given back 6 dollars of its Monday gains — and it’s only up 3 bucks from Monday’s close.

Gold volume, net of Monday’s volume is something over 37,000 contracts — and that number in silver is 7,900 contracts…net of Monday’s volume as well.

The dollar index took off right at the open of trading at 6:00 p.m. EDT on Monday evening in New York. Most of the gains were in about an hour later — and from there it traded pretty flat until 1:30 p.m. CST on their Tuesday afternoon.  It had an interesting up/down move after that — and is up about 20 basis points from its ‘close’ on Monday.

Well, the powers that be didn’t waste much time once the trading week began in London this morning — and with May going off the board today, it will be interesting to see what ‘da boyz’ have in store for us during the remaining two trading days of the month.

I’m off to bed, as I have a flight to catch later this morning.

See you tomorrow.


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