11 November 2017 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price chopped around a dollar or so either side of unchanged throughout the entire Far East trading session on their Friday. That price activity extended into London and early New York trading as well. Then about ten minutes after London closed for the weekend, JPMorgan et al pulled their bids, spun their algos — and you know the rest…a picture-postcard waterfall decline. But they weren’t done — and had to smack it for a couple of more dollars going into the COMEX close as well. It recovered most of that tiny loss within the next ninety minutes of trading — and the price didn’t do much after that.
The high and low ticks in gold were reported by the CME Group as $1,287.70 and $1,273.60 in the December contract.
Gold was closed in New York on Friday at $1,274.90 spot, down $9.60 from Thursday. Net volume was very heavy at a bit over 296,000 contracts — and roll-over/switch volume out of December was very respectable.
And here’s the 5-minute tick chart for gold, courtesy of Brad Robertson as usual — and I’m including it so you can see the enormous volume associated with that engineered price decline. Volume fell off quite a bit after the 11:30 a.m. Denver time COMEX close on the chart below, but wasn’t back to background levels until several hours later.
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.
It was pretty much the same price activity in silver, at least up until shortly before the noon silver fix in London. At that juncture the price began to chop unsteadily higher — and finally made it back above the $17 spot mark for a bit. Of course that all ended about 11:10 a.m. EST when ‘da boyz’ did their thing. From its low tick, it rallied quietly until 2 p.m. in after-hours trading — and didn’t do a lot after that.
The high and low ticks in this precious metal were recorded as $17.095 and $16.785 in the December contract.
Silver was closed yesterday afternoon at $16.855 spot, down 9 cents on the day at $16.855 spot. Net volume was very decent at just under 70,000 contracts — and roll-over/switch volume out of December was pretty impressive as well.
And here’s the 5-minute tick chart for silver from Brad as well. I’m including it for the same reason as I included the 5-minute tick chart for gold. Once COMEX trading was done, volume vanished.
Like for gold, 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 as well.
Platinum traded in a very similar manner to silver, at least until after the powers-that-be pulled their bids just minutes after the Zurich close. But once that was over with a few minutes later, the price pressure continued — and the low tick of the day was set a few minutes after the COMEX close. The price traded sideways after that. Platinum finished the Friday session at $927 spot, down 9 bucks on the day.
Palladium traded a dollar or so either side of unchanged in Far East trading yesterday — and was down 2 dollars at the Zurich open. It rallied from there — and was actually up 3 bucks by 10 a.m. CET. JPMorgan et al showed up at that point — and rode it unsteadily lower into the COMEX close. The low tick of the day, a sharp down/up move which probably only occurred in the spot month, was set around 4:20 p.m. in the very thinly-traded after-hours market. Palladium finished the day at $988 spot — and down 15 dollars from Thursday’s close.
The dollar index closed very late on Thursday afternoon in New York at the 94.53 mark — and chopped unsteadily sideways until a minute or so before 3 p.m. China Standard Time on their Friday afternoon. It rallied for a couple of hours starting at that juncture — and the 94.65 high tick came a minute or so after the London open. From there it chopped mostly lower, with the 94.26 low tick coming just before 10:30 a.m. in New York. It rallied a bit until a few minutes after 11 a.m. EST, which was the London close — and edged quietly lower from there for the rest of the Friday session. The dollar index closed at 94.39 — and down 14 basis points from Thursday.
You should carefully note that the dollar index was doing absolutely nothing when ‘da boyz’ did the dirty in the precious metals yesterday. They had no fig leaf — and obviously didn’t care what anyone thought, or who saw them do it.
And here’s the 3-year U.S. dollar index which, as always, is presented for its entertainment value only…as is the daily index chart above.
The gold stocks opened unchanged — and began to fade shortly after the afternoon gold fix in London, which was 10 a.m. in New York. Of course they had their own waterfall decline as they followed the gold price lower shortly after 11 a.m. EST. They rallied a bit from there, but chopped a bit lower as the Friday trading session went along. The HUI finished down 1.15 percent.
The silver equities opened in the red by a bit — and never looked back. The engineered price decline in the silver price had virtually no effect on the silver shares. Their respective lows were set around 2:45 p.m. — and they rallied for the next fifteen minutes after that — and traded flat into the close. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index got hit for another 2.73 percent. Click to enlarge if necessary.
Here’s the 1-year Silver Sentiment/Silver 7 Index. Click to enlarge.
Here are the usual three charts from Nick that show what’s been happening for the week, month-to-date — 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 the Silver 7 Index. ‘Click to enlarge‘ for all three.
Here’s the 1-week chart — and it’s pretty bad, particularly for silver.
And here’s the month-to-date chart — and it’s just as ugly.
And here’s the year-to-date chart — and virtually all of the gains in the gold shares we had early in the year have vanished courtesy of ‘da boyz’ — and the silver equities are down even more on the year now. They’re underperforming the underlying metals by a significant amount.
The share price action, along with the precious metals themselves are still in the iron grip of JPMorgan et al — and that won’t change until they’re through doing what they’re doing, or they get over run. As I said last week in this space…”It’s certainly obvious that the CFTC won’t do anything…new enforcement director or not — and it’s a given that the silent co-conspirators in this price management scheme, the mining companies themselves, won’t do anything either.”
The CME Daily Delivery Report showed that 2 gold and 1 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. Nothing to see here, but if you wish to look, the link to yesterday’s Issuers and Stoppers Report is here.
The CME Daily Delivery Report for the Friday trading session showed that gold open interest in November fell by 8 contracts, leaving 71 still open, minus the 2 mentioned just above. Thursday’s Daily Delivery Report showed that 14 gold contracts were posted for deliver on Monday, so that means that 14-8=6 more gold contracts just got added to the November delivery month. Silver o.i. in November declined by 1 contract leaving just 3 left, minus the 1 contract mentioned in the previous paragraph. Thursday’s Daily Delivery Report showed that 2 silver contracts were posted for delivery on Monday, so that means that 2-1=1 more silver contract just got added to November deliveries.
So far in November there have been 991 gold contracts issued and stopped. That number in silver is 872.
For the second day in a row there were no reported changes in either GLD or SLV.
There was no sales report from the U.S. Mint yet again.
Month-to-date the mint has sold 2,500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and 90,000 silver eagles. Pretty pathetic. The retail bullion trade is barely hanging on by its fingernails.
There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday. Nothing was reported received — and only 964.500 troy ounces/30 kilobars [U.K./U.S. kilobar weight] were shipped out of Canada’s Scotiabank. I shan’t bother linking this amount.
It was just as quiet in silver, as nothing was reported received other — and only 1 good delivery bar…1,002.500 troy ounces…was shipped out of CNT. I won’t bother linking this amount, either.
But it was entirely different story over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday. They received 9,150 of them — and shipped out 9,642. All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here’s a chart that I pulled of Nick Laird’s website yesterday evening. I’ve been a subscriber to Nick’s site for years — and that gives me access to every chart he has. This is one you’ve seen before, but it’s now been updated as of the close of business on Friday. It shows the inventory levels of the six COMEX-approved silver depositories that matter — and as should be obvious to all and sundry, JPMorgan’s silver stockpile is almost 50 percent of all silver held in these depositories…116.4 million troy ounces. Of course that doesn’t include the 500+ million troy ounces that Ted Butler says JPM has stashed in London…and elsewhere. Click to enlarge.
I have a lot of stories for you today, including several that had to wait for today because of content or length reasons — and that includes the Cohen/Batchelor interview.
“Inflation” occurs when the creation of currency outruns the creation of real wealth it can bid for… It isn’t caused by price increases; rather, it causes price increases.
Inflation is not caused by the butcher, the baker, or the auto maker, although they usually get blamed. On the contrary, by producing real wealth, they fight the effects of inflation. Inflation is the work of government alone, since government alone controls the creation of currency.
In a true free-market society, the only way a person or organization can legitimately obtain wealth is through production. “Making money” is no different from “creating wealth,” and money is nothing but a certificate of production. In our world, however, the government can create currency at trivial cost, and spend it at full value in the marketplace. If taxation is the expropriation of wealth by force, then inflation is its expropriation by fraud.
To inflate, a government needs complete control of a country’s legal money. This has the widest possible implications, since money is much more than just a medium of exchange. Money is the means by which all other material goods are valued. It represents, in an objective way, the hours of one’s life spent in acquiring it. And if enough money allows one to live life as one wishes, it represents freedom as well. It represents all the good things one hopes to have, do, and provide for others. Money is life concentrated.
This very worthwhile commentary by Doug appeared on the internationalman.com Internet site yesterday — and I thank Scott Otey for pointing it out yesterday evening. Another link to it is here.
Two months ago, for example, President Trump colluded with top Democrats to raise the debt ceiling for the 74th time since 1962.
Since then, the national debt has risen at the rate of about $80 billion a week.
This represents a call on future output… on work that hasn’t been done yet… on products that haven’t been made or sold… on profits that haven’t been earned and taxes that haven’t been collected.
Debt doesn’t erase costs… it doesn’t disappear them. It merely puts them off.
For a while.
Then… who pays?
This worthwhile commentary by Bill was posted on his Internet site on Friday sometime — and another link to it is here.
I’m beginning to think it might not take all that much to wake folks us to risk. And by the looks of Japanese and European equities (along with junk ETFs) this week, there may be some big players with fingers hovering over sell buttons. The Fed will likely raise rates next month, and I’ve already read some analysis that chairman Powell may not be the dovish pushover he’s been portrayed. There was also news out this week shedding further light on the growing split at the ECB. And the esteemed head of the People Bank of China was publicly warning of ‘hidden, complex, sudden, contagious and hazardous’ risks in the Chinese financial system.
So how might we get from the recent “Risk On” to a problematic “Risk Off”?
Imagine a flurry of outflows from junk ETFs spurring illiquidity in the underlying securities holdings. This begins to spook some players leveraged in investment-grade corporate Credit. The more sophisticated players begin to take some risk off the table, as financial conditions tighten. Fears of outflows from the – now massive – passive investment-grade funds complex spur incipient risk aversion in equities. De-risking/de-leveraging dynamics begin to take hold – at home and abroad (spike in the yen pressuring global “carry”?). And with everyone now Crowded so nice and tight into the big tech names, an abrupt reversal of the leadership technology stocks would further rattle the leveraged lending market that has been operating in overdrive. Fears of a bursting “tech” Bubble overwhelm greed. Sinking tech would take down the indices, unleashing a bit of harsh reality upon the tsunami of “money” that has disregarded risk to participate in the passive index mania. The short volatility Crowd gets crushed.
Doug’s weekly Credit Bubble Bulletin showed up on his website in the very wee hours of Saturday morning — and another link to it is here.
Narrated by Liev Schreiber, Money For Nothing takes viewers inside the Fed and reveals the far-reaching impact of its policies.
Current and former Fed officials debate the critics and each other about the decisions that helped lead the global financial system to the brink of collapse in 2008.
This absolute must watch 1 hour and 44 minute documentary on the Federal Reserve is worth very minute of your time. I watched it ‘cover-to-cover’. It was produced in 2014 to mark the 100th anniversary of the Federal Reserve system — and they really get hung out to dry. Jim Grant — along with others — is at the top of his game during his many appearances in this documentary.
I posted this Neil West offering in my column last Saturday, but soon discovered…thanks to Fred Ehrman…that the link to the video documentary only worked if you lived in Canada. He sent me the youtube.com link for it, but I wasn’t able to change it until later in the day. So if you wanted to watch it, but couldn’t, I have made amends in this column. Another link to it is here.
During a visit yesterday to Barcelona, the organizers of the Mobile World Congress, the world’s biggest mobile event, warned the City Council that unless the political situation stabilizes in Catalonia, they will be looking for an alternative venue after 2018. Barcelona has hosted the annual event every year since 2006 and it brings a lot of money to the city each year, much of which ends up in the pockets of local taxi drivers, hoteliers, owners of bars, restaurants and brothels, Airbnb hosts and, last but not least, the thousands of professional pickpockets that flock to the city for the four day event.
John Hoffman, the chief executive of GSMA, the association that organizes the Mobile World Congress (MWC), could not have chosen a worst day to visit Barcelona. As part of a general strike to protest the incarceration of pro-independence ministers and leaders and the imposition of direct rule from Madrid, thousands of picketers had blocked dozens of roads across the region including the main freeway connecting Spain with France, causing massive traffic jams.
High-speed train links between Barcelona and France and Barcelona and Madrid were also put out of action after hundreds of protesters moved onto platforms and railway lines in Barcelona and Girona chanting ‘Freedom, Freedom.”
At midday thousands of protesters occupied Barcelona’s Sant Jaume square in front of the city’s town hall, a traditional assembly point for Catalonia’s separatist movement. The chant “Squatters, get out” rang out in allusion to the take-over by central government authorities of Catalonia’s regional government.
This is a very worthwhile news item, if you have the interest that is. It was posted on the wolfstreet.com Internet site on Thursday sometime — and I thank Roy Stephens for sharing it with us. Another link to it is here.
Senior officials from the European Union and Iran spoke up on Friday in defense of the agreement limiting Tehran’s nuclear program, as the pact comes under heavy pressure from U.S. President Donald Trump.
The nuclear deal was “a major achievement of European and international multilateral diplomacy”, EU. foreign policy chief Federica Mogherini told a conference in Uzbekistan.
“The European Union will make sure it will continue to be fully implemented by all, in all its parts,” she said.
Trump on Oct. 13 dealt a blow to the pact by refusing to certify that Tehran was complying with the accord, under which Iran agreed to curb its nuclear program in return for relief from economic sanctions. International inspectors said it was complying.
The U.S. Congress has until mid-December to decide whether to reimpose sanctions lifted by the deal.
This interesting two-subject Reuters news item was filed from Smarkand in Uzbekistan at 11:19 p.m. EST on Thursday night — and was updated about ten hours later. It’s from the Zero Hedge website via Brad Robertson — and another link to it is here.
A plan for the United Arab Emirates to wage financial war against its Gulf rival Qatar was found in the task folder of an e-mail account belonging to UAE Ambassador to the United States Yousef al-Otaiba and subsequently obtained by The Intercept.
The economic warfare involved an attack on Qatar’s currency using bond and derivatives manipulation. The plan, laid out in a slide deck provided to The Intercept through the group Global Leaks, was aimed at tanking Qatar’s economy, according to documents drawn up by a bank outlining the strategy.
The outline, prepared by Banque Havilland, a private Luxembourg-based bank owned by the family of controversial British financier David Rowland, laid out a scheme to drive down the value of Qatar’s bonds and increase the cost of insuring them, with the ultimate goal of creating a currency crisis that would drain the country’s cash reserves.
Rowland has long had close relationships with UAE leadership, particularly with Abu Dhabi Crown Prince Mohammed bin Zayed, known as MBZ. The bank is currently in the process of creating a new financial institution in cooperation with the UAE’s sovereign wealth fund, Mubadala, according to contracts and correspondence obtained by The Intercept outlining the terms of the deal. That project is separate from the Qatar operation, but it reflects the close relationship between the bank and the UAE.
The Qatar debt project would be grandiose in its ambitions. “Control the yield curve, decide the future,” reads the planning document, referring to a standard financial-industry graph showing a country’s borrowing costs for debt that is due at different dates. The height and shape of the yield curve is thought to be a reflection of how healthy an economy is and influences what financing options are available to a country.
Targeting a nation’s economy using financial manipulation would be a dramatic break from traditional norms of diplomacy and even warfare.
This very long essay/news story appeared on theintercept.com Internet site on Thursday — and Roy Stephens sent it our way. For obvious reasons it had to wait for today’s column — and another link to it is here.
According to a new report by Middle East Eye, Prince Bandar bin Sultan – Saudi Arabia’s most famous arms dealer, longtime former ambassador to the US, and recent head of Saudi intelligence – was among those detained as part of Crown Prince Mohammed bin Salman’s (MBS) so-called “corruption purge” that started with the initial arrests of up to a dozen princes and other top officials last weekend.
If confirmed, the arrest and detention of Bandar would constitute the most significant and high profile figure caught up in the purge – even above that of high profile billionaire investor Prince Alwaleed Bin Talal – given Bandar’s closeness to multiple U.S. administrations and involvement in events ranging from Reagan’s Nicaraguan Contra program (including direct involvement in the Iran-Contra scandal), to making the case for the Iraq War as a trusted friend of Bush and Cheney, to directing US-Saudi covert operations overseeing the arming of jihadists in Syria.
But what is more likely is that Bandar has been caught up in this week’s MBS dragnet for his closeness to Western heads of state and foreign intelligence services. With MBS’ aggressive consolidation of power which could result in ascension to the throne at any moment, and with fate of multiple princes and officials still unknown – not the least of which is now ex-PM of Lebanon Saad Hariri – a shroud of secrecy has resulted in myriad theories concerning what is really happening behind the scenes.
Likely, Bandar has been detained to ensure a communications blackout with Western intelligence and media until MBS’ plans are complete, with the added benefit of ensuring the “anti-corruption” angle to the purges for the consumption of international media.
This news item, which you’ll carefully note, has not yet been confirmed, was posted on the Zero Hedge website at 2:14 p.m. EST on Friday afternoon — and hasn’t been updated since. So that portion of the story should be taken with a big grain of salt, but the rest of it appears completely believable to me. I thank Brad Robertson for this story as well — and another link to it is here.
Tales of the New Cold War: Putin inaugurates “The Wall of Sorrow” — John Batchelor interviews Stephen F. Cohen
Part 1: Stephen Cohen is back from Moscow and he brings news of a new memorial, the Wall of Sorrow, raised in Moscow to the victims of the gulags. The actual construction stone came from a gulag camp well to the north of Moscow on the White Sea that was established in Lenin’s time. And we find that Stalin did not invent the gulag depravities but he escalated their use. Twenty five million people died in them (almost as many that died in WW2). These deaths are a hugely important historical reality, and Cohen goes on to describe the on again off again aspect of later leaders reporting the truth about these events. He also describes how Nikita Khrushchev was the most open leader until Mikhail Gorbachev for what he did to expose Stalin’s crimes. So to finally honour those that perished in the Gulags with this monument was the culmination to put to rest an ugly history, and in Cohen’s words “would not have been possible without Vladimir Putin” who personally led the ceremony on October 30. For Cohen, who wrote a book about Gulag victims and discussed the horrendous impacts on their families, went to this ceremony because of these strong personal connections. While he credits Gorbachev with helping the families of victims of Stalin and revealing fully the regimes crimes, he credits Putin for being proactive with this memorial and the earlier building of a museum showing the personal history of gulags in Russia. Cohen considers that only Putin could have done these things politically, (and I also consider it a measure of his humanity).
Part 2: Batchelor opens this second podcast with a commentary about Lenin who on so many levels never even attempted to curb Stalin’s excesses in the 1930s in spite of being the philosophical guide for the state, and for this and for the presence of the leader of the Russian Orthodox Church at the ceremony Batchelor considers the Wall of Sorrow a monument to the complete failure of the Soviet system. Cohen more or less agreed. Did the Russian people hugely welcome this? Given that about 50% of people still admire Stalin (for his leadership against the Nazi invaders), it is difficult to say, and Cohen only assessed a positive response from the media there. But a very small minority were outspokenly against the monument. Cohen goes on to compare the history of the gulags with the US slavery institution as roughly equivalent events, and the US has done nothing like the Russians have to address their humanitarian crimes. He also recounts a more extreme argument against the monument and criticism of Putin that is truly bizarre. The opposition to Putin accuses that he is weak in his dealing with the West for “not suppressing” NATO encroachment”. They are also not appreciating how Putin after Gorbachev has essentially ended the debate that Stalin committed great crimes against his people and that this must never be repeated. There cannot be debate about these crimes is his position. Cohen ends with a discussion about how important discussion about this history is for the people and he makes a point, to Putin’s great credit, that it he left it open to Russians to come to their own conclusions about their own history.
From my point of view by being open about this history is a way to deal with a future with more confidence. Crimes against a people by government are unacceptable and Putin has given a monument to the people as a kind of promise as well as a symbol. But for Putin’s Russian opposition it does not seem that he can do anything right when dealing with the western aggression. And these people are vocal about criticizing the monument. Resisting politically Washington’s destabilizing efforts in countries along the border would ironically involve similar proactive aggressive interference by Russia in the politics of those same countries. This is not a policy of Russia to do this. Also to “suppress” the encroachment of NATO forces entering those countries after being suborned, could only involve ultimatums and a military response. For Putin — and for moderate thinking Russians, threats against the U.S. is altogether to dangerous. And one could make the argument that Putin’s gradual non-confrontational policy with Washington is paying off better in numerous ways that are apparently unappreciated by this minority of Russians. Militarily NATO is not a conventional threat at all; but Putin is very much concerned about the U.S. nuclear threat and the willingness of a disheveled Washington to resort to it.
Here is the Cohen/Batchelor interview — and as always, my gratitude is extended to Larry Galearis for his most excellent executive summary posted above. I also thank Ken Hurt for being the first one through the door with the links to these two 20-minute podcasts. The link to Part 1 is in the headline — and here. The link to Part 2 is here.
The 25th APEC Economic Leaders’ Meeting in Danang: Together Towards Prosperity and Harmonious Development — Vladimir Putin
The 25th anniversary APEC Economic Leaders’ Meeting will take place in Danang very soon, on November 10 and 11.
We greatly value the APEC forum for the ample opportunities it affords all participants to engage in discussions and coordinate positions on a variety of economic, social, environmental, and cultural issues. Our countries strive to cooperate based on the principles of consensus and voluntary participation, mutual respect and willingness to compromise, regardless of the political situation. This is what APEC’s unique spirit of partnership is all about.
As a major Eurasian power with vast Far Eastern territories that boast significant potential, Russia has a stake in the successful future of the Asia-Pacific region, and in promoting sustainable and comprehensive growth throughout its entire territory. We believe that effective economic integration based on the principles of openness, mutual benefit and the universal rules of the World Trade Organisation is the primary means of achieving this goal.
We support the idea of forming an Asia-Pacific free trade area. We believe this is in our practical interest and represents an opportunity to strengthen our positions in the rapidly growing APR markets. I want to note that over the past five years, the share of APEC economies in Russia’s foreign trade has increased from 23 to 31 percent, and from 17 to 24 percent in exports. And we have no intention of stopping there.
This commentary by Vladimir was posted on the en.kremlin.ru Internet site at 9:00 p.m. Moscow time on their Wednesday evening, which was 2 p.m. in Washington — EST plus 8 hours. I thank reader M.A. for his second contribution to today’s column — and another link to it is here.
Trades that moved about 4 million ounces of gold in a matter of minutes awakened the precious metal from its slumber.
After 11:10 a.m. on the Comex in New York almost 40,000 contracts, each representing 100 ounces of the metal, traded in a span of 10 minutes. That triggered a sell-off, sending prices down as much as 1.1 percent.
The trades jolted the market, which has seen 60-day historical volatility languishing near the lowest since 2001. The metal has struggled to sustain the pace of gains from earlier this year as the outlook for rising U.S. borrowing costs curbs demand for non-interest-bearing assets like gold.
“We didn’t see any headlines, any news to make gold drop $10, but it just did,” Miguel Perez-Santalla, a sales and marketing manager at Heraeus Metals New York LLC, said by telephone. “It’s going with someone who has a huge position that can trigger stops and make the market move in a direction.”
The bullion market has seen similar mysterious trades in the past few months.
Last month, contracts covering more than 2 million ounces of gold traded in just five minutes, sending prices higher. Two months earlier, contracts for a similar amount traded in a minute, propelling the metal higher. In June, the market saw trades for over 1.8 million ounces posted in just a minute.
Such lack of curiosity about this “mystery“. It’s obvious that the press have no interest in pursuing this story any further than they have. As you already know, dear reader, this was a bear raid by ‘da boyz’ in their continuing attempt to flush the Managed Money traders off the long side, so they can cover their own monstrous short positions in both silver and gold. That’s all there is, there ain’t no more. This Bloomberg story put in an appearance on their Internet site at 10:47 a.m. Denver time yesterday morning — and was updated about an hour and a half later. I found it on the gata.org Internet site — and another link to it is here.
A growing number of investors are plowing money into commodities, seeking to diversify their holdings on gnawing concerns about a stock market correction as equities scale new highs almost daily.
Low interest rates, solid economic growth across the globe and rising corporate earnings have hoisted the S&P 500 .SPX 16 percent this year. It reached an all-time high on Tuesday. By contrast the bellwether S&P Goldman Sachs Commodity Index gained 7 percent in that same period.
The last five years presents an even starker divergence. The S&P has gained 82 percent in that time, while the GSCI has dropped by 34 percent.
That may start to shift, portfolio managers and investment advisors say. Strong demand in markets like oil and copper, along with tightening supply, is shifting the fundamental outlook, boosting commodity flows. Oil prices recently hit a two-and-a-half-year high, while copper hit a three-year high.
While commodity markets pale in size to equities and fixed income, a notable shift toward the asset class could help validate the concerns of those who believe stocks have become overvalued.
This Reuters news item showed up on their website late on Wednesday evening EST — and I found it in yesterday’s edition of the King Report. Another link to it is here.
Rick Rule, president and CEO of Sprott U.S. Holdings, takes viewer questions on natural resource investments.
This excellent video interview with Rick lasts for about 46 minutes — and they cover a lot of territory — and a lot of companies. I’ve watched the whole thing — and it’s definitely worth your while. I thank Ken Hurt for sending it along on Thursday — and for length reasons, had to wait for my Saturday column. This wouldn’t load for me on the Microsoft ‘Edge’ web browser, but played fine on Google Chrome.
With Eric in Australia, Craig Hemke interviewed First Majestic Silver CEO Keith Neumeyer in his stead.
On past programs, Craig and Eric Sprott would discuss the price management scheme by the powers-that-be just about every week. But that topic was carefully avoided by both parties during this 11:38 minute Q&A session.
They managed to spend the time walking around this 800-pound gorilla in the living room — and if you ignore that glaring omission, Keith had more than a few interesting things to say about silver supply and demand towards the end of the interview…so it’s worth your while.
When British soldiers conquered Burma in 1885, they gave the last king hours to pack.
Many of his treasures — heirlooms from a millennium of monarchy — were seized and sent to Britain.
But the most precious, an enormous ruby, disappeared.
Who took it, and where is it now?
This long, but absolutely amazing picture-filled exposé was posted on the bbc.co.uk Internet site back on 02 November. Swedish reader Patrik Ekdahl sent it to our way last Sunday — and for very obvious reasons, it had to wait for today’s column. It’s absolutely worth your while — and another link to it is here.
The PHOTOS and the FUNNIES
It is beyond question that if the 4 and 8 largest silver shorts hope to buy back and close out a meaningful number of those short positions (as has always occurred in the past)…the only way for that to happen on lower prices is if the managed money traders sell aggressively, including adding new large short positions. This is a mechanical observation, not a prediction for what’s to come. Increasingly, I find myself asking what happens to the concentrated short position if the managed money traders don’t sell. Or what happens if the managed money traders buy aggressively on higher prices, as these traders could add as many as 40,000 new silver longs if they reverted to holding as many long positions as they held on April 18.
Should the managed money traders buy on higher prices, the raptors (smaller commercials) that are long will sell out many or all of their long positions at a profit, but the big concentrated shorts would still have to add many more silver shorts to satisfy total managed money buying and contain prices. In that event, the concentrated short position in COMEX silver, already severely out of line with any other commodity, would likely surge to new shameful and manipulative extremes.
Should JPMorgan, the big kahuna silver short, and the other big COMEX shorts not add to short positions if the managed money traders buy, it would seem impossible for prices not to surge. Should any of the big 8 shorts move to buy back short positions on higher prices, those higher prices should prove explosive, based upon mechanical thinking. Of course, owing to JPMorgan’s massive 650 million oz physical silver position, it would be completely immunized against real net loss in a silver price explosion despite being the largest COMEX paper short, something not applicable to the other 7 big silver shorts, making the prospect of a high-level double cross feasible, if not likely. — Silver analyst Ted Butler: 08 November 2017
Today’s pop ‘blast from the past’ easily falls into the top 5 rock songs of all time. It never grows old — and the 448 million hits it has had since it was posted on the youtube.com Internet site on August 1, 2008 — tells you all you need to know. It’s been a year or so since I last posted it, so it’s long overdue for a revisit. Feel free to sing along — and the link is here.
Winter arrived in Edmonton the night before Hallowe’en…October 30…and is here to stay. We haven’t seen an above freezing temperature since that date. Along with that, we have 15cm/6 inches of snow on the ground as well. So in ‘honour’ of that, here’s the absolutely incomparable Itzhak Perlman performing Vivaldi’s concerto for violin and strings in F minor, Op. 8, No. 4 [RV.297]…also known as ‘Winter’ from the Four Seasons. Zubin Mehta conducts what is probably the Israel Philharmonic. This is as good as it gets — and the link is here.
Another waterfall decline for your photo album, dear reader. JPMorgan et al were certainly gunning for the Managed Money longs yesterday — and it remains to be see how many of those contracts the ‘Big 4/Big 8 actually ended up with, as Ted’s raptors…the small commercial traders other than the Big 8, along with the traders in the ‘Other Reportables’ category, have been jumping in front of their efforts to cover their massive short positions in both silver and gold.
This won’t be known for sure until next Friday’s Commitment of Traders Report — and there are still two more trading days left in the reporting week. And I don’t even have this week’s COT/Bank Participation Report data to show you, as it won’t be posted on the CFTC’s website until Monday afternoon. As I said in my Friday column, there won’t be much to discuss in The Wrap section of today’s column — and there isn’t.
Here are the 6-month charts for all four precious metals, plus copper, as usual — and there’s not really a lot to see. If this is the start of a far more serious decline in precious metal prices, it should become apparent not long after the open on Sunday evening in New York. The ‘click to enlarge‘ feature helps a bit with the first four charts.
Watching the now-perverted multi-ring circus that Washington has become, it’s more than mildly disconcerting as a Canadian to see all three branches of the U.S. government going completely off the rails. Even the venerable FBI is being questioned on all sides — and the strong stench of corruption is everywhere within the Deep State now. It is becoming a failed state both at home — and abroad.
As Ernest Hemingway said in his famous quote…”The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
It is only through direct interventions in the stock, bond and currency markets that the paper tiger that the U.S. financial system has become, is still up and going around the track. The suppression of the wealth producing class, as Doug pointed out in today’s lead story in the Critical Reads section, becomes absolutely paramount in order for the survival of the paper hangers of Wall Street — and the too-big-to-fail banks.
Many years ago, this American disease infected the entire world’s economic, financial and monetary systems as well — and when America goes down, she’ll take everyone else with her. The system is not only way to big to bail, it’s also way too interconnected. A financial crisis in one part of the world will quickly escalate into major problems in financial markets everywhere — and at the speed of light.
The in-your-face engineered price declines in the precious metal market yesterday just after the London close shows how brazen New York and Wall Street have become. There wasn’t even a fig leaf of a melt-up in the dollar index to hide their activities. It was just naked price fixing — and nobody says a word, or will do a thing.
And although I hate to close today’s column with another quote, this one is very apropos as well. As Edmund Burke said…”The only thing necessary for the triumph of evil, is for good men to do nothing.” Unfortunately, almost all the good men have been driven from the halls of power in Washington — and the parasitic Deep State that feeds on it. So it’s mostly evil and self-interest that remains, not only to the detriment of the citizens of the U.S…but for all nations of the world.
How did it come to this?
See you on Tuesday.