A Surprising Friday Trading Session

18 November 2017 — Saturday

YESTERDAY in GOLD, SILVER, PLATNUM and PALLADIUM


After trading flat for a bit when trading began in New York at 6:00 p.m. EST on Thursday evening, the price began to rally a bit as the dollar index cratered.  It was up about 5 bucks by around 11 a.m. China Standard Time on their Friday morning — and then didn’t do much until the COMEX opened at 8:20 a.m. EST in New York on their Friday morning.  It rallied quietly until the equity markets opened at 9:30 a.m. — and then dipped a bit until at, or just after, the afternoon gold fix in London.  Then away it went to the upside.  ‘Da boyz’ put an end to the fun a few minutes before the COMEX close as it appeared it was about to take out the $1,300 price level.  It was then sold down a handful of dollars until about 2 p.m. in after-hours trading — and didn’t do much after that.

The low and high ticks were reported by the CME Group as $1,278.10 and $1,297.50 in the December contract.

Gold finished the Friday session in New York at $1,293.40 spot, up $15.10 on the day — and back above its 200-day moving average.  Gross volume was past Jupiter at 411,597 contracts — and even net of December roll-over/switch volume, the volume was still monstrous at around 326,000 contracts.

Here’s the 5-minute tick chart for gold courtesy of Brad Robertson — and as you can tell at a glance all the volume that really mattered came between 6:30 a.m. and 12:00 p.m. Denver time on the chart below, which was between 8:30 and 2 p.m. in New York.  There was also decent volume in morning trading in the Far East, as JPMorgan et al were active keeping the gold price under control as the dollar index was falling like a stone.  Come to think of it, there wasn’t much in the way of background volume anywhere to be found during the Friday session.

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.

The silver price wasn’t allow to rally more than a nickel in Far East trading on their Friday morning — and by 9 a.m. in London, it was actually down 2 cents on the day.  It didn’t do much after that, but was back at unchanged by the time London closed at 11:00 a.m. EST/4:00 p.m. GMT.  It began to head higher from there — and really began to sail starting about 12:50 p.m. in New York.  ‘Da boyz’ were forced to step in at the same time as they did in gold, which was a few minutes before the COMEX close.  It was tapped lower during the next five minutes before trading pretty flat for the remainder of the after-hours session.

The low and high ticks in this precious metal were recorded as $17.02 and $17.385 in the December contract.

Silver was closed yesterday at $17.275 spot, up 22.5 cents from Thursday — and back above both its 50 and 200-day moving averages.  Heaven only knows what its closing price would have been if the powers-that-be hadn’t shown up when they did.  Gross volume was over the moon at 121,466 contracts, but roll-over/switch volume out of December was pretty heavy as well — and net silver volume was ‘only’  about 78,000 contracts.

And here’s the 5-minute tick chart for silver, courtesy of Brad as well and, like for gold, all the volume that mattered occurred between 6:30 a.m. and 12:00 p.m. MST…COMEX hours, plus 30 minutes.

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.

The platinum price sort of followed what silver was doing, at least up until 10 a.m. CET in Zurich on their Friday morning.  From that juncture it began to creep high — and was up about 4 bucks when trading began on the COMEX in New York.  From there it rallied very steadily until ‘da boyz’ showed up two minutes before the COMEX close…as they did in silver and gold.  It was sold a bit lower during the after-hours market — and finished the Friday trading session at $948 spot, up 17 dollars from Thursday’s close, but was up 23 bucks at its high tick.  And, like gold and silver, heaven only knows what it would have really closed at if allowed to trade freely, which it obviously wasn’t.

The palladium price rallied unsteadily until Zurich opened — and then traded sideways equally unsteadily for the rest of the Friday session.  It finished the day at $988 spot, up 5 bucks from Thursday’s close.

The dollar index, which closed very late on Thursday afternoon at the 93.91 mark, began heading for the nether reaches of the earth just minutes after trading began at 6:00 p.m. EST on the Thursday evening in New York.  The usual ‘gentle hands’ put in an appearance between 10:30 and 11 a.m. China Standard Time on their Friday morning.  It didn’t do much of anything from there until a ‘rally’ was initiated starting about 2:45 p.m. CST.  It ran into some resistance during the first ninety minutes of trading in London, but then began to head higher once again.  The rally flamed out at the 93.93 mark at 8:45 a.m. in New York — and then chopped quietly lower until minutes before 3:30 p.m. EST.  It rallied a handful of basis points into the close from there — and finished the Friday session at 93.67…down 24 basis points on the day.

As I’ve already pointed out, the volume in Far East trading on their Friday morning was huge — and whatever it took from ‘da boyz’ to prevent precious metal prices from exploding then.  During that 40 basis point crash, gold was only allowed to rise five bucks — and silver by a nickel.  But during the 30 basis point fall from grace in New York trading over a much larger time period, gold was up over 20 bucks — and silver by over two bits.

That’s why I post the dollar index charts…whether they be the daily, 3-day, or 6-month charts for their ‘entertainment value’ only.

Here’s the 3-day intraday chart, because if I don’t use it, the precipitous decline on Thursday evening in New York is totally missing in action on the daily chart.

And here’s the 6-month U.S. dollar index chart.

The gold shares opened up a bit — and proceeded to drift back to almost unchanged by shortly before 11 a.m. in New York trading.  Then away they went to the upside — and that rally lasted until JPMorgan et al showed up in the COMEX futures market to cap the price a few minutes before the COMEX close.  They drifted unevenly lower from there, as the day traders squared their positions for the weekend during the last hour of trading.  The HUI closed higher by 1.1 percent.

The silver equities opened higher by a bit — and then continued to rally quietly until ‘da boyz’ appeared two minutes before the COMEX close.  They chopped sideways until about twenty minutes before trading ended at 4:00 p.m. EST — and were sold lower by a bit from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished the Friday session up 1.44 percent.  Click to enlarge if necessary.

And here’s the 1-years Silver Sentiment/Silver 7 Index.  Let’s hope the worst is behind us.  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 looks a lot happier this week than it did in last Saturday’s column.

Here’s the month-to-date chart — and the silver equities still have a ways to go to get back in positive territory.

And here’s the year-to-date chart — and my comments on this one are the same as what I offered on the month-to-date chart.

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.  We may have seen signs of that during the Friday trading session, but it’s waaaay too soon to say with any degree of certainty.  But as Ted — and by extension, me — have been saying for quite some time now, this price management scheme can’t go on forever, particularly now that every man and his dog knows what’s going on…except for those who positions in life depend upon them not seeing it.

Those people would include [but are not limited to] the CFTC’s new enforcement director — along with the silent co-conspirators in this price management scheme, the mining companies themselves.


The CME Daily Delivery Report showed that 1 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Nothing to see here, as the November delivery month creeps ever closer to the end.  But if you wish to check it out, 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 November fell by 30 contracts, leaving just 10 left, minus the 1 contract mentioned just above.  Thursday’s Daily Delivery Report showed that 31 gold contracts were actually posted for delivery within the COMEX-approved depositories on Monday, so that means that 31-30=1 more gold contract just got added to the November delivery month.  Silver o.i. in November decreased by 2 contracts, leaving 3 left, minus the 3 silver contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 5 silver contracts were actually posted for delivery today, so that means that another 5-2=3 more silver contracts were added to November.

So far in November there have been 2,690 gold contracts issued and stopped — and in silver, that number stands at 884.  These are impressive numbers considering that fact that November is not a traditional delivery month for either precious metal.


There were no reported changes in either GLD or SLV yesterday.

And there was no sales report from the U.S. Mint, either.

Month-to-date mint sales are pretty gruesome…6,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 265,000 silver eagles.

It was very quiet in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  They didn’t receive any — and only 6,026 troy ounces were shipped out — and that activity, which I won’t bother to link, occurred at Canada’s Scotiabank.

It was pretty quiet in silver as well.  Nothing was reported received — and only 253,225 troy ounces were shipped out.  Of that amount, there was 250,225 troy ounces shipped out of Scotiabank — and the remaining three good delivery bars departed Delaware.  I shan’t bother linking this activity, either.

There was some action over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 3,334 — and shipped out 754.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was as close to unchanged in both gold and silver as it was possible to be, so there’s not much to report.

In silver, the Commercial net short position declined by a smallish 1,193 contracts, or 6.0 million troy ounces of paper silver.

They arrived at this number by  reducing their long position by 453 contracts, plus they also reduced their short position by 1,646 contracts — and the difference between those two numbers is the change for the reporting week.

Ted said that the entire change came from the Big 4 trader category…read JPMorgan…as they reduced their short position by approximately 1,200 contracts — and the ‘5 through 8’ large trader…plus the raptors, the 34 small Commercial traders other than the Big 8…did very little.

Under the hood in the Disaggregated COT Report there wasn’t much to see, although the Managed Money traders did add 1,092 long contracts, plus reduced their short position by 1,342 contracts, for a total weekly change of 2,434 contracts.  Most of the activity that mattered came from the traders in the ‘Other Reportables’ category — but with weekly changes this small, it doesn’t really matter.

The Commercial net short position in silver sits at 402.2 million troy ounces — and since Ted attributed the entire 1,200 contract reduction in the Big 4 traders to JPMorgan, he pegs their short position at the 38,000 contract mark.  And while on that subject, the Big 8 traders are short 50.6 percent of the entire open interest in silver in the COMEX futures market — and that works out to 505.4 million troy ounces.  Net of spread trades, it’s even more than that.

Here’s the 3-year COT chart for silver — and it’s still way up there at nosebleed levels — and is undoubtedly larger after Friday’s trading activity.  Click to enlarge.

In gold, the commercial net short position increased by a very tiny 534 contracts, or 53,400 troy ounces of paper gold.

They arrived at this number by selling 446 long contracts, plus they added 58 short contracts — and the sum of those two numbers is the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by around 200 contracts — and the ‘5 through 8’ large traders increased their long position by 1,400 contracts.  Ted’s raptors did all of the heavy lifting, as they increased their short position by approximately 2,100 contracts.

Under the hood in the Disaggregated COT Report, the numbers were much larger and more significant.  There, the Managed Money traders not only added 2,875 long contracts, they also reduced their short position by 2,511 contracts, for a weekly swing of the sum of those two numbers, which is 5,386 contracts.  The other big change, like in silver, was in the ‘Other Reportables’ category, as they went short to the tune of 6,362 contracts.  The traders in the ‘Nonreportable’/small trader category made up the difference.

The commercial net short position in gold now stands at 21.58 million troy ounces of paper gold, which is basically unchanged from last week’s report.  The ‘Big 8’ traders are short 47.5 percent of the entire open interest in gold in the COMEX futures market, or 25.32 million troy ounces.

Like for silver, it’s a near certainty that the Big 8 traders were there to go short against all comers on Friday, so if this rally in gold is allowed to continue, next week’s COT Report will be pretty ugly.

Here’s the 3-year COT chart for gold — and there isn’t much to see.  Click to enlarge.

With the short positions of the Big 8 traders — and particularly the Big 4 — at or near record levels already, it will be interesting to see how willing they are to pile in on the short side in order to stop this current rally from getting out of hand next week.  The situation is still unresolved in the COMEX futures market — and it remains to be seen if it’s more of the “same old, same old”…or will things turn out differently if some of the traders in the ‘5 through 8’ category are forced to cover in a rising price environment.

I look forward to what Ted has to say about all this in his weekly review which comes out later this afternoon.


Here’s Nick Laird’s “Days to Cover” chart…which I consider to be the most important chart of all in my Saturday column…updated with yesterday’s COT data for positions held at the close of COMEX trading last Tuesday, a week ago today.  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 145 days of world silver production—and the ‘5 through 8’ large traders are short an additional 63 days of world silver production—for a total of 208 days, which is seven months of world silver production, or about 505.4 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 210 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 402.2 million troy ounces.  The short position of the Big 8 traders is 505.4 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 505.4 minus 402.2 = 103.2 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the approximately 34-odd small commercial traders other than the Big 8…are long that amount.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 38,000 contracts, or around 190 million troy ounces, which is down 5 million troy ounces from what they were short in last week’s COT Report.  190 million ounces works out to around 78 days of world silver production that JPMorgan is short.  That’s compared to the 208 days that the Big 8 are short in total.  JPM is short about 38 percent of the entire short position held by the Big 8 traders.

I estimate the short position in silver held by Scotiabank/ScotiaMocatta at approximately 31 days of world silver production minimum, a number that hasn’t changed much in the last while — and that’s most likely because they’re not doing much in the COMEX futures market anymore as they continue to try and sell that ‘pig-in-a-poke’.  JPMorgan has been forced by circumstance to pick up Scotiabank’s trading duties in silver and gold.  So JPMorgan is by far the No. 1 silver short on Planet Earth — and likely to remain that way indefinitely, unless they can engineer the mother of all price declines.

The two largest silver shorts on Planet Earth—JP Morgan and Canada’s Scotiabank—are short about 109 days of world silver production between the two of them—and that 109 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 18 days of world silver production apiece, which is down a hair from last week’s COT Report.  The four traders in the ‘5 through 8’ category are short, on average…15.75 days of world silver production each, which is up a hair from last week’s COT Report.

This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that every changes by any material amount.

The silver short positions of Scotiabank and JPMorgan 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 50.6 percent of the entire open interest in silver in the COMEX futures market — and that number would be around 55 percent once the market-neutral spread trades are subtracted out.  In gold, it’s 47.5 percent of the total COMEX open interest that the Big 8 are short — and something over 50 percent once the market-neutral spread trades are subtracted out.

For more than two months now, the Big 8 have been short a larger percentage of the total open interest in silver, than they have in gold.

In gold, the Big 4 are short 65 days of world gold production, which is unchanged from what they were short last week — and the ‘5 through 8’ are short another 25 days of world production, which is also unchanged from what they were short the prior week, for a total of 90 days of world gold production held short by the Big 8 — which is, of course, also unchanged from what they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 72 percent of the total short position held by the Big 8…which is unchanged from last week’s COT Report as well.  As a matter of fact, all these numbers have remained exactly unchanged for the last four reporting weeks in a row.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 are about 70, 67 and 76 percent respectively of the short positions held by the Big 8.  That number in silver is unchanged from last week’s report, but up 1 percentage point for platinum — and up 2 percentage points for palladium.

I have a decent number of stories for your weekend reading pleasure, including quite a number that, for content and/or length reasons, weren’t suitable for posting during the week — and that includes the Cohen/Batchelor interview.


CRITICAL READS

Tax Cuts for the Rich…Hallelujah! — Bill Bonner

Have we been too cynical?

Yesterday, the House passed its big tax-cut bill. The Dow popped up 187 points on the news. A reporter asked us later: “Will the Dow go to 40,000?

Assuming a tax bill comes through the Senate and out of committee in more or less the same shape, it will be a bonanza for your editor.

We are one of the people who will benefit most (relatively speaking). Most of our income is “pass-through” money from an S corporation… and we need protection from estate taxes.

Thank you, Donald Trump and Paul Ryan!

This long, but delightful commentary from Bill was posted on the bonnerandpartners.com Internet site on Friday sometime — and it’s definitely worth reading.  Another link to it is here.


Doug Noland: “Not Clear What That Means

There is a special place in market hell for long-term price distortions. Given sufficient time, an enterprising Wall Street will ensure a proliferation of new products and strategies meant to profit from upward price trends and ingrained market perceptions. As central banks punished savers and “helped” the markets with low rates, QE and liquidity assurances, The Street ensured an onslaught of enticing new investment vehicles and approaches. Why not just buy a corporate Credit ETF [exchange traded fund] instead of holding zero-rate deposits or T-bills? Of course it’s perfectly rational to own equities index ETFs, especially with central bankers ensuring underperformance by active managers conscious of risk. And after a number of years, with markets booming and economies humming along, don’t fundamentals beckon for participating in the junk bond ETF bonanza?

From my perspective, there are two key areas where central banker-induced market distortions have been precariously exacerbated by (fed and fed by) structural developments. First, the perception of “moneyness” has spurred Trillions of flows into the ETF complex. Indeed, the perception of safety and liquidity has created a structural vulnerability to a destabilizing reversal of flows. Everyone perceives they can easily – and almost instantaneously – get out of the market with a couple mouse clicks. And in a rehash of Wall Street Alchemy, hundreds of billions (Trillions?) of illiquid securities have been intermediated through the ETF complex – transformed into perceived liquid ETF shares. This has been a particularly momentous development for corporate Credit and critical as well for mid- and small cap equities.

A second perilous structural development has been within the Wild West of Derivatives. The perception that there are no limits to what central bankers will do to bolster the markets has fostered an explosion of derivative strategies – variations of writing market protection or “selling flood insurance during a drought”. The availability of cheap risk protection became fundamental to financial excess on a systemic basis.

Doug’s weekly Credit Bubble Bulletin was posted on his Internet site around 2 a.m. EST this morning — and another link to it is here.


Bonfire of the Absurdities — John Mauldin

Vanity of vanities, saith the Preacher, vanity of vanities; all is vanity.”
– Ecclesiastes 1:2, King James Version (attributed to King Solomon in his old age)

This week’s letter will take a look at the growing number of ridiculous, inane, and otherwise nonsensical absurdities that fill the daily economic headlines. I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week.

Wondering if it was just me, I recently sent an appeal to a what became a large number of my friends and fellow writers and analysts, asking for their graphic examples of this paranormal economic activity. Suffice to say, it is not just me who sees absurdities. I received so many responses that I may have to extend this letter another week or two. (Note: This letter will print long, as there are lots of graphs.)

And long it is, but a must read in my opinion.  It appeared on the mauldineconomics.com Internet site yesterday — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


Saudi Retreat From U.S. Oil Market…Cuts Exports to 30-Year Low

For a generation, the huge, whitewashed storage tanks at America’s largest oil refinery in Port Arthur, Texas, have stored almost nothing but Saudi crude.

The plant is owned by Saudi Arabia’s state-run oil company, Aramco, and since it first bought a stake in 1988, the Motiva refinery guaranteed the kingdom a strategic foothold in the world’s largest energy market. The tankers carrying millions of barrels a month of Arab Light crude from Saudi export terminals to Port Arthur were testament to the strength of the energy and political ties binding Riyadh and Washington.

All of a sudden, there are very few Saudi ships arriving in Texas. Since July, Aramco has constricted supply, attempting to drain the crude storage tanks at Motiva — and many others across America — part of a plan to lift oil prices, even at the cost of sacrificing its once prized U.S. market.

While Motiva is most affected, the rest of the U.S. oil refining system, from El Segundo in California to Lake Charles in Louisiana, has also taken a hit. The result: Saudi crude exports into America fell to a 30-year low last month.

The drop is huge,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. in London. “It’s not just that Saudi exports are low, but they have been low for several months.

This interesting Bloomberg article showed up on their website on Monday afternoon — and was updated about eleven hours later.  I thank Brad Robertson for finding it for us — and another link to it is here.


Security Breach and Spilled Secrets Have Shaken the N.S.A. to Its Core

Jake Williams awoke last April in an Orlando, Fla., hotel where he was leading a training session. Checking Twitter, Mr. Williams, a cybersecurity expert, was dismayed to discover that he had been thrust into the middle of one of the worst security debacles ever to befall American intelligence.

Mr. Williams had written on his company blog about the Shadow Brokers, a mysterious group that had somehow obtained many of the hacking tools the United States used to spy on other countries. Now the group had replied in an angry screed on Twitter. It identified him — correctly — as a former member of the National Security Agency’s hacking group, Tailored Access Operations, or T.A.O., a job he had not publicly disclosed. Then the Shadow Brokers astonished him by dropping technical details that made clear they knew about highly classified hacking operations that he had conducted.

America’s largest and most secretive intelligence agency had been deeply infiltrated.

They had operational insight that even most of my fellow operators at T.A.O. did not have,” said Mr. Williams, now with Rendition Infosec, a cybersecurity firm he founded. “I felt like I’d been kicked in the gut. Whoever wrote this either was a well-placed insider or had stolen a lot of operational data.”

The jolt to Mr. Williams from the Shadow Brokers’ riposte was part of a much broader earthquake that has shaken the N.S.A. to its core. Current and former agency officials say the Shadow Brokers disclosures, which began in August 2016, have been catastrophic for the N.S.A., calling into question its ability to protect potent cyberweapons and its very value to national security. The agency regarded as the world’s leader in breaking into adversaries’ computer networks failed to protect its own.

This long essay appeared on The New York Times website back on Sunday — and for obvious reasons, had to wait for today’s column.  I thank Doug Clark for pointing it out — and another link to it is here.


Will America Survive Washington? — Paul Craig Roberts

In recent columns posted on my website, I brought attention to two dramatic and dangerous developments between the two major nuclear powers.

One was the public statement of the deputy commander of the Russian military’s Operation Command at a recent Moscow security conference. Lt. Gen. Viktor Poznihir, Deputy Chief of the Main Operations Directorate of the Russian Armed Forces, stated at the Moscow International Security Conference that the Operations Command of the Russian General Staff has concluded that Washington is preparing a nuclear first strike on Russia.

The other is the report that the U.S. is collecting Russian DNA for the U.S. Air Force weapons laboratory, the implication being that the U.S. intends to research if a bio-weapon can be created that only targets Russians.

As far as I can ascertain, neither of these startling developments were reported in the U.S. media. One would think that the White House would have been on the telephone to Putin giving reassurances that the U.S. is not planning a surprise nuclear attack on Russia. One would think that the publication of US contracts for Russian DNA and Putin’s public statement about it would have immediately resulted in President Trump ordering a halt to the Russian DNA project.

But not a peep.

Instead, the morons ruling us are content to send two back-to-back messages to Russia that we intend to wipe out Russia.

Can you imagine anything more reckless and irresponsible than to convince a nuclear power that you have targeted them for destruction?

This link-filled must read commentary from Paul was posted on his Internet site on Monday — and is another article that had to wait for my Saturday missive.  It comes courtesy of reader M.A. — and another link to it is here.


Debunking two American myths — The Saker

There are two myths which are deeply imprinted in the minds of most Americans which are extremely dangerous and which can result in a war with Russia.

  • The first myth is the myth of the U.S. military superiority.
  • The second myth is the myth about the U.S. invulnerability.

I believe that it is therefore crucial to debunk these myths before they end up costing us millions of lives and untold suffering.

In my latest piece for the Unz Review I discussed the reasons why the U.S. armed forces are nowhere nearly as advanced as the U.S. propaganda machine would have us believe. And even though the article was a discussion of Russian military technologies I only gave one example, in passing, of Russian military technologies by comparing the T-50 PAKFA to the U.S. F-35. First, I am generally reluctant to focus on weapons systems because I strongly believe that, in the vast majority of real-world wars, tactics are far more important than technologies. Second, Andrei Martyanov, an expert on Russian military issues and naval warfare, has recently written two excellent pieces on Russian military technologies which gave many more examples. Having read some of the comments posted under Martyanov’s and my articles, I think that it is important, crucial, in fact, to drive home the message to those who still are thoroughly trained by the propaganda machine to instantly dismiss any notion of U.S. vulnerability or, even more so, technological inferiority.

I am under no illusion about the capability of those who still watch the idiot box to be woken out of their lethargic stupor by the warnings of Paul Craig Roberts, William Engdal, Dmitrii Orlov, Andrei Martyanov or myself. But I also think that we have to keep trying, because the war party (the Neocon Uniparty) is apparently trying really hard to trigger a conflict with Russia. So what I propose to do today is to connect the notions of “war with Russia” and “immediate and personal suffering” by showing that if Russia is attacked…two of the most sacred symbols of the USA, aircraft carriers and the U.S. mainland itself, would be immediately attacked and destroyed.

This longish commentary by the Saker is definitely worth reading if you have the interest.  It was posted on thesaker.is Internet site a week ago Friday — and is another article that had to wait for today’s column.  I thank Larry Galearis for bringing it to our attention — and another link to it is here.


USA strangles Europe with Russian gas

The anti-Russian hysteria that reached its peak in the form of the July package of U.S. draconian sanctions against the Russian Federation, is now gaining momentum in European countries. Donald Tusk, the chief of the European Council, openly urged E.U. leaders to take prompt measures to block the construction of the Nord Stream-2 natural gas pipeline.

The European Commission passed amendments to the Gas Directive, which excludes the need for new pipelines, because by 2030, due to the reduction of domestic production and the consumption of fuel, the volume of gas imports to the E.U. will allegedly not increase. Moreover, even if the Nord Stream-2 is built, Brussels intends to deprive Russia’s Gazprom of the monopoly right to manage this pipeline as the Russian giant will not be able to transport and sell gas to European consumers at the same time.

In November 2016, the European Commission withdrew the Nord Stream-1 gas pipeline from the Third Energy Package. However, in case of Nord Stream-2, Brussels intends to apply stringent conditions of European energy legislation. In addition, Washington tries to block the project completely, because of the intention to transport U.S. liquefied natural gas.

The U.S. and the E.U. are doing the above to save Ukraine from imminent collapse in the field of energy. If Nord Stream-2 is launched, Ukraine will lose huge revenues from the transit of Russian natural gas to Europe. Another goal is to weaken Gazprom’s position in the European market and prepare conditions for the American LNG to enter the market. The problem is that LNG terminals in Europe are capable of accepting small amounts of gas.

The European Commission takes a tougher stance on the Nord Stream-2 project due to the results of the September elections to the Bundestag that weakened Chancellor Angela Merkel’s supporters in the parliament, who supported the idea of building the new gas main. The “Greens” are going to block the project.

This very interesting article, which loses something in the translation from Russian to English, put in an appearance on the pravdareport.com Internet site on Tuesday — and had to wait for today’s column.  I thank reader M.A. for his second contribution of the day — and another link to it is here.


Tales of the New Cold War: Russiagate threatens both nuclear superpowers — Stephen F. Cohen and John Batchelor

Part 1:  Batchelor’s introduction this week introduces the concept of the Democrat use of Russiagate as a weapon “in order to nationalize the 2018 mid term elections”. What the goals are for the Democrats, he explains, are to motivate voters to support them over the Republicans. So the balls are all still in the air – and impeachment hearings may be the ultimate goal. Cohen agrees and says it segues with what he wants to talk about, that in his mind Trump is “leading bravely and wisely in terms of national security” while the opposition “calls it treason”. Trump’s visit to Southeast Asia is then mentioned as revealing a significant incident when Putin personally met with Trump and denied the Russian intervention in the election, and for Cohen this was historical in that both acknowledged sincerity in the other. Cohen considers this a courageous act for Trump. After all his opposition is accusing him of treason. And Cohen goes on to discuss how bizarre his opposition is in the historical sense with allegations of treason openly stated that are openly seditious. They also discussed Syria, North Korea and Ukraine. Trump found agreement with the Russians on Syria, that Russia was a necessary partner for the United States, and he even publicly questioned the level of Russian sanctions. Cohen states that Trump has “serious doubts” about the validity of Russiagate.

There is much more to this discussion revealed in the podcast, but we should know how important it was that these two leaders could talk candidly, and reveal that what Russiagate meant to Trump’s opposition in Washington was not the same as what Trump believed. Trump was his own man and stood for what he felt (knew?) to be the truth. This is immensely important for Putin who is increasingly fearful of the Russiagate hysteria contributing to an attack on Russia, and it is to Trump’s credit that he realized the same thing and had the courage to state that his original stated goals in his election platform were still his goals. He is, after all, being routinely accused of being a traitor. One could even suspect that Trump has been listening to the John Batchelor Show.

Part 2:  Batchelor continues with Trump’s astonishing public statement: “U.S. intelligence agencies are composed of hacks”. And Cohen elaborates here that the reference was about Obama’s choices as heads of these agencies that are/were abusing their positions and using their influence for political opposition against him. The new CIA director, Pompeo, Trump’s man, was sent last month by Trump to meet William Benny who was a member of Veterans Intelligence Professionals for Sanity to find out the truth about the DNC “hack”. Cohen theorizes that Trump was telling the opposition that he was now aware of those shenanigans – and then declared the presence of corrupted Intelligence heads. And the hysteria and attacks ratcheted up in the Russiagate camp. Cohen, as a result, now considers Russiagate as the number one threat to American national security and discusses his reasons. Batchelor then introduces the item that President Macon of France also supports Trump’s view of Russia, and that the alienation of Russia is very bad for the E.U. Batchelor also opines that Russiagate is not good for the U.S. economy as well, and that for the Democrats “there will be an accounting”.  Cohen agrees, and states that Russia has not suffered greatly under the sanctions. But continuing with his national security argument, Cohen, acknowledges a Hillary Clinton component, and a third consideration to it that Trump is basically not in control of foreign policy. (Putin would know this too, L.). Trump’s battle is not won; it is only declared. And Cohen also wants to know to what extent the Intelligence Community is compromised in supporting Russiagate.

This weekly audio interview from Tuesday is in its usual two parts…each about twenty minutes long.  As always, I thank Larry Galearis for his very excellent executive summary — and also I thank Ken Hurt for providing the links.   Part 1 is linked in the headline above — and here.  And the link to Part 2 is here.


Turkey abandons NATO drill over portrayal as the enemy

Turkey has pulled all 40 of its troops out of a NATO exercise in Norway over an alleged insult to its political leaders.

Reports said that an image of the “enemy” in the mock exercise was actually a photo of modern Turkey’s founder, Mustafa Kemal Ataturk.

Turkish media also reported that a fake social media account in the name of President Recep Tayyip Erdogan was used to send anti-NATO messages.

Norway’s Defence Minister Frank Bakke-Jensen issued a statement of apology for the incident, which he blamed on a single individual.

This story showed up on the bbc.com Internet site yesterday sometime — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.


Certain parties” linked to Syrian War sabotaging gas deal with Russia – Lebanon’s Foreign Minister

Lebanon’s Foreign Minister Geral Bassil is in Moscow where he has spoken of elements within Lebanon attempting to sabotage joint initiatives and cooperative agreements with Russia.

Bassil who is a member of President Michel Aoun’s Free Patriotic Movement has stated the following to Russian journalists,

We are about to conclude the first in the history of our country agreement with Russia on shell gas exploration. And now we see an attempt to hinder this effort. Certain parties are trying to intimidate Lebanon.

    We hope that Russia will continue building up its influence in the Middle East in order to form a balance of powers in the region“.

He continued, offering an obvious criticism of Saudi Arabia, although refusing to name it.

Bassil affirmed that he looks forward to expanding Lebanon’s relationship with Russia, while praising Russia’s constructive position in the region. During his official visit to Moscow, Bassil also praised Hezbollah. He said,

Hezbollah defended Lebanon against ISIS terrorist when the government and army failed to do so.”

This news item by columnist Adam Garrie put in an appearance on theduran.com website at 5:51 p.m. EST on Friday afternoon — and I thank Larry Galearis for sending it our way.  Another link to it is here.


A ZioWahabi attack on Hezbollah and Iran? — The Saker

The following is only my speculation and nothing more. I have no way of knowing what the Axis of Kindness (USA-Israel-KSA) as come up with, but I feel that I can take an educated guess. For one thing, this is nothing new. The Saudis and the other Gulf states have in the past made noises about intervening in Syria and we know that the Saudis have intervened in Bahrain and Yemen. As for the Israelis, their record of (completely illegal) military interventions is so long that we can safely assume that the Israelis will be involved in *any* ugly or evil plan to late the region to waste. The main problem for the Saudis and the Israelis is that they have bad armies. Expensive ones – yes. High-tech ones – yes. But their problem is that their only true area of expertise is massacring defenseless civilians, that they are real experts at. But in terms of real warfare, especially against truly formidable adversaries like the Iranians or Hezbollah, the “ZioWahabis” (what a combo!) don’t stand a chance and they know it (even if they never admit it). Imagine how frustrating that must be: you basically control the USA which you have turned into a vassal-state, you spent billions and billions of dollars in equipping and training your bloated armed forces, but at the end of the day the Shias are just laughing in your face. And, for some reason you cannot fathom, every time you try to “teach them a lesson”, it is you who has to crawl back home in total shame to lick your wounds and try to hush up the magnitude of your defeat. That hurts, badly. So a plan to make the Shias pay for it had to be concocted. Here is what I think it will be.

First, the goal will not be to defeat Hezbollah or Iran anywhere. For all their racist rhetoric and hubris, the Israelis know that neither they nor, even less so, the Saudis have what it would take to seriously threaten Iran, or even Hezbollah. But their plan is, I think, much cruder: to trigger a serious conflict and then force the USA to intervene.

I have written many articles explaining that the U.S. military does not have the means to win a war against Iran. And that might be the problem here: the U.S. commanders know full well that and they are therefore doing whatever it takes to tell the Neocons “can’t do, so sorry!” (that is the only reason why a U.S. attack on Iran has not happened yet). From an Israeli point of view, this is totally unacceptable and the solution is simple: simply force the USA into a war they really don’t want. After all, who cares how many U.S. goyim will die? As for the Iranians, the goal of a Israeli-triggered U.S. attack on Iran would not be to defeat Iran, but only to hurt it, very very badly. That is the real goal. As far as the Israelis are concerned, not only don’t they give a damn about how many non-Jews will die as long as their Master Race benefits from it. Simply put: to them we are only tools, tools capable of thought, but tools nonetheless. That is also how Neocons view us, of course. In fact, I can just about imagine the glee of the Israelis seeing the Shia and Sunni Muslims are killing each other. Throwing in a few Christians only makes it even better.

This opinion piece — and that’s what it is — was posted on thesaker.is Internet site yesterday — and it’s the second offering in a row from Larry Galearis.  Regardless of its speculative nature, it’s certainly worth reading if you have the interest, but should be viewed in that light.  Another link to it is here.


Gold/Silver Price Management Scheme Will End “Spectacularly and Suddenly” — Ed Steer

I had an audio interview with Mike Gleason at the Money Metal Exchange on Wednesday.  It ran for about thirty minutes, but I note from the length of the audio clip that it’s been edited.

It was posted on their website on Friday — and the interview itself starts at the 5:20 minute mark.  There’s also a full transcript as well.


India gold prices flip to discount as wedding demand underwhelms

Gold prices in India traded at a discount for the first time in six weeks as the key wedding season failed to spur fresh demand, while high prices curbed appetite for the precious metal in major Asian centres except China.

Gold is considered an essential part of weddings in India, the world’s second-biggest consumer after China, and it is a popular gift for special occasions.

Dealers in India were offering a discount of up to $2 an ounce this week over official domestic prices, compared to a $2 premium last week.

After Diwali festival, the market relies on wedding season demand. This year, it has been weak so far. Retail purchases are lower than normal,” said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.

Since retail demand is weak, jewellers are not restocking. They are waiting for a price correction,” said a Mumbai-based dealer with a private bank.

This gold-related Reuters story, co-filed from Mumbai and Bengaluru at 2:49 a.m. EST on Friday morning — and was subsequently updated about three hours later.  I found it on the Sharps Pixley website — and another link to it is here.


Diamond fetches $33.7 million at Christie’s auction in Geneva

The colourless diamond was taken from a 404-carat stone found in Angola.

The finished piece is made from white gold, diamond and emeralds.

The necklace was designed by Swiss jewellery maker de Grisogono and took more than 1,700 hours to make, Christie’s said.

It went under the hammer at Geneva’s Four Seasons Hotel following a series of public viewings in Hong Kong, London, Dubai and New York.

The necklace, named The Art of de Grisogono, sold for $33.5m – $29.5m plus $4m premium – exceeding pre-sale predictions of $30m.

This brief, but very interesting news item, with an excellent 53-second video clip embedded, appeared on the bbc.com Internet site on Tuesday — and I thought I’d save it as ‘click bait’ for today.  It comes to us courtesy of Swedish reader Patrik Ekdahl — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is a blood pheasant — and I must admit that I’d never heard of it before last night when I was working on today’s column.  This relatively small, short-tailed pheasant is widespread and fairly common in eastern Himalayas, ranging across India, Nepal, Bhutan and China. It was the national bird of the former Kingdom of Sikkim — and remains Sikkim’s state bird.


The WRAP

Today’s pop ‘blast from the past’ dates from 1965…which is now 52 years ago if you’re doing the math.  They were part of the ‘British Invasion’ that swept through North America during that decade.  The intro to the tune is kind of kitschy, but the song never grows old.  The link to this black and white youtube.com video is here.

Today’s classical ‘blast from the past’ is one I’ve posted before, but it’s been a few years — and it’s certainly time for a revisit.  It’s Nikolai Rimsky-Korsakov‘s “Scheherazade” which, without doubt, his is most popular composition — and to hear it performed live with a full orchestra, is an emotional experience like no other.  This youtube.com video staring the Vienna Philharmonic, with the incomparable Valery Gergiev conducting, is the next best thing.  It’s had 9.4 million views, so this is as good as it gets.  The link is here.


It was a rather amazing trading session on Friday.  After killing the morning rally in Far East trading stone cold dead on a plunging dollar index, ‘da boyz’ allowed the precious metals to rise almost unimpeded during the COMEX trading session in New York yesterday, as the dollar index chopped quietly lower.  They certainly stepped in a few minutes before the COMEX close as the markets were about to go ‘no ask’…as liquidity appeared to be drying up.

The gold price was allowed to close just above its 200-day moving average — and both silver and platinum blew through, then closed above their respective 50 and 200-day moving averages.  Based on that price activity, it’s pretty much a given that the Managed Money traders were going long and covering short positions as and when these moving averages fell — and that certainly forced the JPMorgan et al to go short against them.  It’s also a strong possibility that Ted’s raptors, the 34-odd smaller commercial traders were selling some of their long positions for fat profits as well.

If they hadn’t, the closing prices of all four precious metals would be the ‘talk of the town’ this weekend.  And on a parallel subject, I’m sort of wondering how big the margin call was at Scotiabank/ScotiaMocatta yesterday, plus the other Big 7 traders.

Here are the 6-month charts for all four precious metals, plus copper, once again — and they’re far more interesting to look at today, then were during the rest of the week.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

Although I was certainly delighted with yesterday’s price action, it still remains to be seen if this the start of a rally that grows some legs or not, so I’m not prepared to ‘high 5’ anyone just yet.  We’ll have to wait to see what next week brings — and I’ll be particularly interested in what happens when the markets open in the Far East on their Monday, starting at 6:00 p.m. EST on Sunday evening in New York.

As Ted has been going on about for as quite some time now, this attempted engineered price decline that began back in early September has not been going as well as ‘da boyz’ had hoped.  Not only have they not been able to cover much of their current grotesque short positions, their food supply…the Managed Money traders…is being eaten by far more nimble traders that are stepping in front of them as they attempt to engineer prices lower.

This leaves open the possibility that they are a spent force in the COMEX futures market, but as I said before, it’s a bit early to assume that.  But it’s obvious after trading in New York ended yesterday that not only haven’t they been able to cover any significant portion of their short positions, but were forced by circumstance to add to them significantly on Friday.  Just looking at the change in open interest in Friday’s Preliminary Report showed a huge 30,000+ contract increase in total open interest — and a very decent increase in silver’s total o.i. as well.

So until there’s a bit more water under this particular bridge, I’m not prepared to speculate further on what may or may not happen in the days ahead.  But, like you, I’ll be watching with keen interest to see if some of the commercial traders will be forced to cover during rising prices — and if that turns out to be the case, then the fox will truly be amongst the pigeons.

So we wait some more — and I’ll certainly be looking forward to what Ted has to say about all this in his weekly review this afternoon.

As for what’s going on in the world economically, financially and monetarily…no better answer to those questions is contained in the headline to the John Mauldin piece in today’s column.  It has all become, as he so correctly puts it, the “Bonfire of the Absurdities“.

The central bankers of the world, along with the bullion banks in New York are certainly standing their ground.  However, I think that they’ll soon discover that the ground is about to shift under their feet — and there won’t be a damn thing they can do about it when it does.

It’s entirely possible that Friday’s price action in the precious metals was a foreshock of that event — and the best we can do is sit back and watch to see how things unfold.

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

Ed