Ted Butler: Life Under Manipulation

25 November 2017 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


It was another quiet trading for gold.  The low of the day, such as it was, came at 11:30 a.m. in London — and it began to edge unevenly higher from there.  It made it back to unchanged on the day at, or shortly before, the afternoon gold fix in London — and was sold quietly lower — and back to its 50-day moving average — until London closed at 11 a.m. EST.  The gold price didn’t do a thing after that — and the after-hours market closed early…just before 2 p.m.

The low and highs definitely aren’t worth looking up.

Gold finished the Friday session in New York at $1,287.90 spot, down $2.70 from Thursday’s close.  Net volume on Friday was pretty light at something under 137,000 contracts

Silver traded a handful of pennies above unchanged all through Far East trading — and was still up a penny or so at the 10:30 a.m. GMT morning gold fix in London.  Once that was put to bed, the silver price was sold sharply lower — and back below $17 spot briefly.  By the noon GMT silver fix, it was back at $17 spot — and it chopped a few more pennies higher until the equity markets opened at 9:30 a.m. EST in New York.  It shot higher from there — and back above unchanged on the day, but ran into JPMorgan et al within minutes.  Once the afternoon gold fix was done, the silver price was sold back to $17 spot — and a bit below.  But it popped back above that mark by a penny or two just before the COMEX close.

The high and low ticks in this precious metal aren’t worth looking up either.

Silver was close in New York yesterday at $17.01 spot — and down 6 cents from Thursday  — and back below its 50-day moving average by a few pennies.  Net volume was exceedingly light at a bit under 29,000 contracts.

The platinum price was up 6 bucks by shortly after 11 a.m. China Standard Time on their Friday morning.  From that point it was sold unevenly lower to its $932 low tick of the day, which came shortly after 11 a.m. in Zurich.  It was bounced off that price a few times until about 8:30 a.m. in New York.  At that juncture it began to head higher.  An attempt was made to cap it just before 10 a.m. EST at the afternoon gold fix, but it powered higher through that — and the $942 spot high tick came a noon in New York.  It didn’t do a thing after that, finishing the day at $941 spot — and up 8 dollars from Thursday’s close.

The palladium price traded ruler flat in morning trading in the Far East on their Friday, but was sold back to the $1,000 spot mark by the Zurich open.  It traded at that price until a few minutes before 2 p.m. CET — and then the selling pressure appeared.  The $987 low tick was set at 1 p.m. in New York — and it recovered a couple of bucks before the markets closed for the day.  Palladium finished the Friday session at $989 spot — and down 14 bucks from Thursday.  This foray above the $1,000 spot mark certainly wasn’t allowed to last long.

The dollar index closed very late on Thursday afternoon in New York at 93.12 — and made a couple of minor attempts to rally once trading began at 6:00 p.m. EST in New York on Thursday evening.  It made it up to the 93.25 mark, its high tick of the day, minutes before 3:30 p.m. CST on their Friday afternoon.  Then the long slide began, with the 92.67 low tick coming about twenty minutes after the London close…about 11:20 a.m. in New York.  It rallied weakly until a few minutes before 1 p.m. EST — and didn’t do much of anything after that.  The dollar index finished the day at 92.76 — down 36 basis points from Thursday’s close.

And here’s the 6-month U.S. dollar index chart — and Friday’s doji contains Thursday’s trading data as well.

The dollar index is down about 240 basis points since around November 7 — and the gold price isn’t even up ten bucks.  That’s how carefully precious metal prices, particularly gold and silver, are being managed.

As I’ve said on a number of occasions in the last six months, this appears to be a controlled devaluation of the U.S. dollar that began back at the start of January.  The dollar index is down a monstrous 1,100+ basis points since January 1 — and the gold price has only been allowed to rise by 12 percent — and silver by less than 7 percent.

The gold shares gapped up a bit at the open, only to be met by a wave of selling.  There was a respite between 10:30 and 11 a.m. in New York trading, before the sell-off recommenced.  The markets closed at 1:00 p.m. EST — and at that point the HUI was down 0.70 percent.

The silver equities traded in a mostly similar manner, except Nick Laird’s Intraday Silver Sentiment/Silver 7 Index dropped by 0.96 percent.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index chart.  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 the precious metal equities managed small gains on the week, despite the fact that both silver and gold were down over that time period.

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.  The terrible share price action in the silver equities hasn’t been helped by the poor earnings coming out of the major silver producers — and that has certainly been a drag on the Silver Sentiment/Silver 7 Index.  Of course that won’t change until we have higher prices…a real ‘Catch 22’ situation if I ever saw one.


The CME Daily Delivery Report showed that zero gold and 1 silver contract was posted for delivery within the COMEX-approved depositories on Tuesday.  Morgan Stanley issued — and ADM stopped.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session, which includes Thursday’s as well, showed that gold open interest in November declined by 11 contracts, leaving just one left.  Wednesday’s Daily Delivery Report showed that 11 gold contracts were actually posted for delivery on Monday, so those numbers work out fine — and we await delivery of that last gold contract.  Silver o.i. in November increased by 1 contract, leaving 1 left to deliver, minus the 1 mentioned in the previous paragraph — and that’s out for delivery on Tuesday.  For the most part, November deliveries are done.

Gold and silver open interest in December are still very chunky, but as I said a day or two ago, the vast majority of that will be gone by December’s first notice day — and those numbers will show up on the CME’s website around 10 p.m. EST on Wednesday evening.  A clearer picture of December deliveries won’t be know with any real certainty until Thursday.


There was no reported change in GLD on Friday, but there was another withdrawal from SLV, as an authorized participant took out 943,834 troy ounces.  Regardless of the circumstance of its removal from this ETF, it’s a reasonable assumption the JPMorgan owns it now.

There was no sales report from the U.S. Mint on Friday.

Month-to-date the mint has sold 8,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 295,000 silver eagles.  There is no retail bullion market worthy of the name at the moment.

The Royal Canadian Mint final got around to posting their Q3/2017 report on their website yesterday — and with this report, it’s becoming more and more obvious that they’re couching their retail bullion sales in fewer words — and in more generalities.  All I could find was one paragraph, plus a chart on what’s happening vis-à-vis gold and silver maple leaf sales — and this time those words were nowhere to be found.  But from my previous conversations with the mint on this issue, it’s an excellent bet that most of the sales are silver and gold maple leafs and, not surprisingly, they’re down substantially once again.

Here’s a snip from the Page 8 of their third quarter report — and if you want to read the rest of the 40-page document, the link is here.  The ‘click to enlarge‘ feature helps a bit with snip below.

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  There was 56,146 troy ounces received over at HSBC USA — and there was 6,012.050 troy ounces/187 kilobars shipped out of Canada’s Scotiabank.  The link to that activity is here.

In silver, there was one truck load…598,157 troy ounces…received at Brink’s, Inc. — and one good delivery bar…987.000 troy ounces…was shipped out of Delaware.  The link to that is here.

It was a fairly busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  There were 5,431 received — and 1,152 shipped out.  As per usual, all of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


In case it had skipped your mind, there was no Commitment of Traders Report yesterday because of Thanksgiving in the U.S.  The report will appear on the CFTC’s website at 3:30 p.m. EST on Monday — and I’ll have all the details for you in my Tuesday column.


Here are two charts that Nick Laird slid into my in-box just as I was about to post today’s column — and since I don’t have any COT/Days to Cover charts in today’s column, I thought I’d slide them in here.  They show the weekly transparent gold holdings of all known depositories, mutual funds and ETFs as of the close of business on Friday.  The gold holdings continue to creep higher — and silver inventories are flat.  Click to enlarge for both charts.

I have an average number of stories today, including one repeat — and that’s the Cohen/Batchelor interview, this time with the usual executive summary from Larry Galearis.  There was no commentary from Doug Noland this weekend.


CRITICAL READS

A Bedtime Story — Bill Bonner

We are explaining our money system to our grandson, James, now 14 months old…

His mother tries to get him to go to bed at 9 p.m. But the little boy’s internal clock is still on Baltimore time; it tells him it is much too early to go to sleep.

Grandpa takes over, drawing out the monetary system like a general spreading a map on a field table. “Here is the enemy,” he says gravely. “They have us completely surrounded. We’re doomed.”

James grumbles. He squirms. He has a sunny, optimistic temperament. But we think our explanations are sinking in.

He seems to understand…that money is not wealth; it just measures and represents wealth, like the claim ticket on a car in a parking garage — and that our post-1971 money system is based on fake money that represents no wealth and measures badly.

This amusing, but deadly serious commentary by Bill appeared on the bonnerandpartners.com Internet site yesterday — and another link to it is here.


British Banks Brace for Grades in Toughest Stress Tests Yet

U.K. banks are bracing themselves for their grades in the toughest round of stress tests yet, with the fate of their dividends and strategies at stake as the Bank of England models how the seven largest British lenders will cope in another crisis.

On Tuesday the central bank will reveal how they fared in a scenario that includes sharp declines in global and domestic growth, the pound losing a quarter of its value, and deep consumer loan losses driven by surging interest rates and unemployment. While analysts forecast all will overcome the basic hurdle rate — which differs between banks — the results will reveal how much spare capital they can return to investors.

This year’s examination “combines a more severe stress scenario and higher capital hurdles,” making it the strictest so far, Goldman Sachs Group Inc. analysts led by Martin Leitgeb said in a Nov. 22 note. The focus will be on Barclays Plc, Lloyds Banking Group Plc and Standard Chartered Plc because they are all trying to increase or restart dividend payments, they said.

Responding to the aftershocks of the financial crisis, four years ago the BOE started annual health checks of the banking system, theorizing what the results could be from increasingly severe economic and geopolitical shocks. Royal Bank of Scotland Group Plc, still owned by taxpayers after a bailout in 2008, failed last year’s test and was forced to bolster capital. Barclays and Standard Chartered had some capital inadequacies, but neither was required to submit a new plan as they were deemed to be on the right track.

This story showed up on the Bloomberg website at 10:00 p.m. Denver time on Thursday evening — and was updated about 4 hours later.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.


Tales of the New Cold War:  Five things more perilous to the U.S. than Russia — John Batchelor interviews Stephen F. Cohen

Part 1:  John Batchelor opens the discussion with the President Trump, President Putin phone call  and its significance. Obviously a follow up to his statements after his earlier meeting in Vietnam, it signals earnestness for the leaders to have a diplomatic relationship and it is an important event. The Kremlin reports the subjects included Syrian peace talks, the U.N. peace process position, solving the refugee situation in Europe and Syria. But both pundits acknowledge that the domestic politics in Washington have stifled the attention this story deserved. The reason for this is the U.S. MSM which continues to echo the U.S. position that Russia is the major existential threat to the country, and Cohen delves into the dialectical history of the process since the end of the Soviet Union. How did the U.S. get from Clinton’s Yeltsin relationship, seen as partnership, to the existential threat today? Cohen maintains Russia does not even reach number five of his top threats to American national security. The list is: 1. Russiagate, 2. demonizing Putin, 3. terrorists with radioactive material, 4. nuclear arms club, 5. climate change and income inequality. Batchelor wanted this discussion also to include the devolution of diplomacy and discussion over this period. (Note that my bare bones approach to this complicated discussion is meant to encourage careful listening by readers.)  Number one, Russiagate is Cohen’s first choice as the most serious threat. The reason for this is that a president’s first duty as a president is diplomacy. If disallowed for any reason, the risk is grave. There follows next a discussion from Batchelor and details of how Russiagate has limited this diplomacy and the censorship and hysterical spin has kept Americans uninformed, confused or alienated.

Part 2:  Cohen’s second contender for the major national security concern resides in the personification of someone to hate for the public. Cohen states that citizen nationals need a “bad guy” to focus on. Putin, as a high profile world leader, had to fill that role, and Cohen maintains he was given that personal involvement in Russiagate for this reason. This is easily done in a censored press, and with a people kept ignorant for generations. Terrorism using nuclear materials is number three on Cohen’s list. So called “dirty bombs” are a nightmare of worry for both governments, and Russia’s security expertise is being wasted through damage by Russiagate.  The fourth concern on the list involves the proliferation of nuclear weapons. The fifth involves cooperation with climate change and addressing the politics of poverty that contribute to unstable countries and extremism in national populations. Russia and China are already doing much to change the economic conditions with its New Silk Road program and the U.S. is losing prestige in opposing it.  Cohen also comments on why Russia and China should not be seen as enemies according to a recent Rasmussen Poll. According to the poll 52% of Americans do not consider Russia an enemy and wish a cooperative relationship. There is also a large percentage of undecided listed as well, and Cohen makes the point that Russiagate for American citizens has not been a success.

The Hillary Clinton component to Russiagate has provided a strong element of inertia to the campaign. My speculation is that the Russiagate accusations remain in the news as a theme that has gone the bridge too far politically. There are two separate issues related to Hillary, her broad based criminality and ironically her own criminal manipulations in the election that have fuelled this chaos and may be fuelling it still. The facts are coming out, and yet are being shouted down with the dogma of Russiagate by the press. How does Washington deal with the revelation that their electoral system has become this corrupt, and it can put a Hillary Clinton in the White House? The attack on Trump, equally squalid, is but another neon sign that Americans have lost the control of their own government. The result seems to be a media and a government that has become ideological on a war footing at the expense of its own credibility. If Hillary is ever charged with a fraction of the crimes that have helped stage this chaos, the political damage may be too much to contemplate for those that have invested in the present system. Perhaps it would not be remiss to include an increasingly hostile American public to its own central government as a sixth national security concern.

I thank Larry Galearis for his very excellent executive summary — and Ken Hurt for providing the links earlier this week.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


Syria war, Sochi peace — Pepe Escobar

The main take away of the trilateral, two hour-long Russia-Iran-Turkey summit in Sochi on the future of Syria was expressed by Russian President Vladimir Putin:

The presidents of Iran and Turkey supported the initiative to convene an All-Syrian Congress for national dialogue in Syria. We agreed to hold this important event at the proper level and ensure the participation of representatives of different sectors of Syrian society.”

Diplomatic sources confirmed to Asia Times much of the discussions in Sochi involved Putin laying out to Iran President Hassan Rouhani and Turkey President Recep Erdogan how a new configuration may play out in a constantly evolving chessboard.

Behind diplomatic niceties, tensions fester. And that’s how the current Astana peace negotiations between Russia-Iran-Turkey interconnect with the recent APEC summit in Danang.

In Danang, Putin and Trump may not have held a crucial bilateral. But Sergey Lavrov and Rex Tillerson did issue a joint statement on Syria – without, crucially, mentioning Astana; instead, the emphasis was on the slow-moving U.N. Geneva process (a new round of talks is scheduled for next week).

An extremely divisive issue – not exactly admitted by both parties – is the presence of foreign forces in Syria. From Washington’s perspective, Russian, Iranian and Turkish forces must all leave.

But then there’s the Pentagon, which is in Syria without a U.N. resolution (Russia and Iran were invited by Damascus).

This very worthwhile commentary by Pepe was posted on the Asia Times website at 5:50 a.m. HKT on their Friday morning, which was 4:50 p.m. on Thursday afternoon in Washington — EDT plus 13 hours.  It comes to us courtesy of U.K. reader Tariq Khan — and another link to it is here.


Russia slams U.S. “occupation” of Syria after reports suggest the U.S. will not leave Syria

Russian Foreign Ministry Spokesman Maria Zakharova has slammed a report from the Washington Post which claims the U.S. is planning to stay in Syria for “years” in an attempt to occupy and destabilise the country using the ethno-nationalist ambitions of their Kurdish proxies as a flimsy ‘justification’. This is something which was categorically rejected by the members of the Astana Group which includes Russia, Iran and Turkey.

Today Zakharova stated in response to the report,

They are there not only without permission from Damascus, but also in direct violation of the wishes of the Syrian government. In fact, what they are doing could be described as occupation”.

She further stated,

U.S. Defense Secretary openly said on November 13 that the American troops will not leave Syria until progress is made with a political resolution. The conditions of which, we presume, the U.S. wants to dictate arbitrarily.

    We have noted on numerous occasions that such statements cast a serious doubt about what the true goals of the U.S.-led coalition are in Syria”.

This very interesting, but not entirely surprising news item was written by columnist Adam Garrie — and posted on theduran.com Internet site at 10:03 p.m. EST on Thursday evening — and I thank Larry Galearis for pointing it out — and another link to this worthwhile article is here.


Sudan’s president visits Russia, tells Putin: “We need protection from the U.S.

Sudan has reached an agreement with the Russian Defense Ministry on assistance in upgrading its armed forces, President Omar al-Bashir said at a meeting with Russian President Vladimir Putin on Thursday in Sochi.

Sudan finds the situation in the Red Sea worrisome, al-Bashir said, adding that “U.S. interference in these affairs is also a problem,” TASS reports.

The Sudanese president said that U.S. intervention was “to blame for Sudan’s split” into two states.

As a result we need protection from aggressive actions by the U.S. We believe that what is happening in Syria now is an effect of U.S. interference.”

This RT news story was picked up by the russiafeed.com Internet site on Friday sometime — and I thank Roy Stephens for bringing it to our attention.  Another link to it is here.


The U.S./Saudi Starvation Blockade — Patrick Buchanan

Our aim is to “starve the whole population — men, women, and children, old and young, wounded and sound — into submission,” said First Lord of the Admiralty Winston Churchill.

He was speaking of Germany at the outset of the Great War of 1914-1918. Americans denounced as inhumane this starvation blockade that would eventually take the lives of a million German civilians.

Yet when we went to war in 1917, a U.S. admiral told British Prime Minister Lloyd George, “You will find that it will take us only two months to become as great criminals as you are.”

After the Armistice of Nov. 11, 1918, however, the starvation blockade was not lifted until Germany capitulated to all Allied demands in the Treaty of Versailles.

As late as March 1919, four months after the Germans laid down their arms, Churchill arose in Parliament to exult, “We are enforcing the blockade with rigor, and Germany is very near starvation.

So grave were conditions in Germany that Gen. Sir Herbert Plumer protested to Lloyd George in Paris that morale among his troops on the Rhine was sinking from seeing “hordes of skinny and bloated children pawing over the offal from British cantonments.”

This absolute must read commentary by Patrick showed up on his Internet site on Thursday night 11:44 p.m. EST — and I found it over at Zero Hedge.  Another link to it is here.


Rand Faces Test on Looming Risk of South Africa Junk Rating

Already bruised by political and budget troubles, the rand faces its next crucial test in less than 24 hours: reviews by two ratings companies.

S&P Global Ratings and Moody’s Investors Service are reviewing the country’s credit ratings Friday, and nine of 16 economists surveyed by Bloomberg expect the former to deliver a cut to the nation’s domestic debt. Four see a similar action by Moody’s. A demotion to sub-investment grade by both agencies will result in South Africa’s exclusion from Citigroup Inc.’s World Government Bond Index, hurting demand for the nation’s currency and bonds.

The rand slumped almost 6 percent versus the dollar since the end of June, the worst emerging-market performance after the Turkish lira, as October’s medium-term budget estimated a larger government deficit as well as slower economic growth. A double debt downgrade, combined with unresolved political uncertainties, could see the currency plunge more than 18 percent to 17 per dollar by year-end, according to Nedbank Group Ltd.

The rand slumped almost 6 percent versus the dollar since the end of June, the worst emerging-market performance after the Turkish lira, as October’s medium-term budget estimated a larger government deficit as well as slower economic growth. A double debt downgrade, combined with unresolved political uncertainties, could see the currency plunge more than 18 percent to 17 per dollar by year-end, according to Nedbank Group Ltd.

This is another Bloomberg story from Swedish reader Patrik Ekdahl.  This one put in an appearance on their website at 8:00 p.m. MST on Thursday evening — and was updated about seven and a half hours later.  Another link to it is here.


China’s bond squeeze could spread offshore

It is time to start worrying about Chinese bonds. Tightening regulation has provoked a sharp selloff in the $9 trillion fixed-income market, with collateral damage to share. If stress is sustained, it could infect China’s giant pile of foreign-currency debt.

Anxiety has been increasing all year, as President Xi Jinping takes a tougher line on financial risk. Regulators have suppressed techniques abused by speculators, such as short-term borrowings using bond-repurchase agreements and so-called negotiable certificates of deposit. This crackdown, combined with expectations of higher rates, had pushed up benchmark yields without much panic until this week.

What tweaked local punters were central bank guidelines targeting excesses in the $15 trillion asset management industry. The benchmark 10-year treasury yield topped 4 percent on Thursday, its highest since 2014.

Overseas investors have watched Chinese markets closely since 2015, when a stock crash was felt around the world. Bonds are far more important. Stressed companies and financial institutions have come to rely heavily on short-term debt issues to repay bank loans and maturing wealth management products. The sector remains patchily regulated and distorted by implicit guarantees.

No surprises here, as stories about troubles in China’s bond market have been showing up with more frequency these days.  This Reuters new item was posted on their Internet site at 9:21 p.m. EST on Thursday evening — and I thank Richard Saler for finding it for us.  Another link to it is here.


Gold CEO Lashes Out Against His Industry

A gold industry obsessed with containing costs and minimizing risks will find itself at the edge of a cliff by 2020 as supply tightens, according to one of the most profitable producers.

Despite prices recovering from 2015 lows, the industry has been slow to reinvest in exploration or sustaining capital, Randgold Resources Ltd. Chief Executive Officer Mark Bristow said. Half of the gold coming out of the ground isn’t profitable to mine based on the true extraction costs, he said.

The one thing this industry does very well is mine gold at a loss,” Bristow told analysts at a breakfast meeting in Toronto on Friday.

The weakening outlook is being masked by a focus on all-in-sustaining costs rather than cash costs, he said. While companies can lower AISC and boost earnings by reducing spending to sustain operations or tightening exploration budgets, the tactic erodes asset quality in the long run, the CEO said.

Similarly, severe damage has been done by high-grading, which shortens the life of a mine by focusing on the best quality ore. Since 2007, grades have dropped from an average of 2.5 grams a tonne to about 1 gram, Bristow said.

But not a word is spoken of the short position of the Big 4 and Big 8 traders in the COMEX futures market, dear reader.  This must read gold-related Bloomberg story appeared on their Internet site at 12:51 p.m. on Friday afternoon Denver time — and I found it embedded in a GATA dispatch.  Another link to it is here.


New tax on Dubai gold

Dubai calls itself City of Gold. Traders there buy and sell $75bn (£56bn) worth of the precious metal every year. Part of the reason for its success is that gold is untaxed, and therefore cheap.

But from the start of next year, the government is imposing a value added tax on gold sales. Jeremy Howell has more.

This 2:09 minute video clip was posted on the bbc.com Internet site on Friday sometime — and this brief news item is something I found over at Sharps Pixley last evening.


Ted Butler: Life under manipulation

Silver market analyst Ted Butler marvels again at the huge position in COMEX silver futures and the concentration of the short position.

Total open interest data indicates that there is a 1-billion-ounce open commitment in Comex silver short and long positions, more than annual world production or consumption. No other commodity has a larger real-world equivalent total open interest this high.

“The long and short position in Comex silver is so much larger than that of any other futures-traded commodity that it necessarily exerts a force on price more profound than in any other commodity. Because the positioning in Comex silver futures is larger than what’s going on in the real world, the paper market dictates price to the world of silver production and consumption.

The entire Comex net short silver position (more than 500 million ounces) is held by just eight traders, most of which are U.S. and foreign banks. This is the one glaring feature in silver that, to this point, has largely escaped notice, even by those that regularly follow and comment about the silver market. This is the entire ball game in silver.

The above three paragraphs was the Ted Butler quote in my Friday column.  Now it’s in the public domain over at the silverseek.com Internet site.  It’s a must read commentary that I found on the gata.org Internet site yesterday morning Denver time.  Another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the Asian black bear, also known as the moon bear, and white-chested bear.  It’s a medium-sized bear species native to Asia and largely adapted to arboreal life. It lives in the Himalayas, in the northern parts of the Indian subcontinent, Korea, northeastern China, the Russian Far East, the Honshū and Shikoku islands of Japan, and Taiwan. It is classified as vulnerable by the International Union for Conservation of Nature (IUCN), mostly because of deforestation and hunting for its body parts.


The WRAP

Today’s pop ‘blast from the past’ is, at ‘heart’, all Canadian…at least for us they are — and it’s a timeless and universal hit song of the ages.  Of course the Americans have claimed them as their own, because they were born there.  But up here in Canada…Ann and Nancy Wilson still belong to us, if only in spirit.  The link to their biggest hit ever is here — and the second biggest, a Led Zeppelin cover, is here.

Today’s classical ‘blast from the past’ was going to be Tchaikovsky’s Sixth Symphony, but after listening to snippets of it, I realized that it was way to deep and dark for this column, so I decided on something far more uplifting that I found in the right side-bar.  I’ve featured it once before, but it never ages — and without fail, it draws a sell-out crowd every time it’s performed.  It Maurice Ravel’s Boléro — and it was a smash hit right out of the gate when it was premiered in Paris on 22 November 1928.

Boléro became Ravel’s most famous composition, much to the surprise of the composer, who had predicted that most orchestras would refuse to play it.  Here’s the London Symphony, with the incomparable Valery Gergiev, conducting it with a toothpick!  The link is here.


Despite the fact that it was a holiday-shortened trading day — and volumes were very light, it was more than obvious that ‘da boyz’ were ever vigilant, as they were certainly micro-managing silver and gold prices on Friday.  It was particularly obvious in the 5-minute tick charts from Brad Robertson, which I didn’t include because yesterday’s price movements were so small.  But their footprints were unmistakable.  They also made sure that palladium wasn’t allowed to close above $1,000 spot.

And as I pointed out in my discussion on the dollar index changes, the powers-that-be certainly aren’t allowing the rapidly declining dollar index to be reflected in precious metal prices.  Not only has it been obvious all year long, but even more so when you consider the fact that the dollar index was down over 100 basis points on Thursday and Friday combined — and JPMorgan et al had the audacity to close gold and silver lower as well.  That would never happen in a free market.

Here are the 6-month charts for all four precious metals, plus copper once again — and as for the 6-month U.S. dollar index further up in today’s missive, the Friday dojis include Thursday’s price move as well.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

As Ted pointed out on the phone yesterday, it’s now been two months with no resolution to the sky-high short positions in the precious metals held by the Big 4 and 8 traders in the COMEX futures market.  Just a cursory glance at silver and gold’s respective charts above, shows that to be true.  They are, as Ted has also stated, now stuck with these short positions — and it only remains to be seen if they are able to engineer one last desperate price decline, or will they finally be forced to cover in a rising market.  There are no other ways out for them, except for JPMorgan, which has a big enough physical holding in silver to bail itself out of any short-side covering issue that presents itself.

Another week has also gone by where nothing has changed in the world’s financial and equity markets, either.  The rumblings under the surface are becoming more widespread, but the world’s various Plunge Protection Teams and central banks show up in the nick of time before anything develops a serious down-side momentum — and the ‘recoveries’ are near instantaneous now.  One or two these events spaced out within a week or two, seems to be something that they can handle.  The worrisome part is that they are becoming not only more frequent, but much larger in scale…most with the knock-on potential to turn from only a local issue, into a rapidly unfolding international debacle with a few simple mouse clicks.  The budding bond crisis in China is the latest standard bearer for all this.  I would suspect that multiple crisis of these magnitudes occurring all at once would be beyond their ability to cope one they got anywhere near out of hand.

So far, the powers-that-be have been able to keep the word’s investment dollars mostly away from precious metals — and all things of value, as per Peter Warburton’s classic essay “The debasement of world currency: It’s inflation but not as we know it“.  But some day that dog won’t hunt no more.  But as to which day that will be, heaven only knows.  However, the signs that the economic system that we’ve known all our lives is about to come to an abrupt end, are everywhere you care to look now.

That’s all for today — and the week — and I’ll see you on Tuesday with all the COT data.

Ed