A Bloodbath in Silver: Courtesy of JPMorgan et al

03 February 2018 — Saturday


The gold price didn’t do much in Far East trading on their Friday — and was up less than a dollar by the London open.  But by the 10:30 a.m. GMT morning gold fix, it was down about three bucks and change — and then didn’t do a thing until the job numbers came out.   ‘Da boyz’ were lying in wait — and the low tick of the day came around 10:35 a.m. EST.  It rallied a decent amount from there until  12:30 p.m. — and then traded flat until the dollar index was rescued at the 1:30 p.m. EST COMEX close.  The gold price drifted lower from there, almost getting back to its low tick of the day by shortly after 3 p.m. in after-hours trading — and it ticked a bit higher into the close from there.

The high and low ticks were reported as $1,353.30 and $1,330.10 in the April contract.

Gold was closed in New York yesterday at $1,331.90 spot, down $16.40 on the day.  Not surprisingly, net volume was over the moon at 404,000 contracts.

The silver price traded in a very similar price pattern as gold on Friday — and with the same inflection points.  JPMorgan was laying in wait at 8:30 a.m. EST — and the carnage was awesome to behold.  At its low, they had silver down 70 cents in after-hours trading…a hair over 4 percent.  Both the 50 and 200-day moving averages fell in the process.

The high and low ticks in this precious metal were recorded by the CME Group as $17.225 and $16.52 in the March contract.

Silver finished the Friday session in New York at $16.575 spot, down 62.5 cents from Thursday — and was also closed below both its 50 and 200-day moving averages in the process.  Net volume was an eye-watering 113,500 contracts.  The Managed Money traders were pitching long contracts and going short in droves — and JPMorgan et al…courtesy of their own engineered price smash…were standing there buying up everything that the Managed Money traders were selling.  How criminal can you get.

Platinum was also sold a bit lower when trading began in New York at 6:00 p.m. EST on Thursday evening.  It was down 10 bucks minutes before noon in Zurich, but rallied back above the $1,000 spot mark by the COMEX open.  The $983 low tick was set shortly before the Zurich close — and it was forced to follow a price path similar to gold and silver for the remainder of the New York session.  Platinum finished the Friday session at $990 spot, down 16 bucks from Thursday.

Palladium didn’t do much until shortly after 3 p.m. China Standard Time on their Friday afternoon — and at that juncture it jumped up a bit — and then crawled higher until a few minutes before the COMEX open in New York.  It was sold down to a dollar below unchanged by shortly before the Zurich close…just like for platinum — and it then rallied quietly and unsteadily higher for the rest of the day.  Palladium closed at $1,039 spot, up 8 dollars.

The dollar index closed very late on Thursday afternoon in New York at 88.65 — and began to chop very quietly higher once trading began a few minutes later at 6:00 p.m. EST.  It hit a 90-minute air pocket between 3 p.m. CST — and around 8:45 a.m. in London — and then didn’t do much until the job numbers came out.  The index launched higher at that point, but that ‘rally’ flamed out at the 89.43 mark just minutes after 10:30 a.m.  It chopped lower from there — and got rescued by the usual ‘gentle hands’ at the 1:30 p.m. COMEX close as it broke below the 89.00 mark.  That feeble ‘rally’ that was generated at that point didn’t amount to much — and the dollar index was closed on Friday at 89.22 — and up 57 basis points from Thursday.

It’s obvious that without the intervention of those ‘gentle hands’…the dollar index would have crashed and burned — and there would have been no fig leaf for the powers-that-be to do the dirty in the precious metals yesterday.

On Thursday, the dollar index fell 52 basis points — and gold closed higher by $3.30 the ounce.  On Friday, the dollar index rallied 57 basis points, basically regaining all of Thursday’s losses in the process — and gold got hit for $16.40.  With silver down 4 percent yesterday, I thought gold got off easy.

The point I’m making is that ‘da boyz’ are selling into the precious metal rallies on dollar index weakness — and adding fuel to the fire to the downside when the dollar index rises.

And here’s the 2-year U.S. dollar index chart.

The gold stocks gapped down a bunch at the open — and hit their morning lows around 10:40 a.m. when the gold price began to rally off its low tick of the day.  That rally in the equities ended the same time as the rally in gold did…12:30 p.m. EST.  It was down hill all the way from there — and the HUI got clubbed to the tune of 4.39 percent.

The price path for the silver equities was very similar — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by ‘only’ 2.99 percent.  When you consider the fact that silver was down 4 percent on the day, these declines in their associated equities don’t look nearly as bad…although on days like today, that’s cold comfort.  Click to enlarge, if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index — and it’s just as sad looking.  Click to enlarge.

Here are the usual 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.

Here’s the weekly chart — and it’s butt-ass ugly.  There’s just no other words for it.  Click to enlarge.

And year-to-date — as there are only two days gone in the new month, so the month-to-date chart is rather meaningless.  But it doesn’t look too hot, either.  Click to enlarge as well.

No matter how obvious the price management scheme in the precious metals is, you can take it to the bank that the executives of these mining companies that we own shares in will say and do nothing.  And neither will the World Gold Council, The Silver Institute…or the CME Group or the CFTC.  As stockholders, we have been completely abandoned by all parties that are supposed to be looking out after our best interests.  Instead of that, they’ve willfully fed us to the wolves.

The CME Daily Delivery Report for Day 3 in February shows that 431 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Of the five short/issuers in total, the only two worth mentioning are HSBC USA and Goldman Sachs, as they issued 366 and 61 contracts out of their respective in-house/proprietary trading accounts.  And of the six/long stoppers, JPMorgan stopped nearly everything…392 for its own account, plus 24 for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

Of the 1,302 gold contracts issued and stopped this month, JPMorgan has stopped 1,051 of them…875 for its own account, plus another 176 for its client account.  JPMorgan has also issued 508 contracts out of its client account, with JPMorgan stopping a goodly chunky of those for its own in-house/proprietary trading account as well.

The CME Preliminary Report for the Friday trading session showed that gold open interest in February fell by 675 contracts, leaving 2,233 left, minus the 431 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that only 196 gold contracts were actually posted for delivery on Monday, so that means that 675-196=479 more gold contracts vanished from February at the mutual consents of both the short/issuers and long/stoppers involved.  Silver o.i. in February declined by 2 contracts, leaving just one left.  Thursday’s Daily Delivery Report showed that zero gold contracts were actually posted for delivery on Monday, so it’s obvious that 2 silver contracts vanished from the February delivery month for the same reason that I gave for gold.  At the rate that deliveries/open interest in both precious metals is progressing, the February delivery month has quickly turned into a non-event.

It’s a given that Ted Butler will have something to say about all this in his mid-week review this afternoon.

There were no reported changes in GLD yesterday, but there was a smallish withdrawal from SLV, as an authorized participant removed 133,948 troy ounces.  A withdrawal of this size usually represents a fee payment of some kind.

Ted mentioned on the phone yesterday that close to 18 million share of SLV changed hands yesterday.  One has to wonder just how many of those shares now belong to JPMorgan — and how soon the ‘redemption of shares for physical metal’ will begin…not that it has ever stopped, mind you.

The U.S. Mint had a tiny sales report yesterday.  They sold 1,000 troy ounces of gold eagles — and 1,000 one-ounce 24K gold buffaloes.  Those numbers are the month-to-date totals for February as well.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Only 7,523.100 troy ounces/234 kilobars [U.K./U.S. kilobar weight] were received over at Scotiabank — and nothing was shipped out.  I shan’t bother linking this amount.

It was busier in silver, as 591,161 troy ounces were received — and 352,369 troy ounces shipped out.  All of the ‘in’ activity was at JPMorgan — and all the ‘out’ activity was from CNT.  The link to that is here.

That truckload into JPMorgan’s vault on Thursday put their COMEX silver stash at a new record high of 126.3 million troy ounces, which is a bit over 51 percent of all the silver held on the COMEX.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 3,500 of them, plus they shipped out another 398.  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, showed a moderate increase in the commercial net short position in silver — and a somewhat surprising decline in gold.

In silver, the Commercial net short position increased by 5,794 contracts, or 29.0 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 3,808 contracts — and they also added 1,986 contracts to their short position.  The sum of those two numbers is the change for the reporting week.

Ted said that the Big 4 traders actually reduced their short position by approximately 300 contracts — and the ‘5 through 8’ large traders decreased their short position by around 700 contracts as well.  All the heavy lifting was by Ted’s raptors, the 42 small commercial traders other than the Big 8, as they reduced their long position by about 6,800 contracts.

Under the hood in the Disaggregated COT Report it was a rather mixed bag, as the Managed Money traders only accounted for about half of the weekly change in the Commercial net short position.  They reduced their long position by 3,732 contracts — and they reduced their short position by 6,562 contracts as well — and the difference between those two numbers…2,830 contracts…was their change for the reporting week.  As always, the difference between that number and the Commercial net short position…5,794 minus 2,830 equals 2,964 contracts…was picked up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories.  In this week’s report, the lion’s share of that difference came from the ‘Nonreportable’/small trader category.

Based on the tiny drop in the short position of the Big 4 traders, Ted didn’t change the short position of JPMorgan this week…leaving it at 31,000 contracts.  The Commercial net short position in silver as of the Tuesday cut-off was 236.4 million troy ounces of paper silver.

Here’s the 3-year COT chart for silver.  Click to enlarge.

Of course, after the JPMorgan-led bloodbath in the COMEX silver market yesterday, the above COT data is “yesterday’s news” in every respect — and I would suspect that silver is now configured bullishly.

In gold, the commercial net short position actually dropped by 9,476 contracts, or 947,600 troy ounces of paper gold.

They arrived at that number by selling 6,768 long contracts, but they also reduced their short position by 16,244 contracts — and the difference between those numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by about 6,100 contracts…however, the ‘5 through 8 large traders increased their short position by around 1,100 contracts.  Ted’s raptors, the 45 small commercial traders other than the Big 8, added approximately 4,500 contracts to their long position.

Under the hood in the Disaggregated COT Report there was very little in the way of change with the Managed Money traders during the reporting week.  They reduced their long position by 5,406 contracts, but they also reduced their short position by 3,432 contracts — and the difference between those two numbers…is only 1,974 contracts.  The difference between that number and the commercial net short position…9,476 minus 1,974 equals 7,502 contracts…was made up by the traders in the other to categories, as both sold long positions and increased their respective short positions as well.

The commercial net short position in paper gold now sits at 22.51 million troy ounces.

And here’s the 3-year COT Report for gold.  Click to enlarge.

Of course ‘all of the above’ is, like in silver, very much “yesterday’s news” as well.

With JPMorgan et al taking out both the 50 and 200-day moving averages in silver with real authority yesterday, it’s a reasonable assumption to make that we may be close to, or at, a bottom for the silver price.  But the same can’t be said of gold, as it has had a bearish market structure on the COMEX for quite a number of weeks.  So although there certainly was huge improvement in the commercial net short position since the Tuesday cut-off, with most of that coming yesterday, one should fervently hope that the 50 and 200-day moving averages in gold aren’t on ‘da boyz’ ‘to do’ list.  I don’t think they are, but Ted pointed out that possibility on the phone yesterday — and it can’t be ignored.

Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 126 days of world silver production—and the ‘5 through 8’ large traders are short an additional 64 days of world silver productionfor a total of 190 days, which is over 6 months of world silver production, or about 461.7 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 192 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 236.4 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 461.7 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 461.7 minus 236.4 = 225.3 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 42-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 31,000 contracts, or around 155 million troy ounces, unchanged from what they were short in last week’s COT Report.  155 million ounces works out to around 64 days of world silver production that JPMorgan is short.  That’s compared to the 190 days that the Big 8 are short in total.  JPM holds about 34 percent of the entire short position held by the Big 8 traders.

Up until two weeks ago, when I was preparing my presentation for the Vancouver Resource Investment Conference, I had estimated the short position in silver held by Scotiabank/ScotiaMocatta at approximately 32 days of world silver production minimum.  That turned out to be high by quite a bit.  Now that I’ve recalibrated their short position, it’s now down to about 23 days, or maybe a bit less.  So it’s more than obvious that Scotiabank has been actively reducing their short position in the COMEX futures for the last year.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s equally obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

JPMorgan has been forced by circumstance to pick up Scotiabank’s trading/price management 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.  Of course they have 675+ million troy ounces of physical silver [and counting!] stashed away to cover that, so they are in no danger.  That can’t be said of the remaining Big 7, unless JPMorgan plans to bail out some, or all of them.  And if that’s the case…at what price?  I get the feeling, as I said last week, that it wouldn’t come cheap.

The two largest silver shorts on Planet Earth—JP Morgan and one other, which may or may not be Scotiabank, are short about 87 days of world silver production between the two of them—and that  87 days represents about 69 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…a bit more than two thirds of it.  The other two traders in the Big 4 category are short, on average, about 19.5 days of world silver production apiece, down 0.5 days from last week’s report.

The four traders in the ‘5 through 8’ category are short, on average…16 days of world silver production each, which is down 0.25 days from what they were short in 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 ever changes by any material amount.  Although not much happened during the past reporting week

The Big 8 commercial traders are short 46.6 percent of the entire open interest in silver in the COMEX futures market, which is virtually unchanged from last week’s COT Report — and that number would be almost 50 percent once the market-neutral spread trades are subtracted out.  In gold, it’s now 48.5 percent of the total COMEX open interest that the Big 8 are short, up a bit from last week’s report — and something over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 68 days of world gold production, which is down 2 days from what they were short last week — and the ‘5 through 8’ are short another 29 days of world production, which is up 1 day from what they were short the prior week, for a total of 97 days of world gold production held short by the Big 8 — which is down one day from the 98 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold 70 percent of the total short position held by the Big 8…which is up 1 percentage point from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 66, 71 and 77 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report — and platinum is down 1 percentage point from last week — and palladium is down 2 percentage points from what it was in last week’s COT Report.

I have an average number of stories for you today…but there’s no Cohen/Batchelor interview this week.


U.S. Adds 200,000 Jobs; Wages Rise by Most Since Recession

U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018.

Non-farm payrolls rose 200,000 — compared with the median estimate of economists for a 180,000 increase — after an upwardly revised 160,000 advance, Labor Department figures showed Friday. The jobless rate held at 4.1 percent, matching the lowest since 2000, while average hourly earnings rose a more-than-expected 2.9 percent from a year earlier, the most since June 2009.

Treasury yields and the dollar gained, while stock futures remained lower, as the data reinforced the Fed’s outlook for three interest-rate hikes this year under incoming Chairman Jerome Powell, including one that investors expect in March. The figures may also add to the likelihood of a fourth rate increase in 2018.

The report puts the nation closer to maximum employment — one of the goals of the Federal Reserve — and sets a solid tone for hiring this year following continued gains in payrolls in 2017. That could be starting to generate a long-awaited, sustained pickup in wages and boost demand in this expansion, which may also get a lift this year from tax-cut legislation signed by President Donald Trump in December.

The gain in wages will add to concerns that inflationary pressures are building in the economy,” said Michael Feroli, chief U.S. Economist at JPMorgan Chase & Co., who correctly projected the payrolls gain. “It solidifies expectations that the Fed will hike in March. The question is, what will they signal for hikes after that?

There were lot of caveats buried in the job numbers yesterday, so it’s not as rosy as this Bloomberg story makes it out to be.  This article was posted on their Internet site at 6:30 a.m. Denver time on Friday morning — and updated about an hour later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.

Dollar Spikes Most in Over a Year, But…

Strong ‘headline’ earnings growth (despite all the caveats) has sparked a hawkish tilt to trading sending bond yields higher and spiking the dollar index by the most since Jan 2017.

There’s just one thing though…

The 0.9% spike in the dollar index is the most since January 18th 2017 and sounds impressive, but for a trader, it appears the spike is for fading as it hits the Trump Rescue highs and rolls over…

So the strongest wage growth in years merely enabled machines to run some stops before the trend lower continues?

This very brief 2-chart Zero Hedge item appeared on their website at 11:28 a.m. EST on Friday morning — and I thank Brad Robertson for sending it our way.  The second chart is worth a look — and another link to it is here.

Is the U.S. waging a ‘cold war’ to weaken the dollar?

The dollar is at its weakest level in years against other major currencies.

Experts say the drop is being driven, at least in part, by the U.S. government. And some suggest it’s a deliberate campaign aimed at boosting the American economy at the expense of major trading partners like Europe and Japan.

The Trump administration is engaged in “a cold currency war — and it’s winning,” Joachim Fels, an economist at investment firm Pimco, said this week.

Rather than an open conflict, which would involve direct intervention in currency markets, the hostilities come in the form of words and “covert” actions, he wrote in a blog post.

Fels points to the Trump administration’s moves to slash taxes and boost spending, which he says are coming at “the wrong time“. The measures will pile on more government debt, making investors less eager to own dollar assets, like U.S. Treasury bonds.

Policies like that “are sending an implicit but very clear signal to markets: A weaker dollar is the goal,” Fels wrote. “Markets have understood the signal.”

Yep, that pretty much sums it up.  This news item put in an appearance on the money.cnn.com Internet site at 6:47 a.m. EST on Friday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.

Bond Panic Spreads/World of Hurt — Bill Bonner

The feds giveth; the feds taketh away…and the feds maketh a mess of things.

They have engineered a grotesquely exaggerated credit cycle – holding short-term interest rates below the rate of inflation for far too long.

They’ve been giving out free money, in other words.

Now they have an economy burdened by far too much debt… just as the credit cycle turns.

A few basis points doesn’t seem like much. But when you have to borrow, every extra basis point (one one-hundredth of a percentage point) hurts. And when you have $67 trillion in debt, a few basis points can be a disaster.

To be more precise, a one-basis point increase in carrying costs would add $6.7 billion to the nation’s annual interest rate charge.

This excellent commentary by Bill was posted on the bonnerandpartners.com Internet site yesterdays sometime — and another link to it is here.

Doug Noland: The Grand Crowded Trade of Financial Speculation

It’s worth noting that the U.S. dollar caught a bid in Friday’s “Risk Off” market dynamic. Just when the speculator Crowd was comfortably positioned for dollar weakness (in currencies, commodities and elsewhere), the trade abruptly reverses. It’s my view that heightened currency market volatility and uncertainty had begun to impact the general risk-taking and liquidity backdrop. And this week we see the VIX surge to 17.31, the high since the election.

The cost of market risk protection just jumped meaningfully. Past spikes in market volatility were rather brief affairs – mere opportunities to sell volatility (derivatives/options) for fun and hefty profit. I believe markets have now entered a period of heightened volatility. To go along with currency market volatility, there’s now significant bond market and policy uncertainty. The premise that Treasuries – and, only to a somewhat lesser extent, corporate Credit – will rally reliably on equity market weakness is now suspect. Indeed, faith that central bankers are right there to backstop the risk markets at the first indication of trouble may even be in some doubt with bond yields rising on inflation concerns. When push comes to shove, central bankers will foremost champion bond markets.

Unless risk markets can quickly regain upside momentum, I expect “Risk Off” dynamics to gather force. “Risk On” melt-up dynamics were surely fueled by myriad sources of speculative leverage, including derivative strategies (i.e. in-the-money call options). As confirmed this week, euphoric speculative blow-offs are prone to abrupt reversals. Derivative players that were aggressively buying S&P futures to dynamically hedge derivative exposure one day can turn aggressive sellers just a session or two later. And in the event of an unanticipated bout of self-reinforcing de-risking/de-leveraging, it might not take long for the most abundant market liquidity backdrop imaginable to morph into an inhospitable liquidity quandary.

This week’s Credit Bubble Bulletin was posted on Doug’s website in the wee hours of Saturday morning EST — and it’s always a must read for me.  Another link to it is here.

Welcome to the Trade War — Jim Rickards

Ready or not, a trade war between the U.S. and China is underway.

On Monday, Jan. 22, President Trump announced steep 30% U.S. tariffs on imports of solar panels and washing machines.

What was significant about these tariffs is that they are being applied worldwide. The tariffs are not aimed at China alone, but China is by far the largest source of solar panels shipped to the U.S., and China and South Korea are the largest sources of washing machines.

So while Trump can claim that these tariffs are not specifically targeted at China, that is exactly what they are.

This war has the potential to sink stock markets, shrink world trade and unravel the “synchronized growth” story that global elites have been pushing for the past year.

This worthwhile commentary by Jim was posted on the dailyreckoning.com Internet site yesterday — and another link to it is here.  Jim had a second article posted on that website as well on Friday — and it’s headlined “Trump, Davos and Free Trade

U.S. sanctions, baffled Russians, hot air and history — The Saker

So, finally, the suspense is over.  Kind of.  The U.S. Treasury has finally released the list of Russian entities and individuals which could (conditional!) be sanctioned by the U.S. Treasury in compliance with the H.R.3364 – Countering America’s Adversaries Through Sanctions Act.

Two things are noteworthy: first, this list completely ignores one of the most important realities of Russian politics: that the real, dangerous, opposition to Putin is not from the people (who support him at anywhere between 60% to 80%+) or from the Russian media (which, while often critical, does not represent a real threat to him) or even the Duma (whose opposition parties are critical of the Kremlin, but who are very careful about criticizing Putin himself lest they lose support from the people) .  For years now I have been explaining that the real opposition to Putin is a) inside the ruling elites, including the Presidential Administration and the Government and b) big money: banks, oligarchs, etc.  I call this (informal) opposition the “Atlantic Integrationists” because what these pro-western globalists want is for the AngloZionist Empire to accept Russia as an equal partner and to have Russia fully integrate the US-controlled international financial and security structures: WTO, NATO, EU, G7/8, etc.  Very roughly speaking you could think of them as the “Medvedev people” (but you could also say that the Ministers in charge of the Russian economy all fall into this category, as do almost all the heads of Russian banks).

Now that the U.S. Treasury has released this “list of marked individuals” (and their families, relatives or associated corporate entities) for potential, unspecified, future sanction, who do you think will freak out most, the Eurasian Sovereignists or the Atlantic Integrationists?  Then look a step further and forget about the U.S. for a second: Russia is trying hard to work with the Europeans in many join projects.  What do you think the creation of such a list will have on joint ventures between E.U. and Russian businessmen?  I predict two things:
It will place a great deal of pressure on E.U. corporations not to do business with the Russians and, therefore, it will further place the E.U. and the U.S. on a collision course.

It will hurt the Atlantic Integrationists where it hurts them the most: in their financial interests.

Frankly, if I was paid to think long and hard about how to come up with the dumbest and most self-defeating foreign policy decision for the USA, I could never do better than what the Trump Administration and Congress have just done.  This is, by the way, something which all Russian analysts agree with.  What they don’t agree with are the reasons for that seemingly completely and terminally stupid move.

This long — and rather involved commentary is a must read…if you have the interest, that is. And even if you don’t read the whole thing, the commentary under the last three sub-headings, 1] Possible Russian reactions, 2] Conclusion one: the Empire’s main export is hot air, and…most important…3] Conclusion two: learning optimism and caution from history; should be on your must read list.  This commentary by the Saker showed up on his Internet site yesterday sometime — and I thank Larry Galearis for pointing it out.  Another link to this is here.

Russia says U.S. ‘hunting’ for Russians to arrest around the world

Russia has issued a travel warning recommending its citizens think twice before traveling abroad, saying the United States was hunting for Russians to arrest around the world.

The Foreign Ministry statement warns Russian citizens that when abroad they face a serious threat of arrest by other countries at Washington’s request, after which they could be extradited to the United States.

Despite our calls to improve cooperation between the relevant U.S. and Russian authorities … U.S. special services have effectively continued ”hunting“ for Russians around the world,” the travel warning said.

Considering these circumstances, we strongly insist that Russian citizens carefully weigh up all the risks when planning trips abroad,” the Foreign Ministry said.

It said more than 10 Russians had been detained in foreign countries with U.S. involvement since the start of 2017.

This brief Reuters story, filed from Moscow, showed up on their Internet site at 11:19 p.m. EST on Thursday night — and was updated about eight hours later.  It’s from Zero Hedge via Brad Robertson — and another link to this short news item is here.

Gas Wars: Germany approves North Stream 2 pipeline with Russia

In the latest of a slowly advancing series of events, Germany has decided to disregard and work around the American economic sanctions directed at the Russian Federation, and to find a way to bring in the new Nord Stream 2 pipeline from Russia to Germany.

Finland, Sweden and Denmark have yet to approve the new pipeline project, but with Germany as a major economic power on board it is increasingly likely that they will follow suit.

The Nord Stream 2 pipeline is expected to double the present pipeline’s volume of natural gas to Europe, from 55 billion cubic meters to about 110 billion cubic meters.  The pipeline terminates in Greifswald, Germany, where it connects to various trans-European pipelines for distribution across that continent.

With this pipeline in place, Russia further secures both its place as an energy exporter with Europe, but it also solidifies business and commercial relations with Europe as a whole. As the economic sanctions against the Russian Federation slowly resolve, the nation stands to be seen as much more vital to the region than it ever has been.

This story was posted on the russiafeed.com Internet site just before midnight Moscow time on their Thursday night — and it comes to us courtesy of Roy Stephens.  Another link to it is here.

Henry Kissinger says a “pre-emptive attack” against North Korea is a “strong” possibility

Former Secretary of State Henry Kissinger has said that he agrees with the aggressive statements President Trump has made towards North Korea.

Kissinger also warned Congress last week against potential military intervention near Russian and Chinese borders without the world’s support.

The former Secretary of State said that the Trump Administration “will hit that fork in the road, and the temptation to deal with it with a pre-emptive attack” against North Korea “is strong, and the argument is rational.

The current North Korean trajectory, Kissinger continued, could lead to nuclear proliferation throughout Asia, as he believes South Korea will not accept being the only Korea without nuclear capability. Japan will follow suit, he said.

Then we’re living in a new world, in which technically competent countries with adequate command structures are possessing nuclear weapons in an area where there are considerable national disagreements,” Kissinger said. “That is a new world that will require new thinking by us.

This news item appeared on theduran.com Internet site at 2:23 p.m. EST on Friday afternoon — and it has obviously been edited since it was first posted, because Roy Stephens sent it to me about five hours before that.  Another link to it is here.  The Zero Hedge spin on all this is linked here.

Hope Diamond Eat Your Heart Out! Two Huge, Rare Gemstones Discovered in Russia

The discovery was made at a mine in Yakutia, the northeastern Russian region where close to 95% of Russia’s diamonds and over a quarter of all diamonds mined in the world are found.

The two large, jewelry-quality diamonds, with a mass of 97.92 and 85.62 carats, respectively, are very rare, according to officials from Alrosa, the Russian diamond mining group whose miners made the incredible find.

The transparent, yellow-tinged gems, both coming in the shape of an octahedron, were found at the Yubileynaya mine, one of the largest in the world, last month. The mine has long been known for being the source of some of Alrosa’s largest gemstones.

Alrosa is one of the largest diamond producers in the world, accounting for about 29% of global production, with mining operations in Yakutia and Arkhangelsk Region. In 2017, the company reported a 6% increase in its diamond output to 39.6 million carats.

This very brief news item/click bait, with a neat photo of one of these stones, was posted on the sputniknews.com Internet site at 3:45 p.m. Moscow time on their Friday afternoon, which was 7:45 a.m. in New York — EST plus 8 hours.  I thank reader M.A. for sending it our way — and another link to it is here.

All trapped gold miners in South Africa rescued unhurt

The National Union of Mineworkers confirmed on Friday morning that all 955 Sibanye Gold mine workers who were trapped underground have been resurfaced.

The mine workers were rescued at around 06:30 this morning,” the union’s national spokesperson Livhuwani Mammburu confirmed to News24.

They are currently getting medical check-ups. No injuries were sustained – they are just exhausted.”

There were some people with dehydration and few cases of high blood pressure and 16 of our older employees needed drips – but everything was successful.”

We are providing counselling for them and their families where it’s necessary,” Wellsted told News24.

This news item showed up on the news24.com Internet site at 9:23 a.m. SAST on their Friday morning, which was 2:23 a.m. in New York — EST plus 7 hours.  I found it on the gata.org Internet site — and another link to it is here.

Swiss gold exports in 2017 lower but still 80% plus flowing east — Lawrie Williams

The continued accumulation of physical gold in Asia and the Middle East goes on regardless as shown by gold exports from Switzerland – the leading national conduit for gold bullion.  Switzerland has achieved this position through its refineries specialising in taking gold in unmarketable forms and importing dore bullion from mines and refining, or re-refining it into the sizes and purities in demand in the eastern market place.  This is combined with the great reputation of Switzerland in the gold marketplace and as a conduit for such activities.

Although Swiss gold exports in 2017 were the lowest in 11 years they were still substantial at over 1,600 tonnes. That is equivalent to half the world’s annual new mined gold output, and with China the world’s largest gold miner already, and a known non-exporter, the Asian and Middle Eastern regions will have accumulated at least 65% of global gold output adding up the imports from Switzerland plus Chinese domestic production alone.  But other countries also export gold directly to Asian and Middle Eastern refineries and we would guesstimate that perhaps 80% of all the gold bullion moving around the world may be ending up in these regions – a huge proportion of what remains the world’s No.1 monetary asset (in our opinion at least).  With bitcoin continuing to crash – it has lost almost 60% of its value from its peak in December and could well crash much further as scared investors offload on the way down – gold may be again coming into its own as a key investment asset class in the minds of investors seeking to preserve their wealth.

This very worthwhile commentary by Lawrie put in an appearance on the Sharps Pixley website yesterday — and another link to it is here.


The first award-winning photo is entitled “Willow Grouse” by Finnish photographer Markus Varesvuo.  This must have been shot using a remote control, as no willow grouse/ptarmigan would ever let you get this close in the wild.  This is what it looks like in its summer plumage.  Its pure white in winter.  This is a bird that inhabits the high latitudes and arctic regions of Planet Earth.  I saw lots of them in my younger days when that area of Canada was my home.  The second photo is by the same photographer — and I’d dearly love to know how he got this shot, because he’d have to be looking virtually straight down on it when he took it.  It’s entitled “Gannet Underwater“.  Click to enlarge.


Today’s iconic pop ‘blast from the past’ needs no introduction — and the only hard part to believe is that it’s 40 years young/old this year!  The link is here.

Today’s classical ‘blast from the past’ is somewhat more ancient, of course, dating from 1844.  It’s Felix Mendelssohn’s Violin Concerto in E minor, Op. 64…his last large orchestral work. It forms an important part of the violin repertoire and is one of the most popular and most frequently performed violin concertos in history — and for very good reasons.  I’ve featured this work before, but it’s been a while.

Here’s the incredibly gifted Hilary Hahn with the Frankfurt Radio Symphony Orchestra — and under that baton of Paavo Järvi.  It doesn’t get any better than this — and the link is here.

It was obvious that the powers-that-be were not going to allow the precious metals to become a safe harbour yesterday, especially when they were busy engineering price declines in both silver and gold so they could cover as many of their short positions as possible.  So these manufactured waterfall price declines in these two precious metals did double-duty yesterday.

Although silver certainly appears washed out to the downside, at least for the most part, the same can’t be said for gold — and I’m not at all sure how far along the “wash, rinse, spin — and repeat” cycle we’re going to have to travel with that precious metal.  I’d hate to think that they have the 50 and 200-day moving averages for gold in their sights but, as Ted pointed out, you can’t overlook that possibility.  What that would mean for silver is not good either — and a revisit of mid-December’s low can’t be dismissed.  But that’s wild-ass speculation on my part at the moment.

Of course JPMorgan’s short positions in the COMEX futures market has now been trumped by the physical silver and gold that Ted Butler says they hold.  And, without doubt, that along with covering their short positions in the COMEX futures market, they were big buyers of both GLD and SLV shares yesterday as well — and it’s an absolute guarantee that they’ll be redeeming every last share for physical metal at some point.  The question then becomes, just how much physical gold and silver are they going to accumulate before allowing prices to rise?  A good question with no answer at the moment.

As I say every Saturday without fail — and it’s just as apropos this week…”JPMorgan et al continue to have precious metal prices in their iron grip — and until that changes, nothing changes.

Here are the 6-month charts for all four precious metals, plus copper once again.  And because the low tick of the day in silver was set by ‘da boyz’ after the COMEX close, that data point doesn’t appear on Friday’s doji.  The ‘click to enlarge‘ feature helps a bit with the first four.

They say that they don’t ring a bell at the top of the market, but if you didn’t hear it yesterday, you could certainly see the signs that it was.  The powers-that-be were at battle stations in every market that mattered right from 8:30 a.m. EST onward — and I expect they’ll be around when the markets open at 6:00 p.m. on Sunday evening in New York.

This day of reckoning, if this is indeed the start, has been a long time in coming…and has been prolonged as long as it has by easy Central Bank credit.  I will not wax philosophical on this, as others such as Bill Bonner, David Stockman — and Jim Rickards have already done so — and far more eloquently than I…with more to come as the great unwind begins.

If you read the last paragraph of the article by the Saker in today’s Critical Reads section, what you see below is an excerpt from that.  As I’ve been saying for the last month or so, the U.S. deep state has painted itself into a corner in just about every theatre of operation that they have been engaged in, both domestically — and abroad.  They are running out of options — and their list of friends is getting thin.  I was very relieved and reassured by what he had to say, as it confirmed my thoughts as well, except he’s just so much better with words than I.

If we look at world history we can always see the same phenomenon taking place: when things go well, the elites are united, but as soon as things go south, the elites turn on each other.  The reason for this is quite simple: elites are never as united as they pretend to be.  In reality Empires, and any big country, really, are run by a coalition of elites who all benefit from the established order.  They can hate each other, sometimes even kill each other (SA vs SS, Trotskyists vs Stalinists, etc.), but they will work together just like crime families do in the mob.  But when a real, profound, crisis becomes undeniably apparent, these ruling elites typically turn on each other and when that happens, nobody is really in charge until, eventually, the entire system comes tumbling down or a new main ruler/group emerges.  Right now the Anglo/Zionists elites are locked into a huge struggle which is likely to last for the foreseeable future.”

Finally, we should never confuse the inability to get anything done with the inability to make things worse: the latter does not flow from the former.  Nazi Germany was basically defeated in Stalingrad (Feb 1943) but that did not prevent it from murdering millions more people for another two and a half years before two Soviet soldiers placed the Soviet flag on top of the Reichstag.  We are still far away from such a “Reichstag flag” moment, but we sure are witnessing the Anglo/Zionist “Stalingrad” taking place before our eyes.”

A dangerous and cornered beast, just chock-full of socio/psychopathic personality types I like to mention every weekend, is one to be watched carefully — and with some fear and trepidation.  They will not go down to defeat gladly, or willingly.  I’ll put absolutely nothing past them — and Henry Kissinger’s straw-in-the-wind of a military strike against North Korea might just be the start.  Or maybe something in the Ukraine or Middle East…or “all of the above”.

Somewhere in all of this will come the “event” that was spoken of back on July 12 when CME Group CEO Terry Duffy was interviewed by Neil Cavuto.  Here’s a cut-and-paste from my July 13, 2017 column…

Well, the Duffy/Cavuto interview certainly looked a bit stage-managed to me.  The leading questions were too pat — and the answers came too smoothly.  The gold chart, as Dave Janda pointed out in the story above, appeared right on cue.  Nothing was left to chance.  The other thing that I found intriguing was the fact that he said “people will wake up some morning and find precious metal prices substantially higher“…or words to that effect.  What that translates into from where I sit, is that the blast off will begin while North America is asleep.  All we await is the whatever “event” he spoke of, to occur.  As I’ve told Ted for years now, the precious metals price explosion will not take place in a news vacuum.

But when this “event” does finally occur, it will bring an end to the precious metal price management scheme in general — and silver in particular.  The only side-show left will be to place your bets on high silver prices go, or are allowed to go.  I’m not sure if this will be a partially controlled event or not…but if left to free-market forces alone, the 3-digit silver price we end up with will be jaw-dropping — and silver will really become the “new gold”.

The pertinent part of the Duffy/Cavuto interview begins at the 4:55 minute mark — and the link is here.

As bad as things appear at this point in time, it’s always darkest just before dawn — and this too shall pass.

I’m done for the day — and the week — and I’ll be watching the Sunday evening open in New York with great interest.

See you on Tuesday.