JPMorgan: Now the No. 4 Short in Silver on the COMEX

25 August 2018 — Saturday


The gold price was sold down to its low of the day about 8:05 a.m. China Standard Time on their Friday morning.  From that point it began to crawl steadily higher — and that state of affairs lasted until 9 a.m. in New York.  Then the rally began to develop some real legs — and the high tick of the day came at precisely noon EDT.  The gold price then edged quietly lower from there until around 3 p.m. in the thinly-traded after-hours market — and then traded flat into the close of trading at 5:00 p.m.

The low and high ticks were reported by the CME Group as $1,184.90 and $1,210.40 in the October contract — and $1,189.50 and $1,215.40 in December.

Gold finished the Friday session in New York at $1,205.30 spot, up $20.70 on the day.  Net volume in October and December combined was very healthy at around 301,000 contracts, but roll-over/switch volume was only 3,215 contracts.

The price path for silver was identical to gold’s in most respects that mattered, so I’ll spare you the play-by-play.

The low and high ticks in this precious metal were recorded as $14.45 and $14.855 in the September contract.

Silver closed on Friday at $14.765 spot, up 31 cents on the day.  Net volume was nothing out of the ordinary at just under 52,000 contracts, but roll-over/switch volume out of September and into futures months…mostly December…was very heavy at 46,000 contracts.  With First Notice Day for September silver deliveries only a week away, silver volumes are going to be extremely heavy for the rest of next week as well.

In most respects, the price pattern in platinum was the same as it was for silver and gold…particularly silver.  Its low came shortly after 8 a.m. in Shanghai — and the high came shortly after the Zurich close.  From there it was sold lower until 1 p.m. EDT in New York — and didn’t do a lot after that.  Platinum finished the day at $789 spot, up 14 dollars from Thursday’s close.

Ditto for palladium — and after its 8:15 a.m. CST low tick, it was up, up, and away until a minute or so before noon in New York.  Then, like silver and platinum, it was sold lower until 1 p.m. EDT — and didn’t do much after that.  Palladium was closed at $936 spot, up 24 dollars on the day, but was up 29 bucks at its high tick.

The dollar index closed very late on Thursday afternoon in New York at 95.62 — and after rallying a small handful of basis points by around 8 a.m. China Standard Time on their Friday morning, began to head lower.  And except for a couple of very weak counter-trend rally attempts, it was all down hill to the 95.03 low tick, which came a minute or so after 1 p.m. EDT in New York.  But Friday’s low tick may also have occurred at the afternoon gold fix in London, when the market appeared to go ‘no bid’ for a few minutes…so it was obviously ‘gentle hands’ to the rescue at that point.  Then from a few minutes after 1 p.m. in New York, the dollar index crawled quietly and unevenly higher until the close — and it finished at the 95.17 mark…down 45 basis points from Thursday.

And here’s the 1-year U.S. dollar index chart.  Click to enlarge.

The gold stocks gapped up 2 percent at the open — and then back-peddled a bit until minutes after 10 a.m. in New York trading.  Then up they went, with their respective highs coming a few minutes after 12 o’clock noon EDT.  They edged very quietly lower from there into the close.  The HUI closed up a very respectable 3.67 percent, but didn’t quite erase of all of Thursday’s losses.

The buyers of silver equities were far more aggressive — and the big 1.25 percent gap up shortly after the COMEX close, should be carefully noted.  From that juncture they crawled a bit lower going into the 4:00 p.m. EDT close of trading.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 5.53 percent — and easily clawed back all of Thursday’s losses — and then some.  Click to enlarge.

And here’s the 1-year Silver Sentiment/Silver 7 Index.  Click to enlarge as well.

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 except for silver, which was unchanged on the week, it’s a sea of green…a refreshing and happy change.  Click to enlarge.

The month-to-date chart chart doesn’t look anywhere near as happy, but it wouldn’t take many more days like we had on Friday to turn things around in a hurry.  Click to enlarge.

The year-to-date graph is a big sea of red, too. This one is as ugly as it can possibly be, except for last week when it was worse.  But what I said about the weekly chart, applies to this year-to-date chart as well.  Click to enlarge.

And with another excellent COT Report yesterday, the above seas of red is what major price bottoms are made of — and they’re ugly, with this last swing for the fences by JPMorgan being the worst I’ve very seen in the eighteen years I’ve been watching the precious metal market.  With the current configuration in the COMEX futures market, it’s highly doubtful that JPMorgan will appear as shorts sellers of either first and/or last resort once the next serious moving average-breaking rally is allowed to begin.  If they do appear again, it will be at significantly higher prices…and I really do mean significantly.

And as I’ve already stated, I doubt that the weekly and month-to-date charts will look this way for long.  And as I also said last week in this space, please don’t forget that it’s always darkest just before dawn.  I think the sun peeked above the horizon yesterday.

The CME Daily Delivery Report showed that 27 gold and 33 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, the sole short/issuer was HSBC USA with 27 contracts out of their in-house/proprietary trading account.  There were three long/stoppers in total — and the two largest were JPMorgan and Morgan Stanley with 19 and 6 contracts for their respective client accounts.  In silver, the two short/issuers were Goldman and ADM, with 25 and 8 contracts — and the two long/stoppers were ADM and Advantage with 29 and 4 contracts.  All of these silver contracts, both issued and stopped, involved their respective client accounts.  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 August dropped by 7 contracts, leaving 140 still around, minus the 27 mentioned just above.  Thursday’s Daily Delivery Report showed that 4 gold contracts were posted for delivery on Monday, so that means that 7-4=3 more gold contracts disappeared from the August delivery month.  Silver o.i. in August rose by 12 contracts, leaving 35 still open, minus the 33 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that zero silver contracts were posted for delivery on Monday, so that means the obvious…12 more silver contracts just got added to August.

So far in August, there have been 2,323 gold contracts issued and stopped — and that number in silver is 1,211.

For the second day in a row — and for the third time this week, there was another withdrawal from GLD.  This time an authorized participant took out 85,200 troy ounces.  There were no reported changes in SLV.

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

Month-to-date the mint has sold 15,500 troy ounces of gold eagles — 18,000 one-ounce 24K gold buffaloes — and 1,180,000 silver eagles.

There was almost no activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Nothing was reported received — and only 1,929.000 troy ounces/60 kilobars [U.K./U.S. kilobar weight] were shipped out.  That occurred over at Canada’s Scotiabank — and I won’t bother linking this amount.

It was busier in silver, as one truckload…608,481 troy ounces….was received — and all of that went into CNT.   the 15,138 troy ounces of ‘out’ activity was at the International Depository Services of Delaware.  The link to that is here.

It was another fairly quiet day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 330 of them — and shipped out 165.  This activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

Erfurt, City, Ducat 1633…under Swedish occupation.  On occasion of the death of Gustavus Adolphus (1594-1632).

Origin: Roman German Empire     Material: Gold     Full weight: 3.46 grams

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday showed the expected across-the-board improvements in the commercial net short positions in all four precious metals, plus copper.  But despite the severity of the combined engineered price declines on Wednesday, August 22nd during the COMEX trading session — and in the evening session that followed, the improvements, although very respectable, certainly weren’t on the scale that they were in the previous week’s COT Report.

In silver, the Commercial net short position improved by a further 4,958 contracts, or 24.8 million troy ounces of paper silver.  They arrived at that number by adding 6,705 long contracts, but they also increased their short position by 1,747 contracts as well — and it’s the difference between those two numbers that represents the change for the reporting week.

Ted said that the Big 4 traders [read JPMorgan] reduced their short position by approximately 3,900 contracts.  But the ‘5 through 8’ large traders actually increased their short position by about 500 contracts during the reporting week — and that’s most certainly because of the fact that there are a couple of Managed Money traders with positions big enough that they’re now in that category.  The same situation exists in the Big 4 category as well.  Ted’s raptors, the 32-odd small Commercial trader other than the Big 8, added around 1,600 contracts to their long position, which is another new record high.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more.  The brain-dead technical funds in that category added another 2,099 short contracts…bring their total short position up to another new record — and the non-technical fund Managed Money traders sold off 3,327 longs…which Ted wasn’t happy [but not surprised] to see.  It’s the sum of those two numbers…5,426 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…5,426 minus 4,958 equals 468 contracts, was made up by the traders in the other two categories…the ‘Other Reportables’ — and the ‘Nonreportable’/small trader category.  Here’s the snip from the Disaggregated COT Report for silver so you can see these changes for yourself.  Click to enlarge.

The Commercial net short position in silver is down to 7,418 contracts, or 37.1 million troy ounces, which is basically no short position at all.  Ted pegs JPMorgan’s short position at around the 10,000 contract mark, or 50 million troy ounces silver which is, obviously, somewhat larger than the entire Commercial net short position.

Here is the 3-year COT chart for silver, courtesy of Nick Laird — and if you want to know what what an absolute bottom looks like…this week’s entry is the epitome of that.  Click to enlarge.

As Ted pointed out in his weekly commentary last Saturday, it is miraculous beyond belief the JPMorgan has reduced its short position to such a tiny amount, considering what they inherited from Bear Stearns ten years ago…plus stash away 750 million troy ounces of physical silver over that same time period.  These crooks are the best in the business.

But despite their huffing and puffing on the big engineered price decline on Wednesday, August 15…the improvement in the Commercial net short position during the reporting week was very modest — and that’s mainly because the Managed Monday traders, both technical and non-technical, refused to add more short positions, or sell more longs.  And as Ted has pointed out many times over the years, once this selling stops, there’s nothing left for the Commercials to buy.  At that juncture, the price stops falling — and the bottom is in.

In gold, the commercial net short position improved by only 5,665 contracts, or 566,500 troy ounces of paper gold.

They arrived at that number by adding 2,334 long contracts, plus they decreased their short position by a further 3,331 contracts — and it’s the sum of those two numbers that represents the change for the reporting week.

Ted said the Big 4 traders actually increased their short position by around 3,300 contracts and, like in silver, that’s solely because of the all the Manged Money traders that currently inhabit/contaminate the Big 8 category.  The ‘5 through 8’ large traders reduced their short position by approximately 1,500 contracts — and Ted’s raptors, the 42-odd small commercial traders other than the Big 8, added a further 7,500 long contracts or so which, like in silver, is yet another new record.

Under the hood in the Disaggregated COT Report it was all Managed Money traders, plus more.  The brain-dead technical traders in the category increased their short position by a further 9,044 contracts, to 197,171 contracts short…19.72 million troy ounces…20 percent of world gold production!  According to Ted, that’s another new record.  The non-technical Managed Money traders actually added to their long position during the reporting week…2,340 contracts worth.  They are now net long 107,143 COMEX contracts…10.71 million ounces worth!

The difference between what the Managed Money traders sold and bought…9,044 minus 2,340 equals 6,704 contracts…that represents their change for the reporting week.  The difference between the number — and the commercial net short position is…6,704 minus 5,665 equals 1,039 contracts.  And, as is always the case, that difference was made up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories.  Here’s the snip from the Disaggregated COT chart that shows all of the above changes in gold.  Click to enlarge.

The commercial net short position in gold is now down to an irrelevant 1,685 contracts, or 168,500 troy ounces of gold, which is basically no short position at all.

Here’s the 3-year COT chart for gold — and it’s a sight to behold…not only for the record books, but the history books as well.  Click to enlarge.

Like for silver, the almost 30 dollar engineered price decline on Wednesday, August 15 could only shake the COMEX gold tree for 5,665 contracts, so the commercial traders have all the blood out of the golden stone as they’re likely to get.

Platinum’s massive engineered price decline on the same date only netted ‘da boyz’ about 700 contracts — and in palladium, it was 1,100 contracts.  It wasn’t worth their effort.  But they had to do it, because to have platinum and palladium sitting there at either unchanged…or rallying, while they hammered the living snot out of silver and gold, would have been far too obvious.

In copper, the commercial traders are now net long the market by about 1,500 contracts.  During the reporting week they increased their long position by 2,749 contracts, plus they reduced their short position by a further 4,791 contracts.

As Ted said in his Wednesday commentary, we are “Locked and Loaded” in all the COMEX metals.  A link to his website is here — and if you’re not a subscriber already, you should seriously consider it, as he’s the real authority on all thing silver and gold related.

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 traders are short 118 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 181 days, which is 6 months of world silver production, or about 422.5 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 189 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 37.1 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 422.5 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 422.5 minus 37.1 equals 385.4 million troy ounces.  The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 32-odd small commercial traders other than the Big 8, are long that amount.

Ted pegs JPMorgan’s short position at around 10,000 contracts, or 50 million troy ounces of paper silver.  That works out to about 21 days of world silver production.  The short position of the Big 4 traders is 118 days — and once you subtract out JPMorgan’s 21 days, that leaves 118-21=97 days of silver production divided up between the other three traders in the ‘Big 4’ category, or a bit over 32 days of world silver production each on average.  So it’s obvious that one trader of the three has a position larger than that amount — and one trader has position smaller than that.

But what should jump out at you here is that no matter how you divide up the short positions of the other three large traders in the Big 4 category…JPMorgan now has the smallest short position of them all.

The four traders in the ‘5 through 8’ category are short 63 days of world silver production in total…which is unchanged from last week’s COT Report.  They’re short, on average, a bit under 16 days of world silver production each.  The smallest of the traders in this category holds something less than that amount — and the largest, something more than that amount…but neither number by a lot…one full day at most.

It should be noted that JPMorgan’s short position in #4 spot, is only about four days or so of world production larger than the short position of the #5 trader in the ‘5 through 8’ large trader category.

The Big 8 commercial traders are short 34.7 percent of the entire open interest in silver in the COMEX futures market, which is down a bit from the 36.7 percent that they were short in last week’s COT Report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be something under 40 percent.  In gold, it’s now 32.6 percent of the total COMEX open interest that the Big 8 are short, virtually unchanged from the 32.7 percent they were short in last week’s report — and a bit over 35 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 35 days of world gold production, which is up 1 day from what they were short last week — and the ‘5 through 8’ are short another 20 days of world production, which is unchanged from what they were short the prior week, for a total of 55 days of world gold production held short by the Big 8 — which is up 1 day from what they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 64 percent of the total short position held by the Big 8…which is up 1 percentage point from last week’s COT Report.  Like in silver, there’s at least two, if not more, Managed Money traders in the Big 8 category now — and that certainly skews the numbers to the high side by a number of days of world gold production.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 65, 61 and 66 percent respectively of the short positions held by the Big 8.  Silver is down 2 days from the previous week’s COT Report, platinum is unchanged from a week ago — and palladium is down 1 day from last week’s COT Report.

Ted’s double cross trap was pretty much set for the other commercial/Managed Money traders in both gold and silver in last week’s COT Report, so it’s even more ‘locked and loaded’ now.  That would also apply to platinum and palladium as well.

And as I keep saying — and will keep on saying…all we’re waiting for is CME CEO Terry Duffy’s “event“.

It’s another day where I only have a tiny handful of stories for you — and that includes the repost of the Cohen/Batchelor interview that appeared in Thursday’s column.


Durable Goods Orders Drop Most in Six Months as U.S. Slowdown Accelerates

After managing a modest bounce in June, expectations were for a drop in Durable Goods Orders in July and just as we have seen soft survey and hard ‘real’ data disappoint, so did preliminary data showing a worse than expected 1.7% drop MoM.

Against expectations of a 1.0% drop, durable goods orders in July were ugly with a 1.7% drop – the most since January.

Core durable goods orders (ex-transportation) also missed expectations, rising only 0.2% MoM vs economists’ best guess of a 0.5% gain.

Orders rose for machinery, computers and electronic products and motor vehicles and parts last month, according to the report. The data, representing the first results since the U.S. and China imposed tariffs on each other’s goods in early July, signal that business investment remains intact even as President Donald Trump widens a trade war to a growing range of products from China.

There was a modest silver lining in the report as Capital Goods Shipments ex-air (proxy for capex spending) jumped more than expected – rising 0.9% MoM…

The drop in overall durable-goods orders reflects bookings for aircraft and parts, typically a volatile category. Civilian airplane orders fell 35.4 percent in July, while the military side dropped 34.6 percent. Boeing Co. previously reported that the planemaker received 30 orders in July, down from 233 in June.

U.S. macroeconomic data disappointments continue to pour cold water on the ‘greatest economy’ narrative…

This brief 3-chart Zero Hedge new item was posted on their Internet site at 8:41 a.m. EDT on Friday morning — and it’s the first of two in a row from Brad Robertson.  Another link to it is here.

Quite A Landmark Moment” – U.S. Yield Curve Tumbles Below Japan’s For First Time In 11 Years

The U.S. Treasury curve has (infuriatingly for policymakers) refused to reflect any growth hype narrative at all, with the spread between 2Y and 10Y maturities back in the teens – for the first time since 2007.

However, in what Deutsche Bank calls a “landmark moment” the U.S. yield curve has tumbled back below the Japanese yield curve for the first time since Nov 2007…

We are sure the ‘smartest men (and women) in the room’ in Jackson Hole will be doing their best to shrug off this yield curve collapse as ‘different this time’, but we suspect deep down they all realize that one more hike priced into the short-end and the curve is inverted.

We know there’s a bunch of people who are saying this time it’s different [when discussing the yield curve]” said  Omair Sharif, senior U.S. economist at Societe Generale . “Yet they spent a good chunk of that [July] meeting listening to a staff presentation on whether their tool kit is sufficient if there’s another downturn. They’re kind of prepping their tool kit.”

Sharif said the minutes of the July meeting showed that some Fed officials are concerned about the flattening curve but others are not.

And bear in mind that the market remains adamant that The Fed will be cutting rates in 2020, not hiking…

This tiny 3-chart Zero Hedge item put in an appearance on their website at 9:44 a.m. on Friday morning EDT — and I thank Brad Robertson for sharing it with us.  Another link to it is here.

Trump’s War With the Fed — Bill Bonner

Donald Trump is naturally at odds with the “elite.” He’s a New York Post guy; The New York Times despises him.

He sees himself under attack by the elite… which is made up, near as we can tell, of people who walk fully upright and speak in full sentences. He claims they are trying to stop him from making America great again.

But the real fight is not between Mr. Trump and the elite. It is between two factions of the Deep State. Neither has much cause for complaint.

Donald Trump has increased military spending by an additional $52 billion; he’s given the elite a big tax break; he’s done nothing to “drain the swamp” or threaten the Deep State’s power or privileges.

Instead, he is expanding its power with new initiatives (such as the trade war) that bring vast new opportunities for mischief within reach of the chief executive.

But the elite in the Deep State is determined to bring him down. He’s regarded as vulgar, unreliable, and embarrassing.

This very interesting and worthwhile commentary by Bill showed up on the Internet site very early on Friday morning EDT — and another link to it is here.

Doug Noland: Powell, Greenspan and Whatever it Takes

Ironically, the free-market ideologue sowed the seeds for unsound markets increasingly incapable of self-correction and adjustment. Asset inflation: the most dangerous form of inflation specifically because there are powerful constituencies beholden to it and essentially none in opposition.

In the sixties, Alan Greenspan was said to have explained to his fellow Ayn Rand colleagues that the Great Depression was the result of the Federal Reserve repeatedly placing “coins in the fuse box.” Ironically, Greenspan initiated a process that has seen the Fed and global central bankers resorting to coins to circumvent market forces for going on three decades – culminating with “whatever it takes” directing the one-way, free-flow of “money” into the securities markets.

I try to cut Chairman Powell some slack. I understand he’s trapped in gradualism and flawed central bank doctrine, more generally. But I was hoping he would over time initiate a retreat from the Greenspan/Bernanke/Yellen market “put.” Powell: “I am confident that the FOMC would resolutely ‘do whatever it takes’ should inflation expectations drift materially up or down or should crisis again threaten.” Why is this language necessary on a day with the S&P500 and NASDAQ trading to all-time highs?

Bond yields (and the dollar) dropped on the release of Powell’s Speech. The market essentially presumes zero probability of the Fed ever aggressively tightening policy under any circumstance. Aggressive cuts and market support, well that’s an altogether different story. I would argue that the prospect for a return of aggressive QE and zero rates is fundamental to ongoing extraordinarily low market yields and the flat yield curve. Greenspan’s “asymmetrical” globally on steroids.

Doug’s weekly Credit Bubble Bulletin appeared on his Internet site in the very wee hours of Saturday morning EDT — and it’s always a must read for me.  Another link to it is here.

Can’t get enough of what you don’t need — Dave Morgan

It was the French philosopher Voltaire who said, “All paper money eventually returns to its intrinsic value – zero.”

As the world is now awash with fiat currency – and the debt that accompanies it – should we heed his words and worry about the collective confidence we all have in paper money?

Host Ross Ashcroft joined by metals expert David Morgan to discuss the importance of honest money and the benefits of a sound financial system.

This very worthwhile 28-minute video interview with David Morgan was posted on the Internet site on Monday — and I thought it best to wait until Saturday’s column before including it.  I’ve only listened to the first ten minutes — and was impressed with what I heard up to that point.  I’ll listen to the rest this weekend.  Another link to it is here.

New U.S. anti-Russia sanctions ban loans, arms exports and dual-use goods

A new batch of U.S. sanctions against Russia will prohibit issuing loans to Moscow, as well as exports of weapons and dual-use products. The sanctions package is expected to come into force on August 27.

The unpublished document by the State Department was uploaded to the Federal Register website on Friday for “public inspection.”

The new restrictions have been imposed on the pretext of alleged Russian involvement in poisoning of the Skripals in the U.K. back in March, which London promptly pinned on Moscow but is yet to produce any evidence to back up its claims.

The notice from the U.S. Federal Register squarely accuses Moscow of using “chemical weapons in violation of international law or lethal chemical weapons against its own nationals,” and imposes new restrictions on Russia.

The State Department, however, deemed it to be “essential to the national security interests of the United States” to waive sanctions on the export and re-export of products and technology that are needed for cooperation in space cooperation and civil-flight safety.

This story appeared on the Internet site at 1:28 p.m. Moscow time on their Friday afternoon, which was 6:28 a.m. in Washington — EDT plus 7 hours.  I thank Larry Galearis for pointing it out — and another link to it is here.

U.S. warns of sanctions for buying Russian defense system

The U.S. would consider implementing sanctions on any ally that buys a Russian air defense system, as Turkey has done, State Department spokeswoman Heather Nauert said.

The recent decline in U.S.-Turkish relations, caused in part by Turkey’s detention of an American pastor on espionage and terrorism charges, also includes the Turkish purchase of the Russian S-400 air defense system. The S-400 is not compatible with systems used by Turkey, the United States and other NATO countries.

In a Thursday press briefing, Nauert said the U.S. could implement more sanctions against Turkey, and warned other NATO countries that sanctions could follow if they consider similar deals.

It goes against our policy to have a NATO ally such as Turkey use an S-400 system. Part of the problem with that, it is — that it is not interoperable with other NATO systems,” she said. “And so we are against the — having some of our partners and allies around the world potentially purchase S-400s.”

When asked if such a purchase, by Turkey or any other country, would trigger Countering America’s Adversaries Through Sanctions Act economic sanctions by the United States, Nauert added, “I’m not going to get into that, but we have made very clear what could trigger sanctions for other countries and entities around the world.”

This UPI news item was posted on their Internet site at 10:42 a.m. on Friday morning EDT — and it comes to us courtesy of Roy Stephens.  Another link to it is here.  A parallel Zero Hedge article on this is headlined “Defections From Pax Americana Coming Louder And Faster

Time has come for Russia to finally ditch U.S. dollar – Foreign Ministry

Russia will definitely respond to Washington’s latest sanctions and, in particular, it is accelerating efforts to abandon the American currency in trade transactions, said Deputy Foreign Minister Sergei Ryabkov.

The time has come when we need to go from words to actions, and get rid of the dollar as a means of mutual settlements, and look for other alternatives,” he said in an interview with International Affairs magazine.

Thank God, this is happening, and we will speed up this work,” Ryabkov said, explaining the move would come in addition to other “retaliatory measures” as a response to a growing list of U.S. sanctions. Russian Energy Minister Aleksandr Novak recently noted that a growing number of countries are interested in replacing the dollar as a medium in global oil trades and other transactions.

There is a common understanding that we need to move towards the use of national currencies in our settlements. There is a need for this, as well as the wish of the parties,” Novak said.

According to the minister, it concerns both Turkey and Iran.

This article appeared on the Internet site at 9:24 a.m. Moscow time on their Friday morning, which was 2:24 a.m. EDT in Washington.  I thank Jack Watt for sending it our way — and another link to it is here.

Tales of the New Cold War: 1 of 2: John Brennan and the Criminalizing of Trump and Putin — John Batchelor interviews Stephen F. Cohen

Larry Galearis sent me this interview on Wednesday, but with no executive summary or commentary, as he knows that I’m trying to stay away from all things “Russiagate”…as it’s just all politically motivated — and you need a program to keep up with what’s happening with all the unbelievable bulls hit shenanigans going on in Washington these days.

To me, the entire situation is neatly summed up in the headline above.  This 2-part audio interview, with each part being about 20 minutes long, put in an appearance on the Internet site on Tuesday — and the link to Part 1 is in the headline and here — and the link to Part 2 is here.  This was in my Thursday column — and I said then that I would post it in Saturday’s missive as well — and here it is.

Land Reform In Ramaphosa’s South Africa

He who believes he has a right to another man’s property ought to produce proof that he is its rightful owner. “As the old legal adage goes, ‘Possession is nine-tenths of the law,’ as it is the best evidence in our uncertain world of legitimate title. The burden of proof rests squarely with the person attempting to alter and abolish present property titles.” (From “Into the Cannibal’s Pot: Lessons For America From Post-Apartheid South-Africa”.)

It is to this potent principle that democratic rule in South Africa has taken an axe—or, rather, an assegai.

Here is how taking land legally currently works, in South Africa, a place the U.S. State Department has only just lauded as “a strong democracy with resilient institutions…,” a country merely “grappling with the difficult issue of land reform.” “Land reform,” of course, is a euphemism for land distribution in the Robert Mugabe mold.

The process currently in place typically begins with a “tribe” or group of individuals who band together to claim vast tracts of private property.

If these loosely and conveniently conjoined groups know anything, it’s this: South Africa’s adapted, indigenized law allows coveted land, owned and occupied by another, to be obtained with relative ease.

See, the country no longer enjoys the impressive Western system of Roman-Dutch law it once enjoyed. Lax law and poorly protected property rights signal a free-for-all on the lives of white owners and their livestock.

This article, which is certainly worth reading if you have the interest, was put in an appearance on the Internet site on Thursday sometime — and it’s the third offering of the day from Larry Galearis.  Another link to it is here.

I didn’t see any precious metal-related stories that I though worth posting.


Today’s ‘critter’ is a species of…Araneus gemmoide…or cat-faced spider.  It’s a common outdoor orb-weaver spider found in the USA and Canada.  They make their webs near lights, closed spaces, and on the sides of buildings. They can also be found under wood, overhangs, or guarded places such as animal burrows. They come in varying colors but are easily identified by the two horn shaped growths on their relatively large abdomen. Their color changes from summer to winter.  The female will die within days of laying a single egg sac with hundreds of eggs.

This one had spun her web under the eaves of our garden shed just outside our back door.  I had to take these photos using a flash at night, because she hides out of sight during the day.  Legs and all would be mostly covered by a 50 cent piece, if you remember what they are.  Click to enlarge.


If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” — Joseph Goebbels

Today’s pop ‘blast from the past’ hails from the disco era — and I’ve danced my brains out to it many times in my younger years.  It was released in 1979 — and won the the Grammy Award for Best Female Rock Vocal Performance in the inaugural year the award was given out.  In 2004, the song was ranked No. 104 on Rolling Stone’s list of “The 500 Greatest Songs of All Time”.  It’s a goody — and the link is here.

Today’s classical ‘blast from the past’ couldn’t be more different.  It’s one of French composer Claude Debussy’s greatest hits…Clair de Lune…a piece for solo piano that I actually learned how to play in my final year of piano back in my late teens in the mid 1960s.  Here’s the incredibly gifted — and incredibly dishy Kathia Buniatishvili doing the honours.  This is as good as interpretation as you’ll find anywhere.  The link is here.

So, lets hope that yesterday’s rallies are the start of Ted’s “big one”.  Except for palladium, the other three precious metals remained well below their respective 50 and 200-day moving averages, which means they’re most likely well below any price where the Managed Money trader might start to cover their massive and record short positions.

Here are the 1-year charts for all four precious metals, plus copper and crude oil — and as impressive as the rallies were in the four precious metals on Friday, the tops of these rallies are miles/kilometers away if JPMorgan doesn’t show up as short seller of last resort.  The ‘click to enlarge‘ feature helps with all of them.

The deep state has Washington, the U.S.A. — and the U.S. presidency in crisis.  The will of the people, the rule of law — and the Constitution have all been pretty much tossed in the trash can.  It would be tragedy enough if the collateral damage was limited to within the beltway in Washington, or the country itself…but the deep state and their ilk have plunged the knife into friend and ‘foe’ alike in an ever-expanding international trade war.

No good will come of this, but that’s probably the intent.

Despite all this, the U.S. equity markets and the dollar index remain ‘elevated’…but as you already know, dear reader, they’re certainly getting help from the Plunge Protection Team in the futures market — and those ‘gentle hands’ in the currency market.  But it’s a reasonable assumption that these two groups are the same, or joined closely at the hip if they’re not.

How long this U.S. version of Kabuki theatre can last, or be propped up, remains to be seen, but this ‘now-longest economic expansion in U.S. history’ has only made it this far by massive financial and monetary interventions at all levels.  At some point it will come to an inglorious end — and it will certainly take the rest of the world’s equity markets with them when it does happen.

This sudden and mysterious ‘exit, stage left’ by JPMorgan in the precious metal markets is somehow related to all the above.  As I’ve said before, Jamie Dimon is as plugged in as they come — and you have to wonder what got whispered in his ear that made him head for the exits in the COMEX futures market when he did.

Whatever it was, we won’t find out about it until after the fact.  But JPMorgan is now out of its short positions in all the precious metals, except for silver — and whatever is coming down the pipe, they’re as ready as they’re ever going to be.

But after Friday’s price action in the precious metals and their shares, it certainly appears that the end of these engineered price declines are behind us.

Now we await for the upside resolution.  Hopefully it began yesterday — and we should find out pretty quick once the first big moving average is penetrated to the upside, whether this is Ted’s “big one” or not.

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