Another Blockbuster COT Report for Silver

01 September 2018 — Saturday


The gold price didn’t do much once trading began at 6:00 p.m. EDT in New York on Thursday evening.  It began to rally in fits and starts, starting around 9:40 a.m. China Standard Time on their Friday morning — and the high tick of the day came a minute or so after 9 a.m. in London.  At that precise moment, a dollar ‘rally’ began — and gold was sold lower until shortly after 12 o’clock noon in New York.  It rallied from there until shortly after 2 p.m. in after-hours trading, but even that gain wasn’t allowed to last — and it was sold back below unchanged within the next hour or so.  But it did pop back into positive territory during the last hour before trading ended at 5:00 p.m. EDT.

The high and low ticks aren’t worth looking up.

Gold was closed in New York on Friday afternoon at $1,200.80 spot, up $1.20 from Thursday.  Net volume was decent at a bit over 258,000 contracts — and roll-over/switch volume amounted to a bit over 7,400 contracts.

‘Da boyz’ took silver on the same price ride as gold.  They bounced it off its $14.45 low tick multiples times in afternoon trading in New York — and prevented it from closing it above unchanged.

The high and low ticks in this precious metal, which are barely worth looking up, were recorded by the CME Group as $14.76 and $14.525 in the December contract.

Silver was closed at $14.505 spot, down 1.5 cents on the day.  Net volume was fairly decent as at about 61,500 contracts — and roll-over/switch volume was only 2,200 contracts.

The platinum chart looks suspiciously like the charts for silver and gold — and it wasn’t allowed to close above unchanged, either.  It finished the Friday session at $786 spot, down 2 bucks on the day.

Palladium was the outlier once again.  It was up about 10 bucks by 10 a.m. CEST in Zurich when the ‘rally’ in the dollar index began, but it continued to trade sideways, regardless of that fact.  The price chopped and flopped around a bit in New York trading, before jumping higher shortly before 1 p.m. EDT.  It crawled quietly lower from there until trading ended at 5:00 p.m. EDT.  Palladium finished the day at $978 spot, up 14 dollars from Thursday’s close.

The dollar index closed very late on Thursday afternoon in New York at 94.70 — and after a down/up dip between the 6 p.m. EDT open — and 10 a.m. China Standard Time on their Friday morning, the dollar index sank unsteadily lower, with the 94.55 low tick coming at exactly 9:00 a.m. BST in London.  It began to chop unsteadily higher from that juncture — and really took flight between 10:40 a.m. EDT and its 95.22 high tick, which came around 12:35 p.m. EDT.  It edged lower from that point until 2 p.m. in after-hours trading — and then flat-lined into the close from there.  The dollar index finished the Friday session at 95.10 — up 40 basis points from Thursday’s close.

It was obvious that this engineered rally in the dollar index was needed to keep precious metal prices in check, because even with the currency gain on the day, ‘da boyz’ were only able to close three of the four precious metals around the unchanged mark.

And here’s the 6-month U.S. dollar index — and it would be unwise to read too much into it, as its values are just as manufactured as every other price index out there.

The gold stocks opened unchanged — and then rallied to their respective highs of the day around 10:15 a.m. in New York trading.  Their respective lows came at gold’s low tick of the day — and they chopped quietly and unsteadily sideways for the rest of the Friday trading session.  The HUI closed down 0.29 percent.

The trading pattern in the silver equities was almost identical to the gold shares.  But the initial rally at the opening of trading in New York was quiet a bit higher than it was for the gold stocks, so they managed to squeeze a positive close…albeit by a tiny amount.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.19 percent.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index from Nick.  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 the ongoing rally in palladium, there’s a lot of red to look at, but the declines are pretty tiny.  Click to enlarge.

The month-to-date chart chart doesn’t look anywhere near as happy — and palladium’s outperformance is the only bright spot.  The outperformance of the silver equities vs. the gold equities is quite stark here.  But it wouldn’t take too many days of decent gains to change the appearance of this chart radically for the better.  Click to enlarge.

The year-to-date graph is but-ass ugly — and the ‘outperformance’ of the silver equities vs. the gold equities is even more stark here. This fact clearly demonstrates that silver — and its associated equities are going to vastly outperform their golden cousins when the next big rally is allowed to get underway.  Click to enlarge.

And with another excellent COT Report in silver yesterday, the above seas of red is what major price bottoms are made of.  And I as I said last week in this space…they’re ugly…with this last swing for the fences by JPMorgan being the worst I’ve very seen in the eighteen years that 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.

The CME Daily Delivery Report for Day 2 of September deliveries showed that 49 gold and 316 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, of the four short/issuers in total, the two largest were Advantage and ADM with 25 and 19 contracts from their respective client accounts.  There were three long/stoppers in total…Morgan Stanley with 27 for its in-house/proprietary trading account — and JPMorgan and Advantage picked up 11 contracts each — and all for their respective client accounts.  In silver, there were twelve short/issuers in total — and the three largest were ABN Amro, Advantage and ADM, with 166, 52 and 34 contracts from their respective client accounts.  There were nine long/stoppers in total.  The largest by far was JPMorgan, with 147…105 for its own account, plus 42 for its client account.  HSBC USA and Goldman were nearly tied for second place with 71 and 70 contracts for their respective in-house/proprietary trading accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME’s Daily Delivery Report showed that gold open interest in September fell by 359 contracts, leaving 144 still around, minus the 49 mentioned just above.  Thursday’s Daily Delivery Report showed that 371 gold contracts were actually posted for delivery on Monday, so that means that 371-359=12 more gold contracts were added to the September delivery month.  Silver o.i. in September dropped by 3,663 contract, leaving 2,542 still open, minus the 316 mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 3,759 silver contracts were actually posted for delivery on Tuesday, so that means that another 3,759-3,663=96 more silver contracts were added to September.

There was another withdrawal from GLD yesterday, as an authorized participant took out 85,193 troy ounces.  There were no reported changes in SLV.

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

For the month of August, the mint sold 21,500 troy ounces of gold eagles — 20,000 one-ounce 24K gold buffaloes — and 1,530,000 silver eagles.

It was another all zeros day in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.

It was another pretty busy day in silver, as 1,221,049 troy ounces were received…nothing was shipped out — and 2,172,568 troy ounces was transferred from the Eligible category — and into Registered.  That’s obviously in preparation for September deliveries.  One truck load…613,349 troy ounces…was left at Brink’s, Inc. — and another truck full…605,688 troy ounces…was dropped off at Canada’s Scotiabank.  The remaining 1,921 troy ounces was left at CNT.  The transfer from Eligible to Registered also occurred at CNT as well — and the link to that activity is here.

It was fairly busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 4,150 of them — and shipped out another 2,160.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Saxony, John George I, 1615-1656, Reichsthaler 1629

Origin: Roman German Empire     Material: Silver     Full Weight: 29.33 grams

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed another monster improvement in silver — and the expected deterioration in gold…although it wasn’t much.

In silver, the Commercial net short position improved by another huge amount…8,835 contracts…or 44.2 million troy ounces of paper silver.

The arrived at that number by reducing their long position by 3,824 contracts, but they also reduced their short position by a monstrous 12,659 contracts — and it’s the difference between those two numbers that represents the change for the reporting week.

The Commercial traders are now net long the silver market for the first time that I can remember.  And the other thing I noticed about the Commercial traders in silver is that the number of traders in their category jumped from 40 to 49 during the last reporting period.

With so many Managed Money traders now infecting the Big 8 traders category…there are at least two in the Big 4 category…the weekly changes in the short position of the Big 8 traders don’t mean much.  But here are the numbers for those of you who keep track of these things.

Ted said that the Big 4 traders reduced their short position by around 400 contracts — and the ‘5 through 8’ traders actually increased their short position by approximately 300 contracts.  Ted’s raptors, the 41-odd small Commercial traders other than the Big 8, added 8,700 long contracts which, without doubt, is another new record high for them.  They were probably added by the 9 new traders [raptors] that showed up in the Commercial category during the reporting week.

Under the hood in the Disaggregated COT Report, it was mostly Managed Money traders on the other side of the Commercial traders, as the technically orientated Managed Money traders went further on the short side to the tune of 5,208 contracts — and another new record high.  Ted was astounded.  The non-technical Managed Money traders reduced their long position by 2,780 contracts — and it’s the sum of those two numbers…7,988 contracts…that represents their change for the reporting week.  As always, it was the traders in the other two categories that made up the difference between what the Commercial traders bought — and the Managed Money traders sold.  Here’s the usual snip from the Disaggregated COT Report so you can see these changes for yourself.  Click to enlarge.

As I mentioned further up, the Commercial net short position in silver no longer exists.  In its place is a tiny long position…1,417 contract, or 7.1 million troy ounces of paper silver.  Who would have thought it possible!  Ted pegs JPMorgan’s short position at no more than 7,000 contracts — and maybe as low as 5,000 contracts.  If they are still a member of the Big 8 category, they would be in No. 8 spot now if they hold the larger amount — and not in it all if the 5,000 contract number is more applicable.  Ted will be waiting for next Friday’s Bank Participation Report to fine-tune this number.  But regardless of what it is, that number is now pretty irrelevant.

Here is the 3-year COT chart — and it is a sight to behold.  Click to enlarge.

With JPMorgan’s short position down to what it is — and probably even less since the Tuesday cut-off, they have succeeded in transferring the vast majority of their short position onto the backs of the Managed Money traders — and now have the most to gain from a major repricing of silver.  All they have to do is not go short the next rally — and the sky [literally] will be the limit for the silver price in a short covering rally for the ages.

In gold, the commercial net short position rose by a smallish 6,577 contracts, or 657,700 troy ounces of paper gold.

They arrived at that number by reducing their long position by 948 contracts — and they also increased their short position by 5,629 contracts.  It’s the sum of those two numbers that represents the change for the reporting week.

As in silver, the Big 8 category of large traders is also infected with a goodly number of Managed Money traders, so the positions of the Big 4 and ‘5 through 8’ large traders are rather meaningless as well.

Ted said that the Big 4 traders increased their short position by approximately 3,800 contracts.  Ted felt that JPMorgan added those on a temporary basis for reasons he’ll discuss in his weekly review later today — and that they’ve probably covered them all since the Tuesday cut-off.  The ‘5 through 8’ traders also increased their short position by about 1,000 contracts — and Ted’s raptors, the 48-odd small commercial traders other than the Big 8, sold around 1,800 long contracts.

Under the hood in the Disaggregated COT Report it was all Managed Money traders, plus a bunch more, as the technically oriented Managed Money traders reduced their short position by 15,428 contracts, plus the non-technical Managed Money traders decreased their long position by 1,172 contracts — and it’s the difference between those two numbers…14,256 contracts…that represents their change for the reporting week.  As always, the difference between that number — and the commercial net short position…14,256 minus 6,577 equal 7,679 contracts…was made up by the traders in the ‘Other Reportables’ — and ‘Nonreportable’/small trader category…with the traders in the ‘Other Reportables’ category doing virtually all the heavy lifting during the reporting week.  Here’s the snip from the Disaggregated COT Report for gold as well.  Click to enlarge.

Ted was sort of expecting an increase in the commercial net short position in gold — and that’s what the 6-month gold chart showed — and that’s what we got.  The commercial net short position in gold now sits at 8.26 million troy ounces, which is up a tiny amount from last week’s COT Report — and certainly nothing to be concerned about.

Here is the 3-year chart for gold.  Click to enlarge.

There was decent Managed Money short covering in palladium as well…2,343 contracts worth.  That may not sound like a lot, but it was more than 25 percent of the entire technical fund/Managed Money short position.  In platinum, the technical fund/Managed Money traders actually increased their short position by 87 contracts during the reporting week.  They reduced their short position in copper by a bit.

With JPMorgan gone from the short side in gold — and its short position in silver down to fumes and vapours, we’re still, as Ted Butler has said….”locked and loaded” for precious metal price moves of Biblical proportions…if that’s what the powers-that-be have in mind.

I’m certainly looking forward to what Ted has to say in his weekly review this afternoon — and while his name is fresh in your mind, you should consider subscribing to his service, as he’s the real authority on anything silver or gold related.  I’m just a student/disciple of his work…but he’s ‘da man’.  The link to his website is here.

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 117 days of world silver production—and the ‘5 through 8’ large traders are short an additional 64 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 also short 181 days of world silver production.]

In the COT Report above, the Commercial net long position in silver was reported as 0.7 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 plus 0.7 equals 423.2 million troy ounces.  The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 41-odd small commercial traders other than the Big 8, are long that amount.

The short position of the four largest traders in the Big 4 category is a bit over 29 days of world silver production each.  So JPMorgan is obviously no longer a part of the Big 4 traders.

The four traders in the ‘5 through 8’ category are short 64 days of world silver production in total…which is up one day from last week’s COT Report.  They’re short, on average, 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.

As stated earlier, Ted pegs JPMorgan’s short position at 7,000 contracts on the high side — and 5,000 contracts on the low side.  I’ll be conservative and use the 7,000 contract number.  That works out to about 15 days of world silver production.

As stated above, in last week’s COT Report, JPMorgan was in the No. 4 short position spotIn one week they have gone from No. 4 short, to No. 8.  And if this 7,000 contract/15 days of world silver production proves to be too high, then that means that JPMorgan has already vanished from the Big 8 category.  I never thought I’d live long enough to be able to type those words…but that, dear reader, is exactly the situation as of the Tuesday cut-off.

The Big 8 commercial traders are short 37.2 percent of the entire open interest in silver in the COMEX futures market, which is up a bit from the 34.7 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 over 40 percent.  In gold, it’s now 33.9 percent of the total COMEX open interest that the Big 8 are short, up a bit from the 32.6 percent they were short in last week’s report — and close to 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 36 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 56 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 unchanged from last week’s COT Report.  Like in silver, there are 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, 59 and 65 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report, platinum is down 2 days from a week ago — and palladium is down 1 day from last week’s COT Report.

Ted’s double cross scenario by JPMorgan of the other commercial/Managed Money traders in all four precious metals was pretty much set two weeks ago, so it’s even more ‘locked and loaded’ now after two blockbuster COT Reports in a row for silver since then.  That set-up is similar in platinum, palladium and copper as well.

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

I have very few stories for you today but, as I promised on Thursday, I’ve included the Cohen/Batchelor interview once again.


Concert in a Dying Town… — Bill Bonner

[T]here’s nothing in the MAGA program to change these trends. The tax cut simply shifted the burden of government into the future.

Like all the feds’ flimflams, it is supposed to “pay for itself.” But every crackpot scheme is supposed to create a better, freer, more competitive, more efficient, and healthier society… and thereby “pay for itself.”

From alpha to omega… from Amtrak to zoos… we know of none – save, perhaps, the interstate highway system – that even came close.

Already, Mr. Market has tried to put the brakes on three times – with the Crash of ’87, the NASDAQ crash of 2000, and the debt crisis of 2008–2009.

Each time, the feds stifled the correction with even more debt. And each time, more and more massive inputs of credit produced less and less extra output.

But now, we are near the end of one of the longest business expansions/bull markets in history.

This interesting and eye-opening commentary appeared on the Internet site very early on Friday morning — and another link to it is here.

What the Heck Just Happened in Argentina? — Wolf Richter

Just when you think Argentina’s financial crisis can’t get worse, it gets a whole lot worse. In order to halt the peso from collapsing further, the IMF, after some serious begging from the government, had agreed to a $50-billion bailout package in June, to be disbursed in increments. In addition, the central bank raised its policy rate in big jumps, reaching 45% on August 13. And in an emergency meeting today, it goosed the rate to a blistering 60%!!
And this is what followed: Yesterday the peso plunged 7%; and today as of midday in Buenos Aires, it has plunged over 17%. That brings the total plunge for the two days to 24%. It now takes 41.3 pesos to buy a dollar. Seen the other way around, a peso is now worth 2.4 cents (down from $1 in early 2002).

WTF happened? As soon as those IMF dollars started flowing a couple of months ago, the government – the central bank is under the Ministry of Finance and thus integral part of the government – started selling those dollars and buying pesos. But it was the only entity buying pesos, and those dollars were handed to the pesos sellers and thus wasted instead of being invested in the economy.

This interesting article from Wolf was posted on the Internet site on Thursday — and I thank Richard Saler for pointing it out.  Another link to it is here.  There was a related story on Russia Today on Friday headlined “Argentina’s currency collapses despite massive rate hike as possible debt default looms” — and it’s worth a look.

U.S. CFTC orders BNP Paribas to pay $90 million penalty for rate-rigging

U.S. federal regulators on Wednesday ordered BNP Paribas to pay a $90 million civil penalty after settling charges against BNP Paribas Securities Corp for attempted manipulation of the ISDAfix benchmark.

Companies and investors use ISDAfix to price swaps transactions, commercial real estate mortgages and structured debt securities.

The Commodity Futures Trading Commission order found that BNP Paribas attempted to manipulate the benchmark to benefit its derivatives positions in instruments and that the conduct involved multiple traders and included supervisors, it said in a statement.

From 2007 to 2012, the CFTC said the bank attempted to manipulate the benchmark rate by deliberately trading to move it in a direction at the precise time it was being set. The CFTC also said the bank submitted false pricing reports to further sway the benchmark in a profitable direction.

Every bullion bank except JPMorgan.  This Reuters story, filed from Washington, showed up on the Internet site on Wednesday sometime — and I found it in a GATA dispatch yesterday.  Another link to it is here.

Italian Bond Yields Are Blowing Up Again

For the second day in a row, the “weakest link” among G-10 bond markets, Italy, is getting hit hard, with the 10Y Italy government bond sliding, sending its yield to session highs of 3.24%, which also is above the highest yield hit during the May mini crisis, is now the highest going back to 2014.

“Lo spread” is similarly getting blown up, with the 10Y Italy-German spread now the widest since 2013…

The move has erased earlier gains, after reports in the Italian media that Finance Minister Tria is seeking a deficit/GDP ratio of 1.5% in the new budget law, well below the 3% feared by investors.

However, this favorable take was quickly erased following the latest blow out in emerging market bonds, where Argentina bonds took the lead and are being dumped en masse, and contagion is once again starting to emerge.

And while U.S. equities remains in a range, the move higher in Italy is being noticed by U.S. Treasurys, whose yields are now down to session lows, just above 2.83%.

This brief 3-chart Zero Hedge new story showed up on their Internet site at 9:27 a.m. EDT on Friday morning — and I thank Brad Robertson for this one.  Another link to it is here.

Doug Noland: Unassailable

Our reading of financial history has left us with the impression that financial manias are replete with crazy speculators running around in fits of irrational greed and excess. I hold the view that Bubbles are much more about fits of deceptively rational behavior. The “Oracle of Omaha,” 88 years young Thursday, can drink Coke and preach the virtue of buying stocks for the long-term. Who today would take exception with such an irrefutable truth?

Mr. Buffett, along with virtually everyone, was blindsided by the 2008 crisis. This should matter but doesn’t. Amazingly, another crisis is viewed these days as an opportunity rather than a risk. Stocks, as they always do, will come roaring back. The last crisis was only an issue for those that lacked conviction and sold stocks in an irrational panic.

At this point, the bullish view that stocks must be bought and held for the long-term has surpassed rational. It’s Unassailable. Your price entry point matters little – the global backdrop even less. Politics little, geopolitics less. Holding cash is stupid, shorting much worse. Indeed, to not bet confidently on the U.S. for the long-term is an act of self-destructive irrationality. A risk-based approach, to be sure, would lead to irrational decisions. It’s been proven – repeatedly. Don’t sell.

I believe were nearing the end of an historic multi-decade Bubble. Risk is incredibly high, a view that has by now been thoroughly discredited. A key factor boosting risk is the overwhelming consensus view that risk is virtually nonexistent. In stark contrast, I believe this protracted period of serial boom and bust cycles has led to the accumulation of financial and economic distortions and deep structural impairment.

Determined central banks and governments have resolved a series of busts with only more powerful booms. At his point, this ensures that few contemplate a scenario where policymakers are without the capacity to sustain robust markets and economic growth.

Doug’s latest Credit Bubble Bulletin was posted on his website in the wee hours of Saturday morning EDT — and another link to it is here.

NATO member Turkey concludes deal with Russia for S-400 missile systems

Turkey concluded what can only be seen as an historic move. RT reported on 31 August that President Recep Tayyip Erdogan concluded a deal with the Russian Federation for the purchase of the Russian-made S-400 “Triumph” air-defense system, showing the U.S. and NATO that it has alternatives if the Americans cancel their F-35 deal with the country.

Recep Tayyip Erdogan … reaffirmed Turkey’s commitment to purchasing the Russian-made S-400 air-defense system, asserting that Ankara has alternatives if the Washington cancels its F-35 deal.

Speaking to a crowd of military officers at a graduation ceremony on Friday, the Turkish president said that Turkey “needs” the S-400 system for its defense, and that deliveries would happen very soon on account that the deal was already “done.”

He added that it was “not acceptable” for Turkey to accept U.S. impositions regarding the S-400 sale and, if the U.S. wanted to cancel its deal to deliver F-35 fighter jets to Turkey, then “we have alternatives.”

A member of NATO, Turkey’s decision to buy the S-400 has been a major concern for the U.S. and other members of the alliance, who fear that its deployment alongside U.S.-made weapons and systems operated by Turkey, such as the F-35, will be put at risk.

This news item put in an appearance on Internet site around 10:30 a.m. EDT on Friday morning — and I thank Larry Galearis for pointing it out.  Another link to it is here.

Tales of the New Cold War:The Kremlin Mole(s) who may not exist. Extended Le Carre Edition — John Batchelor interviews Stephen F. Cohen

Part 1: The title is a reference to the famous author of espionage novels that gives us a hint that this podcast is about geopolitical games and important changes in the relationships between East and West countries. Batchelor opens with Putin and his growing fondness for video on his countrywide trips, and professor Cohen notes something similar with Putin dancing with the Austrian foreign minister at her wedding. These are all early indications of relaxing geopolitical relationships. Even of more significance Cohen describes an about face of both Merkel of Germany and Macron of France who suddenly announced that they are turning their back on Washington. Merkel is now officially backing Nord Stream 2 – the Russian LNG pipeline – and Macron is stating a rejection of Washington’s “security” relationship with Europe. Both are looking at cooperation with Russia. Another important news item is the proposed U.S. meeting with the Taliban to discuss the future of Afghanistan in Moscow! So far the Afghan government and Washington are refusing to attend.

From here Cohen makes a brief foray into recent Russiagate stories and a list of culprits that have nothing to do with Russia but reminds Batchelor of an old story resurfacing about Washington having a mole in the Kremlin.  This story for Cohen is about “we are approaching the dark soul of the Watergate saga”, and as preposterous as the original New York Times article was, the story has reemerged as “news” in a recent New York Times article that that Russia is targeting the mid term elections. Cohen is positive that this whole fiction is a product of the CIA. But Cohen lists a number of incidents over the past 100 years that show both governments meddling in Russian and American internal affairs at very much more serious levels. Please listen to the podcasts.

Part 2: Batchelor fixates on the mole in the Kremlin story – which has morphed into more than one source in the latest rendition. He is intrigued by the very outlandish and preposterous nature that any spies in Russia could be “outed” for Washington politics. That would put those “sources” at real risk, if the story was true, maintains Cohen, and all for the “core” reason that Putin put Trump in the White House. Now the mid term elections are threatened. This new accusation is getting very thin on the ground, and while they are attempting to de-legitimize Trump, Cohen states that now they are attempting to de-legitimize Congress. And by extension de-legitimizing the U.S. electoral process. This is the damage of Russiagate and the perpetrators need to be held accountable. The remaining portion of the podcast concerns the role of the mole in the Kremlin story and its veracity.  But Cohen raises a final point about how this same story has crippled the U.S. intelligence apparatus through the expulsion of U.S. embassy staff in Russia.


The strength of this podcast is in early Part 1 — and there is even a common theme that can be detected in the news items listed. We may have turned the corner of Washington control of Europe and that turn is toward Moscow. I was also most impressed with the Taliban story where they (insist?) want the future of Afghanistan discussion with the Americans to take place in Moscow. The U.S. military situation in Afghanistan is worsening by the day as increasingly the Taliban is denying the countryside to the American forces and limiting them to the cities and their military bases. They are in essence in a corner and fighting a defensive war. This means that the Taliban is now also in control now of the peace process. The meeting in Moscow would concern the withdrawal of American forces in a negotiated peace, a peace that would announce both the American loss of the war and an acknowledgement that, as Cohen said several podcasts ago, that Russia would need to have Washington’s back in order for the withdrawal of U.S. forces to happen. For the Taliban agrees — and for history it would also add the descriptive “humiliating” to the loss of the war for Washington. And once again Putin the statesman rescues the United States.

The theme is also repeated as both Merkel and Macron are also looking for solutions to their countries energy supply and security respectively by looking to Russia. Several times I have stated that NATO is failing as a “security” institution and to think that both of the strongest countries in Europe (and one may also include Turkey in this discussion) are opting out as enemies of Russia is a very new and welcomed reality. This is verification. Russia is the solution that the U.S. pretends to be, but as we all know by now Europe must also look east for the future of all Europe. NATO would not have French, Turkish, or probably German support for NATO action against Russia and I see this as a stage in the disintegration of NATO. This is a start in a new direction – and a big one at that!

This 2-part audio interview, with each part running about twenty minutes, appeared on the Internet site on Tuesday.  I thank Larry Galearis as always, for excellent executive summary — and his closing commentary.  If I remember, this interview will also appear in my Saturday column if you don’t have the time for it just now.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.

Is the next U.S. aggression on Syria already scheduled? — The Saker

It appears that we are coming back full circle: the AngloZionists are again, apparently, preparing to use the very same White Helmets (aka “good terrorists”) to execute yet another chemical false flag attack in Syria and again blame the government forces for it. The Russians are, again, warning the world in advance and, just as last time, (almost) nobody gives a damn.  And there are even reports that the U.S. is, yet again, considering imposing a (totally illegal) no-fly zone over Syria (I have not heard this once since Hillary’s presidential campaign).  And just like last time, it appears that the goal of the U.S. is  to save the “good terrorists” from a major governmental victory.

It appears that my prediction that each “click” brings us one step closer to the “bang!” is, unfortunately, coming true and while the Empire seems to have given up on the notion of a full-scale reconquest of Syria, the Neocons are clearly pushing for what might turn out to be a major missile strike on Syria.  The fact that firing a large number of missiles near/over/at Russian forces might result in Russian counter-attack which, in turn, could lead to an major, possibly nuclear, war does not seem to factor at all in the calculations of the Neocons.  True, the Neocons are mostly rather stupid (as in “short-term focused”) people, with a strong sense of superiority and a messianic outlook on our world.  However, it baffles me that so few people in the USA and the E.U. are worried about this.  Somehow, a nuclear war has become so unthinkable that many have concluded that it can never happen.

The other thing which the Neocons seem to be oblivious to is that the situation on the ground in Syria cannot be changed by means of missile strikes or bombs.  For one thing, the last U.S. attack has conclusively shown that U.S. Tomahawks are an easy target for the Syrian (mostly antiquated) air defenses.  Of course, the U.S. could rely on more AGM-158 JASSM which are much harder to intercept, but no matter what missiles are used, they will not effectively degrade the Syrian military capabilities simply because there are so few lucrative targets for cruise missile strikes in Syria to begin with.  Considering that the U.S. knows full well that no chemical attack will take place (or even could take place, for that matter, since even the USA have declared Syria chemical weapons free in 2013) the White House might decide to blow up a few empty buildings and declare that “the animal Assad” has been punished I suppose.  But even if completely unopposed a U.S. missile attack will make no military sense whatsoever.  So this begs the question of what would be the point of any attack on Syria?  Sadly, the rather evident answer to that is that the upcoming missile strike has less to do with the war in Syria and much more to do with internal U.S. politics.

This very worthwhile commentary by the Saker appeared on his website on Friday sometime — and it’s the second contribution of the day from Larry Galearis.  Another link to it is here.

Ted Butler: JPMorgan’s Opportunity of a Lifetime in Silver

Ted Butler comes on to talk about the silver market, and why JP Morgan is now in prime position to let silver rise organically for the first time in decades.  Should those of us that own physical silver be rooting for JP Morgan?  And if they do let the price rise significantly, what’s next?  More manipulation, or will silver rise through honest price discovery?

This 46:25 minute audio/video interview was posted on the Internet site on Friday sometime — and it’s certainly worth your while.


Today’s ‘critter’ is the blue-and-white flycatcher.  It’s a migratory songbird in the Old World flycatcher family Muscicapidae. The species is also known as the Japanese flycatcher. It breeds in Japan, Korea, and in parts of north eastern China and far eastern Russia. It winters in South East Asia, especially in Vietnam, Cambodia, Thailand, Sumatra and Borneo.  From the photos below, it’s easy to see how it came by its name.  Click to enlarge.


Today’s pop ‘blast from the past’ dates from 1968.  It was originally released in 1967 by a group known as The Ever-Green Blues and, for whatever reason, it didn’t get very far.  A year later, The Grass Roots came along and covered it — and the rest, as they say, is history.  The link is here.  Along with that tune is the bass cover by Constantine Isslamow.  Until I heard it just now, I had no idea how complex the bass line to this song was.  It’s certainly worth a listen if you have the interest — and the link is here.

Today’s classical ‘blast from the past’ is one that I’ve only posted once before I believe — and it’s probably been two years and change since I did it last, so it’s certainly time for a revisit.  Of all the world’s great violin concertos, this one sits in Number One spot for me.  I’ve heard it performed live on several occasions — and it’s not of this earth.  One commentator described it as “the great fall upwards” — and I couldn’t improve on that description.  It’s hard to believe that it’s premiere performance in 1806 was unsuccessful.  It’s Beethoven’s concerto for violin and orchestra in D major, Op. 61.

Here’s the luscious and incredibly gifted Hilary Hahn doing the honours with the Detroit Symphony Orchestra — and the link is here.

It was a day where a sudden ‘rally’ in the dollar index was used to pound three of the four precious metals back to unchanged, or down a bit on the day.  As Ted said on the phone last night, JPMorgan is still very much in control of prices — and I suspect that they’ve been using the three days since the cut-off for yesterday’s COT Report to reduce their short position in silver even further.

And after all these months of effort, they’re pretty much out of what’s left of that short position, plus they’ve managed to extract themselves from the short side in gold as well.  Although I don’t follow platinum and palladium that closely, it’s a very reasonable bet that they are long gone from any short side position that they had in those precious metals.

Since they put all that effort into it, it’s also a reasonable assumption that they won’t be back any time soon — and if they are, it will be at a price levels that we’ve only ever dreamed about.

Here are the 6-month charts for the Big 6 commodities — and you should note the price action in silver over the last three days…new low closes every day since the Tuesday cut-off.  So it’s a reasonably safe bet that the two disparate groups of Managed Money traders were either going further short, or maybe selling long positions — and that JPMorgan was standing right there snapping up all the longs being sold — and the taking the long side of any new short position put on.  We won’t know until next Friday’s COT Report — and as I said in my discussion on yesterday’s COT Report, Ted will be be able to recalculate JPM’s remaining short position, if any, at that time, as the companion Bank Participation Report is also published next Friday as well.  The ‘click to enlarge‘ feature only helps with the the first four charts.

The Emerging Market crisis was certainly kicked up a few more notches this past week — and if it wasn’t for the efforts of the various Plunge Protection Teams and central banks, the industrial world’s stock markets would have melted down ages ago.  But regardless of their efforts, the powers-that-be won’t be able to avoid a spill-over effect — and the longer they hold back the inevitable, the worse it will be when it happens.

Things have been coming to a boil in the Middle East this week as well — and on top of the stories about the Syrian army’s upcoming battle against the remaining ISIS stronghold, now comes word of possible Iranian missiles in both Syria and Iraq.  How much truth there is to these latest stories/rumours is hard for us mere mortals to know, but as the old saying goes “the first casualty of war is the truth” — and that goes for journalism as well.

As I’ve said before, I’ve long suspected that JPMorgan’s rush to extract itself from the short side in precious metals over the last many month is somehow connected to some sort of denouement surrounding this upcoming military action in Syria — and the world’s equity markets will become a casualty of whatever unfolds over there as well.

At the same time, it will be all the cover necessary for JPMorgan to stand back and let nature take its course in the precious metal market.  As I said earlier, they didn’t go to all this effort to get off the short side, plus accumulate all the precious metals that they have, for no reason.

And with this military action in Syria “imminent“…as Russian Foreign Minister Sergey Lavrov put it earlier this week, we may not have too long to wait to find out.

I’m done for the day — and the week.

Because of the Labour Day holiday on Monday, the jury is still out on whether I’ll have a column on Tuesday or not.

Enjoy what’s left of your weekend, whether it be a long one, or not.