Gold: The Managed Money Traders Go Deeper In the Hole

22 September 2018 — Saturday


The gold price traded flat for the first two hours once it began at 6:00 p.m. EDT in New York on Thursday evening.  It jumped up a couple of bucks within the the next twenty minutes or so, around 10:20 a.m. China Standard Time on their Friday morning — and made it above its 50-day moving average by a hair.  It was sold lower in pretty short order — and then traded sideways once again until minutes after the London open.  It jumped up above its 50-day moving average by a little bit more at that juncture, but that as its high tick of the day, as the price was quietly sold lower from there until 8:45 a.m. in New York.  ‘Da boyz’ showed up at that point — and the low tick of the day was set at the 9:30 a.m. open of the equities markets.  It rallied from that point, but the moment the gold price poked its nose back above the $1,200 spot mark, it was quietly sold lower until around 2:30 p.m. in after-hours trading.  It crawled equally quietly higher into the close from there.

The high and low ticks were recorded by the CME Group as $1,210.90 and $1,191.70 in the October contract — and $1,215.80 and $1,196.00 in December.

Gold was closed in New York on Friday at $1,198.70 spot, down $8.20 on the day.  Net volume was pretty enormous at around 332,500 contracts — and roll-over/switch volume was a bit under 13,300 contracts on top of that.

JPMorgan ran silver through the same price machinations as gold.  The 9:30 a.m. New York rally managed to make it back to a nickel or so above unchanged, but shortly after 1 p.m., it was sold lower — and down on the day as well.

The high and low ticks in the precious metal were reported as $14.465 and $14.18 in the December contract.

Silver was closed on Friday at $14.25 spot, down 5.5 cents from Thursday.  Net volume was enormous as well at a bit over 101,500 contracts.  Roll-over/switch volume in this precious metal was 2,023 contracts.

Platinum was up a few dollars by noon in Shanghai on their Friday — and then chopped very quietly sideways until ‘da boyz’ showed up at 8:45 a.m. in New York.  Its subsequent rally wasn’t allowed to get far — and from there it once again traded sideways for the remainder of the day.  Platinum was closed at $826 spot, down 7 bucks from Thursday.

Ditto for palladium, except after JPMorgan smacked the price lower at 8:45 a.m., it rallied back to almost unchanged on the day, closing at $1,048 spot, down a buck.

The dollar index closed very late on Thursday afternoon in New York at 93.91 — and then proceeded to trade ruler flat once trading began at 6:00 p.m. EDT a few minutes later.  It started to chop around a bit either side of unchanged, starting at exactly 2:00 p.m. China Standard Time on their Friday afternoon.  Then a ‘rally’ began starting a few minutes after 9 a.m. in London — and that peaked out at its 94.33 high tick of the day about 9:35 a.m. in New York.  Then, after a 15 basis point down/up move over the next two hours, it crawled quietly lower into the close from there.  The dollar index finished the Friday session at 94.20…up 29 basis points from Thursday.

Another day — and what had all the appearances of another manufactured rally in the dollar index.

And here’s the 6-month U.S. dollar index — and the difference in 93.80 Friday close on this chart, compared to the 94.20 Friday close on the intraday chart above, couldn’t be more stark — and I have no idea why it is that way.  This dichotomy, which started on Tuesday, is clearly visible on the 6-month chart below.

The gold stocks sold off a bit more than 2 percent the moment that trading began in New York at 9:30 a.m. EDT, but were back in positive territory by a hair shortly before noon.  From that juncture they began to chop quietly lower, but there was a flurry of buying activity during the last thirty minutes of trading, that cut the losses on the day — and the HUI closed down only 0.92 percent.

The trading pattern for the silver equities was almost identical, except for the fact that the rally off the 9:45 a.m. EDT lows, never got a sniff of positive territory.  They peaked out at 10:30 a.m. — and then slid quietly lower until 3:30 p.m…where they rallied a bit into the close as well.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.49 percent.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index…courtesy of Nick as well.  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 what a difference a week make…green across the board. Click to enlarge.

The month-to-date chart is a lot happier looking as well — and the silver equities continue to outperform their golden brethren, but not by a huge amount, as both precious metals were forced to trade in a very tight price range during the reporting week.  Click to enlarge.

The year-to-date chart continues to be wall-to-wall red but, once again I will point out that the silver equities continue to outperform their golden brethren — and not be an inconsequential amount, either.  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.

It’s pretty much common knowledge on the Internet that JPMorgan is not only out of all its short positions in the precious metals, it’s also long them as well…particularly silver and gold.  With the current “white hot” configuration in the COMEX futures market, it’s…like I said last week in this space…highly doubtful that JPMorgan will appear as short sellers of either first and/or last resort once the next serious moving average-breaking rally is allowed to begin.  And IF they do appear again, it will be at significantly higher prices and, as I also said last week, I really do mean significantly.

The CME Daily Delivery Report showed that zero gold and 392 silver contracts were posted for delivery within the COMEX-approved depositories on the U.S. east coast on Tuesday.  In silver, the only short/issuer worth mentioning was Goldman Sachs once again with 391 contracts out of its in-house/proprietary trading account.  JPMorgan was the largest long/stopper with 248 in total…246 for its client account, but only 2 contracts for its own account.  The only other long/stopper worth mentioning is ADM for the second day in a row, as they picked up another 132 contracts for their client account.  The link to yesterday’s Issuers and Stoppers Report is here.

Seeing Goldman show up out of the blue as a big short/issuer is not a new phenomenon.  But the fact that JPMorgan has backed away as a big long/stopper for its own account is something that Ted mentioned on the phone yesterday afternoon…as was ADM [Archer Daniels Midland] as a big long/stopper for the second day in a row.  What a “leading food ingredient provider” is doing stopping 7 truck loads/42.6 million troy ounces of silver so far in September, is a bit of a mystery.

Here’s a snip from the CME’s yearly delivery report showing ADM’s activity in the silver market so far in 2018.  They only have a client account…and it’s been very busy, especially this month.  ‘C’ is for client account, ‘I’ is for issued — and ‘S’ is for stopped.  Click to enlarge.

I would think that Ted will have lots to say about ‘all of the above’ in his weekly commentary later today.

The CME Preliminary Report for the Friday trading session didn’t show up on their website until almost 2 a.m. EDT this morning, a good four hours later than normal.  It showed that gold open interest in September remained unchanged for the second day in a row, with 17 contracts still open — and Thursday’s Daily Delivery Report showed that zero gold contracts were posted for delivery on Monday.  Silver o.i. in September declined by 22 contracts, leaving 961 still open, minus the 392 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 28 silver contracts were actually posted for delivery on Monday, so that means that 28-22=6 more silver contracts got added to the September delivery month.

So far this month there have been 609 gold contracts issued and stopped — and that number in silver is up to a very chunky 7,326 contracts.

For the fourth day in a row, there were no reported changes in either GLD or SLV.

And there was no sales report from the U.S. Mint for about the same period of time.

Month-to-date the mint has sold 16,500 troy ounces of gold eagles — 6,500 one-ounce 24K gold buffaloes — and 1,962,500 silver eagles.

There was no gold activity worthy of the name over at the COMEX-approved gold depositories on the U.S. east coast on Thursday.  Nothing was reported received — and 200 troy ounces were shipped out of Delaware.  I won’t bother linking this.

It was certainly different in silver, as 599,417 troy ounces were received — and 971,862 troy ounces were shipped out.  All of the ‘in’ activity, one truck load, was at CNT.  In the ‘out’ category, there was 542,048 troy ounces from HSBC USA…another 335,966 troy ounces from Brink’s, Inc. — and the remaining 90,829 troy ounces were withdrawn from CNT.  The link to this activity is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 2,000 of them — and only shipped out 160.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

Here are two charts that Nick passed around on Thursday — and I decided to wait for today’s column to post them.  They show gold and silver imports into India, updated with July’s data.  For that month they imported 74.46 tonnes of gold — and 314.44 tonnes of silver.  In troy ounces, those numbers are 2.39 million and 10.11 million troy ounces respectively.  Click to enlarge for both.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed a slight increase in the Commercial net short position in silver, but a surprising further improvement in gold, especially in the Managed Money category.  But first things first.

In silver, the Commercial net short position increased by 3,540 contracts, or 17.7 million troy ounces of paper silver.

They arrived at that number by decreasing their long position by 993 contracts — and they also added 2,547 contracts to their short position.  It’s the sum of those two numbers that represents the change for the reporting week.

As per last week’s discussion, the positions of the Big 8 traders, being totally contaminated by many members of the Managed Money category, are no longer relevant.

Under the hood in the Disaggregated COT Report, the Managed Money traders only made up part of the change for the reporting week, as they reduced their long position by 738 contracts, plus they also reduced their short position by a further 2,062 contracts — and it’s the difference between those two numbers…1,324 contracts…that represents their change for the reporting week.  And please don’t forget the Managed Money traders holding long positions have diametrically opposite trading strategies to those brain-dead/moving average-following Managed Money traders on the short side.  Thus their positions aren’t really comparable.

The difference between what the Managed Money traders did — and what happened in the Commercial category…3,540 minus 1,324 equals 2,216 contracts…was made up by the traders in the other two categories.  The ‘Other Reportables’ reduced their short position by about 550 contracts — and the ‘Nonreportable’/small traders increased their long position by about 1,650 contracts.  Here’s the snip from the Disaggregated COT Report so you can see the weekly changes for yourself.  Click to enlarge.

The Commercial net long position in silver is now down to 8,834 contracts, or 44.2 million troy ounces of paper silver.  Ted left JPMorgan’s long position unchanged at 3,000 contracts, but I got the impression from talking to him on the phone yesterday that it might actually be a bit more than that.

Here’s the 3-year COT chart for silver and, like last week, these changes are a drop in the bucket — and absolutely nothing should be read into them.  Click to enlarge.

Although I was certainly hoping that the change in silver would be less than it was, it is what it is — and it detracts very little from the ‘white hot’ bullish set up in this precious metal in the COMEX futures market.

In gold, the commercial net long  position increased by a rather smallish 1,678 contracts…or 167,800 troy ounces of paper gold…but that’s way better than the alternative, which is a decrease like we had in silver.

They arrived at that number by adding 2,101 long contracts, but they also increased their short position by 423 contracts — and it’s the difference between those two number that represents their change for the reporting week.

Like for silver, the Big 8 category in gold is now so chock full of Managed Money traders on the short side, that the break-down into the Big 4 — and Big ‘5 through 8’ categories is not meaningful.

But it was under the hood in the Disaggregated COT Report where the big changes were.  The Managed Money traders reduced their long position by 2,689 contracts — and also added a very hefty 4,555 short contracts.  It’s the sum of those two numbers…7,244 contracts…that represents their change for the reporting week.  And, like in silver, the Managed Money traders in the long category are value investors, whereas the traders on the short side are the brain-dead/moving average-following Managed Money traders.  The difference between what the Managed Money traders did — and what the commercial traders did during the reporting week…7,244 minus 1,678 equals 5,566 contracts…was made up, as always, by the traders in the other two categories.  Both categories increased their net long positions during the reporting week…the ‘Other Reportables’ by about 4,000 contracts — and the ‘Nonreportable’/small traders by around 1,580 contracts.

Here’s the snip from the Disaggregated COT Report for gold, so you can see these changed for yourself as well.  Click to enlarge.

The commercial net long position in gold is now sitting at 1,691 contracts, or 169,100 troy ounces of paper gold…an immaterial amount.  But at least it’s not a short position.

Here’s the 3-year COT chart for gold — and as I just stated, the weekly changes are immaterial.  Click to enlarge.

Although the headline number from the Legacy COT Report didn’t change by much, the fact that the brain-dead Managed Money traders increased their collective short positions even further, makes the set-up in the COMEX futures market in gold even more bullish that it was.

In the other two precious metals, the Managed Money traders increased their net long position in palladium by a smallish 442 contracts — and the small traders increased their long position by 386 contracts.  As you can tell, the palladium market is very tiny — and very illiquid — and it doesn’t take much change in the numbers, to show up as big changes in the price.  In platinum, the Managed Money traders were covering shorts and going long like mad…to the tune of 6,405 contracts [net].

During the reporting week, platinum broke above and closed above its 50-day moving average on Tuesday, the cut-off date — and palladium broke above and closed above its 200-day moving average on Tuesday as well.

The same can be said of copper‘s closing price on Tuesday — and the Managed Money traders in that metal increased their long position and covered short positions by around 11,700 contracts [net].

But, as you already know, both gold and silver are being kept on a very short price leash, just waiting for JPMorgan to put their hands in their pockets.

This week’s Days to Cover chart had some serious issues — and there was no usable data on it, or in the numbers that accompanied it.  I e-mailed Nick many hours ago about this, but haven’t heard back, so he obviously had a social engagement, as it’s Saturday evening in Cairns.  I will add this information to the website version of today’s column once Nick deals with it.  But it’s too late for the e-mail version.

[Update:  Saturday…5:04 a.m. EDT — The problem with the ‘Days to Cover’ chart and the data was no fault of Nicks.  There was a data error in the Legacy COT Report — and the positions of the Big 4 and Big 8 large traders was corrupted or missing…something else Ted pointed out on the phone yesterday afternoon.  It remains to be seen if the CFTC will fix this issue before next week’s COT Report — and if they do, I’ll add it to one of my columns next week. — Ed]


This Bull Market is Running Out of Time — Bill Bonner

Our old friend Richard Russell was a devotee of Dow Theory. The theory consists of a series of observations.

For our purposes today, Dow Theory says that when the Dow hits a new high – confirmed by the transportation average – it’s time to buy. The “primary trend” is bullish.

Accordingly, we got a buy signal yesterday. CNBC reports:

The Dow closed at its first record high since January on Thursday as gains in Apple and a decrease in trade fears lifted the 30-stock index. […]

Art Cashin, the director of floor operations for UBS, said the Dow’s record should be a bullish confirmation of the high reached by the Dow Transports last week. “That should be a Dow theory buy signal,” Cashin said. “According to the theory, the economy is supposed to be improving and therefore, you have six to nine months of a higher stock market.”

And who knows? Dow Theory could turn out to be right.

Or we could just be out of time.

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

10 Years Later, a Debt Crisis Is Building Again — Nomi Prins

Though it seems like only yesterday, it’s been a decade since my former employer, Lehman Brothers went bankrupt, and in the process, helped instigate a massive global financial crisis.

That collapse catapulted the Federal Reserve on a mission to, in its own narrative, save the economy from further collapse. In fact, its creation of $4.5 trillion to purchase U.S. treasury and mortgage related bonds from the big private banks in exchange for continued liquidity was the biggest subsidy in U.S. history.

In some ways, we seem much better off now. Employment is at record highs in most developed nations outside the Eurozone. Global economic growth has picked up overall and stock markets have recovered.

Indeed, many stock markets around the world have regained or passed their former record highs. Asset prices are booming.

But that only tells half the story. That’s because the last financial crisis was about debt and debt levels have increased substantially since 2008. The entire “recovery” was built on debt.

This worthwhile commentary by Nomi was posted on the Internet site on Wednesday — and another link to it is here.

Doug Noland: Q2 2018 Z.1 Flow of Funds

Ten-year yields closed Friday trading at 3.06%, the high since May 17th. Safe haven bids for Treasuries and the dollar have waned of late. For the most part, EM has somewhat stabilized. But the Fed will likely raise rates again next Wednesday, returning the markets’ focus to U.S. rate prospects.

It’s still early innings for EM travails. Liquidity tends to ebb and flow with greed and fear, as crisis conditions unfold over time. It’s been quite a short squeeze backdrop in U.S. equities the past several months. This week saw some decent squeezes in global markets. The Argentine peso jumped almost 7% this week, with the South African rand up 4.3% and the Brazilian real gaining 3.1%. Brazil’s Bovespa equities index surged 5.3% and Turkish stocks rallied 3.4%. The Shanghai Composite jumped 4.3%. Hong Kong’s Hang Seng Financial index recovered 5.6%. Japan’s TOPIX Bank Index surged 6.6%. European bank stocks rallied 4.1%. Italian stocks were up 3.1%. Italian 10-year yields dropped 15 bps. Copper jumped 8.0%, and crude surged 2.6%.

Booming U.S. securities markets bolster the case for the Fed sticking with “normalization.” This week’s squeeze notwithstanding, higher U.S. rates boost the odds of another round of EM de-risking/de-leveraging – and a further tightening of global financial conditions. Such a backdrop would be conducive to tighter conditions at the “periphery” coming closer to penetrating the “core.” The Q2 Z.1 report indicated waning international liquidity flowing into U.S. securities markets.

This rather technical commentary from Doug was posted on his Internet site in the wee hours of Saturday morning — and another link to it is here.

Jason Chaffetz: The Deep State is real – I’ve seen it up close and it’s far worse than you can imagine

With each successive batch of text messages released between then-FBI agent Peter Strzok and then-FBI lawyer Lisa Page, the evidence supporting a politically motivated Deep State within the federal government spills out into the open.

Based on my own experience, this particular set of text messages is the tip of the iceberg. While serving on the House Oversight Committee, I saw firsthand how those in control of our bureaucracy brazenly abuse their power – spying, manipulating and misleading – in an effort to perpetuate their stranglehold on the government.

What I witnessed and wrote about in my new book –“The Deep State: How an Army of Bureaucrats Protected Barack Obama and is Working to Destroy the Trump Agenda” – was a bureaucracy that allowed agencies to become weaponized in the service of political battles.

In the beginning, that meant protecting President Obama by using federal power to target political opponents or by covering the tracks of the corrupt or incompetent within his administration. By the time I left Congress, the Deep State’s focus had shifted to thwarting the administration of the newly elected President Donald Trump.

My first run-in with the Deep State happened weeks after the Benghazi terrorist attacks of September 11, 2012. In an encounter highlighted in my book, I went face-to-face with a lawyer sent to Libya by Hillary Clinton’s State Department to act as a spy and ensure I did not ever get to the truth of what happened on that tragic night.

Wow!  This absolute must read story put in an appearance on the Internet site on Tuesday — and I thank Roy Stephens for sending it our way.  There’s also an embedded video interview as well.  I would also think that his new book is worth reading.  Another link to this news item is here.

Clinton-Yeltsin docs shine a light on why Deep State hates Putin (Video)

Bill Clinton and America ruled over Russia and Boris Yeltsin during the 1990s. Yeltsin showed little love for Russia and more interest in keeping power, and pleasing the oligarchs around him.

Then came Vladimir Putin, and everything changed.

Nearly 600 pages of memos and transcripts, documenting personal exchanges and telephone conversations between Bill Clinton and Boris Yeltsin, were made public by the Clinton Presidential Library in Little Rock, Arkansas.

Dating from January 1993 to December 1999, the documents provide a historical account of a time when U.S. relations with Russia were at their best, as Russia was at its weakest.

On September 8, 1999, weeks after promoting the head of the Russia’s top intelligence agency to the post of prime minister, Russian President Boris Yeltsin took a phone call from U.S. President Bill Clinton.

The new prime minister was unknown, rising to the top of the Federal Security Service only a year earlier.

Yeltsin wanted to reassure Clinton that Vladimir Putin was a “solid man.”

I haven’t had the time to watch the 21:24 minute embedded video clip, but it’s on my list of thing to do this weekend.  This worthwhile article, if you have the interest…that is, showed up on Internet site on Friday morning [EDT] sometime — and it comes to us courtesy of Roy Stephens as well.  Another link to it is here.

ECB Heads for Peak Liquidity as Euro-Area Stimulus Tools Top Out

The euro zone’s era of massive excess liquidity, courtesy of the European Central Bank, is about to peak.

Next week, lenders must repay €9 billion ($10.6 billion) outstanding from cheap loans the ECB doled out in 2014-2016, when the bloc was teetering on the edge of deflation. Next month, the central bank will cut its monthly bond-buying program by 15 billion euros, and stop altogether at year-end.

In a speech on Thursday, ECB Chief Economist Peter Praet presented a model that projects excess liquidity — the cash beyond banks’ immediate needs that is sloshing around the financial system — will peak at about 2 trillion euros around the end of this year and drop below 500 billion euros in 2022.

Praet’s comfort with that potential trend reflects the euro area’s solid economic growth even in the face of risks such as U.S. trade protectionism. Nevertheless, President Mario Draghi’s suite of stimulus measures in recent years has subdued bond yields, weakened the single currency and boosted stocks to drive the region’s recovery, raising concern that any tightening will further drag on an already slowing expansion.

This news item appeared on the Bloomberg website at 8:18 a.m. Denver time on Friday morning — and I thank Swedish reader Patrik Ekdahl for sending it along.  Another link to it is here.

‘Gezi generation’ fleeing Turkey

Speaking at an Istanbul fair Sept. 13, Turkish Industry and Technology Minister Mustafa Varank — a long-time chief adviser to President Recep Tayyip Erdogan before joining the Cabinet after the June elections — lamented that the country was “unfortunately losing its qualified human resources through brain drain.” It was a rather remarkable statement, for such admissions are rare in Turkish government quarters.

Varank’s statement is backed by newly released official statistics that speak of an accelerating, dramatic brain drain that is stripping Turkey of its well-educated youth — the sole strategic asset the country has for any quest of global competitiveness and prosperity. According to migration data released Sept. 6 by the Turkish Statistical Institute, the number of Turks emigrating due to “economic, political, social and cultural” reasons increased 42.5% to reach 253,640 in 2017. More than 42% of those emigrants were aged 25-34, and 57% were from big cities such as Istanbul, Ankara, Antalya, Bursa and Izmir. In other words, roughly half of the those leaving Turkey are young urban people.

The staggering 42.5% increase in emigration last year stems from the political watersheds in 2016 and 2017. The failed coup attempt on July 15, 2016, and the ensuing state of emergency resulted in severe restrictions on rights and freedoms. Then came the April 16, 2017, constitutional referendum, in which an authoritarian presidential regime was narrowly approved. Erdogan’s victory in the June 24 elections, which completed the transition to the new regime, and the ensuing economic downturn are expected to further accelerate the emigration wave.

This interesting, but not surprising article was posted on the Internet site on Friday — and it’s another contribution from Roy Stephens.  Another link to it is here.

Tales of the New Cold War: 1 & 2: What Vladimir Putin is not — John Batchelor interviews Stephen F. Cohen

Part 1: This is an important podcast that covers the very recent Syrian event involving the shoot down of the Russian military plane by a Syrian S-200 anti air missile late Monday. And John Batchelor opens the discussion with this news item. While Putin did say the shoot down was the “result of a series of tragic events and chance circumstances”, he also said that the investigations would continue and there would be no retaliatory reaction. But there would be changes made in how the Syrian air defences would respond in future and that these changes “would be noticed”. He also corrected the much stronger accusations of the Syrians and his own military that Israel had caused the tragedy. For Professor Cohen this was a reminder that every day is fraught with danger in this New Cold War and every day the American mainstream media is filled with anti Putin vilification – the NYTimes and Washington Post, for example, recently published eight stories like this in one day.  And this process has now been institutionalized in the MSM. This institution can thus be broken down into 8 different aspects: Putin as the usurper of Yeltsin, Putin as despot, Putin as a Stalinist, Putin as organizer of a kleptocracy, Putin kills people who threaten him (because he is ex-KGB and still a thug), Putin as a fascist, white supremacist, Putin as the foreign aggressor, and Putin as hostile to America. Each of these is given detailed inspection and discussion from the historical perspective by both pundits.

But most of these aspects is soundly defeated by historical facts; most are preposterous (and overwhelmingly dependent for credibility on the naivety and ignorance of the American public. L.) Briefly it was Yeltsin who was the enemy of a fledgling democracy and Putin reclaimed that process when he was legally appointed to his position; Putin was anti-Stalin (built Wall of Grief) and Putin reigned in the oligarchs and did not help the worst of them. (Putin has actually made it illegal for any Russian corporation that would put profits ahead of hurting the Russian people. L.)

Part 2: The list and discussion continues with Putin as a kleptocracy was more a Yeltsin creation, and Putin slowly took back what Yeltsin privatized, enough, as Cohen explains, to save his people. The relationship is still uneasy and Putin is still watchful for abuses, but Russia has grown and recovered and the people hold Putin responsible for that Russian recovery and their salvation. But here Batchelor makes a very fine point that American society is a much more the highly developed kleptocracy than Russia (and the people also know who is responsible for the decline. – L.) Next, Putin was an ex-KGB analyst – which is no more evil than a CIA specialist – and Cohen considers this history as “turning him into a European man”. Cohen considers the accusation that Putin is a fascist and white supremacist is ludicrous. Putin is the successful leader of the most multi-ethnic nations of the world and, as Cohen states, a master race worldview would be impossible politically for a modern Russian leader. However, the view that Putin is anti-American. is at least now true. Is Putin aggressive? His whole pattern of dealing with provocation by the West has been reactive, not aggressive. His main critics accuse him of not being aggressive enough – as, for example, dealing with the latest incident of the loss of his plane in Syria.


It is sometimes frustrating to listen to a historian of the calibre of Stephen F. Cohen and a learned pundit like John Batchelor spend so little time on a single event like the shoot down of a Russian plane that could have caused a war.  But as an historian’s discussion they are more focused on the series of events leading up to the event than any single isolated news event. But the Syrian situation is very complicated for the Russian leader. Has Putin been damaged politically and geopolitically from his overly generous (perhaps) reasonableness with Israel and even U.S. adversaries?

What are his options given the podcast discussion? Putin has stated that there will be an appropriate response that will be quite noticeable in the air defence area in Syria. At a guess this means bolstering the quality of Syrian air defences – perhaps with the addition of S-300 anti-air systems that would provide the means to 1) avoid a similar event, 2) provide deniability for the Russian Israeli “lobby”(a.k.a. – fifth column group) to claim Putin’s actions are anti-Israeli, and 3) provide a more “aggressive” reaction for his own war party adherents who accuse him of being too non aggressive. He has additional problems, as every time Israel, or the U.S., or other U.S. satrap allies open fire on Syrians and Russians– how much provocation can he ignore when his own ally is attacked? Is the agreement with Turkey to delay (?) the attack on Idlib also a ploy to avoid a direct military confrontation with the U.S. that might lead to war? Does his lack of aggression suggest weakness to Washington thereby encouraging an escalation of provocations? Or does it mean he should stall as much as he can to hope for a change in diplomacy with Washington? These are serious questions that surely must plague the Russian leader, and the background history is certainly vital for understanding the scope and complexity of Syria. I urge readers to also listen to the podcast as much of the events of the U.S. MSM institution confusions are discussed in much greater detail.

This 2-part audio interview showed up on the Internet site on Tuesday — and I thank Larry Galearis for his always excellent executive summary, plus his own read on the situation at the end.  Each part is twenty minutes long.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.  This was in my Friday column, but I said I would post it in my Saturday missive as well — and here it is.

Putin, Israel and the downed Il-20 — The Saker

Yesterday (Sept 19th), I tried to post a short commentary suggesting that before we jump to conclusions about anything, we ought to wait for the fact to come out. But to no avail. The chorus of “Putin is a doormat!!”, “bomb Israel!!” and similar inanities is carrying on, louder than ever. Reading that crazy nonsense, I wanted to toss in a slogan, something like “Jew-haters and Putin-haters – unite!”. But then I realized that it would be futile because they have already united…

My friend Andrei Martyanov has tried to bring some logic and sanity into this pandemonium which I posted here (in spite of not normally doing reposts). Well, at the risk of being called a “gatekeeper” or a “cryto-Zionist”, I have decided to also try once more to bring this discussion into the realm of sanity, facts and logic.

First, let me start by a very simple and primitive question:

Why in the world has nobody considered that the Israelis might have truly screwed-up?

Seriously, I mean it. Unless you belong to the type of folks who believe that the Israelis are exceptionally crafty, smart and quasi infallible (there are such folks amongst both Jew-lovers and, more surprisingly, Jew-haters), this is a legitimate question, no?

What do we know for sure as of right now (Sept 20th)? We know that the Israelis did not give enough warning time to the Russians, which is in direct violation of an agreement between Israel and Russia. Do we know that they did it deliberately? No, we don’t. We really don’t.

This very worthwhile commentary by the Saker appeared on his Internet site on Friday — and it comes to us courtesy of Larry Galearis.  Another link to it is here.

Some Fast Thoughts On IL-20 (Andrei Martyanov)

Note: I don’t normally do reposts, but things are becoming so crazy that I asked Andrei if I could repost his short article — and he kindly agreed.  So here it is.The Saker

And so it starts. Russia must attack Israel, no—she must obliterate it, Putin is “soft”, the world is coming to an end, Zionists are in control of Kremlin, Russia turns another cheek. And on, and on, and on. The chorus of noble warriors with the evils of Zionism is getting louder with each day. Behind this hysteria surrounding the tragedy of Russian VKS’ IL-20 somehow crucial and widely publicized news have been ignored completely. It is no surprise they were ignored by all kinds of “specialists” in strategy, politics, and armchair strategists (I am one myself). The news are pretty simple. Lt. General Alexander Ionov, former Deputy Chief of Main Staff of Russian Air Force from 1991 through 2001, stated to popular Russian media Zvezda that it is guaranteed that Syrian Air Defense forces were not provided with compatible IFF equipment and codes.

For those who don’t know what IFF (Interrogator Friend-Foe) is—it is electronic system which provides both a defense against friendly fire and easy radar identification of friendly forces. On older radar friendly forces would usually be marked with arches (below or above) radar marks of the targets and that is how one knows how not to shoot at them. The IFF technology is extremely sensitive as are the “codes” on which it runs. It wasn’t provided, and for a good reason, to Syrian Forces. So, the question, in this case which will be asked by laymen is: but what about “full integration” of Russian and Syrian Air Defenses. It is a legitimate question. Without going into much detail how a key aspect of this integration is provided—in Western parlance it is called CEC (Cooperative Engagement Capability)—there are reasons to assume that in case of older S-200s the targeting data could have been provided by radio-voice commands. But here comes this most important fact—Syrian S-200 and its radar did have a track and, possibly, a lock on the Israeli F-16s. The certainty of this fact, as in old proverb about the proof being in the pudding, is in all advanced aircraft being equipped with Emission Detectors which are a warning system and Israeli aircraft using available “screen” in a form of Russian IL-20 on its approach to Khmeimim Air Base.

In other words, Israeli aircraft were forced to seek a cover and one can only imagine how warnings were screaming in their cockpits. They saw IL-20 with its huge Radar Cross Section (RCS). For those with a short attention span it is worth reminding them that Syrian Air Defense does have a track record of shooting down or damaging IAF’s aircraft.  In fact, apart from actually admitting their losses, IAF is still mum on the fate of “damaged by birds” F-35. In other words, Syrian AD does track and locks on Israeli combat aircraft. S-200 missiles are what is known SARH—Semi-Active Radar Homing, meaning that missile needs the illumination of the target by the air defense complex radar and that is where the professionalism, especially at the significant engagement ranges (tens and even hundreds of kilometers), becomes absolutely crucial. But so does a protocol, or ROE (Rules of Engagement), for people in control of any particular AD complex which is not “inside” the loop of highly sensitive IFF. At this stage, I do have reasons to believe that under a huge pressure of the situation unfolding in what used to be a calm sector of approaches to Khmeimim Air Base, which was agreed between Israel and Russia, and where IAF’s aircraft were not supposed to be, the Syrian crew simply went for the target which was clearly visible and shaded smaller RCS Israeli planes.

This commentary was written on Thursday, one day before the prior commentary by the Saker, which was written on Friday…so please keep that in mind while you read this worthwhile article.  It put in an appearance on Internet site on Thursday — and I thank Larry Galearis for this article as well.  Another link to it is here.

Russia, China warn U.S. of ‘consequences‘ of ‘playing with fire

China and Russia reacted strongly Friday to another round of U.S. government sanctions, with Moscow warning the Trump administration against “playing with fire.”

The administration announced sanctions Thursday against nearly three dozen Russian individuals and entities, and a section of Beijing’s military. The Chinese department was sanctioned for buying fighter jets and missiles from Russia, a violation of prior sanctions.

Friday, the Russian government warned that the new sanctions — the 60th round against Moscow since 2011 — could lead to trouble for the United States.

Each new round of sanctions proves our foe’s complete lack of success in pressuring Russia with previous such attempts,” Russian Deputy Foreign Minister Sergei Ryabkov said. “It would not be bad if they remembered about the concept of global stability, which they are unthinkingly undermining by whipping up tensions in Russia-U.S. relations.”

Playing with fire is stupid and can become dangerous.”

The sanctions mean China’s Equipment Development Department will be denied U.S. foreign export licenses, is banned from making foreign exchange transactions within U.S. jurisdictions and is prohibited from using the U.S. financial system.

This UPI story showed up on the Internet site at 9:09 a.m. EDT on Friday morning — and I thank Roy Stephens for this story as well.  Another link to it is here.  In a parallel story, this news item is headlined “‘Remedy the mistake or bear the consequences’: China hits back at U.S. over sanctions on military” — and that’s from Larry Galearis.

U.S. sanctions are sign of dollar crisis and decline of confidence – Lavrov

The U.S. dollar system has completely discredited itself and the confidence in the greenback is falling very sharply, according to the Russian Foreign Minister Sergey Lavrov. Sanctions by Washington are a sign of that.

Russia is working on ways to cut its dependence on the U.S. and the dollar system, Lavrov said Friday during his visit to Sarajevo, Bosnia and Herzegovina.

We are already drawing conclusions, doing everything necessary not to depend on the countries that are acting that way with their international partners,” Lavrov said. According to the Russian foreign minister, U.S. sanctions undermine global trust in the world’s most used currency.

Lavrov was reacting to the fresh U.S. sanctions against Russia introduced Thursday. 33 people and entities were added to the U.S. Treasury blacklist of Russian defense and intelligence sector.

More and more of our partners in Asia, in Latin America, start to draw the same conclusions [about the U.S. dollar]. I think that this trend will only continue,” Lavrov said.

This new item appeared on the Internet site at 12:23 p.m. Moscow time on their Friday morning — and it represents the final offering of the day from Roy Stephens.  Another link to it is here.

John Paulson Joined by 15 Investors in Council to Oversee Gold Miners

After almost a year of behind-the-scenes work, billionaire hedge-fund manager John Paulson has formed a coalition with 15 other investors aimed at curbing years of what his fund has called value destruction in the gold sector.

John Hathaway — who is a general partner at Tocqueville Asset Management LP — and activist fund Livermore Partners are among those who have agreed to join the group, according to an emailed statement from the newly formed Shareholders’ Gold Council. Egyptian billionaire Naguib Sawiris’ La Mancha Group is also on the council. In April, Sawiris told Bloomberg he put half his $5.7 billion net worth into gold.

The idea for the group was first floated by Paulson & Co. during the Denver Gold Forum last September.

Since last year, the gold price has crept lower and shareholder returns have been poor,” Marcelo Kim, a partner at Paulson, said in a separate e-mail. “Interest in the sector has continued to languish, and you have seen capital leave the space and notable fund closures.”

Of course it’s a given, dear reader, that they won’t go within a country mile of what they already know as the real cause — and that the price management scheme in the COMEX futures market run by JPMorgan.  They know all about it.  This Bloomberg story was posted on their Internet site at 6:00 a.m. MDT on Friday morning — and was updated about three hours later.  I found it in a GATA dispatch — and another link to it is here.  There was another story about this in the Globe and Mail.  It’s headlined “U.S. hedge fund Paulson & Co. launches group aimed at shaking up gold sector” — and I thank George Whyte for that one.

GATA appeals to the new Shareholders Gold Council

Now that the Shareholders Gold Council has formally gotten started, according to the Bloomberg News report dispatched to you a little while ago, GATA is appealing to the council’s founder, investment fund manager John Paulson, to allow GATA to make a presentation to the council about the longstanding policy of Western governments and central banks to intervene in the gold market surreptitiously to suppress the monetary metal’s price.

The council represents a lot of influence in the monetary metals mining business and the financial markets and might do much to help expose and end the market manipulation.

Of course the World Gold Council ignores this issue and seems to exist mainly so that there might never be a world gold council. Maybe the Shareholders Gold Council can be more relevant both to investors in the monetary metals and to the cause of free markets and transparent and limited government.

I’ll be amazed if we get past first base with these guys, as the truth of this matter really doesn’t interest them, even though it’s the only thing that they should be considering.  This GATA dispatch was posted on their Internet site at 12:37 p.m. EDT on Friday morning — and another link to it is here.

A Constructive Suggestion — Ted Butler

Shortly after I posted publicly last week’s article, “Is the COT Report Still Valid?,” commentary on my article was posted by Chris Powell, from GATA, suggesting that I consider the possibility that JPMorgan may be operating in the silver and gold markets as an agent under orders from the U.S. Government and not as a principal for its own account (as I believe). I want to thank Chris for offering his input and I’m not kidding when I say it’s much better for an article to generate interest than to be ignored.

Since I know this is a widely-held opinion, namely, that the U.S. Government is behind the silver and gold manipulation, ostensibly to defend the dollar, I have always considered this to be a possibility and believe I have written about it previously. Since there is no question that the regulators have continuously evaded allegations of wrongdoing by JPMorgan in the silver and gold markets, that’s reason enough to admit to the possibility of U.S. Government involvement.

Throw in the fact that the U.S. Government arranged the pivotal takeover of Bear Stearns by JPMorgan, thrusting JPM into the role of the biggest COMEX gold and silver short in early 2008. It’s easy to suspect some level of governmental involvement. On the other hand, I’m more persuaded that JPMorgan is acting on its own behalf in its silver and gold activities. No doubt that JPMorgan extracted some type of “free get out of jail card” on its takeover of Bear Stearns and that has accounted for the CFTC turning a blind eye towards JPM’s corrupt behavior in silver and gold. However, that’s very different from the U.S. government orchestrating things. What things?

This rather brief, but must read commentary by Ted put in an appearance on the Internet site at 11:56 a.m. on Friday afternoon EDT — and another link to it is here.  Chris Powell had a few things to say about this in a GATA dispatch yesterday afternoon headlined “Ted Butler: A constructive suggestion” — and it’s worth reading as well.

GATA asks CFTC if market rigging by U.S. government is legal

The U.S. Commodity Futures Trading Commission this week announced it has imposed penalties on two futures traders for attempting to manipulate the gold market and other markets with “spoofing” trades.

In response, GATA is asking the commission whether its jurisdiction covers futures market manipulation by the U.S. government or brokers acting for the U.S. government, or whether such manipulation is authorized by law, like the Gold Reserve Act of 1934 as amended in the 1970s, which established the U.S. Treasury Department’s Exchange Stabilization Fund.

U.S. citizens can assist this endeavor by asking their members of Congress to urge the CFTC to reply promptly to GATA’s inquiry.

The short and sweet letter containing GATA‘s inquiry to the CFTC is embedded in this commentary on the website version of this story.  It was posted on the Internet site at 12:56 p.m. EDT yesterday — and another link to ‘all of the above’ is here.

Western Australia prospector finds $110K gold nugget

A massive gold nugget worth at least $110,000 has been uncovered by a prospector in remote Western Australia.

The retired man, who doesn’t wish to be named to protect his identity, says he’s been combing the same patch in the northern Goldfields with a metal detector for years, but struck it lucky with better technology.

When I had finished digging it out, I just thought ‘Oh my god’,” he said of the find, a 3.23kg specimen containing 68 troy ounces or 2.11kg of gold.

It was pretty deep at about 800mm in clay soil so it took more than two hours of careful digging to get it out.”

This very interesting gold-related news item, complete with a great photo, showed up on the Internet site on Friday afternoon local time ‘down under’ — and I thank Kiwi reader Kae Lewis for sharing it with us.  It’s worth reading — and another link to it is here.


Today’s ‘critter’ is the Japanese spider crab.  It has the greatest leg span of any arthropod, reaching up to 5.5 metres (18 ft) from claw to claw. The body may grow to a size of 40 cm (16 in) in carapace width and the whole crab can weigh up to 19 kilograms (42 lb)—second only to the American lobster among all living arthropod species.  They live at depths of 150–300 metres (490–980 ft).  Click to enlarge.


Today’s blast from the past was #63 on Billboard magazine’s Top Hot 100 songs of 1967 — and I certainly thought it deserved a higher ranking than that.  They were an American rock band from Garfield, New Jersey — and this, in my opinion, was their biggest hit.  I can’t believe I haven’t posted this before. The link is here.

Today’s classical ‘blast from the past’ is one I haven’t posted before either — and I can’t figure out why.  It’s J.S. Bach’s “Air on the G String“. It’s the second movement of his Orchestral Suite No. 3 in D major, BWV 1068 that he composed in the first part of the 18th century.

Here it is played on original instruments by the Early Music ensemble Voice of Music.  If there’s a better recording of this on the Internet, I couldn’t find it.  Full-screen viewing is a must — and the link to it is here.

With the 50-day moving average in gold, along with the 20-day moving average in silver being nibbled away at over the last few days or so, it was obvious that the powers-that-be wanted to put a little price distance away from them on Friday — and they did the dirty in New York starting at 8:45 a.m.  How long this ‘care and maintenance’ move will last, remains to be seen.  But by the close of trading, they hadn’t picked up any breathing space at all.

Of course both platinum and palladium received similar treatments, as it would have looked even more suspicious than it already was, if they hadn’t engineered their respective prices lower at the same time.

Here are the 6-month charts for all four, plus copper and WTIC as well.  If you check the gold chart, you’ll note that the 50-day moving average in gold is $1,212.46 — and gold was closed at $1,212.46 in the December contract yesterday…no wiggle room at all.  It was precisely the same for silver.  It’s 20-day moving average on the chart below is $14.36 spot — and that’s exactly what it was closed at in the December contract on Friday as well.  There was nothing accidental about any of this.

As Ted pointed out on the phone yesterday, copper had an inter-week move of about 30 cents, which is visible on the 6-month copper chart below.  That represents a 10 percent increase in the space of a week — and it had everything to do with COMEX positioning by the Managed Money traders — and zero to do with supply and demand.

The ‘click to enlarge‘ feature only helps with the first four charts.

Well, the deep state still doesn’t have its proxy war with Russia yet, although they and their Middle Eastern ‘allies’ gave it the old college try this past week.  But Putin…wisely, in my opinion…didn’t fall for it, so it’s back to the drawing board.  One can only fantasize as to what these sociopathic/psychopathic personality types may dream up for their next move.  But you can rest assured dear reader, that it’s coming.

I grow tired of discussing the current economic and financial situation that currently exists in the world — and grows more dangerous by the week.  The system continues to edge ever closer to total collapse, as what we’re seeing out there is what I’ve called a Frankenstein economy…built on a Mount Everest of debt that will never be repaid.  This perilous situation now exists world wide — and in all countries…except for Russia — and they added another million ounces of insurance to their financial position in August.

But the economic piper has to be paid at some point — and now that the U.S. is at ‘daggers drawn’ with Russia in Syria…I’m becoming more convinced than ever that whatever happens in Syria, or maybe Washington, will be the ‘event’ that will send precious metal prices higher — and the world of financial paper ablaze.

Russia could still play the gold card if it wishes — and in Sun Tzu-type asymmetrical warfare, this is just the sort of weapon that Putin may choose to use — and let the chips fall where they may.  He could do enormous damage to the West’s financial system without firing a single shot, although the collateral damage would be ugly.  However, with his nation’s survival at stake…all is fair in love and war, as the saying goes — and his country would have little to lose by going down that road.

I just finished reading Putin’s self-portrait “First Person” this week, an astonishing book — and I’m well into Oliver Stone’s “The Putin Interviews“.  I can tell you straight out that no man has more understanding of Russia’s history — and more love of his nation and its people than Vladimir.  Do not underestimate this man.  He’s nobody’s fool…or patsy.

The ball is now back in the deeps state’s court, so lets see how they play it from here.

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