The Precious Metal Equities Did Well on Friday

08 December 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crawled quietly higher in Far East trading on their Friday morning — and was up two bucks and change by shortly before 12 o’clock noon CST over there.  From that juncture, the price crawled unevenly sideways until the jobs report came out at 8:30 a.m. in New York.  Its attempt to blast higher from there ran into immediate ‘resistance’ — and the price struggled higher until it was capped for good just minutes after 2 p.m. in the thinly-traded after-hours market.  It was sold a bit lower into the 5:00 p.m. EST close from there.

The low and high ticks are barely worth looking up.  The CME Group reported them as $1,242.60 and $1,254.80 in the February contract…an intraday move of just under one percent.

Gold was closed on Friday at $1,247.80 spot, up $10.60 on the day.  Net volume was nothing special at around 201,500  contracts — and roll-over/switch volume was just over 15,000 contracts.

The silver price chopped very unevenly sideways until London opened yesterday morning — and the rally from that point was capped less than an hour later.  It was sold back to a penny or so above unchanged by 8:30 a.m. in New York and, like gold, attempted to rally when the job numbers came out.  That was resisted strongly all the way up to its high tick of the day in after-hours trading — and it was sold a bit lower into the 5:00 p.m. close from there.

The low and highs in this precious metal were reported as $14.51 and $14.715 in the March contract.

Silver was closed yesterday afternoon in New York at $14.58 spot, up 14 cents from Thursday.  Net volume was, happily, not much out of the ordinary at just over 57,500 contracts — and there was 4,900 contracts worth of roll-over/switch volume on top of that.

The platinum price traded very erratically almost right from the open of trading in New York at 6:00 p.m. EST yesterday evening — and was down five dollars minutes before the COMEX open.  Its rally from there was capped at the afternoon gold fix in London — and it then traded sideways until a few minutes before noon EST.  It was quickly sold back to unchanged, but then began to rally a short while later — and that ended a few minutes after 2 p.m. in after-hours trading.  It didn’t do a thing after that.  Platinum finished the Friday session at $792 spot, up 4 dollars from Thursday’s close.

The palladium price traded almost ruler flat until a few minutes before 11 a.m. China Standard Time on their Friday morning — and less than an hour later it was down 18 dollars on the day — and at its low for Friday.  It ‘rallied’ very unevenly from there until shortly after 11 a.m. CET in Zurich trading — and then was sold down some more until 2 p.m. CET/8 a.m. EST.  It began to head higher with some authority at that point, but that rally ended at the Zurich close — and it really didn’t do much of anything after that.  Palladium ended the Friday session in New York at $1,209 spot, up 16 dollars on the day.

The dollar index closed very late on Thursday afternoon in New York at 96.77 — and traded sideways until it began to edge higher staring around 11:35 a.m. in Shanghai.  That lasted until around 3:10 p.m. CST — and it proceeded to chop unevenly sideways until the job numbers hit the tape at 8:30 a.m. in New York.  It dropped like the proverbial rock at that point — and was obviously saved by the usual ‘gentle hands’ at the 96.54 mark three minutes later.  It was back at the unchanged mark shortly after that — and any and all attempts to break above that mark were less than successful.  The index finally rolled over for good around 12:35 p.m. EST — and the 96.51 low tick of the day was set a minute before 3 p.m.  It crawled quietly higher into the close from there.  The dollar index finished the Friday session in New York at 96.71…down only 6 basis points on the day.

But heaven only knows what it would have really closed at if the free markets had their way, like they wanted to at 8:30 a.m. — and then again at 3:00 p.m. EST in New York yesterday.

Here’s the DXY chart from the folks over at the marketwatch.com Internet site one more time — and the ‘click to enlarge‘ feature is pretty much required here, as it’s a big chart.

There’s no 6-month U.S. dollar index chart from the folks over at stockcharts.com — as they are having issues just like the good people over at the ino.com website.  Hopefully they’ll have this sorted out over the weekend.


The gold shares jumped up a bit at the 9:30 EST open of trading in New York on Friday morning — and then crawled quietly lower until a few minutes before 1 p.m.  They began to rally smartly at that juncture — and their respective highs came around 3:35 p.m. EST.  But profit-taking by the usual day-trader crowd took them down a bit into the close.  The HUI finished up 2.62 percent.

In most respects, the price action in the silver equities was identical to what happened to the gold stocks.  The only real noticeable difference was that they rallied by more — and the sell-off into the 4 p.m. market close in New York started a bit earlier than it did for the gold shares.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index close higher by 3.02 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 both gold and silver closed up on the week.  The gold stocks outperformed their silver brethren by a decent amount during that time period.  Click to enlarge.

The month-to-date chart — and the weekly chart are the same at this point of the month, so I’m not posting it.

Like it was last week, the year-to-date chart, except for palladium as always, continues to be a sea of red.  But it’s still crystal clear that the silver equities are ‘outperforming’ their golden brethren over the longer term.  Click to enlarge.

It’s still JPMorgan’s world in the precious metals market– and they’ll do whatever they want, or until they’re told to step aside. However, this DoJ criminal investigation into JPMorgan’s trading activities in the precious metals certainly has the potential to change things in a hurry.  And as I point out in The Wrap further down, the sentencing date for this JPM traders is on December 19…if it doesn’t get pushed back.  It’s also the same day that the December FOMC meeting comes to an end.  That date, December 19th, could prove to be interesting in more ways than one.


The CME Daily Delivery Report showed that 98 gold and 91 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, there were five short/issuers in total, but the only two that mattered were Advantage and ABN Amro with 51 and 33 contracts out of their respective client accounts.  Of the seven long/stoppers, the three largest were Goldman Sachs [again] with 57 contract for their own account — and in second and third spots were JPMorgan and Advantage, with 21 and 10 contracts for their respective client accounts.

In silver, the three largest of the four short/issuers were Goldman Sachs with 40 out of its in-house/proprietary trading account.  In second and third place came Advantage and ABN Amro with 34 and 16 contracts from their respective client accounts.  There were six long/stoppers in total and, as always, it was JPMorgan in number one spot with 55 contracts…43 for clients — and 12 for its own account.  The only other long/stopper worth mentioning was Advantage, as they picked up 25 contracts for their client account.

The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in December declined by 672 contracts, leaving 1,696 still around, minus the 98 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 707 gold contracts were posted for delivery on Monday, so that means that 707-672=35 more gold contracts were added to the December delivery month.  Silver o.i. in December fell by 65 contracts, leaving 565 still open, minus the 91 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 128 silver contracts were actually posted for delivery on Monday, so that means that 128-65=63 more silver contracts were added to December.

So far this month, there have been 6,080 gold contracts issued and stopped. Goldman Sachs has picked up 3,428 of those for its own account — and JPMorgan has stopped 1,327 contracts for its client account.  In silver, there have been 3,419 contracts issued and stopped so far in December.  Of that amount, JPMorgan has stopped 2,486 contracts in total…1,950 for its client account, plus another 536 contracts for its own account.


There was an addition to GLD yesterday, as an authorized participant added 48,849 troy ounces.  There were no reported changes in SLV.

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

Month-to-date the mint has sold sold 150,000 silver eagles.

There was the expected announcement from the mint on Thursday regarding the end of 2018 coin sales — and the start of delivery of the 2019 model year.  I picked it up off the coinworld.com Internet site — and it’s headlined “U.S. Mint announces availability for 2019 bullion coins“.  It’s worth reading, if you have the interest.

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  They received 64,757 troy ounces — and none was shipped out.  Almost all of the ‘in’ volume was 64,057 troy ounces that was received at HSBC USA — and the remaining 700 troy ounces was dropped off at Delaware.  The link to that is here.

There was certainly more activity in silver, as 748,973 troy ounces were received, but only one good delivery bar…1,000 troy ounces…was shipped out.  All of the ‘in’ activity was at CNT — and the lone bar shipped out departed Delaware.  The link to this is here.

It was pretty quiet once again over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  Only 483 were received — and 40 were shipped out.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, was here.


Here are two charts that Nick passed around on Thursday, which I didn’t have room for in Friday’s column, as I had the Shanghai Gold Exchange chart instead, so here they are today.  They show gold and silver bullion coin sales for The Perth Mint, updated with November’s data For that month, they sold 64,308 troy ounces of gold coins — and 876,446 troy ounces of silver coins.  The ‘click to enlarge‘ feature helps with both charts.

The Środa Treasure is a hoard of silver and gold coins, plus gold jewellery and some precious stones. The hoard dates from the mid 14th century. Its largest component is silver coins, of which there are about 3,000 pieces. The hoard was found in years 1985–1988 during renovation works in Silesian town of Środa Śląska, Poland.

They were discovered during demolition works and digging for the foundation of the local telephone exchange building in the town of Środa on 8 June 1985. The authorities secured the original find (a vase filled with approximately 3,000 Prague groschen), however, no serious archaeological study was carried out at that time. Three years later, on 24 May 1988, during another demolition in the vicinity of the first discovery, another, even bigger find was reported (including silver and gold florin coins).

It is now agreed that the treasure belonged to the King (later Emperor) Charles IV of the House of Luxembourg.

The treasure is considered immensely valuable, described by some as “one of most valuable archeological finds in the 20th century“.  The ‘click to enlarge‘ feature only helps with the third photo.

Because of the day of mourning on Wednesday in the U.S…the COT and Bank Participation Reports that were scheduled for release on Friday afternoon, have been delayed until Monday.  I thank reader “Okie Bill” for pointing that out.

I don’t have all that much for you, but Doug Noland is back after a week off — and I have a Cohen/Batchelor interview as well.


CRITICAL READS

U.S. Consumer Credit Hits All Time High as Credit Card Usage Soars

After a surprising slump in the use of revolving debt in September, when U.S. consumers unexpectedly paid down a total of $310 million on their credit cards, moments ago, the Fed reported that in October, consumer credit posted a huge rebound, rising by $25.4 billion, above the $15.0 billion expected, the highest one month jump since last November. The surge in borrowing in October brought the total to $3.963 trillion, a 7.7% annualized increase from a year ago, and a new all time high, largely on the back of a newfound love with credit cards.

At the same time, growth in non-revolving credit, i.e. student and auto loans, was stable and in line with recent months, increasing by $16.2 billion, and also bringing the non-revolving total to a new all time high of $2.926 trillion.

And while the rebound in revolving credit use will silence any questions about the resilience of the U.S. consumer heading into the fall, the recent dramatic upward revision to personal savings notwithstanding, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers were at fresh all time highs, with a record $1.564 trillion in student loans outstanding, an impressive increase of $33 billion in the quarter, while auto debt also hit a new all time high of $1.143 trillion, an increase of $19 billion in the quarter.

In short, Americans are drowning even deeper in debt, and loving every minute of it.

This 4-chart Zero Hedge new item showed up on their website at 3:17 p.m. EST on Friday afternoon — and I thank Brad Robertson for this one.  Another link to it is here.


Doug Noland: Q3 2018 Z.1 and THE Cycle Peak

There are many aspects of the unfolding downturn that go unappreciated. I worry about deep economic structural maladjustment. How many thousands of uneconomic enterprises have propagated from all the easy finance and surging asset prices? I have deep concern for Silicon Valley. If the unfolding trade and cold war with China wasn’t enough, they’re about to get the rug pulled out from under them by the financial markets. How much perceived wealth could be lost in a bursting Bubble of inflated technology shares and private business equity, compounded by a deflating Bubble in wildly inflated real estate prices surrounding the tech hubs? I fear a complete lack of understanding and preparation.

It’s difficult not to see the arrest of a top Huawei executive on the same day as the Trump/Xi summit as an ominous development. The CFO and daughter of the founder of one of China’s most powerful international technology conglomerates faces fraud charges and possible extradition to the U.S. In China, outrage. Sure, there was a weird level of ambiguity regarding the true gains from Saturday’s U.S./China trade meeting. But to see global markets convulse on the arrest of a Chinese executive rather starkly illuminates the acute fragilities the world now confronts.

It was curious to see the U.S. dollar under some selling pressure (dollar index down 0.7% this week). But, then again… If our asset markets (i.e. stocks, fixed-income, real estate…) are as vulnerable as I believe and the American economy as maladjusted, there’s a credible bear case against the U.S. currency to ponder. We’ve certainly done our level best to swamp the world with dollars over recent decades.

A dollar break would really catch the speculator community (and investors) positioned poorly. It’s reached the point that NOTHING can be taken for granted in these chaotic financial markets. Which portends something really important: ongoing pressure to de-risk and deleverage. Why do I have the feeling I’ll be using Q3 2018 Z.1 data for Household Net Worth (along with both Equities and Total Securities to GDP, etc.) as THE Cycle Peak for years (decades?) to come?

Doug’s weekly Credit Bubble Bulletin appeared on this Internet site shortly before 2 a.m. EST on Saturday morning — and another link to it is here.  It’s always a must read for me.


Dow 10,000 — Bill Bonner

Worldwide, about $5 trillion has already been knocked off stock values. The S&P 500 is about 10% below its top in September. And the FAANG stocks – the leading technology stocks – are down about 25% from their highs.

Still, they’ve got a long way to go.

Warren Buffett’s favorite yardstick for valuing stocks measures the relationship of total market capitalization (the value of all stocks added together) to GDP. The ratio should be well below 100%. Stocks cannot be worth much more than the GDP of the country that supports them.

But this ratio is now as high as it’s ever been – it’s about even with the top of the great bubble market of 1999.

Stocks today are equal to about 150% of GDP. The Dow would have to fall by nearly 50% to get back to normal.

This worthwhile commentary by Bill appeared on the bonnerandpartners.com Internet site early on Friday morning EST — and another link to it is here.


Credit “Death Spiral” Accelerates as Loan ETF Sees Record Outflow, Primary Market Freezes

One week after even the IMF joined the chorus of warnings sounding the alarm over the unconstrained, unregulated growth of leveraged loans, and which as of November included the Fed, BIS, JPMorgan, Guggenheim, Jeff Gundlach, Howard Marks and countless others, we reported that investors had finally also joined the bandwagon and are now fleeing an ETF tracking an index of low-grade debt as credit spreads blow out and cracks appeared across virtually all credit products.

Specifically, we noted that not only had the $6.4 billion Invesco BKLN Senior Loan ETF seen seven straight days of outflows to close out November, with investors pulling $129 million in one day alone and reducing the fund’s assets by 2% to the lowest level in more than two years, but over $800 million has been pulled in last current month, the biggest monthly outflow ever as investors are packing it in.

Fast forward to today, when another major loan ETF, the Blackstone $2.9BN leverage-loan ETF, SRLN, just suffered its largest ever one-day outflow since its 2013 inception.

Year-to-date, the shares of this ETF backed by the risky debt have dropped 2.6%, hitting their lowest level since February 2016; the ETF’s underlying benchmark, the S&P/LSTA Leveraged Loan Index, has also been hit recently and is down 2.3% YTD, effectively wiping out all the cash interest carry generated YTD and then some.

With the leveraged loan market freezing up – and potentially entering a death spiral – the recent weakness has raised concerns that other debt sales currently in the works may be sold at discounts that are so deep underwriters may have to book a loss, if they can be sold at all. This is precisely what happened in late 2007 and early 2008 when underwriters found themselves with pipelines of debt sales that sudden got blocked, and were forced to take massive haircuts to keep the credit flowing.

This long Zero Hedge article was posted on their Internet site at 11:30 a.m. on Friday morning EST — and it’s the first offering of the day from Brad Robertson.  Another link to it is here.


Fed’s QE Unwind Reaches $374 Billion — Wolf Richter

The Federal Reserve shed $54 billion in assets over the five weekly balance sheet periods that encompass the calendar month of November. This reduced the assets on its balance sheet to $4,086 billion, the lowest since January 15, 2014, according to the Fed’s balance sheet for the week ended December 5, released this afternoon. Since the beginning of the QE unwind — or “balance sheet normalization,” as the Fed calls it — in October 2017, the Fed has now shed $374 billion:

The Fed holds a variety of assets, including the Treasury securities and mortgage-backed securities (MBS) that it had acquired as part of QE. Between the end of QE in late 2014 and the beginning of the QE unwind in October 2017, the Fed replaced maturing securities with new securities to keep their levels roughly the same. Starting in October 2017, the Fed has been shedding Treasury securities and MBS.

How much lower will the balance sheet go?

The Fed held about $910 billion in assets in the summer of 2008, before the whole mess started. Over the prior decades, the amount of assets on its balance sheet had roughly grown in line with nominal GDP (not inflation adjusted); and this trend would have continued. In other words, there is zero chance the assets on the balance sheet will ever revert to $910 billion.

This 3-chart commentary from Wolf showed up on the wolfstreet.com Internet site sometime on Thursday — and I thank Richard Saler for pointing it out.  Another link to it is here.


All Around the World, Central Bank Independence Is Under Threat

South Africa’s top monetary policy maker spoke for his peers around the world last week when he declared that threats to central-bank independence from politicians are no longer just an “emerging market phenomenon.”

The U.S. Federal Reserve, Bank of England and European Central Bank are feeling the heat from elected lawmakers, while India and Turkey are among others under pressure.

There’s concern among the central-banking community that the independence of central banks could be under threat,” South African Reserve Bank Governor Lesetja Kganyago said.

The threat could have real economic consequences: A study in the 1990s by economists Alberto Alesina and Lawrence Summers concluded that independent central banks were better at controlling inflation without damaging output or employment.

Financial markets risk being unnerved if investors suspect central banks will bow to lobbying and take their eye off inflation. That could push up long-term interest rates. Conversely, officials might feel the need to stamp their authority by raising short-term borrowing costs higher than they would otherwise.

An idea whose time has come.  Then we just might have some semblance of free markets — and real interest rates.  The carnage would be awesome — and that’s being kind.  This Bloomberg story was posted on their Internet site at 4:00 p.m. Pacific Standard Time on Thursday afternoon…7 p.m. EST — and I found it embedded in a GATA dispatch.  Another link to it is here.


Macron’s Defeat in Paris Sounds Alarm for Europe

Less than a month ago, French President Emmanuel Macron staked his claim as the flag-bearer for globalism. In a speech to 60 world leaders at the Arc de Triomphe, he eulogized the United Nations and declared nationalism the “betrayal” of patriotism.

Last Saturday, tear gas and cobblestones flew in the same part of Paris as protesters trashed the iconic monument and demanded Macron’s embattled government withdraw a proposed fuel-tax increase. For the first time in his presidency, he backed down. It was a humbling moment for opponents of the populist revolts that spawned Donald Trump.

Europe has seen many a critical juncture in recent years, from the Greek debt crisis to the anti-immigrant backlash against refugees and Britain’s Brexit vote. Rarely, though, have so many political vultures been circling around one leader with so much at stake for the world order.

Poland is flirting with the far right and nationalist parties cajoled by Hungarian Prime Minister Viktor Orban are plotting a rebellion at European Parliamentary elections in May. Meanwhile, Italy has collided with the European Union by taking a defiant stand on its budget spending.

With the E.U.’s erstwhile firefighter, Angela Merkel, planning to step down as German chancellor, the baton was supposed to pass to Macron to uphold liberal democracy.  But Merkel’s power on the world stage was underpinned by a political fortress at home, and the French leader looks anything but solid.

This news item put in an appearance on the bloomberg.com Internet site at 9:01 p.m. PST on their Thursday evening, which was one minute after midnight in New York on their Friday morning.  It was updated about eleven hours later.  I thank Swedish reader Patrik Ekdahl for this one.  Another link to it is here.


Tales of the New Cold War: Moscow asserts the Kerch Strait was a Kiev provocation — John Batchelor interviews Stephen F. Cohen

Part 1: The John Batchelor show this week deals with the latest crisis of the Kerch Strait event and the continuing news of the withdrawal of the United States from the INF Treaty. The professors recent trip to Russia is also discussed and we are surprised to discover that Stephen Cohen and the John Batchelor show is also followed with interest by English speaking Russians there. The Kerch Strait event was actually taking place at the time of Cohen’s arrival and after a brief discussion of the geography he begins his discussion with this update to the New Cold War and its implications. This, he maintains, is the concept of the flash point to war that Ukraine has become, and the Kerch incident is a continuing example to his thesis that this cold war is more dangerous. Unlike the previous cold war, the American president is constrained in his ability to react to any dangerous confrontation with Russia and he notes that this concept was also shown with Trump’s inability to talk to Putin last weekend at the G20 conference.

John Batchelor then moves to the politics behind the Kerch Strait event that he maintains has two different explanations. They both should favour Poroshenko politically, but fail. The Russians consider the martial law imposed in areas of the Ukraine and propaganda value as a ploy to help Poroshenko’s fading stature as president. Cohen elaborates on this view, that the situation relates to the amalgamation of Crimea to Russia and the changing realities of territorial waters that accompanied this. Ukraine has been somewhat isolated in that the Kerch Strait (over which the now famous Russian bridge looms) is Russian territory and Ukraine needs permission now to reach its own ports in Mariupol, and even its naval port in Berdiyansk on the adjacent Sea of Azov. The Sea of Azov is a shared ownership with Russia. As Cohen explained, the Ukrainians and three small ships tried to transit the straits without Russian permission, and Batchelor opines that Ukraine’s goal was to get Russia to open fire on these ships to keep Putin and Trump separated at the G20 meeting, and to create conditions for Washington to levy more sanctions. Cohen maintains that the Ukrainians were at fault and the Russians were protecting their all important bridge. Poroshenko, he continued, was after political gains and his declaration of martial law could have been an attempt to compromise the March elections. (Although he asked for 60 days for martial law, the elections are scheduled for the end of March. L.) Washington in turn started talking about sending warships to the Black Sea.

Part 2. John Batchelor introduces the second part of the program with statements from both Brussels and the U.S. (Atlantic Council) that Russia intends to “annex the Black Sea”, to blockade the Bosporus, and to deny the International rights of other littoral countries. Cohen dismisses this as impossible, but states that this is still dangerous because diplomacy is absent, as is discussion. The preparations of conflict continue.

The conversation then switches to Ukrainian politics and the presidential race there. Poroshenko’s closest competitor Yulia Tymoshenko  accuses Poroshenko of mismanagement with the country so dependent on IMF funding. Cohen believes she is not the war monger that Poroshenko is and may have a softer, more practical view on the relationship with Russia. After all, Cohen states, Russia is still Ukraine’s main trading partner, and 50% of Ukrainians still maintain a positive view of Russia. Batchelor also brings up the question of the complete collapse of the country. Cohen acknowledges this danger and mentions the possibility of the country breaking down into three main “statelets” – as a worst case scenario. Washington, unfortunately, discourages talks between Russia and Kiev – which encourages the described disintegration, and concludes by saying that (significantly) the Kerch event was the first time Ukrainian forces actually came under fire from Russia.

The conversation next shifts to the last cold war under H.W. Bush’s presidency. Under Reagan the cold war was over and this was positive news. But the new White House team was divided as to whether it really was over. Cohen was consulted about this debate at Camp David, and for Cohen, the historian, this was unprecedented. These lofty discussions over foreign affairs never occurred again under other presidents. Consecutive presidents came to use their own special advisers and in practical terms the results accordingly lacked scope and were lacking in an adversarial discussion component that brought out the all important details.

***********

Militarily, (and I am not an expert) the Kerch crisis opens to question whether the Black Sea is really a “Russian Lake”. According to International Law and the Montreux Convention, any military ships not owned by countries bordering the sea are limited in both numbers and tonnage on the Black Sea. If the U.S. decided to initiate hostilities with Russia through Ukraine, it would have to transit the Bosporus Strait into the Black Sea that is controlled by Turkey in order to both attack Russia and supply a long term major conventional military campaign in Ukraine.  If Washington ordered the breaching of  the Montreux Convention, it may or may not pose a problem given its disregard for International Law, but the Russian reaction would likely be more predictable. Putin, following the Kerch event sent S-400 anti-air divisions and anti ship missiles to Crimea as a response.  At present there is no major military build up by the West in Ukraine that poses a real threat to Russia. Also a naval campaign by the U.S. against Russia in the Black Sea would certainly fail. A conventional war pressed here by the West is probably impossible. The strategic reality could change, however, if short-range missiles capable of carrying nuclear warheads were placed on Russia’s Ukrainian border. Such a move would be comparable to the situation of the Cuban Missile Crisis and it may be significant that Washington has not yet decided to do so. This suggests that the professionals in the Pentagon still hold some influence over the politicos who are dangerously bellicose amateurs. In the meantime, the Black Sea is a Russian Lake.

This 2-part audio interview, with each part running for about twenty minutes, appeared on the audioboom.com Internet site on Tuesday sometime.  Larry Galearis sent them along on Thursday, complete with his most excellent executive summary — and his own comments.  These are certainly worth reading if you don’t have the time or the inclination for the interviews themselves.  The link to Part 1 is in the headline — and here.  The link to Part 2 is here.


Maduro says Russia will invest billions in Venezuela’s oil and gold production

As Washington tries to build an economic wall around Venezuela, President Nicolás Maduro keeps digging tunnels.

On Thursday, Maduro said that Russia had agreed to invest more than $5 billion in boosting Venezuelan oil production and an additional $1 billion in mining — principally for gold.

After meeting with President Vladimir Putin this week, Maduro said the Russian government and private sector would also invest in Venezuela’s diamond sector, bring in new satellite technology and provide some 600 tons of wheat in 2019. In addition, Russia will continue to supply and maintain Venezuela’s military arsenal.

Venezuela has the world’s largest oil reserves and is thought to have one of the world’s largest gold reserves, but it has been mired in an economic crisis that has led to food and medicine shortages, and the migration of more than three million people in recent years.

But the announcement was greeted with skepticism by some. Venezuela already owes Russia an estimated $6 billion in overdue loans, and there are doubts that it would be willing to double down on its bad bet.

This rather interesting story, filed from Bogota in Columbia, appeared on the miamiherald.com Internet site at 1:28 p.m. EST on Thursday afternoon.  It’s actual headline reads “Russia may be handing Venezuela a $6 billion lifeline” — and I found it on the gata.org Internet site.  Another link to it is here.


Central Bank silent over plans for Irish gold in U.K.

Ireland’s Central Bank has refused to say if it plans to move almost €200 million worth of gold bars from the vaults of the Bank of England as a result of Brexit, insisting that any such move would be “commercially sensitive.”

The gold reserves have been held by its U.K. counterpart for a number of years, and the Central Bank has traditionally been coy on the precise details of the reserves, and the terms of the arrangement it has with the Bank of England.

It refused to be drawn yesterday on whether the reserves would be removed from the Bank of England either before or after the Brexit deadline of next March.

It is for the Central Bank to determine how Ireland’s gold reserves ought to be managed,” a spokeswoman told the Irish Independent.

The Central Bank’s transactions in gold are commercially sensitive and no further comment can be made at this time,” she said.

This is the usual bulls hit smoke and mirrors from a central bank about their gold reserves.  Do they have it in physical form, or don’t they?  This gold-related news item showed up on the independent.ie Internet site at 2:30 a.m. GMT on Friday morning — and I found it on the gata.org Internet site as well.  Another link to it is here.


The PHOTOS and the FUNNIES

Today’s photos are two more from the Siena International Photo Awards — and the first one was taken by internationally-renowned wildlife photographer Roie Glalitz on the Kamchaa Peninsula in Russia — and is entitled “Surrounded Bear”.  “In this image from above, the Brown Bear is surrounded by salmon in Kurile Lake. The salmon are circling the bear and keeping their distance, just out of his reach.”  [I had a similar experience scuba diving in Shuswap Lake at the entrance to the Adams River in British Columbia when the sockeye were running there.  It was a sea of red [and green] above, beside and below me, for as far as the underwater visibility allowed — about 150 ft/45 meters.  No picture could ever do it justice. – Ed]  Click to enlarge.

This second award-winning photo was taken by Australian Andrew Peacock — and is titled ‘Mind the Gap’.  “A small group of Emperor Penguins huddles near a crack in an ice floe, in a pristine area of the Southern Ocean adjacent to Antarctica, known as the Ross Sea.”  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ dates from way, way back.  I’ve posted it before, but it was years ago.  “Born Dino Paul Crocetti on June 7, 1917 in Steubenville, Ohio; the son of an immigrant barber, he spoke only Italian until the age of five, and at school was the target of much ridicule for his broken English.”  Well, he sure showed them.  The first hit of his superstar career…this one from 1955…is linked here — and I remember it all too well…unfortunately.

Today’s classical ‘blast from the past’ dates from the spring or summer of 1777.  It’s Wolfgang Amadeus Mozart’s Oboe Concerto in C major, K. 314. In 1778, Mozart re-worked it as a concerto for flute in D major.  The concerto is a widely studied piece for both instruments — and is one of the more important concertos in the oboe repertoire.

Here is soloist Yun-Jung Lee and the Chuncheon Philharmonic Orchestra.  Jong Jin Lee conducts.  This was recorded at the Seoul Arts Center sometime in 2017.  It’s a wonderful performance, but the recording level is a little low, so you’re going to have to turn up the volume.  The link is here.


It was another day where gold and silver prices weren’t allowed to get far.  But surprisingly enough, considering the price action volumes in both these precious metals were very much on the lighter side on Friday.  So it didn’t take much by any interested party in managing prices in whatever way it suited them — and it does appear that we’re still in “care and maintenance” mode for the most part, at the moment.

But make no mistake about it, precious metal prices are really going to scream once the heavy hand of JPMorgan is removed.  Despite whatever deterioration we see in these metals in Monday’s COT Report, the set-up in the COMEX futures market is still extremely bullish regardless.

And despite the fact that the general equity markets were crushed again yesterday, it was extremely satisfying to see the precious metal equities put in a decent show.  I was very encouraged by that — and you should be too.

Here are 6-month charts for all four precious metals…but no copper or WTIC today, as the folks over at the stockcharts.com Internet site were having issues with those two, plus a whole host of others.  I got nothing but a blank screen when I clicked on their respective links.  Click to enlarge.

Nothing has changed out there.  The main-stream media is still screaming that all is well, but that is far from the case everywhere one cares to look.  The Potemkin village that they’ve been propping up, painting and pointing to for at least the last decade, is coming ever closer to collapsing.  Yes, the various and sundry central banks and Plunge Protection Teams have been working overtime to keep up the facade, but it’s equally obvious that more and more people now see it for what it really is.

As I’ve said before — and I’ll repeat myself again here, if the powers-that-be weren’t propping up everything that wanted to crash and burn…equities, bonds and currencies…then the world’s economic, financial monetary systems would be a smouldering ruin by the close of trading next Friday, if not before.  And the longer they try to stave off the inevitable, the worse the carnage will be when it finally does happen — and it will happen.  It’s just a matter of when — and the day of reckoning gets closer with each passing day.

Now I, along with a lot of others, have been saying the same thing for several years now, but that changes nothing.  All it proves is that these powers-that-be have been able to keep the old apple cart up and going around the track for a lot longer than any of us thought possible.  The melt-down in all things paper is still coming, regardless.

I still haven’t sold a single share of any precious metal stock that I own, or one ounce of my precious metal holdings — and added to several of my stock positions earlier this year.  All of them are now down from when I purchased them, but that doesn’t change my resolve one bit.

Here, once again, is the list of precious metal stocks that I own shares in.  I also have a couple of precious metal mutual funds as well, but they don’t show up on this particular list.  Click to enlarge.

As I’ve pointed out on numerous occasions over the last couple of weeks, including today’s missive, that there’s a buyer for every precious metal stock being sold at these price levels — and it’s a given that they’re now held by the strongest of hands.  They won’t be selling them until they make big profits — and probably obscene profits in the process.

Then there’s the last FOMC meeting of the year coming up on December 18 and 19.  If the markets melt down before then, or on whatever news comes out of that meeting — and they’re showing all the signs that they just might.  Then the rest of December could prove to be historic in every sense of the world.

And finally — and as I mentioned further up in today’s column, unless it gets pushed back — and Ted said that it just might, the DoJ sentencing date for that JPMorgan trader that pleaded guilty to spoofing the precious metal market, is on December 19th as well.

You couldn’t make this stuff up if you tried.

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

Ed