No Precious Metal Safe Haven Allowed on Friday, Either

22 December 2018 — Saturday


NOTE: I had issues coding the e-mail version of today’s column through Constant Contact — and until they open for business later this morning — and I can reach them on the phone, this website version is all I have until I get this straightened out. – Ed

The gold price wandered generally sideways on Friday — and was up a dollar or so at the COMEX open in New York.  From there it was quietly sold lower into the 1:30 p.m. COMEX close — and it crawled higher into the 5:00 p.m. EST close from there.

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

Gold was closed yesterday at $1,255.60 spot, down $3.80 from Thursday — and less than a dollar above its 200-day moving average.  Net volume was on the lighter side at just over 193,500 contracts — and there was 7,400 contracts worth of roll-over/switch volume on top of that.

The silver price chopped unevenly sideways throughout all of Far East trading on their Friday, but at 8:30 a.m. in London, someone stepped on the price, with the London low tick coming at, or just before, the morning gold fix over there.  It chopped higher from there until a few minutes after the COMEX open, but the selling pressure recommenced — and the low tick of the day was set a minute or so before 4 p.m. in the thinly-traded after-hours session.  It rallied a few pennies higher into the close from there.

The high and low ticks in this precious metal were reported by the CME Group as $14.86 and $14.665 in the March contract.

Silver was closed in New York on Friday at $14.595 spot, down 14 cents on the day — and taking back almost all of Thursday’s gain in the process.  Net volume was pretty quiet at 50,000 contracts — and there was only 1,708 contracts worth of roll-over/switch volume in this precious metal.

Platinum was down a few dollars until very shortly before 3 p.m. China Standard Time on their Friday afternoon — and it rallied a bunch from there.  But like in silver, a willing seller appeared about half an hour after the Zurich open — and the Zurich low was set a minutes after 12 o’clock noon CET.  It chopped unsteadily higher from that point, but was sold back almost to its low of the day starting shortly after the Zurich close — and from about 1:45 p.m. EST onwards, it didn’t much.  Platinum finished the Friday session at $787 spot, down 6 dollars from Thursday’s close.

The palladium price fell and rose 6 bucks or so during Far East trading on their Friday — and was back at unchanged by the Zurich open.  At that juncture the price pressure began — and that lasted until around 2:30 p.m. EST in after-hours trading.  It rallied about five bucks from that point into the 5:00 p.m. close.  Palladium was closed at $1,215 spot, down 29 bucks on the day.  I ignored the down/up price spike that occurred at 1 p.m. in COMEX trading.

The dollar index closed very late on Thursday afternoon in New York at the 96.28 mark — and opened higher by 10 basis points the moment that trading began in New York on Thursday evening.  It crawled a bit higher until 2 p.m. CST on their Friday afternoon — and began to head lower from there.  It’s 96.25 low tick, a few basis points below unchanged, came at 8:20 a.m. in London — and I would suspect that the usual ‘gentle hands’ appeared at that juncture.  It ‘rallied’ sharply for an hour, before continuing to chop quietly higher until precisely 11:00 a.m. EST in New York…the London close.  The ‘rally’ topped out at the 97.05 mark around 3:30 p.m. — and it slid a bit into the close from there.  The dollar index finished the Friday session at the 96.96 mark…up 68 basis points on the day.

What was happening in the currency market yesterday, down or up, seemed to have little effect on what the precious metals were doing.

Here’s the DXY chart courtesy of Bloomberg.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…96.46…and the close on the DXY chart above, was 50 basis points on Friday.  Click to enlarge.

The gold stocks opened down a bit, but did manage to rally back into positive territory for a bit, with their respective highs coming shortly after 11 a.m. in New York trading.  But they got dragged back into negative territory as the gold price continued to slide — and their respective lows came around 1:15 p.m. EST.  Then, following the gold price, they crept higher until 2:30 p.m. —  and then inched lower into the close from there.  The HUI finished down 1.26 percent.

It was the same general price pattern for the silver equities — and they closed down 1.29 percent on the day.  Here’s Nick’s  Silver Sentiment/Silver 7 chart.  Click to enlarge.

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

Considering how the precious metals were manhandled in the COMEX futures market yesterday, I’m not unhappy with the reaction of their associated equities….especially considering how the general equity markets performed.

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.  Gold closed up a bit — and silver was closed down a bit.  But the silver equities outperformed their golden brethren by a huge amount during that time period.  Click to enlarge.

Here is the month-to-date chart — and it’s much happier looking for the second week in a row.  Except for platinum, it’s all green, but the silver equities are now back to outperforming the gold stocks once again, but only by a hair…compared to the gains in their respective underlying precious metal prices.  Click to enlarge.

Like it was last week, the year-to-date chart, except for palladium as always, continues to be a sea of red.  After a 1-week or so hiatus, the silver equities are back to outperforming their golden brethren, compared to their respective underlying precious metals — and that’s mainly because the gold stocks did so poorly this past week.  Click to enlarge.

As I said last week — and the week before, 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 at any time.  And in case you’ve forgotten, the DoJ sentencing date of that former JPMorgan precious metals trader has now been pushed back to June 2019.

So we wait some more.

The CME Daily Delivery Report showed that 34 gold and 30 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, the two short/issuers were Advantage with 22 — and Morgan Stanley with 12 contracts.  The three long/stoppers were Advantage, JPMorgan and HSBC USA…with 21, 9 and 4 contracts respectively.  All contracts, both issued and stopped, involved their client accounts only.

In silver, the only short/issuer that mattered was Advantage with 29 contracts — and in the long/stopper category, JPMorgan stopped 16 for its client account — and The CME Group stopped 13 for its own account, which it immediately re-issued as 13×5=65 one-thousand ounce COMEX mini-silver contracts.  ADM stopped them all.

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 7 contracts, leaving 131 still open, minus the 34 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 27 gold contracts were actually posted for delivery on Monday, so that means that 27-7=20 more gold contracts were added to the December delivery month.  Silver o.i. in December fell by 69 contracts, leaving just 42 left, minus the 30 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 85 silver contracts were actually posted for delivery on Monday, so that means that 85-69=16 more silver contracts were added to December.

So far this month there have been 7,422 gold contracts issued and stopped — and that number in silver is now up to 4,321.

And after a decent-sized withdrawal on Thursday, there was an even larger deposit into GLD on Friday, as an authorized participant added 113,452 troy ounces.  There were no reported changes in SLV.

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

Month-to-date the mint has sold 2,000 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 350,000 silver eagles.

The only physical activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday was 96.450 troy ounces/3 kilobars [U.K./U.S. kilobar weight] that was shipped out of Canada’s Scotiabank.  I won’t bother linking this.

It was another very busy day in silver, as 583,913 troy ounces were received, but 1,802,725 troy ounces were shipped out.  All the ‘in’ activity, one truckload, was at HSBC USA — and all the out activity, three truckloads, was at Brink’s, Inc.  There was also a paper transfer of 58,855 troy ounces out of the Eligible category — and into Registered over at CNT.  The link to this action is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They didn’t receive anything, but shipped out 2,314 of them.  All of this occurred 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 evening, that I didn’t have room for in my Friday column, so here they are now.  They show gold and silver imports into India, updated with October’s data.  During that month, they imported 45.0 tonnes/1.45 million troy ounces of gold — and a very chunky 1,031.6 tonnes/33.2 million troy ounce of silver…their biggest monthly import of that precious metal since December of 2015.  Click to enlarge.

And here are two more charts that Nick slid into my in-box very late last night — and the reason I’m posting them in today’s column is because I most likely won’t have another column until a week from today, as I’m taking a week off over Christmas…if nothing untoward happens in the interim, that is.

These are the usual two charts that shows the amount of gold and silver in all known depositories, mutual funds and ETFs, as of the close of business on Friday, December 21.  It was another big ‘in’ week for gold [on a net basis] as 594,000 troy ounces was deposited.  But silver deposits show net withdrawals of 6,643,000 troy ounces — and it’s a near certainty that JPMorgan’s COMEX withdrawals this week [amongst others] accounted for virtually all of it…if not more.

The [Legacy] Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday showed the expected increases in the commercial net short positions in both silver and gold, but there were some positive surprises under the hood in the Disaggregated COT Report.

In silver, the Commercial net short position increased by another 7,597 contracts, or 38.0 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 3,237 contracts, plus they increased their short position by 4,360 contracts — and it’s the sum of those two numbers that represents their change for reporting week.

The short positions of the eight largest traders are still irrelevant because they are still contaminated by the large number of Managed Money traders that now inhabit that space.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders — and much more, as they added 3,818 long contracts — and they reduced their short position by 7,125 contracts.  It’s the sum of those two numbers…10,943 contracts…that represents their change for the reporting week.

The difference between that number — and the change in the Commercial net short position…10,943 minus 7,597 equals 3,346 contracts…was made up by the traders in the other two categories…as both groups decreased their long positions, plus added to their short positions by that amount on a net basis.  Here’s the snip from the Disaggregated COT Report so you can see these changes for yourself.  Click to enlarge.

The good news, if you wish to call it that, was that the traders in the Producer/Merchant category…where JPMorgan hides out…only increased their short position by 2,441 contracts of the 7,597 contract increase in the Commercial net short position.  Ted wasn’t entirely sure whether this amount was entirely attributable to JPMorgan or not, but even if it was, it’s likely that not all of it was JPMorgan’s doing.  If that’s the case, then JPMorgan’s short position in silver may be as high as 7,000 contracts, up from the 5,000 contracts they were short in last week’s report.  This is not a big increase — and it’s obvious from these numbers that JPMorgan is keeping its shorting in the COMEX silver market to a minimum.

The Commercial net short position is now up to 35,476 contracts, or 177.4 million troy ounces, which is not exactly a small amount, but probably a bit less than twenty percent of that amount belongs to JPMorgan.

Here’s the 3-year COT chart for silver — and this week’s change should be noted.  Click to enlarge.

As of this week’s report, the Managed Money traders are now net long the silver market by a tiny amount, but there’s still plenty of room for them to pile in the long side, plus reduce their current short position, before they’re anywhere near holding a record long position.

In gold, the commercial net short position increased by 15,307 contracts, or 1.53 million troy ounces of paper gold — and Ted was happy that it was only that much.

They arrived at that number by reducing their long position by 2,137 contracts — and they also added 13,170 short contracts — and it’s the sum of those two numbers that represents their change for the reporting week.

And as in silver, the short positions of the eight largest traders in gold are still irrelevant because they’re still contaminated by the large number of Managed Money traders that now inhabit that space.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up for only part of the change.  The added 10,886 long contracts, but only reduced their short position by 378 contracts…which was a surprise.  And it’s the sum of those two numbers…11,264 contracts…that represents their change for the reporting week.

The difference between that number — and the commercial net short position…15,307 minus 11,264 equals 4,043 contracts…was made up in its entirety by the traders in the ‘Other Reportables’ category, as the ‘Nonreportable/small traders’ category didn’t do a thing on a net basis during the reporting week.  Here’s the snip from the Disaggregated Report for gold that shows the changes during the reporting week.  Click to enlarge.

But, like in silver, the positive surprise was in the Producer/Merchant/JPMorgan category, as they actually reduced their short position during the reporting week by a net 3,742 contracts.  So it’s a reasonable assumption to make the JPMorgan reduced their short position in gold, despite the huge increase in the commercial net short position during the reporting week.

The commercial net short position in gold is now up to 9.27 million troy ounces.

Here’s the 3-year COT chart for gold — and the continuing increase in the commercial net short position should be noted as well.  Click to enlarge.

And as in silver, the Managed Money traders are now back to being net long the market by a bit, but miles away from any record high.

But, having said all that, there’s no question that despite the still-bullish market structure of the current COT Report, we’re quite some distance off the record lows of this past July — and as Ted pointed out on the phone yesterday afternoon, JPMorgan et al could engineer a price decline if they wished to do so — and ring the Managed Money cash register yet again.

In the other metals, the Managed Money traders didn’t do much in palladium…increasing their net long position by a scant 95 contracts.  The big volume activity was in the other two categories.  The Managed Money traders did even less in platinum, increasing their net short position by a tiny 15 contracts — and the other two categories didn’t do much either.  But that wasn’t the case in copper, as they increased their net short position by a chunky 15,740 COMEX contracts — and are now net short the COMEX futures market by quite a bit.  That occurred because copper got blasted well below its 50-day moving average on the last day of the reporting week…Tuesday.  And it should be noted here that the short positions of the bullion banks are barely a rounding error in the grand scheme of things in copper.  They are never a factor in its pricing.

Of course — and as I pointed out in yesterday’s column, this COT Report is, in a lot of respects, already ‘yesterday’s news’, as the changes since the Tuesday cut-off…especially Thursday’s price action…will have made a big difference in both COT Reports.  Ted checked with the CFTC yesterday — and despite the Christmas holiday on Tuesday, there will be a COT Report next Friday…as of the close of COMEX trading on Monday, December 24.  We’ll know a lot more by this time next week.

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

Like the COT Report itself, the chart above is basically irrelevant at this point as well — and for the same reason. Except for Scotiabank — and and maybe one U.S. bank…most likely Citigroup…the positions of the Big 4 and Big 8 traders in silver are back to being made up of the brain-dead/moving average-following Managed Money traders now.

For the current reporting week, the Big 4 traders are short 116 days of world silver production, down 3 days from what they were short in last week’s report — and the ‘5 through 8’ large traders are short an additional 46 days of world silver production, which is down 1 day from last week’s report—for a total of 162 days held short, which is five and a half months of world silver production, or about 378.1 million troy ounces of paper silver held short by the Big 8. [In last week’s COT Report the Big 8 were short 166 days of world silver production.]

Just as a point of interest, the Big 4 traders in silver are short 29 days of world silver production each — and the Big ‘5 through 8’ are short 11.5 days of world silver production each.  Quite a dichotomy.

The Big 8 commercial traders are short 43.7 percent of the entire open interest in silver in the COMEX futures market, which is down a hair from the 44.4 percent that they were short in last week’s COT Report. And once whatever market-neutral spread trades are subtracted out, that percentage would be around 50 percent. In gold, it’s 41.6 percent of the total COMEX open interest that the Big 8 are short, up a bit from the 40.6 percent they were short in last week’s report — and 45 percent [or a bit more] once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 43 days of world gold production, which is up 1 day from what they were short last week — and the ‘5 through 8’ are short another 17 days of world production, which is up 2 days from what they were short the prior week, for a total of 60 days of world gold production held short by the Big 8 — which is up 3 days from what they were short in last week’s report. Based on these numbers, the Big 4 in gold hold about 72 percent of the total short position held by the Big 8…which is down 2 percentage point from last week’s COT Report.

And, once again, don’t forget that like in silver…most of the traders in the Big 4 and Big 8 categories in gold are still Managed Money traders — and not the commercial variety.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 72, 67 and 76 percent respectively of the short positions held by the Big 8.  Silver is about unchanged from the previous week’s COT Report, platinum is down 3 percentage point from a week ago. And palladium is also down about 3 percentage points from last week’s COT Report.

The so-called Varna Necropolis (also Varna Cemetery) is a burial site from 4569–4340 B.C. in the western industrial zone of Varna in Bulgaria (approximately half a kilometre from Lake Varna and 4 km from the city centre), internationally considered one of the key archaeological sites in world prehistory. There were other necropoles dating from later Greek and Roman periods around the ancient city.

The oldest gold treasure in the world, dating from this period, was discovered at the site.

The site was accidentally discovered in October 1972 by excavator operator Raycho Marinov. The first to value the significant historical meaning was Dimitar Zlatarski, the creator of the Dalgopol Historical Museum. He was called by the locals to examine what they had found earlier that day. He realized how important the finding was, so he contacted the Varna Historical Museum and, after signing government papers, he handed over the research to the direction of Mihail Lazarov (1972–1976) and Ivan Ivanov (1972–1991). About 30% of the estimated necropolis area is still not excavated.

A total of 294 graves have been found in the necropolis, many containing sophisticated examples of metallurgy (gold and copper), pottery (about 600 pieces, including gold-painted ones), high-quality flint and obsidian blades, beads, and shells.  Click to enlarge.

I have a reasonable number of stories for you today.


Doug Noland: Powell Federal Reserve Lowers “Fed Put” Strike Price

Expiration for the aged “Fed put” was long past due. For too long it has been integral to precarious Bubble Dynamics. It has promoted speculation and speculative leverage. It is indispensable to a derivatives complex that too often distorts, exacerbates and redirects risk. The “Fed put” has been integral to momentous market misperceptions, distortions and structural maladjustment. It has been fundamental to the precarious “moneyness of risk assets,” the momentous misconception key to Trillions flowing freely into ETFs and other passive “investment” products and strategies. It was central to a prolonged financial Bubble that over time imparted major structural impairment upon the U.S. Bubble Economy.

Moreover, prolonged U.S. financial and economic Bubbles were fundamental to Bubbles inflating on an unprecedented global scale. The “Fed put” morphed into a disastrous global “policymaker put” phenomenon. If not for the “Fed put,” never would there have been the audaciousness to set forth on “whatever it takes.” And the greater asset Bubbles inflated the more convinced everyone became that central banks and governments (certainly including Beijing!) had everything under control – and would in no terms tolerate a bust.

There is never a good time to pierce a Bubble. There definitely is no cure, so it’s a central banker and policymaker imperative to avoid supporting a backdrop conducive to Bubble Dynamics. There was never going to be a convenient time to end the “Fed put.” Implicit backstops and guarantees are problematic that way. Washington throughout the mortgage finance Bubble period was content with the markets’ view that the Treasury would backstop GSE obligations. No one was willing to rock the boat during the boom. Critical lesson not learned.

As for the Fed’s market “put”, it proved a challenge for Chairman Powell to distance the Federal Open Market Committee (FOMC) from an implicit backstop the Federal Reserve repeatedly employed starting all the way back with the 1987 stock market crash (evolving from liquidity assurances to Trillions of “whatever it takes” liquidity injections and zero rates in a non-crisis backdrop). The new Chairman intimated that he preferred the Fed move in a different direction, subtlety easily lost with the focus on communicating policy continuity. It was only when the markets were under acute pressure that participants would comprehend the seriousness of a subtle but momentous change in the Fed’s approach. That day came Wednesday.

This rather brief, but must read commentary from Doug, showed up on his Internet site in the very wee hours of Saturday morning — and another link to it is here.

What to Do When Stocks Fall — Bill Bonner

The last days of 2018 are dwindling down. Today, the sun reaches its lowest point on the horizon, in the Northern Hemisphere.

And stocks continue to sink.

One reason cited for the continued selloff on Wall Street was the looming “shutdown” of the federal government.

The shutdown doesn’t worry us. It may rattle investors. But it won’t do any serious harm to the economy or its people. The government is a consumer, not a producer. Generally, the less it consumes, the better.

So a shutdown may actually be a positive. Especially if it lasts a long time.

Like Mr. Mnuchin, we’re more focused on the Fed. That’s where we’d welcome a permanent shutdown.

Bill’s commentary was posted on the Internet site early on Friday morning — and another link to it is here.

Deutsche Bank Death Spiral Hits Historic Low. European Banks Follow — Wolf Richter

It just doesn’t let up with Deutsche Bank — or with European banks in general. A new day, a new scandal, a new historic low in the share price that has been in a death-spiral for over 10 years. Deutsche Bank shares plunged 7% today in Frankfurt, to a new historic low of €7.00, after briefly threatening to close at an ignominious €6.99. Its market cap is now down to just €14 billion. The stock has plunged 56% so far this year.

The European Commission — the executive branch of the E.U. — after nearly three years of investigating this, announced today that is suspects four unnamed banks of colluding to manipulate the vast market for U.S.-dollar-denominated government-backed bonds between 2009 and 2015.

The European Commission has informed four banks of its preliminary view that they have breached E.U. antitrust rules by colluding, in periods from 2009 to 2015, to distort competition in secondary market trading in the EEA of supra-sovereign, sovereign and agency (SSA) bonds denominated in U.S. Dollars,” the statement said.

The Commission has “concerns” that the four banks “exchanged commercially sensitive information and coordinated on prices…,” it said. “These contacts would have taken place mainly through online chatrooms.”

Deutsche Bank and Credit Suisse confirmed that they are among the four.

This is just the latest in an endless series of allegations of wrongdoing and costly settlements of such cases. This is in addition to the bank’s bulging portfolio, so to speak, of operational and financial problems.

This chart-filled and worthwhile commentary from Wolf put in an appearance on the Internet site on Thursday — and I thank Richard Saler for pointing it out.  Another link to it is here.

An historical journey into Crimea — Pepe Escobar

Washington officially insists all Crimea-related sanctions will remain until Moscow returns the peninsula to Ukraine. This will never happen. For Moscow, Crimea is already back to where it belongs. After all, Nikita Khrushchev, a sentimental Ukrainian, had transferred Crimea to Ukraine in 1954 in a fit of proletarian brotherhood, while blatantly violating the Constitution of the USSR.

U.S. neocons and assorted Russophobes insist that Washington should further weaponize Kiev’s land, sea and air forces to counter “Russian aggression”, but Crimeans treat this as a bad joke.

Everyone knows Ukrainian President Petro Poroshenko needs a diversion from his dismal, corrupt government. Thus the illegal – according to the Minsk agreements – bombing of cities in Donbass and the recent Kerch “incident”.

Poroshenko is polling at a meager 8%. He used the Kerch incident to declare martial law. He wanted three months, but Kiev’s legislature gave him just one. He is bound to lose the next elections. Meanwhile, over two million Ukrainians have already voted with their feet and sought refuge in Russia. Poroshenko can’t afford to launch a full-scale war on Donbass with no weapons, funds and little support from the E.U.

For four years, Poroshenko has used a propaganda tsunami to manipulate the Ukrainian far right, which always abhorred Russians, Poles and Jews, to direct their blind hate towards Russians, the country’s largest minority. But that was not enough to “solve” any of the myriad problems of a de facto failed state.

This long, interesting, but somewhat involved commentary by Pepe appeared on the Asia Times website a week ago today — and I plucked it from a Zero Hedge article that Brad Robertson sent my way yesterday morning.  Another link to it is here.

Tales of the New Cold War: Vladimir Putin and Mother Russia had a very good year — John Batchelor interviews Stephen F. Cohen

Part 1: In almost a reminiscence of their podcast discussions and a review of how far the geopolitical positions have evolved between Russia and the West, John Batchelor asks Stephen Cohen about his perspective on how the New Cold War has progressed? Both pundits agreed that they had assessed correctly the start of the confrontation with the Maidan Coup of 2014, but neither knew then it would evolve as it has into a New Cold War. In review he states that what started in Kiev, Ukraine evolved into a near full militarization by 2018. He also points out that a similar progression occurred in the post WW2 years, that that too became militarized and dangerous. This face-to-face standoff became proxy wars in Ukraine and Syria that led to the present arm’s race, and one that went hot briefly during the Kerch Event in the Black Sea. But he concludes by reminding that this Cold War is more dangerous because the adversaries to Russia are right on Russia’s borders in Europe and Eastern Europe.

Batchelor mentions then the recent escalation of Russia planning to build a military base on an island off the coast of Venezuela for its long-range Tu-160 bombers. Cohen, however, thinks this is a mistake, an escalation. It is atypical behaviour for Putin to be proactive and provocative like this, and the professor surmises that he is reacting to political pressure from his own war party. Ironically, an aggressive Russia is now dogma to the American political scene, and the frenzy of Russiagate has only served to solidify Washington in this position. And most dangerously it has encumbered President Trump’s normal diplomatic role with Russia. Batchelor adds that the dogma becomes insurmountable when Russia begins to demonstrate its military superiority over the United States, and he goes on to state that this is all about the future presidential race. Cohen does not disagree, and points out how the New Cold War has taken over the MSM in the U.S.

Part 2: Cohen launches the term “coldwarization” of the media, that the compliance of all mainstream media outlets is uniform and he describes the outcome of what amounts to no discussions with an opposing view. Facts are therefore censored or abused and this made Russiagate, for example, possible. As another example, the professor describes in detail the recent Kerch Strait incident and how the Ukrainian naval ships refused to follow internationally accepted procedures, and the U.S. MSM simply blamed Putin for attacking Ukraine. Another more insane example came from the U.S. think tank, the Atlantic Council, stating recently that Russia was planning an invasion of Europe. Another story, quoted by Batchelor is about Russian military forces building on Ukraine’s eastern border in preparation for invasion. [In reality there is a build up, but behind the borders of the Donbass, and its purpose is almost certainly to back up the rebel provinces if Kiev is too successful in its next attack. L] Again no alternative discussion is evident – and therefore this is not journalism, states Cohen. He even uses an interesting and droll argument against a Russian invasion using Putin’s problem with national pensions. Conquered nations also need viable pension plans, and he does not need more problems like this.

Batchelor then asks the question: “What happens in 2019?” Cohen’s answer is succinct, and he states that Putin is responsible for building Russia into a great power with superior global stature due to diplomacy. The diplomacy is formulated as: Russia will cooperate with any state that wants to cooperate with Russia. In comparison the United States is in decline and Europe is in near chaos. He then asks, “How will Washington react to this?” The possibilities he lists are well worth the listen. He also concludes that Putin had a very good year.


At the very least Putin’s (tentative?) decision to base long range bombers on Venezuelan territory appears to be an atypical action on his part that is sure to raise the tempers of Washington much as Khrushchev actions of placing missiles in Cuba were in the 1960s. These bombers, like the missiles that they carry, are clearly military power projection against Washington to match what Washington is doing with NATO along its own borders. They are strategic weapons, not defensive ones. Although we do not know the details of the negotiations discussed that will site these bases, whether they will include aircraft for local defence to give some protection for the host country in the event of an attack by the U.S., but the destruction of Venezuela and perhaps the appropriation of its oil riches by U.S. corporate interests will be seen as thwarted, and its national security threatened similarly to the Soviet missiles placed in Cuba during the 1960s. The amazing delusion of U.S. Manifest Destiny sees the Americas as Washington’s back yard and political playground to manage as it sees fit. This mindset has not atrophied but expanded to include the rest of the planet. Amazingly, U.S. citizens seem largely ignorant of this history and trend, or are indifferent to the morality of seeking empire in the first place. The only hopeful note in these tawdry antics is the recent report from Gallup, that 58% of Americans want better relations with Russia. On the other hand it is not very clear at all now how much Washington and the Deep State care what the people want. However, one would also think Trump would take to heart, at least, that almost 60% of his people want détente.

This 2-part audio interview…20 minutes for each segment…was posted on the Internet site on Tuesday, but I thought it best to wait to post it in my Saturday column, as that will give you plenty of time over the holidays to listen to it…if you so choose.  As always, I thank Larry Galearis for his excellent executive summary — and personal comments.  The link to Part 1 is in the headline — and here.  The link to Part 2 is here.

Russia’s gold reserves up 7%, inflation goal on target, unemployment down – Putin

Russia’s gold and foreign currency reserves have seen an increase of nearly 7 percent over the recent year and are set to reach $464 billion, Putin said on Thursday.

Earlier this month, the Russian Central Bank reported the country’s foreign exchange reserves demonstrated a week-on-week growth of $2.5 billion, having reached $461.8 billion compared to $459.3 billion at the end of November. The growth of 0.5 percent was reportedly triggered by positive market to market dynamics.

Russia’s international reserves are highly liquid foreign assets comprising stocks of monetary gold, foreign currencies and Special Drawing Right (SDR) assets, which are at the disposal of the Central Bank of Russia and the government.

Last year, Russia’s foreign exchange reserves grew by nearly $55 billion. Over the past year, Moscow has set a course for diversification of foreign exchange reserves, increasing the share of gold bullion and reducing the volume of US sovereign bond holdings.

The measure was taken in response to Washington’s economic sanctions against Moscow. The US penalties are threatening to fence off Russia from dollar transactions, as well as from the SWIFT global payment network, according to the Kremlin.

This news item was posted on the Internet site at 9:46 a.m. Moscow time on their Thursday morning, which was 1:46 a.m. in Washington — EST plus 8 hours.  It was updated about ninety minutes later.  I found it on the Sharps Pixley website last night — and another link to it is here.

Russia keeps up the gold pressure — Lawrie Williams

With economic growth perhaps even higher than that in the USA – at least according to President Putin – Russia appears to be shrugging off the effects of economic sanctions put in place by the USA and European nations.  And last month it once again added substantially to its gold reserves with the central bank taking in another 1.2 million ounces (37.3 tonnes).  This has already made 2018 a record year for increasing its gold holdings, with still another month to go.

Altogether the nation has added almost 265 tonnes of gold to its reserves so far this year and is heading for 300 tonnes for the full year if the current rate of gold purchases continues.  Interestingly this possible target looks to be in excess of the country’s total annual gold mine production – estimated by the major consultancies at around 270-280 tonnes – the world’s third largest after China and Australia.  It is possible that Russia’s 2018 gold output may have risen a little but probably not by up as much as around 20-30 tonnes.

The World Gold Council has already noted a significant upturn in global central bank gold purchases this year.  Last year it put this total at a little over 371 tonnes.  Central bank purchases in the current year have already exceeded this if we take the latest Russian figures into account. A number of countries have joined the gold purchasing bandwagon – some for the first time in decades.

This very worthwhile commentary by Lawrie appeared on the Sharps Pixley website on Friday sometime — and another link to it is here.

Central Banks continue to buy Gold in November

Data compiled by the International Monetary Fund shows that a number of countries continued to buy gold for official holdings during November.

The list includes Turkey with 18 tonnes and Kazakhstan with 4.4 tonnes. The buying interest shown by central banks, particularly those in emerging economies has increased significantly this year.

The World Gold Council envisages central bank purchases of 400-500 tonnes in 2018 (following 375 tons last year), so central banks again constitute an important component of gold demand.

Of course, dear reader, not to be forgotten is the 37.3 tonnes that Mother Russia added to its reserves last month.  The above three paragraphs are all there is to this very brief gold-related news item that appeared on the Internet site yesterday sometime.  It’s another article I found on the Sharps Pixley website.

American Eagle gold, silver coin demand reaches 11-year lows

In a sign of precious metals demand, sales of U.S. Mint American Eagle gold and silver coins are closing out their weakest year since 2007, as investors favored higher-yielding assets, despite volatility in global stock and bond markets late in the year.

Annual sales of U.S. Mint American Eagle gold coins were at 244,500 ounces for 2018 as of Dec. 20, the lowest since 2007, when 198,500 ounces were sold. Silver American Eagle coins sold by the U.S. Mint for 2018 were at 15.56 million ounces, also the lowest in 11 years.

Lackluster sales of new U.S. Mint American Eagle gold and silver coins came as investors concentrated on buying more older coins at lower premiums, U.S. dealers said.

During summertime, premiums for backdated one-ounce American Eagle gold coins sank to as low as 1.2 percent over spot prices. That premium has since rebounded to about 2.5 percent above spot gold prices, still less than 2018-minted gold coins, which sell for up to about 3.25 percent above spot prices, said Katie Cooper, a trader at Upstate Gold Coins in Fayetteville, New York.

This Reuters article, filed from Chicago, showed up on their Internet site at 11:29 a.m. EST on Thursday morning — and it’s the third news item that I ‘borrowed’ from the Sharps Pixley website.  Another link to it is here.

EDITORIAL: ‘In Money We Trust?’ — The New York Sun

Coming soon to a public television station near you is a documentary favoring the gold standard. If that seems improbable it may be from underestimating the determination of Steve Forbes. He is the author of the book “Money,” on which the film is based. The book is about how, in the words of its subtitle, the destruction of the dollar threatens the global economy and what we can do about it.

The book was first brought out in 2014. At the time, the Sun dubbed Mr. Forbes the “anti-Piketty” — that is, the best answerer of the economist Thos. Piketty, then in vogue for his complaints about inequality. Mr. Forbes’ brilliant book nailed the point that the inequality so many were complaining about had burgeoned after our government abandoned a stable, gold-based dollar.

At the time, it looked to us as if the idea of monetary reform might prosper in Congress. And it did, at least in the House (more on which in moment). It failed in the Senate. Not for lack of trying by Mr. Forbes. The significance of the new documentary is that it may restore some lift to this issue, as the film starts to make its way around the public broadcasting stations.

We certainly hope so. The genre of the T.V. documentary forces filmmakers to get to the pith. Mr. Forbes goes right to it in the title of the film, “In Money We Trust?” He and those he interviews on camera drill in on the consequences of the loss, after we delinked the dollar from gold in the 1970s, of trust in our national currency. It touched off a crisis of trust more generalized than money.

This editorial is well worth your time, as is the 2:08 minute trailer embedded in it.  I found this on the Internet site just after midnight EST this morning.  Another link to it is here.

Barrick slashes jobs at head office; director Anthony Munk to resign

Barrick Gold Corp. is making deep cuts to its Toronto head office even before its acquisition of Randgold Resources Ltd. has closed — and long-standing director Anthony Munk is stepping down from the board.

About 95 people, more than half of Barrick’s head-office staff, have already been given layoff notices, according to sources familiar with the matter who aren’t authorized to speak to media. Most of the staff have already departed and a minority will stay on until the end of February.

After the US$6-billion deal with Randgold was announced in September, Barrick employed about 150 people in its Toronto office. At the time, Barrick said its continuing decentralization push may result in “some workforce reduction” and any cuts were expected to be identified within 12 months of the deal closing.

But the pace of layoffs appears to be quicker than expected — at least at the head office.

The Toronto layoffs affect finance, capital allocation, communications, and investor relations, sources said. Almost the entire digital team — about 15 people — has been cut, sources said, and the company will now occupy only one floor in its Toronto building, as opposed to two.

‘Bad Boy’ Barrick is finally getting cut down to size — and it’s about bloody time.  A bit more of this story is available in the public domain at that GATA-linked story in the headline, but the rest of it is behind the Globe and Mail‘s subscription wall.  Another link to it is here.

South Florida gold refiner…caught with ‘blood gold’…files for bankruptcy

Republic Metals, the South Florida-based gold refiner that is one of the nation’s largest, has filed for bankruptcy, a further sign of trouble for the U.S. precious metals industry, which has been targeted by federal prosecutors investigating “blood gold” for more than two years.

Republic — a family-owned company with a 38-year history in South Florida — buys raw gold and silver from the United States, Canada and Latin America, processes the metal and then sells it to corporate giants, including Tiffany & Co., Apple and General Motors.

Because of its proximity to Latin America, which is rich both in gold deposits and drug traffickers seeking to launder money, Miami has become a major hub for the U.S. gold industry.

Republic’s financial problems were uncovered in April, when the company said an internal inventory could not account for a large amount of precious metal at its plant in Opa-locka. That shortfall, coupled with serious bank debt, led Republic to try to sell itself to a major Swiss gold refiner. The deal failed, leading the company to file for Chapter 11 bankruptcy in federal court in New York on Nov. 2.

This very interesting, but longish essay appeared on the Internet site at 7:00 a.m. EST on Friday morning — and was updated about twelve hours later.  The actual headline to this commentary is “As feds target ‘blood gold’ and dirty money, this Miami refinery has bigger problems“.  I found it embedded in a GATA dispatch — and another link to it is here.

World’s Oldest Message in a Bottle

Anyone who has grown up around the water has at one point written a note, put it in a bottle, and cast it into the sea. Personally, I never found a bottle that wasn’t my own, thrown into an incoming tide as a child — a quick return to sender. But messages in bottles are not just the work of deserted island dwellers and small children. During the Age of Sail, drift bottles were dropped by the world’s navies to track currents as they searched for the fastest routes between ports. The date, time, and location of the jettison was recorded in a ship’s log with the hopes that if someone found the bottle, they would return the note to their respective government along with the location of its discovery.

On the 12th of June in 1886, the captain of the German sailing barque, Paula recorded a drift bottle being thrown from the ship while it sailed from Cardiff, Wales, to the Dutch East Indies, or as it is known today, Indonesia. For over a century that entry in the ship’s Meteorological Journal was nothing more than a relatively meaningless piece of data preserved in German archives.

But earlier this year, that data point gained relevance as the bottle that was jettisoned overboard 132 years ago was found on a beach in Western Australia, just north of Wedge Island, on January 21, 2018.

This very interesting story put in an appearance on the Internet site on Tuesday — and I’ve been saving it for today’s column.  I thank Roy Stephens for bringing it to my attention — and now to yours.  Another link to this worthwhile article is here.


Today’s award winning photo in the ‘Young Photographer of the Year” was this one by Milo Hyde — and is entitled “Spots”.  Without doubt, this is the flower of one of the various species of carrion plants.  The second photo below this one shows what the flower looks like if you could see the whole thing.  I plucked that shot off the Internet.  Click to enlarge for both.

The second [and final] photograph in this category was taken by Sean Clayton — and is entitled “Nature’s Stained Glass” — the wing of of one of the thousands of species of dragonflies.  Click to enlarge.


This one column a year I dispense with the customary pop and classical ‘blasts from the past’ to post music that represents the spirit of the season.  They’re the same two carols that I posted last year…and the year before…so you can call it a ‘tradition’ if you wish.

The first is from the movie ‘Home Alone’.  I never cared for the flick, but some of the music…well, that’s different.  I have a CD of John Williams’ Christmas music…’Joy to the World‘ — and it’s wonderful.  Here’s a selection from that disc — and that movie.  It’s by far my favourite.  The link is here.  Enjoy.  But a lot of good folks like this one from that movie better — and that’s fine too!

Next are two versions of the Coventry Carol — and they are both so excellent, I couldn’t decide between them.  I posted them both last Christmas as well.  They’re both sung a capella…which is the way it was meant to be performed.

The first version is sung in English, which is obviously not their native language, by an all-male Latvian ensemble called Quorum…but it’s wonderful all the same — and the link is here.

The second version, sung by St. Mary’s Assyrian Church of the East Choir [Los Angeles] was dedicated to all displaced children — and in particular Assyrian children who have suffered the most by war and bloodshed in the Middle East.  It’s beautiful — and watch it right to the end.  The link is here.

Once again the precious metals were turned lower so they wouldn’t be a safe haven for anyone with money to invest.  But certainly some solace can be taken from the fact that the precious metal equities fared far better than the shares in the general equity markets in New York and elsewhere yesterday.  And if ‘da boyz’ hadn’t stepped into the precious metals at the COMEX open, they would have undoubtedly closed up on the day.

Here are the usual charts for the Big 6 commodities — and it should be noted that not only did gold get closed back within a whisker of its 200-day moving average, but WTIC set a new low for this move down.  Click to enlarge.

However, it’s the bank stocks, not only in the U.S…but in Europe as well, that are signalling “Danger, Will Robinson!”   And here, once again, is the 6-month chart for the KBW Bank Index…the BKX.  The poster boy for this problem is Germany’s Deutsche Bank — and I had a story about that in the Critical Reads section further up.  Click to enlarge.

The bull market in general equities is dead — and has a long way to fall from here.  How far is entirely dependent, as Doug Noland so succinctly put it in today’s Credit Bubble Bulletin posted as the top story in today’s Critical Reads section…

I certainly don’t believe the “Fed put” is dead. The Powell Fed just meaningfully lowered the “strike price.” They’ll be forced to respond, but only after the market has suffered significant impairment. To the markets’ horror, the bursting Bubble will pass the point of no return before our central bank is compelled to aggressively defend the marketplace.

As painful as this process will become, and as deeply distressing it will be to see so many hopes, dreams and expectations crushed, the Powell Fed is taking the best approach. The Bubble would have inevitably burst. Indeed, the global Bubble has been deflating since earlier in the year. That the U.S. “Terminal Phase” of Bubble excess continued even as the global Bubble faltered created a perilous divergence that would end badly. It’s ending now – badly.”

Along with the inevitable fall from grace of the world’s equity markets, the question that remains to be answered is whether or not the ‘powers-that-be’ will allow precious metal prices to rise, as would normally occur in a free market at times of great financial crisis and panic.

So far, it doesn’t seem that way, but it’s way too early in the game to say one way or another.  However, the performance of the precious metal equities month-to-date indicates that somebody may know something, despite what the underlying precious metal prices are being allowed to do.

The precious metal price management scheme is still under the complete control of JPMorgan — and it will be entirely up to them [and/or a small handful of other members of the Deep State] as to whether it happens or not.  And as Ted Butler has been pointing out for the last few weeks now — and as was apparent in this week’s COT Report — they seem to be making all the efforts possible to only short the precious metals when it was absolutely necessary…at least up until this point.

Things may have changed since the Fed meeting on Wednesday…the day after the cut-off for yesterday’s COT Report.  We certainly won’t know with any clarity until next Friday’s COT Report, as to what they’ve been up to when gold blew through its 200-day moving average on Thursday.

So as the year draws to a close, we’re back to “waiting some more”.

This was going to be my last column until January 1…but since the CFTC has indicated that there will be a Commitment of Traders Report next Friday, despite the fact of the Christmas Day holiday, I’ll have a column next Saturday.

But if something blows up or melts down in the interim, I will have a column the following day, but it will “Just the facts, ma’am” — and nothing else.

I’m done for the day — and the week.

Season’s Greetings — and Happy Holidays to you and yours.