Ted Butler: A New Silver Issue For the Justice Department

16 February 2019 — Saturday


The gold price did nothing in Far East trading on their Friday, at least up until shortly before 2 p.m. China Standard Time on their Friday afternoon.  It began to edge quietly higher from there until around 11:45 a.m. in London – and from that juncture it chopped quietly sideways until a few minutes before the equity markets opened in New York on their Friday morning.  From that point the gold price was sold quietly lower until London closed — and then away it went to the upside.  That lasted until a bit after 2 p.m. in the thinly-traded after-hours market — and it didn’t do anything after that.

And as impressive as the Kitco chart is for gold, the low and high ticks aren’t worth looking up once again.

Gold finished the Friday session in New York at $1,321.40 spot, up $9.10 on the day.  Net volume was pretty light, all things considered at 195,000 contracts — and there was only around 6,200 contracts worth of roll-over/switch volume on top of that.

The trading pattern in silver was very similar to what happened in gold, so I’m not going to spend any time repeating what I just said above.

The low and high ticks in this precious metal were reported by the CME Group as $16.525 and $15.69 in the March contract.

Silver closed in New York on Friday at $17.755 spot, up 16.5 cents from Thursday.  Net volume was nothing special at just over 49,500 contracts — and there was a fairly healthy amount of roll-over/switch volume out of March and into future months….just under 22,500 contracts worth.

Platinum was sold a few dollars lower in Far East trading on their Friday morning — and was down 2 bucks by the Zurich open.  It edged quietly and unsteadily higher from there until the 11 a.m. EST Zurich close — and then really set sail.  That rally lasted until the COMEX close — and the price was comatose after that.  Platinum finished the Friday session in New York at $805 spot, up 19 dollars from Thursday’s close.

The palladium price chopped unevenly sideways in Far East trading, but was sold a bit lower into the Zurich open.  It began to head higher shortly after that — and the high tick of the day was set shortly before the equity markets opened in New York on their Friday morning.  It really didn’t do much of anything after that.  Palladium closed on Friday afternoon in New York at $1,415 spot, up 16 bucks from Thursday.  And, like most days over the last few months, would have obviously closed higher, if allowed.

The dollar index closed very late on Thursday afternoon in New York at 96.98 — and jumped up about 10 basis points once trading began at 7:45 p.m. EST on Friday evening.  It chopped quietly sideways until about 12:15 a.m. GMT in London — and then headed higher, with the 97.37 high tick of the day coming at a minute or so after 8:30 a.m. in New York.  It was all down hill from that point until the usual ‘gentle hands’ appeared a very few minutes after 2 p.m. EST.  From there, it inches unevenly higher into the close, finishing the Friday session at 96.90…down 8 basis points from the Thursday.

Here’s the usual DXY chart from Bloombergclick to enlarge.

And here’s the 6-month U.S. dollar index chart from stockcharts.com — and the delta between its close…96.74…and the close on the DXY chart above, was 16 basis points on Friday.  Click to enlarge.

The gold shares gapped up a hair as soon as the equity markets opened in New York on Friday morning, but ran into heavy selling pressure right away.  Their respective lows were set around 11:10 a.m. EST — and from there they crawled quietly higher for most of the rest of the day.  The HUI closed on its high tick.  Having said that, I was not overly enamoured with the price action in the gold stocks yesterday.  The HUI only closed higher by 1.18 percent.

The silver stocks rallied over a percent in the first few minutes of trading on Friday morning in New York — and at that point, they suffered the same fate as the gold shares.  Their respective lows came minutes before 10:30 a.m. EST — and they chopped quietly higher until around 2:20 p.m.  Then they faded a hair into the 4:00 p.m. close of trading from there.   Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 1.50 percent — and I must admit that I was somewhat underwhelmed by this price action as well.  Click to enlarge.

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

Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — and year-to-date.  The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index.

Here’s the weekly chart — and as you can see, there’s not a lot to see.  Silver and gold — and their respective equities, did virtually nothing during the week that was — and it was the same in the prior week as well.  Click to enlarge.

Here is the month-to-date chart — and we’re down a bit across the board by a tiny bit in everything, except for palladium, which keeps right on truckin’ — and would be even higher than it is now, if it was allowed to trade freely, which it so obviously isn’t.  Click to enlarge.

The year-to-date chart still shows green across the board — and it should also be noted that the silver equities continue to outperform their golden brethren, especially when you compare them to the gains of their respective underlying precious metals.  Expect that pattern to continue when we really get a price break to the upside worthy of the name.  Click to enlarge.

With only six weeks gone out of 2019, it’s hard to tell how the rest of the year will turn out.  As I’ve said before — and further down again in this column, the precious metal market feels a lot different now, but that statement is hard to quantify…it just is. I’m very optimistic going forward.  The DoJ is still lurking about over at JPMorgan — and I await the resolution to that situation with great interest.  However, I expect that any decision made will show up in the price activity long before any word comes out of the DoJ — and that may have already started.

The CME Daily Delivery Report showed that 72 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  The sole short/issuer was Advantage out of its client account — and the largest long/stopper was JPMorgan with 58 contracts…8 for its own account  and 50 for its client account.  The only other long/stopper that mattered was Advantage, with 13 for its 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 February dropped by 826 contracts, leaving 594 still around, minus the 72 contracts mentioned just above.  Thursday’s Daily Delivery Report showed that 928 contracts were posted for delivery on Tuesday, so that means that 928-826=102 more gold contracts just got added to the February delivery month.  Silver o.i. in February remained unchanged at just 1 contract still open — and no silver contracts were scheduled for delivery on Tuesday.

So far this month, there have been 10,233 gold contracts issued and stopped — and that number in silver is 565.

There was another withdrawal from GLD yesterday, as an authorized participant took out 122,833 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 8,000 troy ounce of gold eagles — 5,500 one-ounce 24K gold buffaloes — 1,800 one-ounce platinum eagles — and 1,060,000 silver eagles.

For the second day in a row, there was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.

There was some activity in silver.  One good delivery bar was reported received…915 troy ounces…and that ended up at Delaware.  That was the only ‘in’ activity there was.  There was 1,233,279 troy ounces shipped out.  In the ‘out’ category, there was two truckloads…1,193,077 troy ounces…shipped out of JPMorgan, plus another 38,194 troy ounces departed the International Depository Services of Delaware.  The remaining 2,007 troy ounces was shipped out of Delaware.  The link to this is here.

It was another very quiet day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 100 of them — and shipped out 200.  This activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, January 22, showed that the commercial net short positions in both silver and gold declined during the reporting week…which was expected — and all good news.

In silver, the Commercial net short position was reduced by 6,758 contracts, or 33.8 million troy ounces of paper silver.

They arrived at that number by increasing their long position by 861 contracts — and the also reduced their short position by 5,897 contracts — and it’s the sum of those two numbers that represents their change for the reporting week.

The Big 8 didn’t do much during the reporting week, reducing their short position by a bit over 3,000 contracts — and Ted’s raptors, the small commercial traders other than the Big 8, reduced their short position by about 3,600 contracts.

The Big 8 traders are short 49.4 percent of the entire open interest in the COMEX futures market in silver.  The Big 4 traders are short 36.5 percent of the entire open interest in COMEX silver — and the ‘5 through 8’ large traders are short the difference between those two numbers…12.9 percent.

Under the hood in the Disaggregated COT Report, the Managed Money traders only made up part of the weekly change in the Commercial net short position.  They reduced their long position by 2,706 contracts — and they added 1,352 short contracts, for a total change of 4,058 contracts.

The difference between that number — and the change in the Commercial net short position…6,758 minus 4,058 equals 2,700 contracts — was made up entirely by the traders in the ‘Nonreportable’/small trader category, as the traders in the ‘Other Reportables’ did nothing during the reporting week.  Here’s the snip from the Disaggregated Report so you can see these changes for yourself.  Click to enlarge.

The Commercial net short position in silver is down to 64,932 contracts, or 324.7 million troy ounces of paper silver, which is still obscene — and bearish.  Ted estimates JPMorgan’s short position in the area of 20,000 contracts.

Here’s the 3-year COT chart for silver, updated with this latest data.  Click to enlarge.

Next Tuesday’s COT Report in silver, for positions held at the close of trading on January 29 won’t be quite as happy looking, as there was a big rally towards the end of that reporting week.

In gold, the commercial net short position also improved, declining by 16,036 contracts, or 1.60 million troy ounces of paper gold.

They arrived at that number by increasing their long position by 18,219 contracts, but they also added 2,183 short contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

The banks in the Producer/Merchant category didn’t do much…adding about 6,800 contracts on both the long and short side…Ted says they’re spread trades…and that’s market neutral.  The big change that mattered in the commercial traders was in the Swap Dealer/Raptor category, as they were very active, increasing their net long position by 16,128 contracts during the reporting week.

The Big 8 traders in gold are short 32.5 percent of the total open interest in the COMEX futures market — and the Big 4 are short 24.0 percent.  The Big ‘5 through 8’ large traders are short the difference…8.5 percent.

Under the hood in the Disaggregated COT Report, the Managed Money traders, like in silver, only made up part of the change in the commercial net short position.  They reduced their long position by 10,356 contracts — and also reduced their short position by 1,631 contracts — and it’s the difference between those two numbers…8,725 COMEX contracts…that makes up their change during the reporting week.

The difference between that number — and the change in the commercial net short position…16,036 minus 8,725 equals 7,311 contracts — and that was made up by the traders in the ‘Other Reportables’ and the ‘Nonreportable’/small trader categories.  Here’s the snip from the Disaggregated COT Report for gold, so you can see these changes for yourself.  Click to enlarge.

The commercial net short position in gold is now down to 9.21 million troy ounces, which is far closer to bullish than it is to market neutral.  Ted feels that JPMorgan may not be short gold much, if at all.

Here’s the 3-year COT chart for gold, updated with this latest data.  Click to enlarge.

And like for silver, the next COT Report for gold won’t be as happy looking because of a rally in that precious metal that occurred during the latter part of the reporting week as well.

The Casco de Leiro (“Helmet of Leiro”) is a ritual hemispherical cap probably dating to the end of the Late Bronze Age (circa 1,000 to 800 B.C.) in the town of Leiro in Spain. The circumstances of its discovery show that technically it constitutes a hoard.

The cap, hammered from a single casting of gold, is entirely covered with registers of repeated repoussé decoration, hammered over bronze molds, of repeated bosses alternating with bands of repeated concentric circles. The central point is applied with a flat-sided point in the form of a truncated cone. Its maximum diameter is 19.5 cm with a height of 15 cm to the base of the point, it weighs 270 grams.

The casque was a chance discovery made by a fisherman, José Vicente Somoza, on 7 April 1976.  Removing some earth to flatten a space for a shed in which to beach his boat, he struck a coarsely made earthenware crock that broke as he struck it. He immediately saw that it contained a gold object, and he reported the find to the Guardia Civil of Rianxo and the Department of Archaeology at the Instituto Padre Sarmiento.  Click to enlarge.

I have a very decent number of stories for you today, plus four rather eclectic ones that I’ve been saving specifically for today’s column, because of content and/or length reasons.


U.S. Stocks Are Playing Russian Roulette — Bill Bonner

The first panacea for a mismanaged nation is inflation,” wrote Hemingway. “The second is war…” he continued. And the third is concrete.  We’ll probably see all of them in the years ahead.

Cycles are called “cycles” because they repeat themselves. The credit cycle is no exception. Bust follows boom. Always has. Always will.

We’ve been looking at what will happen next. That is, when the next trends and policies, the ones that will dominate for years ahead, reveal themselves. Our guess – a view we share with Alan Greenspan – is that we’re headed for stagflation.

And that will set in motion all the usual clunky and scammy wheels that pretend to reverse the natural correction. Interest rates will be cut to zero… and then below zero.

And quantitative easing (QE) is no longer like that little hammer that you’re only supposed to use to break the glass in case of an emergency… Now, it hangs on the Fed’s tool belt next to its stretchy measuring tape.

And it won’t take the feds long to find other tools; soon, they’ll be buying ETFs and launching huge “infrastructure” programs to “get the economy going again.”

That’s where the concrete comes in.

This worthwhile commentary from Bill showed up on the bonnerandpartners.com Internet site sometime on Friday morning EST — and another link to it is here.

U.S. Industrial Production Plunges in January as Manufacturing Unexpectedly Contracts

Against expectations of a modest 0.1% MoM rise, US Industrial Production plunged 0.6% MoM in January, and was downwardly revised historically…driven by a 0.9% slump in manufacturing production.  Click to enlarge.

Year-over-year Industrial production growth slowed to +3.8%, the weakest since June 2018…

The decline was driven by an 8.8 percent decline in motor vehicles and parts, with assemblies falling from the best pace in more than two years to the weakest reading since May.

Additionally, capacity utilization, measuring the amount of a plant that is in use, decreased to 78.2 percent from 78.8 percent.

This 3-chart Zero Hedge news item appeared on their Internet site at 9:22 a.m. EST on Friday morning — and it comes to us courtesy of Brad Robertson.  Another link to it is here.

Foreigners Dumped Record Amount of U.S. Treasuries

Late last year, DoubleLine’s Jeff Gundlach warned that as a result of rising hedging costs, US Treasury bonds have become increasingly unattractive to foreign buyers.

Then, in January, to underscore just how low yielding U.S. paper is on an FX-hedged basis, we showed that in a world in which there is still approximately $8 trillion in negative yielding debt, the debt instrument which has the lowest, FX-adjusted yields is… the 10Y U.S. Treasury!

This is also why foreign holdings of U.S. Treasurys have been declining in recent years, and dropped to just over 36% as a percentage of total holdings, the lowest in over a decade, as domestic holdings of US paper have risen to just shy of 50%, and near all time highs.

Which brings us to today’s latest monthly TIC data which showed that, as Gundlach would expect, Foreign investors dumped over $77 billion in U.S. treasuries in December – the most on record – even as yields fell amid the December stock market carnage and the “Mnuchin Massacre”. Click to enlarge.

One has to wonder, with U.S. Treasury’s funding needs set to soar, as the U.S. faces a $1.1 trillion deficit in 2019, and set to unleash an aggressive borrowing binge, even as the rest of the world dumping U.S. Treasuries if the sudden shock timing of The Fed’s abrupt U-Turn on rates and more importantly the balance sheet normalization are not related to supporting the bond market that America’s hegemon relies upon.

The bottom line: Trump told the world he doesn’t need its generosity to either fund the U.S. deficit or prop up stocks, and according to recent data, the world has taken up Trump on his dare, and has been actively liquidating U.S. securities.

This multi-chart Zero Hedge story put in an appearance on their Internet site at 4:18 p.m. on Friday afternoon EST — and I thank Brad Robertson for this one as well.  Another link to it is here.

Doug Noland: No Hold Barred

The world is now fully embroiled in a most precarious period. I wonder if the Fed is comfortable seeing the markets dash skyward – the small caps up 16.4% y-t-d, the Banks 15.9%, the Transports 15.2%, Biotechs 18.5% and Semiconductors 17.0%. Or, perhaps, they’re quickly coming to recognize that they are now fully held hostage by market Bubbles.

Similarly, I ponder how Beijing feels about January’s booming Credit data – Aggregate Financing up $685 billion in the month of January. Do officials appreciate that they are completely held captive by history’s greatest Credit Bubble? I have argued that Bubbles have become a fundamental geopolitical device – a stratagem. Things have regressed to a veritable global Financial Arms Race. As China/U.S. trade negotiations seemingly head down the homestretch, each side must believe that rallying domestic markets beget negotiating power. Meanwhile, emboldened global markets behave as if they have attained power surpassing mighty militaries and even nuclear arsenals.

Led by bubbling bank lending, China’s Aggregate Financing expanded a record $685 billion during January. Flood gates wide open. While typically a big month for Chinese lending, January’s growth in Aggregate Financing was 50% above January 2018. It’s worth noting that the growth in Aggregate Financing over the past six months ran 7% above the comparable year ago period (and equates to an annualized pace of $3.7 TN). Consumer (largely mortgage) Loans expanded a record $146 billion for the month, 10% greater than the previous record from January 2018. Consumer loans expanded 18% over the past year; 43% in two years; 77% in three; and 140% in five years.

It’s too fitting: as the long-standing global superpower and ascending superpower are locked in tortuous negotiations, their respective financial power centers – securities markets in the U.S. and state-directed bank lending in China – rage. No Holds Barred.

What worries me most is that underlying instability and vulnerabilities have policymakers resolved to abrogate bear markets and recessions. Extraordinary measures continue to be taken to nullify business and market cycles, with apparently no appreciation for how vital adjustments and corrections are to sound financial and economic systems. Worst of all, structurally maladjusted and highly speculative global markets are emboldened as never before. Party like it’s twenty nineteen – with global financial, economic and geopolitical backdrops uncomfortably reminiscent of ninety years ago…1929.

Doug’s weekly Credit Bubble Bulletin is definitely worth reading this week — and another link to it is here.

Reporter’s Diary from Venezuela

This is the personal view of the correspondent on today’s life of Caracas.

Day one…

Our Air France flight was grounded in Paris for 5 hours; no one wants to land in Venezuela in the middle of the night, due to the “dangerous criminal situation.” The airliner is half empty, the passengers, judging by nervous conversations, are only Venezuelans. A taxi driver, while leaving the airport, locks the doors, and sweetly warns that after dark, bandits scatter spikes on the roads and rob the stranded cars. “Oh, don’t worry, Amigo, I have an old car. They are not interested in old, cars.” That’s where you understand why Caracas is ranked first in the ranking of the most dangerous cities in the world. It’s too late for supper, but I at least want to exchange my U.S. dollars for Venezuelan bolivars. I ask my cab driver. He violently shakes his head: “No, no, no. I do not mess with such things, it’s illegal!” “Whatever,” I laugh at him. “Tomorrow, someone will take the dollars, maybe even with my hands torn off.” I was wrong…

The following morning, no one at the hotel wants to look at my dollars. The hotel employee tells me to go to one of the official “exchange stores” but honestly adds: “only Americans, or complete jerks go there.”

In Venezuela, the official dollar exchange rate is 200 bolivars, and the “black market” exchange rate is 2,715. And if you exchange your currency in a bank, then according to this calculation, a bottle of ordinary water will cost 330 rubles, and a modest lunch in an inexpensive cafe—7,000 rubles per person. Judging by the stories on the Internet, in Venezuelan people should simply kill each other for dollars, but this is not the case. There is also other things different from perception. On western news, it is shown that demonstrators fight with police daily, tens killed, hundreds wounded, the sea of blood. But in Caracas, all is quiet. In an afternoon, people are sitting in cafes and idly sipping rum with ice, while maintenance crews sweep the streets. It turns out that the world ‘s leading TV new sources (including CNN and the BBC) show some fantasy film about Venezuela. “Demonstrations?” yawns Alejandro, a street vendor selling corn. “Well, Saturday there will be one, sort of. On one end of the city will be a rally of opposition supporters, and on the other, Maduro supporters. The police keep them separate to prevent fights.” Amazing. You browse the Internet, you turn on the TV, and you see the revolution, the people dying on streets to overthrow the “evil dictator Maduro.” And you come here, and nobody cares.

Then it got even better. Never in my life have I had so many adventures while trying to exchange one currency for another. The country has a problem with cash money, long queues waiting for the ATM, and even the street dealers of “currency” have no “efectivo,” as they call cash. I wander inside a jewelry store and ask if they want some “green.” The answer is “No.” Everyone acts like law-abiding citizens. I am told that police recently started arresting people for private exchange, that’s why people don’t want to associate. One owner of the jewelry store almost agrees. “What do you have? Dollars? No, I won’t take that.” “Why not?” “I take only the Euros …dollar, man, is the currency of the aggressor, they try to tell us how to live!

This longish, but very interesting photo-filled commentary appeared on the saker.is Internet site a week ago, but I was waiting for Saturday’s column before posting it.  Roy Stephens sent it our way on Monday — and another link to it is here.

European Car Sales Fall For Fifth Month In A Row

In keeping with the global stagnation that has enveloped the auto industry, the latest EU/EFTA vehicle registration data paints an ominous picture to start 2019 in Europe, where passenger car registrations dropped 4.6% year over year and sales declined in all of largest markets in Germany, France, the U.K., Italy and Spain.

Here is a look at the trend of ugly YOY misses that began consistently in September of last year.  Click to enlarge.

Bloomberg Intelligence analyst Michael Dean put it clearly in a note: “The E.U. auto-demand cycle has peaked.”

Spain saw the largest decline in registrations, down 8%. Italy followed, down 7.5%. Both Audi and Porsche saw double digit percentage declines, as VW Group sales were down 6.4%.

Brexit continues to be a major point of volatility for many of these manufacturers. Renault and Ford have both warned that unless the U.K. leaves Europe with a deal, both companies could miss estimates and that the effects could be “catastrophic“.

But the biggest risk for European car makers has yet to emerge: on Monday, the U.S. Commerce Department is expected to issue a report outlining that car imports into the U.S. pose a national security threat, and then suggest ways for U.S. president Donald Trump to restrict these imports through high tariffs and quotas. From there, Trump has 90 days to make a decision.

Trump has said in the past he would consider a 25% tariff on car imports. That’s the same figure levied on steel imports, which were also deemed a national security threat last year.

This news story was appeared on the Zero Hedge website at 7:30 p.m. EST on Friday evening — and another link to it is here.

The U.S. has ruined Afghanistan. It can’t just walk away now — Simon Tisdall

The approaching U.S. withdrawal from Afghanistan is not an honourable retreat – it’s a capitulation. The best the Americans can hope for in exit talks with the Taliban, due to resume in Doha later this month, is a promise that coalition troops, unlike the British army led by General Elphinstone in 1842, will not depart under fire. After more than 17 years of conflict, with at least 38,000 civilians killed and millions more injured, traumatised or exiled, none of the long-term objectives set out by George W Bush following the 2001 invasion has been met. In short, the US has lost the war, and lost badly.

The al-Qaida terrorists who used Afghanistan as a base from which to launch the 9/11 attacks have not been wholly vanquished, as Bush promised. Their former leader, Osama bin Laden, is dead but the group, and likewise Islamic State, made territorial gains in Afghanistan last year, according to U.N. experts. It is unlikely that Taliban leaders could in future prevent jihadists once again using parts of the country as a terrorist safe haven – a key demand of American negotiators – even if they sincerely wanted to.

The idea, promoted by successive U.S. administrations and NATO partners such as Britain, that Afghanistan could become a model nation-building exercise has long since been exposed as a neo-liberal fantasy. This is not to dismiss the tenacious efforts of British and allied forces on the ground who struggled valiantly, for instance, to bring stability to Helmand province. But they, and the Afghan people, have paid a terrible price for a lack of clarity and candour on the part of the politicians who sent them there.

This very interesting commentary/opinion piece showed up on theguardian.com Internet site of all place back on February 8th.  It’s another article that had to wait for my Saturday column — and I thank Patricia Caulfield for sending it along.  Another link to it is here.

Zbigniew Brzezinski as I Knew Him — Paul Craig Roberts

When you hear a source called a ‘Russian agent,’ an ‘anti-semite,’ or a ‘conspiracy theorist,’ you had better listen to them. These are those in the know who accept arrow slings in order to tell you the truth.”

I decided to repost this column for several reasons. One is that the misrepresentation of Brzezinski as a neoconservative illustrates the cavalier attitude toward truth that characterizes our era. The rise in the West of denunciation as a more effective force than truth bodes ill for the survival of the Western World.

Throughout the Western World name-calling has taken the place of reasoned debate. A person who criticizes Israel’s treatment of the Palestinians or the Israel Lobby’s influence over the U.S. government and academic appointments is labeled an “anti-semite,” a name that the Israel Lobby uses to discredit critics.

A person who points out that reckless and irresponsible accusations against Russia can lead to war is labeled “a Russian agent.”

A person who is too well-informed to believe the official stories of the Gulf of Tonkin, the assassinations of Martin Luther King and John and Robert Kennedy, 9/11, and the USS Liberty is said to be a “conspiracy theorist.” In other words, if you don’t accept the official stories, all of which are disproved by hard facts, you are discredited.

Throughout the Western World facts are persona non grata.

This timely repost of a June 2, 2017 article is definitely worth reading if you have the interest. It’s certainly the first time I’ve seen it — and this is a first-person account of the man.  This was posted on Paul’s website on February 12 — and was another article that had to wait for my Saturday missive.  I thank Richard Connolly for sending it along — and another link to it is here.

January Arctic Sea Ice Update

Arctic sea ice extent in January has recovered sharply since last year, and stands at the highest level since 2013, and higher than even 2005.  Much of it is 2 meters or more thick.  Click to enlarge.

And ice volume is also up this year.

There was certainly a decline in sea ice extent and volume probably beginning in the 1990s, and it culminated in the large losses in 2007 and 2008.

But it is clear that, looking at both summer and winter data, sea ice has been stable since then, despite the occasional up and down.

Having drilled enough holes in both fresh water ice and sea ice at Alert, N.W.T. [go to the top of Greenland — and then take a hard left. – Ed] back in the early 1970s for the Canadian Department of the Environment, I thought some hard data about the true state of the Arctic ice-pack might be of interest to some.  All this data is taken from the Danish Meteorological Institute website — and is linked in this article.  Simply put, Al Gore, along with various and sundry global warming alarmists, are lying their asses off.  I thank Roy Stephens for sending me this item on Wednesday — and for obvious reasons it had to wait for today’s column.  Another link to it is here.

S.S. Central America carried more than gold coins and bars

Much has been written about the gold treasure salvaged in 2014 from the S.S. Central America, but less information has filtered out about the silver coins. Until now.

California Gold Marketing Group, which holds marketing rights for all numismatic treasure recovered from the ill-fated vessel, is beginning to release information about the United States silver coins that were aboard the vessel, specifically those recovered from the purser’s box stored inside a shipboard safe.

CGMG Managing Partner Dwight Manley revealed: “Two bags found in the purser’s box contained a combined total of $1,588.95 face value of U.S. coins from silver dimes to half eagle $5 gold coins, and ranged in dates from 1796 to 1857. Most of the coins are dimes that were to be used in daily commerce while the ship sailed between Panama and New York City before sinking in a hurricane off the North Carolina coast in September 1857.”

The silver coins are coming to market by one of the CGMG’s partners, Kenny Duncan Sr. from U.S. Coins in Houston. The coins are being marketed in conjunction with Universal Coin & Bullion, Beaumont, Texas. Manley said Duncan purchased 99.9 percent of the silver coins salvaged.

The purser’s bag contained 8,873 U.S. dimes, 503 quarter dollars, 345 half dollars, and a smaller bag inside the large one contained 55 gold dollars, 56 gold $2.50 quarter eagles and 41 gold $5 half eagles. Additional gold and silver coins, perhaps brought onboard by S.S. Central America passengers, were found elsewhere in the safe for a combined total of 9,877 coins.

This very interesting story was one I found over on the coinworld.com Internet site on Thursday night when I was writing Friday’s column — and I thought I’d save it for today.  Another link to it is here.  There was another story about this on the charolotteobserver.com Internet site on Thursday.  That one was headlined “Some of the rarest U.S. coins ever found are hitting the market, thanks to N.C. shipwreck” — and I found it in a GATA dispatch very late last night.

Venezuela’s Guaido asks Citibank to freeze gold swap with Maduro

Advisers to Venezuelan opposition leader Juan Guaido are asking Citibank not to claim gold put up as collateral for a loan to the government of President Nicolas Maduro if his administration does not make payments on time, a lawmaker said on Friday.

Citi would be entitled to keep the gold if cash-strapped Venezuela does not pay the loan when it expires in March, lawmaker Angel Alvarado said, without specifying the value of the gold in question.

Citibank has been asked to stand by and not invoke the guarantee until the end of the usurpation,” Alvarado said in an interview. “We don’t want to lose the gold.”

The gold is worth $1.1 billion, according to a finance industry source with knowledge of the situation.

This Reuters article, filed from Caracas, was posted on their website at 12:26 p.m. EST on Friday afternoon — and I found it on the gata.org Internet site late last night.  Another link to it is here.

Russia closing gap on China as World No.1 gold miner? — Lawrie Williams

Assuming the veracity of the latest figures from official sources in China and Russia the latter is expanding its gold output while the former’s output is contracting.  The latest figures are as follows: China’s 2018 gold output, as announced by the China Gold Association, was around 401 tonnes, down from 426 tonnes in 2017 – a fall of almost 6%, while Russia’s 2018 gold output was up nearly 2.5% to 314 tonnes according to the country’s Finance Ministry.  If the figures are correct, and the trend continues, Russia could surpass China as the world’s largest gold producer within around 4 years given that China’s output is seen as continuing to fall given ever-increasing environmental strictures, while Russia’s output is continuing to advance.

Russia has already overtaken China in the size of its official gold reserves as reported to the IMF, although we continue to express our doubts about the veracity of the Chinese total (See: China officially adds to gold reserves again)

In 2017, according to the major gold analytical consultancies, Russia was the third largest global gold producer – but vying with Australia for second place.  Interestingly the aforementioned consultancies invariably come up with lower annual estimates for Russian gold production than that announced by the Finance Ministry – but they also come up with lower estimates for Australian domestic production than that calculated by Melbourne-based consultancy Surbiton Associates, which should, on past performance, be publishing its latest estimate for Australia’s 2018 gold production in around two to three weeks’ time.  Last year Surbiton put Australian output at 301 tonnes and, if anything we would take the Surbiton figure as being perhaps closer to that nation’s true position than the big global consultancies’ estimates given Surbiton’s almost total specialisation in the Australian gold sector.

This commentary by Lawrie put in an appearance on the Sharps Pixley website on Friday sometime — and another link to it is here.

Perth Mint Gold and Silver Bullion Sales Climb in January

Demand for Australian bullion products increased in January from December but fell from their levels of a year ago, according Perth Mint figures published February 4, 2019.

The monthly gains were supported by surging precious metals with LBMA prices in January scoring increases of 3.3% for gold and 3.9% for silver.

The Perth Mint’s sales of gold coins and gold bars combined last month to 31,189 ounces, rising 6.9% from December but sliding 16.1% from the same month a year earlier.

January sales of of the Mint’s silver coins and silver bars reached 828,854 ounces, climbing 19.6% from the previous month but dropping 22.4% from January 2018.

This brief article appeared on the coinnews.net Internet site on Friday sometime — and I found it on the Sharps Pixley website. Another link to it is here.

A New Silver Issue for the Justice Department — Ted Butler

It’s now been four months since the U.S. Department of Justice secured a criminal guilty plea from the former trader from JPMorgan for spoofing and manipulating precious metals prices on the COMEX and three months since that plea was unsealed. In its announcement on Nov 6, the Justice Department made it clear that it was engaged in an ongoing investigation into COMEX precious metals trading by no less than three of its important divisions; the Criminal Division, the Federal Bureau of Investigation (FBI), and the U.S. Attorneys Division.

While it’s no small matter for suspected criminal activity to be pursued by three separate divisions within the Justice Department, yesterday’s release of the (still delayed) Commitments of Traders (COT) report for positions as of Jan 15, indicates yet another important division of the DOJ should be involved in the current investigation – the Antitrust Division. Incontrovertible evidence in yesterday’s COT report indicates serious violations of monopoly and restraint of trade issues in COMEX silver futures.

This is not a “new” issue, in that I have continuously raised it over the years, but yesterday’s COT report indicates it is imperative for the Antitrust Division to consider the matter in light of the current COMEX precious metals investigation already underway.  That issue is the concentrated holdings of the 4 and 8 largest traders on the short side of COMEX silver futures. As of the close of business on Jan 15, the 8 largest traders on the short side of COMEX silver futures held a net (pure) short position of 95,577 contracts, the equivalent of nearly 478 million ounces of silver, or roughly 60% of annual total mine production. The 4 largest traders held a net short position of 70,627 contracts, the equivalent of more than 350 million ounces or roughly 40% of total annual world mine production. In terms of the average short holdings of each trader; the 4 largest traders average more than 87 million ounces per trader, while the 8 largest traders hold short nearly 60 million ounces per trader.

No silver mining company produces 60 million ounces per year. Moreover, silver prices traded flat to lower over the reporting week, finishing at $15.62.  That represents a price barely at or even below the cost of production for a primary silver miner, so the thought that silver miners were rushing to sell short and hedge production is absurd.

This very worthwhile commentary by Ted put in an appearance on the silverseek.com Internet site at 3:40 p.m. on Thursday afternoon Mountain Standard Time.  It’s definitely worth reading — and another link to it is here.


Here are the last two photos from the “Ocean Art” series that I thank Mike Easton for sending our way.

The photo credit for this first picture goes to Miguel Ramirez — and it’s captioned “A soapfish photographed mid-meal”.  Click to enlarge.

This second picture was take by Greg Lecoeur — and it’s captioned “An upside-down grey seal“.  Click to enlarge.


Today’s pop ‘blast from the past’ needs no introduction, nor do the three brothers that sing it.  It was one of their smash hits from the sound track of the 1977 movie ‘Saturday Night Fever‘.  That was 42 years ago, but who’s counting — and the link is here.

And while I’m at it, here’s a sensational video about the Bee Gees that I ran across on the youtube.com Internet site earlier this week.  It’s titled “Barry Gibb — the Last Bee Gee“.  Barry gets very emotional in spots talking about his brothers, so be prepared.  The link is here.

Today’s classical ‘blast from the past’ is one I’ve feature before, but it’s been a while.  Felix Mendelssohn’s Violin Concerto in E minor, Op. 64, was his last large orchestral work. It forms an important part of the violin repertoire and is one of the most popular and most frequently performed violin concertos in history.  It took him six years to complete — and was first premiered in Leipzig on 13 March 1845.  It was well received and soon became regarded as one of the greatest violin concertos of all time — and it still is today.

Here’s the incredibly gifted Hilary Hahn and the Frankfurt Radio Symphony Orchestra.  Paavo Järvi conducts — and the link is here.

Except for palladium, all the price action that really mattered occurred the moment that the markets closed in both London and Zurich at 11 a.m. EST in New York.  Then the other three precious metals really began to rally with some authority.

As to why that was the case, I don’t really know.  I’m not sure if it was short covering or new long buying.  Friday’s Preliminary Report [posted further up] showed a big increase in open interest in gold…10,000 contracts worth, but in silver, there was no increase in open interest worth noting.

But, whatever the reason, it was certainly a highly unusual trading pattern for a Friday in New York — and it will be about three weeks before this activity appears in a COT Report.  By that time, the data will be buried by subsequent events.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and because the Friday high ticks in gold and silver came after the COMEX close, they don’t appear on their respective dojis on the charts below.  Click to enlarge.

I look at the U.S. and world equity markets in stunned disbelief, as the economic indicators both at home and abroad continue to crash and burn everywhere you care to look.  These are very sick markets, but the algos and the machines that run them have a mind of their own.  I would also suspect that the “Powell Put”…a.k.a. the Plunge Protection Team…is watching over all U.S. markets very carefully, including the currency markets.

The big rally in the Dow yesterday was further confirmation of the enormous hyper-bubble that all things paper have become.  It cannot and will not last, of course…but the powers-that-be in the U.S. deep state and elsewhere are certainly pulling out all the stops to make everyone thinks otherwise.

I continue to be fully in lock-step with Doug Noland on this — and if you didn’t read his weekly missive in the Critical Reads section further up, you can make amends now, as another link to it is here.

With ‘da boyz’ on guard in the COMEX futures market, the rallies in the precious metals on Friday seemed very out of place — and what they portend is hard to fathom at the moment.  But as I’ve stated before, the precious metal market “feels different” now — although that statement is really hard to quantify.

However, with all the shenanigans surrounding the return of Venezula’s gold from the U.K. over the last few months, along with the issues surrounding the return of Germany’s gold from the New York Fed many years back, it’s certainly dawning on most nation states, that keeping their gold in “the West” is no longer a guarantee that they’ll ever see it again, if push becomes shove.

There have been lots of stories over the last month or so about how much gold that the world’s central banks and governments bought in 2018 — and based on that one fact alone, it’s pretty much a given that 2019 will see last year’s record purchases exceeded by a rather handsome amount.

But if the imports by the five ‘Silk Road’ nations…Russia, China, India, Turkey and Kazakhstan…in 2018 can be believed, then virtually every ounce of gold mined year is disappearing into those countries.  So the question has to be asked as to where all this new central bank/nation state gold purchased is going to come from — and at what price?

Based on all this, I suspect that there’s a stealth bull market going on in physical gold right now — and the only reason that it’s not visible, is because of the price control that ‘da boyz’ have in the COMEX futures market in New York.

I sort of suspect that the price activity we’ve seen of late is some indication that this stealth bull market in gold, won’t be quiet for much longer — and not only that, it will quickly spill over into the other three precious metals as well.

I think we saw the precursors of that on Friday in New York.

I’m done for the day — and the week.

Enjoy what’s left of your weekend — and I’ll see you here on Tuesday.