Doug Noland: “Such a Precarious Time in History”

13 April 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything on Friday — and its high tick of the day, if you wish to dignify it with that name, came a few minutes before 11 a.m. in London.  From there it was mostly quietly and unevenly down hill until trading ended at 5:00 p.m. EDT in New York.

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

Gold finished the Friday session at $1,289.80 spot, down $2.10 on the day.  Net volume was pretty quiet at just under 185,500 contracts — and there was a hair under 8,000 contracts worth of roll-over/switch volume on top of that.

The silver price didn’t do much of anything until around 12:30 p.m. China Standard Time on their Friday afternoon.  From that juncture it crawled rather unevenly higher [and back above $15 spot briefly] until shortly after the afternoon gold fix in London and, like gold, was sold quietly lower for the remainder of the New York session.

The low and high ticks aren’t worth looking up in this precious metal, either.

Silver was closed at $14.95 spot, up a penny on the day.  Net volume was fairly impressive at just under 60,500 contracts — and there was a bit over 11,000 contracts worth of roll-over/switch volume in this precious metal.

Platinum trade very unevenly sideways in Far East trading — and that state of affairs lasted until the 2:15 p.m. CST afternoon gold fix in Shanghai.  It rallied unsteadily from that point until the 8:20 a.m. COMEX open in New York — and at that juncture, suffered the same fate as both silver and gold.  Platinum was closed at $890 spot, down 2 bucks on the day.

Palladium chopped quietly sideways until the COMEX open in New York on Friday morning — and then had a bit of a down/up/down move for the rest of the Friday session.  It was closed at $1,352 spot, up 4 dollars.

The dollar index closed very late on Thursday afternoon in New York at 97.18 — and opened down 4 basis points points once trading began at 7:44 p.m. EDT on Thursday evening, which was 7:44 a.m. China Standard Time on their Friday morning.  Within thirty minutes it was back at unchanged — and began to decline quietly and unevenly lower until the 96.75 low tick was set around 9:05 a.m. in New York.  It began to chop quietly higher from there, with all that gains that mattered in by around 12:45 p.m. EDT — and the index didn’t do much after that.  The dollar index finished the Friday session at  96.97…down 21 basis points from Thursday’s close.

That decline in the dollar index certainly wasn’t allowed to manifest itself in the prices of the precious metals.

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

And here’s the 5-year U.S. dollar index chart courtesy of the folks over at stockcharts.com — and the delta between its close…96.07…and the close on the DXY chart above, was 90 basis points on Friday.  Click to enlarge as well.

The gold stock chopped sideways once trading began at 9:30 a.m. in New York — and that lasted until around 11:30 a.m. — and then they slid into the red to stay.  That quiet sell-off lasted until shortly before 1 p.m. EDT — and they edged unevenly sideways, with a slight positive bias, until the markets closed at 4:00 p.m.  The HUI closed down 0.42 percent.

The silver equities opened unchanged to down a bit — and that lasted until shortly after 10 a.m. EDT.  And as the silver price began to get sold lower starting at that juncture, the shares followed.  That quiet sell-off lasted until a few minutes after 3 p.m. EDT — and then notched a bit higher into the close of trading from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.18 percent.  Click to enlarge if necessary.

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

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

Here’s the weekly chart — and except for palladium, everything else was down on the week.  A lot of this ugly activity was a direct result of the engineered price decline by ‘da boyz’ last Thursday.  Click to enlarge.

And with the exception of platinum and palladium, everything is now down month-to-date, but not by amounts that I consider worrying, as it was mostly a result of last Thursday’s price activity.  Click to enlarge.

The year-to-date chart shows that everything, with the exception of silver and their associated equities, is in positive territory…although gold, not by much.  Chalk this unhappy looking chart to last week’s price activity as well.  Click to enlarge.

Looking at the 6-month charts in The Wrap section, it certainly appears that the precious metals have been on ‘care and maintenance’ since the beginning of March — and I have no idea as to what will happen going forward.  All we can is wait some more.


The CME Daily Delivery Report showed that 10 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, the lone short/issuer was Advantage — and JPMorgan picked up 9 contracts as the largest long/stopper.  Advantage picked up the remaining contract.  All transactions involved their respective client accounts.

In silver, the lone contract was issued by ADM — and was stopped by the CME Group, which immediately reissued it as 1×5=5 one-thousand ounce COMEX mini silver contracts.  Advantage stopped 3 of those — and ADM picked up the other two.

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 April rose yet again…for the second day in a row…this time by 300 contracts, leaving 866 still around, minus the 10 contracts mentioned a few short paragraphs ago.  Thursday’s Daily Delivery Report showed that 49 gold contracts were actually posted for delivery on Monday, so that means that another 49+300=349 gold contracts were added to the April delivery month.  Silver o.i. in April remained unchanged at 1 contract still open, minus the 1 contract mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that zero silver contracts were reported for delivery on Monday.

This indicates the silver deliveries will be done for April as of Tuesday, but I’ll really be surprised if we don’t see more deliveries added in this precious metal before the month is over.

So far this month, there have been 4,221 gold contracts issued/reissued and stopped — and that number in silver is 774.


There were no reported changes in GLD on Friday.  But there was a change in SLV, as an authorized participant added a rather counterintuitive 749,849 troy ounces.

There was a small sales report from the U.S. Mint yesterday.  They sold 500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — 500 one ounce platinum eagles — and zero silver eagles.

Month-to-date the mint has sold 5,000 troy ounces of gold eagles — 4,000 one-ounce 24K gold buffaloes — 1,600 one-ounce platinum eagles — and 550,000 silver eagles.

And still no Q4 or 2018 financial statements from the Royal Canadian Mint.

There was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.

It was far different in silver, as 1,195,415 troy ounces was reported received — and 1,736,161 troy ounces were shipped out.  All of the ‘in’ activity…two truckloads…occurred at CNT.  In the ‘out’ category, there was 1,079,846 troy ounces shipped out of Canada’s Scotiabank, plus one truckload…632,122 troy ounces…left Brink’s, Inc.  The remaining 24,192 troy ounces departed Delaware.  There was also a paper transfer of 151,331 troy ounces from the Registered category — and back in Eligible — and that occurred at Brink’s, Inc. as well.  The link to all this activity is here.

There was a decent amount of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only reported receiving 200 of them, but shipped out a rather hefty 4,150.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Ringlemere Gold Cup is a Bronze Age vessel found in the Ringlemere barrow near Sandwich in the English county of Kent in 2001.

The body of the cup was created by hammering a single piece of gold, with the handle cut from a flat strip of gold and attached by rivets. Although badly crushed by recent plough damage, it can be seen to have been 14 cm high with corrugated sides. The cup resembles a late Neolithic (approximately 2300 B.C.) ceramic beaker with Corded Ware decoration, but dates to a much later period.

The cup was discovered by metal detectorist Cliff Bradshaw on 4 November 2001. He reported the find to the local coroner’s office, and through the Portable Antiquities Scheme and the Treasure Act 1996 the cup was recorded and declared to be treasure in 2002. It was bought by the British Museum for £270,000 (then roughly US$520,000), with the money paid split between Bradshaw and the Smith family who own Ringlemere Farm. The money to secure the cup for the nation was raised through donations by the Heritage Lottery Fund, the National Art Collections Fund and The British Museum Friends.  Click to enlarge.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, April 9, showed increases in the short positions in both silver and gold, with the biggest increase coming in gold.

I suppose the increase in silver should come as no surprise, as it spent a goodly portion of the week above its 200-day moving average…but gold only broke above its 50-day moving average on a intraday basis on the the final day of the reporting week.  So its rally even rising to to its 50-day moving average obviously ran into considerable resistance.

In silver, the Commercial net short position increased by 3,404 COMEX contracts, or 17.0 million troy ounces.

They arrived at that number by increasing their long position by 6,409 contracts, but they also increased their short position even more, by 9,813 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, the Managed Money traders actually decreased their long position by a net 808 contracts, which Ted thought rather strange…as did I.  All of the change for the reporting week, plus a bit more, came from the ‘Nonreportable’/small trader category, as they increased their net long position by 3,769 contracts.  Ted speculated that it could have been a reporting error of some kind.

The Commercial net short position in silver is now up to 188.8 million troy ounces — and Ted also figured that JPMorgan added 2,500 short contracts during the reporting week to keep that silver rally above its 200-day moving average from going further than it did.

Here is the 3-year COT chart for silver — and the change should be noted.  Click to enlarge.

Of course — and as I said in Friday’s column…”all of the above” is now irrelevant after the engineered price decline that ‘da boyz’ laid on us on Thursday.


In gold, the commercial net short position blew out by another 14,579 contracts, or 1.46 million troy ounces of paper gold.

They arrived at that number by reducing their long position by 7,036 contracts — and they also added 7,543 short contracts — and it’s the sum of those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, it was almost all Managed Money traders that accounted for the weekly change, as they added 7,101 long contracts — and reduced their short position by 5,318 contracts.  It’s the sum of those two numbers…12,419 contracts…that represents their change for the reporting week.

The difference between that number — and the commercial net short position…14,579 minus 12,419 equals 2,160 contracts was made up by the traders in the other two categories.  However both went about it in entirely differently — and here’s the snip from the Disaggregated COT Report so you can see that for yourself.  Click to enlarge.

The big banks in the Producer/Merchant category didn’t do much in gold during the reporting week, as all the commercial activity that really mattered occurred in the Swap Dealer category…which you can see in the above chart as well.

The commercial net short position in gold is back up to 13.29 million troy ounces.

Here’s the 3-year COT chart for gold — and that changes in it should be noted as well.  Click to enlarge.

Of course — and like for silver, all of the above numbers are “yesterday’s news” in every sense of the word.  Whatever improvements there are won’t be known until this time next week.

In the other metals, it was back to business as usual in palladium this past week, as the Managed Money traders reduced their net long position by a paltry 502 contracts — and the other two categories did even less.  The Managed Money traders are net long the palladium market by 10,000 contracts.  Total open interest in palladium dropped to 22,937 COMEX contracts, down 904 contracts from the previous week.  It’s a very tiny market.  In platinum, the Managed Money traders went long big time…increasing their long position by 10,225 contracts.  The Managed Money traders are now net long the platinum market by about 20,300 contracts.  Total open interest in this precious metal is 74,605 contracts, up 6,541 contracts from last week’s report.  In copper, the Managed Money traders increased their net long position by a further 2,012 COMEX contracts — and are only net short the COMEX futures market in copper by around 2,400 contracts.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading this past 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.

For the current reporting week, the Big 4 traders are short 116 days of world silver production, which is up 6 days from last week’s report — and the ‘5 through 8’ large traders are short an additional 62 days of world silver production, up 2 days from last week’s report — for a total of 178 days that the Big 8 are short, which is a hair under 6 months of world silver production, or about 415.4 million troy ounces of paper silver held short by the Big 8.  [In the prior week’s COT Report, the Big 8 were short 170 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 188.8 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 415.4 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 415.4 minus 188.8 equals 222.7 million troy ounces.

The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 34-odd small commercial traders other than the Big 8, are net long that amount.

JPMorgan has only about a 2,500 contract short position in the COMEX futures market in silver…what they added this past reporting week — and with such a tiny short position, are not even close to being part of the Big 8 traders in silver.

The Big 4 traders now in that category are short, on average, about…116 divided by 4 equals…29 days of world silver production each.

The four traders in the ‘5 through 8’ category are short 62 days of world silver production in total, which is 15.5 days of world silver production each.  JPMorgan’s current 2,500 contract short position only amounts to 5.4 days of world silver production.

The Big 8 commercial traders are short 39.7 percent of the entire open interest in silver in the COMEX futures market, precisely unchanged from the 39.7 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be very close to the 45 percent mark.  In gold, it’s now 37.7 percent of the total COMEX open interest that the Big 8 are short, also unchanged from what they were short in last week’s report — and something over 40 percent once the market-neutral spread trades are subtracted out.

The fact that both these percentages are unchanged from last week make me wonder about their accuracy, as it’s never happened before…ever.  I’ve never even had even one of these percentages show unchanged week-over-week.

In gold, the Big 4 are short 38 days of world gold production, unchanged from what they were short in last week’s COT Report.  The ‘5 through 8’ are short another 21 days of world production, up 1 day from what they were short last week…for a total of 59 days of world gold production held short by the Big 8…up 1 day from last week’s COT Report.  Based on these numbers, the Big 4 in gold hold about 64 percent of the total short position held by the Big 8…down 2 percentage points from last week’s COT Report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 65, 75 and 77 percent respectively of the short positions held by the Big 8.  Silver is unchanged from a week ago, platinum is up 7 percentage points from last week — and palladium is down 2 percentage points.

It’s another day where I have very few stories for you.


CRITICAL READS

What America’s Elite Have Planned for Your Money — Bill Bonner

Yes, it is heartwarming, isn’t it? Almost inspiring.

We mean… seeing our leaders finally get together… embracing warmly… and agreeing on something.

No more trouble. No more strife. Oh, Lord, they’ve seen the light!

They are all on board now – Trump, AOC, Bernie Sanders, Powell, The New York Times… and hundreds, thousands of others, the great, the good, and the grandiose numbskulls.

Swaying together… singing… hugging… drinking cocktails… and giving each other high fives…

…as they ride along on the DebtBall Express.

This commentary from Bill, filed from Paris, was posted on the bonnerandpartners.com Internet site early on Friday morning EDT — and another link to it is here.


The U.K. Has Gone Mad” – Brits’ Disenchantment With Politics is Soaring

The rest of the world is watching in disbelief…

In The New York Times Thomas L. Friedman wrote “If you can’t take a joke you shouldn’t come to London right now because there is political farce everywhere. In truth though it’s not very funny, it’s actually tragic… What we’re seeing is a country that’s determined to commit economic suicide but can’t even agree on how to kill itself.”

He went on to say we were led by “a ship of fools” unwilling to “compromise with one another and with reality… an epic failure of political leadership,” scary stuff “but you can’t fix stupid.”

In The Washington Post Fareed Zakaria wrote  “Brexit will mark the end of Britain’s role as a great power. Britain famous for its prudence, propriety and punctuality is suddenly looking like a banana republic.”

He goes on to warn that the consequences of a no-deal Brexit could mean the beginning of the end of “the West as a political and strategic entity.”

Yep, that pretty much sums it up, dear reader.  This Zero Hedge story put in an appearance on their Internet site at 2:45 a.m. on Friday morning EDT — and I thank Brad Robertson for pointing it out.  Another link to it is here.


E.U. Readies List of $12BN in Retaliatory Tariffs on U.S. Ketchup, Orange Juice, Tobacco

Europe is reportedly preparing a list of U.S. imports worth some €20 billion ($22.6 billion) that will be subject to retaliatory tariffs in what appears to be the latest development in an incipient trade spat that helped crash the S&P 500’s eight-day winning streak earlier this week.

As the two sides inch closer to an all-out trade war, here’s more from Reuters:

The European Commission has drawn up a list of U.S. imports worth around 20 billion euros ($22.6 billion) that it could hit with tariffs over a transatlantic aircraft subsidy dispute, EU diplomats said.

U.S. President Donald Trump on Tuesday threatened to impose U.S. tariffs on $11 billion worth of European Union products over what Washington sees as unfair subsidies given to European planemaker Airbus.

The E.U. measures would relate to the European Union’s World Trade Organization complaint over subsidies to Boeing.

A WTO adjudicator still has to set a final amount of potential countermeasures.

Offering a slightly different version of the facts, Bloomberg reported that the E.U. is considering retaliatory tariffs on €10.2 billion euros ($11.5 billion) of goods ranging from foods to helicopters. The list reportedly includes frozen seafood, vegetable oil, chocolate, rum, ketchup, orange juice, vodka, tobacco, trunks and many other items.

The WTO ruled last week that the European Union had unfairly subsidized French aerospace company and Boeing arch rival Airbus, prompting President Trump to chime in and threaten tariffs on $11 billion of goods, though the WTO has not yet ruled on the proper retaliatory measures to which the U.S. would be entitled.

This Zero Hedge new item appeared on their website at 11:52 a.m. on Friday morning EDT — and another link to it is here.


China’s Debt Bomb is Back: Beijing Injects Most Ever Credit For Month of March

One month ago, we asked if that was it for China’s “Shanghai Accord 2.0“? Turns out the answer was a resounding “no.”

As we noted at the time, one month after the PBOC injected a gargantuan 4.64 trillion yuan ($685 billion) into the economy – more than the GDP of Saudi Arabia – in the month of January in the country’s broadest credit measure, the All-System Financing Aggregate a credit injection that was so massive it even prompted the fury of China’s prime minister Li Keqiang who lashed out at the central bank for its unprecedented debt generosity in a time when China was still pretending to be on a deleveraging path, in February the PBOC again surprised China-watchers, this time to the downside, when the Chinese central bank reported that aggregate financing increased by a paltry 703 billion yuan, roughly half the expected 1.3 trillion, the lowest print in the revised series history.  Click to enlarge.

However, to assuage fears that China was turning off the credit taps just one month after the release of weak February TSF, PBOC governor Yi commented in his press conference during the NPC that (although February TSF data was weak) the data should be viewed in light of strong January data. He also noted that even combined Jan-Feb data could be distorted by the Chinese New Year, and one needed to wait for March data.

Well, we got just that overnight (as reported previously) and it was a monster: just after 4 a.m. ET, the S&P futures surged above 2,900 when the PBOC reported that in March, new yuan loans jumped by 1.69 trillion, far above 1.25 trillion estimate, while total social financing in March soared higher 2.86t yuan, the highest March increase on record; smashing the 1.85 trillion yuan estimate, and more than four times the February 703BN yuan increase.

Putting the staggering jump in China’s All-System Financial Aggregate in context, the March number was 80% higher than the year ago March print, and the YTD TSF cumulative total is 40% higher than a year ago! Run-rated, and assuming no further growth at any month in the rest of 2019, China’s TSF is set to close 2019 some 12% higher than a year ago, and nearly twice as high as China’s official GDP growth rate.

Wow!  This amazing news item showed up on the Zero Hedge website at 10:20 a.m. EDT on Friday morning — and another link to it is here.


Doug Noland: The Perils of Stop and Go

Such a precarious time in history. So much crazy talk has drowned out the reasonable. Deficits don’t matter, so why not a trillion or two for infrastructure? Our federal government posted a $691 billion deficit through the first six months of the fiscal year – running 15% above the year ago level. Yet no amount of supply will ever impact Treasury prices – period. A Federal Reserve governor nominee taking a shot at “growth phobiacs” within the Fed’s ‘temple of secrecy’, while saying growth can easily reach 3 to 4% (5% might be a “stretch”). Larry Kudlow saying the Fed might not raise rates again during his lifetime.

Little wonder highly speculative global markets have become obsessed with the plausible. Why can’t China’s boom continue for years – even decades – to come? Beijing has everything under control. Europe has structural issues, but that only ensures policy rates will remain negative indefinitely. Bund and JGB yields will be stuck near zero forever. The ECB and BOJ have everything under control. Bank of Japan assets can expand endlessly. Countries that can print their own currencies can’t go broke. And it’s only a matter of time until all central banks are purchasing stocks and corporate Credit.

Lurking fragility is not that difficult to discern, at least not in the eyes of safe haven debt markets. And sinking sovereign yields – as they did in 2007 – sure work to distract risk markets from troubling fundamental developments. Stop and Go turns rather perilous late in the cycle. Speculative Dynamics intensify – “risk on” and “risk off.” Beijing and the Fed (and global central banks) were compelled to avert downturns before they gathered momentum. But that only ensured highly energized “blow off” speculative dynamics and more problematic Bubbles.

The next serious bout of “risk off” will be problematic. Another dovish U-turn will not suffice. A significant de-risking/deleveraging event in highly synchronized global markets will only be (temporarily) countered with QE. And with the markets’ current ebullient mood, there’s no room for worry: of course central bankers will oblige with more liquidity injections. They basically signaled as much.

Timing is a major issue. Especially as speculative Bubbles turn acutely unstable, any delay with central bank liquidity injections will boost the odds things get out of hand. Central bankers, surely in awe of how briskly intense speculative excess has returned, may be hesitant to immediately accommodate.

The way things are setting up – intense political pressure, the election cycle and such – they will likely be reluctant to return to rate normalization. Yet the crazier things get in the markets the more cautious they will be next time in coming to a quick rescue. The Perils of Stop and Go.

This absolute must read by Doug was posted on his Internet site in the very wee hours of Saturday morning — and another link to it is here.


Global silver demand up 4% in 2018

The Silver Institute has released a report saying global silver demand rose 4% – to 1.03 billion oz. – in 2018. This is the first time since 2015 that demand has risen year-over-year.

Three factors were at play: demand growth, robust retail investment, and falling supply.

On the demand side, sales of silver bars and coins rose by 20%, the largest driver was silver bar demand, which jumped 53%. Silver jewelry demand moved up 4%, to 212.5 million oz. Demand for industrial silver fell 1% to 578.6 million oz., due to a 9% drop in silver used in photo-voltaic.

Silver supply fell by 2% last year, the third consecutive annual decline to 855.7 million oz. The largest downturn was experienced by primary silver mines, which decreased by 7% to contribute 26% of total mine supply. The zinc-lead sector contributed 38% of by-product silver, followed by copper at 23% and gold at 12%.

The price of silver also declined by 7.8% to average $15.71 in 2018. Negative factors affecting the price last year included a rising U.S. dollar, interest rate hikes, the trade dispute between the United States and China, and lower global economic growth projections.

Well, dear reader, the “negative factors” pointed out in this Canadian Mining Journal‘s story are all bulls hit.  The only reason that the silver price hasn’t blasted higher is because JPMorgan is sitting on the price.  This 5-paragraph article was posted on the mining.com Internet site yesterday — and I plucked it from another article that Brad Robertson had sent my way.  Another link to the hard copy is here.  And if you wish to read the 104-page Silver Institute’s World Silver Survey…it’s linked here.  I found that on the Sharps Pixley website.


The PHOTOS and the FUNNIES

On the road to Cache Creek via Ashcroft.  I took the first photo from Highway 97C looking over the Thompson River and Ashcroft.  No snow anywhere at this elevation and location, which is classified as semi-arid, which is certainly not what the climate is on the Thompson PlateauClick to enlarge.

These second two photos were taken in and around the rather tiny community of Cache Creek, which is a 10-minute or so drive from Ashcroft — and it’s at the junction of B.C. Highway 97 — and the Trans-Canada Highway.  The highway in the second shot is B.C. Highway 97…which starts at Watson Lake, Yukon — and ends up in Las Vegas.  Click to enlarge for both.


The  WRAP

Today’s pop ‘blast from the past’ hails from ‘down under’ in Australia — and the year was 1980.  It’s from the soundtrack of the movie ‘Xanadu’.  You should know it…plus the classy and sexy 4-time Grammy award-winning performer that sings it…right away, as it’s a classic.  The link is here.  And if you have the interest, the bass cover of this tune is here.

Today’s classical ‘blast from the past’ is a very short work for cello and piano extracted from Camille Saint-Saëns “The Carnival of the Animals” (Le carnaval des animaux) that he composed in February of 1886.  It’s a humorous musical suite of fourteen movements — and was written for private performance by an ad hoc ensemble of two pianos and other instruments, and lasts around 25 minutes.

Number XIII “Le cygne” (The Swan) is a staple of the cello repertoire — and is the most well-known movement of the suite, usually in the version for cello with solo piano, which was the only publication of this work in Saint-Saëns’s lifetime.

Here are Yo-Yo Ma and Kathryn Stott doing the honours — and the link to this very moving and touching performance, is here.


Well, there was absolutely no follow-through to the downside after the engineered price declines in the precious metals on Thursday.  If there was ever a time that ‘da boyz’ could have pushed their advantage and really laid the lumber to the Managed Money traders, it was yesterday.  But they passed on it — and don’t ask me why.

Looking at the 6-month charts for both gold and silver below, it certainly does appear that ‘da boyz’ have both precious metals on ‘care and maintenance’…gold below its 50-day — and silver below its 200-day for the last couple of months.

Here are the 6-month charts for the Big 6 commodities — and there’s not a lot to see.  Click to enlarge for all.

With the Dow and S&P500 painting triple tops at the moment, one has to wonder how long these indices can keep flying high, when the underlying U.S. economy is slowly sinking into the abyss.

None of us alive today would be old enough to remember the crash of ’29…but if we had been, I get the feeling that the euphoria then, would have matched the euphoria that exists in the U.S. equity markets at the moment.  It is sheer madness.  First there are the FANG stocks.  Then all the zombie companies that are only alive because they can continue to borrow on the cheap — and don’t even get me started on Tesla.

I can do no better than to quote Doug Noland from his commentary this week headlined “The Perils of Stop and Go“…”If Dr. Richebacher were alive today, he would draw a direct link between rising populism and central bank inflationism. Born in 1918, he lived through the horror of hyperinflation and its consequences. While he was appalled by the direction of economic analysis and policymaking, we would tell me that he didn’t expect the world to experience another Great Depression. He had believed that global leaders learned from the Weimar hyperinflation, the Great Depression — and WWII. His view changed after he saw the extent that policymakers were willing to go to reflate the system after the “tech” Bubble collapse.”

It was fundamental to Dr. Richebacher’s analysis that Bubbles destroy wealth. He spared no wrath when it came to central bankers believing wealth would be created through the aggressive expansion of “money” and Credit. ”

Such a precarious time in history. So much crazy talk has drowned out the reasonable. Deficits don’t matter, so why not a trillion or two for infrastructure? Our federal government posted a $691 billion deficit through the first six months of the fiscal year – running 15% above the year ago level. Yet no amount of supply will ever impact Treasury prices – period. A Federal Reserve governor nominee taking a shot at “growth phobiacs” within the Fed’s ‘temple of secrecy’, while saying growth can easily reach 3 to 4% (5% might be a “stretch”). Larry Kudlow saying the Fed might not raise rates again during his lifetime.”

It’s all so utterly unbelievable and preposterous.  I — and probably you as well dear reader, never thought we’d live to see such times.  I wake up every morning wondering if this is the day that the end will begin.  We had a glimpse of that in the December melt-down — and the Fed et al rushed to save the markets before they imploded, which they most certainly would have if they hadn’t intervened.  Then there was Draghi’s “Whatever it Takes 2.0” earlier this week.  And if you read the piece in today’s Critical Reads section about China and its liquidity infusions so far this year, only those massive liquidity injections at all levels of the banking system are preventing the melt-down of China Inc.

It is, as Doug said just above — and in today’s headline…”Such a precarious time in history.”

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

Ed