An Excellent COT Report — Especially in Silver

25 May 2019 — Saturday


The gold price wandered around a few dollars either side of unchanged on Friday, but did manage to close in the green by a bit.  Nothing to see here — and the low and high ticks are obviously not worth looking up.

Gold finished the Friday session at $1,284.60 spot, up $1.80 on the day.  Net volume was fumes and vapours once again at a bit under 134,500 contracts — and roll-over/switch volume out of June and into future months was very heavy at 84,500 contracts.

It was the same for sliver — and except for a few hours in early morning trading in the Far East on their Friday, silver wasn’t allowed a sniff of positive territory for the rest of the day.  The high and low aren’t worth looking up either.

Silver was closed at $14.525 spot, down 3 cents from Thursday.  Net volume was very quiet for the second day running at just under 38,500 contracts — and roll over/switch volume was 2,567 contracts.

The platinum price rose unsteadily back above the $800 spot mark by the COMEX open, but ran into ‘something’ at that point — and it was sold back to unchanged by shortly after the Zurich close.  It managed to rally a bit from there — and back above the $800 mark, closing at $804 spot, up 6 bucks from Thursday.

Palladium stair-stepped its way higher in price until shortly before 11 a.m. in Zurich on their Friday morning — and ran into ‘something’ at that juncture.  It chopped quietly and unevenly sideways from that point until trading ended at 5:00 p.m. in New York.  Palladium finished the Friday session at $1,315 spot, up 23 dollars from Thursday’s close.

I had forgotten that Monday is Memorial Day in the U.S…so that accounts for the very low trading volumes in the precious metals on Friday.  A lot of traders headed home early…if they showed up for work at all, that is. [However, that doesn’t explain the very low volumes on Thursday.]

The dollar index closed very late on Thursday afternoon in New York at 97.86 — and opened down 3 basis points once trading commenced at 7:45 p.m. EDT.  It then proceeded to gain that loss back, plus a few basks points more — and then chopped quietly sideways until a waterfall decline commenced a very few minutes after 2 p.m. China Standard Time on their Friday afternoon.  That ended abruptly about thirty-five minutes later — and it manged to ‘rally’ back to the unchanged mark by around 10:20 a.m. in London.  The decline resumed in stair-step fashion from that juncture — and the 97.55 low tick was set at 1:20 p.m. in New York…five minutes after the COMEX close.  It edged a bit higher until trading ended at 5:30 p.m. EDT.  The dollar index finished the Friday session at 97.61…down 25 basis points from its Thursday close.

And it should be carefully noted that precious metal prices weren’t allow to reflect the decline in the dollar index yesterday.

Here’s the DXY chart…courtesy of BloombergClick to enlarge.

And here’s the 5-year U.S. dollar index chart, courtesy of the good folks over at the Internet site.  The delta between its close…97.48…and the close on the DXY chart above, was 13 basis points on Friday.  Click to enlarge as well.

The gold stocks traded within a one percent range during the entire New York trading session on Friday — and managed to close in the green by a hair.  The HUI finished higher by 0.07 percent, so call it unchanged.

It was about the same for the silver equities.  But, like in gold, were sold lower staring around 2 p.m. in New York trading — and Nick Laird’s Intraday Silver Sentiment Index closed up only 0.26 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.  Both gold and silver were up tiny amounts, but their respective equities finished lower.  And as I pointed out early this week, I suspect that there was active shorting going on.  And with ‘da boyz’ really leaning on platinum recently, its negative close should come as no surprise, either.  Click to enlarge.

The month-to-date chart, with the exception of the gold price, is still a sea of red.  Platinum is now down 10 percent on the month, but the decline in the silver equities has been particularly brutal — and I’ve already advanced my suspicious why this is so just above.  Click to enlarge.

Here’s the year-to-date chart — and gold is still hanging in there, but all of platinum’s big gains on the year have vanished, as ‘da boyz’ have been working that precious metal over pretty good for the last few weeks now.  Silver — and their associated equities are really getting smoked…courtesy of JPMorgan.  Click to enlarge.

As I pointed out last week in this space, the shorting of the precious metal equities…mostly silver, will certainly be rocket fuel during the next big rally in that precious metal.  We’re at, or near the bottom now, except for gold’s 200-day moving average situation, which has yet to be resolved.

The CME Daily Delivery Report showed that 8 gold and 40 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, ADM and Advantage issued 4 contracts each.  JPMorgan stopped 5 — and Advantage stopped the other 3.  All contracts, issued and stopped, involved their respective client accounts.

In silver, the two short/issuers were International F.C. Stone and JPMorgan, with 25 and 15 contracts out of their respective client accounts.  ADM was the big long/stopper, picking up 29 — and JPMorgan was in distant second spot, with 8 contracts…5 for its client account, plus 3 for its own account.

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

So far this month, there have been 314 gold contracts issued/reissued and stopped — and that number in silver is up to 3,574.

The CME Preliminary Report for the Friday trading session showed that gold open interest in May declined by 1 contract, leaving 57 still open, minus the 8 mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that zero gold contracts were posted for delivery on Tuesday, so one lone gold contract vanished from the May delivery month yesterday.  Silver o.i. in May rose yet again, this time by 10 contracts, leaving 219 still around, minus the 40 mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 3 silver contracts were actually posted for delivery on Tuesday, so that means that 10+3=13 more silver contracts were just added to May.

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

And there was no sales report from the U.S. Mint on Friday, either.

So far this month the mint has sold 3,000 troy ounces of gold eagles — 3,000 one-ounce 24K gold buffaloes — 726,000 silver eagles — and 78,000 of those ‘America the Beautiful’ 5-ounce silver rounds.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  JPMorgan shipped out 7,924 troy ounces — and nothing was reported received.  That amount shipped out was precisely the same amount of gold that was transferred from the Registered category and back into Eligible over at JPMorgan on Tuesday. There was also a tiny transfer of 200 troy ounces from the Registered category and back into Eligible over at HSBC USA. I won’t bother linking this.

There was a bit of activity in silver, as one truckload…600,473 troy ounces…was received over at Canada’s Scotiabank — and 26,362 troy ounces in total was shipped out.  Of that amount, there was 24,309 troy ounces that departed the International Depository Services of Delaware — and the remaining 2,053 troy ounces left Delaware.  The link to all this, is here.

There was pretty substantial activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received 3,000 of them — and shipped out 3,139.  All of this activity occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.

The Mildenhall Treasure is a large hoard of 34 masterpieces of Roman silver tableware from the 4th century A.D., and by far the most valuable Roman objects artistically and by weight of bullion in Britain. It was found at West Row, near Mildenhall, Suffolk, in the year 1942. It consists of over thirty items and includes the Great Dish weighing over 8 kg. alone.

The hoard was discovered while ploughing in January 1942 by Gordon Butcher, who removed it from the ground with help from Sydney Ford, for whom he was working at the time. Many details of the discovery remained uncertain, not least because it took place in wartime. Apparently they did not at first recognise the objects for what they were, though Ford collected ancient objects. Ford cleaned the pieces and displayed them in his house, using some of them as daily utensils and some, such as the Great Dish, on special occasions with the family. Ford declared the hoard to the authorities in 1946 after a knowledgeable friend had seen them in his home. An inquest was held in the summer of that year, when the find was legally declared “treasure trove” and acquired by the British Museum in London. Academic opinion at the time was generally reluctant to believe that such fine-quality Roman silver could possibly have been used in Roman Britain, and so there were many imaginative rumours and even doubts that this was a genuine British find at all. The numerous well documented discoveries of high-quality Roman material in recent decades, including the Hoxne Hoard, have set all such doubts to rest.

The collection is on view in the British Museum because of its immense importance and value, and replicas are on show in the local museum at Mildenhall.

I think I’ve posted this treasure trove before — and if I have, it’s been more than year, so it’s time for a revisit.  Click to enlarge.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday,  showed big improvements in the commercial net short position in both silver and gold.

In silver, the Commercial net short position dropped by 7,595 contracts, or 38.0 million troy ounces.

Ted’s comments in his Wednesday column about what the report might show were as follows:  “I am expecting a pretty big improvement in Friday’s report, along the lines of managed money selling/commercial buying of 5,000 to 7,500 net contracts or so.”

They arrived at that number by adding 4,112 long contracts — and they also reduced their short position by a further 3,483 contracts.  It’s the sum of those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated Report was where the real action was — and it remains just as bifurcated this week as it has been for the last while.  Anyway, they made up for all the change in the Commercial net short position during the reporting week, plus 100 percent more!

The brain dead moving average-following Managed Money traders increased their short position by 10,656 contracts.  Ted figures that this is “hot money” that will exit their positions at the first sign that they move against them…not waiting for any particular moving average to be broken before they exit, stage left.  The non-technical/value investing Managed Money traders reduced their long position by 4,578 contracts during the reporting week — and I suspect that the severity of the price decline recently has forced some of these traders to sell because of margin requirements.

Anyway, in aggregate, these two groups of Managed Money traders increased their net short position by the sum of those two numbers…10,656 plus 4,578 equals 15,234 contracts.

And as is always the case, the difference between that number — and the Commercial net short position…15,245 minus 7,595 equals 7,639 contracts…was made up by the traders in the other two categories, as both increased their net long positions by rather surprising, but substantial amounts…the ‘Other Reportables’ by 2,781 contracts — and the ‘Nonreportable’/small trader category by a hefty 4,858 contracts. The sum of those two numbers equals 7,639 contracts, which it has to be.

I was expecting both these categories to increase their short positions during the reporting week as well, but they didn’t. What do these new contract holders know that we don’t, I wonder?

Here’s the snip from the Disaggregated COT Report so you can see these changes for yourself.  Click to enlarge.

The big surprise for Ted was how aggressively that the Managed Money traders continued to go on the short side, when every one of these contract placed will be sold for a guaranteed loss at some point.

Ted figures that JPMorgan bought back all of the 2,000 contracts that they sold last week — and their long position in silver in the COMEX futures market is back around the 5,000 contract mark.

The Commercial net short position in silver is down to an immaterial 5,183 contracts, or 25.9 million troy ounces of paper silver.  And since the Tuesday cut-off, all…or a very large percentage of that amount, may have vanished.

Here’s the 3-year COT chart courtesy of Nick Laird — and this week’s rather dramatic improvement should be noted.  Click to enlarge.

We’re on the launchpad for a moon shot higher in price, as the current set-up in the COMEX futures market is back to “white hot” bullish.  But the big rally that we’re all expecting will only occur if JPMorgan allows it.

In gold, the commercial net short position declined by 29,245 contracts, or 2.92 million troy ounces of paper gold.

They arrived at that number by increasing their long position by 8,383 contracts — and they also reduced their short position by 20,862 contracts.  It’s the sum of those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated Report it was all Managed Money trader, plus much more, as they decreased their long position by 23,481 contracts — and they also added 13,128 short contracts — and it’s the sum of those two numbers…36,609 contracts…that represent their change for the reporting week.

The difference between that number — and the commercial net short position…36,609 minus 29,245 equals 7,364 contracts.  That was made up by the other two categories, as both increased their net long position, like in silver…the ‘Other Reportables’ by 878 contracts — and the ‘Nonreportable’/small traders by a hefty 6,486 contracts.  Those two numbers total 7,364 contracts, which they must.

Here is the snip from the Disaggregated COT Report for gold, showing these changes.  Click to enlarge.

Ted’s comments on what the COT Report for gold on Wednesday were as follows: “It may be too optimistic to expect a complete reversal of the prior week’s 40,000 net contracts of managed money buying, but I do hope we come reasonably close.”  We did.

Ted figures that JPMorgan’s short position in gold is somewhere between “10,000 contracts and zero“.  Ten thousand contracts is a million ounces, but he figures that JPMorgan is sitting on 20-25 million ounces of physical metal, so they’re in no danger.

The commercial net short position in gold is down to 10.79 million troy ounces.

Here is the 3-year COT chart for gold from Nick as well — and the weekly change should be noted.  Click to enlarge.

The set-up in gold is still very bullish on an historical basis…but the fly in the ointment continues to be its 200-day moving average.  Will they or won’t they?  No one knows.

In the other metals, the Manged Money traders in palladium increased their net long position in this precious metal by 565 contracts.  The Managed Money traders are net long the palladium market by 8,431 contracts.  Total open interest in palladium is 20,509 COMEX contracts, down a bit from the previous week.  As I keep saying, it’s a very tiny market.  In platinum, the Managed Money traders decreased their net long position by a further and very hefty 12,332 contracts.  The Managed Money traders are net long the platinum market by a very tiny 680 contracts — and it’s a given that they’re now net short since the Tuesday cut-off.  Total open interest is 78,838 contracts.  With copper engineered lower in price for another week, the Managed Money traders increased their net short position in that metal by a further 1,639 contracts — and are now net short the COMEX futures market by a whopping 37,345 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 95 days of world silver production, which is down 4 days from last week’s report — and the ‘5 through 8’ large traders are short an additional 64 days of world silver production, up 2 days from last week’s report — for a total of 159 days that the Big 8 are short, which is a bit over 5 months of world silver production, or about 371.1 million troy ounces of paper silver held short by the Big 8.  [In the prior week’s COT Report, the Big 8 were short 161 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 25.9 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 371.1 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 371.1 minus 25.9 equals 345.2 million troy ounces.

The reason for the difference in those numbers…as it always is…Ted’s raptors, the 36-odd small commercial traders other than the Big 8, are net long that amount.  Incredible.

As I mentioned in my COT commentary in silver above, Ted said that JPMorgan was back to being long the COMEX futures market in silver by around 5,000 contracts, up about 2,000 contracts from the previous reporting week.

The Big 4 traders now in that category are short, on average, about…95 divided by 4 equals…23.75 days of world silver production each.

The four traders in the ‘5 through 8’ category are short 64 days of world silver production in total, which is 16 days of world silver production each.

Ted’s of the opinion that there are most likely three [or maybe now four] Managed Money traders with short positions large enough in the COMEX futures market to inhabit the Big 8 category now.

The Big 8 commercial traders are short 35.3 percent of the entire open interest in silver in the COMEX futures market, which is down a bit from the 36.8 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be a around the 40 percent mark.  In gold, it’s now 31.9 percent of the total COMEX open interest that the Big 8 are short, down a fair amount from the 35.5 percent they were short in last week’s report — and around the 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 32 days of world gold production, down 5 days from what they were short in last week’s COT Report.  The ‘5 through 8’ are short another 24 days of world production, down 3 days from what they were short last week…for a total of 56 days of world gold production held short by the Big 8…down 8 days from last week’s report.  Based on these numbers, the Big 4 in gold hold about 57 percent of the total short position held by the Big 8…down a percent 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 60, 71 and 82 percent respectively of the short positions held by the Big 8.  Silver is down 1 percentage point from a week ago, platinum is down 3 percentage points from last week — and palladium is down 4 percentage points.

If you look at the above ‘Days to Cover’ chart, you can see these percentages for yourself between the red and the green bars for each precious metal.  The grotesque short position of the Big 4 traders, relative to the positions of the Big 8 traders in palladium should be noted.

I have an average number of stories/article for your weekend reading pleasure, including a couple that I’ve been saving for today’s column for length and/or content reasons.


Doug Noland: The Ignore Them, Then Panic Dynamic

As we witnessed in December, things can start to unwind rather quickly when markets begin questioning the timeliness and scope of the central bank backstop. When the faithful dip buyers reverse course and turn urgent sellers, there’s an immediate market liquidity issue. Worse yet, when the protection sellers (i.e. put writers) suddenly fear they might end up on the hook for substantial market losses, it’s “Then Panic.” They must either buy protection for themselves or start shorting securities to offset their exposure to escalating losses. Any time writers of derivative protection are forced into aggressive selling, markets quickly face a major liquidity problem.

The huge 2019 risk market rally has only exacerbated underlying market and economic fragilities. Safe haven bonds concur with this view, while the collapse in global market yields works to support the speculative Bubble raging in the risk markets. Corporate Credit, in particular, has been underpinned by sinking sovereign bond yields. It has made it especially easy to Ignore Them – myriad risks including collapsed trade talks, rising U.S./China tensions, a fragile Chinese Bubble, waning global growth, vulnerable EM, susceptible European finance and economies, and the rapidly deteriorating geopolitical backdrop.

Healthy markets would adjust and correct to reflect heightened uncertainties and deteriorating prospects. Speculative markets instead promote excess and the ongoing accumulation of imbalances, maladjustment and impairment. There’s no operable release valve. Pressure builds and builds – risks accumulate in all the wrong places – Then Panic.

The flaw in contemporary finance – especially within market psychology over recent years – is to believe central bankers have nullified market, economic and Credit cycles. They have certainly averted a number of market crises over recent years, in the process significantly extending cycles. Along the way, risk market participants grew greatly overconfident in the capacity of central bankers to permanently forestall crisis. Moreover, they have turned completely blind to the historic crisis festering just below the surface of their delusional view of a “Permanently High Plateau” of global peace and prosperity.

This weekly commentary from Doug is definitely worth reading — and it was posted on his Internet site in the very early hours of Saturday morning.  Another link to it is here.

Our Crash Alert Flag Is Still Flying — Bill Bonner

It’s beginning to look more and more like 2008… or 2000… or 1929. The leveraged loan market of 2019, for example, looks a lot like the mortgage market of 2008, with $1 trillion of debt and securities packaged with tranches of mystery meat and stuck together like a bad sausage.

The Age reports:

“The epicentre of the last financial crisis was the implosion of junk bonds – the bundles of securitized sub-prime mortgages labelled as collateralized debt obligations, or CDOs.

If there were to be another crisis, it wouldn’t be at all surprising if it started with a meltdown of junk bonds again – this time bundles of securitized sub-prime loans labelled as collateralized loan obligations, or CLOs.”

How great is the risk? Colleague Dan Denning is on the case in the latest issue of the The Bonner-Denning Letter:

“CLOs are the new CDOs: baskets of risky corporate loans that have been bundled together to “disaggregate” the risk. The result is at least a trillion dollars’ worth of ticking time bombs.

This time around, CLOs are buried on the balance sheets of pension funds, insurance companies, and banks that have yet to unload them on unwary investors. If our analysis is correct, they’re ready to erupt out of Wall Street’s sewers and onto Main Street America.”

This worthwhile commentary appeared on the Internet site on Friday morning EDT — and another link to it is here.

This is Going to be One for the Record Books” — Doug Casey

Just because society experiences turmoil doesn’t mean your personal life has to. And a depression doesn’t have to be depressing. Most of the real wealth in the world will still exist—it will just change ownership.

What is a depression?

We’re now at the tail end of a very long, but in many ways a very weak and artificial, economic expansion. At the same time we’ve had one of the strongest securities bull markets in history. Both are the result of trillions of new dollars created over the last decade. Right now very few people are willing to consider the possibility of tough times—let alone The Greater Depression.

But, perverse though it may seem, this is the very best time to think about it. The U.S. economy is a house of cards, built on quicksand, with a tsunami on the way. I urge everyone to read up on the topic. For now, I’ll only briefly touch on the nature of depressions. There are at least three good definitions of the term:

  1. A period of time when most people’s standard of living drops significantly.
  2. A period of time when distortions and misallocations of capital are liquidated.
  3. A period of time when the business cycle climaxes.

Using the first definition, any natural disaster can cause a depression. So can living above your means for long enough. But the worst kind of depression has not just economic effects, but economic causes. That’s where definitions 2 and 3 come in.

This rather brief commentary from Doug was posted on the Internet site on Friday sometime — and another link to it is here.

U.S. Colonel Douglas Macgregor Hits It Out of the Ball Park — Andrei Martyanov

Ahh, what a coincidence. The moment I write this two days ago:

One of the very few reasons I read (as in past tense) this dumpster The National Interest was precisely for reasons that once in a while people like Douglas Macgregor or Daniel L. Davis, a cadre senior officers of the US Army, would publish their opinions. I do not always agree with them but their opinions are, which is expected from real professionals, head and shoulders above the amateur tripe the magazine’s so called “military experts” (none of them military) continue to publish. Luckily, Lt. Colonel Davis’ writing is beginning to appear more and more in such outlets as The American Conservative, which for all its major flaws, still tries to figure things out and still retains, despite Rod Dreher continuing to write about things he has no clue about, a degree of respectability and expertise.”

Colonel Douglas Macgregor is published in the American Conservative. And he starts with the bang:

The United States is primarily a global maritime and aerospace power, not a global land power. Washington is known for exaggerating threats, but is the notion of spending to fight a near-simultaneous war with Russia and China in 2030 a realistic goal? Wars with continental powers like Russia, China, or even Turkey or Iran, demand the persistent employment of large and powerful ground forces projected over thousands of miles. U.S. military advantages at sea and in the air are relegated to supporting roles as seen in World War II, Korea, and Vietnam.”

Ranges and velocities of weapons today is what drives this very real Revolution in Military Affairs (RMA) sweeping away whole scores of obsolete technologies and operational concepts and the process only accelerates–it is inevitable, we are deep in the process of crossing into new combat physics reality.

I cannot see as of today U.S. forces capable of fighting a peer without sustaining catastrophic losses which may change the dynamics of the conflict dramatically and push the U.S.  to the nuclear threshold. As I spoke for years now, the United States is nuclear-biased since roughly 2008 when the reality of a new combined arms and naval warfare started to trickle down slowly to people who actually have a clue. Not a “four-stars”, as Macgregor calls them, of course. In the end, one must ask a question–what happens when the U.S. loses a whole CBG and an amphibious group, or begins to lose 5-10 combat aircraft a day? What will be a reaction? Macgregor doesn’t mince his words and is blunt and realistic as ever when he concludes…

If you have the interest, this very worthwhile commentary by Andrei put in an appearance on his website on Friday — and I thank Larry Galearis for pointing it out.  Another link to it is here.

You REALLY want to know? U.S. Army asks members how serving ‘impacted’ them, gets schooled in replies

The U.S. Army probably expected an influx of patriotic replies when it asked for testimonies about people’s service. Instead, Twitter offered disturbing stories of debilitating injuries, mental health problems and suicide.

It all began with a a video of a soldier who told the camera he joined to serve “something greater than myself.” The army, the featured soldier said, had given him the opportunity to “give to others” and better himself “as a man and a lawyer.”

The Army then made the mistake of asking Twitter at large for their thoughts.

That was where the patriotism ended.

The account was quickly inundated with responses from former service members and their families — and they make for some seriously disturbing reading.

From damaged mental health and suicide, friends lost to war, post-traumatic stress (PTSD), nightmares and life-changing injuries, almost none of the responses were positive.

This disturbing, but not really surprising story, along with a whole raft of Twitter responses, was posted on the Internet site at 8:12 p.m. Moscow time on their Friday evening, which was 1:12 p.m. in Washington — EDT plus 7 hours.  I thank George Whyte for finding it for us — and another link to it is here.

Global Warming: It Can do Anything!

I’m so old, I can remember when global warming caused droughts. Or, put another way, climate change was making the Earth–in particular, the Great Lakes–drier. Thus, as I noted here:

National Geographic: “Climate Change and Variability Drive Low Water Levels on the Great Lakes.”
The National Resources Defense Council: “Climate change is lowering Great Lakes water levels.

It’s no secret that, partially due to climate change, the water levels in the Great Lakes are getting very low.”

Those quotes date from 2013, while my post was in 2017, when news reports indicated that Lake Superior was nearing a record high water level. Steve had already pointed out in 2014 that, in “a development that has startled scientists”–notwithstanding, apparently, the claim that the science is settled–Great Lakes water levels were rising rapidly.

What reminds me of this is today’s article in The Wall Street Journal headlined, “High Water Levels on Great Lakes Flood Towns, Shrink Beaches.”

“Lakes Erie and Superior are among the Great Lakes expected to reach all-time highs this summer, according to the U.S. Army Corps of Engineers. And the levels of Lakes Michigan, Huron and Ontario are well above seasonal averages.

High water levels across the Great Lakes are being driven primarily by persistently wet conditions for the past five to six years, including heavy rains and a large snowpack…”


This interesting and worthwhile article, along with a killer chart, put in an appearance on the Internet site on Friday sometime — and I thank Roy Stephens for sharing it with us.  Another link to it is here.

Smuggling Conrad Black over the border was always my Plan B — Mark Steyn

The last time I saw my old boss Conrad Black was a week ago. It was a very Conradian occasion: We ended up keeping a visiting prince (not from the House of Windsor, as it happens) waiting in the lobby, and by the time we parted on the doorstep the conversation had worked its way round to Doris Day, then still among us. When Miss Day died a few days later, almost all the broadcast tributes played a snippet of:

Que Sera Sera
Whatever will be will be
The future’s not ours to see…

That’s a little fatalistic for my tastes. Nevertheless, in just a very few areas of life the future is ours to see, with piercing clarity: For example, if you attract the attention of America’s federal justice system, you’re going down, no question. You have the “right to a fair trial,” but U.S. prosecutors win 99 per cent of the cases that go to court — a success rate that would embarrass Kim Jong Un and Saddam Hussein. Indeed, the feds win 97 per cent without ever going near court.

Americans who know anything about the country’s evil and depraved “justice” system grasp that central fact. It’s only rubes who say “let the process play out” or “if you haven’t done anything wrong, you’ve got nothing to fear.” For a start, by the time the process “plays out,” you’ll be broke and scavenging from dumpsters (as Trump’s fallen National Security honcho Michael Flynn learned, shortly before copping a plea). Second, from a prosecutorial point of view, “if you haven’t done anything wrong” they can still get you on misremembering to the FBI in a matter for which there’s no underlying crime (as Martha Stewart discovered), or, alternatively, on Robert Mueller’s second-favourite process crime of hanging out with too many foreigners in alleged breach of the “Foreign Agents Registration Act,” which Trump aide George Papadopoulos told me recently Mueller had threatened him with. (I met most Aussie cabinet ministers of the John Howard years, so I’m undoubtedly guilty on that front, even before you factor in dinner with Jason Kenney and a bit of chit-chat with Maxime Bernier).

It’s a corrupt system heavily reliant on blackmail. But its crude thuggish simplicity concentrates the mind, and thus everyone gets it. Which is why, when the dismantling of Conrad Black’s business empire began 16 years ago, the rich and powerful were the first to abandon him: whatever will be will be, but one thing’s for certain — Conrad’s screwed, he’s over, cut him loose now. The U.S. government threatened to send the “independent” directors of Hollinger “Wells Notices” — that’s to say, a public warning that you may be on the hook for violating securities laws. The way to avoid getting a Wells Notice was to testify against Lord Black at trial.

This longish, exceptionally well written and informative commentary showed up on the Canada’s Internet site back on May 17 — and for obvious reasons, had to wait for today’s column.  It would also be humorous if the subject matter wasn’t so serious.  I thank Roy Stephens for sending it our way — and another link to it is here.

Theresa May quits: U.K. set for new P.M. by end of July

Theresa May has said she will quit as Conservative leader on 7 June, paving the way for a contest to decide a new prime minister.

In an emotional statement, she said she had done her best to deliver Brexit and it was a matter of “deep regret” that she had been unable to do so.

Mrs. May said she would continue to serve as PM while a Conservative leadership contest took place.

The party said it hoped a new leader could be in place by the end of July.

Foreign Secretary Jeremy Hunt has become the latest M.P. to say that he will run, joining Boris Johnson, Esther McVey and Rory Stewart.

More than a dozen other MPs are believed to be seriously considering entering the contest.

This brief story was posted on the Internet site on Friday morning BST [British Summer Time] — and I thank Swedish reader Patrik Ekdahl for pointing it out.  Another link to it is here.

West-backed think tanks threaten new Ukrainian president with disturbing list of ‘RED LINES’

When President Volodymyr Zelensky won a landslide victory in the free and undisputed April elections, most accepted that he was given a fairly strong mandate to lead Ukraine. But it seems not everyone is so democratically-minded.

Particularly unmoved by the democratic process are a collection of Ukrainian ‘civil society’ groups, who have just issued a lengthy list of “red lines not to be crossed” by the new president, lest he risk provoking a new wave of political instability – that they would presumably instigate.

Issuing their catalog of demands on Thursday, the groups claim to be “politically neutral” but “deeply concerned” about the first actions taken by the comedian-turned-politician Zelensky, including his decision to appoint members of former President Viktor Yanukovych’s government to positions within his own government.

A scan of the undersigned reveals that many of these “civil society groups” are anything but politically neutral. In fact, quite a few of them are partly funded by the U.S. government, various E.U. governments (including the U.K.), the European Commission itself – and, of course, the omnipresent liberal billionaire George Soros.

The list includes the notorious Euromaidan Press, Stop Fake and Ukrainian Crisis Media Center, to name just a few. In their heyday, many of these groups acted as propaganda tools of the Western-backed government of Petro Poroshenko, rather than the watchdogs they claim to be. They now confirm that a pesky election isn’t going to stand in the way of their agenda, reaffirming that their own “principles and positions” on issues remain unchanged and warning:  “Should [Zelensky] cross these red lines, such actions will inevitably lead to political instability in our country…

This statement, which precedes the wide-ranging list of red lines, reads like a threat: Do what we say, or there will be trouble. Isn’t that a strange, almost dictatorial approach for groups purporting to be interested in “democracy,” “freedom,” and “dignity”? Did we all miss the part where a group of think tanks were collectively elected president of Ukraine?

This disturbing, but worthwhile commentary showed up on the Internet site at 7:33 p.m. on Monday evening, which was 12:33 p.m. in Washington — EDT plus 7 hours.  It’s another contribution from George Whyte — and another link to it is here.

Royal Mint in U.K. selling rare gold sovereign for £100,000

The Royal Mint says the George III sovereign was one of 3,574 to be struck in 1819 and there are around only 10 left in the world.

It says the coin is being offered via a ballot on 12 July at the fixed price, reflecting its rarity and high quality.

Potential purchasers will need to apply online before 28 June.

They will also need to have their application approved before the winner is selected at random.

The Royal Mint said the sovereign – minted in the year Queen Victoria was born – has been sourced and verified by its historic coin experts.

This brief click-bait type story appeared on the Internet site early on Friday morning BST — and it’s the third and final offering of the day from George Whyte.  Another link to it is here.

Palladium/platinum premium to persist — Lawrie Williams

Perhaps the most significant comment for followers of the platinum group metals (pgm) market, in our opinion. is that the consensus view was that palladium’s premium over platinum would not be challenged ‘for years to come’.  Fundamentals for the two major platinum group metals remain strongly tilted in palladium’s favour and although there are down the line risks, supply and demand predictions suggest that the palladium price will continue to be elevated, while platinum supply and demand, and thus the price, is much more balanced. although sentiment for platinum appears to be improving. The consultancy feels that the price premium for palladium is here to stay – perhaps until fully electric or fuel cell powered automobiles begin to dominate the new light vehicle market.  But this may not happen for a number of years yet.

One thing which could change all this is the hotly-debated subject of possible reverse substitution.  Followers of the pgm market will be well aware that palladium’s dominance as an emissions control catalyst for petrol (gasoline) engined vehicles came about because of platinum’s then big price premium over palladium.  Now the positions are reversed many believe that the opposite may come about, but Metals Focus disagrees. It stands by the view “that technical constraints, limited budgets and uncertain cost benefits will all limit the extent of any such shift, making a noteworthy change in the two metals’ medium-term fundamentals unlikely any time soon.”  But of course ‘medium-term’ is something of an undefined period of time.

Certainly advances in exhaust control technology over the past several years mean that the current palladium/rhodium exhaust control catalysts are far more efficient than the old platinum-based ones, so a switch back to platinum would not be a simple process.  However we suspect that catalyst manufacturers will currently be conducting research to see if palladium’s current technological advantage in this field can be overtaken by an improved platinum-based version.  Of course the ‘Catch 22’ position here is that if successful then there could be a swift turnaround in supply/demand fundamentals making platinum the more expensive metal again.  That is a major obstacle in the current reverse substitution argument.

This commentary by Lawrie was posted on the Internet site on Thursday sometime — and another link to it is here.

India gold prices flip to premium as demand picks up

Gold prices in India flipped into premiums this week on firmer demand in the domestic market, while buyers in top consumer China took advantage of weaker bullion prices and stepped up purchases.

In India, dealers charged a premium of about $1 an ounce over official domestic prices. That contrasted with last week when gold was sold at a discount, of around $2, for the first time in 2-1/2 months.

Gold futures in India, the world’s second biggest bullion consumer after China, fell to 31,232 rupees per 10 grams earlier this week.

Retail demand has improved a bit since them due to the drop in prices, said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.

The (stronger) rupee has been helping in bringing down domestic prices,” he said.

This Reuters article, co-filed from Mumbai and Bengaluru, appeared on Internet site at 6:42 a.m. EDT on Friday morning — and I plucked it off the Sharps Pixley website.  Another link to it is here.


Our trip to Chase, B.C. on the back/gravel road from Kamloops resulted in some critter photos as well…Mr. and Mrs. Mountain Bluebird — and Mr.  Western MeadowlarkClick to enlarge.


The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” — Ernest Hemingway

Today’s pop ‘blast from the past’ is by an American rock band — and off an album that “received six Grammy Awards in 1983 including Album of the Year, Producer of the Year for the band, and Record of the Year“.  That was 36 years ago for those who aren’t good at math — and the link is here.

And if you’re into bass covers, a link to a very impressive one for the above tune is here.

Today’s classical ‘blast from the past’ is one I discovered when I was looking around for last Saturday’s ‘blast’.  So this one has been sitting in my in-box since last Friday night.  It’s not played as much as I would like, but it’s a wonderful piece.  It’s a composition by Pyotr Ilyich Tchaikovsky…his Capriccio Italien, Op. 45 — and is a fantasy for orchestra he composed between January and May 1880…based on street music that he heard on a trip to Italy.  Here’s the Russian Philharmonic/Moscow City Symphony doing it up right — and the link is here.

With the Memorial Day long weekend coming up hard on Friday, it’s now obvious in hindsight why volumes in the precious metals were as low as they were — and it would be unwise to read anything into the price action in any of them.  It was strictly a ‘care and maintenance’ day for the traders before they headed home to the Hamptons or wherever, for the weekend — and some started very early.

It was a good COT Report in both precious metals, although I’ll admit that despite Ted’s right-on-the-money calls for both, I was hoping for more in gold than we got.

And as I also pointed out, the situation with gold’s 200-day moving average still remains unresolved.  I was somewhat apprehensive about the count-down into the June delivery month — and that they would take that opportunity to really punch gold’s lights out, but it never happened.  It could still, of course, but there are only two trading/business days left before the big traders that aren’t standing for delivery in June, have to roll or sell their June contracts, so it’s a very long shot at best.  Maybe next month…or maybe not at all.

Here are the 6-month charts for the Big 6 commodities — and there’s not a lot to see, as nothing much happened yesterday.  Click to enlarge.

Despite what has now turned in a bitter and most likely protracted trade war between the U.S. and China, the U.S. equity markets continue to levitate far above their intrinsic values.  Not only has the Chinese communications company Huawei Technologies been blacklisted, the U.S. companies that provide parts and service to that company have now been forbidden to deal with them as well.  And the U.S. Commerce Department is set to bring out a warning of “currency manipulation“….a charge leveled at several countries, but does not include China…yet.  When is all this “bad news is good news” dynamic going to revert back to what it really is…”bad news, is bad news“?

The U.S. economic signs on all fronts are pointing down everywhere one cares to look…car, home and retail sales — and truck, rail and ocean traffic continues to wither away. Reality, at some point, will set in, as it must.

Of course with this trade war, China’s gargantuan bubble economy is also at grave risk — and as I pointed out last week, crashing the Chinese economy — and its financial system, would set China back decades.  It’s a war that the U.S. would win without firing a shot.  But the carnage within China’s borders concurrent with such an event, would almost instantly spread to the rest of the world’s economic and financial systems, so it would by a Pyrrhic victory at best.  There would be no winners, only those who lost the least.

The other development earlier this week was the sudden full stop of the U.S. deep state war machine against Iran.  That was totally unexpected.  Of course something that can come to a full stop with one press release, can also roar ahead at a moments notice if a suitable and convincing “false flag” event appears out of nowhere.  The main-stream western press, which is wholly owned by card-carrying members of that group, will resume the war cry — and all bets will be off.

How ‘all of the above’ resolves itself itself is something I think about every day — and how that fits into the current set-up in the Big 6 commodities.  Four of the six are now sitting at prices below their respective 200-day moving average — and gold is below its 50-day.  And as I pointed out in Friday’s missive, getting palladium below its 200-day moving average may turn out to be “a bridge too far“…even for the likes of JPMorgan.  But it’s such a tiny market, it hardly matters in the grand scheme of things.

With inflation stuck in low gear — and an economy sinking into the morass, a steep down-turn in the U.S. equity markets is an inevitable event that only awaits a trigger.  Which snowflake will start the avalanche the Jim Rickards speaks of?

The deep state is all out of aces…except war.  But despite war being Bourne’s “health of the state” back during WW1, it could also be the U.S.’s downfall, if you read the commentary by Andrei Martyanov in the CRITICAL READS section.

But the deep state/military-industrial complex is all about power and control.  They already have all the money they need to survive any financial tragedy, plus I suspect that they have all the physical precious metals they need squirreled away out of sight of us rabble.  They could also be long the COMEX futures market in JPMorgan’s ‘Customer Accounts’…or long in the ‘Other Reportables or ‘Nonreportable’/small trader categories in the Disaggregated COT Report…not to mention GLD, SLV and a myriad of other physical precious metal funds. They aren’t going to suffer much, if at all — and neither will JPMorgan.

So, since power and control is all these sociopathic/psychopathic personality types want, then a U.S.A. in economic ruin would be fertile ground for whatever plans they have for us.  Phase 1 of their plans began with the ‘Patriot Act’ after their little 9/11 adventure.  I suspect we’re going to see Phase 2 in the not-too-distant future.

Only physical precious metals stored close at hand…and/or abroad, will save us…hopefully.  And if your passport isn’t current, you should put that on your “to do” list as soon as the weekend is over.

On that rather gloomy note, I’ll see you here next week.  But because the markets will be closed on Monday for the U.S. Memorial Day holiday, my Tuesday column, if I have one, will be mercifully brief.