JPMorgan et al “Do the Dirty at 8:30”

06 July 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price popped the moment that trading began at 6:00 p.m. EDT in New York on Thursday evening…but that was summarily dealt with an hour later — and it was sold quietly and unevenly lower until the 2:15 p.m. afternoon gold fix in Shanghai on their Friday afternoon.  From that point it traded almost ruler flat until the jobs report hit the tape at 8:30 a.m. in New York.  The engineered price decline commenced at that point — and the low tick of the day was set at the 10 a.m. EDT afternoon gold fix in London.  The price chopped quietly higher from there until around 11:35 a.m. in New York — and from that point it traded flat until 2:30 p.m. in the thinly-traded after-hours market.  From that juncture it inched higher — and back above $1,400 spot.  But then an hour later, ‘da boyz’ sold it quietly and carefully back below that price — and from about 4:35 p.m. EDT onwards, it traded flat into the 5:00 p.m. close.

The high and low ticks were reported by the CME Group as $1,426.80 and $1,388.60 in the August contract.

Gold was closed in New York on Friday at $1,398.30 spot, down $16.60 from Thursday close — and $19.90 from Wednesday’s.  Net volume was over the moon at just under 430,000 contracts — and there was a bit over 31,000 contracts worth or roll-over/switch volume out of August and into future months.  Both these numbers are net of Thursday’s figures.

Silver was forced to follow the same general price path as gold, but there were some notable differences.  Firstly, it was sold unevenly lower from 9 a.m. China Standard Time on their Friday morning until the noon silver fix in London.  It then rallied a few pennies into the 8:30 jobs report in New York.  Then JPMorgan et al went to work.  But you can tell from the saw-tooth price decline that there were buyers coming into the market every so often — and it took ‘da boyz’ until around 10:45 a.m. EDT to set silver’s low tick of the day.  The silver price crawled higher until noon — and then traded flat until 2:30 p.m. in the thinly-traded after-hours market.  Then, like gold, it crawled back above a key number…$15.00 spot…an hour later — and it too was sold carefully lower and back below $15.00 spot before trading ended at 5:00 p.m. EDT.

The high and low ticks in this precious metal were recorded as $15.37 and $14.915 in the September contract.

Silver was closed at $14.965 spot, down 31 cents from Wednesday — and 28 cents from Thursday’s close.  Net volume was enormous as well at just under 87,000 contracts — and roll-over/switch volume was a hair over 7,000 contracts.  Both those numbers are net of Thursday’s numbers as well.  Silver traded below its 200-day moving average for a while on Friday, but was allowed to close above it…but not above $15.00 spot.

Platinum was a up small handful of dollars by shortly before 2 p.m. CST on their Friday afternoon — and it was sold down to a few dollars below unchanged by 10 a.m. in Zurich.  From that juncture it traded ruler flat until the jobs report showed up — and at that point, ‘da boyz’ worked their magic.  It was bounced off its $801 low tick a couple of time, but began to crawl higher starting an noon in New York — and that lasted until shortly before 4 p.m. in after-hours trading — and it then traded flat into the 5:00 p.m. close.  Platinum was closed at $808 spot, down 31 bucks from Wednesday’s close — and 24 dollars from its Thursday close — and far below any moving average that mattered.

The palladium price traded very unevenly sideways in Far East and most of Zurich trading on their respective Fridays — and then a real price fight broke out at 8:30 a.m. in New York…first up a bunch…only to be driven down hard — and then back up again.  That free-for-all lasted until around 11:30 a.m. EDT — and the price didn’t do much after that.  Palladium was closed at $1,554 spot, down a dollar from Wednesday, but up 8 bucks from Thursday.

The dollar index closed very late on Thursday afternoon in New York at 96.77 — and opened down 5 basis points once trading commenced at 7:45 p.m. EDT on Thursday evening, which was 7:45 a.m. China Standard Time on their Friday morning.  It didn’t do much of anything until around 11:40 a.m. CST — and at that point it began to creep quietly higher until around 10:45 a.m. in London.  At that juncture it chopped quietly sideways until 8:30 a.m. in New York.  A rally/ramp job in the dollar index began — and the the 97.44 high tick was set a minute or so before 11:30 a.m. EDT.  It was sold quietly lower until 3:30 p.m. — and then crawled quietly sideways until trading ended at 5:30 p.m. EDT.  The dollar index finished the Friday session at 97.29…up 52 basis points from Thursday’s close.

And if you think that the currencies and the precious metals were trading freely on Friday…do I have a bridge for you.

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

And here’s the 5-year U.S. dollar index chart…courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…96.89…and the close on the DXY chart above, was 40 basis points on Friday.  Click to enlarge as well.

The gold shares gapped down almost four percent at the 9:30 open of the equity markets in New York on Friday morning — and hit their respective low ticks [down more than 4 percent] at the afternoon gold fix in London.  They began to rally quietly and steadily from there — and almost made it back to unchanged, until someone tapped the gold price back below $1,400 spot at 3:30 p.m. EDT — and the shares followed in sympathy.  The HUI closed down only 0.89 percent.

It was the same price pattern for the silver equities, including their respective highs at 3:30 p.m. in New York trading — and the tiny sell-off into the 4:00 p.m. close from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.15 percent.  Click to enlarge.

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

The fact that the precious metal equities came very close to finishing the Friday session unchanged, despite the fact that their respective underlying metals were crushed yesterday, has to been see for what it was…a huge positive.  It certainly indicates, at least to me, that gold and silver stocks continue to be under serious accumulation by the strongest of hands…because everything that was sold in a panic at the 9:30 a.m. EDT open was bought…plus a whole bunch more as the Friday trading session progressed.


Here are the usual three charts from Nick that show what’s been happening for the week, month — 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.

I’m not posting the weekly chart because of the Independence Day holiday on Wednesday.  Nick’s program that computes the weekly chart, grabs the data from the last five business days in New York which, because of the holiday on Thursday, takes last Friday’s data…June 28th…in lieu of that.  So the weekly data is not accurate.  This chart will be back to normal in next Saturday’s report.

The month-to-date chart shows the weekly data correctly, as the new month started on Monday.  It’s not that happy looking, as it’s been a down week, especially after Friday’s engineered price declines in gold, silver and platinum.  The silver equities underperformed their golden brethren. Click to enlarge.

Here’s the year-to-date chart — and it’s much happier looking.  JPMorgan’s near death grip on the silver price is more than obvious in this chart.  All platinum’s gains are gone after Friday’s price ‘action’ — and palladium is still the Energizer Bunny.  Click to enlarge.

The precious metal complex is certainly in play now — and it remains to be seen if ‘da boyz’ can pull it off one more time.  But regardless of that fact, very deep pockets were snapping up all the precious metal shares being offered on Friday…plus more.


The CME Daily Delivery Report showed that 6 gold and 30 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, the two short/issuers were Advantage and JPMorgan, with 5 and 1 contracts. The two long/stoppers were also Advantage and JPMorgan, with 4 and 2 contracts.  All contracts, both issued and stopped, involved their respective client accounts.

In silver, the two short/issuers were ADM and JPMorgan, with 15 contracts each from their respective client accounts.  The largest long/stopper was HSBC USA, with 11 contracts for its own account — and in second and third place were Morgan Stanley and JPMorgan, with 10 and 6 contracts for their respective client accounts.

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

So far in the July delivery month, there have been 706 gold contracts issued/reissued and stopped — and that number in silver is 3,425.

The CME Preliminary Report for the Friday trading session showed that gold open interest in July declined by 8 contracts, leaving 80 left open, minus the 6 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 21 gold contracts were actually posted for delivery on Monday, so that means that 21-8=13 more gold contracts just got added to the July delivery month.  Silver o.i. in July rose by 27 contracts, leaving 754 still around, minus the 30 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that only 2 silver contracts were actually posted for delivery on Monday, so that means that 27+2=29 more silver contracts just got added to July.


There was another withdrawal from GLD on Friday as an authorized participant removed 47,171 troy ounce.  But after Friday’s big engineered price decline, it will be interesting to see how much physical gold disappears from this ETF next week.  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 absolutely nothing.

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

There was some activity in silver, as one truckload…617,874 troy ounces…was dropped off at HSBC USA.  There was 15,023 troy ounces shipped out — and that departed the CNT Depository.  The link to this activity is here.

There was a bit of activity over at the COMEX-approved gold kilobar depository in Hong Kong on their Wednesday.  They received 250 of them — and shipped the same number out the door.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are some charts that Nick Laird passed around on Wednesday — and I thought I’d include them all in today’s column, rather than wait until next Tuesday.

The first two show gold and silver imports into India, updated with April’s data.  During that month they imported 96.1 metric tonnes/3.09 million troy ounces of gold — plus 517.2 metric tonnes/16.63 million troy ounces of silver.  Click to enlarge for both.

With April’s official gold imports into India in hand, Nick updated his “Silver Road Gold Demand” chart for April 2019.  The four countries included in that chart imported at total of 277.5 metric tonnes during that month, virtually all of the gold mined world-wide during that month…as shown in the insert chart below the main one.  Click to enlarge.

I have an average number of stories/articles for you today.


CRITICAL READS

June Payrolls Soar by 224K, Sending Rate Cut Odds Tumbling Despite Cooling Wage Growth

So much for 50bps (or maybe even 25bps) of rate cuts in July.

With whisper numbers for the June payrolls well below the 160K consensus (perhaps as the market hoped the case for 2 rate cuts in July would be cemented), moments ago the BLS reported that last month 224K jobs were created, three times greater than the revised 72K jobs in May, and well above the 160K expected and above the highest Wall Street forecast.  Click to enlarge.

This was also the best monthly increase since January, and a number that has made 2 rate cuts at the Fed’s July meeting virtually impossible, and even setting the scene for a Fed that may in fact be “patient” in three weeks, crushing market hopes for an imminent easing cycle.

Just as notable, the Household survey was even more euphoric, rising by 247K to 157.005 million employed workers.

The change in total non-farm payroll employment for April was revised down from +224,000 to +216,000, and the change for May was revised down from +75,000 to +72,000. With these revisions, employment gains in April and May combined were 11,000 less than previously reported.

Sure enough, the market implied odds of a July rate cut slumped quickly even as the wage growth number disappointed, as the BLS reported only 0.2% increase in average hourly wages in June, below the 0.3% expected, a number which also missed on a Y/Y bases, increasing 3.1% Y/Y in June, below the 3.2% expected. That said, May’s monthly gain revised higher, suggesting workers continue to wring solid wage increases from employers.

This Zero Hedge article was posted on their website at 8:37 a.m. EDT on Friday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.  There was a companion story to this on the ZH website yesterday morning — and it’s headlined “It Wasn’t All Great News: Multiple Jobholders Soar to Record High“.  I thank Brad for that one as well.


The Myth of the Tight U.S. Labor Market — Bloomberg Opinion

As the U.S. election cycle gets underway, expect much debate over just how strong the economy really is after becoming the longest uninterrupted expansion in America’s history. After all, the jobless rate is at a half-century low and the S&P 500 Index is at a record high. The bond market, though, is signaling that the Federal Reserve will soon be forced to ease monetary policy to shore up the economy. How can that be?

A key part of the answer lies with jobs “growth,” which has been slowing much more than most probably realize. Despite the better-than-forecast jobs report for June, the fact is the labor force has contracted by more than 600,000 workers this year. And we’re not just talking about the disappointing non-farm payroll jobs numbers for April and May.

Certainly, that’s caused year-over-year payroll growth, based on the Labor Department’s Establishment Survey – a broad survey of businesses and government agencies – to decline to a 13-month low. But year-over-year job growth, as measured by the separate Household Survey – based on a Labor Department survey of actual households – that is used to calculate the unemployment rate is only a hair’s breadth from a five-and-a-half-year low. (The data in the charts below don’t reflect Friday’s employment report.)  Click to enlarge.

Growth in the Economic Cycle Research Institute’s more comprehensive U.S. Coincident Employment Index (USCEI), which includes both those figures and more, has fallen to its worst reading since late 2013. Because it subsumes data from both surveys, its verdict about overall job growth is more reliable than the others.

But there’s even more cause for concern. Months from now, the Establishment Survey will undergo its annual retrospective benchmark revision, based almost entirely on the Quarterly Census of Employment and Wages conducted by the Labor Department. That’s because the QCEW is not just a sample-based survey, but a census that counts jobs at every establishment, meaning that the data are definitive but take time to collect. Since it is retrospective, few pay any attention but the QCEW offers critical information for those wanting to verify that the job market is as strong as the headlines would lead you to believe.

This opinion piece appeared on the bloomberg.com Internet site at 6:37 a.m. PST on Friday morning, which was 9:37 a.m. in  New York — and I found it on the gata.org Internet site.  Another link to it is here.


CNBC’s full interview with Trump Fed nominee Judy Shelton

President Trump Fed nominee Judy Shelton joins “Santelli Exchange” to discuss the interest rate policy, where she stands in terms of Fed policy and the popularity in cryptocurrency and what it says about government backed currency.

This 12-minute video interview with Rick Santelli as host, appeared on the cnbc.com Internet late on Friday morning EDT — and I thank Brad Robertson for pointing it out.


Main Street Relies on Rate Cuts — Bill Bonner

The Irish got their independence from Britain in 1921. Americans went out on their own much earlier.

And it’s a good thing they didn’t wait. If a group of hot-heads tried to pull off a revolution in America today, they’d be labeled “terrorists” by Homeland Security, snooped on by the NSA, infiltrated by the FBI, given bus tickets to Philadelphia, arrested by hundreds of robo-cops, and would soon disappear into the American prison gulag.

Yesterday, Americans hung out their flags and put up their red, white, and blue bunting, proudly celebrating their deliverance.

But the promise of July 4, 1776, was always a bit of self-delusion and double-talk. All governments are controlled by smallish, insider groups who use them to exploit the outsiders.

Even at the time of the Revolution, only a third of the people were in favor of it. Another third were opposed. And the middle third, probably the wisest of the bunch, didn’t give a damn.

The third in favor of revolution got what it wanted – at great expense, even to those who didn’t want it. Then, gradually, over the next 250 years, the insiders extended their reach. The small, humble republic grew into a great world empire; Washington put on the bossy-pants… and became far more of a pest than London ever was.

This worthwhile commentary from Bill put in an appearance on the bonnerandpartners.com Internet site early on Friday morning EDT — and another link to it is here.


Doug Noland — Abject Monetary Disorder

I’ve witnessed a lot of “crazy” in my three decades of closely following various Bubble markets (i.e. Japan’s Nikkei ending 1989 at 38,916 (closed Friday at 21,746); manic early-nineties buying of Mexican tesobonos; late-1993 collapsing U.S. yields and Bubble excess that portended the 1994 rout; speculative Bubbles in SE Asian securities and Russian bonds; LTCM with $2 TN notional derivatives exposures; Internet and tech stocks in 1999; and $1 TN of new subprime CDOs in 2006; etc.). Yet nothing compares to the ongoing global yield collapse.

The global bond market speculative melt-up has brought new meaning to phrase “indiscriminate buying.” I know it’s heresy to suggest as much, but we’re witnessing history’s greatest speculative Bubble go to absolutely “crazy” extremes (it will all have been obvious in hindsight).

According to Bloomberg, the amount of negative-yielding debt globally jumped Thursday to a record $13.4 TN. Rising almost $2.2 TN over the past month, “negative-yielding debt now comprises 25%” of the total investment-grade universe.

What others celebrate as a “fantastic bull market,” I see as Abject Monetary Disorder. With global bond prices spiking parabolically upward, how much systemic leverage and resulting liquidity is being created in the process? What quantity of global fixed-income has been purchased on leverage? More importantly, what is the scope of derivative-related leverage that has accumulated throughout global bond markets and fixed-income, as seller/writers of myriad strategies are forced to purchase the underling debt securities to hedge derivative contracts previously sold.

Central bankers are now faced with the predicament of having nurtured distorted markets (with aberrant signals) that will throw a frenetic tantrum if central banks don’t follow the markets’ directive. There is bold discourse aplenty these days regarding the merits of an “insurance” rate cut. Chairman Powell himself has stated “an ounce of prevention is worth a pound of cure” – a comment markets have interpreted as guaranteeing a July cut. Pundits, including former central bankers, have been speaking as if there is essentially no risk to a cut they believe would offer protection against bad outcomes. This, however, completely disregards the risks associated with adding monetary stimulus to dislocated global securities markets already in dangerous detachment from fundamental realities.

Market speculation used to be grounded in “the greater fool theory”. Who needs a fool when markets have central bankers with the wizardry of their QE tool. Bonds have been around for centuries, but we’ve finally reached the point where there is no longer a ceiling to bond prices. This is a precarious juncture for global markets, and the Fed should think twice before it feeds this beast.

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


Broken markets and fragile currencies — Alasdair Macleod

There are growing signs that the global economic slowdown is for real. As was the case in 1929, the combination of the peak of the credit cycle coupled with trade protectionism in the Smoot-Hawley Tariff Act are similar conditions to those of today and potentially pose a serious economic challenge to the post-Bretton Woods fiat currency system. Therefore, we must consider the consequences if monetary policy fails to contain the developing recession and it turns into a full-blown slump. Complacency over broken markets is no longer an option, with rising prices for gold and bitcoin signalling the prospect of a new round of currency debasement to avoid market distortions unwinding. This article shows why this outcome could undermine fiat currencies entirely and looks at the alternatives of bitcoin and gold in this context.

This long commentary from Alasdair showed up on the goldmoney.com Internet site on Friday sometime — and I must admit that I’ve only read the first half-dozen paragraphs.  But what I have read was certainly worthwhile.  You’re on your own after that.  I found this in a GATA dispatch yesterday morning — and another link to it is here.


RenTech Pulls Cash From Deutsche Bank as Insider Warns of “Lehman-Style” Scene

With Deutsche Bank CEO Christian Sewing set to unveil his sweeping restructuring plan to the struggling German banking behemoth’s board on Sunday – a plan that’s expected to focus on brutal cuts to DB’s investment bank – the longtime head of that unit, Garth Ritchie, has reportedly quit, according to the Financial Times.

On Friday, DB said that Mr Ritchie would step aside “by mutual consent“, ending his more than 20-year run at the bank.

But the bank’s mass-firings of both executives and rank-and-file staff are only just beginning.

Though news of Ritchie’s departure was telegraphed well in advance (he was widely expected to depart before Sewing unveiled his turnaround plan to the bank’s board on Sunday), DB has been rocked by some unexpected news that could revive the sense of fear and panic that sent investors running for the exits back in 2016, when many believed a massive DoJ fine might sink the bank.

Echoing a mini-bank run from late 2016 when hedge funds that cleared derivatives trades with the bank started withdrawing excess cash and positions held with the lender, Renaissance Technologies, the giant hedge fund that has been one of DB’s largest prime brokerage clients, has reportedly been taking money out of its prime brokerage accounts with the German lender over the past few months, according to people familiar with the move.

According to Bloomberg, while the secretive quant fund giant remains a major client of Deutsche Bank, it has been quietly moving business to Barclays, Bank of America, and others, according to several sources who weren’t identified. Reps for both DB and RenTech declined to comment when approached by BBG reporters.

This story appeared on the Zero Hedge Internet site at 2:05 p.m. EDT on Friday afternoon — and it’s yet another offering from Brad Robertson.  Another link to it is here.


Iran condemns, U.S. applauds Britain’s seizure of Iranian oil tanker at Gibraltar

White House National Security Advisor John Bolton applauded the interception by Britain’s Gibraltar Thursday of a super tanker believed to be carrying Iranian crude oil to Syria, saying the ship was breaking international sanctions.

The Grace 1 tanker was impounded in the British territory on the southern tip of Spain after sailing around Africa, the long route from the Middle East to the mouth of the Mediterranean.

Iran’s foreign ministry summoned the British ambassador to voice “its very strong objection to the illegal and unacceptable seizure” of its ship. The diplomatic gesture lifted any doubt over Iran’s ownership of the vessel, which flies a Panama flag and is listed as managed by a company in Singapore.

In a statement sent out on Friday, Iran’s foreign ministry said that in the meeting with the British ambassador, Tehran had “called for the immediate release of the oil tanker, given that it has been seized at the request of the US, based on the information currently available“.

America and our allies will continue to prevent regimes in Tehran and Damascus from profiting off this illicit trade,” Bolton said on Twitter.

This news story was posted on the france24.com Internet site at 11:52 p.m. CEST on their Thursday night, which was 5:52 p.m. in Washington — EDT plus 6 hours.  I thank Roy Stephens for sending it along — and another link to it is here.  A parallel story to this appeared on the UPI website — and it’s headlined “Iran calls for seizure of British ship if oil tanker isn’t freed” — and I thank Roy Stephens for that one as well.  The Zero Hedge spin on all this is headlined “Iran Threatens Seizure of U.K. Oil Tankers in Response to Royal Marines Boarding Its Own” — and that’s courtesy of Brad Robertson.


Syria and Iran to Defy Sanctions by Building Railway From Tehran to Mediterranean

Iran is preparing to begin construction on a large railway that links their capital city of Tehran to the Syrian coastal city of Latakia, the Director of Syrian Railways Najib Al-Fares said on Wednesday.

According to Fares, the new railway will promote regional trade between Syria, Iraq, and Iran. The new project is expected to be funded by the Iranian government, with support from both Syria and Iraq.

The Director of the Iraqi Railway Company, Jawad Kazim, said that Iraq had previously signed contracts to implement projects with Iranian companies, but most were delayed.

For Syria, the new railway system is expected to help ease their economic issues that have derived from the U.S.-led sanctions on the Levantine nation.

During the signing of the minutes, [Iranian Deputy Minister and Chairman of Roads Maintenance and Transport Organization] Shahram Adamnejad said that the tripartite meeting resulted in positive outcomes among the three sides, affirming that the goal of the negotiations is to activate the Iranian-Iraqi-Syria load and transport corridor as a part of a wider plan for reviving the Silk Road as the three countries have an old experience in the international trade.” — Syria’s SANA

While this should be beneficial for all parties, this new railway system will face heavy criticism and possibly military attack from the U.S. and its allies, most notably Israel.

This news item showed up on the Zero Hedge website at 3:30 a.m. on Friday morning EDT — and it’s another contribution from Brad Robertson.  Another link to it is here.


India hikes gold import duty, industry fears smuggling surge

India raised the import duties on gold and other precious metals on Friday in a surprise move that industry officials say could dampen retail demand and boost smuggling in the world’s second-biggest bullion consumer.

Lower demand from India could weigh on global prices that are trading near their highest level in six years.

Jewellery trade associations have asked India’s government to reduce gold import duties, which have caused a surge in smuggling.

The government instead hiked the duty to 12.5% from 10% as policymakers try to bring down the fiscal deficit and recapitalise banks.

This is a shocking move. We were expecting reduction in the custom duty,” Anantha Padmanabhan, chairman of All India Gem and Jewellery Domestic Council (GJC) told Reuters, adding the hike has effectively raised smugglers’ margins.

This very interesting Reuters article was filed from Mumbai at 5:41 a.m. EDT on Friday morning — and it’s another article that I picked up off the gata.org Internet site.  Another link to it is here.


PHOTOS and the FUNNIES

After photographing mule deer and Stellar’s Jays in Coalmont, we managed to drive the final 14 km/8.5 miles to Princeton with only a few photo stops along the way.  The Tulameen River — and the right-of-way for the long-defunct Kettle Valley Railway…now the Trans-Canada Trail…is visible in all three shots.  This is another road that is not for the faint of heart in some spots.  Click to enlarge.


The  WRAP

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’ dates from 1965 — and I was in Grade 11 when this song burst on the scene.  During their nine-year run on the charts from 1963 to 1972, this American all-female vocal group charted over twenty-six hits and recorded in the styles of doo-wop, R&B, pop, blues, rock and roll — and soul.  This was one of their biggest hits — and the link is here.

Today’s classical ‘blast from the past’ is by Russian composer Sergei Rachmaninoff.  It’s his Rhapsody on a Theme of Paganini, Opus 43 which he composed over a 6-week period from July 3 to August 18, 1934.   It’s written for solo piano and symphony orchestra, closely resembling a piano concerto, albeit in a single movement.  The piece is a set of 24 variations on the twenty-fourth and last of Niccolò Paganini’s Caprices for solo violin, which has inspired works by several composers…which is also the composition by Paganini that I featured in last Saturday’s classical ‘blast from the past’.

Here’s British piano virtuoso Stephen Hough doing the honours at the BBC Proms back in 2013.  Preceding the performance, he does a wonderful 4-minute introduction to the work — and that part is definitely worth watching as well.  The link to it is here.


With a headline jobs report coming in ‘better than expected’ for some, it was a moment made in heaven for JPMorgan et al…as they hammered gold, silver and platinum prices into the dirt on the news…accompanied by the usual ‘gentle hands’ ramping the dollar index.  But they weren’t quite as successful in palladium.  However, they’re doing all they can to keep money from flowing into the precious metals — and into all things paper.  But in the end, it’s a fight they will lose — and it’s becoming more apparent with each passing week.

Despite the pounding that gold took, it’s still miles above any moving average that matters — and closed above $1,400 by a dime in the August contract.  And as I pointed out in my silver commentary earlier, its price traded below its 200-day moving average for a while in COMEX trading in New York yesterday morning, but managed to close above it by a few pennies — and at precisely $15.00 in the September contract.  ‘Da boyz’ really laid the lumber on platinum, blasting it back through both its 200 and 50-day moving averages in the process — and closing it well below both of them.  Palladium was the outlier…as always…and still in overbought territory.  It’s my opinion that the powers-that-be are trying to break the price lower and ring the cash register on the Managed Money traders, but so far it isn’t working.  They ran into some powerful buying in COMEX trading in New York yesterday, but that was the only battle they lost.

And as I also mentioned earlier, I was happy to see how well the precious metal equities performing despite the lickin’ that JPMorgan et al laid on silver and gold yesterday.  It was strong hands buying from weak hands starting a very few minutes after the equity markets opened in New York on Friday morning.

But where we go from here from a price perspective is anyone’s guess — and I’m not about to speculate.  Monday’s new COT and Bank Participation Reports would help…but in most respects they’re already yesterday’s news because of the price activity since Tuesday’s cut-off…especially Friday’s.

Here are the 6-month charts for the Big 6 commodities, but the only price action that mattered was in the precious metals, as not much happened in copper and WTIC.  Click to enlarge.

Just when one thought that the U.S. et al had pulled back from their adventures in the Middle East…both in Syria and Iran…along comes MI-6 and pulls off their caper in the Straits of Gibraltar the other day, with U.S. [and Israeli?] knowledge, encouragement — and approval, no doubt.  Some of the main stream media in the Arab world were calling it “piracy” — and that is true.  But as I pointed out in yesterday’s missive, it’s also an act of war.

Now the Iranian government is threatening to take over a U.K. oil tanker in reprisal.  Two wrongs don’t make a right, of course…but it’s a dream scenario that these three aforesaid governments would love to see happen, as that would give them the casus belli that they so desperately want.

And if the Iranian’s don’t actually carry through with their threat, then I’m sure that a suitable ‘false flag’ situation has already been dreamed up to ensure that they will be blamed…even if they didn’t do it.  I’m certainly old enough to remember the Gulf of Tonkin ‘incident’ of 1964 — and there are still big question marks hanging over the sinking of the Lusitania in 1917.

Don’t underestimate the sociopathic/psychopathic minds in the U.S./U.K. deep state — and their associated security apparatuses.   Now we wait and see what happens, if anything.

Despite all the happy-looking job numbers yesterday, that doesn’t change the fact that the U.S. — and most of the rest of the world are continuing to slide into recession…if they’re not already there.  There was terrible new order data out of Germany yesterday — and then there’s the meat cleaver hanging over Deutsche Bank. The first blow will be struck tomorrow.  And don’t even get me started on that Ponzi scheme masquerading as a country…China.

Of course when we stand back and look at the whole world — and not just China…everything and every country has become a Ponzi scheme…except for Russia and a tiny handful of others.  It’s only massive amounts of made-up-out-of-thin-air paper/electronic money that’s keeping this world-wide insanity afloat.  This can’t and won’t last.

Back in 1918, or thereabouts, Randoph Stillman Bourne coined the phrase “War is the health of the state” — and with the world’s economic, financial and monetary systems in dire peril of collapsing under its own weight, a war would be the opportunity that the deep state has been planning for, for decades.  At some point they will not be denied — and this opportunity looks tailor-made…literally and figuratively.

The impact of war on ‘society’ is even more dramatic. Bourne writes, …in general, the nation in war-time attains a uniformity of feeling, a hierarchy of values culminating at the undisputed apex of the State ideal, which could not possibly be produced through any other agency than war.” Instead of embodying its peace time principle of functioning — ‘live and let live,’ society adopts the State’s principle of “a group” acting “in its aggressive aspects.”

This is the theoretical meaning of ‘War is the Health of the State.’ In times of peace, people are largely defined by their society — and they interact with Government, giving little thought to the State. In times of war, the hierarchy and the power of these concepts is inverted. The Government virtually becomes the State, and society is subordinated to both.”

Physical gold and silver, closely held…along with a current passport…would be a very good idea under these circumstances.

Let’s hope it doesn’t come to this.

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

Ed