JPMorgan et al. Show Up in Force on Monday

07 January 2020 — Tuesday


Not surprisingly,  all four precious metals blasted higher the moment that trading began at 6:00 p.m. EST in New York on Sunday evening — and ‘da boyz’ were at the ready.  They capped the price spike in gold in an instant, then drove it lower.  From there it wandered sideways until the COMEX open in New York.  The bullion banks appeared again — and sold it down a bit more.  From that juncture it crept quietly quietly sideways until the market closed at 5:00 p.m. EST.

The high and low ticks were reported by the CME Group as $1,590.90 and $1,562.30 in the February contract.

Gold was closed in New York on Monday afternoon at $1,565.20 spot, up $12.90 from Friday — and miles off its Kitco-recorded high tick of the day.  Net volume was beyond Mars at around 497,500 contracts — and there was a bit under 63,000 contracts worth of roll-over/switch volume on top of that.

The silver price ran into ‘da boyz’ in an instant at 6:00 p.m. EST in New York on Sunday evening — and had their work cut out for them.  They managed to cap the price and turn it lower by a few minutes before 10 a.m. China Standard Time on their Monday  morning — and it was sold lower into the London open from there.  It crept a bit higher going into the COMEX open in New York, where it was sold a bit lower — and then a whole bunch more once the 10 a.m. EST afternoon gold fix in London was put to bed.  It recovered a bit from that point going into the 1:30 p.m. COMEX close — and didn’t do much after that.

The high and lows in silver were recorded as $18.55 and $18.045 in the March contract.

Silver was closed on Monday afternoon in New York at $18.12 spot, up only 10.5 cents on the day — and 40 cents below its $18.52 Kitco-recorded high tick of the day.  Net volume was over the moon in silver as well at around 127,500 contracts — and there was 9,300 contracts worth of roll-over/switch volume in this precious metal.

Platinum was also capped at the open in New York on Sunday evening — and after getting sold lower for a bit, rallied to its high tick of the day, which came shortly before noon in Shanghai.  From there it crept quietly lower until around 9:40 a.m. in New York — and ‘da boyz’ appeared in force at that juncture — and the low tick was set about two hours later.  It crawled quietly higher into the 5:00 p.m. close from there.  Platinum finished the day at $962 spot, down 18 bucks on the day — and 32 dollars off its Kitco-recorded $994 spot high tick of the day.

The palladium price jumped up a whole bunch on Sunday evening in New York, but was also brutally capped and turned lower minutes later.  That lasted until around 9 a.m. China Standard Time on their Monday morning — and from there it wandered unevenly higher until trading ended in New York on Monday afternoon.  Palladium finished the Monday session at $2,008 spot…up 41 bucks on the day, but 26 dollars off its Kitco-recorded high tick.  But, having said all that, palladium closed at a new record high price yesterday.

The dollar index closed very late on Friday afternoon in New York at 96.84 — and opened up about 1 basis point once trading commenced around 6:35 p.m. EST on Sunday evening.  It traded quietly sideways until about 8:15 a.m. in London — and a spirited sell-off began at that juncture.  The 96.54 low tick appeared to come around 11:35 a.m GMT.  A ‘rally’ commenced at that point, but ran out of gas at precisely 10:00 a.m. in New York, which was the afternoon gold fix in London.  It crawled unevenly lower from there until trading ended at 5:30 p.m. EST.  The dollar index finished the Monday session at 96.67…down 17 basis points from its close on Friday.

Of course there was absolutely no correlation between precious metal prices and the currencies on Monday, as precious metal prices were being set in the GLOBEX/COMEX paper trading system.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the fine folks over at the Internet site.  The delta between its close…96.35…and the close on the DXY chart above, was 32 basis points on Monday.  Click to enlarge as well.

The gold shares blasted higher at the open in New York on Monday morning, but a willing seller/short seller appeared in a flash — and their respective lows came around 11:35 a.m. EST.  They rallied quietly from there — and back above unchanged by a bit by 1:50 a.m. — and then sank back below unchanged going into the 4:00 p.m. close.  The HUI finished lower by 0.22 percent.

After a brief tick up at the open, the silver equities were sold down hard, with their respective lows also coming at 11:35 a.m. in New York trading — and from there they followed the gold stocks  for the remainder of the Monday session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.54 percent.  Click to enlarge if necessary.

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

All the silver equities in Nick’s graph closed down on the day…but Coeur Mining was the black sheep, as it got clubbed like the proverbial baby seal…getting creamed for a 10.0 percent loss.   I didn’t see any news that caused that. First Majestic Silver was also down a fairly heft amount…2.67 percent.

As I pointed out in my Saturday column…”It has been suggested by several that the U.S. bullion banks have been selling some of their precious metal stocks to dampen this rally.”  Reader John McFarland had this to say [in part] in an e-mail to me yesterday…”This short selling is one of the main contributors to the inexplicable performance of PM equities, but not the only contributor.  Something else is in play.

If you check Nick’s 1-year Silver 7 chart above, the silver equities have barely rallied above unchanged during the last six trading sessions — and for the last four trading sessions in a row have closed lower, despite the fact that silver has closed higher every single day.  There is definitely deliberate interference in the silver shares and, of course, in the gold stocks as well.

And in a second e-mail to me, John had this to say…”two straight days of seismic rises in the gold and silver prices, accompanied by contemporaneous broad, systemic downward pressure in the PM equities.  This is unprecedented in the 3+ years I have been watching and investing in this sector….This had to have been done to prevent an exodus of money from the general market into PM equities.

That may be true, but they can’t keep it up forever.  This appears to be just another version of ‘care and maintenance’ until the day arrives that the powers-that-be step aside for real.  I have more about this in The Wrap.

The CME Daily Delivery Report for Day 5 of the January delivery month showed that 192 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, the three largest of the six short/issuers in total were JPMorgan, Advantage and ABN Amro, with 114, 34 and 21 contracts out of their respective client accounts.  There were nine long/stoppers in total — and the only three that mattered were Scotia Capital/Scotiabank, Advantage and JPMorgan…stopping 96, 44 and 27 contracts…Scotia Capital for its own account — and the other two for their respective client accounts.

In silver, Marex Spectron was the issuer — and Advantage the stopper — and both involved their respective client accounts.

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

The CME Preliminary Report for the Monday trading session showed that gold open interest in January rose by 63 contracts, leaving 238 still around, minus the 192 mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 80 gold contracts were actually posted for delivery today, so that means that 63+80=143 more gold contracts were just added to the January delivery month.  Silver o.i. in January fell by 78 contracts, leaving 6 still open, minus the 1 contract mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 80 silver contracts were actually posted for delivery today, so that means that 80-78=2 more silver contracts were just added to January.

There was another deposit into GLD on Monday, as an authorized participant added 28,246 troy ounces.  There were no reported changes in SLV.

The folks over Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, January 3 — and this is what they had to report.  There was a smallish 3,922 troy ounces of gold added — and an equally smallish 27,231 troy ounces of silver was added as well.

In other gold and silver ETFs on Planet Earth on Monday…minus COMEX, ZKB, GLD & SLV activity…there was a net 66,976 troy ounces of gold removed…but there was a net 1,264 troy ounces of silver added.

Of course there’s nothing to report from the U.S. Mint.

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

There was some activity in silver, as 953,967 troy ounces was received.  Of that amount, one truckload…600,215 troy ounces…was dropped off at Canada’s Scotiabank — and the remaining 353,752 troy ounces found a home over at CNT.  All of the out activity…5,949 troy ounces…occurred at Delaware.  The link to this is here.

There was a tiny amount of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They reported receiving 25 of them — and shipped out the same number.  This occurred over at Brink’s, Inc. — and I won’t bother linking it.

Here are two charts that Nick passed around on the weekend.  They show gold and silver bullion coin sales over at the U.S. Mint…updated with December’s data.  You pretty much need a magnifying glass to see the total sales for that month on the two charts below…especially silver sales.  During that month the mint sold 3,500 troy ounces of gold eagle and buffaloes — and 125,000 troy ounces worth of those 5-ounce ‘American the Beautiful’ coins.  Click to enlarge.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, December 31 did not make for happy reading as I knew it would, because the short positions in both gold and silver increased a bunch more…even more than I was expecting…particularly in gold.

In silver, the Commercial net short position increased by a further 11,325 COMEX contracts, or 56.6 million troy ounces.

They arrived at that number by decreasing their long position by 4,042 contracts — and increasing their short position by 7,283 contracts.  It’s the sum of those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up a bit more than half of that amount, as they increased their long position by 4,078 contracts — and reduced their short position by 1,893 contracts, for a total weekly change of 5,971 contracts.

The difference between that number and the Commercial net short position….11,325 minus 5,971 equals 5,354 contracts.

And, as it has to be, that difference was made up by the traders in the other two categories, as both increased their net long positions during the reporting week…the ‘Other Reportables’ by 1,335 contracts — and the ‘Nonreportable’/small traders category by a healthy 4,019 contracts.

The sum of those two numbers….4,019 plus 1,335 equals 5,354 contracts…which it must do.

Ted figures that JPMorgan increased their short position in silver by about 3-4,000 contracts during the reporting week…which puts their short position [splitting the difference] at around 16,500 contracts.

The Commercial net short position in silver is now up to 483.2 million troy ounces, which is not a record amount to be sure, but closing in on it fast.

The Big 8 Commercial traders hold another new record high short position in silver…237 days/8 months of world silver production worth or, in ounces…553.5 millionThat’s larger than the Commercial net short position by a bit over 114 percent.  I have more on this in the ‘Days to Cover‘ analysis below.

The Managed Money traders hold an almost record amount net long.

Here’s the 3-year COT chart for silver, courtesy of Nick Laird — and the above change should be noted.  Click to enlarge.

Of course it almost goes without saying that, all things being equal, there will be a new record high short position in silver by the Big 8 traders in this Friday’s COT Report as well.

In gold, the commercial net short position blew out by another 26,095 troy ounces, or 2.61 million troy ounces of paper gold.

They arrived at that number by reducing their long position by 279 contracts, but increased their short position by an eye-watering 25,816 contracts — and its the the sum of those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report — and like in silver, the Managed Money traders made up only a bit more than half of the change in the commercial net short position in gold.  They increased their long position by 12,991 contracts — and reduced their already piddling short position by a further 895 contracts.  It’s the sum of those two numbers…13,886 contracts…that represents their change for the reporting week.

The difference between that number — and the commercial net short position…26,095 minus 13,886 equals 12,209 contracts.

And as is always the case, the ‘Other Reportables’ and ‘Nonreportable’/small traders made up the difference, as the former increased their net long position by a chunky 8,387 contracts — and the latter by a decent 3,822 contracts.  The sum of those two numbers add up to aforesaid mentioned 12,209 contracts, which it must do.

With the Managed Money traders accounting for only a bit more than 50 percent of change in the commercial net short positions in both gold and silver, it may indicate that the Managed Money traders are running out buying power to the upside…something that Ted had mentioned may happen.

The commercial net short position in gold is at another new all-time high…the largest in history…36.65 million troy ounces — and the Big 8 traders are short another new record high amount as well…31.2 million troy ounces.  That amount represents just under 86 percent of the commercial net short position in gold.  Of course the Managed Money traders are net long record, or near-record amounts on the opposite side of this trade in both gold and silver. All the data in this paragraph is hugely bearish on an historical basis.

Ted pegs JPMorgan’s short position in gold at around 36,000 contracts/3.6 million troy ounces, up about 6,000 contracts from the previous week’s COT Report.

Here’s Nick’s 3-year COT chart for gold — and the unhappy-looking and record high short position should be noted.  Click to enlarge.

And as in silver, we’re most likely going to see another new record high commercial net short position in gold in this Friday’s COT Report.

And as silver analyst Ted Butler said in his COT commentary on his website yesterday afternoon…”There should be little question that if we move lower in price, it will be due to the massive record concentrated short positions in both silver and gold — and those few traders succeeding in driving prices lower. The few triumphing over the many – as has been the case for decades. But since the big shorts have not succeeded for months in driving prices lower and they have sustained record open losses in the interim, there is still the question of whether they can succeed in driving prices lower ahead.

I can see the big crooked shorts perhaps succeeding in inducing selling by those traders which have most recently bought on the upward penetration of the 50-day moving average over the past couple of weeks. But I have trouble seeing how the big commercial shorts could succeed in inducing selling from those traders which didn’t sell over the past couple of months where they always had sold before.

In any event, the current extreme positioning must be resolved and it’s hard for me to see how the coming resolution won’t be a humdinger. I’m still of a mind that if we do get a price smash, it will be the last such smash, [as] the big shorts are so deep in the hole that it could end up with some of them covering to the upside for the first time ever.”

In the other metals, the Manged Money traders in palladium increased their net long position by by a piddling 14 COMEX contracts during the reporting week — and are net long the palladium market by 12,480 contracts…a bit under 53 percent of the total open interest.  Total open interest in palladium is 23,638 COMEX contracts.  As I keep harping on, it’s a very tiny and very illiquid market — and as you can see from these numbers, it doesn’t take more than a handful of contracts to move the price by a significant amount.  In platinum, the Managed Money traders increased their net long position by a further 4,960 contracts.  The Managed Money traders are net long the platinum market by 45,811 COMEX contracts…a bit over 46 percent of the total open interest. The other two categories [Other Reportables/Nonreportable] are still mega net long against JPMorgan et al. as well — and both these categories increased their net long positions during the reporting week.  In copper, the Managed Money traders increased their net long position in that metal by a smallish 869 COMEX contracts during the reporting week.  They are now net long copper by 9,299 COMEX contracts…after holding a record net short position about three months ago.  As I keep saying, this dramatic change in positioning by the Managed Money traders is the sole reason why the copper price has been in ‘rally’ mode recently…as it’s the very act of them covering short positions and going long, that causes the price to rise.

Here’s Nick Laird’s “Days to Cover” chart, updated with the COT data for positions held at the close of COMEX trading on Tuesday, December 31. 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 160 days of world silver production…unchanged from last week’s COT Report — and the ‘5 through 8’ large traders are short an additional 77 days of world silver production…up 2 days from last week’s COT Report — for a total of 237 days that the Big 8 are short…up 2 days from last week’s report…an absolutely preposterous number.  This represents eight months of world silver production, or about 553 million troy ounces of paper silver held short by the Big 8.  [In the prior reporting week, the Big 8 were short 235 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported by the CME Group as 483 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 553 million troy ounces.  So the short position of the Big 8 traders is larger than the total Commercial net short position by around 553-483=70 million troy ounces.

The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 27-odd small commercial traders other than the Big 8, are net long that amount.

Another way of stating this is that if you removed the Big 8 commercial traders from that category, the remaining traders in the commercial category are net long the COMEX silver market.  It’s the Big 8 against everyone else…a situation that has existed for about three decades in both silver and gold — and now in platinum as well.

As I mentioned in my COT commentary in silver above, Ted figures that JPMorgan is short around 16,500 contracts, up around 3,500 contracts from the 13,000 COMEX contracts in last week’s COT Report.  That works out to around 82.5 million troy ounces of paper silver…which works out to around 35 days of world silver production that JPMorgan is short…up 7 days from last week’s report.

Based on the numbers in the paragraph below, that puts JPMorgan in the #2 or #3 spot of the Big 4/8 traders.  Citigroup is by far the largest…but JPMorgan is catching up fast.

As per the first paragraph above, the Big 4 traders in silver are short around 160 days of world silver production in total. That’s 40 days of world silver production each, on average.  The four traders in the ‘5 through 8’ category are short around 77 days of world silver production in total, which is around 19.25 days of world silver production each, on average.

The Big 8 commercial traders are short 48.2 percent of the entire open interest in silver in the COMEX futures market, which is down a bit from the 49.1 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be around the 55 percent mark.  In gold, it’s now 39.7 percent of the total COMEX open interest that the Big 8 are short, down a hair from the 40.3 percent they were short in last week’s report — and around 45 percent, once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 70 days of world gold production, up 1 day from last week’s COT Report.  The ‘5 through 8’ are short another 38 days of world production, up 2 days from last week’s report…for a total of 108 days of world gold production held short by the Big 8…up 3 days from last week’s COT Report.  Based on these numbers, the Big 4 in gold hold about 65 percent of the total short position held by the Big 8…down 1 percentage point from last week’s report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 68, 73 and 80 percent respectively of the short positions held by the Big 8…the red and green bars on the above chart.  Silver is about unchanged from last week’s COT Report…platinum is up 1 percentage point from a week ago — and palladium is unchanged week-over-week.

And as Ted has been pointing out for years now, JPMorgan is, as always, in a position to double cross the other commercial traders at any time and walk away smelling like a rose — and that’s because of the massive amounts of physical gold and silver they hold.

I have a very decent number of stories for you today.


Debt will kill the global economy. But it seems no one cares

The warning signs are clear. Debt is rising on every continent and especially in the business sector, which has spent the past decade ramping up its borrowing to previously unheard-of levels.

Last October, the International Monetary Fund said that almost 40% of the corporate debt in eight leading countries – the US, China, Japan, Germany, Britain, France, Italy and Spain – would become so expensive during a recession that it would be impossible to service. In other words, tens of thousands of businesses, employing millions of people, would have gambled with high levels of borrowing and lost, making themselves insolvent.

Worse, the IMF said the risks were “elevated” in eight out of 10 countries that boasted systemically important financial sectors, adding that this situation was a repeat of the years running up to the last financial crisis.

There is little evidence that anyone is paying any attention to the dire misgivings expressed by either organisation. This year, the U.S. S&P 500 stock market resumed its long-term (100-year) upward trend following a near 200% increase since 2010. Likewise, the German Dax has soared over the past 10 years from 5,500 to over 13,000 while the Paris CAC 40 has almost doubled to 6,000.

Some analysts have argued that the IMF and World Bank are over-cooking their analysis after missing the last financial crash – seeing danger around every corner. Others dismiss them as archaic remnants of the postwar consensus that fail to understand how the global economy has entered a new phase, one that keeps stock markets humming along and bad recessions at bay.

This very interesting commentary was posted on Internet site at 5:00 p.m. GMT in London on Saturday afternoon, which was 12:00 noon in New York.  I thank Neil West for pointing it out — and another link to it is hereGregory Mannarino‘s post market close rant for Monday is linked here — and it’s a long one.

Soleimani murder: what could happen next? — The Saker

First, a quick recap of the situation.

We need to begin by quickly summarizing what just happened:

  1. General Soleimani was in Baghdad on an official visit to attend the funeral of the Iraqis murdered by the USA on the 29th
  2. The U.S. has now officially claimed responsibility for this murder
  3. The Iranian Supreme Leader, Ayatollah Ali Khamenei has officially declared that “However, a severe retaliation awaits the criminals who painted their corrupt hands with his and his martyred companions’ blood last night

The Iranians simply had no other choice than to declare that there will be a retaliation.

Iran HAS to retaliate and HAS to do so publicly.


Because whether the Iranian do retaliate or not, they are almost guaranteed another U.S. attack in retaliation for anything looking like a retaliation, whether Iran is involved or not.

This longish but worthwhile commentary from the Saker put in an appearance on his Internet site on Friday — and I thank Larry Galearis for sending it along.  Another link to it is here.  The Saker had a follow-up piece on Sunday headlined “Short “intermission” of sorts with a few (apparently needed) explanations” — and I thank U.K. reader Tariq Khan for this one.  Then there’s this third commentary from Saker on Sunday as well headlined “The USA is now at war, de-facto and de-jure, with BOTH Iraq and Iran (UPDATED 6X)” — and that’s from Larry Galearis.

Iraqi Parliament Expels Foreign Militaries From Iraq

Parliament voted on a five-point action plan that would require the Iraqi government to end the presence of foreign troops in the country, and withdraw its request for assistance from the anti-ISIS global coalition. This would require new legislation to cancel the existing agreement.

Parliament also called on the government to ban the use of Iraqi airspace by any foreign power.

The Iraqi foreign minister has been directed to head to the U.N. to lodge an official complaint against the U.S. strike.”

The Iraqi Prime Minister and the whole cabinet supported the resolution.

Before the vote Prime Minister Adil Abdul-Mahdi told the parliament that he was scheduled to meet with Soleimani a day after his arrival to receive a letter from Iran to Iraq in response to a de-escalation offer Saudi Arabia had made. The U.S. assassinated Soleimani before the letter could be delivered by him. Abdul-Mahdi also said that Trump had asked him to mediate between the U.S. and Iran. Did he do that to trap Soleimani? It is no wonder then that Abdul-Mahdi is fuming.

The Prime Minister’s letter to the General Secretary of the U.N. and the Secretary of the UNSC is here.

This brief commentary showed up on the Internet site on Sunday — and it’s also comes courtesy of Larry Galearis.  Another link to it is here.

Iranian Revenge Will Be a Dish Best Served Cold — Scott Ritter

The assassination by the United States of Qassem Suleimani, a senior Islamic Revolutionary Guard Corps general and commander of the Quds Force, an Iranian paramilitary force specializing in covert operations on foreign soil, has sent shock waves through the Middle East and around the globe.

The Trump administration has justified its action, citing unspecified intelligence that indicated Suleimani was in the process of finalizing plans for attacks on U.S. personnel and interests in the region, claiming that Suleimani’s death “saved American lives.” This narrative has been challenged by Lebanese officials familiar with Suleimani’s itinerary, noting that the Iranian general had been in Beirut on diplomatic business, and had travelled to Baghdad via a commercial air flight, where he had been diplomatically cleared to enter. These officials claim Suleimani was killed while riding in a convoy on his way from Baghdad International Airport into the city of Baghdad.

In any event, Suleimani’s death resonates in a region already on edge because of existing tensions between the U.S. and Iran. The Supreme Leader of Iran, Ali Khamenei, has announced three days of mourning for Suleimani, an indication of his status as national hero. Khamenei also vowed revenge on those who perpetrated the attack. Concern over imminent Iranian retaliation has prompted the State Department to order all American citizens to leave Iraq, and for U.S. forces in the region to be placed on the highest level of alert. Hundreds of American soldiers have been flown into the region as reinforcements, with thousands more standing by if needed.

For many analysts and observers, Iran and the U.S. are on the cusp of a major confrontation. While such an outcome is possible, the reality is that the Iranian policy of asymmetrical response to American aggression that had been put in place by Qassem Suleimani when he was alive is still in place today. While emotions run high in the streets of Iranian cities, with angry crowds demanding action, the Iranian leadership, of which Suleimani was a trusted insider, recognizes that any precipitous action on its part only plays into the hands of the United States. In seeking revenge for the assassination of Qassem Suleimani, Iran will most likely play the long game, putting into action the old maxim that revenge is a dish best served cold.

[Scott Ritter is a former Marine Corps intelligence officer who served in the former Soviet Union implementing arms control treaties, in the Persian Gulf during Operation Desert Storm, and in Iraq overseeing the disarmament of WMD.]

Scott’s commentary appeared on Internet site on Saturday morning at 5:56 a.m. EST — and I thank Larry Galearis for sending it our way.  Another link to it is hereTucker Carlson weighed in on this issue on Friday in a 7:21 minute video — and that’s linked here.  I thank Larry for this one as well.

The Mafia Would Have Been Proud — Eric Margolis

The U.S. drone strike at Baghdad airport that killed Iran’s top commander, Gen. Qassem Soleimani, and a senior leader of Iraq’s Shia militia, has set the Mideast on fire. The Trump administration, which authorized the assassination, called it a ’pre-emptive’ strike. Iran branded it ‘outright murder.’

Soleimani was Iran’s second most powerful figure and a national icon. He headed up the Quds Force, the elite branch of Iran’s Revolutionary Guards, a key player in Syria, Iraq, Lebanon and the Gulf region. Soleimani was also the most capable, intelligent and effective military leader in a region of third rate generals.

The 62-year-old general distinguished himself in the long Iraq-Iran War, the dirty war in Lebanon, and operations in Iraq. He played a key role in defeating the ultra-radical Islamic State movement in Iraq, working in tandem with the US. Soleimani helped turn the tide of battle in Syria, saving the regime of Bashar Assad.

As a result of his battlefield and political successes, Soleimani earned the enmity of the U.S., Israel and the U.S. media. So many assassination attempts were launched against him that Iran’s spiritual leader dubbed him a ‘living martyr.’

This brief, but very worthwhile commentary from Eric was posted on the Internet site on Saturday sometime — and is yet another contribution from Larry Galearis.  Another link to it is here.  Pepe Escobar weighed in with this article from website headlined ”U.S. starts the Raging Twenties declaring war on Iran” — and it’s from Larry as well.

The Soleimani Assassination: The Long-Awaited Beginning of The End of America’s Imperial Ambitions — Philip Giraldi

The United States is now at war with Iran in a conflict that could easily have been avoided and it will not end well. There will be no declaration of war coming from either side, but the assassination of Iranian Quds Force Commander General Qassem Soleimani and the head of Kata’ib Hezbollah Abu Mehdi Muhandis by virtue of a Reaper drone strike in Baghdad will shift the long-simmering conflict between the two nations into high gear. Iran cannot let the killing of a senior military officer go unanswered even though it cannot directly confront the United States militarily. But there will be reprisals and Tehran’s suspected use of proxies to stage limited strikes will now be replaced by more damaging actions that can be directly attributed to the Iranian government. As Iran has significant resources locally, one can expect that the entire Persian Gulf region will be destabilized.

And there is also the terrorism card, which will come into play. Iran has an extensive diaspora throughout much of the Middle East and, as it has been threatened by Washington for many years, it has had a long time to prepare for a war to be fought largely in the shadows. No American diplomat, soldier or even tourists in the region should consider him or herself to be safe, quite the contrary. It will be an “open season” on Americans. The U.S. has already ordered a partial evacuation of the Baghdad Embassy and has advised all American citizens to leave the country immediately.

Donald Trump rode to victory in 2016 on a promise to end the useless wars in the Middle East, but he has now demonstrated very clearly that he is a liar. Instead of seeking detente, one of his first actions was to end the JCPOA nuclear agreement and re-introduce sanctions against Iran. In a sense, Iran has from the beginning been the exception to Trump’s no-new-war pledge, a position that might reasonably be directly attributed to his incestuous relationship with the American Jewish community and in particular derived from his pandering to the expressed needs of Israel’s belligerent Prime Minister Benjamin Netanyahu.

Trump bears full responsibility for what comes next. The neoconservatives and Israelis are predictably cheering the result, with Mark Dubowitz of the pro-Israel Foundation for Defense of Democracies enthusing that it is “bigger than bin Laden…a massive blow to the [Iranian] regime.” Dubowitz, whose credentials as an “Iran expert” are dubious at best, is at least somewhat right in this case. Qassem Suleimani is, to be sure, charismatic and also very popular in Iran. He is Iran’s most powerful military figure in the entire region, being the principal contact for proxies and allies in Lebanon, Syria and Iraq. But what Dubowitz does not understand is that no one in a military hierarchy is irreplaceable. Suleimani’s aides and high officials in the intelligence ministry are certainly more than capable of picking up his mantle and continuing his policies.

This rather brief commentary is certainly worth reading as well.  It showed up on the Internet site on Friday — and it’s the final contribution of the day from Larry Galearis.  Another link to it is here.

Military Strikes Won’t Solve America’s Middle East Problem — Bill Bonner

A woman is never more beautiful than when the first gray hairs appear. And at the beginning of the 21st century, America looked divine.

Then, when George W. Bush launched his War on Terror in 2001, three thousand generations of dead humans must have all laughed at once. There was America – so rich, so sophisticated… making a damned fool of herself.

The gods must have laughed too… and no one louder than Ares himself, the god of war.

This was the kind of endless, expensive and unwinnable war that Ares knew well. It was the kind of war that was easy to get into… and hard to get out of. It was the kind of war that corrupted the military… and the government that supported it. It was the kind of war that could only be lost.

And there she was, the U.S… stooping for the bait like every empire before it.

Bill’s daily commentary put in an appearance on the Internet site on Monday morning EST — and another link to it is here.

An Empire Self-Destructs — Jeff Thomas

Empires are built through the creation or acquisition of wealth. The Roman Empire came about through the productivity of its people and its subsequent acquisition of wealth from those that it invaded. The Spanish Empire began with productivity and expanded through the use of its large armada of ships, looting the New World of its gold. The British Empire began through localized productivity and grew through its creation of colonies worldwide—colonies that it exploited, bringing the wealth back to England to make it the wealthiest country in the world.

In the Victorian Age, we Brits were proud to say, “There will always be an England,” and “The sun never sets on the British Empire.” So, where did we go wrong? Why are we no longer the world’s foremost empire? Why have we lost not only the majority of our colonies, but also the majority of our wealth?

Well, first, let’s take a peek back at the other aforementioned empires and see how they fared. Rome was arguably the greatest empire the world has ever seen. Industrious Romans organized large armies that went to other parts of the world, subjugating them and seizing the wealth that they had built up over generations. And as long as there were further conquerable lands just over the next hill, this approach was very effective. However, once Rome faced diminishing returns on new lands to conquer, it became evident that those lands it had conquered had to be maintained and defended, even though there was little further wealth that could be confiscated.

The conquered lands needed costly militaries and bureaucracies in place to keep them subjugated but were no longer paying for themselves. The “colonies” were running at a loss. Meanwhile, Rome itself had become very spoiled. Its politicians kept promising more in the way of “bread and circuses” to the voters, in order to maintain their political office. So, the coffers were being drained by both the colonies and at home. Finally, in a bid to keep from losing their power, Roman leaders entered into highly expensive wars. This was the final economic crippler and the empire self-destructed.

This worthwhile commentary from Jeff appeared on the Internet site on Monday afternoon EST — and another link to it is here.

Here’s what could be lost if Trump bombs Iran’s cultural treasures

The U.S. president has warned Iran he will obliterate its cultural sites. Here is our guide to the nation’s jewels, from hilltop citadels to a disco-ball mausoleum

If carried out, Donald Trump’s threat to target “cultural sites” in Iran would put him into an axis of architectural evil alongside the Taliban and Isis, both of which have wreaked similar forms of destruction this century. The Taliban dynamited Afghanistan’s sixth-century Buddhas of Bamiyan in 2001; Isis has destroyed mosques, shrines and other structures across Iraq and Syria since 2014, some in the ancient city of Palmyra. Not, you might have thought, company the U.S. president would prefer to be associated with.

Does Trump know what would be lost? Probably not – but he’s hardly the only one. The fact that the country is rarely visited by western tourists is not due to a lack of attractions. With a civilisation dating back 5,000 years, and over 20 UNESCO world heritage sites, Iran’s cultural heritage is rich and unique, especially its religious architecture, which displays a mastery of geometry, abstract design and pre-industrial engineering practically unparalleled in civilisation. This is is not just Iran’s cultural heritage, it is humanity’s.

This extremely worthwhile photo essay was posted on Internet site at 5:27 p.m. GMT on Monday afternoon, which was 12:27 p.m. in Washington.  I thank Patricia Caulfield for sharing it with us — and another link to it is here.  Then there’s this related story that appeared on the Internet site late on Monday evening EST.  It’s headlined “Esper contradicts Trump on targeting Iranian cultural sites: We ‘follow the laws of armed conflict” — and I found it all by myself.

The Government’s Wrong Decisions Can Help You Gain Wealth — Doug Casey

My regular readers know why I believe the gold price is poised to move from its current level of around $1,525 per ounce to $2,000… $3,000, and beyond.

Right now, we are exiting the eye of the giant financial hurricane that we entered in 2007, and we’re going into its trailing edge. It’s going to be much more severe, different, and longer lasting than what we saw in 2008 and 2009.

In a desperate attempt to stave off a day of financial reckoning during the 2008 financial crisis, global central banks began printing trillions of new currency units. The printing continues to this day. And it’s not just the Federal Reserve that’s doing it: it’s just the leader of the pack. The U.S., Japan, Europe, China… all major central banks are participating in the biggest increase in global monetary units in history.

These reckless policies have produced not just billions, but trillions, in malinvestment that will inevitably be liquidated. This will lead us to an economic disaster that will in many ways dwarf the Great Depression of 1929–1946. Paper currencies will fall apart, as they have many times throughout history.

This isn’t some vague prediction about the future. It’s happening right now. The Canadian dollar has lost 24% of its value since 2013. The Australian dollar has lost 34% of its value during the same time. The Japanese yen and the euro have crashed in value. And the U.S. dollar is currently just the healthiest horse on its way to the glue factory.

This gold-related commentary from Doug appeared on the Internet site on Saturday sometime — and I thank Judy Sturgis for bringing it to our attention.  Another link to it is here.

Gold Has Been This Overbought Only Three Times in Two Decades

Gold is almost guaranteed to record losses in the next two weeks, if history is any guide.

The 14-day Relative Strength Index for the yellow metal soared to 86 on Monday, well above the level of 70 that typically suggests securities are overbought. Previously, there have been only three times since 2000 when the RSI rose above 85, and in each instance bullion fell over the next 10 trading days. The loss averaged 1% compared with a gain of 7% over the previous 10 session.

To be sure, in all three occasions — October 2010, February 2016 and June 2019 — gold eventually resumed its rally. But the momentum had slowed. Gold performs best when interest rates fall and the dollar weakens. Without a further escalation of Middle East tensions, the bulk of the moves in rates and the dollar may be over for now. And the same is probably true for the bounce in gold, at least in the short term.

I’ve been talking about this for quite a number of days now, so this story is not surprising…nor should it be alarming.  It’s just stating the facts as they appear to be, at least on the surface.  The above three paragraphs are all there is to this very brief article that showed up on the Internet site at 9:40 a.m. PST on Monday morning.  I found it in a GATA dispatch yesterday evening — and another link to the hard copy is here.


After taking the shot of the western grebe on August 4 that appeared in Saturday’s column, I took a few photos of that spit of land I had been standing on a short while prior.  At some point in the not-too-distant past, this was under a decent amount of water, but Shuswap Lake level is way down.  The mallard ducks on the left side of the frame in the first shot, are featured in the second photo.  On our way out of the waterfront park in downtown Salmon Arm — and eastward bound to Sicamous and Revelstoke, we walked by a flower garden that had these gorgeous and giant stalks of white lilies — and I couldn’t resist.  Click 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

There’s no escaping the fact that JPMorgan et al. were at battle stations from the 6:00 p.m. open in New York on Sunday evening, right up until the market closed at 5:00 p.m. EST on Monday afternoon.  They threw everything they had at the prices of gold, silver and platinum — and it proved to be enough.  Without their massive intervention, the prices of these precious metals would have closed at heaven-only-knows what amounts.

And the share prices of the gold and silver equities were pretty closely managed as well.  That has been going on for the last week now — and should be obvious to anyone.  I’ve been pointing this out in just about every column since this time last week — and the interventions have become far more blatant each day.

However, I should mention the fact that this sort of counterintuitive price action in the equities may be the insiders dumping shares or going short into this rally because precious metal prices are about to get bombed — and they’ll buy them back, or cover at lower prices.  This scenario has happened before…but that was a very long time ago.  However, I have a long memory for this sort of thing — and I’ll be watching closely to see how it all unfolds going forward.

Here are the 6-month charts for the four precious metals, plus copper and WTIC.  As you already know — and as the Bloomberg article in the Critical Reads section was kind enough to remind us, gold is hugely overbought.  Since that’s the case, the conditions are ripe for a coordinated engineered price decline by the Big 8 traders.

Of course it remains to be seen just how much selling the Managed Money do, as the Big 7/8 traders have had limited success to date in blowing them off their huge long positions…something that Ted described in his comments on yesterday’s holiday-delayed COT Report.

Silver is hovering around the overbought level — and after yesterday’s beating in the COMEX futures market, platinum is now approaching market neutral.  And at some point, using the past as prologue on the 6-month chart for palladium below, ‘da boyz’ will inevitably work their magic in that precious metal once again as well.

As for copper, it closed basically unchanged on the day, as did WTIC.  It was up about two bucks a barrel early in the Monday trading session, but that gain all melted away by the COMEX close.  Click to enlarge.

And as I type this paragraph, the London/Zurich opens are less than a minute away — and I see that the gold price didn’t do much when the market opened at 6:00 p.m. EST in New York on Monday evening. It was tapped a bit lower starting around 9:20 a.m. China Standard Time on their Tuesday morning — and the current low tick was set a few minutes after 10 a.m. CST. It didn’t do much until shortly before 1 p.m. — and then began to head higher with some authority — and is currently up $4.80 an ounce. Silver price was guided in a similar manner — and it’s up 7 cents as London opens. Platinum crept higher in morning trading in Shanghai — and that rally gained some momentum around 2 p.m. CST on their Tuesday afternoon — and it’s up 10 dollars. The palladium price slid quietly lower until shortly after 1 p.m. CST — and it has crept a bit higher since, but is still down a buck as Zurich opens.

Net HFT gold volume is enormous already at around 108,500 contracts — and there’s 3,600 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is very high as well…coming up on 30,000 contracts — and there’s a bit over 1,200 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down about 1 basis point at 96.66 once trading commenced around 7:45 p.m. EST on Monday evening in New York, which was 8:45 a.m. China Standard Time on their Tuesday morning. Its current low tick, such as it is, came around 8:30 a.m. CST — and it has been creeping quietly and somewhat unevenly higher since. And as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is up 8 basis points.

Today, at the 1:30 p.m. EST close of COMEX trading, is the cut-off for this week’s COT Report and companion Bank Participation Report.  In that one, we get to see what the world’s banks have been up to in the precious metals — and it’s usually a fair amount.

It also gives Ted the opportunity to recalibrate JPMorgan’s short position in silver — and I’m looking forward to seeing what that number is.

And as I post today’s efforts on the website at 4:02 a.m. EST, I note that all four precious metals have been sold lower starting at the London/Zurich opens. Gold is now down a dollar — and they have silver down 4 cents the ounce. Platinum is up only 4 bucks now — and palladium is down 3.

Gross gold volume is an incredible 139,000 contracts already — and minus what little roll-over/switch volume there is, net HFT gold volume is a bit under 129,000 contracts. Net HFT silver volume is coming up on 33,000 contracts — and there’s only 1,262 contracts worth of roll-over/switch volume in this precious metal.

The dollar index fell off a bit of a cliff starting around 8:15 a.m. in London, but that hasn’t helped the precious metals — and as of 8:45 a.m. in London/9:45 a.m. in Zurich, it’s back at unchanged.

That’s all I have for today — and I await what for what the powers-that-be have in store for us as the Tuesday trading session moves along.   But events in the Middle East could change a lot of things in heartbeat, so be prepared for any eventuality.

See you here tomorrow.