A Second Consecutive Monster Deposit Into SLV

19 March 2020 — Thursday


The gold price jumped up a bunch of dollars once trading began at 6:00 p.m. EDT in New York on Tuesday evening.  But it was capped about forty-five minutes later — and ‘da boyz’ were in firm control of the price after that.  The London low was set a few minutes before 10 a.m. GMT — and it rallied until the noon GMT silver fix, which was 8 a.m. in New York.  It was then sold down to its low, which came a few minutes after the 1:30 p.m. COMEX close.  Its tiny rally in after-hours trading ran into ‘something’  and it was sold lower into the 5:00 p.m. EDT close.

The high and low ticks in gold were recorded as $1,547.00 and $1,473.30 in the April contract…an intraday move of around 74 bucks.

Gold was closed in New York on Wednesday afternoon at $1,486.10 spot, down $41.80 from its close on Tuesday — and at a new low close for this engineered price decline — and also back below its 200-day moving average once again.  Net volume was very heavy at 351,000 contracts — and there was 85,500 contracts worth of roll-over/switch volume out of April and into future months.

The silver price crept quietly higher until around noon in Shanghai on their Wednesday — and then it was all quietly and unevenly down hill until the low tick was set…just as it was for gold…a few minutes after the COMEX close in New York.  It rallied a bit from that juncture until it hit the $12 spot mark — and it was turned sideways at that point — and traded that way until the market closed at 5:00 p.m. EDT.

The high and low ticks were reported by the CME Group as $12.905 and $11.64 in the May contract…an intraday move of $1.265.

Silver was closed on Wednesday afternoon in New York at $11.94 spot, down another 62 cents — and a long way off its $11.52 low of the day.  Net volume was, not surprisingly, very heavy at a bit under 112,000 contracts — and there was a hair under 13,000 contracts worth of roll-over/switch volume in this precious metal.

The platinum price was managed in an identical fashion as silver — and the Kitco charts for both could be easily mistaken for each other.  Platinum was closed at $623 spot, down another 35 bucks — and at another new low for this move down.

Palladium’s high of the day came around 9:30 a.m. China Standard Time on their Wednesday morning.  From there it was guided lower until 2 p.m. CST — and it traded very unevenly sideways for the remainder of the Wednesday session everywhere on Planet Earth.  Palladium finished the day at $1,511 spot, down another 49 dollars from its close on Tuesday — and another new low for this move down.

Using their post COMEX close low ticks of the day, the gold/silver ratio blew out to an astronomical 127 to 1.

The dollar index closed very late on Tuesday afternoon in New York at 99.58 — and opened down about 17 basis points once trading commenced around 7:45 p.m. EDT on Tuesday evening, which was 7:45 a.m. China Standard Time on their Wednesday morning.  After ticking a bit higher — and back to unchanged by 9:05 a.m. CST.  It began to crawl very quietly and very steadily lower until the low tick was set at 1:45 p.m. CST.  The ‘rally’ de jour commenced at that point — and the 101.74 high tick was set around 1:22 p.m. in New York.  It gave a bunch of that back by 4:10 p.m. before trading sideways until the market closed at 5:30 p.m. EDT.

The dollar index finished the Wednesday session at 101.1600…up 158 basis points from its close on Tuesday.

To say that the currencies played a roll in yesterday’s price declines in the precious metals is laughable — as JPMorgan et al. capped them — and had them heading lower long before the ‘rally’ in the dollar index began.  But it sure did make a good fig leaf to hide behind as the Wednesday trading session moved along.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…101.54…and the close on the DXY chart above, was 38 basis points on Wednesday…the fourth day in a row where the future month has closed higher than DXY spot month.  Click to enlarge as well.

The gold shares were sold down a bit as soon as the markets opened in New York at 9:30 a.m. EDT on Wednesday morning.  Strong buying pressure appeared at that point, but vanished around 10:35 a.m. — and from there they chopped very unevenly lower until the markets closed at 4:00 p.m.  But you can tell from the saw-tooth price pattern, that there was dip-buying going on most of the day.  The HUI closed lower by a whopping 13.59 percent.

In most respects, the silver equities followed the same price path as their golden brethren — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 11.07 percent.  Click to enlarge if necessary.

Once again I computed the Silver 7 Index manually from Tuesday’s closing price data — and it showed it down 15.35 percent.

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

The star of the day was Peñoles…up 17.21 percent.  The rest were dogs, with the best looking one…Wheaton Precious Metals…down only 3.39 percent.

It was another day where forced redemptions from mutual funds and the like had to be sold into the market whether they wanted to or not — and the new ‘strong hands’ owners aren’t going to be selling them anytime soon.

The CME Daily Delivery Report showed that 62 gold and 86 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, the two short/issuers were Scotia Capital/Scotiabank with 44 contracts out of its own account — and Advantage, with 18 contracts out of its client account.  There were four long/stoppers in total — and the three biggest were Morgan Stanley, ADM and Advantage…with 24, 22 and 11 contracts for their respective client accounts.

In silver, there were only three short/issuers…Scotia Capital/Scotiabank with 64 contracts out of its own account, followed by ADM and Advantage, with 16 and 6 contracts from their respective client accounts.  There were thirteen long/stoppers — and the only four that mattered were Morgan Stanley with 25, the CME Group with 21…followed by JPMorgan and Advantage with 11 and 10 contracts.  All were for their respective client accounts, except those for the CME Group, as they immediately reissued those as 21×5=105 Micro Silver Futures contracts…single one thousand ounce bars.  Of that total, Morgan Stanley picked up 65…Advantage 26 — and ADM 14 — and all were for their respective client accounts.

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

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in March rose by another 49 contracts, leaving 133 still open, minus the 62 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that only 3 gold contracts were actually posted for delivery today, so that means that 49+3=52 more gold contracts just got added to the March delivery month.  Silver o.i. in March fell by 33 contracts, leaving 286 still around, minus the 86 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 60 silver contracts were actually posted for delivery today, so that means that 60-33=27 more silver contracts were just added to March.

Total gold open interest in March declined by a further 5,974 contracts — and total silver o.i. for March fell by another 2,316 contracts.  Both these numbers are subject to some slight revisions when the final report for the Wednesday session is posted on the CME’s website later this a.m. EDT.

There was another very decent withdrawal from GLD yesterday, as an authorized participant removed 197,565 troy ounces.  And, for the second day in a row, there was a monster deposit into SLV, as an a.p. added 5,597,232 troy ounces.  That makes 17.63 million troy ounces of silver added in the last two business days.

In other gold and silver ETFs on Planet Earth on Wednesday…net of any COMEX or GLD & SLV activity…there was a net 46,879 troy ounces of gold withdrawn — and a net 50,760 troy ounces of silver was added.

There was no sales report from the U.S. Mint on Wednesday.

But the evidence of severe shortages of precious metals in the retail industry continues to grow.  Here’s another one from bullionstar.com based in Singapore — and it’s headlined “The Window to Purchase Precious Metals with Fiat Currency is Closing“.  I found it on the gata.org Internet site.

There was only a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  They didn’t receive any — and only 2,481 troy ounces was reported shipped out — and that occurred at Brink’s, Inc.  There was some paper activity, as 48,225.000 troy ounces/1,500 kilobars [U.K./U.S. kilobar weight] was transferred from the Registered category and back in to Eligible.  This was most likely gold that belongs to JPMorgan’s clients — and was transferred to save on storage charges.  I won’t bother linking this amount.

There was some activity in silver, as 662,466 troy ounces was received — and all of that ended up at Canada’s Scotiabank.  There was also 727,669 troy ounces shipped out: one truckload…619,969 troy ounces…from CNT — and the remaining 107,700 troy ounces from Brink’s, Inc.  The link to that is here.

There was some decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  There was 554 kilobars reported received — and 1,007  were shipped out.  Except for 500 kilobars shipped out of Loomis International, the remaining in/out activity was at Brink’s, Inc.  The link to that, in troy ounces, is here.

Roman Empire, Zeno, 474-491, Semissis

Mint: Constantinople   Material: Gold   Full Weight: 2.26 grams

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


JPM Cuts Q2 GDP to -14%: “The Lamps Are Going Out All Across the Economy

At the start of the 20th century, JP Morgan (the person) was instrumental in letting electric lamps shine on America thanks to his collaboration with Thomas Edison which unleashed electricity, and culminated in the formation of General Electric. So it is rather poetic that JP Morgan the bank is there to watch as they are shut down.

In a note published late on Wednesday by JPM’s chief economist Michael Feroli, he writes that in Chair Powell’s Sunday evening conference call he said there will be no Summary of Economic Projections because the forecast is “unknowable” and as Feroli notes, “we sympathize with this sentiment” because “In economic parlance, the current environment is one of pervasive “Knightian uncertainty”—that is, an unknown for which we cannot even quantify the odds of various outcomes.”

While that description clearly applies to the present situation, the very process of producing a forecast still possesses some value, as it can highlight the key assumptions needed to break past this uncertainty according to Feroli. With this in mind, JPMorgan has slashed its forecast for real annualized GDP growth in Q1 to -4.0%, followed by an even weaker -14.0% in Q2, far, far worse than Goldman’s -5%. However, just like Goldman, JPM too sees a V-shaped recovery in Q3, when it expects the economy to recover to 8.0% in Q3 followed by 4.0% growth in Q4. For the full year (Q4/Q4) JPM now look for growth of -1.5%, a number which will be more of a Great Depression-like -10% if the second half rebound does not materialize.

But it is the conclusion is where JPM’s wit truly shines, please pardon the pun:

Prices of toilet paper and hand sanitizer will not rise enough to get inflation back to the Fed’s 2 percent objective any time in our forecast. Consequently, we have the Fed on hold this year and next.”

This news item showed up on the Zero Hedge website at 3:35 p.m. on Wednesday afternoon EDT — and it’s another offering from Brad Robertson — and another link to it is here.

Fed Announces Program for Wall Street Banks to Pledge Plunging Stocks to Get Trillions in Loans at ¼ Percent Interest

The Federal Reserve Board of Governors announced at 6 P.M. [Tuesday] evening that it is following the direction of Steve Mnuchin, the former foreclosure king who now serves as U.S. Treasury Secretary, and authorizing the reinstatement of a hideously operated, multi-trillion dollar bailout program for Wall Street’s trading houses known as the Primary Dealer Credit Facility (PDCF). Veterans on Wall Street think of it as the cash-for-trash facility, where Wall Street’s toxic waste from a decade of irresponsible trading and lending, will be purged from the balance sheets of the Wall Street firms and handed over to the balance sheet of the Federal Reserve – just as it was during the last financial crisis on Wall Street.

The Fed fought for years in court to keep the details of the PDCF and its sibling Wall Street bailout programs a secret from the American people. Thanks to an amendment attached to the Dodd-Frank financial reform legislation of 2010 by Senator Bernie Sanders, the Government Accountability Office (GAO) was instructed to conduct an audit of the PDCF and the rest of the alphabet soup of programs the Fed set up to secretly funnel $29 trillion to the denizens of Wall Street, the foreign banks that were counterparties to their failing derivative trades, central banks, and even a hedge fund that was shorting the Wall Street banks’ own stocks.

We learned from the GAO audit that the Primary Dealer Credit Facility was the largest Wall Street bailout program during the financial crisis. It issued 1,376 loans that cumulatively totaled $8.95 trillion. Just as is happening this time around, the Fed spun the story that the program would help American workers and businesses. It did no such thing. It went to bail out the trading and derivative operations of sinking ships on Wall Street as those same firms paid out millions of dollars in bonuses to their derelict executives and traders. Of the $8.95 trillion in loans issued by the PDCF, $5.7 trillion, or 64 percent, went to Citigroup, Morgan Stanley and Merrill Lynch according to the GAO audit. (The Levy Economics Institute, per chart above, found that percentage to be 67.3 percent.)

This very worthwhile commentary put in an appearance on the wallstreetonparade.com Internet site on Wednesday sometime — and I plucked it from a GATA dispatch.  Another link to it is here.

We’re About Halfway There” – Historic Carnage Everywhere Sparked By Dollar Margin Call Panic

It’s definitely a ‘deer in headlights’ day…

Stocks down, Bonds down, credit down, gold down, oil down, copper down, crypto down, global systemically important banks down, and liquidity down…

Today was the worst day for a combined equity/bond portfolio… ever…

This chart-filled market-close commentary about the Wednesday trading session was posted on the Zero Hedge website at 4:01 p.m. EDT on Wednesday afternoon — and is certainly worth your while.  I thank Brad Robertson for pointing it out — and another link to it is hereGregory Mannarino‘s post market close rant for Wednesday is linked here — and I thank Brad for that one as well.

Federal Reserve to shore up prime money market funds amid Wall Street rout

The Federal Reserve took another page out of its 2008 crisis-era playbook late Wednesday evening, invoking its emergency authority to create a backstop for prime money market mutual funds.

The new Money Market Mutual Liquidity Fund will provide loans to financial institutions to buy assets from prime money market funds.

Concern had risen in recent days about the prime funds, which purchase non-Treasury debt, such as corporate debt, commercial paper and government agency debt. They had seen outflows as large corporate and institutional depositors sought to raise cash amid the financial turmoil stemming from the coronavirus.

This in turn put pressure on corporate funding markets, as prime money market funds withdrew.
It was the second program in two days to use a $10 billion backstop from the Treasury Department’s Exchange Stabilization Fund. And it was the second time in two days that the Fed invoked its emergency authority under section 13.3 of the Federal Reserve Act.

The move was another sign of turmoil inside the financial system created by the coronavirus, and it remained unclear if the constant barrage of programs from the Fed and the Treasury would be enough to restore order.

This news item was posted on the cnbc.com Internet site at 11:42 p.m. EDT on Wednesday night — and I thank Swedish reader Patrik Ekdahl for sending it along.  Another link to it is here.  The Zero Hedge spin on this is headlined “Lehman Playbook Continues: Fed Unveils Another Bailout Fund to Avoid Money Market Funds ‘Breaking the Buck’” — and I thank Richard Saler for that one.

Peter Schiff: These Markets Are Rigged

To go along with the CPFF, the Fed announced a Primary Dealer Credit Facility offering overnight and term funding with maturities up to 90 days.

In simplest terms, it will allow over-leveraged companies to go into even deeper debt and those loans will be backed by the federal government. Peter called it a bank bailout 2.0:

Loaning money to banks and accepting corporate and muni bonds, plus equities as collateral, so the banks don’t have to sell those assets at huge losses, is a bailout. In 2008, I warned the next bank bailout would be even more expensive.”

In his podcast on Tuesday, Peter said he thinks the Fed has already committed to spending more money than it did in the entirety of the 2008 financial crisis.

With the economy slowing due to the coronavirus, inflation should ostensibly be lower. So, why are bond yields rising? Because everybody governments, corporations and individuals are already deeply in debt. The economy has very little savings. Peter said the Fed is desperately trying to counteract market forces.

The last thing the Fed wants is for the free market to function because then it exposes the gigantic mess that they’ve created. So, they’re doing everything they can to prevent market forces from raising interest rates to a market-clearing level. So, the Fed has to come in with QE and they have to buy up or loan money into the commercial paper market to keep interest rates from rising.”

Yields on U.S. Treasuries are also rising. Peter talked about the fact that the bond bubble may well have popped during a podcast last week. He said we would have to wait and see if yields continued to rise. So far, they have.

That blow-off bottom we talked about on this podcast is looking stronger and stronger. And imagine, where would these yields be if the Fed wasn’t buying all of these Treasuries? I mean, who the hell knows how many they’ve already bought? I can only imagine how big the Fed’s balance sheet is by now. But despite all of that manipulation, yields are still rising.”

In fact, the Federal Reserve and the U.S. government have been manipulating the economy for decades. They managed to blow up a massive bubble after the crash in 2008 and now they are trying desperately to keep it inflated. It’s almost like coronavirus flipped on a light switch. It revealed the huge mess in the basement the kids made a long time ago.

The 51-minute video commentary from Peter, recorded on Tuesday, is embedded in this Zero Hedge article that appeared on their Internet site at 1:40 p.m. EDT on Wednesday afternoon — and is another contribution from Brad Robertson.  Another link to it is here.

Biggest Factory Shutdown Since World War II Hits U.S., Europe

The economic impact of the growing coronavirus outbreak is shifting from service-driven industries like hotels and restaurants to the manufacturing sector on both sides of the Atlantic, leading to a synchronized shutdown of heavy industry that historians and industry experts say is unlike any seen since the 1940s.

Automakers in the U.S. and Europe are idling plants in response to the crisis, echoing the industrial shutdown in China that reverberated through global supply chains earlier this year and adding to the case that a global recession may already be under way.

It also may justify President Donald Trump’s declaration Wednesday that he has become a “wartime president” leading the fight against an “invisible enemy” in the virus.

Among Trump’s moves was his authorization of powers under the Defense Production Act, which was established at the time of the Korean War to allow the government to direct industrial capacity. Larry Kudlow, his top economic adviser, later told Fox News that the administration was already in discussions with General Motors Co. and other automakers to start producing ventilators vital to treating people affected by the virus.

Such a move to retool and shift production dramatically would echo the industrial transformation seen in the 1940s as factories moved from producing consumer goods like cars to turning out tanks and guns for the war effort on both sides of the Atlantic.

This Bloomberg article put in an appearance on their website at 6:30 p.m. PDT…Pacific Daylight Time…on Wednesday evening — and it’s the second offering of the day from Patrik Ekdahl.  Another link to it is here.

European Central Bank to buy another €750 billion in bonds

The European Central Bank has announced plans to buy E750 billion more in bonds after holding an emergency call of its rate-setting committee on Wednesday evening in response to the worsening economic and financial market turmoil caused by coronavirus.

The central bank said the extra asset purchases would be carried out by the end of this year and cover both sovereign bonds and corporate debt. Dubbed the Pandemic Emergency Purchase Programme, it would last until the coronavirus crisis is judged to be over.

The ECB also decided to expand the range of eligible assets to non-financial commercial paper and to ease the collateral standards to allow banks to raise money against more of their assets, including corporate finance claims.

The above three paragraphs are all that are posted in the clear from this ft.com story that was filed from Frankfurt in the very wee hours of Thursday morning Central European Time.  I found this news story on the gata.org Internet site — and another link to that dispatch is here.  The ZH spin on this is headlined “Lagarde Fires Bazooka #2: ECB Announces €750BN Pandemic Purchase Program

Italian Debt Crashes Prompting ECB Intervention

Welcome to the brave new world of a helicopter money, aka the Magic Money Tree (MMT), where everything is crashing and nowhere more so than in Europe, which having made a dramatic U-turn on its historic fiscal stinginess, and where a flood of debt is now expected, bond yields across the continent are soaring even as European stocks crater, and nowhere more so than in Italy where the 10Y bond yield, which was trading below 1% as recently as one month ago, exploded as high as 2.99% this morning, before easing some of the rout following media reports that the ECB is intervening via the Bank of Italy.

Earlier in the session, Italy’s 10-year yield climbed as much as 64bps to 2.99%, pushing the BTP-bund spread up to 44bps wider to 323bps, the most since 2018 after a La Stampa report that Rome may extend the nationwide lock-down to beyond April 3…Click to enlarge.

Then shortly after 6am ET, Italian bonds trimmed declines after Radiocor reported the ECB was intervening in the domestic market through the Bank of Italy. “Moves are flexible in terms of timing and of markets targeted, and can continue as long as needed“, Radiocor news agency reported, citing central banking sources.

Even that, however, barely made a dent, with Italy’s 10-year yield still almost 40bps higher at 2.72% after earlier climbing to 2.99%.

There was no ECB intervention in other European bonds, although they certainly also need it, with Bunds suffering sharp losses as the 10Y Bund yield surged as high as -0.20%…

How soon until Lagarde wave a white flag and demands that the Fiscal stimulus tsunami which we summarized here last night, be immediately halted as the ECB simply does not have a large enough trading floor to buy everything that is suddenly breaking courtesy of helicopter money?

This story appeared on the Zero Hedge website at 8:43 a.m. EST on Wednesday morning — and it’s also courtesy of Brad.  Another link to it is here.

BoJ Admits It Has Lost ¥3 Trillion on Its Equity Purchases Despite Literally Printing Money Out of Thin Air

Long gone are the days when central banks pretended they aren’t in the business of propping up the stock market.

A week after we reported that the BoJ had bought a record amount of ETFs in a desperate attempt to stabilize its illiquid stock market, where the central bank now owns over 73% of all ETFs, Kuroda bought a whopping ¥121.6BN of ETFs on Tuesday, the most on record, and just one day after the BOJ doubled the upper limit of ETFs it can purchase to ¥12 trillion, without however answering where it will get all those ETFs from.

The unprecedented creeping nationalization of Japan’s stock market – which has made even the USSR spin in its grave – can be seen in the chart below:

Of course, none of the above is a problem as long as the market keeps levitating higher and higher, however once the crash arrives, people are bound to start asking question.

And as we noted last week, the crash did arrive — and the questions emerged. Like for example now that the Nikkei has plunged below the BoJ’s cost basis on its ETF purchases, how big are the losses for all taxpayers.

Answering just this question on Wednesday, Kuroda said that the amount of losses on exchange-traded funds held by the central bank is estimated at ¥2 trillion to ¥3 trillion as a result of the current crash.

The estimate is based on the current levels of Nikkei225, Kuroda said at a meeting of the Financial Affairs Committee of the House of Councillors, the upper chamber of the Diet, the country’s parliament.

I found this Zero Hedge article on their Internet site at 9:40 p.m. on Wednesday night EDT — and another link to it is here.

Federal Reserve Stimulus Packages Begin New Economic Era — Bill Bonner

So far, everything is going according to plan. That is, if the plan is to leave the U.S. economy a godforsaken wreck.

All our worst predictions… all our night terrors… all our “they couldn’t be that dumb” worries… all are coming to pass – and fast!

But as Andy Kessler – author of The Wall Street Journal’s “Inside View” column – observes, a new era is breaking. And as bad as the bear market/virus attack/recession will be, the new era cure will be worse.

Yes, they are dumber than even we could imagine.

And the 2020 bailout won’t go like the 2008 bailout. A headline at Bloomberg this morning hints at the debacle ahead:

Yes, Dear Reader, this is a new era. Of course, it is also a very familiar old era… at least it is familiar here in Argentina.

Here, the gaucho feds routinely spend too much… then borrow too much… then print too much… And then inflation goes through the roof… their bonds collapse… and the whole system blows up.

This very interesting and worthwhile commentary from Bill was posted on the bonnerandpartners.com Internet site on Wednesday sometime — and another link to it is here.

Jim Rickards: economic freeze is here, get gold, silver if you can and get ready

We are potentially entering an “Ice-9” situation where the entire world may “freeze” over economically, said Jim Rickards, best-selling author of “The Road to Ruin” and “Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos.”

If you shut down the New York stock exchange, and I can’t sell stocks and get cash, I’m going to sell my money market funds or redeem my money market funds. Then you’ve got to shut down the money market funds industry, and then people say ‘OK, I’ll go to the banks or the ATMs,’” he said. “And then you’ve got to shut down the banks so the point is, it spreads from exchange to money markets, to brokerage accounts, to banks, and you end up shutting down the entire system.”

This 26-minute video interview with Jim put in an appearance on the kitco.com Internet site on Wednesday sometime.  I haven’t had a chance to listen to it yet, but will do as soon as I put Thursday’s column up on the website.  I thank Brad Robertson for pointing it out — and another link to it is here.

The Biggest Thing Since 1776 is Happening NOW… How the Coronavirus Will Spark the Greater Depression — Doug Casey

International Man: Panicked people are emptying supermarket shelves and stockpiling toilet paper. Hand sanitizer is impossible to find anywhere.

Is the impact of the fear and hysteria greater than the risk of the virus itself?

Doug Casey: Yes, very much so. The virus itself is what we can call a first-order effect. I don’t want to spend much time talking about the flu itself because, even though worst-case numbers like a million deaths in the U.S. are tossed around, it’s not the biggest problem.

The second-order effects—like the economy shutting down from hysteria—are actually much more serious.

The third-order effects—new laws and state action—will have the longest-lasting consequences. We can talk about them in a minute.

This long, but very worthwhile Q&A session with Doug showed up on the internationalman.com Internet site on Wednesday afternoon EDT — and another link to it is here.

Ted Butler — Worsening Silver Shortage Q&A

We reached out to Ted Butler of ButlerResearch.com to get some of his thoughts on spot price plunges this past month in COMEX silver and COMEX gold specifically.

We sourced a dozen questions both internally and externally too online.

Ted Butler has been analyzing the silver bullion and gold bullion markets for his loyal newsletter subscribers for many decades. Many self-proclaimed gold and silver experts originally found out about precious metals from Ted’s trailblazing writings during the early days of the internet.

Ted’s somewhat recent, yet near decade long public and explicit calling out of JPMorgan as perhaps the kingpin in silver price rigging has been partially validated by criminal charges filed by the U.S. Department of Justice. To date, none of the alleged JPMorgan precious metals executives and other subordinate derivative traders charged with price rigging crimes have been sentenced to US federal prison.

This Q&A session with Ted appeared on the Zero Hedge website at 6:19 p.m. EDT on Wednesday evening — and it’s certainly worth your while.  Another link to it is here.


After leaving Purden Lake Provincial Park on September 1, we continued eastbound on B.C. Highway 16/The Yellowhead, on our way to McBride.  Except for this park, there was zero signs of human habitation anywhere between Prince George and McBride…not even a side road…just the highway, the forest and the inter-mountain country.  Unfortunately, the rain began shortly after we left the park — and the first photo is the only one that I had the opportunity to take for the rest of the drive.  The last two were taken the last mile or so into the town after we had left the rain behind temporarily.  Click to enlarge.


JPMorgan et al. closed every one of the Big 6 commodities at new lows for this move down on Wednesday…unbelievable.  Even Ted professed shock at how badly ‘da boyz’ had beaten down silver.  But, as he carefully explained in his Wednesday column — and as he’s been explaining for like seems forever now, it was all positioning in the COMEX futures market, as the commercial traders continue colluding to engineer prices lower.

And as an aside, I note that rhodium, which set a new record high of $13,800 the ounce about ten days ago or so, closed yesterday at $2,130 an ounce.

I would suspect that the only reason that price are now falling is because the technically-oriented Managed Money, ‘Other Reportables’ and ‘Nonreportable’/small traders are piling in on the short side, as they’ve sold all the long positions that they’re about to.  Ted said that it’s impossible to fathom why they would do that at this insanely low prices, but they’ve done it before.  No wonder he calls them ‘brain dead’.

It’s most unfortunate that yesterday’s price activity won’t be in Friday’s Commitment of Traders Report.

Here are the 6-month charts for the Big 6 commodities — and with the exception of gold, all of them are still miles below any moving average that matters.  Click to enlarge.

And while on the subject of “miles below any moving average that matters”…here’s the 6-month banking index [BKX] chart again — and it set another new low for this move down as well.  It would have closed on its low of the day if the Dow hadn’t ‘rallied’ during afternoon trading in New York on Wednesday.  Both German banks…Deutsche Bank and Commerzbank closed at new lows yesterday.  Click to enlarge.

Tomorrow we get the long-awaited Commitment of Traders Report — and it will be unrecognizable from the numbers that were in last week’s report, as the engineered price declines by JPMorgan et al. didn’t really get started until the day after last Tuesday’s cut-off.  And as I said at the top of The Wrap, it’s too bad that yesterday’s numbers won’t be in it as well.

And as I type this paragraph, the London open is less than a minute away — and I note that after opening flat at 6:00 p.m. EDT on Wednesday evening in New York, it jumped up a bunch of dollars just before 8 a.m. China Standard Time on their Thursday morning. ‘Da boyz’ were right there to take charge. They sold it lower until just after 12:30 p.m. CST — and it has been struggling higher since — and is currently down $4.80 an ounce. Silver’s decent rally was also capped at 8 a.m. in Shanghai — and its current low tick was set at 11 a.m. CST and, like gold, it has been struggling higher since, but was turned lower at 3 p.m. CST — and as London opens silver is up 4 cents the ounce. The trading pattern in platinum has been managed in a similar fashion as silver — and it’s down 13 dollars. Ditto for palladium, as it’s price path was similar to both silver and platinum. Its low came at 11 a.m. CST — and it has been trying valiantly to blast higher in afternoon trading in the Far East, but is obviously running into ‘something’ on every attempt. It’s down 9 bucks as Zurich opens.

Gross gold volume is a bit under 90,500 contracts — and net of current roll-over/switch volume out of April and into future months, net HFT gold volume is around 65,600 contracts. Net HFT silver volume is a bit over 19,500 contracts — and there’s 1,888 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down 37 basis points at 100.79 the moment that trading commenced around 7:45 p.m. EDT in New York on Wednesday evening — and it’s been on a roller coaster ride since, but has been screaming higher since around 2:48 p.m. CST — and is currently up 31 basis points as 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.

That’s all I have for today — and I’m wide open for anything that ‘da boyz’ have to throw at the Big 6 again today.

See you here tomorrow.