Category Archives: Newsletter Archive

JPMorgan’s Last Swing For the Fences?

30 June 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price dipped briefly into negative territory in early Far East trading on their Friday morning — and the swan dive in the U.S. dollar index at 10:30 a.m. China Standard Time wasn’t allowed to manifest itself in the price, as ‘da boyz’ were standing by with whatever paper gold was necessary to cap the price.  The gold price was turned lower at the 2:15 p.m. CST afternoon gold fix in Shanghai — and it really didn’t do much from there until at, or just before, the afternoon gold fix in London.  The tiny rally that developed at that point was capped and sold lower starting at 1 p.m. EDT — and the sell-off continued into after-hours trading as well.

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

Gold finished the Friday session in New York at 1,252.40 spot, up $4.40 from Thursday’s close.  Net volume was pretty respectable for a Friday in summer, at 209,000 contracts — and roll-over/switch volume was a bit under 15,600 contracts.

The price path for silver was similar, except more ‘volatile’.  It was turned lower at the afternoon gold fix in Shanghai as well — and the low tick, like for gold, came about 9:40 a.m. EDT in New York.  It rallied from there, but ran into ‘resistance’ right away — and also like gold, was sold lower starting just before the COMEX close.

The low and high ticks in this precious metal were reported by the CME Group as $15.91 and $16.12 in the July contract.  In the new front month, September, the low was reported as $16.00 — and the high as $16.22.

Silver was closed on Friday afternoon in New York at $16.09 spot, up 11.5 cents from Thursday.  Net volume was very healthy at 62,300 contracts — and there was a bit over 5,800 contracts worth of roll-over/switch volume in this precious metal.

Like silver and gold, platinum was sold lower until the dollar index did its mid-morning face plant in the Far East on their Friday — and after that, it was forced to trade very much like the silver price.  Platinum finished the Friday session at $852 spot, up 4 dollars on the day.

With some minor variations, palladium traded in a similar manner to platinum for most of the Friday trading session.  That changed at 1 p.m. in New York, as it received the same treatment as gold as silver at that point.  Palladium was closed at $948 spot, up 10 bucks from Thursday.

The dollar index closed very late on Thursday afternoon in New York at 95.29 — and traded mostly sideways until 10:30 a.m. China Standard Time on their Friday morning.  A trap door got opened under the dollar index at that juncture — and that was the start of long stair-step decline that lasted right until the end of trading in New York on Friday afternoon. The 94.48 low tick was set around 4:30 p.m. EDT.  The dollar index shows that it finished the day at 94.52…down 77 basis points from Thursday…but the ino.com DXY chart below doesn’t show the last forty-five minutes of trading data, so this close may not be entirely accurate.

Here’s the 3-day dollar index, so you can see the entire 24-hour move starting at 6:00 p.m. on Thursday evening in New York…including the 10:30 a.m. CST/10:30 p.m. EDT face plant.

And here’s the 6-month U.S. dollar index — and one has to wonder how long this dollar index ‘rally’ will last?

The gold stocks began to rally the moment that trading began at 9:30 p.m. EDT in New York on Friday morning.  Their respective highs came shortly after 1 p.m. — and shortly before the silver price was turned lower in COMEX trading.  The shares crawled quietly lower from there into the close, as the HUI finished up 2.25 percent.

The silver equities followed an almost identical price path as their golden brethren, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by only 1.52 percent.  Click to enlarge if necessary.

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

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

Here’s the weekly chart — and it’s mostly red across the board. But the declines in stock prices weren’t much when compared to the declines in the underlying precious metals themselves — and I certainly take heart from that.  Click to enlarge.

The month-to-date chart is a complete sea of red, even the loses over the last month didn’t amount to much considering how badly the underlying metals got hammered by JPMorgan et al.  Gold was down about 44 bucks for the month — and silver well over a dollar from its high tick. It could have been far worse.  Click to enlarge.

The year-to-date graph still isn’t very happy looking, as ‘da boyz’ now have all four precious metals down on the year.  But, as has been the case right from the start of 2018, the silver equities are still outperforming the gold stocks by a goodly margin — and that’s despite the fact that both gold and silver are down about the same percentage in price year to date.    Click to enlarge as well.

Just like I said in this space last week, where we go from here from a price perspective in both the equities — and their underlying precious metals, is still very much in the hands of JPMorgan et al…but mostly just JPMorgan.  However, with the COMEX futures market structure in all four precious metals as wildly bullish as we’re ever likely to see them, the path of least resistance is higher prices — and that will occur whenever JPMorgan decides, or is told to step aside.  The only thing not known is if ‘da boyz’ will appear as shorts sellers of either first and last resort once again.  I think not, but that’s just my opinion.


The CME Daily Delivery Report for Day 2 of July deliveries showed that 14 gold and 1,583 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, ADM and Advantage issued 8 and 6 contracts out of their respective client accounts — and HSBC USA stopped 7 contracts for its own account, plus Merrill and Advantage picked up 4 and 3 contracts for their respective client accounts. In silver, Of the nine short/issuers in total, the two largest by far were Scotia Capital USA[?] with 827 contracts out of its in-house/proprietary trading account — and Merrill with 432 contracts out of its client account.  In distant 3rd and 4th spots were HSBC USA and ABN Amro, with 99 and 96 contracts out of their respective client accounts.  There were twelve long/stoppers in total — and the three largest were the same as they were on Day 1…Goldman Sachs with 829 contracts for its own account…Australia’s Macquarie Futures with 173 contracts for its house account as well — and JPMorgan with 124 contracts for its client account.  And in distant third and fourth place were HSBC USA and ABN Amro, with 99 and 94 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The question I have is:  Who the heck is Scotia Capital USA?  I would suspect that they’re a spin-off — and completely separate legal entity from Canada’s Bank of Nova Scotia/Scotiabank.  I’ll wait for Ted’s thoughts on this, if he has any.

The CME Preliminary Report for the Friday trading session showed that gold open interest in July declined by 19 contracts, leaving 199 still open, minus the 14 contracts mentioned two paragraphs ago.  Thursday’s Daily Delivery Report showed that 15 gold contracts were actually posted for delivery on Monday, so that means that 19-15=4 gold contracts disappeared from the July delivery month.  Silver o.i. in July fell by 1,831 contracts, leaving 3,358 still around, minus the 1,583 mentioned above.  Thursday’s Daily Delivery Report showed that 1,888 contracts were actually posted for delivery on Monday, so that means that 1,888-1,831=57 more silver contracts just got added to July.


There was another smallish withdrawal from GLD yesterday, as an authorized participant took out 47,362 troy ounces.  But over at SLV there was a huge deposit.  This time an a.p…most likely with the initials JPM…added 2,070,185 troy ounces.  I would suspect that Ted will have something to say about the goings-on in both these ETFs in his weekly review later today.

There was no sales report from the U.S. Mint yesterday.

For the month of June, the mint sold 19,500 troy ounces of gold eagles — 6,000 one-ounce 24K gold buffaloes — and 435,000 silver eagles.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Nothing was reported received — and only 402 troy ounces were withdrawn.  That activity was at Canada’s Scotiabank, which I won’t bother linking.

It was quite a bit busier in silver, as 1,139,598 troy ounces were received — and 596,678 troy ounces were shipped out.  In the ‘in’ category, there was one truck load…599,981 troy ounces…dropped off at CNT — and 452,456 troy ounces were left at Scotiabank.  The remaining 87,160 troy ounces found a home over at Brink’s, Inc.  All of the silver in the ‘out’ category was shipped out of HSBC USA.  In addition to all this physical movement, there was an eye-watering 3,546,332 troy ounces transferred from the Eligible category and into Registered.  The lion’s share of that amount…3,422,734 troy ounces was switched over at CNT — and the remaining 123,505 troy ounces, at Brink’s, Inc.  All of this would be in preparation for July delivery I would think.  The link to all this action is here.

There was decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only received 200 of them, but shipped out 2,189.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, was way better than even my wildest hopes, as there was the expected improvement in gold…and it wasn’t exactly small — and there was also a huge improvement in silver, which I wasn’t expecting at all.

In silver, the Commercial net short position fell by a very chunky 9,510 contacts, or 47.5 million troy ounces of paper silver.  The decrease wasn’t a total surprise, but the size of it certainly was.

They arrived at that number by adding 1,598 long contracts, plus they reduced their short position by 7,912 contracts as well — and it’s the sum of those two numbers that represents the change for the reporting week.

Ted said that the ‘Big 4’ traders only appeared to have covered about 400 short contracts, but that’s certainly because there’s a big Managed Money trader in this category now.  The ‘5 through 8′ large traders reduced their extreme and record short position by around 1,100 contracts during the reporting week — and Ted’ raptors, the 30-odd small Commercial traders other than the Big 8, added approximately 8,000 new long contracts.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up a bit over half of the weekly change, as they reduced their long position by only 885 contracts, but some of those traders piled in on the short side to the tune of 4,790 contracts — and it’s the sum of those two numbers…5,675 contracts…that represents their change for the reporting week.  The difference between that number — and the Commercial net short position…9,510 minus 5,675 equals 3,835 contracts– and that was made up by the traders in other two categories, as the ‘Other Reportables’ increased their short position by about 1,000 contracts — and the ‘Nonreportable’/small traders increased their short position by around 2,800 contracts.

The Commercial net short position in silver now stands at 245.1 million troy ounces, down a very decent amount from last week’s report.  Ted says that the big Managed Money trader that now inhabits the Big 4 category, masked the fact that JPMorgan most likely covered around 3,000 more contracts of their short position during the reporting week — and that puts their short position at about 30,000 contracts, or 150 million troy ounces of paper silver.  As of this COT Report, JPMorgan owns about 60 percent of the entire Commercial net short position in silver.

Here’s the 3-year COT chart for silver — and the improvement should be noted.  Click to enlarge.

Well, with the Managed Money traders selling only 885 long contracts during the reporting week, it certainly appears that the Managed Money traders hanging onto their long positions aren’t going to be selling them…because they would have done so already if they were going to.  And if that’s the case, the bottom is in for the silver price as of Thursday close.  JPMorgan really was picking up nickels on Wednesday and Thursday, because that’s all that was available.

I certainly look forward to what Ted has to say about all this, as he’s the real authority on it.


In gold, the commercial net short position fell by 19,161 contracts, or 1.92 million troy ounces of paper gold.  I was expecting a reduction, but nothing this size.

They arrived at that figure by adding 10,126 long contracts, plus they reduced their short position by 9,035 contracts as well — and it’s the sum of those two numbers that represents the change for the reporting week.

Ted said that the Big 4 traders covered approximately 2,800 short contracts — and the Big ‘5 through 8’ traders covered about 3,800 short contracts as well. Ted’s raptors, the 42-odd small commercial traders other than the Big 8, added 12,600 long contracts.  So, like in silver, it was Ted’s “all for one — and one for all” scenario, as they all got the memo.

Under the hood in the Disaggregated COT Report it was, also like in silver, only partly due to Managed Money traders, as the increased their long position by 548 contracts, but also added to their short position to the tune of 11,100 contracts — and it’s the difference between those two…10,552 contracts…that represents their change for the reporting week, a bit over half of what the commercial traders bought back.  The difference, as it always is, was made up by the traders in the other two categories, but they went about it in very different fashions, as the ‘Other Reportables’ decreased their long position by about 9,200 contracts — and the ‘Nonreportable’/small trader actually increased their long position by around 700 contracts.  Here’s a snip from the Disaggregated Report so you can see these changes in all three categories for yourself.  Click to enlarge.

The commercial net short position in gold is now down to 9.50 million troy ounces.  And I would suspect, that like in silver, the Managed Money traders are done selling longs — and going short in gold as well.

Here’s the 3-year COT chart for gold.  It was bullish last week at this time — and even more extreme this week.  Click to enlarge.

Since the Tuesday cut-off, there have been two more days of careful salami slicing by JPMorgan et al…but mostly just JPMorgan — and it goes without saying that if we could see a COT Report as of the close of COMEX trading on Thursday, we’d see an even more wildly bullish set-up than we have now.  And that’s just silver and gold I’m talking about.

The COT Report for platinum showed that the Managed Money traders went even further onto the short side during the reporting week, to another new record.  I didn’t think that was possible.  There was a big improvement in palladium as well.  And then there’s copper.  The Managed Money traders really outdid themselves, as they sold 21,308 longs, plus they added 8,757 short positions.  Of course things have gotten even more extreme in these three metals in the two trading days since the Tuesday cut-off.

Unless JPMorgan is prepared to show up as short seller of last resort on the next rallies…whenever they’re allowed to commence…this certainly looks like their last swing for the fences to me.   But if they do decide to step in at some point during the next rally, then they’ve gone to a lot of effort over the last two weeks for no reason at all.

So we wait some more.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 traders are short 144 days of world silver production—and the ‘5 through 8’ large traders are short an additional 87 days of world silver production—for a total of 231 days, which is a bit under 8 months of world silver production, or about 539.1 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were also short 234 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 245.1 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 539.1 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 539.1 minus 245.1 equals 294.0 million troy ounces.  The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 30-odd small commercial traders other than the Big 8, are long that amount.  And if you think that’s preposterous, you would be right about that.

As stated earlier, Ted estimates JPMorgan’s short position at 30,000 contracts, down 3,000 contracts from last week’s report, or 150 million troy ounces of paper silver.  That translates into about 64 days of world silver production.  That number represents about 27 percent of the short position of the Big 8 traders — and about 44 percent of the short position held by the Big 4 traders.  This is simply grotesque.

The Big 4 traders are short 144 days of world silver production — and once you subtract out the 64 days that JPM is short, that leaves 80 days split up between the other three large traders…a bit under 27 days each.  And since those contracts are obviously not split up evenly between them, it’s a certainty that one of these traders has a short position something under 27 days — and the other, more than 27 days.  But whatever those three number are, they can’t add up to more than 80 days.  But it all fairness, it should be pointed out that there’s a Managed Money trader now in the Big 4 category — and this certainly distorts the numbers.  I would think they would be a few days lower than 27 if the Managed Money trader wasn’t there.

The four traders in the ‘5 through 8’ category are short 87 days of world silver production in total — and off their record high short position of last week by two whole days.  They’re short a bit under 22 days of world silver production each, which is down a hair from what each was short in last week’s COT Report.  Back in mid May, these same ‘5 through 8’ small traders were short a bit under 12 days of world silver production each.  Now they’re up to a bit under 22 days short each, which is an increase of more than 80 percent during the last six weeks.

The smallest of the traders in this category holds something less than 22 days — and the largest, something more than that amount.  So it’s a mathematical certainty that the smallest of the Big 4 traders holds a short position of over 22 days, but under 27 days  — and the second smallest of the Big 4…something around the 27 day mark [the average of the remaining ‘Big 3’ traders] of world silver production held short.  That means [another mathematical certainty] that the second largest short in the Big 4 category [Scotiabank?] only has a short position slightly larger than the average of 27 days.  JPMorgan remains, as always, the King Short, with a short position that is a bit more than twice the size of the other three traders in the Big 4 category — and just under three times the size of the traders in the ‘5 through 8’ category.  These are fairly substantial declines from the prior reporting week — and it’s more proof that JPMorgan is covering their short position in silver as fast they can.

By the way, there is very little wiggle room in these numbers — and are 95+ percent accurate.

It certainly appears that the trap is being set for the other commercial traders in gold.  Ted has been talking about this for a few weeks now — and you’ll read more about it in the quote in The Wrap section.  But it now appears, that with another COT Report under our belts, the Big 7 Commercial traders in silver appear destined to suffer the same fate at the hands of the ‘Big 1’ Commercial trader, as a silver trap looks ready to be sprung by JPMorgan as well.

The Big 8 commercial traders are short 49.3 percent of the entire open interest in silver in the COMEX futures market, which is down a hair from the 50.0 percent that they were short in last week’s COT Report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be something approaching 55 percent.  In gold, it’s now 37.6 percent of the total COMEX open interest that the Big 8 are short, down a bit from the 39.0 percent they were short in last week’s report — and a bit over 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 41 days of world gold production, which is down 1 day from what they were short last week — and the ‘5 through 8’ are short another 20 days of world production, which is also down 1 day from what they were short the prior week, for a total of 61 days of world gold production held short by the Big 8 — which is down 2 days from what they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8…which is unchanged from last week’s COT Report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 62, 64 and 75 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report, platinum is down 1 percentage point from a week ago — and palladium is down a hefty 5 percentage points from last week’s report.


Saxony, Frederick Christian, Conventionsthaler 1763

Mint: Dresden     Metal: Silver     Full weight: 27.97 grams

There’s just no news out there that’s worth posting so, once again, I have an embarrassingly small number of stories for you for a Saturday.


CRITICAL READS

Doug Noland: A Decisive Quarter

Booming markets ensure imaginations run wild. Importantly, reality began to gain the upper hand during the quarter. The global Bubble faltered. The world is not robust – there are, indeed, fragilities everywhere. EM is a potential disaster. China is increasingly vulnerable. China and Asian debt has become a huge global risk. I worry about Brazil.

And this age of populism and the “strongman” politician actually does matter to the markets. Trump Tariffs. China ready to “punch back.” Erdogan to dictate Turkish rate policy? The new Italian government to play hardball with the EU. Immigration becoming a pressing political issue from Washington to Frankfurt. A new leftist President in neighboring Mexico. Well, booming markets were content to disregard the global rise of populism, divisiveness and autocracy. Faltering markets will now amplify these troubling trends. All the makings for savage bear markets.

It was A Decisive Quarter: The world became more divided; the “Atlantic Alliance” became more divided; Europe became more divided; Asia became more divided; and the United States turned only more divided. U.S. stock performance during the quarter should not distract from the ominous storm clouds forming globally – in the markets, economically, socially and geopolitically. Global markets were also more divided, though I would expect Contagion from the Periphery to now make more discernable headway toward the Core.

Doug’s Credit Bubble Bulletin was posted on his website in the wee hours of Saturday morning EDT — and is always a must read for me.  Another link to it is here.


E.U.’s sanctions against Crimea extended for another year

The European Union is committing to its policy of perceiving revolutionary determination as its course of legitimacy. Apparently, a referendum gaining nearly 100% popular support isn’t sufficient to qualify for the self determination of a region. Therefore, the E.U. will continue to consider the Crimea as politically a part of the Ukraine. This, of course, means that the E.U. has reason for its sanctions regime against Crimea, which it will be extending for yet another year.

Deutsche Welle reports:

The European Union extended economic sanctions on Crimea and its port city of Sevastopol on Monday. The 28-member bloc imposed the measures after Russia annexed the Black Sea peninsula four years ago.

The E.U. said it remains “firmly committed to Ukraine’s sovereignty and territorial integrity,” reiterating that “it does not recognize and continues to condemn this violation of international law.”

The measures — which will now stay in place until June 23, 2019 — ban the import of products originating in Crimea. They also prevent E.U. nationals or companies based in the bloc from investing or buying real estate in Crimea and Sevastopol, and ban E.U. cruise ships from docking there, except in an emergency.

The move comes three weeks after French lawmakers voted in favor of a resolution to lift parallel sanctions targeting Russia — currently set to expire at the end of next month — over its role in an ongoing conflict in eastern Ukraine. “(The sanctions are) totally ineffective today to solve this international crisis and are dangerous for France’s interests,” said conservative MP Thierry Mariani, who put forward the resolution.

The bulls hit continues on this issue.  I expected the Italians to vote against this — and I wasn’t amused to see them follow the status quo.  This news item appeared on theduran.com Internet site at 6:37 p.m. EDT on Thursday evening — and I thank Larry Galearis for pointing it out — and another link to it is here.


Tales of the New Cold War: Summiteering Eve — John Batchelor interviews Stephen F. Cohen

Part 1:  John Batchelor opens the discussion with a short history of the successes and failures of post war summits between the U.S. and the Soviet Union; what stands out is the multiple times presidents met with Soviet leaders to work out the problems. Most presidents from Eisenhower on had at least one summit, and Cohen concurs and proceeds to address a detailed history of the most important of these meetings to ensure that younger listeners have a good understanding of the importance of them. Cohen points out that wartime summits between the leaders were about that war as allies fighting Germany, but post war they became about avoiding war with each other. This discussion is about the coming summit between Trump and Putin that hopefully will happen sometime in July. And Professor Cohen was at the last summit as an observer/consultant in 1985 in Geneva between Gorbachev and Reagan and brings that perspective to this discussion. Cohen informs us about what a formal summit is like as opposed to a behind closed doors meeting. The former is partly a media event with theatrical trimmings to solve basically three things: to ratify a partnership to solve a national security problem between them, to force cooperation where the politics at home make this difficult, and finally these summits hopefully foster a sympathetic relationship as a media event. They are important as public opinion can be significantly altered, sometimes fundamentally/strategically altered. But the history of these things shows a very mixed result of some successes and failures. Nixon’s summit, for example, won him his legacy with the creation of détente and was a great success.

Part 2: Batchelor opens this session with the Reagan/Gorbachev summit in Geneva. The political background was rocky with the Korean airliner shoot down incident, and even more serious the false alarm of an American nuclear attack that was almost acted upon at the Soviet end. This was the time of “Star Wars” and his two summits during his presidency were successful. He cancelled with Gorbachev a whole category of nuclear weapons. President Bush continued the meetings but the process was complicated by the fall of the Soviet Union. But none of these past presidents, from Eisenhower to Clinton, had the difficulties that Trump is bearing with his summit. Cohen lists them: He has no political support at all at home. This is unprecedented. In addition to this, in Cohen’s opinion, the danger of war between the two countries has never been greater. And Batchelor adds that not only has Trump no support, he has very active opposition from numerous fronts. He then asks what the agenda will be? Cohen in turn wonders if there will be enough trust between the two for discussion and then adds the worry that if there are agreements achieved, can Trump deliver in Washington? This is a danger for both leaders that failure would be a political problem at home for them. Nevertheless, Cohen deems the agenda will include the new nuclear arms race, how to regulate the use of cyber warfare activities, the Syria situation, fighting terrorism, resolving Ukraine by the Minsk Accords, stopping NATO exercises in Europe, and finally to re-staff the embassies in both countries.

****************************

As the pundits have said there are many outcomes possible should a summit come to pass, and commentary about will happen is completely speculative. We have seen the theatre elements already with Trump’s summit with North Korean, Kim and for inexplicable reasons the world collectively breathed a sigh of relief. But we know that Kim is not going to give without receiving in turn, and he likely won’t give up his nukes. Russia will be just as difficult to deal with as Trump’s “America First” slogan, which means “take as much as possible and give little in return” is just as failure prone in North Korea as it will be in Russia. But in Trump’s style of negotiation, allegedly successful in real estate, may prove impotent in summits. The other factor weighing down the probabilities of success is the Russian attitude (as stated in the podcast) that Trump may not be able to produce any concessions due to his opposition in Washington. This will probably see the Russian side as less willing to concede in negotiations. Another factor Russians feel wary about is that Trump’s narcissistic problems will add a component of stubbornness to the already overwhelming suspicions that he is badly informed about both the realities of Russia and also has a weak grasp of the many problems of his own country. We are reminded that facts do not rule Washington diplomacy, mythology does. He is only sure about his own goals – again, “America First” is going to be the style – and he will be prepared as well as this allows. Again this is problematic for success.  The Russians, on the other hand will have a better understanding of both American problems and what they need for their own national security concerns. Trump has not failed yet at a major summit and it he will need, in my opinion, a failure or two in this area in order to bring to him a better sense of realities.

This 2-part audio interview was posted on the audioboom.com Internet site on Tuesday — and I though it best to wait until today’s column for the usual length and content reasons.   As always, I thank Larry Galearis for his always excellent executive summary — and closing commentary.  Each part is about twenty minutes long — and the link to Part 1 is in the headline and here — and the link to Part 2 is here.


No 5th Column in the Kremlin? Think again! — The Saker

Following the re-appointment of Medvedev and his more or less reshuffled government, the public opinion in Russia and abroad was split on whether this was a good sign of continuity and unity amongst the Russian leadership or whether this was a confirmation that there was a 5th column inside the Kremlin working against President Putin and trying to impose neo-liberal and pro-western policies on the Russian people. Today I want to take a quick look at what is taking place inside Russia because I believe that the Russian foreign policy is still predominantly controlled by what I call the “Eurasian Sovereignists” and that to detect the activities of the “Atlantic Integrationist” types we need to look at what is taking place inside Russia.

The Russian 5th column and its typical operations

First, I want to begin by sharing with you a short video translated by the Saker Community of one of the most astute Russian analysts, Ruslan Ostashko, who wonders how it is that a rabidly pro-western and vociferously anti-Putin radio station named “Ekho Moskvy” manages not only to elude normal Russian legislation, but even gets money from the gas giant Gazprom, which is majority owned by the Russian state. Ekho Moskvy is also so pro-Israeli that it has earned the nickname “Ekho Matsy” (Ekho Moskvy means “Echo of Moscow” whereas “Ekho Matsy” means “Echo of the Matzo”). Needless to say, that radio has the unwavering and total support of the U.S. Embassy. It would not be an exaggeration to say Ekho Moskvy serves as an incubator for russophobic journalists and that most of the liberal pro-western reporters in the Russian media have been, at one time or another, associated with this propaganda outfit. In spite of this or, more accurately, because of this, Ekho Moskvy has been bankrupt for quite a while already, and yet – it continues to exist. Just listen to Ostashko’s explanations (and make sure to press the ‘cc’ button to see the English language captions)…

This longish, but interesting commentary from the Saker was posted on his Internet site on Friday sometime — and I’ve only skimmed it.  I’ll read the rest of it this weekend.  It’s another offering from Larry Galearis — and another link to it is here.


Price drop spurs India gold demand, buyers eye bigger dips

Gold demand improved this week in India as prices fell to their lowest level in nearly three months, while demand elsewhere in Asia remained tepid as investors waited for prices to fall further.

There is modest rise in demand from jewellers, but still gold is trading at a discount,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.

Dealers in India were offering a discount of up to $2 an ounce over official domestic prices this week, compared with a premium of $1 last week. The domestic price includes a 10 percent import tax.

Improving retail demand is giving jewellers some confidence. They are placing small orders,” said a Mumbai-based dealer with a private bullion importing bank, adding “falling rupee is still confusing some.

This gold-related Reuters news item, co-filed from Mumbai and Bengaluru, put in an appearance on their website at 4:38 a.m. EDT on Friday morning — and I found it on the Sharps Pixley website.  Another link to it is here.


Silver denarius of Augustus shows famous celestial event

A famous celestial event of antiquity was recorded on an ancient coin.

A silver denarius of Augustus (also known as Caesar Augustus), issued circa 19 to 18 B.C., depicts the so-called Julian star.

The wreathed head of Augustus graces the obverse.

The reverse of the coin shows the “Julian Star,” a bright comet that appeared in the heavens during the summer of 44 B.C., a few months after the assassination of Julius Caesar (March 15, 44 B.C.).

Based on eyewitness descriptions, the comet was clearly visible in the daytime, making it one of the brightest comets on record, the auction firm said. It has never reappeared and may have been destroyed on a suicidal dive into the sun.

The ancients did not understand the nature of comets as celestial ice balls moving within our Solar System, and the apparition was held to signal the ascension of Caesar’s soul to the heavens,” according to the catalog. “This proved quite useful in Octavian’s effort to get the Senate to deify his adoptive father. During his later reign as Augustus, he made extensive use of the comet in state propaganda.”

This news item, complete with a nifty photo, showed up on the coinworld.com Internet site on Friday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the whistling heron, a bird I ran across when I was researching the great white heron/great egret in Friday’s column. It hails from South America — and is not very big…60 cm tall maybe — and a bit over a kilo in weight.


The WRAP

Note: This quote from Ted is from his weekly review last Saturday…a week ago today.

It has now become obvious to me that JPMorgan has embarked on a concerted plan to buy back as many of its gold short positions from other commercials (raptors) as possible over the past month — and not from managed money traders, because the lower prices required to trigger managed money selling would have also attracted raptor buying competition for JPM. By allowing gold prices to trade up to, but not penetrating the key moving averages in gold, JPM was able to buy from the raptors without tripping off managed money buying.

At the same time, due to different market circumstances in silver, while JPMorgan was able to buy back important quantities of gold shorts without much of a gold rally, the silver market realities were such that JPM couldn’t do the same in silver and, in fact, had to resort to selling short silver to keep the price capped while it pulled off its gold short covering. You’ll recall that over the past month (not including the latest reporting week), JPMorgan was the biggest silver short seller, adding 20,000 new shorts, while it was buying back gold shorts. JPM had no choice – it had to cap the price of silver if it hoped to keep gold below its moving averages and buy back gold shorts from the raptors.

With this [past] week’s buyback of both gold and now silver shorts, it appears that JPMorgan is now close to completing its double cross of other commercials in both metals. It is possible for JPM to buy back more of its short positions in both metals at lower prices, but that would require managed money selling, which in turn, would bring out more raptor buying — and buying competition for JPM. In gold, with the managed money net long position at two year lows — and a giant increase in managed money short selling this past reporting week, there wouldn’t appear to be much more managed money selling capacity left.Silver analyst Ted Butler: 23 June 2018


Today’s pop ‘blast from the past’ is one I’ve posted before, but it’s been at least a year or more, so it’s time for a revisit.  It was a monster hit back in 1978 — and is one of those timeless classics that just about anyone can identify right from the opening bar.  The link is here.

The summer solstice in the northern hemisphere was a bit over a week ago — and I forgot all about it for last Saturday’s column.  So here is Italian composer Antonio Vivaldi’s Concerto No. 2 in G minor, Op. 8 RV315 “L’estate” [Summer] which he composed around 1721 — and published in Amsterdam in 1725.  The soloist in this recording is Mari Silje Samuelsen — and the link is here.


I’m not sure much, if anything, should be read into Friday’s precious metal price action, or lack thereof.  But I was less than amused that ‘da boyz’ showed up to put out the precious metal rallies that began at 10:30 a.m. CST — and ended at the afternoon gold fix in in Shanghai.  Volumes were very elevated during that period — and it was obvious that they were throwing whatever COMEX paper at those rallies to ensure that they went away.  After that, gold and silver et al, were basically on ‘care and maintenance’ during the remainder of the Friday session, despite the big decline in the dollar index that was ongoing as the trading day moved along.

But as you already know, dear reader, what’s happening in the currency markets becomes irrelevant when JPMorgan et al are out and about in the COMEX futures market — and we’ve seen ample evidence of that over the last two weeks.

Here are the 6-month charts for all four precious metals, plus copper.  A new intraday low was set in platinum yesterday, along with a tiny new closing low in copper for this move down as well.  The ‘click to enlarge‘ feature helps a bit with the first four.

Not a thing has changed since last week.  The emerging markets are still a mess, both economically and monetarily — and this rising dollar index thingy is only exacerbating the situation for all of them.

Closer to home, there’s lots of happy talk, most of which is of the “whistling past the graveyard” variety.  A look under the hood in the ‘developed world’ economies, regardless of which side of the Atlantic or Pacific you choose, reveals a string of Potemkin villages that no longer fools anyone.  Only central bank largess of endless asset and bond purchases has prevented the implosion of the world’s economic, financial and monetary system.

It is long past being saved — and removal of any of the supporting structure will bring instant contagion, along with equally instant liquidity issues.  The problems with emerging markets are but the thin edge of that wedge — and it will get thicker in a hurry if things continue on as they are.

So, with one eye on a seemingly intractable financial and monetary situation not only in the U.S…but world wide…I’m trying to figure out where JPMorgan fits into all of this, along with their absolutely manic efforts to cover as many of their short positions in gold [and the other precious metals] as they can. They’re certainly doing it for a reason, but a reason not know to us, at least not yet.

I suspect, as I said earlier, that what we’re witnessing is most likely their “last swing for the fences” — and at some point in the not-very-distant future, this price management scheme will come to a rather abrupt end.

JPMorgan would certainly be one of the first to know that — and getting its house in order in preparation for that moment, would be at the top of their “to do” list.  Sticking it to everyone else will be a casualty of such an event — and JPMorgan is never known to come out on the losing end of anything.  They are, as Jim Rickards has said in the public domain on more than one occasion over the years…”the biggest criminal organization the world has ever known“.

So, as I’ve said on more than one occasions, if this scenario I’ve painted is close to being correct, then all we can do is await the ‘event’ that triggers it — and hope that we survive whatever the power-that-be/deep state have prepared for us.

And on that rather unhappy note, I’m done for the day — and the week — and I’ll see you here on Tuesday.

Ed

New Intraday Lows Set in Both Gold and Platinum Yesterday

22 May 2018 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price chopped quietly lower, as the dollar index ‘rallied’ during Far East trading on their Monday.  Once the 2:15 p.m. CST afternoon gold fix was put to bed in Shanghai, ‘da boyz’ took gold down to its low tick of the day, which came minutes after the London open.  It chopped quietly higher from there — and any rally attempt that looked remotely serious, was dealt with in the usual manner.  It even gained a bit in the thinly-traded after-hours market — and was allowed to close up a few dimes on the day.

The low and high ticks really aren’t worth looking up, but here they are anyway…$1,281.20 and $1,292.00 in the June contract.

Gold was closed in New York on Monday at $1,292.20 spot, up 30 cents from Friday.  Net volume at the London open on their Monday morning, which was almost it’s low price tick of the day, was pretty hefty at 85,000 contract — and net volume for the entire Monday session was a bit under 258,500 contracts, plus a bit over 56,000 contracts worth of roll-over/switch volume on top of that.  It should be carefully noted that JPMorgan et al set a new intraday low in gold for this move down.

Silver was down about 7 cents by 11 a.m. China Standard Time yesterday morning — and it proceeded to trade virtually ruler flat from there until just before 1:30 p.m. CST.  Then it was sold lower as well — and ‘da boyz’ set the low tick of the day in silver the same time as they did for gold…minutes after the London open.  Like gold, silver began to rally from that juncture — and really took off shortly after the COMEX open in New York.  But ‘da boyz’ where there to ensure it didn’t get far – and by the afternoon gold fix in London, had the price back in line.  It inched quietly higher until late in the after-hours trading session — and then didn’t do much after that.

The low and high ticks in silver were recorded by the CME Group as $16.28 and $16.535 in the July contract.

Silver finished the Monday session at $16.49 spot, up 6.5 cents from Friday’s close.  Net silver volume at the London open, silver’s low tick, was 11,800 contracts — and for the complete Monday session, it was a tiny bit under 58,000 contracts, plus a hair over 5,000 contracts worth or roll-over/switch volume as well.

It should come as no shock that ‘da boyz’ set platinum’s low price tick at the same time as they did for silver and gold.  It only recovered a few dollars after that, but once the COMEX opened…away it went.  At 1 p.m. in New York, the platinum market appeared to go ‘no ask’ — and the short sellers of last resort had to step in to provide the necessary “liquidity” the moment the price touched $900 spot…or heaven only knows what platinum would have closed at if they hadn’t.  The price wasn’t allowed to do much after that, but did rally almost back to its high of the day in the very thinly-traded after-hours market.  Platinum was closed at $899 spot, up $14 on the day.  JPMorgan et al set a new intraday low in platinum for this move down at the Zurich open yesterday.

And ditto for palladium’s low tick.  But from that low, it chopped very quietly higher until minutes after the Zurich close.  Then the price activity got far more lively and, once again, JPMorgan et al had to show up as short sellers of last resort, or palladium would have blasted back through $1,000 spot like a hot knife through soft butter.  It was sold down a bunch of dollars into the COMEX close, then, like platinum, it rallied a small handful of dollars into the 5:00 p.m. EDT close of trading.  Palladium finished the Monday session at $988 spot, up 26 bucks on the day.  Palladium rallied above — and closed above, both its 50 and 200-day moving averages yesterday.

The dollar index closed very late on Friday afternoon in New York at 93.67 — and when trading began shortly before 6 p.m. EDT on Sunday afternoon in New York, it continued to rally quietly but unsteadily higher from its London open low on Friday morning.  The 94.06 high tick of the day came at precisely 9:00 a.m. BST in London trading on their Monday morning, which was about forty-five minutes after the low ticks in all four precious metals were set by ‘da boyz’ — and all four were headed higher by then.  The index began to chop lower from there, but at exactly 10:00 a.m. EDT…the afternoon gold fix in London…someone goosed the dollar index.  The respite in the dollar index decline ended shortly before London closed — and it chopped steadily lower until the 93.51 low tick of the day was set around 4:30 p.m. in New York.  It traded flat from there into the close.  The dollar index finished the Monday session at 93.52 — and down 15 basis points from Friday.

The ‘rally’ in the dollar index looked just as manufactured as the low ticks in the precious metals.

Here’s the intraday dollar index for Monday, so you can see the precision of those turning points for yourself.

And here’s the 3-day dollar index, so you can see the trading on Sunday evening in New York — and Monday morning in the Far East.

And here’s the 6-month U.S. dollar index.  After yesterday’s currency action, this dollar index rally is looking rather shaky — and very overbought.  So it remains to be seen how much more support those ‘gentle hands’ are going to provide going forward.

The gold shares opened about unchanged — and then for no reason that made sense to me, sank to their respective lows by 11 a.m. EDT in New York trading.  They rallied from there — and back to unchanged by a few minutes before 2 p.m. — and then didn’t do a thing after that.  The HUI closed lower by 0.03 percent, so call it unchanged.

It was mostly the same for the silver equities, although their rallies lasted until 2:30 p.m. — and were in positive territory by a reasonable amount.  They chopped sideways from there until some kind soul dumped a fairly large position into the market around 3:25 p.m. EDT — and dropped the stocks back to barely above unchanged on the day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.34 percent.  Click to enlarge if necessary.

Here’s the 1-year Silver Sentiment/Silver 7 Index from Nick.  Click to enlarge as well.

The CME Daily Delivery Report showed that 35 gold and 13 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, ADM issued 32 — and Advantage the other 3…both from their respective client accounts.  There were six long/stoppers in total.  JPMorgan was in first spot with 19 contracts — and R.J. O’Brien and Advantage were tied in second spot with 6 contacts each.  All contracts stopped involved everyone’s client account.  In silver, the two short/issuers were ABN Amro and Advantage with 11 and 2 contracts.  The largest long/stopper was HSBC USA with 8 — and JPMorgan and Advantage were tied in second spot with 2 contracts each.  All issued and stopped contracts involved everyone’s 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 May rose by 5 contracts, leaving 92 still around, minus the 35 mentioned just above.  Friday’s Daily Delivery Report showed that 1 gold contract was actually posted for delivery today, so that means that 1+5=6 more gold contracts were added to the May delivery month.  Silver o.i. in May declined by 14 contracts, leaving 172 still open, minus the 13 contracts mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 27 silver contracts were actually posted for delivery today, so that means that another 27-13=14 silver contracts were added to May.


There was a decent sized withdrawal from GLD yesterday, as an authorized participant took out 104,243 troy ounces.  There were no reported changes in SLV.

There was a decent-sized sales report from the U.S. Mint for a change.  They sold 4,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 230,000 silver eagles.  Considering the current price action, I would suspect that purchases of this size weren’t made by John Q. Public.

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

There wasn’t must activity in silver, although JPMorgan picked up another 150,483 troy ounces, which was all the ‘in’ activity there was.  That’s the third 150,000 troy ounce deposit into JPMorgan in the last week — and Ted was wondering why such strange amounts.  So was I.  There was 135,289 troy ounces shipped out…80,092 troy ounces from Canada’s Scotiabank — and 55,197 troy ounces from Malca-Amit USA.  The link to that activity is here.

It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They reported receiving 5,791 of them — and shipped out only 116.  All of this action was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are the usual two charts that Nick Laird passes around on the weekend.  They show the transparent gold and silver holdings of all known depositories, ETFs and mutual funds, updated as of the close of business last Friday.  Gold is up a tiny bit from last week — and the reason for the big decline in silver is because of a 3.6 million ounce withdrawal from SIVR, the worlds’ second-largest silver ETF, during the reporting week…something that Ted Butler pointed out in his weekly commentary on Saturday.  Click to enlarge for both.

I have quite a few stories for you today.


CRITICAL READS

Are Americans The “Bad Guys”?  — Bill Bonner

After the fall of the Berlin Wall, the U.S. stood alone. It was the “end of history,” as one public intellectual proposed.

America was #1 – the ne plus ultra of the 20th century. By comparison, the whole rest of the world was just one big “sh*thole.” And the U.S. could blast any part of it back to the Stone Age.

Power was unbalanced and disproportionate. It was take… with no give. It was live… but not letting the other guy live.

We could invade Iraq, but the Iraqis couldn’t invade us. We could target extremists for drone assassination while we slept in peace.

And why not?

Paraphrasing former Secretary of State, Madeleine Albright: “What good was it to have so much power if we didn’t use it?

Therein lay the fatal temptation…

This very worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.


Credit Card Delinquencies Spike Past Financial-Crisis Peak at the 4,788 Smaller U.S. Banks

In the first quarter, the delinquency rate on credit-card loan balances at commercial banks other than the largest 100 – so at the 4,788 smaller banks in the US – spiked in to 5.9%. This exceeds the peak during the Financial Crisis. The credit-card charge-off rate at these banks spiked to 8%. This is approaching the peak during the Financial Crisis.

A sobering set of numbers the Federal Reserve Board of Governors released this afternoon.

But overall, across all commercial banks, including the largest banks with the largest credit-card loan balances outstanding, the delinquency rate was 2.54% (not seasonally adjusted). This overall rate was pushed down by the largest 100 banks, whose combined delinquency rate in Q1 was 2.48%.

These large banks have been offering appealing incentives to consumers for years, and they’ve been going after consumers with the higher credit ratings, and they’ve been following good underwriting practices – having not yet forgotten the lesson from the last debacle – and this conservative approach is now helping to keep losses down.

This commentary by Wolf Richter put in an appearance on the wolfstreet.com Internet site last Friday sometime — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Maduro wins another term as Venezuela’s president

Nicholas Maduro has won reelection in an election process that the U.S. and its allies refuse to acknowledge as legitimate, together with the Venezuelan opposition candidate, Henri Falcon. Maduro won with over 68% of the popular vote, while Falcon received considerably less.

Falcon, perhaps taking a cue from Hillary Clinton, seems as if he just won’t concede the fact that the people of Venezuela just didn’t want him to govern them.

This election was something like a battle between Washington and the people of Venezuela. Washington has long considered that no election in Venezuela can be considered legitimate unless the outcome is for a pro-Washington candidate.

In this case, Falcon appears to be Washington’s man, and reports of the U.S. State Department and other politicians slamming the outcome of this election installing a patriotic candidate, saying that the elections were somehow rigged or illegitimate will be hitting the headlines of mainstream media outlets right and left. Despite the fact that the elections process entertained many international observers…

This news item showed up on theduran.com Internet site at 10:24 a.m. EDT on Monday morning — and it comes to us courtesy of Roy Stephens.  Another link to it is here.  There was a companion story about Venezuela that I picked up on Zero Hedge.  It’s headlined “Trump Bars Purchases of Debt, Receivables Owed to Venezuela, PDVSA“.


Investing in Collapse — Jeff Thomas

For years, I’ve been writing about Venezuela, describing it as the “movie” by which we can view the future of other jurisdictions that are presently in decline.

The reason is that declining nations follow the same pattern, time and time again, over the centuries. This is not coincidence. The pattern exists because human nature never changes, regardless of the era or the locale. Political leaders make the same mistakes as their forebears, and the people of a nation react in kind.

For this reason, countries have a sort of “shelf life.” They rise in prominence, due to work ethic and productivity. They then go through a period of abundance, which eventually deteriorates, due to complacency and apathy. Finally, they collapse into a period of bondage.

If we recognize that this pattern has played out countless times over the millennia, we can track any given country and assess where it is at present, in the pattern. For example, Europe and North America are presently in the last stages prior to collapse, Venezuela is in the process of collapse and Cuba is in the post-collapse recovery.

This very interesting commentary by Jeff showed up on the internationalman.com Internet site early on Monday morning EDT — and another link to it is here.


Germany will ‘fight’ for its interests in face of Trump’s ‘America First’ policy, says Economic Minister

It’s no secret that Germany has many deep ties with America that seem to be completely unbreachable. But in the face of Trump’s ‘America first’ policy, those ties are feeling some strain. America first, by definition, means that America’s interests, across all sectors, get the top priority above those of all others, and even in spite of them, with heavy emphasis on the ‘spite’ part.

The manner in which Trump’s foreign policy has progressed during his tenure so far indubitably shows forth his loyalty to this program, which perceives that whatever America wants, it will get, regardless of how it impacts others, and everybody else is expected to just grin and bear it.

But that’s not how you treat your friends, and not how a partnership really works. America has a strong social and cultural policy with equality at its base in just about every human perspective and interaction, at least, insofar as the words go, but in action, it’s an ideal that is quickly losing ground on the value of actions, even at a time when equality is taking on a new emphasis in America’s cultural capital of Hollywood.

America’s foreign policy is enacting an approach that sees the world as a global chess game, and every other player is viewed as an opponent to be bested, a game where America wins at the loss of everyone else, the ‘better end of the deal’. It’s completely different from the party line that Washington has put forward for decades, where fairness, equality, and respect were put forward as motivating factors for international activities and agreements, even if, oftentimes, America still acted like it was purely out to advance its own interests. America still put on a nice face with nice words as a costume for their self interested global influence.

Today, American actions haven’t really changed all that much, in a way, but what has changed is the philosophy that it overtly advances. Now, under President Donald Trump, it brazenly tells the world that America will do and get what it wants, and everyone else must be good little boys and girls and play along, even if it means that they will lose. In Trump’s mind, it’s called ‘winning’, and in order to win, someone must lose.

Even America’s strongest allies have been reluctant to acknowledge America’s self interested global policies, because as long as they got something for it, they were okay with it. But lately, they’re not getting as much for it, if anything at all.

This longish, but worthwhile commentary was posted on theduran.com Internet site at 6:52 a.m. EDT on Saturday morning — and I thank Larry Galearis for pointing it out.  Another link to it is here.


European national sovereignty under threat over Iran — Eric Zuesse

They need to decide whether they seek a world of nations that each is sovereign over its own territory but over no other (and this would not be a world at war); or whether they seek instead a world in which they are part of the American empire, a world based on conquests — NATO, IMF, World Bank, and the other US-controlled international institutions — and in which their own nation’s citizens are subject to the dictatorship by America’s aristocracy: the same super-rich individuals who effectively control the U.S. Government itself (see this and this — and that’s dictatorship by the richest, in the United States).

Iran has become this fateful fork-in-the-road, and the immediate issue here is America’s cancellation of the Iran nuclear deal that America had signed along with 6 other countries, and America’s consequent restoration of economic sanctions against Iran — sanctions against companies anywhere that continue trading with Iran. First, however, some essential historical background on that entire issue:

The U.S. aristocracy overthrew Iran’s democratically elected Government in 1953 and imposed there a barbaric dictatorship which did the bidding of the U.S. and allied aristocracies, by installing the Pahlavi Shah there, just as they had earlier, in 1932, installed the Saud King in Saudi Arabia — which land never ever had known democracy.

As Wikipedia says of Ibn Saud, who became King in 1932, “After World War I, he received further support from the British, including a glut of surplus munitions. He launched his campaign against the Al Rashidi in 1920; by 1922 they had been all but destroyed,” with Britain’s help. Similarly, the U.S. and its British Imperial partner installed Pahlavi as Iran’s Shah in 1953. This was done by U.S. President Dwight David Eisenhower.

This is another longish but worthwhile commentary from theduran.com Internet site.  This one was posted there at 12:20 a.m. on Monday morning EDT — and I thank Roy Stephens for this one as well.  Another link to it is here.


Hilarity in NIRP Zone: Italian 2-Year Yield Still Near 0%, as New Government Proposes Haircut for Creditors and Alternate Currency, Markets on “Knife Edge” — Wolf Richter

The ECB’s Negative Interest Rate Policy has been the funniest monetary joke ever.

The distortions in the European bond markets are actually quite hilarious, when you think about them, and it’s hard to keep a straight face.

Italian assets were pummeled again on mounting concern over the populist coalition’s fiscal plans, with the moves rippling across European debt markets,” Bloomberg wrote this morning, also trying hard to keep a straight face. As Italian bonds took a hit, “bond yields climbed to the highest levels in almost three years, while the premium to cover a default in the nation’s debt was the stiffest since October,” it said. “Investors fret the anti-establishment parties’ proposal to issue short-term credit notes – so-called ‘mini-BOTs’ – will lead to increased borrowing in what is already one of Europe’s most indebted economies.

This comes on top of a proposal by the new coalition last week that the ECB should forgive and forget €250 billion in Italian bonds that it had foolishly bought.

The proposals by a government for a debt write-off, and the issuance of short-term credit notes as a sort of alternate currency are hallmarks of a looming default and should cause Italian yields to spike into the stratosphere, or at least into the double digits.

And so Italian government bonds fell, and the yield spiked today, adding to the prior four days of spiking. But wait…!!!

This amazing article by Wolf Richter appeared on the wolfstreet.com Internet site on Monday sometime — and falls firmly into the “you can’t make this stuff up” category.  It’s certainly worth reading if you have the interest — and I thank Richard Saler for bringing it to our attention — and another link to it is hereZero Hedge had a parallel news item on this headlined “Italian bonds, banks bloodbath as ‘Mini-BoT’ massacre continues“.


God Help Turkey“: FX Confiscation Rumors Launch Lira Meltdown as Yields Explode

While Turkey may have repatriated all of its gold held at the New York Fed, or at least moved it from New York to the BIS tower in Basel as we reported overnight, what markets are far more concerned about is the ongoing inactivity by the central bank to arrest the record collapse in the Turkish Lira and the just as record surge in Turkish 10Y yields, which in light of Erdogan’s threats on the “independent” central bank, which is now terrified to hike rates, is perhaps understandable.

It is therefore also understandable why, as Bloomberg reports this morning, one brokerage is looking for help from a higher power: “God help Turkey” Istanbul-based broker Alnus Yatirim said in the sign-off to its morning note to clients on Monday. “We’re faced with a central bank that is watching the market when it needs to lead and direct it.”

Yatirim has a point: on today’s Bloomberg EM Bloodbath chart, the TRY is once again the worst performing currency against the USD…

The brokerage predicted that the TRY could fall to 4.58 per dollar by the end of this week – or rather the start as it is already there now, give or take – and 4.75 next week.

The market is testing whether the central bank’s verbal interventions are a bluff or not, Alnus said. Without policy action, the damage is likely to spiral, it said, citing the $222 billion of net debt held by Turkish non-financial companies in overseas currencies. Each 1 cent depreciation in the currency adds about 5 billion liras to the cost of Turkey’s foreign borrowings, it said.”

Adding to an already dire picture, overnight rumors emerged that the government will seize foreign currency deposits although Turkey’s banking regulator chief Mehmet Ali Akben said such speculation is “absurd,” Sabah newspaper reported. “Such a decision is neither discussed or a work has been done on it” he said noting that banks’ rollover ratio is around 110%, and adding that they have no problem in foreign borrowing (“for now” he forgot to add).

This Zero Hedge news story was posted on their website at 10:22 a.m. yesterday morning EDT — and it’s the second contribution in a row from Richard Saler.  Another link to it is here.  A brief parallel piece showed up on the Bloomberg website very late yesterday morning Denver Time — and it’s headlined “Greece Moves Closer to Bailout Exit After Deal With Creditors“.  I thank Swedish reader Patrik Ekdahl for that one.


Tehran eyes path ahead after U.S. withdrawal from nuclear pact — Pepe Escobar

The Trump administration’s withdrawal from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), has monopolized the highest levels of government in Tehran around the clock since the decision was announced on May 9.

Prime Minister Mohammad Javad Zarif, who met yesterday with the European Union’s energy chief Miguel Arias Canete, reiterated that mere words of support from the Europeans are not enough. The JCPOA joint commission meets in Vienna this coming Friday to analyze all options ahead.

EU diplomats in Brussels told Asia Times that, contrary to rumors, the European Union is not considering offering financial aid to Tehran in exchange for concessions towards a possible new nuclear deal.

What Brussels is desperate to achieve before the first U.S. sanctions kick in from August is to devise a mechanism to contest the dominance of extraterritorial American law – and reassure President Hassan Rouhani, who allegedly has “limited” trust that France, Britain and Germany will affirm an independent foreign policy.

Tehran, meanwhile, is considering conducting all its trade and commercial transactions in euro and yuan.

This commentary by Pepe put in an appearance on the Asia Times Internet site at 4:59 p.m. Hong Kong time on their Monday afternoon, which was 4:59 a.m. EDT in Washington on the same day — EDT plus 12 hours.  I thank Tolling Jennings for sharing it with us — and another link to it is here.


Strongest sanctions in history’: Pompeo issues 12 demands to Iran, vows ‘unprecedented pressure

Tehran will struggle to “keep its economy alive” if it does not comply with a list of 12 U.S. demands, including Iranian withdrawal from Syria, Secretary of State Mike Pompeo vowed on Monday.

Speaking at the Heritage Foundation, a right-wing Washington think tank, Pompeo laid out a list of 12 “basic requirements” for Iran. The demands call on Iran to withdraw from Syria, “release all U.S. citizens,” end support for Houthi rebels in Yemen, stop “enrichment” of uranium, and promise never to process plutonium. Iran must also allow “unqualified access to all nuclear sites throughout the country,” Pompeo said.

He promised that the U.S. would impose the “strongest sanctions in history” if Iran failed to comply with these demands.

Pompeo said that “the sting of sanctions will be painful” and Iran will struggle to “keep its economy alive” if Tehran “does not change its course from the unacceptable and unproductive path it has chosen.”

Thanks to our colleagues at the Department of Treasury, sanctions are going back in full effect and new ones are coming … These will indeed end up being the strongest sanctions in history,” Pompeo said.

The secretary of state also pledged that the U.S. “will track down Iranian operatives and their Hezbollah proxies operating around the world, and we will crush them. Iran will never again have carte blanche to dominate the Middle East.”

Speaking directly to the Iranian people, Pompeo claimed that “President [Hassan] Rouhani and Foreign Minister [Javad] Zarif… are your elected leaders. Are they not the most responsible for your economic struggles?” He added: “The United States believes you deserve better.”

Pompeo also said he’s sure that over time, Washington’s allies will warm to the Trump administration’s now unpopular stance on Iran.

Spoken like the true sociopathic/psychopathic deep state personality type the he is. This news story appeared on the rt.com Internet site at 1:31 p.m. Moscow time on their Monday afternoon, which was 6:31 a.m. in Washington — EDT plus 7 hours.  I thank Patrik Ekdahl for bringing it to our attention — and another link to it is here.  There was a UPI article about this headlined “Mike Pompeo vows to place ‘strongest sanctions in history’ on Iran”  — and I thank Roy Stephens for pointing it out.


U.S. and China agree to abandon trade war

The announcement came after high-level talks in the U.S. capital and followed months of tensions over what President Donald Trump has blasted as an unfair commercial relationship between the two economic giants.

Vice-Premier Liu He, who led Chinese negotiators in Washington said: “The two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other,” state-run news agency Xinhua reported Sunday.

Liu called the agreement a “necessity”, but added: “At the same time it must be realised that unfreezing the ice cannot be done in a day, solving the structural problems of the economic and trade relations between the two countries will take time.”

An earlier joint statement issued in Washington said Beijing would “significantly” increase its purchases of American goods, but offered few details.

This was the surprise story of the weekend.  This news item put in an appearance on the france24.com Internet site on Sunday sometime — and I thank Roy Stephens for sending it our way.  Another link to it is here.  Patrik Ekdahl sent along a companion piece to this from the BBC — and it’s headlined “U.S. and China halt imposing import tariffs“.


Russia continuing to increase gold reserves…adds 18.66 tonnes in April — Lawrie Williams

Despite U.S. sanctions impacting on some elements of Russia’s foreign trade, the country’s central bank is continuing with its seemingly inexorable increase in its gold reserves.  Indeed recent reports suggest that, in part because of the strong oil price the country is currently running a balance of payments surplus regardless which it may well turn into gold – particularly as the nation’s annual gold production level is seen as increasing as well – even if global gold output is flat or falling!  There may also be a political element involved in turning to gold, and reducing reliance on U.S. dollars in its forex reserves.

In April, therefore, the country’s central bank reports adding the rounded figure of 600,000 ounces (or 18.66 tonnes) to its gold reserve total bringing the overall figure as will be reported to the IMF (Russia is one of the few countries reporting its gold reserve changes on a month by month basis) to around 1,909.5 tonnes – the world’s fifth largest reported national holding and now some 67 tonnes higher than China’s reported holding.  However we remain extremely sceptical about the Chinese figure as stated given that the Asian dragon has reported zero increases in its reserves for fully 18 successive months (See: China’s official gold reserves unchanged – again).  We think the Chinese position, as reported, extremely unlikely – indeed the country has a strong past track record of only reporting its reserve increases at multi-year intervals.

This gold-related story by Lawrie was posted on the Sharps Pixley website on Saturday sometime — and another link to it is here.


Gold frequently disappoints Jim Grant, but does he understand why?

Interviewed this week by the TF Metals Report‘s Craig Hemke for the “Ask the Expert” segment at Sprott Money News, James Grant of Grant’s Interest Rate Observer, an advocate of gold, said he doubts that central banks intervene against the price of the monetary metal. Grant’s comments on gold in the interview begin at the 13:20 mark here.

Grant’s comments were disappointing…first for their inconsistency — and second for indicating ignorance of basic details.

The gold price, Grant said in the interview, is the reciprocal of faith in central banking, and he recalled that former Federal Reserve Chairman Paul Volcker once remarked to him that, for this very reason, he was always rooting for the gold price to go down.

But Grant added that he doesn’t think central banks even care about gold anymore, and that the risk central banks would assume in intervening against gold would be much worse than any benefit they would get from it. He said that as an investor in gold he is always expecting a higher price and is frequently disappointed.

Grant is generally acknowledged to be a brilliant guy, so might there be powerful reasons for the gold price not to be performing up to his expectations?

Grant knows perfectly well that that the gold price is being managed, but would never say a word about it when he’s being interviews by the main stream media, as he knows what would happen if he did.  He’d never be invited back.  This worthwhile commentary by GATA secretary/treasurer Chris Powell showed up on their Internet site on Saturday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

I’m always surprised at how quickly waterfowl include me as part of the scenery once I’ve sat quietly for a few minutes — and it’s amazing what will swim by, or come on shore in front of me.  Of course I had to sneak up on the pair or redhead ducks in the first shot, but the male blue-winged teal acted like I wasn’t even there.  Click to enlarge for both.


The WRAP

I commented in my Saturday missive that I was somewhat disappointed that JPMorgan et al didn’t take gold down to a new intraday low during Friday’s trading day, because they were within dimes of doing so.  But they waited until Monday in Far East trading to do it instead.  Now that it’s “mission accomplished”…it remains to be seen if they will push the price even lower to get more Managed Money long selling — and short buying.  They may, but if I had to bet the usual hypothetical ten bucks on that, I’d say that they’re done, although I certainly reserve the right to be wrong about that.  But the fact that they allowed the gold price to close in positive territory means that my theoretical bet appears pretty safe.  And as I’ve already pointed out, ‘da boyz’ set a new intraday low in platinum as well, so they’ve got the Managed Money traders even deeper on the short side in that precious metal as well.

The other thing worth mentioning is that JPMorgan et al halted silver’s rally right at its 50-day moving average — and I was also very encouraged by the share price action in both precious metals yesterday.

Here are the 6-month charts for all four, plus copper and WTIC — and you can review yesterday’s price action for yourself.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was sold off a few dollars in Tuesday morning trading in the Far East — and is down $3.60 the ounce at the moment.  Silver has followed a similar price path, of course — and it’s down 5 cents.  Ditto for platinum…it’s down 4 bucks, but palladium has rebounded from down a few dollars — and is now sitting at unchanged as Zurich opens.

Net HFT gold volume is a bit over 54,000 contracts — and there’s about 4,100 contracts worth of roll-over/switch volume as well.  Net HFT silver volume is 8,100 contracts — and there’s about 425 contracts worth of roll-over switch volume in that precious metal.

The dollar index declined a bit in early morning trading in the Far East — and its current 93.48 low tick was set around 8:40 a.m. CST on their Tuesday morning — and then didn’t do much until precisely 2:00 p.m. China Standard Time on their Tuesday afternoon.  It has jumped higher since then — and it’s now up 17 basis points as London opens.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report.  Based on the first four days of the reporting week that ended yesterday, there certainly will be improvements in the commercial net short positions in both gold and silver…plus platinum.  Let’s hope it remains that way for the remainder of the Tuesday session.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that the gold price has rallied a bit since London opened — and is only down 30 cents currently. It’s the same for silver — and it’s now up 4 cents. Platinum is now up a dollar — and palladium is up 5 bucks, but obviously running into ‘resistance’.

Gross gold volume is a bit over 85,000 contracts now — and net of roll-over/switch volume, net HFT gold volume is a bit over 74,000 contracts. Net HFT silver volume is a bit over 11,000 contracts — and there’s 430 contracts worth of roll-over switch volume in that precious metal.

The dollar index’s meteoric rise that started at 2 p.m. CST, crashed and burned starting the moment that London opened — and the dollar index is now down 10 basis points as the first hour of trading over there draws to a close.

As wildly bullish as the COT Report was on Friday, it’s even more wildly bullish now, particularly in silver — and all that we have to do is wait until ‘da boyz’ allow precious metal prices to rally.  At that juncture, we’ll find out pretty quick if JPMorgan turns into the short seller of last resort once again.

That’s all I have for today — and I’ll see you here tomorrow.

Ed

‘Da Boyz’ Stop Another Price Break-Out Dead in Its Tracks

14 March 2018 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price zoomed a bit higher in the first hour and change on Monday evening in New York — and ‘da boyz’ obviously had to step in at that point.  It was sold quietly lower from that juncture — and the low tick was set shortly after 9 a.m. GMT in London.  It inched higher from there until the CPI numbers were released at 8:30 a.m. in New York.  The gold price blasted higher, but that was only allowed to last a few minutes — and it was blasted lower at, or just after, the afternoon gold fix in London, which was 10 a.m. EDT in New York — and obviously 2:00 p.m. GMT, so the LBMA is obviously operating as if it was on British Summer Time [BST] already, in order to be in sync with New York.  The gold price rallied back to its high of the day from there, but was carefully kept below its 50-day moving average — and from shortly before noon EDT, the price chopped sideways into the 5:00 p.m. close.

Despite the activity on the Kitco chart below, the low and high ticks aren’t worth looking up.

Gold was closed in New York on Tuesday afternoon at $1,325.90 spot, up $3.30 on the day.  Net volume was pretty heavy at a hair under 274,000 contracts — and roll-over/switch volume was decent as well, at just under 49,000 contracts.

JPMorgan et al kept the silver price on the same short leash as gold — and for the most part, their price paths were identical.

The low and high ticks were recorded by the CME Group as $16.465 and $16.69 in the May contract.

Silver finished the day at $16.555 spot, up 5.5 cents from Monday’s close.  Net HFT volume was a bit over 66,000 contracts, plus another 3,300 contracts worth or roll-over/switch volume on top of that.

Platinum’s price was managed in the same fashion as gold’s, so I’ll spare you the play-by-play.  It finished the Tuesday session in New York at $964 spot, up 2 bucks.

Palladium, was the outlier, as its rally on the CPI news at 8:30 a.m. EDT was only partially capped — and it continued to chop quietly higher until ‘da boyz’ put the kibosh on it at precisely 12:00 o’clock noon in New York trading.  Then from 1 p.m. onwards, it was sold lower into the close, finishing the day at $985 spot — and up 12 dollars on the day.  It was up 21 bucks at its high — and all set to blast through $1,000 spot until the powers-that-be showed up.

The dollar index closed very late on Monday afternoon in New York at 89.92 — and dipped down to the 89.84 mark at 8:30 a.m. China Standard Time on their Tuesday morning.  It appeared to get saved by the usual ‘gentle hands’ at that juncture — and it ‘rallied’ without enthusiasm to its 90.11 high tick of the day which came right at the 8:00 a.m. GMT London open.  It was back the 90.00 mark by time the CPI numbers hit the tape — and the ‘gentle hands’ appeared about ten minutes later. They appeared again at precisely 10:00 a.m. EDT at the afternoon gold fix in London — and as the dollar index got ramped higher, the precious metals were blasted lower.  That flamed ‘rally’ flamed out about fifteen minutes later — and the dollar index began to fall like a stone once again, with the 89.59 low tick coming at exactly 1:00 p.m.  EDT.  It ‘rallied’ a bit from there, but rolled over again around 4:00 p.m. — and finished the Tuesday session at the 89.68 mark…down 24 basis points on the day.

Yesterday’s dollar price action should leave little doubt in your mind that those ‘gentle hands’ prevented an all out crash in the U.S. dollar index yesterday…and the day before…and last week…last month….etc.

And here’s the 6-month U.S. dollar index which, by now, you should know is pure bulls hit…as is the daily DXY chart…and the Dow…and the precious metals…and interest rates…etc.

The gold stocks rallied until shortly before the afternoon gold fix in London — and then were sold into negative territory as the dollar index ‘rallied’ and the gold price got smacked.  They rallied back into positive territory about an hour later — and made every attempt to stay there, but finally gave up the ghost around 3 p.m. EDT.  They then drifted back into negative territory by a bit going into the end of the trading day.  The HUI finished lower by 0.17 percent.

Not so for the silver equities — and although they got sold lower after the London gold fix/dollar ramp job as well, they never got back below unchanged.  They chopped unsteadily higher for the entire New York trading session after that.  Nick Laird’s intraday Silver Sentiment/Silver 7 Index closed up 1.41 percent — and just about on its high tick of the day.  Click to enlarge if necessary.

And here’s the 1-years Silver Sentiment/Silver 7 Index chart.  Click to enlarge.

The CME Daily Delivery Report showed that 2 gold and 248 silver contracts were posted for delivery within the COMEX-approved warehouses on Thursday.  In gold, the short/issuer was ADM from its client account — and the sole long/stopper was JPMorgan for its client account as well.  But the surprise was in silver, as the two short/issuers that mattered were JPMorgan and Australia’s Macquarie Futures, with 200 and 40 contracts out of their respective in-house/proprietary trading accounts.  There were ten long/stoppers in total — and of that number, there were six long/stoppers of interest…Goldman Sachs and HSBC USA with 65 and 47 contracts for their respective in-house/proprietary trading accounts…and the CME Group with 37 contracts for its own account as well…obviously to be broken down for the 1,000 ounce mini-silver contract, which I’ll get to momentarily.  The last three long/stoppers of note were JPMorgan and Advantage, with 32 contracts each — and both for their respective client accounts.  Lastly comes ADM with 28 contracts for its client account as well.

The 37 contracts stopped by the CME Group were immediately broken up and immediately re-issued as single good delivery bar contracts…1,000 troy ounces each.  37 contracts times 5 bars per contract equals 185 contracts.  They were all stopped by ADM for its client account.

The thing I find surprising about this is that I don’t seem to remember the CME Group ever delivering into the silver mini contract at this time of the month before.  Normally it’s the last, or second from last delivery day — and I’m wondering what the significance of that might be.  Maybe it’s nothing, but I though I’d mention it, because it is out of the ordinary.  The link to yesterday’s Issuers and Stoppers Report is here — and it’s certainly worth a look if you have the interest.


The CME Preliminary Report for the Tuesday trading session showed that gold open interest in March fell by 6 contracts, leaving 537 still open, minus the 2 mentioned just above.  Monday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 6 more gold contracts disappeared from the March delivery month by mutual consent between the short/issuers and long/stoppers involved.  Silver o.i. in March rose by 3 contracts, leaving 402 still around, minus the 248 mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 6 silver contracts were actually posted for delivery today, so that means that 6+3=9 more silver contracts were just added to March deliveries.

There were no reported changes in either GLD or SLV yesterday.

There was a small sales report from the U.S. Mint yesterday.  They sold 145,000 silver eagles — and that was it.

For the second day in a row, there was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.

There was a lot more activity in silver, as 1,227,412 troy ounces were received, but only 24,053 troy ounces were shipped out.  One very large truck load…624,745 troy ounces…was left at Brink’s, Inc. — and the other truck load…602,667 troy ounces…ended up at JPMorgan.  That brought their COMEX silver stash up to a new record of 136.2 million troy ounces.  In the ‘out’ category, there was 20,022 troy ounces shipped out of HSBC USA — and the other 4,031 troy ounces departed CNT.  The link to all this activity is here.

It was a huge day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 9,976 of them — and shipped out another 4,531.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

It was a fairly quiet news day — and I only have a handful of stories for you again today.


CRITICAL READS

Consumer Prices Accelerate As Apparel, Car Insurance Costs Jump

January’s Core CPI spiked rates over 12bps but since then they have fallen back to almost unchanged and rallied into today’s February print, suggesting a miss.

However, February CPI printed higher than January, rising 2.2% YoY as expected. However, Core CPI slowed from January to 1.8% (as expected). Drops in new and used vehicles, food, and fuel prices helped steady the consumer cost rise.

Under the hood, sub-components show a very mixed message…

The index for all items less food and energy increased 0.2 percent in February. The shelter index increased 0.2 percent, with the indexes for rent and owners’ equivalent rent both rising 0.2 percent and the index for lodging away from home unchanged.

The apparel index continued to rise, increasing 1.5 percent in February following a 1.7-percent rise in January. The index for motor vehicle insurance also continued to increase sharply, rising 1.7 percent in February.

This chart-filled Zero Hedge story appeared on their Internet site at 8:39 a.m. EDT on Tuesday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.  There was a Bloomberg item on this headlined “Guts of U.S. CPI Data Show Key Inflation Gauge Weakest in Years” — and I found that in this morning’s edition of the King Report.


Trump replaces Secretary of State Rex Tillerson with CIA chief

Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!” Trump tweeted.

Tillerson just finished a diplomatic trip to Africa and spoke to British Foreign Secretary Boris Johnson Monday, telling him the U.S. government is “outraged” about the poisoning of former Russian spy Sergei Skripal.

White House press secretary Sarah Sanders told reporters Trump had asked Tillerson to step aside.

Tillerson said his job would terminate at midnight March 31 and that he plans to effectively delegate duties to his deputy, John Sullivan, in the meantime.

What is most important is … an orderly and smooth transition,” Tillerson said.

The U.S. ‘deep state’ makes yet another move to consolidate its power.  This UPI article, courtesy of Roy Stephens, showed up on their website at 3:59 p.m. EDT yesterday afternoon — and another link to it is here.  And here’s the spin on this story from the politically incorrect Paul Craig Roberts.  It’s headlined “What Secretary of State Tillerson’s Firing Means” — and it’s certainly worth reading.  It comes to us courtesy of Larry Galearis.


Stephen Hawking dies aged 76

He died peacefully at his home in Cambridge in the early hours of Wednesday, his family said.

The Briton was known for his work with black holes and relativity, and wrote several popular science books including A Brief History of Time.

At the age of 22 Prof Hawking was given only a few years to live after being diagnosed with a rare form of motor neurone disease.

The illness left him in a wheelchair and largely unable to speak except through a voice synthesiser.

Apple’s co-founder Steve Wozniak said: “Stephen Hawking’s integrity and scientific dedication placed him above pure brilliance,”

Satya Nadella, Microsoft chief executive, said: “We lost a great one today. Stephen Hawking will be remembered for his incredible contributions to science – making complex theories and concepts more accessible to the masses.

He’ll also be remembered for his spirit and unbounded pursuit to gain a complete understanding of the universe, despite the obstacles he faced.”

This sad story was posted on the bbc.com Internet site early this morning GMT — and it comes courtesy of Swedish reader Patrik Ekdahl.  Another link to it is here.


Skripal crisis: Russia rejects U.K. ultimatum; demands chemical samples — Alex Mercouris

Russia has now publicly responded to the British government’s ultimatum – set out in Theresa May’s statement yesterday – that unless Russia provides a ‘credible response’ to the British inquiry about Russia’s custody of Novichok chemicals by close of business today, then the British government will treat the attack on Skripal as the action of the Russian state.

Russian Foreign Minister Sergey Lavrov has dismissed Britain’s claim of Russia’s involvement in Skripal’s poisoning as “nonsense”.  He has also said that Britain has refused Russia’s offer of cooperation to solve the case, and has also refused what he called Russia’s “legal request” for samples of the chemical used to attack Skripal so that Russia can carry out its own tests.

Latest reports also say that the Russians have summoned the British ambassador to the Russian Foreign Ministry.

That the Russians have rejected yesterday’s British ultimatum will surprise no-one.  I would however point out how completely bizarre this whole situation has become.

The Russians are being asked to provide proof of their innocence – already a bizarre request – whilst being denied the evidence which supposedly ‘proves’ their guilt.

As usual, not a shred of evidence to back up these accusations.  You couldn’t make this stuff up.  This story was posted on theduran.com Internet site at 3:22 p.m. EDT on Tuesday afternoon — and I thank Roy Stephens for pointing it out.  Another link to it is here.


Russia hits back as Britain gains support over poisoning of former spy Sergei Skripal

Russia has issued a thinly veiled threat after Britain gave it a deadline to answer accusations of involvement in a poisoning attack in Salisbury, but U.S. and E.U. allies have expressed support for Britain condemning the attack.

Prime Minister Theresa May had given Russia until midnight on Tuesday to explain how a Soviet-era nerve agent was used against a former Russian double agent.

Denying it had played any part in the attack, which left 66-year-old former spy Sergei Skripal and his 33-year-old daughter fighting for their lives, Russia said it would ignore the ultimatum until London handed over samples of the nerve agent used and complied with international obligations for joint investigations of such incidents.

Any threats to take ‘sanctions’ against Russia will not be left without a response,” the Russian foreign ministry said in a statement. “The British side should understand that.”

Speaking in an interview on state television, foreign ministry spokeswoman Maria Zakharova warned the U.K. not to threaten Russia.

Bearing in mind what the President [Vladimir Putin] said [in his State of the Nation Address], no-one can appear in his or her country’s parliament to say ‘I give Russia 24 hours,’” she told the Rossiya-1 television channel.

This news item was posted on the Australian website abc.net.au on Wednesday afternoon ‘down under’ time — and I thank Australian reader Garry Robinson for pointing it out.  Another link to it is here.  The Zero Hedge spin on this, which is definitely worth reading, is headlined “Russia Threatens U.K.: “One Does Not Give 24Hrs Notice to a Nuclear Power”” — and I thank Brad Robertson for his final contribution to today’s column.


Hungary’s Central Bank to Repatriate Its Gold From London

The leadership of the Hungarian National Bank (MNB) has decided to bring back home Hungary’s gold reserves.

Up to now, 100,000 ounces (3 tonnes) of the precious metal were stored in London, which is in total worth some 33 billion forint ($130 million) at current gold prices.

The decision seems to be in line with international trends as storage of gold reserves out of the country is now considered risky by more and more central banks. Austrian, German, and Dutch central banks are among those who have recently decided to repatriate their gold reserves. According to MNB, this may also further strengthen market confidence towards Hungary.

The highest amount Hungary has ever had was around 65-70 tonnes at the beginning of the 70s. At the end of the 1980s, however, a decision was made to decrease gold reserves to the lowest possible level and rather to invest in sovereign debts, which as a consequence of the collapse of the Bretton Woods system are considered safer, more liquid and potentially of higher yields. At the beginning of 2010 this tendency changed again and central banks started to accumulate gold as a potential response to the financial crisis.

This gold-related news item…via Sharps Pixley…was in my Friday column, so it’s not new ‘news’ for you, dear reader…but it was the only precious metal-related story on Zero Hedge on Tuesday — and there was nothing worthwhile on Sharps Pixley, either.  So in case you missed it, here it is again.  I thank Richard Saler for sharing it with us — and another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the masked lapwing, also known as the masked plover and often called the spur-winged plover or just plover in its native range.  It’s a large, common and conspicuous bird native to Australia, particularly the northern and eastern parts of the continent, New Zealand and New Guinea.  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


There should be little doubt in anyone’s mind that ‘da boyz’ were watching over the precious metal market with more than the usual care and attention yesterday because of the CPI numbers.  That was also true of the currencies as well — and it should also come as no great shock that the ‘da boyz’ in the precious metals market — and the ‘gentle hands’ in the currency markets are either one in the same, or joined at the hip.

Here are the 6-month charts for all four precious metals, plus copper and WTIC as well.  As I pointed out before, JPMorgan et al stopped the gold price from blasting through its 50-day moving average yesterday — and it’s not much of a stretch to think that they did the same for silver on Tuesday as well.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And since the afternoon gold fix was at the same time as it usually was in New York…10:00 a.m. EDT…that means that the LBMA had the afternoon gold fix in London an hour earlier than normal…3:00 p.m. GMT, instead of 4:00 p.m. GMT.  Based on that, I’ll make the assumption the they open in London an hour earlier this week…7:00 a.m. GMT, instead of 8:00 a.m. GMT — and it will stay that way until they go on British Summer Time this Sunday.

So, as I type this paragraph, the LBMA ‘open’ is less than ten minutes away…and the equity market in both London and Europe won’t open for another hour. I see that after getting sold off a couple of dollars by around 9 a.m. CST on their Wednesday morning, the gold price rallied unevenly higher, before running into obviously ferocious resistance just before 2 p.m. over there. Gold was up almost 4 bucks at that point, but is now down 20 cents the ounce. It was the same price pattern for silver — and after being up 9 cents, is up only 2. Ditto for platinum and palladium, with the former up 2 bucks — and the latter by 2 dollars as well.

Net HFT gold volume is coming up on 50,000 contracts, with just under 2,000 contracts worth of roll-over/switch volume as well. Net HFT silver volume is about 8,900 contracts, with light roll-over/switch volume…just under 700 contracts worth.

The dollar index didn’t do much until around 9:30 a.m. China Standard Time on their Wednesday morning — and then it took a bit of a dive until shortly before 11 a.m. over there. Then after a bit of an up/down move to its current 89.56 low tick, the index has begun to ‘rally’ anew — and is back at unchanged currently.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and although we had rallies yesterday in both silver and gold, they were summarily dealt with — and no damage to any moving average was done.  So if there was deterioration in the commercial net short position in either of those two precious metals, it was minimal…hopefully.

Based on that — and eye-balling the last five days of price activity on the 6-month charts posted above, I’ll speculate that whatever increases in the commercial net short positions that manifested themselves in last Friday’s COT Report, should be fully negated and, hopefully, a bit more than that.  However, I wasn’t overly happy with the preliminary open interest change in gold in last night’s Preliminary Report from the CME Group, so I might be off in that precious metal.  Of course Ted is the real authority on all this — and I look forward to what he has to say on this matter in his mid-week commentary this afternoon.

And as I post today’s column on the website at 4:02 a.m. EST, the LBMA has, hopefully, been open for about an hour — and I note that the gold price is down a bit more…$1.00 the ounce. Silver is up a penny — and platinum and palladium are now up 3 dollars and 5 dollars respectively.

Gross gold volume is around 61,500 contracts — and net of roll-over/switch volume, net HFT gold volume is about 58,500 contracts. Net HFT silver volume is a hair over 10,000 contracts — and there’s about 680 contracts worth of roll-over/switch volume on top of that, which is unchanged from an hour ago.

The dollar index hasn’t done much in the last hour — and is up 2 basis point at the moment.

That’s all I have for today — and I’ll certainly be watching this U.K./Russia thingy with great interest…along with a sense of foreboding.

I’ll see you here tomorrow.

Ed

Except For Gold…The Big 6 Commodities Were Closed Lower Again

10 February 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything anywhere on Planet Earth on Friday, but I suppose the reality of the situation was that it wasn’t allowed that luxury.

The gold price traded in a ten dollar price range yesterday — and the high and low ticks aren’t worth looking up.

Gold was closed in New York on Friday at $1,315.70 spot, down $2.60 on the day.  Net volume was pretty heavy at just under 293,000 contracts.

Silver didn’t do much until shortly after 3 p.m. China Standard Time on their Friday afternoon.  Then it began to head unsteadily lower, with every tiny rally running into the usual resistance from “all the usual suspects”.  The low tick — and a new intraday low for this move down, was set at 1 p.m. EST — and once the COMEX closed, it rallied quietly until trading ended at 5:00 p.m. in New York.

The high and lows in this precious metal were reported by the CME Group as $16.405 and $16.13 in the March contract.

Silver finished the Friday session at $16.33 spot, down 6 cents on the day — and a new low close for this engineered price decline.  Net volume was 73,000 contracts, plus there was about 36,000 contracts worth of roll-over/switch volume on top of that amount.

Platinum rose and fell five bucks between 6 p.m. EST on Thursday evening — and shortly before 11 a.m. CST on their Friday morning.  It then chopped quietly sideways until the COMEX open at 8:30 a.m. in New York.  The spoofing got started — and the algos got spun — and the $955 low tick came shortly before 1 p.m. EST.  It was bounced off that low tick a number of times until the COMEX closed and, like silver, rallied until trading ended at 5:00 p.m.  Platinum was down 15 bucks at its low tick, but closed down by ‘only’ 7 dollars at $963 spot.

Palladium was up four or five dollars by the Zurich open — and then jumped up a bunch more between 10 a.m. and 12 o’clock noon CET over there.  From that juncture it was sold down to its low tick of the day, which came shortly after the Zurich close — and like platinum and silver, rallied quietly until trading ended at 5:00 p.m. EST in New York.  Palladium finished the Friday session at $969 spot, up 17 bucks on the day.

The dollar index closed very late on Thursday afternoon in New York at 90.28 — and chopped quietly sideways until 1 p.m. China Standard Time on their Friday afternoon.  It began to edge lower from there, only to get ‘saved’ for the fifth day in a row in the hour preceding the London open.  And except for a 2-hour 25-basis point slide between noon in London — and 9 a.m. in New York, it chopped higher until the 90.56 high tick was set around 12:45 p.m. in New York.  It began to chop lower from there at a similar pace to what it had risen earlier — and the dollar index finished the Friday session at 90.35 — up 7 basis points on the day.

But, like every other day this week, it would have crashed and burned if allowed to seek its true ‘intrinsic value’.

And here’s the 2-year U.S. dollar index chart — and you can read into this whatever you wish.  But while you’re doing that, just remember that this graph is a total fabrication by the powers-that-be…as is most every other chart in this column.

The gold shares gapped down a bit at the open — and kept right on going until shortly before the COMEX close.  Then they made a couple of rally attempts after that as gold rallied in after-hours trading — and closed a decent amount off their respective low ticks of the day.  Thank heavens for that, as the HUI closed down 2.04 percent as it was.

The price pattern for the silver equities looked very similar to their golden brethren, except the sell-off was far more severe.  At their 1:30 p.m. lows, they were down about 5.7 percent, but their subsequent rallies pared that loss, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down ‘only’ 3.49 percent.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index — and it ain’t lookin’ that hot.  Click to enlarge…if you dare!

I get the distinct impression that at least one or two mutual funds were unloading a broad range of large and small gold and silver producers et al on Friday, because the loses were so evenly spread across the entire spectrum of equities.  This was not individual investors acting on their own.  I got an e-mail from John McFarland stating that opinion as well.


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

Here’s the weekly chart — and it’s even uglier this week than it was last week.  There’s just no other words for it.  Click to enlarge.

And here’s the month-to-date chart — and it’s even less happy looking.  Click to enlarge.

And year-to-date — and all the gains in the precious metal equities since the rallies began back in mid December, have vanished.  Click to enlarge as well.

Here, with a few minor changes, is what I said about this disgraceful situation when I wrote in this spot last Saturday.

No matter how obvious the price management scheme in the precious metals is, you can take it to the bank that the executives of these mining companies that we own shares in will say and do nothing.  And neither will the World Gold Council, The Silver Institute…or the CME Group or the CFTC.  Virtually all the large mining companies are members of, or closely associated with, those first two groups — and would never say or do anything to upset their peers.  That disease also infects the major keynote speakers that I see at every precious metals conference I attend.  As stockholders, we have been completely abandoned by all parties that are supposed to be looking out after our best interests.  Instead of that, they’ve willfully fed us to the wolves.


The CME Daily Delivery Report showed that 50 gold and 16 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, the only two short/issuers that mattered were Scotiabank with 28 contracts out of its own account — and R.J. O’Brien with 20 from its client account.  The only long/stopper that mattered was, drum roll please, JPMorgan with 49 for its in-house/proprietary trading account.  In silver, International F.C. Stone issued 15 contracts — and JPMorgan stopped 15 contracts for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in February declined by 110 contracts, leaving 1,199 still around, minus the 50 contracts mentioned just above.  Thursday’s Daily Delivery Report showed that 141 gold contracts were actually posted for delivery on Monday, so that means that 141-110=31 more gold contracts were added to the February delivery month.  Silver o.i. in February rose by 16 contracts, leaving 157 still open, minus the 16 contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that zero silver contracts were posted for delivery on Monday, so that means that a net 16 contracts were added to February.


There was another withdrawal from GLD yesterday — and it was a pretty big one, as an authorized participant removed and/or took ownership of 180,257 troy ounces.  There were no reported changes in SLV.

The folks over at the shortsqueeze.com Internet site updated the short positions in both SLV and GLD as of the close of trading on Wednesday, January 31 — and this is what they had to report.  The short position in SLV declined by only 6.4 percent…from 10,975,500 shares/troy ounces, down to 10,269,500 shares/troy ounces.  It was similar in GLD, as the short position in it dropped by 6.0 percent…from 1,719,630 troy ounces, down to 1,616,410 troy ounces.

There was no sales report from the U.S. Mint yesterday.

Month-to-date the mint has sold 1,500 troy ounces of gold eagles — 1,500 one-ounce 24K gold buffaloes — and 225,000 silver eagles.  Retail investor interest is basically non-existent.

However, I got an amazing e-mail from Tolling Jennings yesterday — and the significance of it was not lost on me, as it immediately unfolded in one of those ‘Eureka’ moments that we’ve all had from time to time.  It was a link to a story headlined “United States Mint has 12 authorized purchasers for bullion coin issues“.

You may remember two or three years back that the mint would not release their list of ‘authorized purchasers’ — and even a ‘Freedom of Information’ request through government channels was turned down for ‘national security’ or some other such equally ridiculous reason.

And why was that, you ask?

Well, Ted Butler had figured out that JPMorgan was the ‘big buyer’ of silver and gold coins, not only from the U.S. Mint, but also silver and gold maple leafs from the Royal Canadian Mint for about four or five years running.  He also assumed that they weren’t buying through any of these ‘authorized purchasers’ at all, but had applied for and become an ‘authorized purchaser’ from the U.S. Mint themselves, to save on the fees charged…cutting out the middleman.

As JPMorgan discovered in hindsight, this turned out to be a grave mistake — and with sober second thought, they had to hide that fact from the general public — and the U.S. Mint went along with it, probably with the approval of their bosses over at the U.S. Treasury Department.  But once JPM’s name had been removed as an authorized participant by the mint, then the coast was clear for them to breeze forth with their freshly polished up “transparency”.

And if you have a better explanation, I’d love to hear it.

So would Ted.

There wasn’t much activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  There was 2,225.057 troy ounces received — and 12,938 troy ounces shipped out.  Of the ‘in’ amount, there was 2,000.000 troy ounces/200 – 10 oz. gold bars deposited at Delaware — and 225.057 troy ounces/7 kilobars [SGE kilobar weight] left at Brink’s, Inc.  Of the ‘out’ activity, there was 11,009 troy ounces shipped out of Brink’s, Inc. — and the remaining 1,929.000 troy ounce/60 kilobars [U.K./U.S. kilobar weight] departed Canada’s Scotiabank.  The link to that activity is here.

It was busier in silver.  JPMorgan picked up another truck load…598,011 troy ounces…and one good delivery bar…1,027 troy ounces…was dropped off at Delaware.  That puts JPMorgan’s COMEX silver stash at another new record high…129.1 million troy ounces.  In the ‘out’ department, there was 443,771 troy ounces that was shipped out of Brink’s, Inc.  The link to all this is here.

It was yet another very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They reported receiving 2,300 of them, but shipped out a very chunky 8,496 to parts unknown.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday came in almost exactly as Ted Butler said they would — and there were also a few surprises as well.

In silver, the Commercial net short position dropped by 16,650 contracts, or 83.2 million troy ounces of paper silver.

They arrived at that number by increasing their long position by 6,977 contracts, plus they covered 9,673 short contracts — and the sum of those two numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by approximately 2,900 contracts — and the ‘5 through 8’ large traders decreased their short position by around 3,800 contracts.  Ted’s raptors, the 44-odd small Commercial traders other than the Big 8, increased their long position by about 10,000 contracts.

Under the hood in the Disaggregated Report, it was all Managed Money  — and a lot more, as they not only sold 11,615 long contracts, they also increased their short position by 11,794 contracts as well — and the sum of those two numbers…23,409 contracts…was their change for the reporting week.  The difference between that number and the Commercial net short position…23,409 minus 16,650 equals 6,759 contracts…was made up by the traders in the other two categories…the ‘Other Reportables’ and the ‘Nonreportable’/small trader category…with the traders in the ‘Other Reportables’ category making up the lion’s share of that difference.

Here’s a snip from the Disaggregated COT Report for silver, so you can see what I see when I’m looking at this report every week.  Click to enlarge.

The big surprise in the Disaggregated COT Report was the sale of those 11,615 long contracts — and it’s obvious from the size of the change that most of these sales were by non-technical Managed Money traders, the ones I  call the “unblinking” longs.  Both Ted and I were expecting/hoping that this number would not exceed 3-4,000 contracts, which would take the Managed Money long position back to its old base number of about 46,000 contracts.  That didn’t happen — and as Ted pointed out, it appeared that some of these non-technical traders made some permanent portfolio adjustments — and that trend may have also extended into the next reporting week as well, if the big drops in silver open interest since the cut-off are any indication.  Ted is the real authority on this — and I look forward to what he has to say in his weekly missive this afternoon.

The Commercial net short position in silver is now down to 153.2 million troy ounces of paper silver.  Ted pegs JPMorgan’s short position at 28,000 contracts…giving them all the improvement in the Big 4 traders in this COT Report.  And with the new Bank Participation Report in hand, Ted said he could certainly make a case for JPMorgan’s short position to be three or four thousand contracts higher than that, but the entrance [for the first time] of a sixth U.S. bank into the COMEX futures market in silver, gave him pause.

Here’s the 3-year COT chart for silver — and its configuration is very bullish.  Click to enlarge.

Of course it has grown even more bullish since Tuesday’s cut-off — and as I said to Ted on the phone yesterday afternoon…what I wouldn’t pay to see what the COT Report looked like after the COMEX close on Friday.


In gold, the commercial net short position fell by 19,625 contracts, or 1.96 million troy ounces of paper gold.

They arrived at this number by adding 3,960 long contracts — and they also reduced their short position by 15,665 contracts.  The sum of those two numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by a hefty 9,200 contracts — and the ‘5 through 8’ large traders also decreased their short position by an even heftier 11,400 contracts.  And if those huge drops weren’t surprise enough, Ted was shocked [as was I] that his raptors, the 48-odd small commercial traders other than the Big 8, actually sold 1,000 contracts of their huge long position during the reporting week.  Normally during these engineered price declines, the raptors pile in big on the long side…like they did in silver to the tune of 10,000 contracts this week…but not this week in gold.  I didn’t discuss this with Ted, but I’m wondering if they got some sort of notice from on high that they should back off during this reporting week.  Needless to say that I’ll be more than interested in what the raptors did during this reporting week, but that won’t be known until next Friday’s report.

Under the hood in the Disaggregated COT Report it was, as is almost always the case, all Managed Money traders…plus more.  They reduced their long position by a monstrous 24,220 contracts, but only added a piddling 413 contracts on the short side…another surprise — and it’s the sum of those two numbers…24,633 contracts…that was their change for the reporting week.  Like in silver, the difference between that number and the commercial net short position…24,633 minus 19,625 equals 5,008 contracts, was made up by the traders in the other two categories, with the largest chunk going to the traders in the ‘Other Reportables’ category.

Considering the huge decline in the Managed Money long position during the reporting week, it was more than surprising that they didn’t add to their short position far more aggressively than they did.  That still might occur, but it probably won’t be more evident until JPMorgan et al engineer the gold price below its 50 and 200-day moving averages.

Here’s the snip from the Disaggregated Report for gold, so you can see what these three groups of traders were up to.  Click to enlarge.

The commercial net short position in gold is now down to 20.55 million troy ounces — and still very much in bearish territory.

And here’s the 3-year COT chart for gold — and although it does look a bit better, the down-side price potential is still very much in place.

Although the internal structure of the COMEX futures market in all four precious metals has much improved since the Tuesday cut-off, the 50 and 200-day moving averages in gold remain unbroken — and hang over the market like the proverbial sword of Damocles.  And with China closed for their New Year’s celebrations for a week starting on February 16…’da boyz’ may wait until that market is closed before doing the dirty.

As Ted pointed out on the phone — and is evident in the numbers presented above, there were strange goings-on in this report.  I’m sort of wondering if a couple of them might be related to Scotiabank’s departure as a player in both silver and gold.

There are lots of pieces in motion in this great gold and silver chess game that’s going on, most of which is hidden from our sight.  But when all the motion stops — and the pieces are aligned in the correct order…then look out above!


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 120 days of world silver production—and the ‘5 through 8’ large traders are short an additional 56 days of world silver production—for a total of 176 days, which is just under 6 months of world silver production, or about 427.6 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 190 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 153.2 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 427.6 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 427.6 minus 153.2 = 274.4 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 44-odd small commercial traders other than the Big 8, are long that amount.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 28,000 contracts, or around 140 million troy ounces, down 15 million ounces from what they were short in last week’s COT Report.  140 million ounces works out to around 58 days of world silver production that JPMorgan is short — and that would be a minimum number.  That’s compared to the 176 days that the Big 8 are short in total.  JPM holds about 33 percent of the entire short position held by the Big 8 traders.

As Ted also mentioned, he could make a case that JPMorgan’s silver short position is still 31,000 contracts, or 64 days of world silver production

It’s more than obvious that Scotiabank has been actively reducing their short position in the COMEX futures market for the last year and change.  Based on the COT data, Scotiabank’s short position is around 23 days of world silver production — and could actually be a lot less than that.  They may not even be a member of the Big 4 anymore, but may have slipped all the way down into the ‘5 through 8’ category.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s equally obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

JPMorgan has been forced by circumstance to pick up Scotiabank’s trading/price management duties in silver and gold.  So JPMorgan is by far the No. 1 silver short on Planet Earth — and likely to remain that way indefinitely.  Of course they have 675+ million troy ounces of physical silver [and counting!] stashed away to cover that, so they are in no danger.  That can’t be said of the remaining Big 7, unless JPMorgan plans to bail out some, or all of them.  And if that’s the case…at what price?  I get the feeling, as I said last week, that it wouldn’t come cheap.

The two largest silver shorts on Planet Earth—JPMorgan and one other, which may or may not be Scotiabank, are short about 81 days of world silver production between the two of them—and that  81 days represents a bit over 67 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…two thirds of it.  The other two traders in the Big 4 category are short, on average, about 19.5 days of world silver production apiece, which is exactly unchanged from last week’s report.

The four traders in the ‘5 through 8’ category are short, on average…14 days of world silver production each, which is down 2 full days from what each was short in last week’s COT Report.  That’s a big drop!

This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that ever changes by any material amount.

The Big 8 commercial traders are short 41.7 percent of the entire open interest in silver in the COMEX futures market, which is a big decline from the 46.6 percent they were short in last week’s COT Report.  Once whatever market-neutral spread trades are subtracted out, that percentage would be over 45 percent.  In gold, it’s now 46.8 percent of the total COMEX open interest that the Big 8 are short, down a bit from last week’s report — and a hair over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 64 days of world gold production, which is down 4 days from what they were short last week — and the ‘5 through 8’ are short another 25 days of world production, which is also down 4 days from what they were short the prior week, for a total of 89 days of world gold production held short by the Big 8 — which is down 8 days from the 97 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold 72 percent of the total short position held by the Big 8…which is up 2 percentage point from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 68, 69 and 77 percent respectively of the short positions held by the Big 8.  Silver is up 2 percent points from the previous week’s COT Report — and platinum is down 2 percentage point from last week — and palladium is about unchanged from what it was in last week’s COT Report.


The February Bank Participation Report [BPR] data is extracted directly from the above Commitment of Traders Report.  It shows the COMEX futures contracts, both long and short, that are held by all the U.S. and non-U.S. banks as of Tuesday’s cut-off.  For this one day a month we get to see what the world’s banks are up to in the COMEX futures market, especially in the precious metals—and they’re usually up to quite a bit.

In gold, 6 U.S. banks were net short 114,088 COMEX contracts in the February BPR, which is well over 50 percent of this week’s commercial net short position shown in the above COT Report.  In January’s Bank Participation Report [BPR], that number was 106,147 contracts, so they’ve increased their collective short positions by a rather immaterial 8,000 contracts.  Four of the six U.S. banks would certainly include JPMorgan, HSBC USA and Citigroup — and Goldman.  As for who the fifth and sixth U.S. banks might be—I haven’t a clue, but I doubt very much if their positions, long or short, would be material.

Also in gold, 28 non-U.S. banks are net short 64,513 COMEX gold contracts, which isn’t much per bank.  In the January BPR, 29 non-U.S. banks were net short 53,078 COMEX contracts, so the month-over-month change shows an increase of about 11,400 contracts.  I suspect that there’s at least one large non-U.S. bank in this group that might hold a third of this short position all by itself — and the remaining contracts, divided up between the remaining 27 non-U.S. banks, would be immaterial.  I used to think it might have been Scotiabank, but that may not be the case anymore as they exist stage left.  But with 27 non-U.S. banks in this category, an 11,400 contract increase spread out more or less equally, wouldn’t be much per bank, either.

As of this Bank Participation Report, 34 banks [both U.S. and foreign] are net short 33.3 percent of the entire open interest in gold in the COMEX futures market, which is a small increase from the 31.8 percent they were short in the January BPR.

Here’s Nick’s chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank’s COMEX short position was outed by the CFTC in October of 2012.  Click to enlarge.

In silver, 6 U.S. banks are net short 31,460 COMEX silver contracts in February’s BPR — and Ted figures that JPMorgan is the proud owner of 28,000 contracts worth, but as stated in the COT discussion in silver, he could make a case that it was 31,000 contracts as well.  This means that some of the remaining 5 U.S. banks obviously have to be net long the silver market in order for the numbers to work out — and they are long to the tune of 3,615 COMEX silver contracts.  In January’s BPR, the net short position of these U.S. banks was 29,934 contracts, an increase of about 1,500 contract since the last reporting month.

Also in silver, 19 non-U.S. banks are net short 17,378 COMEX contracts…down from the 21,517 contracts that 22 non-U.S. banks were short in the January BPR.  I would suspect that Canada’s Scotiabank holds a goodly chunk of this amount all by itself, but down a substantial amount from a year or so ago.  That most likely means that a number of the remaining 18 non-U.S. banks might actually be net long the COMEX silver market by a bit.  But even if they aren’t, the remaining short positions divided up between these other 18 non-U.S. banks are immaterial — and have always been so.

It should be noted that the short position of the U.S. banks in silver rose in the February BPR, while the short position of the non-U.S. banks fell.  That is the obvious sign the Scotiabank is quietly covering their massive silver short position, or transferring it to others — and obviously U.S. banks.  And January was the first month on record where the number of U.S. banks involved in the COMEX futures market in silver rose to 6.

As of February’s Bank Participation Report, 25 banks are net short 23.8 percent of the entire open interest in the COMEX futures market in silver—which is down a decent amount from the 26.7 percent that they were net short in the January BPR — with much, much more than the lion’s share of that held by JPMorgan.

Here’s the BPR chart for silver.  Note in Chart #4 the blow-out in the non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank was brought in from the cold.  Also note August 2008 when JPMorgan took over the silver short position of Bear Stearns—the red bars.  It’s very noticeable in Chart #4—and really stands out like the proverbial sore thumb it is in chart #5.  Click to enlarge.

In platinum, 5 U.S. banks are net short 20,817 COMEX contracts in the February Bank Participation Report.  In the January BPR, ‘3 or less’ U.S. banks were net short 13,341 COMEX platinum contracts, so there’s been a huge increase in the short position of the U.S. banks in question during the last reporting month.

I suspect that, like in silver and palladium, JPMorgan holds virtually all of the platinum short position by itself.

Also in platinum, 17 non-U.S. banks are net short 8,589 COMEX contracts, which is up about 1,700 contracts from the 6,869 contracts they were net short in the January BPR.

As you can see from the number of banks and number of contracts involved in the U.S./non-U.S. categories…this price management scheme platinum is a “Made in America” show as well.

And as of February’s Bank Participation Report, 22 banks were net short 32.3 percent of the entire open interest in platinum in the COMEX futures market, which is up huge from the 24.7 percent they were collectively net short in the December BPR.  It’s obvious that the banks, especially the U.S. banks, having been shorting this current rally in platinum all the way up.  Click to enlarge.

In palladium, 4 U.S. banks were net short 12,021 COMEX contracts in the February BPR, which is down a decent amount from the 13,379 contracts they held net short in the January BPR.  And to show you how lopsided the short position is in palladium, these four U.S. banks hold a total long position of only 31 contracts in the January BPR…but in the February BPR the long position held by the U.S. banks had ‘blown out’ to 524 contracts.

Also in palladium, 12 non-U.S. banks are net short 3,096 COMEX contracts—which is down substantially from the 5,304 COMEX contracts that 13 non-U.S. banks were short in the January BPR.  When you divide up the short positions of these non-U.S. banks more or less equally, they’re mostly immaterial…especially when you compare them to the positions held by only 4 U.S. banks.

But, having said all that, as of this Bank Participation Report, 16 banks are net short 46.8 percent of the entire COMEX open interest in palladium…which is a monstrous amount…and more than the short positions held by  the Big 8 traders in silver — and equal to the Big 8 short position held in gold.  In January’s BPR, the world’s banks were net short 48.9 percent of total open interest…a record high number, so it has only improved by a bit in the last month.

Here’s the palladium BPR chart.  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013.  I would still be prepared to bet big money that, like platinum and silver, JPMorgan holds the vast majority of the U.S. banks’ short position in this precious metal as well.  Click to enlarge.

As I say every month at this time, there’s a maximum of four U.S. banks—JPMorgan, HSBC USA, Goldman and maybe Citigroup—along with Canada’s Scotiabank…and they’re getting out of Dodge—that are the tallest hogs at the precious metal price management trough.

JPMorgan is now the largest silver short holders on Planet Earth in the COMEX futures market — and by more than the proverbial country mile.  JPMorgan’s short position now towers above all of the rest of the Big 7 traders…including Canada’s Scotiabank.


Before hitting today’s stories, I have more commentary from Bill King from the Friday edition of his King Report.  In it, he had this to say…

SPHs, which had been down as much as 23.00 in Wednesday night trading, rallied to an 11.00 gain during Thursday’s European open.  The standard manipulation in the normal window of intervention appeared.
 
As European trading progressed, SPHs tumbled 21 handles due to a hawkish BoE interest rate outlook.

However, the manipulators, out of desperation instead of their usual larcenous urges, crafted a 29.50 SPH rally to influence the NYSE open.
 
As soon as the NYSE opened, the selling began – and it was furious.  The two manipulations, one might have been a pump & dump, failed as stocks and SPHs tumbled.
 
The overnight SPH low (2645.25) was obliterated during the first two hours of trading.  This is a very, very bad development for stocks that astute traders monitor daily (overnight SPH high & low).
 
Similar to Wednesday, stocks rallied in the early afternoon as bond yields rose smartly.  The US 30-year hit 3.15%; the 10-year hit 2.86%.
 
After the VIX fix at 14:15 ET, stocks tumbled with the S&P 500 Index violating its panic low of 2593.07 on Tuesday by 13 handles.  Major indices closed at their session lows.  This is abysmal technical action.
 
The S&P 500 Index all-time high is 2872.87 in January 26, 2018.  A 10% decline, conventional wisdom’s correction threshold, would put the index at 2585.58.  This should have been very strong support.  In fact, one would expect a monstrous ‘V’ rally of this level.
 
Because the breach of the 10% decline threshold occurred near the close, the usual suspects did not have the time to provoke a ‘V’ rally and maintain the notion that the decline is just a ‘healthy correction’.  END

I have an average number of stories for you today…plus the Cohen/Batchelor interview.


CRITICAL READS

Jim Rogers Says Next Bear Market Will Be Worst in His Life

Jim Rogers, 75, says the next bear market in stocks will be more catastrophic than any other market downturn that he’s lived through.

The veteran investor says that’s because even more debt has accumulated in the global economy since the financial crisis, especially in the U.S. While Rogers isn’t saying that stocks are poised to enter bear territory now — or making any claim to know when they will — he says he’s not surprised that U.S. equities resumed their selloff Thursday and he expects the rout to continue.

When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime,” Rogers, the chairman of Rogers Holdings Inc., said in a phone interview. “Debt is everywhere, and it’s much, much higher now.

The plunge in equity markets resumed Thursday, as the S&P 500 Index sank 3.8 percent, taking its rout since a Jan. 26 record past 10 percent and meeting the accepted definition of a correction. The Dow Jones Industrial Average plunged more than 1,000 points, while the losses continued in early Asian trading Friday as the Nikkei 225 Stock Average dropped as much as 3.5 percent.

This Bloomberg article showed up on their Internet site at 6:37 p.m. Denver time on Thursday evening — and was updated about four hours later.  It comes from Zero Hedge via Brad Robertson — and another link to it is here.


U.S. Debt Bomb Exacerbating Stock Market Panic! — Jim Rickards

This 3:51 minute video interview hosted by Stuart Varney over at Fox Business was posted on the youtube.com Internet site on Thursday — and I thank Harold Jacobsen for bringing it to our attention.


Contagion: Credit Crashes to 14-Month Wides Amid Soaring Outflows

Thursday saw rate vol start to accelerate, and today we see credit markets start to snap as equity market volatility contagion is spreading.

In fact, credit market volatility is spiking – and is above the Aug 2015 highs (higher relative to stocks where VIX remains below those levels)…

This is the biggest spike in High Yield bond spreads since Aug 2015’s crash and raises relative funding costs to their highest since Dec 2016…

It’s not just equities that are seeing fund outflows surge.

Junk bond ETFs have seen only 2 days of inflow in 2018, and outflows are accelerating as prices plunge.  IG bond ETFs have also seen outflows for 6 of the last 7 days…

Judging from the discount to NAV, there is more ‘physical’ selling to come in corporate bonds (as managers use JNK as their overlay, then selectively sell into illiquid markets…and one might wonder how much longer the S&P will hold its gains?

This chart-filled story was posted on the Zero Hedge website at 12:49 p.m. EST on Friday afternoon — and I thank Richard Saler for pointing it out.  Another link to it is here.


Subprime and Short Vol — Doug Noland

For nine long years now, CBB analysis has posited “the global government finance Bubble,” “The Moneyness of Risk Assets” and the “Granddaddy of all Bubbles” theses. I believe the Bubble has likely been pierced. The spectacular blowup of all these “short vol” products is a replay of subprime in the summer of 2007 – just so much bigger and consequential. The “insurance” marketplace has badly dislocated, concluding for now the environment of readily available cheap market protection.

Structured finance was instrumental in ensuring the marginal subprime buyer could access the means to keep the Bubble inflating, even in the face of inflated home prices increasingly beyond affordability. These days, all these structured volatility products have been key to enormous pools of “money” chasing inflated securities prices increasingly detached from reality.

The risk versus reward calculus has rather quickly deteriorated for risk-taking and leveraging. Markets have turned much more volatile and uncertain – equities, fixed-income, currencies and commodities. The cost of market “insurance” has spiked, the Treasury market safe haven attribute has been diminished and various market correlations have increased, certainly including global equities markets. “Risk Off” has made a rather dramatic reappearance. How much leverage is lurking out there in global securities and derivatives markets?

Next week is tricky. I would generally expect at least an attempt at a decent rally prior to options expiration. But at the same time, my sense is that market players are especially poorly positioned for the unfolding “Risk Off” backdrop. A break of this week’s trading lows would likely see another leg down in the unfolding bear market. And with derivatives markets already stressed, major outflows from the ETF complex would be challenging for less than liquid markets to accommodate.

Too many years of central bank-induced over-liquefied markets incentivized excess, from Wall Street to Silicon Valley to Washington to Beijing to Tokyo and Frankfurt. Markets at home and abroad completely failed as mechanisms to discipline, to self-adjust and to correct.

There will be a very steep price to pay.

This absolute must read commentary by Doug put in an appearance on his website in the wee hours of Saturday morning EST — and another link to it is here.


Moody’s Threatens U.S. Downgrade Due to Soaring Debt, “Fiscal Deterioration”

Back in 2011, Standard & Poors’ shocked the world, and the Obama administration, when it dared to downgrade the U.S. from its vaunted AAA rating, something that had never happened before (and led to the resignation of S&P’s CEO and a dramatic crackdown on the rating agency led by Tim Geithner).

Nearly seven years later, with the U.S. on the verge of another government shutdown and debt ceiling breach (with the agreement reached only after the midnight hour, literally) this time it is Warren Buffett’s own rating agency, Moody’s, which on Friday morning warned Trump that he too should prepare for a downgrade form the one rater that kept quiet in 2011. The reason: Trump’s – and the Republicans and Democrats – aggressive fiscal policies which will sink the U.S. even deeper into debt insolvency, while widening the budget deficit, resulting in “meaningful fiscal deterioration.”

In short: a U.S. downgrade due to Trumponomics is inevitable. And incidentally, with today’s 2-year debt ceiling extension, it means that once total U.S. debt resets at end of day – unburdened by the debt ceiling – it will be at or just shy of $21 trillion.

We expect if not a full downgrade, then certainly a revision in the outlook from Stable to Negative in the coming  months.

This news item put in an appearance on the Zero Hedge website at 9:48 a.m. EST on Friday morning — and another link to it is here.


Soros and the £400k Question: What constitutes ‘foreign interference’ in the U.K.’s democracy? — Neil Clark

You’d have to have a real sense of humor failure not to laugh. The news that U.S. billionaire Soros donated £400k to an anti-Brexit group came on the day that YouTube said they found no evidence of Russian interference in Brexit.

Repeat After Me (with robotic arm movements): “Unproven Russian involvement in Brexit – terrible! Impose more sanctions on Moscow!  A £400k check from an American billionaire for an anti-Brexit campaigning group – that’s no problem; it’s helping our democracy!

You don’t have to own a brand new £999 state-of-the art Hypocrisy Detector from Harrods, to pick up on the double standards. Just having a few functioning brain cells and thinking for yourself will do. For months in the U.K. we’ve been bombarded with Establishment-approved conspiracy theories – peddled in all the ’best’ newspapers – that Russia somehow ‘fixed’ Brexit. Getting Britain to leave the E.U. was all part of a cunning plot by Vladimir Putin, aka Dr. Evil, to weaken Europe and the ‘free world.’

Even West End musical composer Andrew Lloyd-Webber, who knows quite a bit about phantoms, seemed taken in by it. “By quitting Europe, I fear that we are hastening Putin’s dream of the break-up of the EU – and with it, potentially, western civilisation,” the noble Lord declared in July.

Never mind that we don’t have a single statement from Putin or other senior Kremlin figures saying that they actually supported Brexit. These Establishment Russia-bashers know exactly what The Vlad is thinking.

And never mind that RT and Sputnik, which we are repeatedly told are “propaganda arms of the Russian government,” ran articles by pro- and anti-Brexit writers. The same people who told us Iraq had WMDs in 2003 were absolutely sure it was those dastardly Russkies who had got Britain to vote ‘leave.’ The irony is of course that there was significant foreign interference in Brexit. But it didn’t come from Moscow.

This longish, but worthwhile commentary/opinion piece was posted on the rt.com Internet site on 4:32 p.m. Moscow time on their Friday afternoon, which was 8:32 a.m. in Washington — EST plus 8 hours.  I thank George Whyte for sending it along — and another link to it is here.


Europe ready to defy the U.S. if economic sanctions imposed on Iran

The E.U. is mulling its options in the event of a U.S. withdrawal from the Joint Comprehensive Plan of Action, the 2015 multinational nuclear deal struck with Iran. Various European nations have been exploring ways of increasing business with the middle eastern country since the deal was struck, and are invested in making sure that the deal sticks and that sanctions are not reimposed.

The parties to the Joint Comprehensive Plan of Action (commonly referred to as the JCPOA) agreed to lift all nuclear-related sanctions on Iran if they would apply strict limitations on their nuclear program. The U.S., China, Russia, France, Britain, Germany and Iran struck the accord in July of 2015, the implementation of which began in January of 2016.

The U.S. President, Donald Trump, however, has overtly expressed his opposition to the deal, which was negotiated by Barack Obama, Trump’s predecessor, and has repeatedly threatened to “terminate” it. In January, he extended the waivers of economic sanctions against Tehran for 120 days “for the last time.

In spite of Trump’s position on the matter, the European parties, together with Russia and China are committed to the pact, on which they will not renegotiate, and view it as working quite well in its present iteration. Iran has expressed that they will not agree to any further obligations than those which they have already agreed to under the JCPOA, and will not renegotiate the deal. Therefore, Trump’s concerns can only be considered by U.S. Congress and will have no legal jurisdiction over the nuclear deal, Tehran or the International Atomic Energy Agency.

This article appeared on theduran.com Internet site at 5:20 p.m. EST on Friday afternoon — and it comes courtesy of Roy Stephens.  Another link to it is here.


Tales of the New Cold War: The Origins of Russiagate & Questions to be asked — John Batchelor interviews Stephen F. Cohen

Part 1:  This week we hear a great journalist and a historian discuss what are probably the beginnings of the greatest political scandal(s) in United States history. These are the increasingly infamous events around the FISA Memo, Russiagate, illegal acts of major politicians and heads of departments, and indiscreet minions in government. Again email evidence in addition to media efforts is very important for revealing who was behind Russiagate. But Cohen reminds us of his prediction at the beginning of this ordeal, fully a year and a half ago, that he considered the better name than Russiagate should be “Intellgate”. His point is that since no collusion was found with Trump and Putin, “there was “no Russia in Russiagate”, but there were lots of nefarious behaviour in Washington. A good example, he points out were the people like Glen Simpson and his “Fusion Operation” that was behind the “Steele Dossier”. However, equally guilty, notes Cohen, were the early FBI operations to defame Trump even before the election. This Steele Dossier was very quickly accompanied by the Intelligence Community Assessment released by “17 Intelligence Agencies” (sic) that “verified” the latter. But the important question for Cohen about these events is when did the Russiagate operation actually begin? With the collapse of the Steele Dossier “evidence” the Trump adversaries attempted to find earlier “proof” of Trump’s guilt.  But Cohen maintains John O. Brennan began the earliest effort of this conspiracy (my word), when he passed on “suspicious information about Trump” to the FBI. That joins James Clapper of the FBI with this plot and by extension also to Comey, head of the FBI. But it was Brennan who shared the Steele Dossier with then President Obama.

Part 2:  Cohen returns to the Steele Dossier and effectively debunks it. He mocks the description by Steele having Kremlin contacts and from this condemned the whole “report” – although about this Steele was not questioned, and there were inconsistencies in the story about how the information was received from these contacts. The information that Brennan first sent to the FBI was therefore not from Russian sources but were from British or Ukrainian sources. This connects to the Department of Justice, to an Assistant Attorney General, Bruce Ohr, whose wife, a Russian expert, was helping to research and put together the Steele Dossier. Another dossier was also being researched by Hillary Clinton people and all ended up in the Steele Dossier with Steele as the “author”. Due to the flurry of dubious accusations over the Steele accusations, we are starting to see the lawsuits begin. Nevertheless, Cohen has some major questions remaining about Russiagate and its purpose(s):  Was Russiagate the product of the entire intelligence community and not just the FBI; is the entire intelligence leadership rogue, or just the FBI; were those people close to Trump (Paul Manafort, for example) attacked because they were actually under suspicion, or was it for political reasons only; was Brennan’s involvement a product of consolidating his position with the CIA when Clinton became president; what was Obama’s role in Russiagate; Comey’s actions as FBI director are confusing given he was in a no win situation in his indecisive behaviour to ward’s Clinton prior to the election and to Trump after the election; and finally, Cohen asks whether we are really facing a massive cover-up?

I have been waiting impatiently for a really good journalist and first-rate historian’s interpretations of what Russiagate and the unwinding revelations of the FISA memo mean. This is surely it. Both pundits chronologically join up the dots of the criminal activities of people who created and pushed this narrative and how important the FISA revelations mean for them. What is ahead for Washington is likely in the answers to the five questions posed by Cohen at the end of his talk. My very small quibble is with the question about a cover up. We are already seeing it in the reactions in most of the MSM, political comments from Democrats (and not a few Republicans), the Mueller investigation and the Council on Foreign Relations. There is so much invested by the neocons and the Deep State in this narrative that they will not (can not?) give up, and that should give people an inkling of how much potential damage is ahead for these people and the Washington government institutions. We should speculate that all the Intelligence Agencies and the DOJ are controlled by the Deep State since the top echelons have been active in building the foundation of Russiagate, or shielding the participants, or using it geopolitically (Europe). The bright note here – a no gain, no pain point of view – is that since there is no “Russia in Russiagate” (wonderful line, that), then the whole excuse for war with Russia may be damaged. Basically we are all a little safer that this sinister stupidity is revealed for what it is…

This 2-part audio interview, with each part running about twenty minutes, was posted on the audioboom.com Internet site on Tuesday.  As always, I thank Larry Galearis for the excellent executive summary you see above.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


Professor Stephen F. Cohen: Rethinking Putin –- a review by the Saker

I have recently had the pleasure of watching a short presentation by Professor Stephen F. Cohen entitled “Rethinking Putin” which he delivered on the annual Nation cruise on December 2, 2017 (see here for the original Nation Article and original YouTube video). In his short presentation, Professor Cohen does a superb job explaining what Putin is *not* and that includes: (but, please do watch the original video before proceeding).

The key thesis is this: Putin began as a pro-Western, European leader and with time he realigned himself with a much more traditional, Russian worldview. He is more in line with Russian voters today.

Professor Cohen concluded by addressing two topics which, I presume, his audience cared deeply about: he said that, contrary to Western propaganda, the so-called ‘anti-gay’ laws in Russia are no different from the laws of 13 U.S. states. Secondly, that “by any reckoning, be it flourishing inside Russia or relations with Israel, by general consent of all, nobody denies this, Jews under Putin in Russia are better off than they had ever been in Russian history. Ever. They have more freedom, less official anti-Semitism, more protection, more official admiration for Israel, more interaction, more freedom to go back and forth”.

This is all very interesting important stuff, especially when delivered to a Left-Liberal-Progressive US audience (with, probably, a high percentage of Jews). Frankly, Professor Cohen’s presentation makes me think about what Galileo might have felt when he made his own “presentations” before the tribunal of Inquisition (Cohen’s articles and books are now also on the modern equivalent of the Index Librorum Prohibitorum). In truth, Professor Cohen is simply true to himself: he opposed the crazies during the old Cold War and now he is opposing the same crazies during the new Cold War. His entire life Professor Cohen was a man of truth, courage, and integrity – a peacemaker in the sense of the Beatitudes (Matt 5:9). So while I am not surprised by his courage, I am still immensely impressed by it.

I posted the 28-minute embedded video [referred to in the opening paragraph] in my column some time ago, but the Saker resurrects it in this longish but worthwhile commentary about Cohen that showed up on his Internet site on Thursday sometime.  I thank Larry Galearis for pointing it out — and another link to it is here.


Modern imperialism goes on trial, and is found guilty — Neil Clark

Imperialism – which today is usually referred to by the euphemism ‘liberal interventionism’ – went on Trial at the Waterside Theatre in Derry, Northern Ireland this week.

Five passionate and well-informed speakers, who included the former British Ambassador to Syria Peter Ford, detailed the carnage and chaos that has been unleashed around the globe by the aggressive, warmongering policies of the U.S. and its closest allies.

The event could have been called ‘War on Trial.’ It might have been called ‘Regime Change on Trial.’ Or ‘Economic Sanctions on Trial.’ But it was – thanks to organizer Gregory Sharkey – called ‘Imperialism on Trial’ and, as the first speaker, the writer and broadcaster John Wight declared, that in itself was highly significant.

For the truth is the ‘I’ word is the elephant in the room in contemporary discourse. We’re not supposed to acknowledge its existence. Imperialism, according to the dominant Establishment narrative, ended when the European empires gave their colonies independence in the 1950s and 60s. In fact, the ‘old’ imperialism was only replaced by a new variant which is even more destructive, and certainly more dishonest. At least the British Empire admitted it was an empire.

Today’s U.S.-led neoliberal empire, which has Britain as its junior partner, does no such thing. Entire countries have been destroyed, with millions killed, and it’s been done under a ‘progressive’ banner trumpeting concern for ‘human rights’ and ‘enhancing freedoms.’

This very worthwhile commentary by Neil, with four embedded video clips, was posted on the rt.com Internet site last Saturday, but for length and content reasons, had to wait for today’s column.  I thank George Whyte for his second contribution to today’s column — and another link to it is here.


For the First Time Turkey Ranks Among the top 10 Countries in the World with the Largest Reserves of Gold

Turkey’s gold reserve is 564.80 tons, according to statistics from the World Council on Gold.

By this indicator, Turkey ranks for the first time among the top 10 countries in the world with the largest reserves of precious metal, moving from 10th India.

The world’s largest gold reserves are the U.S. with 8,133 tonnes, followed by Germany and Italy. Gold in Turkey’s total gold-currency reserves is about 18.3%.

Last year, Ankara twice increased its gold by 30.1 tonnes and 33.9 tonnes respectively.

The above four paragraphs are all there is to this brief gold-related news item that put in an appearance on the novinite.com Internet site on Friday.  I found it on the Sharps Pixley website — and another link to the hard copy is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the sandhill crane.  I was getting the tires rotated on my vehicle yesterday — and while I was waiting, I was reading a story in a sports magazine that there actually is a hunting season for these birds, which I find personally abhorrent.  But that’s just my opinion, as they’re magnificent creatures.  I have my own photos of these things, but I don’t have the time to dig them out right now.  The ones here are borrowed from the Internet.  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ comes from a movie soundtrack that I was listening to while I was bottling wine earlier this week.  It’s the theme song from the 1985 movie “St. Elmo’s Fire“.  It was written and produced by David Foster, who did to the recording industry what George Lucas did to the film industry with “Star Wars“…he changed everything.  The link is here.  Enjoy!

Today’s classical ‘blast from the past’ dates from c. 1809/11 and was Beethoven’s last piano concerto…No. 5 in E flat major, Op. 73.  The premiere performance of the “Emperor Concerto” took place at the Palace of Prince Joseph Lobkowitz in Vienna on 13 January 1811.  Here’s the New York Philharmonic with British-born virtuoso pianist Stephen Hough at the keyboard.  The link is here.


Except for gold, there were new closing lows or new interim day lows set in all of the Big 6 commodities yesterday, as ‘da boyz’ went about their business of getting the Managed Money traders off the long side — and as maximum short as they can get them.

And as bad as things are for the precious metals at the moment, there’s still that proverbial “Sword of Damocles” overhanging gold, as the two critical moving averages, the 50 and 200-day, remain untouched.  And if JPMorgan et al still have them in their sights — and there’s no reason to suppose that they haven’t, then the pain in the other precious metals, particularly silver, is not over yet.

I wish there was a way to sugar-coat this, but there isn’t, so I won’t bother trying.

Here are the 6-month charts for all of the Big 6 commodities, so you can see what I mean with your own eyes.  The ‘click to enlarge‘ feature helps a bit with the first four.

The powers-that-be have certainly been busy this week, as their attempts to prevent the total collapse of the world’s equity and bond markets are now so obvious, that every pundit out there is commenting on it — and the quotes from Bill King that precede the Critical Reads section pretty much sums it up.

Their work in the COMEX futures market has certainly taken away the safe haven status that would normally be found in the precious metals and other commodities at times like this.  But they can only keep this up for so long, because at some point, the markets simply will not be denied in seeking their intrinsic values…up, in the case of precious metals and commodities in general…and down, for everything paper.

The economic, financial and monetary systems world-wide are in the process of coming totally unglued, regardless of what the world’s central banks and various Plunge Protection Teams do going forward.  It is simply too big to fix this time — and whether or not Jim Rickards gold-back IMF SDRs put in an appearance at some point, the world as we’ve know it all our lives, is coming to an end.

Not to be forgotten in all this is the U.S. deep state.  With their backs to the proverbial wall, I’ll put absolutely nothing past them, either at home…or abroad…or both.

These are very dangerous times and, unfortunately, all we can do is watch from the sidelines — and hope that our carefully-made nests of precious metals and their equities will see us through all this.

There’s no doubt in my mind that they will, but until JPMorgan et al either get over run, or are instructed to stand aside…either of which has a 100 percent probability of happening…it’s going to be a very rough road ahead until that day dawns.

I’m done for the day — and the week — and I look forward to the Sunday night opening in the Far East with a certain amount of trepidation.

See you on Tuesday.

Ed

All Four Precious Metals Get Closed at New Lows on Wednesday

08 February 2018 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price began to rally quietly, but somewhat unevenly higher once trading began at 6:00 p.m. EST on Tuesday evening in New York — and the high tick of the day was set shortly before the London open, which was shortly after the dollar index got turned higher.  The price rolled over a bit lower from there — and except for a one-hour long rally going into the afternoon gold fix, ‘da boyz’ ran the price down to its low tick of the day, which came at precisely 1:30 p.m. EST…the COMEX close.  It began to crawl quietly higher starting at 2 p.m. in the thinly-traded after-hours market — and that continued right into the 5:00 p.m. EST end of trading.

The high and low tick were reported as $1,334.80 and $1,313.50 in the April contract.

Gold finished the Wednesday session in New York at $1,318.10 spot, down $5.60 on the day, as ‘da boyz’ set a new intraday low for this engineered price move down.  Net volume was extremely heavy at a bit over 326,000 contracts.

It was mostly the same for silver.  It rallied a bit until 11 a.m. China Standard Time on their Wednesday morning — and then chopped sideways until the marginally higher high tick of the day was set shortly after 3 p.m. CST when the dollar index hit its low of the day.  It was sold quietly lower from there — and then got bumped down a bit more after the noon silver fix was put to bed in London.  JPMorgan et al worked their magic once COMEX trading began — and the down/up spike low tick of the day was placed about two minutes before the COMEX close.  Then it gained a few pennies in after-hours trading.

The high and low ticks in this precious metal were recorded by the CME Group as $16.73 and $16.21 in the March contract.

Silver was closed yesterday at $16.34 spot, down 27.5 cents, but was down 39 cents at its low tick.  Net volume was extremely heavy at something under 95,500 contracts, as the Managed Money traders were obviously pouring onto the short side.  There was a fair amount of roll-over/switch volume as well.

The price pattern in platinum was similar in most respects to what happened in gold and silver, so I’ll dispense with the play-by-play.  Platinum’s low of the day was set by ‘da boyz’ at the COMEX close, of course — and it recovered a few dollars from there.  It finished the Wednesday session in New York at $978 spot, down 11 bucks on the day — and another new low for this engineered move down.

Palladium chopped sideways until the Zurich open — and at that juncture, the selling pressure began — and the low tick was set about thirty minutes before the Zurich close.  It popped up ten bucks almost right away — and then traded sideways for the remainder of the day.  Palladium was closed at $978 spot, down 25 dollars from Tuesday, but off it’s low tick by 6 or 7 bucks.

The salami slicing continues in all four precious metals.

The dollar index closed very late on Tuesday afternoon in New York at 89.67 — and began to chop quietly lower from there.  And, for the third day in a row, gentle hands appeared less than an hour before the London open.  The low tick at that point was printed at 89.47.  It chopped quietly higher until 11 a.m. in London — and then didn’t do a lot until another ‘rally’ began at the afternoon gold fix in London, which was 10 a.m. EST in New York.  That ‘rally’ topped out a few minutes before the COMEX close — and it faded a small handful of basis points from there until trading ended.  The dollar index finished the day at 90.34…up 67 basis points on the day.

If you think this sudden ‘strength’ in the U.S. dollar index has an odour to it, you would be right about that.

I’m including the 3-day dollar index chart in today’s column so you can see how these out-of-the-blue dollar index rallies begin shortly before, or at, the London open every day so far this week.  This is the ‘gentle hands’/PPT in action in the currency markets.  They were there at the afternoon gold fix yesterday as well.

There are no markets anymore, only interventions.” — Chris Powell, April 2008

And here’s the 6-month U.S. dollar index — and I’ll bite my tongue about it for the second day in a row, as I’ve already said my piece two paragraphs ago.

The gold stocks opened down a bit, but were back in positive territory by the afternoon gold fix in London, as the gold price rallied for an hour going into the fix.  The shares began to chop lower in a fairly broad range until shortly after 1 p.m. in New York trading — and for the most part, they chopped quietly sideways into the close after that.  The HUI finished down 1.15 percent.

The silver equities opened down a bit as well, but then rallied into positive territory right away, but only for about fifteen minutes — and were headed lower even before the afternoon gold fix was done.  Then, like the gold stocks before them, they were sold down to their lows by shortly after 1 p.m. as well — and they didn’t do a lot after that.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index was closed down a chunky 3.52 percent.  Click to enlarge if necessary.

I would suspect that there was some forced sales due to margin calls in selected constituents of the Silver 7 Index yesterday, with Coeur Mining being the old one that I could see that came close to filling the bill…down 4.02 percent…as all the other major silver stocks I track, didn’t close anywhere near that percentage loss.

And here’s the 1-year Silver Sentiment/Silver 7 chart.  Click to enlarge.

The CME Daily Delivery Report showed that 55 gold and 60 silver contracts were posted for delivery within the COMEX-approved depositories on Friday…so those 214 silver contracts that got added to the February delivery month yesterday, turned out to be the real deal!  In gold, of the five short/issuers in total, the largest by far was Canada’s Scotiabank with 39 contracts out of their in-house/proprietary trading account. [Don’t forget that Scotiabank doesn’t have a client account.]  And it should come as no surprise at all that JPMorgan stopped 54 of those contracts for its own account.  In silver, the sole short/issuer of those 60 contracts was International F.C. Stone — and JPMorgan stopped 56 of them for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

It’s amazing to watch JPMorgan grab every gold and silver contract they can get their hands on…for itself, or its clients.  What do they know, that we don’t…at least not yet.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in February fell by 202 contracts, leaving 1,426 left, minus the 55 mentioned two paragraphs ago.  Tuesday’s Daily Delivery Report showed that only 113 gold contracts were actually posted for delivery today, so that means that another 202-113=89 gold contracts vanished from February at the mutual consents of both the short/issuers and long/stoppers involved.  Silver o.i. in February declined by 13 contracts, leaving 585 still open, minus the 60 contracts mentioned two paragraphs ago.  Tuesday’s Daily Delivery Report showed that exactly 13 silver contracts were posted for delivery today, so the decline in open interest and the deliveries match for a change.


There was another withdrawal from GLD yesterday, as an authorized participant removed/took ownership of 75,900 troy ounces.  And as of 6:32 p.m. EST yesterday evening, there were no reported changes in SLV.

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

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  They received only 2,399 troy ounces, all of which went into Delaware — and there was 36,858 troy ounces shipped out — and that was from JPMorgan’s vault.  The link to this activity is here.

There was some activity in silver as well.  There was 726,931 troy ounces deposited, but nothing was shipped out.  Another truck load…605,120 troy ounces…was left at JPMorgan — and the remaining 121,810 troy ounces was dropped off at Delaware.  The link to all that is here.

It was very busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 6,221 of them, plus they shipped out 8,463.  All of this action was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Before hitting the stories for today, here’s some commentary by Bill King that I lifted from yesterday’s edition of his King Report.  Bill’s no dummy — and he’s been around the proverbial block a number of number of times — and this is what he had to say about the equity market price action on Monday and Tuesday…

The Monday night low for SPHs was 2,529, a decline of 92 handles, almost 4%!  This is the biggest overnight tumble since the triple-digit crash on the night that Trump was elected.
 
Six minutes before the NYSE opened, SPHs traded at 2,579.  Ten minutes after the open, they hit 2,641.  The 63-handle jump in 16 minutes was obviously impact trading/manipulation/plunge protection.
 
Within twenty-two minutes of the NYSE open, SPHs hit 2680, up 72.00 and 151 points above the overnight low of 2529.  We ask you, “Is this natural market action?  Is this how real buyers behave?” 
 
Ergo, there were two massive ‘V’ rallies from the last hour of Nikkei trading to the first 22 minutes of NYSE trading on Tuesday.  ‘V’ rallies are the signature of impact trading/manipulation/plunge protection.
 
The 64-handle (2.4%) SPH rally from 14:30 EST to 15:10 EST looks a manipulation to disabuse real sellers, short-VIX hedgers and traders from dumping stocks during the final hour of trading – or it was the first leg of a ‘pump & dump’ scheme.
 
Let this sink in for a minute: There was a 2.3% S&P 500 Index rally that occurred within 40 minutes.  Once again, this is not natural market activity.
 
We warned in yesterday’s missive that the plunge protection operation usually occurs after the Nikkei closes.  This is when SPHs have their thinnest market.  Yesterday’s rescue operation started during the last hour of trading in Japan.  From midnight EST until 4.23 EST, SPHs rallied 115.50.  Obviously this was manipulation and a rescue operation.  END

I don’t have all that many stories for you today.


CRITICAL READS

Icahn calls U.S. stock nosedive “rumblings of an earthquake“: CNBC

Billionaire activist investor Carl Icahn warned on Tuesday that investors have exposure to “way too many derivatives” and called the stock market’s nosedive just “rumblings of an earthquake.”

The market is really not a place for the average person to be playing around with derivatives,” Icahn said on CNBC. “Today, you have these triple-leveraged ETFs (exchange-trade funds) that are crazy.

U.S. stocks swung wildly between positive and negative territory on Tuesday, a day after the Dow and S&P 500 indexes saw their biggest one-day declines in more than six years, while a world stock index dropped more than 1 percent. The pullback followed a rapid run-up in the start of the year and strong 2017 gains.

Icahn said investors should not use the markets like a casino. “… that’s a huge mistake. This casino is on steroids.

This Reuters article, filed from New York, was posted on their website at 11:14 a.m. on Tuesday morning EST — and I found it in yesterday’s edition of the King Report.  Another link to it is here.


Gundlach: Market Unwind Will Be “Turbulent, Not Just a Few Days

Doubleline CEO Jeffrey Gundlach echoed earlier calls by analysts from SocGen and Morgan Stanley, saying that the “low rate-low volatility” market environment went on for so long that now “the unwind will be turbulent and not over in a couple of days.In other words, don’t buy the dip.

In addition to his discussion of bitcoin and volatility, Gundlach also touched on what many agree was the proximal catalyst for last Friday’s market plunge which in turn triggered this week’s vol eruption: “Clearly, the market gets shaky when the 10-year hits 2.85 percent,” Gundlach told Reuters.  “Just look at this week, and today. Makes one consider what could be coming if 10s push over 3 and 30s (30-year Treasury bond) over 3.22 percent.

During his January webcast, Gundlach correctly predicted that if the 10-year U.S. Treasury note yield went above 2.63%, U.S. stock investors would be spooked. The 10-year yield is currently trading around 2.84%, and its spike today on the heels of the “deficit-busting” Senate agreement which would lift spending caps by $300 billion above current levels, sent the markets into the red after an impressive morning rally.

In little comfort for equity bulls, Gundlach said it is “hard to love bonds at even a 3 percent yield.  Rising interest rates are a problem — and the U.S. is in debt and there is massive bond supply.

This news item showed up on the Zero Hedge website at 7:46 p.m. EST yesterday evening — and another link to it is here.


Biggest Bubble Ever Meets Biggest Pin: Casino Markets — Bill Bonner

The markets were noisy yesterday. A third day of wildly gyrating prices left stocks and bonds in retreat… as the financial press shouted out its outsized fears… and its calming little lies.

This morning, we’re beginning to see some green figures again. Tokyo and London are up slightly.

We still don’t know whether this will turn into the major plunge we anticipated. But already, it has delivered a message: Watch out!

We’re not the only ones who are worried. Bloomberg caught up with billionaire investor Carl Icahn:  “Passive investing is the bubble right now, and that’s a great danger,” he said.  “When you start using the market as a casino, that’s a huge mistake,” he added.

Eventually, Icahn reckons, the bubble will implode and lead to a crisis bigger than in 2009.

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


Credit Card, Student And Auto Debt All Hit Record Highs In December

The U.S. consumer closed out 2017 with a credit bang.

While we reported last month that in November U.S. credit card debt had just surpassed the previous all time high hit in July 2008 just before all hell broke loose when Lehman filed for bankruptcy two months later, there was a slight chance that in December this number had declined after the record surge in November credit-funded spending (which was just revised from $28BN to $31BN0.

Well, that did not happen, and while December total consumer credit increased by less than the expected $20BN, it was still an impressive $18.45BN, of which $5.1billion was credit card debt and $13.3 billion non-revolving – or student and auto loans.

More importantly, with the latest $5.1 billion increase in revolving, or credit card, debt the total is now $1.027.9 trillion, the highest number on record.

Meanwhile, non-revolving credit which with the exception of one definition change month, has never gone down, also hit a new all time high of $2.813 trillion, a monthly increase of $13.34 billion.

So for anyone still wondering why the U.S. economy closed 2017 with an upward GDP burst, here is your answer. The problem is that with the personal savings rate just shy of all time lows…… and with U.S. consumers deep in the red on their household debt, just what will keep the U.S. economic expansion going from this point on is far less clear, especially if the stock market has now peaked, as recent events suggest.

This rather short Zero Hedge article was posted on their website at 3:21 p.m. EST yesterday afternoon — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


Biggest Ever Debt & Dollar Crisis Coming: Greg Hunter interviews Peter Schiff

Money manager Peter Schiff says the wild swings in the market are because of massive central bank money printing and exploding debt. What in the heck is going on?  Schiff explains, “The real question is what was going on when the markets were going up?  That’s what made no sense.  The fact that they are coming back down to earth makes a lot more sense.  I think the catalyst for this move (in the stock market) is, ironically, the tax cuts we got because that put the bigger deficits in the spotlight.  Now, the deficits are going to go off the charts because we have to replace the lost tax revenue with more debt.

What about the economy improving under Trump? Schiff says, “Growth hasn’t really picked up, it’s actually slower.  This is all nonsense.  The economy is not improving.  Nothing is happening other than we are going into huge debt.  We got tax cuts, and we borrowed the money to pay for them.”

Schiff predicts in the next recession, the Fed will go back to printing even more money. Schiff contends, “There is no question in my mind because the alternative is politically unacceptable to anybody, which would be a worse financial crisis than 2008.  When we go back into recession, when we are in a bear market, they are going to go back to the only formula that they think works.  They can’t do rate cuts because rates are so low, they can really cut them very much.  So, the only real stimulus they can reach for is QE (money printing), but it’s not going to work this time.  We are going to overdose on QE.  There are no more bubbles that they can blow.

This 27:37 minute video interview was posted on the usawatchdog.com Internet site yesterday — and it comes to us courtesy of Brad Robertson.  Another link to it is here.


Robo-Brokers Froze as Market “Flash Crashed” –- Open the Pod Bay Doors Hal

* Volatility (VIX) Has Largest Move In History 117%!

* Nomura Bank Offers 4 Cents on the Dollar to Those Who Bet on No Volatility

* Sentiment Changes: Once Complacent Investors Now Jumpy and Nervous

This 58-minute audio commentary, of which I’ve only listed to part of, was posted on the mcalvany.com Internet site on Tuesday sometime.

Judy Sturgis sent it our way, with the comments that it was an… “Excellent interview.   Well worth a listen.   I am sure your readers will find this thoughtful.”  I was certainly impressed with what I heard — and I hope your are too…if you have the time to listen to it all, that is.  Another link to this audio interview is here.


Dutch lender Rabobank to pay $369 million in money-laundering case

Dutch lender Rabobank’s California unit agreed Wednesday to pay $369 million to settle allegations that it lied to regulators investigating allegations of laundering money from Mexican drug sales and organized crime through branches in small towns on the Mexico border.

The subsidiary, Rabobank National Association, said it doesn’t dispute that it accepted at least $369 million in illegal proceeds from drug trafficking and other activity from 2009 to 2012.

It pleaded guilty to one count of conspiracy to defraud the United States for participating in a cover-up when regulators began asking questions in 2013.

The penalty is one of the largest U.S. settlements involving the laundering of Mexican drug money, though it’s still only a fraction of the $1.9 billion that Britain’s HSBC agreed to pay in 2012.

This story appeared on the abcnews.go.com Internet site at 7:14 a.m. EST on Wednesday morning — and I thank West Virginia reader Elliot Simon for sending it along.  Another link to it is here.


Deutsche Bank Shares Plunge to Crisis Level

Deutsche Bank AG fell to the lowest level since a crisis of confidence in 2016 after its fourth-quarter earnings flop prompted analyst downgrades.

MainFirst’s Daniel Regli lowered his recommendation on the stock to the equivalent of sell on Wednesday, citing the bank’s “damaged franchise as well as a need for substantial restructuring, including the closure of several businesses.” Neil Smith at Bankhaus Lampe cut his target price but kept his buy recommendation.

Shares of the bank have lost 11 percent since Friday, when the Frankfurt-based company reported revenue at a seven-year low and declines at businesses from transaction banking to equity derivatives. The sell-off across global equity markets added to the slump, though many of its European competitors posted gains on Wednesday as Deutsche Bank slipped an additional 0.4 percent.

Deutsche Bank struggled to stem its share-price slide and maintain client confidence after the U.S. Department of Justice requested $14 billion in September 2016 to settle a probe tied to sales of mortgage-backed securities. The German lender reached a $7.2 billion agreement in December of that year.

The goal of forging a safer bank with more reliable earnings streams is not yet clearly in sight,” Moody’s Investors Service analysts led by Peter Nerby wrote in a note to clients Monday. “There are still structural impediments blocking a quick path to restored profitability,” Moody’s said, citing “chronic revenue weakness in key markets and business lines.

This Bloomberg article was posted on their Internet site at 8:30 a.m. Denver time on Wednesday morning — and was updated about four and a half hours later.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.  The Zero Hedge spin on this story is far less charitable — and is headlined “Deutsche Bank Tumbles to 2016 Lows Amid Reports of HNA Technical Default“.  It’s worth reading if you have the interest.  I thank Brad Robertson for that one.


Ukrainian factory Azovmash losses thousands of workers to Russia

Despite being portrayed as the ‘aggressor’ many Ukrainians move to Russia in search of employment.

Thousands of workers from one of the largest machining factories in Ukraine, Azovmash in Mariupol, Donetsk Region, have fled to Russia, suggesting there may be truth in the revolutionary idea that if you pay workers fairly, and give them safe homes without the occasional threat of artillery fire, they are overall satisfied. Politnavigator reports, (in Russian):

I spoke with the Deputy Director of Azovmash. A large enterprise, once it had a workforce fifteen thousand people. Now, barely one thousand remain. I asked: where is everyone? He said to me: “Evgeni, you will not believe it – they took them by bus loads to the Russian Federation.” Whole families, whole workshops departed for Russia. Because they were given apartments, they were given a normal salary, no one ran after them with a grenade launcher wearing a balaclava. They instead got work, and a predictable future. said Evgeni Murayev, Verkhovna Rada deputy.

Who would have thought people don’t want to be chased around by balaclava-wearing “gentlemen” throwing grenades at them. At least they weren’t chased around by women in balaclavas throwing chickens at them (Google it…or don’t…better yet…don’t).

In all seriousness, this is excellent commentary to raise against the argument that Russia invaded Ukraine to attack and destroy the people. Generally speaking, people don’t run towards their attackers in order to start new lives. Millions of Ukrainians have moved to Russia because they speak the same language, form the same culture, and largely represent the same East Slavic people group. It is fair to note, however, that Mariupol in Donbass, is part of Eastern Ukraine, the half of the country that is very Pro-Russian.

This article put in an appearance on the russiafeed.com Internet site about 7:30 p.m. Moscow time on their Wednesday evening — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Nine straight years of record annual gold mine production

According to the World Gold Council’s Gold Demand Trends report released Tuesday primary gold production hit another record in 2017 after nine years of annual growth in output.

Overall mine production totalled 3,268.7 tonnes or just over 105 million troy ounces in 2017 which was only slightly higher than in 2016 as new mine starts in recent years have mostly served to fill the gap left by production losses elsewhere according to the WGC report. Compared to 2010, global gold output has surged by 525 tonnes or nearly  17m ounces.

The WGC, an industry body, estimates that output in China – the world’s top producer – fell 9% last year, only the second annual drop in production since 1980. China, which overtook South Africa as the number one miner of the metal in 2007, produced 455 tonnes of the yellow metal in 2016 according to U.S. government figures.

Stricter environmental regulations in China relating to cyanide in tailings imposed in 2017 resulted in the closing of some marginal operations over the course of the year. In February last year Beijing announced plans to reduce the number of gold mines to around 450 from more than 600 before and shutting down40 tonnes of outdated production capacity by the end of 2020.

First of all you have to believe what that the World Gold Council is telling us about world gold production.  And once you get past that, then you have to believe their source data from GFMS.  But no matter how much positive spin they try to put on this, the fact of the matter is that world gold production has been in more or less terminal decline since its high in 2009.  The embedded chart tells all.  It was posted on the mining.com Internet site — and I plucked it from the Sharps Pixley website last night.  Another link to this gold-related news item is here.


The PHOTOS and the FUNNIES

I was driving down the freeway today — and spotted a bird I hadn’t seen in these parts for years.  The cold must have driven them south this winter, as that’s the only time you ever see them either in the city, or this far south.  It’s the snowy owl.  From its white and black speckled feather pattern, it could tell it was a young bird, but still a treat to see.  Click to enlarge.


The WRAP

Remarkably, there already exists, in a very real sense, cryptocurrencies connected to precious metals in the form of ETFs, including SLV and GLD, and others. In essence, the race to develop a cryptocurrency connected to gold and silver has already been run — and run quite successfully, I might add. Admittedly, there has been no great recent rush to silver and gold ETFs, other than the rush to stealthily acquire physical silver and gold by JPMorgan, using SLV and GLD, as well as the COMEX, as its acquisition vehicles of choice.

But that’s my whole point, namely, that the coming collective investment rush into precious metals has not commenced due to the rotten price performance since 2011. JPMorgan, being the market master (and master criminal) that it is, has been harvesting and accumulating massive amounts physical silver and gold since then, while simultaneously being the single entity most responsible for the low silver and gold prices by virtue of it also being the largest paper COMEX short. Just as the early adopters of Bitcoin made the most money, JPMorgan stands to make the most in the coming rush to silver and gold, along with those holding the metals.

All that’s missing at this point is a lift off in price to a level that will set off the coming collective investment buying wave. That’s the main lesson of the recent stock market and cryptocurrency volatility – once the preconditions are in place, all it takes to get the ball rolling is price action. Once JPMorgan gets what it feels is enough physical metal in its hands, the game will begin. Judging by what other markets have done, the silver and gold rush will not end without a complete rewriting of history.Silver analyst Ted Butler: 07 February 2018


Well, ‘da boyz’ were taking no prisoners yesterday, as they set new low closes in all four precious metals, along with the other two card-carrying members of what I call the Big 6 commodities…copper and crude oil.

The 50 and 200-day moving averages in gold still remain unbroken, but ‘da boyz’ are in full control of the precious metals, regardless of what’s happening in the currency and equity markets, so I’m expecting their imminent demise.  And if not the 200-day, certainly the 50-day.

Subscriber Paul Fillion had this comment yesterday…”Wonder if they are saving the gold smash for the Chinese New Year…[starts February 16 over there – Ed]…when their markets will be closed for something like a week? Just a thought. Seems like they are waiting for something.”  That may be the case, but they certainly got a big head start on it yesterday — and I was wondering out loud on the phone with Ted that it seemed like the powers-that-be postponed this major assault until after the cut-off for this Friday’s COT Report…which is an old trick of theirs.  Ted certainly didn’t disagree with that notion.

Here are the 6-month charts for all four precious metals, plus copper and…it’s been a while…WTIC.  All six had their prices engineered lower on Wednesday, as the Managed Money traders in all six were tricked into dumping more longs and adding to short positions…which is the sole reason for these price declines.  The ‘click to enlarge‘ feature helps a bit with the first four.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was sold quietly lower…to a new intraday low for this move down…until around 12:40 p.m. China Standard Time on their Thursday afternoon.  It has been inching unevenly higher since — and is currently down $6.00 an ounce.  The silver price was also lower in morning trading in the Far East — and its new intraday low was set at the same time as gold’s.  It has rallied as well — and is now down 2 cents at the moment.  Ditto for platinum — and it’s down 3 bucks.  Palladium was down 9 bucks by 1 p.m. CST, but it too has rallied a bit since — and is down only 4 dollars as Zurich opens.

Net HFT gold volume is already pretty healthy at somethin over 71,000 contracts — and that number in silver is way up there as well at 18,100 contracts.  There’s no question that the Managed Money traders are dumping longs and going short in droves in all four precious metals — and that will only accelerate in gold once the 50-day moving average is penetrated.  We’re but a chip shot away from that right now.

The dollar index has been chopping around in a 20 basis point range ever since trading began at 6:00 p.m. EST in New York on Wednesday evening — and it’s currently down 12 basis points as London opens.

With new interim lows already set in all four precious metals during early trading on Thursday, it’s obvious that ‘da boyz’ are still hard at work — and where the bottom is won’t be know until…as Ted Butler says…we see it in the rear-view mirror.  And if JPMorgan et al are gunning for gold’s 200-day moving average, there’s still lots of work for them to do.  It only remains to be seen how long they’re going to take to do it.

So we wait some more.

And as I post today’s column on the website at 4:04 a.m. EST, I note that three of the four precious metals have trended lower during London and Zurich trading. Gold is down $8.00…silver is now down 7 cent…platinum by 6 bucks — and palladium is now down only 2 dollars.

Gross gold volume is approaching 96,000 contracts — and net of roll-over/switch volume, net HFT volume is a bit over 85,000 contracts. Net HFT silver volume is now up to about 20,800 contracts.

The dollar is still in that big 20 basis point trading range that it’s been in throughout all of Far East trading on their Thursday, but it’s in ‘rally’ mode at the moment — and is now up 13 basis points.

With ‘da boyz’ obviously on the rampage in the COMEX futures market in the Big 6 commodities, absolutely nothing will surprise me when I check the charts after I roll out of bed later this morning.

That’s it for another day — and I’ll see you here tomorrow.

Ed

A Bloodbath in Silver: Courtesy of JPMorgan et al

03 February 2018 — Saturday

YESTERDAY in SILVER, GOLD, PLATINUM and PALLADIUM


The gold price didn’t do much in Far East trading on their Friday — and was up less than a dollar by the London open.  But by the 10:30 a.m. GMT morning gold fix, it was down about three bucks and change — and then didn’t do a thing until the job numbers came out.   ‘Da boyz’ were lying in wait — and the low tick of the day came around 10:35 a.m. EST.  It rallied a decent amount from there until  12:30 p.m. — and then traded flat until the dollar index was rescued at the 1:30 p.m. EST COMEX close.  The gold price drifted lower from there, almost getting back to its low tick of the day by shortly after 3 p.m. in after-hours trading — and it ticked a bit higher into the close from there.

The high and low ticks were reported as $1,353.30 and $1,330.10 in the April contract.

Gold was closed in New York yesterday at $1,331.90 spot, down $16.40 on the day.  Not surprisingly, net volume was over the moon at 404,000 contracts.

The silver price traded in a very similar price pattern as gold on Friday — and with the same inflection points.  JPMorgan was laying in wait at 8:30 a.m. EST — and the carnage was awesome to behold.  At its low, they had silver down 70 cents in after-hours trading…a hair over 4 percent.  Both the 50 and 200-day moving averages fell in the process.

The high and low ticks in this precious metal were recorded by the CME Group as $17.225 and $16.52 in the March contract.

Silver finished the Friday session in New York at $16.575 spot, down 62.5 cents from Thursday — and was also closed below both its 50 and 200-day moving averages in the process.  Net volume was an eye-watering 113,500 contracts.  The Managed Money traders were pitching long contracts and going short in droves — and JPMorgan et al…courtesy of their own engineered price smash…were standing there buying up everything that the Managed Money traders were selling.  How criminal can you get.

Platinum was also sold a bit lower when trading began in New York at 6:00 p.m. EST on Thursday evening.  It was down 10 bucks minutes before noon in Zurich, but rallied back above the $1,000 spot mark by the COMEX open.  The $983 low tick was set shortly before the Zurich close — and it was forced to follow a price path similar to gold and silver for the remainder of the New York session.  Platinum finished the Friday session at $990 spot, down 16 bucks from Thursday.

Palladium didn’t do much until shortly after 3 p.m. China Standard Time on their Friday afternoon — and at that juncture it jumped up a bit — and then crawled higher until a few minutes before the COMEX open in New York.  It was sold down to a dollar below unchanged by shortly before the Zurich close…just like for platinum — and it then rallied quietly and unsteadily higher for the rest of the day.  Palladium closed at $1,039 spot, up 8 dollars.

The dollar index closed very late on Thursday afternoon in New York at 88.65 — and began to chop very quietly higher once trading began a few minutes later at 6:00 p.m. EST.  It hit a 90-minute air pocket between 3 p.m. CST — and around 8:45 a.m. in London — and then didn’t do much until the job numbers came out.  The index launched higher at that point, but that ‘rally’ flamed out at the 89.43 mark just minutes after 10:30 a.m.  It chopped lower from there — and got rescued by the usual ‘gentle hands’ at the 1:30 p.m. COMEX close as it broke below the 89.00 mark.  That feeble ‘rally’ that was generated at that point didn’t amount to much — and the dollar index was closed on Friday at 89.22 — and up 57 basis points from Thursday.

It’s obvious that without the intervention of those ‘gentle hands’…the dollar index would have crashed and burned — and there would have been no fig leaf for the powers-that-be to do the dirty in the precious metals yesterday.

On Thursday, the dollar index fell 52 basis points — and gold closed higher by $3.30 the ounce.  On Friday, the dollar index rallied 57 basis points, basically regaining all of Thursday’s losses in the process — and gold got hit for $16.40.  With silver down 4 percent yesterday, I thought gold got off easy.

The point I’m making is that ‘da boyz’ are selling into the precious metal rallies on dollar index weakness — and adding fuel to the fire to the downside when the dollar index rises.

And here’s the 2-year U.S. dollar index chart.

The gold stocks gapped down a bunch at the open — and hit their morning lows around 10:40 a.m. when the gold price began to rally off its low tick of the day.  That rally in the equities ended the same time as the rally in gold did…12:30 p.m. EST.  It was down hill all the way from there — and the HUI got clubbed to the tune of 4.39 percent.

The price path for the silver equities was very similar — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by ‘only’ 2.99 percent.  When you consider the fact that silver was down 4 percent on the day, these declines in their associated equities don’t look nearly as bad…although on days like today, that’s cold comfort.  Click to enlarge, if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index — and it’s just as sad looking.  Click to enlarge.

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

Here’s the weekly chart — and it’s butt-ass ugly.  There’s just no other words for it.  Click to enlarge.

And year-to-date — as there are only two days gone in the new month, so the month-to-date chart is rather meaningless.  But it doesn’t look too hot, either.  Click to enlarge as well.

No matter how obvious the price management scheme in the precious metals is, you can take it to the bank that the executives of these mining companies that we own shares in will say and do nothing.  And neither will the World Gold Council, The Silver Institute…or the CME Group or the CFTC.  As stockholders, we have been completely abandoned by all parties that are supposed to be looking out after our best interests.  Instead of that, they’ve willfully fed us to the wolves.


The CME Daily Delivery Report for Day 3 in February shows that 431 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Of the five short/issuers in total, the only two worth mentioning are HSBC USA and Goldman Sachs, as they issued 366 and 61 contracts out of their respective in-house/proprietary trading accounts.  And of the six/long stoppers, JPMorgan stopped nearly everything…392 for its own account, plus 24 for its client account.  The link to yesterday’s Issuers and Stoppers Report is here.

Of the 1,302 gold contracts issued and stopped this month, JPMorgan has stopped 1,051 of them…875 for its own account, plus another 176 for its client account.  JPMorgan has also issued 508 contracts out of its client account, with JPMorgan stopping a goodly chunky of those for its own in-house/proprietary trading account as well.

The CME Preliminary Report for the Friday trading session showed that gold open interest in February fell by 675 contracts, leaving 2,233 left, minus the 431 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that only 196 gold contracts were actually posted for delivery on Monday, so that means that 675-196=479 more gold contracts vanished from February at the mutual consents of both the short/issuers and long/stoppers involved.  Silver o.i. in February declined by 2 contracts, leaving just one left.  Thursday’s Daily Delivery Report showed that zero gold contracts were actually posted for delivery on Monday, so it’s obvious that 2 silver contracts vanished from the February delivery month for the same reason that I gave for gold.  At the rate that deliveries/open interest in both precious metals is progressing, the February delivery month has quickly turned into a non-event.

It’s a given that Ted Butler will have something to say about all this in his mid-week review this afternoon.


There were no reported changes in GLD yesterday, but there was a smallish withdrawal from SLV, as an authorized participant removed 133,948 troy ounces.  A withdrawal of this size usually represents a fee payment of some kind.

Ted mentioned on the phone yesterday that close to 18 million share of SLV changed hands yesterday.  One has to wonder just how many of those shares now belong to JPMorgan — and how soon the ‘redemption of shares for physical metal’ will begin…not that it has ever stopped, mind you.

The U.S. Mint had a tiny sales report yesterday.  They sold 1,000 troy ounces of gold eagles — and 1,000 one-ounce 24K gold buffaloes.  Those numbers are the month-to-date totals for February as well.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.  Only 7,523.100 troy ounces/234 kilobars [U.K./U.S. kilobar weight] were received over at Scotiabank — and nothing was shipped out.  I shan’t bother linking this amount.

It was busier in silver, as 591,161 troy ounces were received — and 352,369 troy ounces shipped out.  All of the ‘in’ activity was at JPMorgan — and all the ‘out’ activity was from CNT.  The link to that is here.

That truckload into JPMorgan’s vault on Thursday put their COMEX silver stash at a new record high of 126.3 million troy ounces, which is a bit over 51 percent of all the silver held on the COMEX.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 3,500 of them, plus they shipped out another 398.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, showed a moderate increase in the commercial net short position in silver — and a somewhat surprising decline in gold.

In silver, the Commercial net short position increased by 5,794 contracts, or 29.0 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 3,808 contracts — and they also added 1,986 contracts to their short position.  The sum of those two numbers is the change for the reporting week.

Ted said that the Big 4 traders actually reduced their short position by approximately 300 contracts — and the ‘5 through 8’ large traders decreased their short position by around 700 contracts as well.  All the heavy lifting was by Ted’s raptors, the 42 small commercial traders other than the Big 8, as they reduced their long position by about 6,800 contracts.

Under the hood in the Disaggregated COT Report it was a rather mixed bag, as the Managed Money traders only accounted for about half of the weekly change in the Commercial net short position.  They reduced their long position by 3,732 contracts — and they reduced their short position by 6,562 contracts as well — and the difference between those two numbers…2,830 contracts…was their change for the reporting week.  As always, the difference between that number and the Commercial net short position…5,794 minus 2,830 equals 2,964 contracts…was picked up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories.  In this week’s report, the lion’s share of that difference came from the ‘Nonreportable’/small trader category.

Based on the tiny drop in the short position of the Big 4 traders, Ted didn’t change the short position of JPMorgan this week…leaving it at 31,000 contracts.  The Commercial net short position in silver as of the Tuesday cut-off was 236.4 million troy ounces of paper silver.

Here’s the 3-year COT chart for silver.  Click to enlarge.

Of course, after the JPMorgan-led bloodbath in the COMEX silver market yesterday, the above COT data is “yesterday’s news” in every respect — and I would suspect that silver is now configured bullishly.


In gold, the commercial net short position actually dropped by 9,476 contracts, or 947,600 troy ounces of paper gold.

They arrived at that number by selling 6,768 long contracts, but they also reduced their short position by 16,244 contracts — and the difference between those numbers was the change for the reporting week.

Ted said that the Big 4 traders reduced their short position by about 6,100 contracts…however, the ‘5 through 8 large traders increased their short position by around 1,100 contracts.  Ted’s raptors, the 45 small commercial traders other than the Big 8, added approximately 4,500 contracts to their long position.

Under the hood in the Disaggregated COT Report there was very little in the way of change with the Managed Money traders during the reporting week.  They reduced their long position by 5,406 contracts, but they also reduced their short position by 3,432 contracts — and the difference between those two numbers…is only 1,974 contracts.  The difference between that number and the commercial net short position…9,476 minus 1,974 equals 7,502 contracts…was made up by the traders in the other to categories, as both sold long positions and increased their respective short positions as well.

The commercial net short position in paper gold now sits at 22.51 million troy ounces.

And here’s the 3-year COT Report for gold.  Click to enlarge.

Of course ‘all of the above’ is, like in silver, very much “yesterday’s news” as well.

With JPMorgan et al taking out both the 50 and 200-day moving averages in silver with real authority yesterday, it’s a reasonable assumption to make that we may be close to, or at, a bottom for the silver price.  But the same can’t be said of gold, as it has had a bearish market structure on the COMEX for quite a number of weeks.  So although there certainly was huge improvement in the commercial net short position since the Tuesday cut-off, with most of that coming yesterday, one should fervently hope that the 50 and 200-day moving averages in gold aren’t on ‘da boyz’ ‘to do’ list.  I don’t think they are, but Ted pointed out that possibility on the phone yesterday — and it can’t be ignored.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 126 days of world silver production—and the ‘5 through 8’ large traders are short an additional 64 days of world silver productionfor a total of 190 days, which is over 6 months of world silver production, or about 461.7 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 192 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 236.4 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 461.7 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 461.7 minus 236.4 = 225.3 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 42-odd small commercial traders other than the Big 8, are long that amount.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 31,000 contracts, or around 155 million troy ounces, unchanged from what they were short in last week’s COT Report.  155 million ounces works out to around 64 days of world silver production that JPMorgan is short.  That’s compared to the 190 days that the Big 8 are short in total.  JPM holds about 34 percent of the entire short position held by the Big 8 traders.

Up until two weeks ago, when I was preparing my presentation for the Vancouver Resource Investment Conference, I had estimated the short position in silver held by Scotiabank/ScotiaMocatta at approximately 32 days of world silver production minimum.  That turned out to be high by quite a bit.  Now that I’ve recalibrated their short position, it’s now down to about 23 days, or maybe a bit less.  So it’s more than obvious that Scotiabank has been actively reducing their short position in the COMEX futures for the last year.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s equally obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

JPMorgan has been forced by circumstance to pick up Scotiabank’s trading/price management duties in silver and gold.  So JPMorgan is by far the No. 1 silver short on Planet Earth — and likely to remain that way indefinitely.  Of course they have 675+ million troy ounces of physical silver [and counting!] stashed away to cover that, so they are in no danger.  That can’t be said of the remaining Big 7, unless JPMorgan plans to bail out some, or all of them.  And if that’s the case…at what price?  I get the feeling, as I said last week, that it wouldn’t come cheap.

The two largest silver shorts on Planet Earth—JP Morgan and one other, which may or may not be Scotiabank, are short about 87 days of world silver production between the two of them—and that  87 days represents about 69 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…a bit more than two thirds of it.  The other two traders in the Big 4 category are short, on average, about 19.5 days of world silver production apiece, down 0.5 days from last week’s report.

The four traders in the ‘5 through 8’ category are short, on average…16 days of world silver production each, which is down 0.25 days from what they were short in last week’s COT Report.

This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that ever changes by any material amount.  Although not much happened during the past reporting week

The Big 8 commercial traders are short 46.6 percent of the entire open interest in silver in the COMEX futures market, which is virtually unchanged from last week’s COT Report — and that number would be almost 50 percent once the market-neutral spread trades are subtracted out.  In gold, it’s now 48.5 percent of the total COMEX open interest that the Big 8 are short, up a bit from last week’s report — and something over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 68 days of world gold production, which is down 2 days from what they were short last week — and the ‘5 through 8’ are short another 29 days of world production, which is up 1 day from what they were short the prior week, for a total of 97 days of world gold production held short by the Big 8 — which is down one day from the 98 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold 70 percent of the total short position held by the Big 8…which is up 1 percentage point from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 66, 71 and 77 percent respectively of the short positions held by the Big 8.  Silver is unchanged from the previous week’s COT Report — and platinum is down 1 percentage point from last week — and palladium is down 2 percentage points from what it was in last week’s COT Report.

I have an average number of stories for you today…but there’s no Cohen/Batchelor interview this week.


CRITICAL READS

U.S. Adds 200,000 Jobs; Wages Rise by Most Since Recession

U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018.

Non-farm payrolls rose 200,000 — compared with the median estimate of economists for a 180,000 increase — after an upwardly revised 160,000 advance, Labor Department figures showed Friday. The jobless rate held at 4.1 percent, matching the lowest since 2000, while average hourly earnings rose a more-than-expected 2.9 percent from a year earlier, the most since June 2009.

Treasury yields and the dollar gained, while stock futures remained lower, as the data reinforced the Fed’s outlook for three interest-rate hikes this year under incoming Chairman Jerome Powell, including one that investors expect in March. The figures may also add to the likelihood of a fourth rate increase in 2018.

The report puts the nation closer to maximum employment — one of the goals of the Federal Reserve — and sets a solid tone for hiring this year following continued gains in payrolls in 2017. That could be starting to generate a long-awaited, sustained pickup in wages and boost demand in this expansion, which may also get a lift this year from tax-cut legislation signed by President Donald Trump in December.

The gain in wages will add to concerns that inflationary pressures are building in the economy,” said Michael Feroli, chief U.S. Economist at JPMorgan Chase & Co., who correctly projected the payrolls gain. “It solidifies expectations that the Fed will hike in March. The question is, what will they signal for hikes after that?

There were lot of caveats buried in the job numbers yesterday, so it’s not as rosy as this Bloomberg story makes it out to be.  This article was posted on their Internet site at 6:30 a.m. Denver time on Friday morning — and updated about an hour later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.


Dollar Spikes Most in Over a Year, But…

Strong ‘headline’ earnings growth (despite all the caveats) has sparked a hawkish tilt to trading sending bond yields higher and spiking the dollar index by the most since Jan 2017.

There’s just one thing though…

The 0.9% spike in the dollar index is the most since January 18th 2017 and sounds impressive, but for a trader, it appears the spike is for fading as it hits the Trump Rescue highs and rolls over…

So the strongest wage growth in years merely enabled machines to run some stops before the trend lower continues?

This very brief 2-chart Zero Hedge item appeared on their website at 11:28 a.m. EST on Friday morning — and I thank Brad Robertson for sending it our way.  The second chart is worth a look — and another link to it is here.


Is the U.S. waging a ‘cold war’ to weaken the dollar?

The dollar is at its weakest level in years against other major currencies.

Experts say the drop is being driven, at least in part, by the U.S. government. And some suggest it’s a deliberate campaign aimed at boosting the American economy at the expense of major trading partners like Europe and Japan.

The Trump administration is engaged in “a cold currency war — and it’s winning,” Joachim Fels, an economist at investment firm Pimco, said this week.

Rather than an open conflict, which would involve direct intervention in currency markets, the hostilities come in the form of words and “covert” actions, he wrote in a blog post.

Fels points to the Trump administration’s moves to slash taxes and boost spending, which he says are coming at “the wrong time“. The measures will pile on more government debt, making investors less eager to own dollar assets, like U.S. Treasury bonds.

Policies like that “are sending an implicit but very clear signal to markets: A weaker dollar is the goal,” Fels wrote. “Markets have understood the signal.”

Yep, that pretty much sums it up.  This news item put in an appearance on the money.cnn.com Internet site at 6:47 a.m. EST on Friday morning — and I found it embedded in a GATA dispatch.  Another link to it is here.


Bond Panic Spreads/World of Hurt — Bill Bonner

The feds giveth; the feds taketh away…and the feds maketh a mess of things.

They have engineered a grotesquely exaggerated credit cycle – holding short-term interest rates below the rate of inflation for far too long.

They’ve been giving out free money, in other words.

Now they have an economy burdened by far too much debt… just as the credit cycle turns.

A few basis points doesn’t seem like much. But when you have to borrow, every extra basis point (one one-hundredth of a percentage point) hurts. And when you have $67 trillion in debt, a few basis points can be a disaster.

To be more precise, a one-basis point increase in carrying costs would add $6.7 billion to the nation’s annual interest rate charge.

This excellent commentary by Bill was posted on the bonnerandpartners.com Internet site yesterdays sometime — and another link to it is here.


Doug Noland: The Grand Crowded Trade of Financial Speculation

It’s worth noting that the U.S. dollar caught a bid in Friday’s “Risk Off” market dynamic. Just when the speculator Crowd was comfortably positioned for dollar weakness (in currencies, commodities and elsewhere), the trade abruptly reverses. It’s my view that heightened currency market volatility and uncertainty had begun to impact the general risk-taking and liquidity backdrop. And this week we see the VIX surge to 17.31, the high since the election.

The cost of market risk protection just jumped meaningfully. Past spikes in market volatility were rather brief affairs – mere opportunities to sell volatility (derivatives/options) for fun and hefty profit. I believe markets have now entered a period of heightened volatility. To go along with currency market volatility, there’s now significant bond market and policy uncertainty. The premise that Treasuries – and, only to a somewhat lesser extent, corporate Credit – will rally reliably on equity market weakness is now suspect. Indeed, faith that central bankers are right there to backstop the risk markets at the first indication of trouble may even be in some doubt with bond yields rising on inflation concerns. When push comes to shove, central bankers will foremost champion bond markets.

Unless risk markets can quickly regain upside momentum, I expect “Risk Off” dynamics to gather force. “Risk On” melt-up dynamics were surely fueled by myriad sources of speculative leverage, including derivative strategies (i.e. in-the-money call options). As confirmed this week, euphoric speculative blow-offs are prone to abrupt reversals. Derivative players that were aggressively buying S&P futures to dynamically hedge derivative exposure one day can turn aggressive sellers just a session or two later. And in the event of an unanticipated bout of self-reinforcing de-risking/de-leveraging, it might not take long for the most abundant market liquidity backdrop imaginable to morph into an inhospitable liquidity quandary.

This week’s Credit Bubble Bulletin was posted on Doug’s website in the wee hours of Saturday morning EST — and it’s always a must read for me.  Another link to it is here.


Welcome to the Trade War — Jim Rickards

Ready or not, a trade war between the U.S. and China is underway.

On Monday, Jan. 22, President Trump announced steep 30% U.S. tariffs on imports of solar panels and washing machines.

What was significant about these tariffs is that they are being applied worldwide. The tariffs are not aimed at China alone, but China is by far the largest source of solar panels shipped to the U.S., and China and South Korea are the largest sources of washing machines.

So while Trump can claim that these tariffs are not specifically targeted at China, that is exactly what they are.

This war has the potential to sink stock markets, shrink world trade and unravel the “synchronized growth” story that global elites have been pushing for the past year.

This worthwhile commentary by Jim was posted on the dailyreckoning.com Internet site yesterday — and another link to it is here.  Jim had a second article posted on that website as well on Friday — and it’s headlined “Trump, Davos and Free Trade


U.S. sanctions, baffled Russians, hot air and history — The Saker

So, finally, the suspense is over.  Kind of.  The U.S. Treasury has finally released the list of Russian entities and individuals which could (conditional!) be sanctioned by the U.S. Treasury in compliance with the H.R.3364 – Countering America’s Adversaries Through Sanctions Act.

Two things are noteworthy: first, this list completely ignores one of the most important realities of Russian politics: that the real, dangerous, opposition to Putin is not from the people (who support him at anywhere between 60% to 80%+) or from the Russian media (which, while often critical, does not represent a real threat to him) or even the Duma (whose opposition parties are critical of the Kremlin, but who are very careful about criticizing Putin himself lest they lose support from the people) .  For years now I have been explaining that the real opposition to Putin is a) inside the ruling elites, including the Presidential Administration and the Government and b) big money: banks, oligarchs, etc.  I call this (informal) opposition the “Atlantic Integrationists” because what these pro-western globalists want is for the AngloZionist Empire to accept Russia as an equal partner and to have Russia fully integrate the US-controlled international financial and security structures: WTO, NATO, EU, G7/8, etc.  Very roughly speaking you could think of them as the “Medvedev people” (but you could also say that the Ministers in charge of the Russian economy all fall into this category, as do almost all the heads of Russian banks).

Now that the U.S. Treasury has released this “list of marked individuals” (and their families, relatives or associated corporate entities) for potential, unspecified, future sanction, who do you think will freak out most, the Eurasian Sovereignists or the Atlantic Integrationists?  Then look a step further and forget about the U.S. for a second: Russia is trying hard to work with the Europeans in many join projects.  What do you think the creation of such a list will have on joint ventures between E.U. and Russian businessmen?  I predict two things:
It will place a great deal of pressure on E.U. corporations not to do business with the Russians and, therefore, it will further place the E.U. and the U.S. on a collision course.

It will hurt the Atlantic Integrationists where it hurts them the most: in their financial interests.

Frankly, if I was paid to think long and hard about how to come up with the dumbest and most self-defeating foreign policy decision for the USA, I could never do better than what the Trump Administration and Congress have just done.  This is, by the way, something which all Russian analysts agree with.  What they don’t agree with are the reasons for that seemingly completely and terminally stupid move.

This long — and rather involved commentary is a must read…if you have the interest, that is. And even if you don’t read the whole thing, the commentary under the last three sub-headings, 1] Possible Russian reactions, 2] Conclusion one: the Empire’s main export is hot air, and…most important…3] Conclusion two: learning optimism and caution from history; should be on your must read list.  This commentary by the Saker showed up on his Internet site yesterday sometime — and I thank Larry Galearis for pointing it out.  Another link to this is here.


Russia says U.S. ‘hunting’ for Russians to arrest around the world

Russia has issued a travel warning recommending its citizens think twice before traveling abroad, saying the United States was hunting for Russians to arrest around the world.

The Foreign Ministry statement warns Russian citizens that when abroad they face a serious threat of arrest by other countries at Washington’s request, after which they could be extradited to the United States.

Despite our calls to improve cooperation between the relevant U.S. and Russian authorities … U.S. special services have effectively continued ”hunting“ for Russians around the world,” the travel warning said.

Considering these circumstances, we strongly insist that Russian citizens carefully weigh up all the risks when planning trips abroad,” the Foreign Ministry said.

It said more than 10 Russians had been detained in foreign countries with U.S. involvement since the start of 2017.

This brief Reuters story, filed from Moscow, showed up on their Internet site at 11:19 p.m. EST on Thursday night — and was updated about eight hours later.  It’s from Zero Hedge via Brad Robertson — and another link to this short news item is here.


Gas Wars: Germany approves North Stream 2 pipeline with Russia

In the latest of a slowly advancing series of events, Germany has decided to disregard and work around the American economic sanctions directed at the Russian Federation, and to find a way to bring in the new Nord Stream 2 pipeline from Russia to Germany.

Finland, Sweden and Denmark have yet to approve the new pipeline project, but with Germany as a major economic power on board it is increasingly likely that they will follow suit.

The Nord Stream 2 pipeline is expected to double the present pipeline’s volume of natural gas to Europe, from 55 billion cubic meters to about 110 billion cubic meters.  The pipeline terminates in Greifswald, Germany, where it connects to various trans-European pipelines for distribution across that continent.

With this pipeline in place, Russia further secures both its place as an energy exporter with Europe, but it also solidifies business and commercial relations with Europe as a whole. As the economic sanctions against the Russian Federation slowly resolve, the nation stands to be seen as much more vital to the region than it ever has been.

This story was posted on the russiafeed.com Internet site just before midnight Moscow time on their Thursday night — and it comes to us courtesy of Roy Stephens.  Another link to it is here.


Henry Kissinger says a “pre-emptive attack” against North Korea is a “strong” possibility

Former Secretary of State Henry Kissinger has said that he agrees with the aggressive statements President Trump has made towards North Korea.

Kissinger also warned Congress last week against potential military intervention near Russian and Chinese borders without the world’s support.

The former Secretary of State said that the Trump Administration “will hit that fork in the road, and the temptation to deal with it with a pre-emptive attack” against North Korea “is strong, and the argument is rational.

The current North Korean trajectory, Kissinger continued, could lead to nuclear proliferation throughout Asia, as he believes South Korea will not accept being the only Korea without nuclear capability. Japan will follow suit, he said.

Then we’re living in a new world, in which technically competent countries with adequate command structures are possessing nuclear weapons in an area where there are considerable national disagreements,” Kissinger said. “That is a new world that will require new thinking by us.

This news item appeared on theduran.com Internet site at 2:23 p.m. EST on Friday afternoon — and it has obviously been edited since it was first posted, because Roy Stephens sent it to me about five hours before that.  Another link to it is here.  The Zero Hedge spin on all this is linked here.


Hope Diamond Eat Your Heart Out! Two Huge, Rare Gemstones Discovered in Russia

The discovery was made at a mine in Yakutia, the northeastern Russian region where close to 95% of Russia’s diamonds and over a quarter of all diamonds mined in the world are found.

The two large, jewelry-quality diamonds, with a mass of 97.92 and 85.62 carats, respectively, are very rare, according to officials from Alrosa, the Russian diamond mining group whose miners made the incredible find.

The transparent, yellow-tinged gems, both coming in the shape of an octahedron, were found at the Yubileynaya mine, one of the largest in the world, last month. The mine has long been known for being the source of some of Alrosa’s largest gemstones.

Alrosa is one of the largest diamond producers in the world, accounting for about 29% of global production, with mining operations in Yakutia and Arkhangelsk Region. In 2017, the company reported a 6% increase in its diamond output to 39.6 million carats.

This very brief news item/click bait, with a neat photo of one of these stones, was posted on the sputniknews.com Internet site at 3:45 p.m. Moscow time on their Friday afternoon, which was 7:45 a.m. in New York — EST plus 8 hours.  I thank reader M.A. for sending it our way — and another link to it is here.


All trapped gold miners in South Africa rescued unhurt

The National Union of Mineworkers confirmed on Friday morning that all 955 Sibanye Gold mine workers who were trapped underground have been resurfaced.

The mine workers were rescued at around 06:30 this morning,” the union’s national spokesperson Livhuwani Mammburu confirmed to News24.

They are currently getting medical check-ups. No injuries were sustained – they are just exhausted.”

There were some people with dehydration and few cases of high blood pressure and 16 of our older employees needed drips – but everything was successful.”

We are providing counselling for them and their families where it’s necessary,” Wellsted told News24.

This news item showed up on the news24.com Internet site at 9:23 a.m. SAST on their Friday morning, which was 2:23 a.m. in New York — EST plus 7 hours.  I found it on the gata.org Internet site — and another link to it is here.


Swiss gold exports in 2017 lower but still 80% plus flowing east — Lawrie Williams

The continued accumulation of physical gold in Asia and the Middle East goes on regardless as shown by gold exports from Switzerland – the leading national conduit for gold bullion.  Switzerland has achieved this position through its refineries specialising in taking gold in unmarketable forms and importing dore bullion from mines and refining, or re-refining it into the sizes and purities in demand in the eastern market place.  This is combined with the great reputation of Switzerland in the gold marketplace and as a conduit for such activities.

Although Swiss gold exports in 2017 were the lowest in 11 years they were still substantial at over 1,600 tonnes. That is equivalent to half the world’s annual new mined gold output, and with China the world’s largest gold miner already, and a known non-exporter, the Asian and Middle Eastern regions will have accumulated at least 65% of global gold output adding up the imports from Switzerland plus Chinese domestic production alone.  But other countries also export gold directly to Asian and Middle Eastern refineries and we would guesstimate that perhaps 80% of all the gold bullion moving around the world may be ending up in these regions – a huge proportion of what remains the world’s No.1 monetary asset (in our opinion at least).  With bitcoin continuing to crash – it has lost almost 60% of its value from its peak in December and could well crash much further as scared investors offload on the way down – gold may be again coming into its own as a key investment asset class in the minds of investors seeking to preserve their wealth.

This very worthwhile commentary by Lawrie put in an appearance on the Sharps Pixley website yesterday — and another link to it is here.


The PHOTOS and the FUNNIES

The first award-winning photo is entitled “Willow Grouse” by Finnish photographer Markus Varesvuo.  This must have been shot using a remote control, as no willow grouse/ptarmigan would ever let you get this close in the wild.  This is what it looks like in its summer plumage.  Its pure white in winter.  This is a bird that inhabits the high latitudes and arctic regions of Planet Earth.  I saw lots of them in my younger days when that area of Canada was my home.  The second photo is by the same photographer — and I’d dearly love to know how he got this shot, because he’d have to be looking virtually straight down on it when he took it.  It’s entitled “Gannet Underwater“.  Click to enlarge.


The WRAP

Today’s iconic pop ‘blast from the past’ needs no introduction — and the only hard part to believe is that it’s 40 years young/old this year!  The link is here.

Today’s classical ‘blast from the past’ is somewhat more ancient, of course, dating from 1844.  It’s Felix Mendelssohn’s Violin Concerto in E minor, Op. 64…his last large orchestral work. It forms an important part of the violin repertoire and is one of the most popular and most frequently performed violin concertos in history — and for very good reasons.  I’ve featured this work before, but it’s been a while.

Here’s the incredibly gifted Hilary Hahn with the Frankfurt Radio Symphony Orchestra — and under that baton of Paavo Järvi.  It doesn’t get any better than this — and the link is here.


It was obvious that the powers-that-be were not going to allow the precious metals to become a safe harbour yesterday, especially when they were busy engineering price declines in both silver and gold so they could cover as many of their short positions as possible.  So these manufactured waterfall price declines in these two precious metals did double-duty yesterday.

Although silver certainly appears washed out to the downside, at least for the most part, the same can’t be said for gold — and I’m not at all sure how far along the “wash, rinse, spin — and repeat” cycle we’re going to have to travel with that precious metal.  I’d hate to think that they have the 50 and 200-day moving averages for gold in their sights but, as Ted pointed out, you can’t overlook that possibility.  What that would mean for silver is not good either — and a revisit of mid-December’s low can’t be dismissed.  But that’s wild-ass speculation on my part at the moment.

Of course JPMorgan’s short positions in the COMEX futures market has now been trumped by the physical silver and gold that Ted Butler says they hold.  And, without doubt, that along with covering their short positions in the COMEX futures market, they were big buyers of both GLD and SLV shares yesterday as well — and it’s an absolute guarantee that they’ll be redeeming every last share for physical metal at some point.  The question then becomes, just how much physical gold and silver are they going to accumulate before allowing prices to rise?  A good question with no answer at the moment.

As I say every Saturday without fail — and it’s just as apropos this week…”JPMorgan et al continue to have precious metal prices in their iron grip — and until that changes, nothing changes.

Here are the 6-month charts for all four precious metals, plus copper once again.  And because the low tick of the day in silver was set by ‘da boyz’ after the COMEX close, that data point doesn’t appear on Friday’s doji.  The ‘click to enlarge‘ feature helps a bit with the first four.

They say that they don’t ring a bell at the top of the market, but if you didn’t hear it yesterday, you could certainly see the signs that it was.  The powers-that-be were at battle stations in every market that mattered right from 8:30 a.m. EST onward — and I expect they’ll be around when the markets open at 6:00 p.m. on Sunday evening in New York.

This day of reckoning, if this is indeed the start, has been a long time in coming…and has been prolonged as long as it has by easy Central Bank credit.  I will not wax philosophical on this, as others such as Bill Bonner, David Stockman — and Jim Rickards have already done so — and far more eloquently than I…with more to come as the great unwind begins.

If you read the last paragraph of the article by the Saker in today’s Critical Reads section, what you see below is an excerpt from that.  As I’ve been saying for the last month or so, the U.S. deep state has painted itself into a corner in just about every theatre of operation that they have been engaged in, both domestically — and abroad.  They are running out of options — and their list of friends is getting thin.  I was very relieved and reassured by what he had to say, as it confirmed my thoughts as well, except he’s just so much better with words than I.

If we look at world history we can always see the same phenomenon taking place: when things go well, the elites are united, but as soon as things go south, the elites turn on each other.  The reason for this is quite simple: elites are never as united as they pretend to be.  In reality Empires, and any big country, really, are run by a coalition of elites who all benefit from the established order.  They can hate each other, sometimes even kill each other (SA vs SS, Trotskyists vs Stalinists, etc.), but they will work together just like crime families do in the mob.  But when a real, profound, crisis becomes undeniably apparent, these ruling elites typically turn on each other and when that happens, nobody is really in charge until, eventually, the entire system comes tumbling down or a new main ruler/group emerges.  Right now the Anglo/Zionists elites are locked into a huge struggle which is likely to last for the foreseeable future.”

Finally, we should never confuse the inability to get anything done with the inability to make things worse: the latter does not flow from the former.  Nazi Germany was basically defeated in Stalingrad (Feb 1943) but that did not prevent it from murdering millions more people for another two and a half years before two Soviet soldiers placed the Soviet flag on top of the Reichstag.  We are still far away from such a “Reichstag flag” moment, but we sure are witnessing the Anglo/Zionist “Stalingrad” taking place before our eyes.”

A dangerous and cornered beast, just chock-full of socio/psychopathic personality types I like to mention every weekend, is one to be watched carefully — and with some fear and trepidation.  They will not go down to defeat gladly, or willingly.  I’ll put absolutely nothing past them — and Henry Kissinger’s straw-in-the-wind of a military strike against North Korea might just be the start.  Or maybe something in the Ukraine or Middle East…or “all of the above”.

Somewhere in all of this will come the “event” that was spoken of back on July 12 when CME Group CEO Terry Duffy was interviewed by Neil Cavuto.  Here’s a cut-and-paste from my July 13, 2017 column…

Well, the Duffy/Cavuto interview certainly looked a bit stage-managed to me.  The leading questions were too pat — and the answers came too smoothly.  The gold chart, as Dave Janda pointed out in the story above, appeared right on cue.  Nothing was left to chance.  The other thing that I found intriguing was the fact that he said “people will wake up some morning and find precious metal prices substantially higher“…or words to that effect.  What that translates into from where I sit, is that the blast off will begin while North America is asleep.  All we await is the whatever “event” he spoke of, to occur.  As I’ve told Ted for years now, the precious metals price explosion will not take place in a news vacuum.

But when this “event” does finally occur, it will bring an end to the precious metal price management scheme in general — and silver in particular.  The only side-show left will be to place your bets on high silver prices go, or are allowed to go.  I’m not sure if this will be a partially controlled event or not…but if left to free-market forces alone, the 3-digit silver price we end up with will be jaw-dropping — and silver will really become the “new gold”.

The pertinent part of the Duffy/Cavuto interview begins at the 4:55 minute mark — and the link is here.

As bad as things appear at this point in time, it’s always darkest just before dawn — and this too shall pass.

I’m done for the day — and the week — and I’ll be watching the Sunday evening open in New York with great interest.

See you on Tuesday.

Ed

The Death Warrant For King Dollar?

27 January 2018 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was up 8 dollars by the London open on continued dollar weakness.  But the dollar decline and the gold price rally both ended a few minutes after 8 a.m. GMT — and the gold price and dollar index began to head in the other direction.  The gold price was back to just about unchanged by 9 a.m. EST in New York as the dollar index topped out around the 89.23 mark.  From that point the gold price rallied weakly until a few minutes after 2 p.m. in the thinly-traded after-hours market — and it was sold a bit into the 5 p.m. close of trading from there.

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

Gold was closed in New York on Friday afternoon at $1,349.30 spot, up only $2.00 from Thursday.  It was another monster volume day…gross volume was 491,038 contracts — but minus all the roll-over/switch volume, which was around 152,000 contracts, net HFT gold volume was only about 186,000 contracts.

The price path for silver was, tick for tick, almost the same as gold, with the low on Thursday evening in New York shortly after the open — and the high tick, minutes after trading began at London, when the dollar index decline got reversed.

The low and high ticks in silver were recorded by the CME Group as $17.235 and $17.53 in the March contract.

Silver was closed at $17.38 spot, up 12.5 cents from Thursday’s close.  Net volume, like in gold, was much reduced from what it has been all week, at only about 75,200 contracts, with only 4,000 contracts worth or roll-over/switch volume on top of that.

The platinum price more or less chopped sideways until shortly after 1 p.m. China Standard Time on their Friday afternoon.  It began to ‘rally’ from there — and that lasted until shortly before 1 p.m. CET in Zurich.  The price began to chop quietly lower from there — and it was closed on its low tick of the day…$1,006 spot — and down 6 dollars from Thursday.

Palladium didn’t do anything until shortly after 3 p.m. CST on their Friday — and it gradually ticked higher and was up about 4 bucks by noon in Zurich.  That lasted for a bit over an hour before the selling pressure appeared — and the spike low below $1,070 spot came shortly before 12:30 p.m. in New York.  It rallied a bunch of dollars from there until minutes after 2 p.m. in the thinly-traded after-hours market — and then traded flat into the close.  Palladium finished the Friday session at $1,083 spot, down 4 bucks on the day.

The dollar index closed very late on Thursday afternoon in New York at 89.46 — and ticked a few basis points higher once trading began at 6 p.m. in New York a few minutes later on Thursday evening.  It was sold lower to just below the 89.20 mark by minutes before 10 a.m. CST in Shanghai on their Friday morning — and then traded pretty flat until shortly after 1 p.m. CST.  Then down it went in a fairly big hurry, blasting through the 89.00 mark like a hot knife through soft butter, with the 88.70 low tick coming a minute or so after the 8 a.m. London open.  ‘Gentle hands’ began to work their magic at that juncture — and the DXY topped out around the 89.32 mark minutes after 9 a.m. in New York.  It chopped lower from there until a minute or so after 2 p.m. — and back below the 89.00 mark once again.  That was no way to end the week, so it was ramped back above the 89.00 mark in short order — and mercifully the markets closed before it could fall back below that number.  The dollar index finished the day and the week at 89.04…down 42 basis points from its Thursday close.

Make no mistake about it, dear reader, but the U.S. dollar is toast — and the remaining currencies are only better by default.  With the powers-that-be in the U.S tossing it around like a rag doll in the public press — and getting saved, but only temporarily, by the ‘The Donald’ on Thursday afternoon, it’s now a currency to run away from as fast as one can.  And if one thinks of the U.S. bond/treasury market in those terms, it boggles the mind. I’ll have more about this in The Wrap.

And here’s the 5-year U.S. dollar index — and as I said last Saturday at this time, there’s not a thing between its current ‘value’ — and the 80.00 mark, except thin air.  But after the Mnuchin/Draghi/Trump bun fight in the currency markets over the last three days…80.00 might just be ‘jacks for openers’.

The gold stocks gapped up a mere one percent and change at the open — and then spent the rest of the Friday session giving back half of even those meagre gains.  The HUI closed higher by only 0.60 percent.

The silver equities gapped up a bit higher at the open, but by 11:30 a.m. they began to head lower and thankfully finished up on the day, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.45 percent.  Click to enlarge if necessary.

 

And here’s the 1-year Silver Sentiment/Silver 7 Index chart.  Click to enlarge.

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

Here’s the weekly chart — and it’s a mixed bag, with the silver equities down on the week, even though silver closed higher for the week by a very decent amount.  Click to enlarge.

And since only three weeks are gone from the New Year so far, the year-to-date chart will serve double duty as the month-to-date chart as well.  Click to enlarge.

Of course the shares continue to underperform the metals themselves, particularly in silver this past week, but I expect that to change as time goes along.  Don’t forget that JPMorgan et al continue to have precious metal prices in their iron grip — and until that changes, nothing changes.


With January open interest down to a tiny handful of contracts in both gold and silver, the CME Daily Delivery Report showed that only 1 silver contract was posted for delivery within the COMEX-approved depositories on Tuesday.  The CME Group stopped that contract and immediately reissued it as 5 contracts in the 1,000 ounce mini-silver contract for delivery in January.

The CME Preliminary Report for the Friday trading session showed that gold open interest in January declined by 2 contracts, leaving 2 left.  Thursday’s Daily Delivery Report showed that 1 gold contract was posted for delivery on Monday.  Silver o.i. in January declined by 1 contract, leaving 2 still open, minus the 1 contract mentioned in the previous paragraph.

For all intents and purposes, the January delivery month is done in both gold and silver — and I won’t bother with the Daily Delivery or Preliminary Reports until First Day Notice on Wednesday, which will be in my Thursday column.


There was a withdrawal from GLD yesterday, as an a.p. took out 37,955 troy ounces.  Based on the current price action, it’s reasonable to assume that this was another one of Ted’s ‘conversion of GLD shares for physical metal’.  There were no reported changes in SLV.

The folks over at the shortsqueeze.com Internet site update their website with the short positions in both SLV and GLD as of the close of trading on Monday, January 15 — and this is what they had to report.  The short position in SLV dropped from 12,322,000 shares/troy ounces, down to 10,975,500 shares/troy ounces, which works out to a decline of 10.9 percent.  But things were far different in GLD, as the short position increased from 871,560 troy ounces up to a whopping 1,719,630 troy ounces, a jump of 97.3 percent…virtually double what it was at the end of December.  Ted and I spoke about this big increase on the phone yesterday, but both of us had other fish to fry, so I didn’t spend too much time on it.  I have my suspicions, but I’ll keep them to myself until I see what Ted has to say about it.

There was no sales report from the U.S. Mint yesterday.

Month-to-date the mint has sold 57,000 troy ounces of gold eagles — 23,500 one-ounce 24K gold buffaloes — and 3,095,000 silver eagles.  These aren’t anywhere close to being record sales numbers for January.

There was no in or out gold movement at the COMEX-approved gold depositories on the U.S. east coast on Thursday.  The only activity was a paper transfer of 2,339 troy ounces from Eligible and into Registered at Delaware.  I won’t bother linking this.

It was much different in silver, of course, as 1,186,241 troy ounces were received — and another 2,338,047 troy ounces were shipped out.  One truck load…599,110 troy ounces…was left at JPMorgan’s vault — and another truck load…587,131 troy ounces…was dropped off at Canada’s Scotiabank.  In the ‘out’ category, two truck loads…1,193,538 troy ounces…departed CNT — and 302,956 troy ounces left Brink’s, Inc. — and the remaining 841,551 troy ounces was shipped out of HSBC USA.  The link to all this action is here.

I would suspect, but do not know for sure, that all this in/out silver activity has to do with deliveries from what was issued and stopped in December.  All I know is that it’s been one hell of a frantic in/out week — and it’s a given that Ted will have lots to say about this in his weekly missive this afternoon.

And before leaving silver, JPMorgan’s COMEX silver inventory now stands at 124.6 million troy ounces — and with that deposit on Thursday, it pushes them over the 50 percent mark, as they now hold over 50 percent of all the physical silver in the COMEX warehouses system.  Here’s the applicable chart.

It was another huge day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They received a chunky 12,551 kilobars — and shipped out 9,657.  All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, showed a huge improvement in the Commercial net short position in silver — and only a minor deterioration in gold.  But even this ‘good news’ in gold was ‘bad news’ in a way, which I’ll get into once I’m done with silver.

In silver, the Commercial net short position dropped by a very decent 8,646 contracts, or 43.2 million troy ounces of paper silver.

They arrived at that number by adding 3,730 long contracts, plus they reduced their short position by 4,916 contracts — and the sum of those two numbers represents the change for the reporting week.

Ted said that the Big 4 traders, read JPMorgan, reduced their short position by around 1,500 contracts, but the ‘5 through 8’ large traders actually increased their short position by about 600 contracts.  The big change was in Ted’s raptors, the 41-odd small Commercial traders other than the Big 8, as they increased their long position by approximately 7,700 contracts.

Under the hood in the Disaggregated COT Report, it was an entirely Managed Money affair plus a bit more, as they decreased their long position by 6,192 contracts, plus they added 3,645 contracts to their short position.  The sum of those two numbers…9,837 contracts…was their change for the reporting week.  The difference between that number — and the Commercial net short position…9,837 minus 8,646 equals 1,191 contracts…was made up, as it always is, by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader categories.

As is usually the case, Ted assigned the entire 1,500 contract decline of the Big 4 traders to JPMorgan — and he estimates their current short position at around 31,000 contracts.  The Commercial net short position in silver is now sitting at 207.5 million troy ounces.

Here is the 3-year COT chart for silver — and it’s nice to see that decline, although I suspect that there’s been some deterioration since the cut-off.  However, I wouldn’t be prepared to bet any money on that.  Click to enlarge.

In gold, the commercial net short position only increased by 2,045 contracts, or 204,500 troy ounces of paper gold.

They arrived at that number by adding 3,256 contracts to their long positions — and they increased their short position by 5,301 contracts.  The difference between those two numbers is the change for the reporting week.

But it was the activity of the Big 8 traders that was cause for concern.  The Big 4 increased their short position by 6,400 contracts — and the ‘5 through 8’ large traders increased their short position by 2,300 contracts as well.  Ted’s raptors, the 46-odd small commercial traders other than the Big 8, added 6,700 long contracts.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders by at least a country mile, as they increased their long position by 8,630 contracts, plus they added a smallish 626 short contracts.  The difference between those two numbers…8,004 contracts…was their change for the reporting week.  Of course the difference between that number — and the commercial net short position…8,004 minus 2,045 equals 5,959 contracts…was, like in silver and every other commodity, made up by the traders in the other two categories, the ‘Other Reportables’ and the ‘Nonreportable’/small traders.  This week, the lion’s share of that difference was taken up by the ‘Other Reportables’…as they reduced their long position by a considerable amount, plus added a small amount of new shorts.

The commercial net short position in gold is now at 23.46 million troy ounces — and I would suspect that it has risen a bit more since the Tuesday cut-off.

Here’s the 3-year COT chart for gold.  Click to enlarge.

It remains to be seen just how far on the long side that the Managed Money traders are willing to go — and how quickly prices are allowed to rise from here depends entirely on how aggressively that JPMorgan et al stand there as sellers of last resort.  At the moment these rallies are orderly, but if the Big 8 traders ever decide to put their hands in their pockets, both silver and gold will explode to the upside — and I say that with the same certainty that I know that the sun will set in the west tonight.

JPMorgan is insulated from any price rallies by the fact that they have 675 million troy ounces of physical silver backing a 155 million troy ounce short position in the COMEX futures market.  Ted has also determined that JPMorgan holds 20+ million troy ounces of physical gold, against an approximate futures market short position of around 7.5 million troy ounces.  ‘Da boyz’ over at JPM could walk away from the futures market any time they wish — and let the other Big 7 shorts burn in hell.  Some day they just might do that.  But as to which day, nobody knows.

I look forward to what Ted has to say in his weekly review this afternoon, as he’s the real authority on all this.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  These are the same Big 4 and ‘5 through 8’ traders discussed in the COT Report above.  Click to enlarge.

For the current reporting week, the Big 4 are short 127 days of world silver production—and the ‘5 through 8’ large traders are short an additional 65 days of world silver production—for a total of 192 days, which is over 6 months of world silver production, or about 466.5 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 194 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 207.5 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 466.5 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 471.4 minus 207.5 = 263.9 million troy ounces.  The reason for the difference in those numbers is that Ted’s raptors, the 41-odd small commercial traders other than the Big 8, are long that amount.  And why they haven’t been selling these positions more aggressively during this 4-week long silver rally still remains a mystery, but by holding off as long as they have, they have been making just oodles more money.  They also added to their long position during this reporting week as well.

As I also stated in the above COT Report analysis, Ted pegs JPMorgan’s short position at about 31,000 contracts, or around 155 million troy ounces, basically unchanged from what they were short in last week’s COT Report.  155 million ounces works out to around 64 days of world silver production that JPMorgan is short.  That’s compared to the 192 days that the Big 8 are short in total.  JPM holds about 33 percent of the entire short position held by the Big 8 traders.

Until last Sunday, when I was preparing my presentation at the Vancouver Investment Conference, I had estimated the short position in silver held by Scotiabank/ScotiaMocatta at approximately 32 days of world silver production minimum.  That turned out to be high by quite a bit.  Now that I’ve recalibrated their short position, it’s now down to about 23 days.  So it’s obvious that Scotiabank has been actively reducing their short position in the COMEX futures for the last year.  I’m sure they’ve covered a certain portion of it during the normal course of business, but it’s obvious that JPMorgan has taken up some of the slack, as have some of the other traders in the Big 8 category.

Here are the two charts from my presentation, which I also posted earlier this week, that caused me to change my mind about Scotiabank.  The first is from January 2017 — and the second from last weekend…January 19, 2018.  Note the huge changes in the positions of JPM and Scotia, plus the increases in the short position of the ‘5 through 8’ traders since January 2017.  Their collective short positions have risen about a third during that period.  Click to enlarge for both charts.

That’s why I keep saying that JPMorgan has been forced by circumstance to pick up Scotiabank’s trading/price management duties in silver and gold.  So JPMorgan is by far the No. 1 silver short on Planet Earth — and likely to remain that way indefinitely.  Of course they have 675+ million troy ounces of physical silver [and counting!] stashed away to cover that, so they are in no danger.  That can’t be said of the remaining Big 7, unless JPMorgan plans to bail out some, or all of them.  And if that’s the case…at what price?  I get the feeling, as I said last week, that it wouldn’t come cheap.

The two largest silver shorts on Planet Earth—JP Morgan and one other, which may or may not be Scotiabank, are short about 87 days of world silver production between the two of them—and that  87 days represents about 68 percent of the length of the red bar in silver in the ‘Days to Cover’ chart…a bit more than two thirds of it.  The other two traders in the Big 4 category are short, on average, about 20 days of world silver production apiece.

The four traders in the ‘5 through 8’ category are short, on average…16.25 days of world silver production each, which is up 0.25 days from what they were short in last week’s COT Report.

This is just more proof of the fact, if any was needed, that it’s only what JPMorgan does in the COMEX silver market that matters, as it’s only their position that ever changes by any material amount.

The Big 8 commercial traders are short 46.7 percent of the entire open interest in silver in the COMEX futures market, which is down a bit from last week’s COT Report — and that number would be almost 50 percent once the market-neutral spread trades are subtracted out.  In gold, it’s now 47.4 percent of the total COMEX open interest that the Big 8 are short, up a bit from last week’s report — and a hair over 50 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 70 days of world gold production, which is up 2 days from what they were short last week — and the ‘5 through 8’ are short another 28 days of world production, which is up 1 day from what they were short the prior week, for a total of 98 days of world gold production held short by the Big 8 — which is up 3 days from the 95 days they were short in last week’s report.  Based on these numbers, the Big 4 in gold hold about 71 percent of the total short position held by the Big 8…which is unchanged from last week’s COT Report.

The “concentrated short positions within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are 66, 72 and 79 percent respectively of the short positions held by the Big 8.  Silver is up 1 percentage point from the previous week’s COT Report — and platinum and palladium are also up 1 percent from what they were in last week’s COT Report.

These concentration numbers show that the Big 4 traders still have an iron grip on precious metal prices — and as I keep going on endlessly about…until this situation changes…nothing else will change either…including their respective prices.

I have a very decent number of stories for you today, including the Cohen/Batchelor interview, which comes in four parts this week.


CRITICAL READS

Core Durable Goods Orders Tumble Most In a Year

While headline durable goods orders showed a 2.9% MoM surge, but away from aircraft orders and war-spending, capital goods orders dropped 0.3% MoM in December – the most in 12 months.

But this surge was all thanks to aircraft and war-spending:

*  Bookings for commercial aircraft climbed 15.9% MoM
*  Orders for Aircraft Engine and Engine Parts rose 24.4% MoM
*  Defense capital goods orders increased 19.5% MoM
*  Defense aircraft and parts soared 55.3% MoM

So, at the core, orders tumbled most in a year…in other words, we’re gonna need more war to get that GDP up over 3.0%…

This brief 3-chart news item showed up on the Zero Hedge website at 8:39 a.m. EST on Friday morning — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Flying Blind, Part 3: Why Now is Not the Time and Place for Nosebleed P/E Multiples — David Stockman

As we indicated in Part 2, the very idea that you would pay 26X EPS for the S&P 500 at the tail end of a 103 month long recovery cycle is truly ludicrous. That is, there is a time to anticipate a strong profits rebound during the early years of a recovery, thereby meriting a robust P/E multiple.

But there is also the obvious point that expansions eventually become long in the tooth and end in recession. Even by the lights of the central bank money printers, the business cycle has not yet been outlawed.

After all, that’s why the Eccles Building is now motoring head-down and straight into an epochal pivot which it is pleased to call interest rate “normalization” and balance sheet shrinkage (QT). In plain English, however, that is just central banker-speak for bond dumping on an unprecedented and epic scale. And it is being done out of deathly fear that the next recession will make its appointed rounds with the Fed out of dry powder and impotent.

Folks, these people aren’t totally stupid. They have amassed extraordinary power and plenary dominance over the nation’s $19 trillion capitalist economy only by assiduously cultivating the mother of all Big Lies.  Namely, the myth that private capitalism is dangerously unstable and possessed of an economic death wish for periodic cyclical collapses, which can be forestalled only by the deft interventions of the central bank.

That’s self-serving malarkey, of course. Every recession of the modern Keynesian era has been caused by the Federal Reserve, and most especially the calamity of 2008-2009. And the “recovery” from that one, as well as those stretching back to the 1950s, was owing to the inherent regenerative powers of the free market, not the interest rate and credit supply machinations of the Fed.

This long chart-filled commentary by David appeared on the Zero Hedge website at 11:02 a.m. EST on Friday morning — and I thank Richard Saler for sending it our way.  Another link to it is here.


Doug Noland: America First and the Decapitation of King Dollar

Historians may look back at Team Trump’s jaunt to chilly Davos as a pivotal juncture in global finance. Was it naivety, gall or a combination – or just typical of today’s overabundance of complacency? The U.S. Treasury Secretary – facing enormous fiscal deficits, rising rates, $16.5 TN of federal debt, a nervous bond market and suspicious foreign officials – openly advocating a weaker dollar.

There are certainly plenty of dollars in the world available to sell or hedge. What is the likelihood of dollar selling turning disorderly? One might look at several years of incredible ECB and BOJ “whatever it takes” liquidity creation and rate suppression (and interest-rate differentials you could drive a truck through) and ponder Friday’s closing prices of 1.24 for the euro and 108.58 for the dollar/yen. Those are two flashing warning signs of dollar vulnerability.

In all the euphoria, markets can be excused for presuming dollar weakness ensures a further delay in global rate normalization. Yet things turn quite interesting the day unruly currency markets begin indicating disorderly trading. The almighty central bankers might have little to offer. What if they intervene to no avail? This could prove the juncture when markets begin questioning the Indomitable Central Banks in Control thesis. The price of market “insurance” would begin to creep (or, not unlikely, spike) higher, and the availability of cheap risk protection would wane (possibly abruptly). In such a development, I would expect the more sophisticated market operators to begin (aggressively) pulling back on risk and leverage. Such a dynamic, especially after such a spectacular melt-up, would mark an important inflection point for market liquidity.

Doug’s weekly Credit Bubble Bulletin showed up on his Internet site in the wee hours of Saturday morning EST — and another link to it is here.


Davos Dumbbells — Bill Bonner

In the Financial Times is a photo of a smiling Christine Lagarde.

The former French finance minister… former partner at multinational law firm Baker McKenzie… former student at the Holton-Arms School for girls in Bethesda, Maryland… and permanent member of the international Deep State Establishment… is now head of the IMF.

Writing in the newspaper, preparatory to her visit to the Swiss citadel of globalism, elitism, and good-intentions-gone-bad, Ms. Lagarde seemed to be picking up on our theme from yesterday’s Diary:

Despite the improved economic outlook, there are still far too many people left out. There is still too much inequality and still a great deal of uncertainty about the future.”

How she knows what is “too much” or “too many” was not disclosed. But in the public space, there’s no check on B.S.

This longish, but very worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site on Friday sometime — and another link to it is here.


U.S. CFTC to fine UBS, Deutsche Bank, HSBC for spoofing, manipulation: sources

The U.S. derivatives regulator is set to announce it has fined European lenders UBS, HSBC and Deutsche Bank millions of dollars each for so-called “spoofing” and manipulation in the U.S. futures market, three people with direct knowledge of the matter told Reuters.

The enforcement action by the Commodity Futures Trading Commission (CFTC) is the result of a multi-agency investigation that also involves the Department of Justice (DoJ) and the Federal Bureau of Investigation (FBI) – the first of its kind for the CFTC, the people said.

The fines for UBS and Deutsche Bank will be upward of ten million, while the fine for HSBC will be slightly less than that, the people said, without providing exact figures.

Spokesmen for HSBC, Deutsche Bank and UBS declined to comment.

The settlement is the most high-profile brought so far by the CFTC’s head of enforcement James McDonald who was appointed to the role in March 2017.

And what about JPMorgan et al –and the four precious metals, Mr. McDonald?????  This Reuters article, filed from Washington, put in an appearance on their Internet site at 4:40 p.m. on Friday afternoon EST — and I plucked it from a GATA dispatch.  Another link to it is here.


Moody’s upgrades outlook on Russia’s sovereign rating to positive from stable

Moody’s rating agency has changed the outlook on Russia’s Ba1 long-term issuer and senior unsecured debt ratings to positive from stable. Concurrently, Moody’s affirmed Russia’s long-term ratings at ‘Ba1’, the agency said in a press release.

Growing evidence of institutional strength” and “increased evidence of economic and fiscal resiliency” were the key factors of the change in the outlook, the agency said.

Russia’s macroeconomic framework coped well with the oil price shock and with the impact of sanctions imposed to date, and enhancements have been made to the government’s rule-based fiscal framework,” the press release said.

In Moody’s view, the rating “appropriately balances Russia’s fiscal strength, somewhat improved economic prospects and effective policy-making against the combination of longer-term economic challenges and continued nearer-term exposure to external events.”

In a related decision, Moody’s raised Russia’s country ceilings for foreign currency debt to ‘Baa3/P-3’ from ‘Ba1/ NP’ “to reflect diminished concerns that the government might impose capital controls or otherwise ration foreign exchange reserves.”

As I’ve said quite a number of times, Russia is the most solvent and well managed country on Planet Earth.  This TASS news item was picked up by the folks over at the russiafeed.com Internet site on Friday sometime — and it comes courtesy of Roy Stephens.  Another link to it is here.


Putin’s message at annual Leningrad siege WW2 memorial: never again

He who does not learn from history is doomed to repeat it; Russians understand this fact better than any when they call to mind the storms of the WW2 and the bloody Seige of Leningrad. Russia can not afford to forget, more than 20 million Russians perished in the ‘Great Patriotic War’, which is more than the population of several modern countries including Romania, The Netherlands, Greece, and many more. Take a moment and imagine an entire country obliterated, that is how great the death toll was for Russia.

But those millions of Russians, Ukrainians, Belarusians, Poles, other Slavs, and Soviet Citizens were not obliterated from existence. Their eternal memory and resolve gave the living strength, and with it, they endured as they always have, and they captured Berlin, ending the largest holocaust in human history.

By far one of the bloodiest battles in human history was the Siege of Leningrad (also called Petrograd and Saint Petersburg today). Casualties were around one million people…one million, for one city. The real number is possibly much higher, as many people were missing.

When the Russian President speaks the words you are about to hear, bare one thing in mind, remember it and never forget it…His brother was among the dead. President Putin’s own brother died of disease as a child during the terrible siege.

Here is what the President said to veterans and celebrants at the anniversary as reports TASS news:

This article was posted on the russiafeed.com Internet site around 8 a.m. Moscow time on their Friday morning.  It’s the second offering in a row from Roy Stephens — and another link to it is here.


Tales of the New Cold War: The 2018 Containment Theory (1 of 4) — John Batchelor interviews Stephen F. Cohen

Part 1: Batchelor opens this week with an introductory bombshell fresh from the American Council on Foreign Relations. Their published report reconfirms all of the Russiagate allegations and goes on to state that Russia is preparing for full spectrum interference of numerous American institutions including elections in the future.   The professor quickly points out that the CFR is composed of the elites of the elites of American foreign affaires experts, council to presidents (Cohen states he has membership – now to be short-lived), and is unabashedly anti Russia, as it states its conclusions that are based on the usual culprits in the MSM. It not only accepts the reality of the New Cold War, but without lament, but accepts the Trumps Putin/Trump collusion. However, to counter this amazing document is one issued from the House of Representatives by three committee chairmen representing Judiciary, Oversight and House Intelligence working together from DOJ documents about what the Obama Administration has done during the Trump election. It concluded that there is firm doubt about the validity of Russiagate.  The link to Part 1 is here as well.

Part 2: The CFR core message, according to Cohen, is a legitimization of this cold war that the U.S. should be “escalating and promoting” and not open to détente. The report itself (if accepted as policy) may be, according to Batchelor, a document with which to go to war. And unsurprisingly Cohen finds the timing, in light of the rapid debunking on all sides of Russiagate, as strange. Again the notes accompanying these podcasts do expand on this commentary and are a recommended read as well.  The link to Part 2 is here.

Part 3:  Batchelor’s opening words to Part 3 introduces the idea that the CFR appears to be advocating the US to move to a full war footing with Russia, and a total propaganda smear campaign against individual countries friendly to Russia and individuals in Russia –  a “you’re either with us or against us” situation. More worrisome for Batchelor is the advocacy of military spending including the modernization of the US nuclear arsenal – and the dismissal for the dangers of doing this – and that there will be no treaties to limit development of nuclear delivery systems. Cohen agrees and states that the CFR is prestigious enough to strongly influence policy direction and with much support from other political entities, including apparently a change of the Trump White House to a more hard line against Russia, that this is more than worrisome. Cohen concludes that those that support the CFR position are actually stating that Russia and China are the greater threats, and that international terrorism is not a concern. (More about this in my commentary.) Cohen considers that the purpose of this document, as odious and inept as it is, is to legitimatize a new cold war and to manage it as orthodoxy without discussion or criticism or moderation – in other words to exclude any official détente between Russia and Washington. It even calls for censorship, an assault on the American Constitution.   The link to Part 3 is here.

Part 4:  The last and shortest sections of this podcast Batchelor hazards the comment that the document is “resting on thin air” given that Russiagate is debunked. Cohen (he calls himself the optimist in this) states that the solution may lie with Putin and Europe. Will Europe go along? Will NATO countries? He does not count on Congress or the Senate – that are both anti-Russiagate AND anti-Russia. The US citizen has other priorities. That brings us back to Trump – who may be the only domestic solution.  The link to Part 4 is here.

“They” just won’t give up! Last week I suggested that government had already discounted any importance given to the U.S. citizens, that their opinion in the Russiagate debate counted for nothing. Although I agree with most of what Batchelor and Cohen say here, I also think that the CFR document from such an important policy institution shows that the CFR has been subverted by Deep State/Military Industrial Complex interests and the real meaning is a kind of declaration that not only is the political position of the citizen not relevant to foreign policy, to the massive procedural irregularities, and to political crimes but neither is that of the Senate, Congress and even the president . Resistance and discussion of any aspect of Russiagate and policy positions involving the validity of the New Cold War should be officially censored according to the orthodoxy of Russiagate in this document. This may also see the dismissal of all criminal acts behind Russiagate, including those of Hillary. I wonder that our pundits have not concluded the same thing. The single minded insistence of conformity to what has been debunked reveals that the Deep State requires total conformity of its views. There is no partnership with Putin’s Russia possible, given that the direction of M.E. terrorism is a direct product of Washington foreign policy. The only question remaining is whether the neocon/war party elements can force this Russiagate madness on government against all the facts emerging in the front lines of Washington? If they can, the United States government becomes a de facto military dictatorship regardless of constitutionality. After all, legitimacy is a trait that has been long abandoned in Washington and this has only become very obvious since just before the Trump election and during the agonizing subversion of Russiagate. The devolution of the Washington government is an on going process that is about to target the congress and the senate.

This extensive executive summary, plus concluding comments, comes to us courtesy of Larry Galearis — and he really outdid himself this week, with four parts in total.  I thank him on your behalf.  All of this was posted on the audioboom.com Internet site on Tuesday — and the links to each part is as indicated.


Kurds call on Syrian regime to intervene in Afrin battle

Kurdish militias fighting against Turkey in the Syrian enclave of Afrin have called on the government of Bashar al-Assad to intervene and protect the area’s borders.

The latest development, nearly a week into Turkey’s military offensive, could undermine Kurdish aspirations for self-governance and, if heeded, could set the stage for a direct military confrontation between Ankara and Damascus.

It could also create an open alliance between the U.S.-backed Kurdish forces and a government that Washington had sought to unseat for years.

While we insist that we will continue to defend Afrin against rabid external attacks and will confront the Turkish attempts at occupying Afrin, we invite the Syrian state to carry out its sovereign duties towards Afrin and to protect its borders with Turkey from attack,” the autonomous authority governing Afrin said in a statement on Thursday.

Ankara launched a military offensive into Afrin spearheaded by its Syrian rebel allies on Saturday in order to oust the People’s Protection Units (YPG) from the Kurdish enclave, which borders Turkey.

This news story was posted on theguardian.com Internet site at 10:55 p.m. GMT on Thursday evening, which was 5:55 p.m. EST in Washington.  I thank Roy Stephens for sending it our way — and another link to it is here.  There was a piece about this by Alex Mercouris on theduran.com Internet site early on Friday morning.  It’s headlined “First sign of end to Afrin crisis as Kurds call on Assad for help” — and that comes to us via Larry Galearis.


Uncle Sam Dumps the Kurds (Yet Again) — The Saker

The drama which is unfolding in northern Syria is truly an almost ideal case to fully assess how weak and totally dysfunctional the Anglo/Zionist Empire has really become. Let’s begin with a quick reminder.

The U.S.-Israeli goals in Syria were really very simple. As I have already mentioned in a past article, the initial Anglo/Zionist plan was to overthrow Assad and replace him with the Takfiri crazies (Daesh, al-Qaeda, al-Nusra, ISIS – call them whatever you want).  Doing this would achieve the following goals…[list]…

With the joint Russian-Iranian military intervention, this plan completely collapsed. For a while, the USA tried to break up Syria under various scenarios, but the way the Russian Aerospace forces hammered all the “good terrorists” eventually convinced the Anglo/Zionists that this would not work.

The single biggest problem for the Empire is that while it has plenty of firepower in the region (and worldwide), it cannot deploy any “boots on the ground”. Being the Empire’s boots on the ground was, in fact, the role the AngloZionists had assigned to the Takfiri crazies (aka Daesh/IS/ISIS/al-Qaeda/al-Nusra/etc/), but that plan failed. The only U.S. allies left in the region are Israel and Saudi Arabia. The problem with them is that, just like the USA themselves, these countries do not have ground forces capable of actually deploying inside Syria and taking on not only the Syrian military, but the much more capable Iranian and Hezbollah forces. Murdering civilians is really the only thing the Israelis and Saudis are expert in, at least on the ground (in the skies the Israeli Air Force is a very good one). Enter the Kurds.

The Anglo/Zionist wanted to use the Kurds just like NATO had used the KLA in Kosovo: as a ground force which could be supported by U.S./NATO and maybe even Israeli air power. Unlike the Israelis and Saudis, the Kurds are a relatively competent ground force (albeit not one able to take on, say, Turkey or Iran).

This longish commentary by the Saker showed up on the unz.com Internet site on Friday sometime — and I thank Larry Galearis for bringing it to our attention.  Another link to it is here.


How the seizure of a U.S. spy ship by North Korea nearly sparked nuclear war

This is it, they’re taking us out here to kill us,” Stu Russell thought as he trudged through the snow in the middle of the night into a dark forest.

Russell was one of 83 Americans held captive inside North Korea, following the seizure of the USS Pueblo spy ship in international waters, on January 23, 1968.

For weeks they were kept in a sparse, freezing-cold building they nicknamed “the Barn.” It had no running water and was infested with rats and bed bugs. Inside, the men were denied sleep, forced into stress positions, whipped and beaten. Their officers, particularly Lloyd Bucher, the ship’s commander, came in for vicious punishments, as their interrogators demanded they sign “confessions” stating they were illegally spying in North Korean territorial waters when they were captured.

Like today, 1968 was a period of heightened tensions on the Korean Peninsula. The war that led to the division of the country had only stopped 15 years earlier and bloody skirmishes were still common.

This very interesting and worthwhile detailed walk down memory lane, which I certainly remember hearing about on the radio way back then, was posted on the msn.com Internet site last Saturday — and for content reasons, had to wait for today’s column.  I thank Garry Robinson for sending it along — and another link to it is here.


Some Reflections on History and Economics — Hugo Salinas Price

Unfortunately, the governments of the whole world and their guides, the professors of the erroneous doctrines of the inductive school of economics, studiously avoid any reference to truly scientific economics as presented by the Austrian Schools. And they do so, because they are under the surviving influence of the ideas of the French Revolution, that postulated a reformed world where there would be no suffering. Today, if an economics professor publicly accepts that a world without suffering is an impossible proposition, he is in great danger of losing his job.
The predictable consequence of a whole world under the management of a false economics based on induction – i.e. experimentation – is an inevitable total disaster for the world.

The thinkers of the world are hoping that Christian Russia and Confucian China, the two great powers of Eurasia, will return to gold as money, by virtue of their military power, and sweep away, as Napoleon did before them, the present existence of “Assignat-like” fiat moneys in the world.

Such a transformation, in full concordance with the doctrines of the Austrian Schools of Economics, would immediately re-vitalize the world’s economy, due to its inevitable consequences: 1. The immediate stimulation of hope for a better future, in all nations. 2. The immediate activation of all able-bodied individuals to work as hard as possible, in order to obtain the precious money of gold and silver. 3. The re-emergence of the principle which has ruled human life in all ages past: “He who does not work, shall not eat” to motivate all those who waste their lives in idleness.

That’s a big 10-4 good buddy!  This very worthwhile commentary by Hugo appeared on the plata.com.mx Internet site on Tuesday — and I thank Hellmuth Vedder for bringing it to my attention — and now to yours.  Another link to this commentary is here.


Days Are Numbered for Price Manipulation — Ed Steer

This 7:30 minute video interview with your humble scribe was hosted by Charlotte McLeod — and was conducted on Monday at the Vancouver Investment Resource Conference.  It was posted on the youtube.com Internet site yesterday.


Divers find stash of rare gold coins at site of 1800s wreck off North Carolina coast

A stash of gold coins found Monday is the latest piece of evidence that a shipwreck 40-plus miles off the North Carolina coast is that of the steamship Pulaski, which took half its wealthy passengers to the bottom of the Atlantic in 1838.

Divers found 14 gold coins and 24 silver coins in a spot “no bigger than a cigar box.” All predate the ship’s sinking and include one British coin that experts say could be worth $100,000. Other gold coins in the collection are valued in the $10,000 to $12,000 range, officials said.

James Sinclair, a marine archaeologist involved in project, says finding gold coins proves the team is in the right spot.

This evidence supports reports that valuables, including gold and silver, were aboard the Pulaski when she sank,” Sinclair said in a statement.

The disappearance of Pulaski remains one of the nation’s most dramatic and deadly maritime disasters, partly because half on board died, but also because its passengers included some of the most prominent families in the southeast. Among those lost was New York Congressman William B. Rochester and six members of the Lamar family, then among the richest families in the southeast. The luxury steamship that went to the bottom of the Atlantic in 1838 with half its affluent passengers may have been found 40 miles off the coast of North Carolina.

This very interesting news item put in an appearance on the charlotteobserver.com Internet site at 4:20 p.m. EST on Friday afternoon — and was updated about three hours later.  I found it on the gata.org Internet site — and another link to it is here.


The PHOTOS and the FUNNIES

Here are two more award-winning bird photos from 2017.  The first is headlined “Camouflage” by Daniel Stenberg from Sweden.  The second is entitled “Bravery” as a pied crow takes on a white-backed vulture.  This photograph is by Hungarian wildlife photographer Bence Máté.  The ‘click to enlarge‘ feature helps with both shots.


The WRAP

Today’s pop ‘blast from the past’ is from the very early 1980s — and is all Canadian once again.  It’s one of the biggest rock and roll hits by any band that this country has ever produced in any generation.  I’ve posted it before, but it’s been a while.  The link is here.

Today’s classical ‘blast from the past’ dates from 1845.  It’s Robert Schumann‘s Piano Concerto in A minor, Op. 54.  It was premiered in Leipzig on January 1, 1846 with his wife Clara at the keyboard.  Here’s another gifted female pianist doing the honours for us today.  It’s the very yummy Georgian-born Khatia Buniatishvili, accompanied by the Frankfurt Radio Symphony, under the baton of Paavo Järvi.  The link is here.


Once again I was more than underwhelmed by the price action in silver and gold yesterday, especially considering the fact that the U.S. dollar index continues to proceed almost unimpeded towards its true intrinsic value.  It will be interesting to see if the powers-that-be will allow free-market forces to determine what that is — and although they’re allowing precious metal prices to rise, they’ve got them on a very short leash.  That’s certainly being reflected in the corresponding equities, as they continue to underperform.

I certainly don’t expect the above situation to continue indefinitely, but it is what it is for the moment — and there’s nothing that can be done about it.  Once the bloom is off the world’s bond and equity markets, I expect things will change for the better in a hurry for both silver and gold.

Of course there’s still JPMorgan to contend with, but this price management scheme is now very long in the tooth — and everyone that matters is on to them.  The latest indication came from The Central Bank of the Russian Federation…with their own version of “Fort Knox” now stacked high with pallets of 1,000 troy ounce good delivery silver bars.

Like I said in that interview with Charlotte McLeod posted in the Critical Reads section, I’d rather be years early, than one day late when this all comes to an end.

Here are the 6-month charts for all four precious metals, plus copper once again.  And how far these rallies can run without getting really, really, really overbought, remains to be seen.  The ‘click to enlarge‘ feature helps a bit with the first four.

As Doug Noland said in the title to his weekly Credit Bubble Bulletin...America First — and the Decapitation of King Dollar…this event has thrown a spanner into the works of the international financial system.  Where we go from here is completely uncharted territory.

I doubt very much of the powers-that-be will be able to put this genie back in the bottle, at least not in my lifetime.  Anyone with dollar holdings, which includes every central bank, government and big business, is certainly looking over their collective shoulders now — and it wouldn’t surprise me in the slightest if there wasn’t some sort of rush for the exits — and soon.

And with King Dollar now on a death watch, the other fiat currencies that comprise the world’s financial system, whether they’re part of the dollar index or not, can no longer be considered safe havens.  The only alternative is precious metals — and when that rush begins, it will certainly spell ‘game over’ for the short holders in the COMEX futures market…except for JPMorgan, of course.

As I approach my seventieth birthday, never once in my lifetime did I ever entertain the idea that I would be living in the world we’re in today…one that has now totally gone off the rails.

Although I’m happy to be ‘all in’ with my precious metal holdings — and certainly hope that they will save me from whatever circumstance that comes shambling forth from this day onward, it’s cold comfort knowing that the safety catch has now been taken off the world’s financial system.

But other than what I’ve done to personally prepare, there’s not much I, or anyone else can do, except watch events unfold — and hope that what I/we have done, proves to be enough.

How did it come to this?

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

Ed

Trump Speaks, the DXY Rallies — Gold and Silver Get Hammered

26 January 2018 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


NOTE If you are getting the daily e-mail version of my column, but there are no charts or photos embedded, please click on and bookmark my new website URL, which is linked here.

That should fix the problem. — Ed


It was a wild day in the currency markets yesterday — and except for what Trump had to say at 2 p.m. EST, thirty minutes after the COMEX close — none of it was allowed to have much effect on precious metal prices.

The gold price traded down a few dollar until around 9:30 a.m. CST on their Thursday morning — and began to head quietly higher, with the high tick of the day coming just a few minutes before 3 p.m. China Standard Time on their Thursday afternoon.  The price was sold quietly lower from there — and that sell-off lasted until around 8:40 a.m. GMT in London.  At that point, the gold price was down a few dollars.  But by minutes after 9 a.m. in New York, it was back in the plus column by the same amount, only to get sold lower into the afternoon gold fix in London.  Once that was put to bed, the gold price began to rally quietly — and that state of affairs lasted until a few minutes before the COMEX close.  Once the close was done, gold was sold down four or five dollars over the next thirty minutes or so until Trump spoke about a ‘strong dollar‘ — and that, as they say, was that.  The low tick was in about 2:45 p.m. — and its subsequent rally off that low wasn’t allowed to get far.  The price chopped sideways from there into the close.

The high and low ticks in gold were reported as $1,365.40 and $1,341.00 in the February contract.

Gold finished the Thursday session at $1,347.30 spot, down $10.40 on the day.  Gross volume was gargantuan once again — and the biggest one-day volume number I’ve ever seen, at 686,134 contracts — and net volume was a knee-wobbling 372,500 contracts.  And, not surprisingly, roll-over/switch volume was very heavy as well at just under 157,000 contracts.  What a day!

The silver price followed a similar path to gold…virtually tick for tick…although the price activity was far more muted, as was the sell-off when Trump spoke a minute or so after 2 p.m.  After that event, everything was the same as it was for gold once again.

The high and low ticks in this precious metal were recorded by the CME Group as $17.705 and $17.125 in the March contract.

Silver was closed in New York yesterday at $17.255 spot, down 28 cents from Wednesday.  It was another record volume day in silver as gross volume checked in at 138,138 contracts…net volume at 121,500 contracts — but not a lot of roll-over/switch volume…just under 8,300 contracts worth.

Platinum followed the silver and gold price pattern yesterday as well, but there was very little price movement at their common inflection points.  And also like gold and silver, platinum was also up on the day until Trump opened his mouth, but ended up getting closed at $1,012 spot, down two dollars from Wednesday.

Up until about 2:30 p.m. China Standard Time on their Thursday afternoon, the palladium price sort of matched what was going on in the other three precious metals.  But once the sell-off began at that point, it continued generally lower until the low tick was placed at, or minutes before, the afternoon gold fix in London.  It rallied a bit from there until shortly before the Zurich close — and then chopped sideways until Trump pontificated on the U.S. dollar at 2 p.m. EST…then down it went as well.  Palladium finished the Thursday session in New York at $1,087 spot, down 17 bucks on the day — and back below $1,100 spot.

The dollar index closed very late on Wednesday afternoon in New York at 90.21 — and after rallying a handful of basis points during the first two hours after trading began a few minutes later at 6:00 p.m. EST Wednesday evening, it began to head sharply lower.  That sell-off ended at the 88.80 mark just minutes before 2:30 p.m. CST on their Thursday afternoon.  By minutes before 9 a.m. GMT in London it was up to 89.22.  By minutes before 11 a.m. it was back at 89.00…but bounced off that mark — and chopped very quietly higher until Draghi spoke at 8:25 a.m. EST in New York.  It fell like a rock from there to its 88.44 low tick, which occurred at precisely 9:00 a.m. EST.  It should be obvious to anyone with even a room temperature I.Q. that the usual ‘gentle hands’ appeared at that time to prevent the dollar index from crashing once again.

The most amazing part of that precipitous decline was that there was nary a hint of it in the prices of any of the precious metals…nada!

From that juncture, the DXY bounced around sideways until ‘The Donald’ spoke at 2 p.m.  — and the index blasted skyward in short order — and ‘da boyz’ began to lean on precious metal prices at the same moment.  The 89.55 high ticks came shortly before 3 p.m. EST — and although it rolled over hard from there, it was rescued once again about thirty minutes later.  It ‘rallied’ quietly into the close from there.  The dollar index finished the day at 89.46 — and up 25 basis points from its Wednesday close.

This is certainly no way for the world’s ‘reserve’ currency to behave.

And here’s the 6-month U.S. dollar index which, as always, is posted for its entertainment value only — and that’s particularly true after yesterday’s action.

The gold shares opened about unchanged — and then slid to their morning lows at the London p.m. gold fix, which was obviously 10 a.m. EST.  They rallied quietly back into positive territory, but began to roll over starting at the 1:30 p.m. COMEX close, as the gold price was rolled over.  Of course the real downside activity started when Trump spoke about a strong U.S. dollar.  The gold stocks hit their respective lows shortly before 3 p.m. — and closed off them by a hair, as the gold price recovered a bit after that.  The HUI closed down 2.32 percent.

The price pattern in the silver equities was almost identical to what happened in the gold stocks, but they barely made it back into positive territory by minutes before the COMEX close — and it was pretty much a bloodbath once ‘The Donald’ waxed philosophical about a “strong U.S. dollar” minutes after 2 p.m. EST.  Nick Laird’s Intraday Silver Sentiment/Silver 7 index closed down a chunky 3.73 percent.  Click to enlarge…if you dare!

I said in my Thursday column [about Wednesday’s silver price action] that the 2.03 percent increase in the Silver 7 Index that day on a 50 cent rally in the silver price was…”really underwhelming“.  On Thursday, silver was hit for 28 cents — and the carnage in the stocks was out of all proportion to that decline.  There’s a lot of day-trading going on in the precious metal stocks right now — and there was obviously some panic liquidation on Thursday.

Here’s the 1-year Silver Sentiment/Silver 7 Index — and all of this week’s gains, plus a tiny bit more, disappeared yesterday.  Click to enlarge.

The CME Daily Delivery Report showed that 1 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Monday.  There were no issuers or stoppers of consequence.  After Monday, there are only two delivery days left in January — and there’s not much open interest left in either gold or silver, anyway.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in January dropped by 2 contracts, leaving 4 still open, minus the 1 contract mentioned just above. Wednesday’s Daily Delivery Report showed that 3 gold contracts were actually posted for delivery today, so that means that 3-2=1 more gold contract was added to the January delivery month. Silver o.i. in January remained unchanged at 3 contracts, minus the 1 mentioned in the previous paragraph. Wednesday’s Daily Delivery Report showed that 1 silver contract was actually posted for delivery today, so that means that 1 more silver contract got added to January.


There were no reported changes in GLD yesterday.  But, for the first time since December 12, there was a deposit in SLV, as an authorized participant, most likely JPMorgan, added 848,727 troy ounces of silver.

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

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  There was 321.500 troy ounces/10 kilobars [U.K./U.S. kilobar weight] received at Canada’s Scotiabank — and the only other activity was a transfer of 22,041 troy ounces from the Eligible category — and into Registered over at HSBC USA.  I won’t bother linking this.

The only action in silver was two truck loads…1,199,756 troy ounces… that was deposited over at CNT.  Nothing was shipped out.  The link to that activity is here.

It was another pretty busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 6,529 of them, but shipped out only 1,210.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


I spent some time talking about The Central Bank of the Russian Federation‘s new-found interest in silver bullion as a monetary metal while I was in Vancouver.  Here’s the link to the story in question about this that I carried in my column from two weeks ago — and the photos of “Russia’s Fort Knox” are more than impressive, especially the ones that show their massive silver bullion holdings.  By my count, there is around 7.7 million troy ounces — and that’s at a minimum, because that’s just what I can see in these pictures. Each stack holds 100,000 troy ounces. Here are the three pertinent photos from that story — and you can count them yourself if you wish.  Here are the three pertinent ones from that story.  The click to enlarge feature only helps a bit with the first photo — and not the other two.

I sent an e-mail off to Russia’s Central Bank about twenty-four hours ago asking some questions about these photos, plus a few other things that were on my mind — and I’ll let you know if I hear anything.

I only have a small handful of stories for you today.


CRITICAL READS

Draghi Hits Back at Mnuchin in Global Currency War of Words

European Central Bank President Mario Draghi attacked the U.S. Treasury Secretary’s comments on the dollar, saying he isn’t playing by the rules.

Speaking in Frankfurt on Thursday, Draghi said recent euro-dollar moves are partly down to Steven Mnuchin’s intervention at the World Economic Forum in Davos, at which he said a weaker greenback is good for U.S. trade.

The remarks breach a pledge by IMF members, Draghi said….

The exchange rate has moved in part because of endogenous reasons, namely the improvement in the economy, in part due to exogenous reasons that have to do with communication. But not by the ECB, but by someone else. This someone else’s communication doesn’t comply with the agreed terms of references.

The euro strengthened after Draghi’s comments, touching $1.2537, the strongest level since December 2014. It was up 0.8 percent at $1.2504 as of 4:55 p.m. Frankfurt time.

It was quite bold for Draghi to mention it,” said Viraj Patel, a currency strategist at ING Groep NV in London. “It’s going to be quite contentious going forward. I think it was a little message to the U.S. to say, let’s not get too carried away with trying to drive markets away from fundamentals.

This Bloomberg news item appeared on their Internet site at 7:37 a.m. Denver time on Thursday morning — and was updated about two hours later.  I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.  The Zero Hedge spin on this, courtesy of Brad Robertson, is headlined “In Stunning Development, Draghi Slams U.S. Dollar Jawboning


Dollar Surges After Trump Says “Mnuchin Was Misinterpreted, Dollar Will Get Stronger

After Stephen Mnuchin failed to arrest the dollar’s free-fall this morning, it appears to have been left to President Trump to ‘fix’ it. In a brief clip from a longer CNBC interview, Trump explained “ultimately he wants to see a strong dollar” and the dollar spiked…

Trump said “Mnuchin’s comment was taken out of context” and added that “our country is becoming so economically strong again and strong in other ways, too… and the dollar will get stronger and stronger and ultimately I want to see a strong dollar

And the reaction was instant buying of the dollar…

We do note that actually this is exactly what Mnuchin said this morning… that in the long-run we want a strong dollar… and offers no content for the short-term plunge.

This brief news item showed up on the Zero Hedge website at 2:09 p.m. on Thursday afternoon EST — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


You Can’t Outrun a Wasp! — Dennis Miller

My grandfather, William Paul Smith was an ordinary dairy farmer with a degree in common sense. One of his favorite sayings was, “It’s the same thing, only different.” 70 years ago, he warned me not to throw rocks at a wasps’ nest. As I cried and put ice on the sting, he explained what happened always happens – and I got stung! I thought I was different – and could outrun a wasp – and had to learn the lesson the hard way.

His sage wisdom does not just apply to children. Why is it that many lessons are constant, yet even as adults, we choose to ignore warnings and learn the hard way?

The four most expensive words in the English language are this time it’s different” – Sir John Templeton

Good friend Chuck Butler, writes for Dow Theory Letters, a terrific publication. Chuck recently asked, “Will This Time Be Different?

His headline reminded me of my grandfather. Warnings are appearing regularly – are they being ignored?

This commentary by Dennis put in an appearance on his Internet site on Thursday morning — and another link to it is here.


When it comes to Davos, it’s inequality, stupid — Pepe Escobar

For billions of people, the Groucho Marx rule applies when talking about Davos. This is the exclusive club, which meets in the luxury Swiss resort each year to discuss the global business environment.

Groucho, of course, has been immortalized along with the rest of the Marx Brothers in the zany Hollywood movies of the 1930s, such as A Night a the Opera, A Day at the Races and Animal Crackers.

In one quick-fire response, he joked: “I sent the club a wire stating, ‘Please accept my resignation. I don’t want to belong to any club that will accept me as a member’.

Well, to start off with those billions of people would not get past the bouncers, because the self-defined World Economic Forum is about exclusion. Yet even if, by divine design, they were handed free passes, what would be the point?

This commentary by Pepe was posted on thesaker.is Internet site on Wednesday sometime — and I thank Roy Stephens for bringing it to our attention.  Another link to it is here.


Storm clouds gather over Ukraine — Alexander Mercouris

In a recent article for The Duran I wrote of how the economic situation in Ukraine appeared once more to be deteriorating, with economic statistics apparently being distorted to conceal the extent of the rise in inflation, making the claimed figure of 2% GDP growth in 2017 unlikely.

In a further sign of a deteriorating economic situation, recent reports from Ukraine speak of rolling electric power blackouts in some regions, suggesting growing energy shortages as the price of oil hikes.

In a symptom of how bad the situation has become, the Ukrainian government has quietly dropped its sanctions prohibiting coal imports from Russia, indicating that Ukraine is being forced to turn to Russia for imports of coal in light of the gathering energy crisis.

In this situation, as Paul Goncharoff has recently pointed out, the decision of the Stockholm Arbitration Tribunal to force Ukraine to resume gas purchases from Gazprom actually helps Ukraine,  since the gas Gazprom is able to supply Ukraine is actually cheaper than the gas Ukraine has up to now for political reasons been buying in Europe.

A further sign that economic pressures are causing a certain return to economic rationality in Ukraine is shown by a recent report from Interfax that Ukraine wants negotiations with Moscow to secure the transit of Russian gas to Europe across Ukraine.

This very worthwhile commentary by Alex appeared on theduran.com Internet site at 7:56 p.m. EST on Thursday evening — and it has obviously been updated, because Larry Galearis sent it tome about four hours before that time.  Another link to it is here.


Mike Kosares: Why gold can beat hyperinflation

USA Gold’s Mike Kosares, answering a question from the Netherlands, explains why gold prices are likely to outpace other prices during hyperinflation.

Kosares’ commentary is headlined “R.K. Asks for Some Specifics on Gold as a Hedge Against Hyperinflation” and it was posted on the usagold.com Internet site yesterday.  I borrowed the headline, plus the entire preamble, from a GATA dispatch yesterday.  Another link to it is here.


Nick Barisheff: Gold price manipulation isn’t mere conspiracy theory anymore

In an address this month to the Empire Club of Canada in Toronto, perhaps the country’s most esteemed public forum, Bullion Management Group founder, president, and chief executive officer Nick Barisheff said gold market manipulation is no longer mere conspiracy theory “promoted by gold bugs and organizations like GATA” but is becoming “self-evident.”

Barisheff described the suppression of the gold price through derivatives trading in which virtually no metal ever changes hands.

He quoted the deputy chairman of Russia’s central bank, Sergey Shvetsov, as saying, “The major gold-producing nations are tired of an international gold price that is determined in a synthetic trading environment having little to do with the physical gold market.

Barisheff added that he expects Asia to overthrow that system.

This very worthwhile gold-related news item was posted on the gata.org Internet site yesterday — and another link to it is here.


The PHOTOS and the FUNNIES

I was out for a drive past the old watering hole early yesterday afternoon — and it is, of course, snow-covered and frozen solid to great depth at this time of year.  Needless to say, there were no waterfowl to be seen…but just out of camera range was a small flock of about a dozen grey partridge, a member of the pheasant family, wandering through alfalfa stubble.  I hadn’t seen any of these critters for years — and it made the trip worthwhile.  Click to enlarge.


The WRAP

It was amazing to watch grown men duke it out in a verbal ‘currency wars’ food fight yesterday.  If that international pissing match between the most powerful of the financial elite on both sides of the Atlantic didn’t want to make you run screaming from fiat currencies, I don’t know what would.

But the big surprise for me yesterday was the 70 basis point decline in the U.S. dollar index in the 35-minute time period between 8:25 and 9:00 a.m. EST in New York.  Gold and silver prices barely moved in either direction.  Then when Trump opened his pie hole at 2 p.m…the DXY screamed higher by about 80 basis points — and “the seas boiled — and the sky fell” in the precious metals, taking their associated equities with them.

I’d be careful about reading too much into yesterday’s price action, because one trading day does not make for a trend.  But I am somewhat gobsmacked at the volumes we’ve been seeing in both gold and silver most of this week, particularly during the last couple of days.  I know that options and futures are expiring next week, but these volume numbers are almost without precedence regardless of that fact.

Here are the 6-month charts for all four precious metals, plus copper once again.  Without exception, the lows in all four precious metals [plus copper, I would think as well] came after the COMEX close — and don’t show up Thursday’s dojis.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price began to edge higher about an hour after trading began in New York on Thursday evening. It rallied until the decline in the dollar index took a bit of a rest — and then chopped sideways until just before 2 p.m. China Standard Time on their Friday afternoon — and it began to edge higher anew. At the moment, gold is up $7.80 an ounce. Silver took the same price path — and it’s up 21 cents currently. It was much the same for both platinum and palladium, with the former up 5 dollars — and the latter by 4 as the Zurich open looms.

Net HFT gold volume is only around the 46,000 contract mark, but there’s heavy roll-over/switch volume to the tune of about 31,000 contracts — and the net HFT volume in silver is a very chunky 20,500 contracts, with fumes and vapours in the roll-over/switch category.

The dollar index rallied for a tiny bit once trading began at 6:00 p.m. EST on Thursday evening in New York, but then sharply reversed until halting minutes before 10 a.m. CST. It didn’t do a lot from that juncture until shortly after 2 p.m. CST — and then began to head sharply lower once again. It’s down 66 basis points as London opens.

Today, at 3:30 p.m. EST, we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, January 23. Just eye-balling the five days of the reporting week, there shouldn’t be much change in gold — and there’s a chance that there might be a slight improvement in the commercial net short position in silver for the reporting week. And as Ted correctly pointed out in his mid-week commentary to his paying subscribers yesterday afternoon…”But as has been the case over the past month or so, I get the feeling that the nuances in the silver report will be of interest.” I couldn’t agree more — and that may turn out to be the case in gold as well.

Whatever the numbers are, I’ll have them for you in Saturday’s missive.

And as I post today’s column on the website at 4:02 a.m. EST, I see that gold continued to rally a bit after London opened, but with the dollar index currently off its low tick, the gold price was turned a bit lower at the same time — and it’s up $7.30 an ounce as the first hour of trading in London draws to a close. It was the same in silver — and it’s up 20 cents. Platinum and palladium are up 6 and 5 bucks respectively.

Gross gold volume is monstrous at about 128,000 contracts — and net of huge roll-over/switch volume…around 37,000 contracts worth, net HFT gold volume is something over 54,500 contracts. Net HFT silver volume is now up to about 23,700 contracts, with still very little in the way of roll-over/switch volume.

The dollar index continued to slide to its current 88.73 low tick — and that came about five minutes or so after the London open — and as I said before, it’s off that low by a bit — and down ‘only’ 56 basis points. And it certainly appears to have all the hallmarks of an ‘engineered’ dollar rally.

With today being Friday — and with options and futures expiry on Monday, Tuesday and Wednesday of next week, absolutely nothing will surprise me when I check the charts later this morning.

Enjoy your weekend — and I’ll see you here tomorrow.

Ed

More Silver For JPMorgan in January COMEX Deliveries

29 December 2017 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


[NOTE:  I have the usual spacing/colour issues on the website version of my column today, but it’s not quite as bad as yesterday.  I’ll be back to normal with my weekend column, as I’ll be back on my computer at home then. — Ed]


The gold price began to head quietly higher starting an hour or so after trading began at 6:00 p.m. EST in New York on Wednesday evening.  That tiny rally lasted until shortly after trading began in London — and then was equally quietly sold lower until five minutes before the COMEX open.  It began to rally with a bit more enthusiasm at that juncture, but ran into a willing seller about fifteen minutes before the afternoon gold fix in London.  From there, it crept higher for the rest of the Thursday session, finishing on what appeared to be its high of the day.

The low and high ticks certainly aren’t worth looking up.
Gold finished the Thursday session in New York at $1,294.70 — and up another $7.90 from Wednesday’s close.  Net volume was very reasonable at something under 197,000 contracts — and there was a noticeable amount of switch volume out of February and into future months.
Silver followed a very similar price path as gold, so it doesn’t require any further embellishment from me — and the low and high ticks aren’t worth looking up in this precious metal, either.
The silver price closed yesterday at $16.84 spot, up another 18 cents.  Net volume was 59,000 contracts, with considerably less switch/roll-over volume than reported for gold.
Platinum was up six dollars by shortly before 2 p.m. China Standard Time on their Thursday afternoon — and didn’t do a lot for the remainder of the Thursday session.  It finished that day at $926 spot, up 6 bucks from Wednesday’s close.
The palladium price was up a few dollars by around 9:30 a.m. CET in Zurich trading, but then began to head a bit lower, with the low tick of the day…such as it was…coming shortly before 9 a.m. in New York.  It rallied from that point until the Zurich close — and ran into a willing seller shortly after that.  From there it traded mostly sideways into the 5:00 p.m. EST close of trading.  Palladium finished the Thursday session at $1,058 spot, up 4 dollars on the day.
The dollar index closed very late on Wednesday afternoon in New York at the 93.00 mark — and began to head lower the moment that trading began at 6:00 p.m. EST that evening.  That continued until shortly after the London open, when a weak counter-trend rally developed.  That lasted less than three hours — and the index continued its downward path.  The 92.57 low tick was set sometime between 1 and 2 p.m. EST in New York — and it chopped quietly higher into the close from there.  The dollar index finished the day at 92.68 — and down 32 basis points from its close on Wednesday.
And here’s the 6-month U.S. dollar index graph…
The gold stocks turned in another very poor performance again yesterday.  Although they gapped up a bit at the open, they were immediately sold down hard into the afternoon gold fix in London.  From that point they rallied nicely, with all the gains that mattered coming by around 12:45 p.m. in New York trading.  They hung in there pretty good until 2 p.m…when they were sold lower until 3 p.m. — and from that point they chopped quietly sideways into the close.  The HUI finished higher by a tiny 0.18 percent.
The silver equities followed a very similar price pattern — and barely managed to close in the green, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up only 0.07 percent…which is barely unchanged on the day.  Click to enlarge if necessary.
The shares continue to vastly underperform the precious metals — and as I said in yesterday’s missive, if it isn’t tax-loss selling, then the only other thing it can be is year-end book-squaring by various and sundry precious metals mutual funds and their ilk.  But for individual investors such as you and I, this if no consolation whatsoever.
Here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart.  Click to enlarge.
The CME Daily Delivery Report for First Day Notice for delivery in January showed that 137 gold and 321 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday, January 2.  In gold, there were five short/issuers in total — and the only real stand-out was 26 contracts that were issued from JPMorgan’s client account.  The only long/stopper that mattered was JPMorgan with 130 contracts for its own account.  In silver, there were six short/issuers in total — and the largest by far was HSBC USA with 247 from its in-house/proprietary trading account — and in very distant second place was JPMorgan with 26 contracts out of its client account.  Top dog as long/stopper was JPMorgan once again with 138 contracts…69 for its own account, plus another 69 for its client account.  In second and third place was HSBC USA and Goldman Sachs, with 97 and 61 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Thursday trading session showed that gold open interest inJanuary fell by 119 contracts, leaving 417 left, minus the 137 mentioned just above. Silver o.i. in January declined by 27 contracts, leaving 539 still open, minus the 321 contracts mentioned in the previous paragraph.
I would suspect that the January delivery month will be finished in very short order — and the fact that a lot of “the usual suspects” are taking delivery for their client accounts means that the insiders are still loading the silver boat for their own personal gain when the silver price is allowed to hit the heights.
There were no reported changes in GLD yesterday, but there was another big withdrawal from SLV, as an authorized participant removed 1,320,729 troy ounces.  It’s a fairly safe bet that this was one of Ted’s patented exchanges of SLV shares for physical metal — and that JPMorgan owns it all now.  With silver prices on the rise recently, there can be no other possible explanation for this withdrawal, or the one for 801,876 troy ounces on Wednesday.
The folks over at the shortsqueeze.com Internet site updated their short report for both SLV and GLD as of the close of business on November 30.  The short position in SLV actually increased during the November 15 to 30th reporting period…from 12,918,800 shares/troy ounces, up to 13,168,600 shares/troy ounces…which works to a rise of 1.93 percent.  And for whatever reason, the website blocked me from getting access to the short interest change in GLD — but I should have that in my next column, which will be posted very late on Saturday night, or Sunday morning.
And much to my surprise, the U.S. Mint had a tiny sales report. They sold 2,000 troy ounces of gold eagles — and that was all.
There was no reported in/out activity in gold over at the COMEX-approved gold depositories on the U.S. east coast on Wednesday.
One truck load of silver…600,483 troy ounces…was reported received — and that all ended up at JPMorgan. That deposit, as does every deposit going forward, brings a new record high for their COMEX silver holdings, which now sits at 118.8 million troy ounces. There was also a transfer of 639,854 troy ounces from the Registered category — and back into Eligible.  That happened over at CNT.  The link to all this activity is here.
And it was all zeros, both in and out, over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.

Another day where the stories, cartoons and photos are the bare minimum required.


CRITICAL READS

Will Millenials Ever Be Able To Retire? — Dennis Miller

My oldest granddaughter (early 30’s) recently asked me that question. She and her husband have two children, a new home and are still paying off their college loans.

I can still remember when we lived from paycheck to paycheck, questioning why there was so much month left at the end of the money….

My response, “Sure, but when, and at what lifestyle, depends on many things; including decisions you make today.”

It’s easy for young people to look at retirement as something they need to address “tomorrow”; saving is put off – too many bills to pay. “Tomorrow” does come – the day of retirement reckoning is here before you know it.

This commentary by Dennis appeared on his Internet site yesterday — and another link to it is here.


Italy’s President Dissolves Parliament, Triggering Elections

Italian President Sergio Mattarella dissolved parliament on Thursday, setting the country on the path to a national election on March 4 that could lead to a hung parliament and a period of political turbulence.

The head of state signed a decree ending the legislative sessions in both houses of parliament, according to an e-mailed statement from Mattarella’s office. At a cabinet meeting later, the government of Prime Minister Paolo Gentiloni set the election date, according to an official who could not be named because he was not authorized to comment publicly on the issue.

At a traditional end-of-year news conference earlier on Thursday, Gentiloni played down the risk of political turbulence ahead.

We mustn’t dramatize the issue of political instability, which is certainly an issue but rather than being worried about it, we should tackle it knowing that we’re pretty much vaccinated against it,” Gentiloni said. Frequent change of government “is not a recent phenomenon and it hasn’t stopped our country growing,” he added.

Italy is the ‘I’ of the PIGS group — and like their totally insolvent banking system, the nation as a whole is bankrupt as well.  Only the fact that the ECB continues to buy up all their bonds, keeps the financial and fiscal wolves off the country’s doorstep.  This Bloomberg news item showed up on their website at 10:27 a.m. Denver time on Thursday morning — and was updated about an hour later.  I thank Swedish reader Patrik Ekdahl for pointing it out — and another link to it is here.


$1.5 million Perth Mint gold seized in U.S. fraud case

More than $1.5 million in Perth Mint gold has been handed to U.S. authorities after its owner, a Texan man, was jailed for 40 years for a fraud that netted millions of dollars.

Matthew Norman Simpson, 34, was chief executive of an internet provider in Dallas until an FBI raid in 2009 named him as an alleged conspirator in a “massive cybercrime conspiracy”.

The complicated plot involved creating shell companies and using phony identities to defraud a number of communications companies, including giants AT&T and Verizon, out of goods and services totalling more than $20 million.

They even paid homeless people in cash and alcohol for the use of their identities to act as the officers, directors or managers of the shell companies.

In 2012, after being found guilty, Simpson was sentenced to 40 years jail, was ordered to pay more than $17 million in restitution, and had millions of dollars in assets seized after a jury found they were the ill-gotten gains of the fraud.

Included in those assets were three certificates of ownership of Perth Mint gold, valued at more than $1.5 million.

This interesting news item appeared early on Wednesday afternoon on December 27 ‘down under’ time — and was posted on The West Australian website.  It’s something I found on the Sharps Pixley website — and another link to it is here.


The PHOTOS and the FUNNIES

 

The WRAP

Gold and silver prices continue to crawl higher every day — and now even platinum is above its 50-day moving average.  There was certainly more Managed Money long buying and short covering again yesterday, but they haven’t shown up en masse as of yet — and that included yesterday’s price/volume activity.  As silver analyst Ted Butler pointed out in his quote in yesterday’s column…”So while I got extremely bullish as prices fell into the Dec 12 price lows, the lack of aggressive buying by the managed money traders on the upswing is even more bullish. Let me not beat around the bush – the managed money trades are in a highly unique circumstance of having their lungs ripped out to the upside, should the commercials so decide to let prices fly higher. Certainly, this adds to my suspicions that the last trip lower in price was more arranged and deliberate than any prior engineered move. In short, I don’t know how the commercials could have set up things better than they have.”
At this stage of the game, it would be Ted’s raptors [the small commercial traders other than the Big 8] doing most of the heavy lifting, selling copious quantities of their long position in both precious metals…for huge profits, I might add.  The ‘5 through 8’ large traders, along the with the Big 4 in general — and the Big 1 in particular…JPMorgan…won’t show up in the rally until its latter stages…if JPMorgan shows up at all, that is.
Here are the 6-month charts for all four precious metals, plus copper once again.  Copper is now well into overbought territory — and I watch these rallies unfold with increasing interest.  The ‘click to enlarge‘ feature helps a bit with the first four charts.
Today at 3:30 p.m. EST, according to what Ted said in his mid-week commentary, we should get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  It should come as no great shock to anyone that there will have been an increase in the commercial net short positions in both silver and gold…with the usual points of interest being the volumes involved — and the internal break-down of the players involved as well…as per Ted’s quote above.
And as London opens — and as I post today’s column on the website, I note that the gold price hasn’t done much during Far East trading on their Friday — and is currently up 10 cents.  Silver was down 2 cents all day long in Far East trading, but has dipped a bit lower in the last hour — and is down 5 cents the ounce.  Neither platinum and palladium have been doing much, with former sitting at unchanged — and the latter up a dollar as Zurich opens.
Net HFT gold volume is coming up on 31,000 contracts — and that number in silver is a bit over 7,600 contracts.
The dollar index continues its slow slide — and is down 9 basis points.

Today is the last trading day of the week, month, 4th quarter — and year.  I must admit that I have no idea what will happen from a price perspective during the New York trading session today.  

My usual Saturday column won’t show up on my website until late Saturday night/early Sunday morning EST, as I’ll be on the road almost all day Friday — and won’t have the hours to spend getting it out at its usual time, which is in the wee hours of Saturday morning.
See you then.
Ed

Ted Butler: Life Under Manipulation

25 November 2017 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


It was another quiet trading for gold.  The low of the day, such as it was, came at 11:30 a.m. in London — and it began to edge unevenly higher from there.  It made it back to unchanged on the day at, or shortly before, the afternoon gold fix in London — and was sold quietly lower — and back to its 50-day moving average — until London closed at 11 a.m. EST.  The gold price didn’t do a thing after that — and the after-hours market closed early…just before 2 p.m.

The low and highs definitely aren’t worth looking up.

Gold finished the Friday session in New York at $1,287.90 spot, down $2.70 from Thursday’s close.  Net volume on Friday was pretty light at something under 137,000 contracts

Silver traded a handful of pennies above unchanged all through Far East trading — and was still up a penny or so at the 10:30 a.m. GMT morning gold fix in London.  Once that was put to bed, the silver price was sold sharply lower — and back below $17 spot briefly.  By the noon GMT silver fix, it was back at $17 spot — and it chopped a few more pennies higher until the equity markets opened at 9:30 a.m. EST in New York.  It shot higher from there — and back above unchanged on the day, but ran into JPMorgan et al within minutes.  Once the afternoon gold fix was done, the silver price was sold back to $17 spot — and a bit below.  But it popped back above that mark by a penny or two just before the COMEX close.

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

Silver was close in New York yesterday at $17.01 spot — and down 6 cents from Thursday  — and back below its 50-day moving average by a few pennies.  Net volume was exceedingly light at a bit under 29,000 contracts.

The platinum price was up 6 bucks by shortly after 11 a.m. China Standard Time on their Friday morning.  From that point it was sold unevenly lower to its $932 low tick of the day, which came shortly after 11 a.m. in Zurich.  It was bounced off that price a few times until about 8:30 a.m. in New York.  At that juncture it began to head higher.  An attempt was made to cap it just before 10 a.m. EST at the afternoon gold fix, but it powered higher through that — and the $942 spot high tick came a noon in New York.  It didn’t do a thing after that, finishing the day at $941 spot — and up 8 dollars from Thursday’s close.

The palladium price traded ruler flat in morning trading in the Far East on their Friday, but was sold back to the $1,000 spot mark by the Zurich open.  It traded at that price until a few minutes before 2 p.m. CET — and then the selling pressure appeared.  The $987 low tick was set at 1 p.m. in New York — and it recovered a couple of bucks before the markets closed for the day.  Palladium finished the Friday session at $989 spot — and down 14 bucks from Thursday.  This foray above the $1,000 spot mark certainly wasn’t allowed to last long.

The dollar index closed very late on Thursday afternoon in New York at 93.12 — and made a couple of minor attempts to rally once trading began at 6:00 p.m. EST in New York on Thursday evening.  It made it up to the 93.25 mark, its high tick of the day, minutes before 3:30 p.m. CST on their Friday afternoon.  Then the long slide began, with the 92.67 low tick coming about twenty minutes after the London close…about 11:20 a.m. in New York.  It rallied weakly until a few minutes before 1 p.m. EST — and didn’t do much of anything after that.  The dollar index finished the day at 92.76 — down 36 basis points from Thursday’s close.

And here’s the 6-month U.S. dollar index chart — and Friday’s doji contains Thursday’s trading data as well.

The dollar index is down about 240 basis points since around November 7 — and the gold price isn’t even up ten bucks.  That’s how carefully precious metal prices, particularly gold and silver, are being managed.

As I’ve said on a number of occasions in the last six months, this appears to be a controlled devaluation of the U.S. dollar that began back at the start of January.  The dollar index is down a monstrous 1,100+ basis points since January 1 — and the gold price has only been allowed to rise by 12 percent — and silver by less than 7 percent.

The gold shares gapped up a bit at the open, only to be met by a wave of selling.  There was a respite between 10:30 and 11 a.m. in New York trading, before the sell-off recommenced.  The markets closed at 1:00 p.m. EST — and at that point the HUI was down 0.70 percent.

The silver equities traded in a mostly similar manner, except Nick Laird’s Intraday Silver Sentiment/Silver 7 Index dropped by 0.96 percent.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index chart.  Click to enlarge.

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

Here’s the 1-week chart — and the precious metal equities managed small gains on the week, despite the fact that both silver and gold were down over that time period.

Here’s the month-to-date chart — and the silver equities still have a ways to go to get back in positive territory.

And here’s the year-to-date chart — and my comments on this one are the same as what I offered on the month-to-date chart.

The share price action, along with the precious metals themselves, are still in the iron grip of JPMorgan et al — and that won’t change until they’re through doing what they’re doing, or they get over run.  The terrible share price action in the silver equities hasn’t been helped by the poor earnings coming out of the major silver producers — and that has certainly been a drag on the Silver Sentiment/Silver 7 Index.  Of course that won’t change until we have higher prices…a real ‘Catch 22’ situation if I ever saw one.


The CME Daily Delivery Report showed that zero gold and 1 silver contract was posted for delivery within the COMEX-approved depositories on Tuesday.  Morgan Stanley issued — and ADM stopped.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session, which includes Thursday’s as well, showed that gold open interest in November declined by 11 contracts, leaving just one left.  Wednesday’s Daily Delivery Report showed that 11 gold contracts were actually posted for delivery on Monday, so those numbers work out fine — and we await delivery of that last gold contract.  Silver o.i. in November increased by 1 contract, leaving 1 left to deliver, minus the 1 mentioned in the previous paragraph — and that’s out for delivery on Tuesday.  For the most part, November deliveries are done.

Gold and silver open interest in December are still very chunky, but as I said a day or two ago, the vast majority of that will be gone by December’s first notice day — and those numbers will show up on the CME’s website around 10 p.m. EST on Wednesday evening.  A clearer picture of December deliveries won’t be know with any real certainty until Thursday.


There was no reported change in GLD on Friday, but there was another withdrawal from SLV, as an authorized participant took out 943,834 troy ounces.  Regardless of the circumstance of its removal from this ETF, it’s a reasonable assumption the JPMorgan owns it now.

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

Month-to-date the mint has sold 8,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 295,000 silver eagles.  There is no retail bullion market worthy of the name at the moment.

The Royal Canadian Mint final got around to posting their Q3/2017 report on their website yesterday — and with this report, it’s becoming more and more obvious that they’re couching their retail bullion sales in fewer words — and in more generalities.  All I could find was one paragraph, plus a chart on what’s happening vis-à-vis gold and silver maple leaf sales — and this time those words were nowhere to be found.  But from my previous conversations with the mint on this issue, it’s an excellent bet that most of the sales are silver and gold maple leafs and, not surprisingly, they’re down substantially once again.

Here’s a snip from the Page 8 of their third quarter report — and if you want to read the rest of the 40-page document, the link is here.  The ‘click to enlarge‘ feature helps a bit with snip below.

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  There was 56,146 troy ounces received over at HSBC USA — and there was 6,012.050 troy ounces/187 kilobars shipped out of Canada’s Scotiabank.  The link to that activity is here.

In silver, there was one truck load…598,157 troy ounces…received at Brink’s, Inc. — and one good delivery bar…987.000 troy ounces…was shipped out of Delaware.  The link to that is here.

It was a fairly busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  There were 5,431 received — and 1,152 shipped out.  As per usual, all of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


In case it had skipped your mind, there was no Commitment of Traders Report yesterday because of Thanksgiving in the U.S.  The report will appear on the CFTC’s website at 3:30 p.m. EST on Monday — and I’ll have all the details for you in my Tuesday column.


Here are two charts that Nick Laird slid into my in-box just as I was about to post today’s column — and since I don’t have any COT/Days to Cover charts in today’s column, I thought I’d slide them in here.  They show the weekly transparent gold holdings of all known depositories, mutual funds and ETFs as of the close of business on Friday.  The gold holdings continue to creep higher — and silver inventories are flat.  Click to enlarge for both charts.

I have an average number of stories today, including one repeat — and that’s the Cohen/Batchelor interview, this time with the usual executive summary from Larry Galearis.  There was no commentary from Doug Noland this weekend.


CRITICAL READS

A Bedtime Story — Bill Bonner

We are explaining our money system to our grandson, James, now 14 months old…

His mother tries to get him to go to bed at 9 p.m. But the little boy’s internal clock is still on Baltimore time; it tells him it is much too early to go to sleep.

Grandpa takes over, drawing out the monetary system like a general spreading a map on a field table. “Here is the enemy,” he says gravely. “They have us completely surrounded. We’re doomed.”

James grumbles. He squirms. He has a sunny, optimistic temperament. But we think our explanations are sinking in.

He seems to understand…that money is not wealth; it just measures and represents wealth, like the claim ticket on a car in a parking garage — and that our post-1971 money system is based on fake money that represents no wealth and measures badly.

This amusing, but deadly serious commentary by Bill appeared on the bonnerandpartners.com Internet site yesterday — and another link to it is here.


British Banks Brace for Grades in Toughest Stress Tests Yet

U.K. banks are bracing themselves for their grades in the toughest round of stress tests yet, with the fate of their dividends and strategies at stake as the Bank of England models how the seven largest British lenders will cope in another crisis.

On Tuesday the central bank will reveal how they fared in a scenario that includes sharp declines in global and domestic growth, the pound losing a quarter of its value, and deep consumer loan losses driven by surging interest rates and unemployment. While analysts forecast all will overcome the basic hurdle rate — which differs between banks — the results will reveal how much spare capital they can return to investors.

This year’s examination “combines a more severe stress scenario and higher capital hurdles,” making it the strictest so far, Goldman Sachs Group Inc. analysts led by Martin Leitgeb said in a Nov. 22 note. The focus will be on Barclays Plc, Lloyds Banking Group Plc and Standard Chartered Plc because they are all trying to increase or restart dividend payments, they said.

Responding to the aftershocks of the financial crisis, four years ago the BOE started annual health checks of the banking system, theorizing what the results could be from increasingly severe economic and geopolitical shocks. Royal Bank of Scotland Group Plc, still owned by taxpayers after a bailout in 2008, failed last year’s test and was forced to bolster capital. Barclays and Standard Chartered had some capital inadequacies, but neither was required to submit a new plan as they were deemed to be on the right track.

This story showed up on the Bloomberg website at 10:00 p.m. Denver time on Thursday evening — and was updated about 4 hours later.  I thank Swedish reader Patrik Ekdahl for sharing it with us — and another link to it is here.


Tales of the New Cold War:  Five things more perilous to the U.S. than Russia — John Batchelor interviews Stephen F. Cohen

Part 1:  John Batchelor opens the discussion with the President Trump, President Putin phone call  and its significance. Obviously a follow up to his statements after his earlier meeting in Vietnam, it signals earnestness for the leaders to have a diplomatic relationship and it is an important event. The Kremlin reports the subjects included Syrian peace talks, the U.N. peace process position, solving the refugee situation in Europe and Syria. But both pundits acknowledge that the domestic politics in Washington have stifled the attention this story deserved. The reason for this is the U.S. MSM which continues to echo the U.S. position that Russia is the major existential threat to the country, and Cohen delves into the dialectical history of the process since the end of the Soviet Union. How did the U.S. get from Clinton’s Yeltsin relationship, seen as partnership, to the existential threat today? Cohen maintains Russia does not even reach number five of his top threats to American national security. The list is: 1. Russiagate, 2. demonizing Putin, 3. terrorists with radioactive material, 4. nuclear arms club, 5. climate change and income inequality. Batchelor wanted this discussion also to include the devolution of diplomacy and discussion over this period. (Note that my bare bones approach to this complicated discussion is meant to encourage careful listening by readers.)  Number one, Russiagate is Cohen’s first choice as the most serious threat. The reason for this is that a president’s first duty as a president is diplomacy. If disallowed for any reason, the risk is grave. There follows next a discussion from Batchelor and details of how Russiagate has limited this diplomacy and the censorship and hysterical spin has kept Americans uninformed, confused or alienated.

Part 2:  Cohen’s second contender for the major national security concern resides in the personification of someone to hate for the public. Cohen states that citizen nationals need a “bad guy” to focus on. Putin, as a high profile world leader, had to fill that role, and Cohen maintains he was given that personal involvement in Russiagate for this reason. This is easily done in a censored press, and with a people kept ignorant for generations. Terrorism using nuclear materials is number three on Cohen’s list. So called “dirty bombs” are a nightmare of worry for both governments, and Russia’s security expertise is being wasted through damage by Russiagate.  The fourth concern on the list involves the proliferation of nuclear weapons. The fifth involves cooperation with climate change and addressing the politics of poverty that contribute to unstable countries and extremism in national populations. Russia and China are already doing much to change the economic conditions with its New Silk Road program and the U.S. is losing prestige in opposing it.  Cohen also comments on why Russia and China should not be seen as enemies according to a recent Rasmussen Poll. According to the poll 52% of Americans do not consider Russia an enemy and wish a cooperative relationship. There is also a large percentage of undecided listed as well, and Cohen makes the point that Russiagate for American citizens has not been a success.

The Hillary Clinton component to Russiagate has provided a strong element of inertia to the campaign. My speculation is that the Russiagate accusations remain in the news as a theme that has gone the bridge too far politically. There are two separate issues related to Hillary, her broad based criminality and ironically her own criminal manipulations in the election that have fuelled this chaos and may be fuelling it still. The facts are coming out, and yet are being shouted down with the dogma of Russiagate by the press. How does Washington deal with the revelation that their electoral system has become this corrupt, and it can put a Hillary Clinton in the White House? The attack on Trump, equally squalid, is but another neon sign that Americans have lost the control of their own government. The result seems to be a media and a government that has become ideological on a war footing at the expense of its own credibility. If Hillary is ever charged with a fraction of the crimes that have helped stage this chaos, the political damage may be too much to contemplate for those that have invested in the present system. Perhaps it would not be remiss to include an increasingly hostile American public to its own central government as a sixth national security concern.

I thank Larry Galearis for his very excellent executive summary — and Ken Hurt for providing the links earlier this week.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


Syria war, Sochi peace — Pepe Escobar

The main take away of the trilateral, two hour-long Russia-Iran-Turkey summit in Sochi on the future of Syria was expressed by Russian President Vladimir Putin:

The presidents of Iran and Turkey supported the initiative to convene an All-Syrian Congress for national dialogue in Syria. We agreed to hold this important event at the proper level and ensure the participation of representatives of different sectors of Syrian society.”

Diplomatic sources confirmed to Asia Times much of the discussions in Sochi involved Putin laying out to Iran President Hassan Rouhani and Turkey President Recep Erdogan how a new configuration may play out in a constantly evolving chessboard.

Behind diplomatic niceties, tensions fester. And that’s how the current Astana peace negotiations between Russia-Iran-Turkey interconnect with the recent APEC summit in Danang.

In Danang, Putin and Trump may not have held a crucial bilateral. But Sergey Lavrov and Rex Tillerson did issue a joint statement on Syria – without, crucially, mentioning Astana; instead, the emphasis was on the slow-moving U.N. Geneva process (a new round of talks is scheduled for next week).

An extremely divisive issue – not exactly admitted by both parties – is the presence of foreign forces in Syria. From Washington’s perspective, Russian, Iranian and Turkish forces must all leave.

But then there’s the Pentagon, which is in Syria without a U.N. resolution (Russia and Iran were invited by Damascus).

This very worthwhile commentary by Pepe was posted on the Asia Times website at 5:50 a.m. HKT on their Friday morning, which was 4:50 p.m. on Thursday afternoon in Washington — EDT plus 13 hours.  It comes to us courtesy of U.K. reader Tariq Khan — and another link to it is here.


Russia slams U.S. “occupation” of Syria after reports suggest the U.S. will not leave Syria

Russian Foreign Ministry Spokesman Maria Zakharova has slammed a report from the Washington Post which claims the U.S. is planning to stay in Syria for “years” in an attempt to occupy and destabilise the country using the ethno-nationalist ambitions of their Kurdish proxies as a flimsy ‘justification’. This is something which was categorically rejected by the members of the Astana Group which includes Russia, Iran and Turkey.

Today Zakharova stated in response to the report,

They are there not only without permission from Damascus, but also in direct violation of the wishes of the Syrian government. In fact, what they are doing could be described as occupation”.

She further stated,

U.S. Defense Secretary openly said on November 13 that the American troops will not leave Syria until progress is made with a political resolution. The conditions of which, we presume, the U.S. wants to dictate arbitrarily.

    We have noted on numerous occasions that such statements cast a serious doubt about what the true goals of the U.S.-led coalition are in Syria”.

This very interesting, but not entirely surprising news item was written by columnist Adam Garrie — and posted on theduran.com Internet site at 10:03 p.m. EST on Thursday evening — and I thank Larry Galearis for pointing it out — and another link to this worthwhile article is here.


Sudan’s president visits Russia, tells Putin: “We need protection from the U.S.

Sudan has reached an agreement with the Russian Defense Ministry on assistance in upgrading its armed forces, President Omar al-Bashir said at a meeting with Russian President Vladimir Putin on Thursday in Sochi.

Sudan finds the situation in the Red Sea worrisome, al-Bashir said, adding that “U.S. interference in these affairs is also a problem,” TASS reports.

The Sudanese president said that U.S. intervention was “to blame for Sudan’s split” into two states.

As a result we need protection from aggressive actions by the U.S. We believe that what is happening in Syria now is an effect of U.S. interference.”

This RT news story was picked up by the russiafeed.com Internet site on Friday sometime — and I thank Roy Stephens for bringing it to our attention.  Another link to it is here.


The U.S./Saudi Starvation Blockade — Patrick Buchanan

Our aim is to “starve the whole population — men, women, and children, old and young, wounded and sound — into submission,” said First Lord of the Admiralty Winston Churchill.

He was speaking of Germany at the outset of the Great War of 1914-1918. Americans denounced as inhumane this starvation blockade that would eventually take the lives of a million German civilians.

Yet when we went to war in 1917, a U.S. admiral told British Prime Minister Lloyd George, “You will find that it will take us only two months to become as great criminals as you are.”

After the Armistice of Nov. 11, 1918, however, the starvation blockade was not lifted until Germany capitulated to all Allied demands in the Treaty of Versailles.

As late as March 1919, four months after the Germans laid down their arms, Churchill arose in Parliament to exult, “We are enforcing the blockade with rigor, and Germany is very near starvation.

So grave were conditions in Germany that Gen. Sir Herbert Plumer protested to Lloyd George in Paris that morale among his troops on the Rhine was sinking from seeing “hordes of skinny and bloated children pawing over the offal from British cantonments.”

This absolute must read commentary by Patrick showed up on his Internet site on Thursday night 11:44 p.m. EST — and I found it over at Zero Hedge.  Another link to it is here.


Rand Faces Test on Looming Risk of South Africa Junk Rating

Already bruised by political and budget troubles, the rand faces its next crucial test in less than 24 hours: reviews by two ratings companies.

S&P Global Ratings and Moody’s Investors Service are reviewing the country’s credit ratings Friday, and nine of 16 economists surveyed by Bloomberg expect the former to deliver a cut to the nation’s domestic debt. Four see a similar action by Moody’s. A demotion to sub-investment grade by both agencies will result in South Africa’s exclusion from Citigroup Inc.’s World Government Bond Index, hurting demand for the nation’s currency and bonds.

The rand slumped almost 6 percent versus the dollar since the end of June, the worst emerging-market performance after the Turkish lira, as October’s medium-term budget estimated a larger government deficit as well as slower economic growth. A double debt downgrade, combined with unresolved political uncertainties, could see the currency plunge more than 18 percent to 17 per dollar by year-end, according to Nedbank Group Ltd.

The rand slumped almost 6 percent versus the dollar since the end of June, the worst emerging-market performance after the Turkish lira, as October’s medium-term budget estimated a larger government deficit as well as slower economic growth. A double debt downgrade, combined with unresolved political uncertainties, could see the currency plunge more than 18 percent to 17 per dollar by year-end, according to Nedbank Group Ltd.

This is another Bloomberg story from Swedish reader Patrik Ekdahl.  This one put in an appearance on their website at 8:00 p.m. MST on Thursday evening — and was updated about seven and a half hours later.  Another link to it is here.


China’s bond squeeze could spread offshore

It is time to start worrying about Chinese bonds. Tightening regulation has provoked a sharp selloff in the $9 trillion fixed-income market, with collateral damage to share. If stress is sustained, it could infect China’s giant pile of foreign-currency debt.

Anxiety has been increasing all year, as President Xi Jinping takes a tougher line on financial risk. Regulators have suppressed techniques abused by speculators, such as short-term borrowings using bond-repurchase agreements and so-called negotiable certificates of deposit. This crackdown, combined with expectations of higher rates, had pushed up benchmark yields without much panic until this week.

What tweaked local punters were central bank guidelines targeting excesses in the $15 trillion asset management industry. The benchmark 10-year treasury yield topped 4 percent on Thursday, its highest since 2014.

Overseas investors have watched Chinese markets closely since 2015, when a stock crash was felt around the world. Bonds are far more important. Stressed companies and financial institutions have come to rely heavily on short-term debt issues to repay bank loans and maturing wealth management products. The sector remains patchily regulated and distorted by implicit guarantees.

No surprises here, as stories about troubles in China’s bond market have been showing up with more frequency these days.  This Reuters new item was posted on their Internet site at 9:21 p.m. EST on Thursday evening — and I thank Richard Saler for finding it for us.  Another link to it is here.


Gold CEO Lashes Out Against His Industry

A gold industry obsessed with containing costs and minimizing risks will find itself at the edge of a cliff by 2020 as supply tightens, according to one of the most profitable producers.

Despite prices recovering from 2015 lows, the industry has been slow to reinvest in exploration or sustaining capital, Randgold Resources Ltd. Chief Executive Officer Mark Bristow said. Half of the gold coming out of the ground isn’t profitable to mine based on the true extraction costs, he said.

The one thing this industry does very well is mine gold at a loss,” Bristow told analysts at a breakfast meeting in Toronto on Friday.

The weakening outlook is being masked by a focus on all-in-sustaining costs rather than cash costs, he said. While companies can lower AISC and boost earnings by reducing spending to sustain operations or tightening exploration budgets, the tactic erodes asset quality in the long run, the CEO said.

Similarly, severe damage has been done by high-grading, which shortens the life of a mine by focusing on the best quality ore. Since 2007, grades have dropped from an average of 2.5 grams a tonne to about 1 gram, Bristow said.

But not a word is spoken of the short position of the Big 4 and Big 8 traders in the COMEX futures market, dear reader.  This must read gold-related Bloomberg story appeared on their Internet site at 12:51 p.m. on Friday afternoon Denver time — and I found it embedded in a GATA dispatch.  Another link to it is here.


New tax on Dubai gold

Dubai calls itself City of Gold. Traders there buy and sell $75bn (£56bn) worth of the precious metal every year. Part of the reason for its success is that gold is untaxed, and therefore cheap.

But from the start of next year, the government is imposing a value added tax on gold sales. Jeremy Howell has more.

This 2:09 minute video clip was posted on the bbc.com Internet site on Friday sometime — and this brief news item is something I found over at Sharps Pixley last evening.


Ted Butler: Life under manipulation

Silver market analyst Ted Butler marvels again at the huge position in COMEX silver futures and the concentration of the short position.

Total open interest data indicates that there is a 1-billion-ounce open commitment in Comex silver short and long positions, more than annual world production or consumption. No other commodity has a larger real-world equivalent total open interest this high.

“The long and short position in Comex silver is so much larger than that of any other futures-traded commodity that it necessarily exerts a force on price more profound than in any other commodity. Because the positioning in Comex silver futures is larger than what’s going on in the real world, the paper market dictates price to the world of silver production and consumption.

The entire Comex net short silver position (more than 500 million ounces) is held by just eight traders, most of which are U.S. and foreign banks. This is the one glaring feature in silver that, to this point, has largely escaped notice, even by those that regularly follow and comment about the silver market. This is the entire ball game in silver.

The above three paragraphs was the Ted Butler quote in my Friday column.  Now it’s in the public domain over at the silverseek.com Internet site.  It’s a must read commentary that I found on the gata.org Internet site yesterday morning Denver time.  Another link to it is here.


The PHOTOS and the FUNNIES

Today’s ‘critter’ is the Asian black bear, also known as the moon bear, and white-chested bear.  It’s a medium-sized bear species native to Asia and largely adapted to arboreal life. It lives in the Himalayas, in the northern parts of the Indian subcontinent, Korea, northeastern China, the Russian Far East, the Honshū and Shikoku islands of Japan, and Taiwan. It is classified as vulnerable by the International Union for Conservation of Nature (IUCN), mostly because of deforestation and hunting for its body parts.


The WRAP

Today’s pop ‘blast from the past’ is, at ‘heart’, all Canadian…at least for us they are — and it’s a timeless and universal hit song of the ages.  Of course the Americans have claimed them as their own, because they were born there.  But up here in Canada…Ann and Nancy Wilson still belong to us, if only in spirit.  The link to their biggest hit ever is here — and the second biggest, a Led Zeppelin cover, is here.

Today’s classical ‘blast from the past’ was going to be Tchaikovsky’s Sixth Symphony, but after listening to snippets of it, I realized that it was way to deep and dark for this column, so I decided on something far more uplifting that I found in the right side-bar.  I’ve featured it once before, but it never ages — and without fail, it draws a sell-out crowd every time it’s performed.  It Maurice Ravel’s Boléro — and it was a smash hit right out of the gate when it was premiered in Paris on 22 November 1928.

Boléro became Ravel’s most famous composition, much to the surprise of the composer, who had predicted that most orchestras would refuse to play it.  Here’s the London Symphony, with the incomparable Valery Gergiev, conducting it with a toothpick!  The link is here.


Despite the fact that it was a holiday-shortened trading day — and volumes were very light, it was more than obvious that ‘da boyz’ were ever vigilant, as they were certainly micro-managing silver and gold prices on Friday.  It was particularly obvious in the 5-minute tick charts from Brad Robertson, which I didn’t include because yesterday’s price movements were so small.  But their footprints were unmistakable.  They also made sure that palladium wasn’t allowed to close above $1,000 spot.

And as I pointed out in my discussion on the dollar index changes, the powers-that-be certainly aren’t allowing the rapidly declining dollar index to be reflected in precious metal prices.  Not only has it been obvious all year long, but even more so when you consider the fact that the dollar index was down over 100 basis points on Thursday and Friday combined — and JPMorgan et al had the audacity to close gold and silver lower as well.  That would never happen in a free market.

Here are the 6-month charts for all four precious metals, plus copper once again — and as for the 6-month U.S. dollar index further up in today’s missive, the Friday dojis include Thursday’s price move as well.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

As Ted pointed out on the phone yesterday, it’s now been two months with no resolution to the sky-high short positions in the precious metals held by the Big 4 and 8 traders in the COMEX futures market.  Just a cursory glance at silver and gold’s respective charts above, shows that to be true.  They are, as Ted has also stated, now stuck with these short positions — and it only remains to be seen if they are able to engineer one last desperate price decline, or will they finally be forced to cover in a rising market.  There are no other ways out for them, except for JPMorgan, which has a big enough physical holding in silver to bail itself out of any short-side covering issue that presents itself.

Another week has also gone by where nothing has changed in the world’s financial and equity markets, either.  The rumblings under the surface are becoming more widespread, but the world’s various Plunge Protection Teams and central banks show up in the nick of time before anything develops a serious down-side momentum — and the ‘recoveries’ are near instantaneous now.  One or two these events spaced out within a week or two, seems to be something that they can handle.  The worrisome part is that they are becoming not only more frequent, but much larger in scale…most with the knock-on potential to turn from only a local issue, into a rapidly unfolding international debacle with a few simple mouse clicks.  The budding bond crisis in China is the latest standard bearer for all this.  I would suspect that multiple crisis of these magnitudes occurring all at once would be beyond their ability to cope one they got anywhere near out of hand.

So far, the powers-that-be have been able to keep the word’s investment dollars mostly away from precious metals — and all things of value, as per Peter Warburton’s classic essay “The debasement of world currency: It’s inflation but not as we know it“.  But some day that dog won’t hunt no more.  But as to which day that will be, heaven only knows.  However, the signs that the economic system that we’ve known all our lives is about to come to an abrupt end, are everywhere you care to look now.

That’s all for today — and the week — and I’ll see you on Tuesday with all the COT data.

Ed