<![CDATA[Ed Steer's Gold & Silver Daily]]> http://www.caseyresearch.com/feeds/main Stay abreast of the news that's moving the gold and silver markets in The Gold & Silver Daily. en <![CDATA[Gold Price Suppression Elicits More Notice]]> http://www.caseyresearch.com/gsd/edition/gold-price-suppression-elicits-more-notice/ http://www.caseyresearch.com/gsd/edition/gold-price-suppression-elicits-more-notice/#When:07:30:00Z "A long-anticipated end game of the present global crisis"

¤ Yesterday In Gold & Silver

Gold got quietly sold down once trading started in the Far East on their Friday, with the low of the day coming shortly before lunch in Hong Kong.  Then equally as quietly gold began to rally a few dollars until shortly after 11 a.m. BST in London---and from there it traded flat until the London close at 11 a.m. EDT.  Gold rallied in fits and starts from that point---and even rallied a decent amount in the electronic market after the Comex close.  For that to happen on a Friday is unusual to say the least.  Gold closed virtually on its high tick of the day.

The CME Group recorded the low and high ticks as $1,291.00 and $1,308.90 in the August contract.

Gold finished the Friday trading session at $1,308.30 spot, up $14.40 from Thursday's close.  Net volume was only 84,000 contracts, which was pretty light.

The silver price dipped about 20 cents in the early going in the Far East, but then recovered back to the $20.40 spot price market by 10 a.m. Hong Kong time---and it traded within a nickel of that amount right up until the rally began around 10:30 a.m. in New York.  Silver, like gold, came close to finishing on its high tick of the day as well.

The low and high were recorded at $20.35 and $20.81 in the September contract.

Silver finished the day at $20.745 spot, up 38 cents from Thursday.  Volume, net of July and August, was pretty decent at around 39,000 contracts, of which 3,000 contracts may or may not have been roll-overs out of September into more distant months.

The platinum price didn't do much until noon in Zurich---and then it, too, chopped quietly higher---and finished up 12 bucks on the day.  It was more or less the same trading pattern in palladium---and it closed up 9 bucks. Here are the charts.

The dollar index closed late on Thursday afternoon in New York at 80.87---and rolled over a bit once trading began in the Far East on their Friday morning.  But minutes before the 8 a.m. BST London open, the index began to head higher, with its 81.07 high tick coming just before 12:30 p.m. in New York.  It gave up a few basis points after that, but did manage to close at the 81.04 mark, up 17 basis points on the day.

The gold stocks opened down a bit, but that lasted less than ten minutes---and except for a bit of a sag in the early afternoon, powered higher for the remainder of the Friday trading session.  The HUI finished up 2.68%---and on its absolute high tick.

The performance of the silver equities was very similar---sans the afternoon sag---and Nick Laird's Intraday Silver Sentiment Index closed up a very decent 3.63%---also on its high of the day.

The CME's Daily Delivery Report showed that 5 gold and 2 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The link to yesterday's Issuers and Stoppers Report is here.

There are only a small handful of gold contracts---and a bit over 150 contracts in silver that are still open in the July delivery month.

There were no reported changes in GLD yesterday---and as of 7:47 p.m. yesterday evening, there were no reported changes in SLV, either.

The U.S. Mint had a tiny sales report. They sold 1,000 one-ounce 24K gold buffaloes.

Month-to-date the mint has sold 34,000 ounces of gold and 1,640,000 silver eagles.  That divides out to a silver/gold ratio of 48 to 1.  Bullion sales so far this month have been abysmal, especially silver eagles.

There was a tiny amount of gold moved within the Comex-approved depositories on Thursday, as 3,000 troy ounces were reported received---and 582 troy ounces were shipped out.  I shall dispense with the link on this.

Silver activity was far more substantial, as 1,187,607 troy ounces were reported received---and 616,446 troy ounces were shipped out.  All the activity was at Brink's, Inc. and CNT.  The link to that action is here.

And not that means anything, there was 165,045 troy ounces of silver transferred from Registered to Eligible over at HSBC USA.

There sure wasn't much in yesterday's Commitment of Traders Report for positions held at the close of trading on Tuesday, July 22.

In silver, the Commercial net short position increased by well under 1 million ounces, which is barely a rounding error.  Nothing to see here.  Ted Butler said that JPMorgan increased their short-side corner in the Comex futures market by 1,000 contracts---and is now up to 20,000 contracts, or a 100 million ounces of paper silver.

There wasn't much change in gold, either.  The Commercial net short position increased by a smallish 3,285 contracts, or 328,500 contracts.  The new Commercial net short position now stands at 16.02 million troy ounces.  JPMorgan increased their long-side corner in the Comex gold market by 3,000 contracts---and their new long position sits at 25,000 contracts, or 2.5 million troy ounces.

So despite all the price action of the last ten days, the Commercial net short position in silver is still at nosebleed levels---and basically unchanged from last week's COT Report---and the situation in gold is only marginally better.

Based on the current COT structure, it doesn't look good.  But as Ted Butler has said on many occasions, one of these days the numbers in the COT Report won't matter.  However, until that day comes, all I can do is use the past as prologue and assume that history will repeat itself, with one eye ever-watchful for a black swan.

Here's three 5-year Comex silver charts courtesy of Nick Laird.

The first chart shows the Commercial short position the highest it's been in more than five years.

The second chart is the Non-Commercial/Technical fund traders---and they hold their biggest long position since back in late 2010.

The last shows the Commercial net short position.  It's not the highest it's ever been in the last five years, but as I said in the COT commentary a few paragraphs above, it's certainly at "nosebleed levels."

Since this is my Saturday column, I get the chance to empty my in-box of stories that I've been saving all week because of length or content reasons.  I have quite a few, so edit away!

¤ Critical Reads

Q2 Closes With A Durable Goods Whimper And 1.6% Y/Y Drop; Core Capex Orders Revised Much Lower; Shipments Tumble

After tumbling in May by 1.0% which was the biggest drop since the dreaded "polar vortex", Durable goods in June posted a modest pick up in June rising 0.7%, driven by yet another surge in aircraft and parts which rose by 8.2% for Non-defense aircraft and 15.3% for defense (thank you Russia). And while this beat expectations of a 0.5% increase, it was the first Y/Y drop in Durable goods since February (and since 2013 if one uses unrevised data).

Excluding volatile transportation, Durable Goods rose by 0.8%, also beating the expected 0.5% print, and higher than last month's 0.1%. Still, the Y/Y change in the category is hardly indicative of sustainable growth in manufacturing production, and certainly smashes any of the ISM and Markit PMI manufacturing surveys indicating an epic renaissance in U.S. production.

This interesting Zero Hedge commentary, with some excellent charts, was posted on their website at 8:57 a.m. EDT Friday morning---and I thank reader M.A. for sending it along.

Money Manager Sanford: 'Stay Out of Money Market Funds' After SEC Rules

The Securities and Exchange Commission approved rule changes for money-market funds this week — some good and some bad, says James Sanford, a portfolio manager for Sag Harbor Advisors.

On the good side, the SEC now requires a floating net asset value rather than a fixed $1.00 par value for the funds, he writes on CNBC.com.

"However, the other proposed change, which would allow money managers to suspend redemptions by investors or charge them fees to redeem during volatile periods, is a travesty."

This short article was posted on the moneynews.com Internet site at 10:22 a.m. EDT yesterday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

Record Student-Loan Debt Prompts Treasury Push to Stem Defaults

The U.S. Treasury, which finances more than 90 percent of new student loans, is exploring ways to make repayment more affordable as defaults by almost 7 million Americans and other strapped borrowers restrain economic growth.

Leading the effort is Deputy Secretary Sarah Bloom Raskin, who became the department’s No. 2 official in March after more than three years as a Federal Reserve governor. As higher-education debt swells to a record $1.2 trillion, Raskin, 53, is alert to parallels to the mortgage crisis.

Raskin has reason to worry: Most of those loans are backed by the federal government. In addition to trying to facilitate stronger growth, she’s focusing on the impact such debt has on government’s financing needs and ways to improve servicing and collection.

This news item was posted on the Bloomberg website at 10:00 p.m. Denver time on Wednesday evening---and it's the second offering in a row from Elliot Simon.

In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates

Rodney Durham stopped working in 1991, declared bankruptcy and lives on Social Security. Nonetheless, Wells Fargo lent him $15,197 to buy a used Mitsubishi sedan.

“I am not sure how I got the loan,” Mr. Durham, age 60, said.

Mr. Durham’s application said that he made $35,000 as a technician at Lourdes Hospital in Binghamton, N.Y., according to a copy of the loan document. But he says he told the dealer he hadn’t worked at the hospital for more than three decades. Now, after months of Wells Fargo pressing him over missed payments, the bank has repossessed his car.

Where have we seen this picture before, dear reader?  This article appeared on The New York Times website a week ago, but for length reasons---and it is a looong read---it had to wait for my Saturday column.  It's the first offering of many from Roy Stephens.

Don’t Tell Anybody About This Story on HFT Power Jump Trading

Far from Wall Street in a Chicago neighborhood once synonymous with urban blight, two futures industry veterans are using secrecy and speed to mint fortunes.

Their firm, Jump Trading LLC, was all but invisible until it was among six companies subpoenaed in April by New York prosecutors. Jump has ascended the ranks of high-frequency traders during the past 15 years to become one of the top firms on the Chicago Mercantile Exchange, where $925 trillion of derivatives changed hands last year. Its annual revenue has exceeded half a billion dollars.

The company was founded by traders Bill DiSomma and Paul Gurinas, whose level heads caused them to stand out in the cacophony of a Chicago trading floor. Today, the pair parcel money among 20 or so teams, each guarding its computer models from the others to trade stocks, bonds and commodities with strategies that go almost as fast as light.

This longish Bloomberg article showed up on their Internet site at 5:01 p.m. MDT on Wednesday---and also for length reasons, had to wait for today's column.  It's the third contribution of the day from Elliot Simon.

Sprott Money Weekly Wrap Up

Eric's weekly commentary also contains a lot of gold-related information as well.  This audio interview runs for 6:05 minutes---and was posted on the sprottmoney.com Internet site on Friday afternoon.

Doug Noland: Bubbles and Schemes

Perhaps it’s coincidence that the ECB is commencing a major new liquidity operation just as the Fed’s QE winds down. Clearly, the “Draghi plan” to bolster fragile European peripheral debt markets should be viewed as a sophisticated financial scheme. Thus far, the Bank of Japan (BoJ) shows no indication that its “money” printing scheme is ending anytime soon. And despite all the talk that the Chinese were serious about financial and economic reform, they apparently took one alarming look at rapidly unfolding systemic fragilities and opted to let their historic Bubble run. The Chinese Bubble is a government-dictated financial scheme of epic proportions.

So it’s become an equally fascinating and alarming global dynamic: a multifaceted global scheme to support inflated securities markets and a grossly maladjusted global economic structure. Worse yet, it’s a global scheme held together by various governments that are increasingly engaged in heated geopolitical strife. In the end, “Ponzi Finance” financial schemes boil down to games of confidence.

Doug's weekly Credit Bubble Bulletin is always a must read for me---and his Friday evening missive over at the prudentbear.com Internet site is no exception.

Fourteen YEAR drought leaves Lake Mead at all-time low

Drought in the southwestern U.S. will deplete the vast Lake Mead this week to levels not seen since Hoover Dam was completed and the reservoir on the Colorado River was filled in the 1930s, federal water managers said Tuesday.

The projected lake level of about 1,080 feet above sea level will be below the level of about 1,082 feet recorded in November 2010 and the 1,083-foot mark measured in April 1956 during another sustained drought.

But U.S. Bureau of Reclamation regional chief Terry Fulp said water obligations will be met at least through next year without a key shortage declaration. The result will be full deliveries to cities, states, farms and Indian tribes in an area that's home to some 40 million people and the cities of Las Vegas, Phoenix and Los Angeles.

I posted a story about this more than a week ago, but this photo essay that showed up on the dailymail.co.uk Internet site on July 15 is first rate---and is worth your time.  I thank William Gebhardt for sending it our way last Sunday.

IMF fears ultra-low rates are fuelling asset bubbles

Ultra-low interest rates around the world are fuelling financial bubbles and pushing investors into overvalued assets, the International Monetary Fund has warned in a marked shift of policy.

“Financial markets have been very optimistic in recent months. Frankly, we’re seeing some prices that are very high compared with what is happening the real economy,” said Gian Maria Milesi-Ferretti, the fund’s deputy director.

“We don’t think there is a generalised bubble but this is something we have to watch closely. In a world of very low interest rates there is an incentive to take on risk and hunt for yield, and that can lead to excesses,” he said.

Olivier Blanchard, the IMF’s chief economist, said the fund is now watching financial markets “like a hawk” but said the world economy is still too fragile to withstand the introduction of tighter monetary policy. “The first line of defence should be macro-prudential tools; slowing down the housing market for example. The recovery is not very strong and really needs to be nurtured,” he said.

The IMF, ECB, BoJ---and the Fed are powerless to do anything.  After having painted Planet Earth into an economic, financial and monetary corner for the last couple of generations they, like us, can only stand by and wait for the whole thing to implode---which it will.  This Ambrose Evans-Pritchard commentary appeared on The Telegraph's website at 6:07 a.m. BST on Thursday morning---and it's the second story of the day from Roy Stephens.

Number of French Jobless Rises to New Record

The number of people without a job in France rose in June to yet another record in the latest blow to President Francois Hollande's efforts to get unemployment falling.

The Labour Ministry said the jobless total in mainland France rose by 9,400 last month to 3,398,300, up 0.3 percent over one month and 4.0 percent over one year.

Hollande has seen his popularity collapse to record lows for a French president as he failed to live up to promises to get unemployment declining.

The Socialist leader is counting on plans to phase out 30 billion euros ($40.29 billion) in payroll tax on companies to get them investing and hiring.

This Zero Hedge piece, based on a Reuters story, showed up on their Internet site at 12:25 p.m. EDT on Friday afternoon---and I thank reader M.A. for his second offering in today's column.

Europe Unveils Preliminary Sanctions Against Russia

While the preliminary terms of Europe's Russian sanctions were leaked on Thursday, moments ago it was reported that E.U. ambassadors have reached an agreement on what the "hard-hitting" economic sanctions against Russia would look like even as details remain to still be ironed out ahead of a formal announcement of the final terms next week. According to Reuters, key measures suggested by the Commission include: 1] closing EU capital markets to state-owned Russian banks,2] an embargo on arms sales to Moscow, 3] restrictions on the supply of energy and dual-use technologies, and 4] a list of 15 individuals and 18 entities, including companies, subject to asset freezes for their role in supporting Russia's annexation of Crimea and detribalization of eastern Ukraine.

Of course, since France would blow a gasket if its Mistral ship was impacted by the sanctions, and since this really is just another populist measure not intended to really punish Russia (as that would mean a prompt shut off of European gas and an even prompter slide into a triple dip recession if not outright depression), Europe promptly "detoothed" the sanctions by announcing that they would not affect current supplies of oil, gas and other commodities from Russia, diplomats said.

This news item, also based on a Reuters story, appeared on the Zero Hedge website at 8:27 a.m. EDT on Friday---and I thank reader M.A. for sharing it with us as well.  There's also an Ambrose Evans-Pritchard take on the sanctions story---and it's courtesy of Roy Stephens.  The headline reads "Proposed E.U. sanctions threaten to shut Russia out of the world financial system".  The euobserver.com website had a story on this as well.  It bears the title "E.U. to hit Russia with economic sanctions next week".  This is also courtesy of Roy Stephens.

Canada sanctions Russian energy sector

Canadian Prime Minister Stephen Harper announced new sanctions targeting the Russian energy sector in response to the Kremlin's pressure on Ukraine.

Harper announced sanctions against 10 separate Russian entities, including Russian independent gas company Novatek and Gazprombank, the financial arm of Russian gas giant Gazprom.

The prime minister said the sanctions were meant as a response to Russia's occupation of the Crimean region in Ukraine and its military action in eastern Ukraine.

Nothing proves that Canada [via Stephen Harper] has sold out to the U.S. lock, stock and barrel, more than this piece of rubbish/propaganda that showed up on the upi.com Internet site yesterday.  I'm embarrassed to call myself Canadian.  It's another article from Roy Stephens.

Ukraine votes to keep Western companies out of gas industry

Ukraine’s parliament has rejected allowing E.U. and U.S. companies to buy up to 49 percent of oil and gas company Naftogaz, and also said they were against liquidating the national energy monopoly.

Kiev rejected splitting the company in two, a measure encouraged by the West in order for Naftogaz to comply with Europe’s third energy package, which doesn’t allow one single company to both produce and transport oil and gas.

The bill proposed creating two new joint stock companies in order to conform to the package, “Ukraine's Main Gas Transmission” and “Ukraine's Underground Storages.”

This Russia Today article appeared on their Internet site at 12:11 p.m. Moscow time on Friday---and credit goes to Roy Stephens once again.

Catastrophic Desertions and Losses in the Ukrainian Army - Official Ukrainian Reports, July 19, 2014

It is rare that we report on the workings of the aggressor across the battle lines. This item is different. Before you is a translation, kindly prepared by Valentina Lisitsa, of a report from the head of the Ukrainian Security Service, V.O. Nalyvaichenko, to the President of Ukraine, P.A. Poroshenko. It is an important document, which, we hope, you will distribute widely.

No further commentary is necessary, other than the following brief quotation. According to V.O. Nalyvaichenko, "2/3 of the active combat military units currently participating in the ATO will simply cease to exist in as little as 4 to 5 days" due to mass desertions and casualties. To provide context for this letter, provided below is another document recently publicized as an internal memorandum from the Ukrainian Ministry of Defence, which details recent casualties of the Ukrainian army, equally as catastrophic as its desertion rates.

This very interesting news item [if true] appeared on the vineyardsaker.blogspot.ca Internet site yesterday---and I thank reader Nick Ferris for bringing it to our attention.

Russia transfer of rocket system to Ukraine rebels imminent - Pentagon

The Pentagon said on Friday the transfer of heavy-caliber multiple-launch rocket systems from Russia to Ukrainian separatists appeared to be imminent with the arms close enough to the border they could be handed over "potentially today."

"We have indications that the Russians intend to supply heavier and more sophisticated multiple-launch rocket systems in the very near future," said Army Colonel Steve Warren, a Pentagon spokesman, adding that the weapons were in the over-200mm range.

Warren indicated the weapons had been seen getting closer to the border and the Pentagon believed a transfer was imminent and could happen "potentially today."

"We believe that they are able to transfer this equipment at any time, at any moment," he said.

The western main stream media is sinking to a new low just about every day.  This breathless propaganda/warmongering piece, filed from Washington, showed up on the reuters.com Internet site at 2:01 p.m. EDT yesterday---and the stories from Roy just keep on coming.

Four Ukraine/MH17/Russia related stories

1. Dutch Send 40 Unarmed Military Police "Forensic Experts" To MH17 Crash Site: AP/Zero Hedge  2. Ukraine Disaster in Search of an Investigation: The New York Times  3. Armed Australian soldiers, police to deploy to MH17 crash site: Russia Today  4. Moral Terror: How Critics of Western MH17 Coverage Are Bullied Into Silence: RIA Novosti

[The above stories are courtesy of reader M.A and Roy Stephens]

Over 40 mortar shells ‘fired to kill’ into Russia from Ukraine

At least 45 mortar shells fired at targets located inside the Rostov-on-Don region have been unleashed by Ukraine’s army, Russia’s border officials said. The barrage destroyed multiple houses and forced an evacuation of civilians.

Investigators say they were examining the site of a previous shelling near the Primiusskiy hamlet right on the southwestern edge of Russia on Wednesday, when a cannonade went off from the other side of the border.

“There is no doubt that those shooting from the Ukrainian side picked their target, and tried to kill Russian security officials,” said Investigative Committee representative Vladimir Markin.

This news item put in an appearance on the Russia Today website at 5:31 p.m. Moscow time on Friday---and it's another story from Roy S.

Shell Leaves Business Strategy for Russia Unchanged Despite Sanctions

British oil giant is determined to continue its work in Russia and will not change its business strategy in the country, despite the sanctions imposed against Moscow by the United States and European Union, representative of Shell’s press service told RIA Novosti on Friday.

“Shell continues to run business in Russia both in the upstream and downstream without any changes. We monitor the situation regarding the sanctions. But so far there have been no changes in either the business itself or in the business strategy,” the source said.

This interesting article was posted on the RIA Novosti Internet site at 7:45 p.m. Moscow time on Friday evening---and it's another contribution from Roy Stephens.

Russia takes aim at McDonald's burgers as U.S. ties worsen

McDonald's burgers and shakes may become the latest victims of worsening ties between Moscow and Washington after a Russian consumer watchdog agency accused the U.S. chain of sanitary violations.

McDonald's Corp, which opened its first Russian restaurant in Moscow in 1990, became an iconic symbol of flourishing American capitalism during the fall of the Soviet Union.

But its Golden Arches may be in the Kremlin's crosshairs as ties between Moscow and Washington have fallen to their lowest point since the end of the Cold War with consecutive rounds of U.S. sanctions over Russia's role in the Ukraine crisis.

"We have identified violations which put the product quality and safety of the entire McDonald's chain in doubt," Anna Popova, the watchdog's head and Russia's chief sanitary inspector, was quoted by Interfax news agency as saying.

This Reuters news item, filed from Moscow, showed up on their Internet site at 11:19 a.m. EDT on Friday---and once again I thank Roy Stephens for sending it.

Washington is Escalating the Orchestrated Ukrainian “Crisis” to War — Paul Craig Roberts

Despite the conclusion by U.S. intelligence that there is no evidence of Russian involvement in the destruction of the Malaysian airliner and all lives on board, Washington is escalating the crisis and shepherding it toward war.

Twenty-two U.S. senators have introduced into the 113th Congress, Second Session, a bill, S.2277, “To prevent further Russian aggression toward Ukraine and other sovereign states in Europe and Eurasia, and for other purposes.” The bill is before the Committee on Foreign Relations.

Note that prior to any evidence of any Russian aggression, there are already 22 senators lined up in behalf of preventing further Russian aggression.

Accompanying this preparatory propaganda move to create a framework for war, hot or cold with Russia, NATO commander General Philip Breedlove announced his plan for a deployment of massive military means in Eastern Europe that would permit lightening responses against Russia in order to protect Europe from Russian aggression.---and there we have it again: Russian Aggression. Repeat it enough and it becomes real.

This must read commentary put in an appearance on Paul's website on Thursday---and my thank go out to reader M.A. for bringing it to my attention, and now to yours.

An Unprecedented Look Inside Iran From a Getty Photographer

Ever since Getty photographer John Moore visited Iran 10 years ago to cover parliamentary elections in Tehran, he's had an itch to experience the country behind the headlines. He finally got his chance this past June when he was approved to tour the country on a one-week trip from Shiraz to Tehran.

Mostly free from the constraints of traditional news — he did happen to document the 25th anniversary of the death of Ayatollah Khomeini along the way — Moore visited Iran’s most prominent cities, monuments, and squares for a look at the everyday life of average Iranians.

Though he had been pleasantly surprised by Iranian hospitality on his trip 10 years ago, he was again struck by how friendly, open, and hospitable most Iranians were to him, an American photographer documenting their country.

Well, dear reader, I know a number of people that come from Iran---and I know this might shock you, but they're people like you and I.  Iran and Turkey are two places I'd love to spend some time.  This photo essay, which has had over 260,000 hits, was posted on the businessinsider.com Internet site on June 23---and it's the final offering of the day from Roy Stephens, for which I thank him.  Enjoy, because it's also worth your time.  The photo sequence on Afghanistan that follows is also worth looking at.  That photo sequence has had over 331,000 hits.

Three King World News Interviews

1. Andrew Maguire: "Criminal" CME Colluded to Save Banks Short Gold"  2. Ronald-Peter Stoferle: "4 Astonishing Charts Show Gold May Finally Be Set to Soar"  3. Art Cashin: "Art Cashin Warns of Terrifying Black Swan and the Banking Crisis"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Gold price suppression elicits more notice

Evidence of gold price suppression ahead of futures contract options expiration abounds and is remarked upon in Friday's commentary by GoldCore's Mark O'Byrne.

I found this precious metal-related story in a GATA release yesterday.  It's definitely worth reading.

London gold fix company appoints committee to oversee benchmark

The company operating the gold price 'fix' has appointed a supervisory committee to oversee the century-old system of benchmarking gold prices ahead of the implementation of stricter regulations, its website showed on Friday.

The London Gold Market Fixing Ltd's new board is made up of compliance officers at the four banks that currently set the twice-daily auction process over the telephone.

The appointment of the committee comes after the company said this month it was seeking a third party to take over administration of the process.

I thought this process was incestuous enough as it was, but this really takes it to a new level.  This Reuters story, filed from London, was posted on their Internet site at 6:40 a.m. EDT Friday morning---and it's the final offering of the day from reader M.A.

The strange case of Germany's gold: An interview with Peter Boehringer

Interviewed by Andrew Schiff for the summer edition of Euro-Pacific Capital's Global Investor Newsletter, Peter Boehringer of the campaign to repatriate Germany's gold reserves explains how the recent Bloomberg News report on the issue was so misleading and elaborates on the fraud of the fractional-reserve gold banking system.

"One reason that the gold was unavailable for quick delivery," Boehringer says, "could be multiple ownerships of our bars at the Fed. Given today's global fractional gold banking scheme, an (allegedly physically existing) bar in a central bank vault could have more than 10 owners and could thereby show up in more than 10 central bank balance sheets as either 'physical gold' or 'gold claim.' These two completely different balance sheet items have not been properly differentiated for many decades now. We are potentially talking about non-existent physical bars at a magnitude of tens of thousands of tonnes."

The Euro-Pacific newsletter headlines the interview "The Strange Case of German Gold -- An Interview with Peter Boehringer" and it's posted about halfway down the newsletter.  It's definitely worth reading.  I found this gold-related news item on the gata.org Internet site yesterday---and I thank Chris Powell for wordsmithing "all of the above."

Physical Gold Fund interviews Jim Rickards

July 2014 Interview with Jim Rickards on the June FOMC meeting, Yellen's July congressional testimony, Yellen is now stock picking, Efficient Markets theory is junk science, the bubble economy is headed for another crash, legal ramifications of USD transactions in non-US jurisdictions, in the next crisis you will be told you can not have your money when you ask for it, the term “Macro Prudential” means asset freeze or bail-in, new money market regulations allow for suspension of redemptions, the Fed is coming around to the view that a collapse is coming, regulators are exhibiting signs they expect another collapse, the Federal Reserve regional bank structure, FOMC driving policy, and the freezing or confiscation of 401k’s.

This 51-minute audio interview was posted on the physicalgoldfund.com Internet site very recently---and I thank Harold Jacobsen for finding it for us.  It's certainly worth listening to if you have the time.

R1.2bn in gold ‘missing’ at Rand Refinery

Rand Refinery, processor of about a third of the world’s gold since 1920, found $113 million (R1.2 billion) less physical metal than the company had booked in its accounts after adopting a new computer system.

The refinery in Germiston, a town 20 kilometres east of Johannesburg, has 87,000 ounces of physical gold less than the amount present in its accounting records after “implementation difficulties” with the new system, the company said in a statement today.

That’s worth about $113 million at today’s price of $1,296 an ounce.

This article was all over the Internet yesterday.  This version appeared on the io.co.za Internet site at 4:30 p.m. South Africa time---and it's the final contribution of the day from Elliot Simon.

India's gold import restrictions turn into political patronage for trading houses

A war is brewing in the gold market with traders led by the All-India Bullion and Jewellers Association complaining to the Reserve Bank of India that its May 21 decision to allow premier and star trading houses to import gold for local sales has given half a dozen export houses a dominant position in the market and raised imports of the metal.

The RBI claimed that one of the complainants from the trade is likely to initiate action shortly, considering that the sharp rise in imports has happened during the traditionally slack month of June.

The trading houses strongly contested the claims of traders. They say the RBI's action had improved supplies and reduced the premium on gold, and that the traders' claims of the surge in gold imports are exaggerated.

This article, filed from Mumbai, appeared on the Economic Times of India website at 5:11 a.m. IST yesterday---and I found this in a GATA release yesterday.

Indian gold imports fell 25% year over year---not counting smuggling, of course

Gold imports in 2013-14 stood at 638 tonnes, a decline of 25 per cent over the previous fiscal, Parliament was informed today.

The quantity of gold imported in 2012-13 was 845 tonnes and in 2011-12 it was 919 tonnes, Minister of State for Finance, Nirmala Sitharaman said in a written reply in the Lok Sabha.

In the April-June period of current fiscal, the quantum of gold import stood at 221 tonnes while in value terms it was Rs 54,792 crore, she said.

This gold-related story, filed from New Delhi, appeared on The Financial Express Internet site at 2:54 p.m. India Standard Time on their Friday afternoon---and it's another item I found over at the gata.org website site.

Deutsche Bank, HSBC Accused of Silver Fix Manipulation

Deutsche Bank AG, HSBC Holdings Plc and Bank of Nova Scotia were accused in a lawsuit of rigging the price of billions of dollars in silver, an allegation similar to earlier suits involving the London gold fix.

The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.

“The extreme level of secrecy creates an environment that is ripe for manipulation,” according to the complaint. “Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits.”

It beats the hell out of me why JPMorgan isn't named in this lawsuit, as they're the ringleaders in all this.  However, Canada's Scotiabank is probably #2 on the list.  I won't be the only person interested in how this all turns out.  This story was posted on the businessweek.com Internet site in the wee hours of Saturday morning---and I thank U.K. reader Nigel Bunting for sliding it into my in-box at 10:41 a.m. BST, which works out to 5:41 a.m. EDT this morning.

¤ The Funnies

¤ The Wrap

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

Today's pop 'blast from the past' doesn't need any introduction, nor do the two ladies who sing it.  But you have to be of a certain vintage to know it was one of their big hits back in 1976.  Alas, I'm of that vintage myself.  The link is here.  Enjoy!  While I'm at it, here's their first Top 10 hit on America's Billboard Top 100 during the same year.

Today's classical 'blast from the past' is one I posted many years back, but thought worth posting again as things start to unravel in eastern Europe once again.  It was written for the 1941 film "Dangerous Moonlight".  The history behind this composition is absolutely fascinating---and you can read about it here.  Ultimately this piece of music was such a hit, that it made the unusual journey from the movie screen to the concert hall.  This performance is by Swedish virtuoso pianist Patrik Jablonski---and he's accompanied by the Polish National Radio Symphony Orchestra, which is as it should be.  The link is here.

Well, both gold and silver had nice bounces off their respective 200-day moving averages---and as I mentioned in The Wrap on Friday, that was one of the price scenarios that might occur.  I was also happy that there wasn't much volume associated with yesterdays price action---and I was surprised to see that a lot of it occurred after the 1:30 p.m. EDT Comex close.  On a Friday, the price normally flat-lines as the traders head out the door for the weekend---but not this time.

Here are the 6-month gold charts for both metals showing Friday's volume and price activity.   The RSI readings on both are virtually identical.

But we're far from being out of the woods yet---and I'm extra cautious about reading too much into yesterday's price action.  All options---up, down and sideways are still out there---but with the Commercial net short positions in gold and silver still sky high, I have to use past as prologue and assume that there's more down-side pain yet to come.  However, I'd love to be proven wrong.

On the political side of things, I must admit that I'm growing more apprehensive by the day.  The way that the West, led by the U.S., is pushing Russia into a financial and economic corner I find frightening.  Even though the U.S. intelligence community has come out and said that there's no evidence that flight MH17 was the result of anything the Russia's did, either directly or indirectly, that's not stopping the West from assuming guilt regardless.   International law is being thrown out the window, as the U.S. drives for a casus belli.

If it comes to that, or even close to that, one would assume that current financial, economic and monetary situation as it exists today would be one of the first casualties.

In a Russia Today story I posted yesterday, Russia's ambassador to the U.K. said that "sanctions would not serve the interests of the countries concerned, including the U.S., and would "trigger a long-anticipated endgame of the present global crisis."

If that isn't a warning of some sort, then I don't know what is.

To me, it's a clarion call to get my own financial affairs in order---and be prepared for the worst.  And the worst could come at any time with little or no warning.  I urge you to keep a close eye on the situation from this day forward.  A current passport and money outside your country of domicile should be the first things on your list.

On that cheery note, I'm done for the day---and the week.

Enjoy what's left of your weekend---and I'll see you here on Tuesday---and on Wednesday elsewhere.

Sat, 26 Jul 2014 07:30:00 +0000
<![CDATA[Zero Hedge Pokes Excellent Fun at Peter Hambro]]> http://www.caseyresearch.com/gsd/edition/zero-hedge-pokes-excellent-fun-at-peter-hambro/ http://www.caseyresearch.com/gsd/edition/zero-hedge-pokes-excellent-fun-at-peter-hambro/#When:06:10:00Z "Well, you don't need me to paint you a picture"

¤ Yesterday In Gold & Silver

The gold price was comatose until the HFT boyz showed up shortly after 9 a.m. Hong Kong time on their Thursday.  Then gold proceeded to chop sideways under the $1,300 spot price mark until the 9:30 a.m. EDT open of the equity markets---and at that point "da boyz" peeled some more off the price, with the low tick of the day coming minutes before 11:30 a.m. in New York.  It traded sideways from there into the 1:30 p.m. Comex close and then crawled higher during the entire duration of electronic trading.

The CME Group recorded the high and low ticks as  $1,305.60 and $1,287.50 in the August contract.

Gold closed the Thursday session at $1,293.90 spot, down $10.10 from Wednesday's close.  Not surprisingly, net volume was pretty decent at 139,000 contracts.

The silver price chart was similar, except the sell-off that began at 9:30 a.m. EDT was much more vicious---and the low tick didn't occur until minutes before 2 p.m. in electronic trading.  From there the price recovered a few pennies into the 5:15 p.m. electronic close.

The high and low ticks for silver were reported as $20.97 and $20.35 in the September contract.

Silver closed at $20.365 spot, down 54 cents on the day.  Volume, net of July and August, was just under 67,000 contracts.  But of the total volume, about 7,500 contracts was traded in December and March, so those may have been rolls out of the September contract.  It's a little early for doing that, but I suppose it is possible.  With or without the volume, it was a pretty busy trading day.

Platinum wasn't spared, either---and it closed down $15.  Palladium got a mini version of the same treatment, but managed to recover and only close down a buck.  Here are the charts.

The dollar index closed at 80.81 late on Wednesday afternoon---and chopped higher, with a 14 basis point down/up move thrown in between the London open and the London p.m. gold fix.  The index finished the Thursday session at 80.87---up 6 basis points on the day.

The gold stocks sold down right at the open---and chopped quietly lower for the remainder of the trading session, but rallied a hair in the last fifteen minutes of trading.  The HUI closed down 1.56%.

The silver equities followed an identical path, but sold off a bit more than the gold stocks.  By the end of the Thursday session, Nick Laird's Intraday Silver Sentiment Index closed down 1.89%.

The CME Daily Delivery Report drew a blank yesterday, as there were no gold or silver contracts posted for delivery within the Comex-approved depositories on Monday.

There was a fairly decent withdrawal from GLD yesterday, as an authorized participant withdrew 115,474 troy ounces---and as of 9:50 p.m. yesterday evening, there were no reported changes in SLV.  But when I edited today's column starting at 3:55 a.m. this morning, I noted that iShares.com had updated their website and showed that an authorized participant had added 815,847 troy ounces of the stuff.

The good folks over at the shortsqueeze.com Internet site updated their website with the new short positions in both SLV and GLD for mid July.  The increase in SLV's short position was only 7.41% or 1.41 million shares/troy ounces.  I was expecting a far bigger number than that.  I'm inclined to think that it's a reporting error---and I know Ted will have something to say about it when I talk to him later today.  I'll let you know what he says.  Anyway, the current short position in SLV as of July 15 now stands at 20,437,900 shares/troy ounces, or a bit over 635 metric tonnes.

The short position in GLD declined by a smallish 3.33%, or 50,600 troy ounces.  The current GLD short position [as of July 15] now stands at 1.47 million troy ounces, or just under 46 metric tonnes.

For the second day in a row, there was no sales report from the U.S. Mint.

The gold movement at the Comex-approved depositories isn't worth commenting on, but it was another big day in silver, as 1,264,979 troy ounces were shipped out.  Nothing was reported received.  The silver came out of Canada's Scotiabank---and HSBC USA.  The link to that activity is here.

Once again I have a decent number of stories, most of them from Roy Stephens---and I hope there are some in the list below that you like.

¤ Critical Reads

U.S. new-home sales hit three-month low

The U.S. Commerce Department reported that sales of new single-family homes fell 8.1% in June to a seasonally adjusted annual rate of 406,000, with drops across the country.

June’s result missed expectations from economists polled by MarketWatch, who had forecast a rate of 475,000, compared with an originally estimated pace of 504,000 for May. On Thursday, the government reported a sizable downward revision to its May figure, estimating a pace of 442,000.

New-home sales in June were down 11.5% from a year earlier.

This martketwatch.com article appeared on their website at 11:20 a.m. EDT on Thursday---and it's worth reading---and the chart is worth the trip all by itself.  I thank Roy Stephens for his first contribution to today's column.

Greenspan says bubbles can’t be stopped without ‘crunch’

Sitting in his office with a view of the Washington Monument in the distance, Greenspan is eager to share the insight distilled in his recent book, “The Map and the Territory,” due out in paperback this fall.

The interview has been edited for length and clarity.

MarketWatch: What is the biggest challenge facing the Fed?

Greenspan: How to unwind the huge increase in the size of its balance sheet with minimal impact. It is not going to be easy, and it is not obvious exactly how to do it.

MarketWatch: As the Fed is looking at the exit, do you think we can get through this without upsetting the economy?

Greenspan: I certainly hope so. I certainly think they will. But it is going to be difficult.

MarketWatch: Do you expect a sharp market reaction to the first hike?

Greenspan: Of course. Look what happened when the first indication of tapering occurred. Markets have always been sensitive. They reflect animal spirits.

I seem to remember Alan Greenspan saying that it was impossible to recognized a bubble when you were in one.  This 2-page interview showed up on the marketwatch.com Internet site at 8:44 a.m. EDT yesterday---and it's the second story in a row from Roy Stephens.

David Stockman: C’mon Alan! Bubbles Are Caused By Central Bankers, Not “Human Nature”

Alan Greenspan just cannot give up the ghost. During his baleful 18-year reign, the Fed was turned into a serial bubble machine—and thereby became a clear and present danger to honest free market capitalism and an enemy of the 99% who do not benefit from the Wall Street casino and the vast inflation of financial assets which it has enabled.  His legacy is a toxically financialized economy that has extracted huge windfall rents from main street, and left it burdened with overwhelming debts and sharply reduced capacity for gains in real living standards and breadwinner jobs.

Yet after all this time Greenspan still insists on blaming the people for the economic and financial havoc that he engendered from his perch in the Eccles Building. Indeed, posturing himself as some kind of latter day monetary Calvinist, he made it crystal clear in yesterday’s interview that the blame cannot be placed at his feet where it belongs: "I have come to the conclusion that bubbles, as I noted, are a function of human nature."

Stockman rips Greenspan a new one, but Greenspan's legacy, if you wish to dignify it with that name, is a target-rich environment---and the interview in the previous story was like saying "sic 'em" to a dog---and David jumped right in.  This commentary showed up on his website yesterday---and it's the third contribution of the day from Roy Stephens.

M&M's, Snickers maker to raise chocolate prices 7 percent

Mars Chocolate North America, the maker of M&M's and Snickers, said on Wednesday that it will raise its prices by an average of 7 percent "to offset rising costs," its first increase in three years.

The price hike by Mars, which did not provide an effective date, follows Hershey Co, the No. 1 candy maker in the United States, which on July 15 raised its chocolate prices about 8 percent due to soaring commodity costs.

"In the three years since our last price increase, in March 2011, we have invested significantly in the category and have experienced a dramatic increase in our costs of doing business," a spokesperson said in an email to Reuters.

The cost of cocoa, a key ingredient in chocolate, has seen a meteoric rise in the past year, having climbed nearly 50 percent to a three-year high on Wednesday at $3,204 per tonne on ICE Futures. U.S. Dairy prices have also soared.

This short article put in an appearance on the chicagotribune.com Internet site at 3:50 p.m. Central Daylight Time on Wednesday---and I found it embedded in yesterday's edition of the King Report.

600 million Apple devices contain secret back doors, researcher claims

A security researcher considered to be among the foremost experts in his field says that more than a half-billion mobile devices running Apple’s latest iOS operating system contain secret backdoors.

Jonathan Zdziarski, also known by his online alias “NerveGas,” told the audience attending his Friday morning presentation at the Hackers on Planet Earth conference in New York City that around 600 million Apple devices, including iPhones and tablets, contain hidden features that allow data to be surreptitiously slurped from those devices.

During Zdziarski’s HOPE presentation, “Identifying Back doors, Attack Points and Surveillance Mechanisms in iOS Devices,” the researcher revealed that several undocumented forensic services are installed on every new iPhone and iPad, making it easier that ever for a third-party to pull data from those devices in order to compromise a target and take hold of their personal information, including pictures, text messages, voice recordings and more.

This Russia Today article showed up on their Internet site at 8:08 p.m. on Wednesday evening Moscow time---and it's another offering from Roy Stephens.

Stalled recovery leaves Europe defenceless against economic shock from Russia

Europe's economic recovery has stalled. The EMU policy elites took a fateful gamble that global growth alone would lift the eurozone off the reefs, without the need for serious monetary stimulus or a reflation package to ensure take-off velocity.

Their strategy has failed. The Bundesbank says German growth may have slumped to zero in the second quarter. French industrial output has fallen for three months in a row. French business surveys point to an outright contraction of GDP, with a high risk of a triple-dip recession.

Stagnation is automatically causing debt ratios to spiral upwards yet again across a large part of the currency bloc. The situation is doubly delicate since the European Central Bank is no longer able to serve as a lender-of last resort for Italy, Portugal and Spain.

This Ambrose Evans-Pritchard offering put in an appearance on the telegraph.co.uk Internet site at 8:59 p.m. on Wednesday evening---and it's definitely worth reading.  It's another contribution of the day from Roy Stephens.

Cameron claims export licenses allowing U.K. arms sales to Russia don’t breach embargo

UK Prime Minister David Cameron says Britain has not breached an embargo by selling military equipment to Russia, following MP demands to clarify the government’s position on UK-Russian arms deals.

The embargo was enacted “with immediate effect” on March 18 by then-Foreign Secretary William Hague.

Heated criticism of British arms deals with Russia emerged after a group of MPs revealed over 200 licenses allowing the sale of British military equipment to the Russian Federation. These revelations surfaced in a report published on Wednesday, conducted by four separate House of Commons committees.

The Committee on Arms Export Controls’ hard-hitting review contradicted a public statement by David Cameron on July 21. The Prime Minister had indicated the government had enforced an absolute arms embargo against Russia.

The meaning of the word hypocrisy is here, dear reader.  This Russia Today story appeared on their website at 3:04 p.m. Moscow time on their Thursday afternoon---7:04 a.m. in New York.  I thank Roy Stephens for finding it for us.

Putin cronies get a week to pull their cash out of Britain as E.U. drags its feet

Russian oligarchs who are close to Vladimir Putin have a week to get their cash out of Britain before sanctions are imposed, it has emerged.

European Union officials started on Tuesday to prepare the list of businessmen and Moscow officials who will be targeted by the sanctions.

Philip Hammond, the Foreign Secretary, has made clear the Britain’s desperation to take action at those close to Mr Putin’s regime, saying "the cronies of Mr Putin and his clique in the Kremlin are the people who have to bear the pressure".

However, British sources disclosed that it will not be until the end of the month that all EU countries will have prepared their lists of individuals to be hit with the sanctions.

This article appeared on The Telegraph's website at 7:14 p.m. BST on Wednesday afternoon---and it's another story I found in yesterday's edition of the King Report.

Germany begins spying on Britain and America for the first time since 1945

Chancellor Angela Merkel has ordered her counter-espionage services to begin surveillance of British and American intelligence gathering in Germany for the first time since 1945 in response to a series of U.S. spy scandals which have badly soured relations between Berlin and Washington.

The Süddeutsche Zeitung and two-state funded German TV channels, WDR and NDR, quoted an unnamed Berlin government source who said Ms Merkel’s Chancellery and her interior and foreign ministries had agreed to launch counter-espionage measures against Britain and the U.S. for the first time.

“Right now we need to send a strong signal,” the Süddeutsche Zeitung quoted the source as saying. The extraordinary measures are a direct response to a series of embarrassing U.S. and British spying scandals in Germany which began last year with revelations that the US National Security Agency had bugged Ms Merkel’s mobile phone.

The Chancellor protested on several occasions that she was “not amused” by the disclosures.

This news item, filed from Berlin, was posted on the independent.co.uk Internet site on Thursday---and I thank South African reader B.V. for sending it our way.

European rights court condemns Poland for hosting secret CIA prisons

The European Court of Human Rights (ECtHR) has ruled that Poland violated an international treaty to protect human rights by hosting secret CIA prisons on its territory.

The Strasbourg-based court ruled that Poland had contravened articles of the European Convention on Human Rights (ECHR) that cover torture, the right to liberty, and the right to an effective remedy for victims of crime.

The case was filed by two men, Saudi-born Abu Zubaydah, and Saudi national Abd al-Rahim al-Nashiri, who charge they were taken to a secret CIA black site in a Polish forest and subjected to treatment which amounted to torture. The men said at a hearing in December they had been brought to Poland in December 2002 with the knowledge of the Polish authorities. Both are now detainees at the U.S.-run Guantanamo Bay prison camp in Cuba.

This news item showed up on the Russia Today website at 8:29 a.m. Thursday morning Moscow time---and it's courtesy of Roy Stephens.

Ukraine's Government Collapses, PM Yatsenyuk Resigns

As if Ukraine was not struggling through enough turmoil currently, Bloomberg reports that thefragile coalition government has collapsed after two parties quit. The UDAR and Svoboda parties said they’d leave the government and seek a snap parliamentary ballot. Tempers have been fraying recently as numerous brawls have broken out in parliament ahead of President Poroshenko's pledge to call elections this year. All we have to do now is find out who Washington would like to see in power?

The end result: Prime Minister Yatsenyuk just resigned. The big question now is what will the IMF do about the remaining tranches of its loans?

This story appeared on the Zero Hedge website at 3:36 p.m. EDT on Thursday---and I thank reader M.A. for finding it for us.  There was also a story about this on the RIA Novosti website.  It's headlined "Ukrainian Prime Minister Yatsenyuk Announces Resignation"---and it's from Roy Stephens.

Ukrainian crisis will not split Russia and Europe - Medvedev

The Russian Prime Minister has acknowledged that relations with the E.U. have become more complicated, but assured foreign trade representatives that the situation in Ukraine would not become a barrier between Russia and Europe.

Despite the current crisis and the sanctions against Russian citizens and companies, Moscow is interested in further development of mutually beneficial relations with European nations, Dmitry Medvedev said in a speech on Wednesday.

This is true that the Ukrainian crisis has complicated our relations with the European Union. Sometimes these events are called a dividing ridge between Europe’s past and future. But this is not true for our country – the EU will remain our major trade partner for a long time and we value our reputation as a reliable supplier,” the Russian Prime Minister stated.

At the same time, Medvedev emphasized that Russia would use all lawful means to protect its business interests in the current complicated conditions.

This is another article from the Russia Today website.  This one was posted there at 1:44 p.m. Moscow time on their Wednesday afternoon---and the stories from Roy just keep on coming.

State Dept. accuses Russia of firing artillery into Ukraine, refuses to provide any evidence

Government officials in the United States said Thursday that Russia is firing artillery across the border into Ukrainian territory, but refused to provide any evidence when grilled by an Associated Press reporter.

Matthew Lee, a veteran AP journalist known for his frequent showdowns with spokespeople during US State Department briefings, raised questions about the latest claims during Thursday’s scheduled press conference.

“We have new evidence that the Russians intend to deliver heavier and more powerful rocket launchers to the separatist forces in Ukraine, and have evidence that Russia is firing artillery from within Russia to attack Ukrainian military positions,” State Department spokeswoman Marie Harf told reporters during the Thursday afternoon briefing.

When asked by Lee for any evidence, however, Harf said the State Department is unwilling at this time to disclose further details because doing so could expose the secret intelligence operations involved in making such claims.

This Russia Today story showed up on their Internet site at 7:09 p.m Moscow time on Thursday evening---and I thank Roy Stephens once again.  It's worth reading.

Three Ukraine/MH17/Russia related stories

1. If Russia is behind MH17 crash, where’s the evidence? – Defense Ministry: Russia Today  2. Russia says will cooperate with MH17 probe led by Netherlands: Reuters  3. 10 more questions Russian military pose to Ukraine, U.S. over MH17 crash: Russia Today

[All three of these stories are courtesy of Roy Stephens as well]

Russian Investigators Pledge to Hold Ukraine's Avakov, Kolomoyskyi Responsible for Crimes

Ukrainian Interior Minister Arsen Avakov and oligarch Ihor Kolomoyskyi will bear responsibility for their crimes, Russian Investigative Committee chief Alexander Bastrykin said Thursday.

“Avakov and Kolomoyskyi aren’t going anywhere. Sooner or later they will be held accountable for their criminal responsibility according to the norms of international law,” Bastrykin said.

As events in Ukraine continue to unravel, Russia is launching criminal cases against both individuals. The Russian Investigative Committee identified 2,700 victims in the criminal cases in the Ukrainian crisis, accusing Ukrainian Interior Minister Arsen Avakov and Dnipropetrovsk Region Governor Ihor Kolomoyskyi of organizing unlawful massacres.

This brief RIA Novosti news item, filed from St. Petersburg, was posted on their Internet site at 2:25 p.m. Moscow time on Thursday afternoon.  It's also courtesy of Roy Stephens.

Sanctions 'wrong signal amid Kiev's punitive' military op - Ambassador

Russia’s ambassador to the UK hit out at planned sanctions on Moscow today, saying that they would be ‘illegal, unreasonable and counter productive’.

He said that sanctions would not serve the interests of he countries concerned, including the U.S., and would "trigger a long anticipated endgame of the present global crisis".

Speaking at a press conference in London on Friday, Alexander Yakovenko told the media that imposing sanctions would send the “wrong message to Kiev’s continued “punitive operation” in Eastern Ukraine.

He said there was ‘no evidence that Russia supplied weapons to separatists, adding that Ukraine and the West’s suggestions on who was responsible for the crash of flight MH17 ‘don’t hold water’.

This is another news item from the Russia Today website.  This one appeared on their Internet site at 2:30 p.m. Moscow time on Thursday---and is definitely worth reading, especially the contents of the second paragraph highlighted above.  One wonders what he meant by that?  I thank Richard Cashmore for bringing it to our attention.

$200 per barrel oil if Russia sanctions escalate: Oxford Economics

If the standoff with Russia and the West reaches a point where the E.U. has to completely cut trade with Russia, oil prices could soar above $200 per barrel, sparking a global economic crisis, says Adam Slater, senior economist at Oxford Economics.

Cutting off trade with Russia, the world’s second largest oil exporter, would create a shortage in global energy supplies, which would have spillover effects into Europe, Slater told The Guardian.

The E.U. buys 84 percent of Russian oil exports, and 76 percent of natural gas exports. About a quarter of European countries completely rely on Russia for gas or oil supplies.

As of yet, Russia hasn’t halted European gas supplied through politically unstable Ukraine, but this event itself could trigger “stage three”, or trade-specific sanctions.

This commentary put in an appearance on the Russia Today Internet site at 10:16 a.m. Moscow time on Wednesday morning---and it's the final contribution of the day from Roy Stephens, for which I thank him.

No One Wants Russia to Host the 2018 World Cup

Peter Beuth, interior minister of the German state of Hesse, has said, "If Putin doesn’t actively cooperate on clearing up the plane crash, the soccer World Cup in Russia in 2018 is unimaginable." Michael Fuchs, a senior leader in Angela Merkel's Christian Democrats party agreed, saying, "FIFA football association should think about whether Moscow is an appropriate host if it can’t even guarantee safe airways." 

This comes just days after six players of the Donetsk soccer team refused to leave France after a match and board a plane back to Ukraine.

The Netherlands Football Association is also suggesting the 2018 World Cup could be moved.

This is all getting rather childish---Russia guilty without a shred of evidence.  You'd think that grown men would know better, but obviously not.  This article appeared on thewire.com Internet site at 3:21 p.m. EDT on Wednesday---and I thank reader Victor George for sharing it with us.

9 Things We Just Learned About Vladimir Putin's Life

A new article in Newsweek provides quite a bit of insight into Russian President Vladimir Putin's daily routine and private life.

The writer, Ben Judah, spent three years interviewing those close to Putin for his book "Fragile Empire: How Russia Fell In and Out of Love with Vladimir Putin."

Judah's insights into Putin's life come from former prime ministers, current ministers, regional governors, senior bureaucrats, close advisers, and personal aides to the president.

This very interesting commentary showed up on the businessinsider.com Internet site at 11:18 a.m. EDT on Wednesday morning---and I thank Harry Grant for sending it our way.

Japan Trade Deficit Expands After Exports Unexpectedly Drop

Japan’s exports unexpectedly fell in June to swell the trade deficit more than forecast, dragging on an economy squeezed by a sales-tax increase in April.

Exports shrank 2 percent from a year earlier, the finance ministry said in Tokyo today, compared with a median forecast of a 1 percent rise in a Bloomberg News survey of 29 economists. Imports rose 8.4 percent to leave a shortfall of 822.2 billion yen ($8.1 billion), surpassing a 643 billion yen projection.

Exports fell 1.7 percent by volume, showing the yen’s 16 percent drop against the dollar since Prime Minister Shinzo Abe came to power in December 2012 has failed to boost outward shipments. They remain 23 percent lower by value than a peak in March 2008, in contrast to the U.S. where they grew 25 percent over the same period.

This short Bloomberg news item, filed from Tokyo, showed up on their website at 1:31 a.m. Denver time on Thursday morning---and it's the third and final story that I 'borrowed' from yesterday's edition of the King Report.

Four King World News blogs/audio interviews

1. Egon von Greyerz: "Shocking Charts Show That Gold is Set to Skyrocket"  2. William Kaye: "Marc Faber, Gold, Silver---and the Horrific Endgame For Markets"  3. Hugo Salinas Price: "Elites Plan to Control Humanity"  4. The audio interview is with Michael Pento

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Lawsuit charges that half of Chicago futures are illegal 'wash' trades

Since March 30 of this year when bestselling author, Michael Lewis, appeared on 60 Minutes to explain the findings of his latest book, Flash Boys, as “stock market’s rigged,” America has been learning some very uncomfortable truths about the tilted playing field against the public stock investor.

Throughout this time, no one has been more adamant than Terrence (Terry) Duffy, the Executive Chairman and President of the CME Group, which operates the largest futures exchange in the world in Chicago, that the charges made by Lewis about the stock market have nothing to do with his market. The futures markets are pristine, according to testimony Duffy gave before the U.S. Senate Agriculture Committee on May 13.

On Tuesday of this week, Duffy’s credibility and the honesty of the futures exchanges he runs came into serious question when lawyers for three traders filed a Second Amended Complaint in Federal Court against Duffy, the Chicago Mercantile Exchange, the Chicago Board of Trade and other individuals involved in leadership roles at the CME Group.

From watching and listening to what Mr. Duffy has had to say over the years, it has convinced me that he's not the sort of person that you would want to leave your pet, or a small child with, for any length of time.  This commentary was showed up on the wallstreetonparade.com website yesterday---and falls into the must read category.  I found it posted on the gata.org Internet site yesterday.

A Chinese Gold Standard?

While the 70th anniversary of D-Day last month received a lot of attention, another event, in July 1944 — the Bretton Woods conference, named for the mountain resort in New Hampshire where it was held — was perhaps even more significant in shaping the modern world. It not only led to the creation of what are now the International Monetary Fund and the World Bank, but it also confirmed the central position of the United States dollar in the international monetary system.

Why does this matter for us now? Just as America displaced Britain as the world’s pre-eminent economic power in the interwar period, so, too, the large debts and fiscal pressures confronting the West, and the rise of China and other economic powers, challenge us to think about the future of finance.

For most of the 19th century the British pound had been the world’s “reserve currency,” the currency in which trade and finance were denominated. “As sound as a pound” became a widely used expression. The pound was pegged to gold at a fixed rate of just under £4 per ounce.

At the outbreak of World War I, Britain abandoned the gold standard. You could no longer exchange pounds for gold. The gold standard was reintroduced in 1925, but this, as John Maynard Keynes observed, proved to be an economic mistake.

This opinion piece, filed from London, showed up on The New York Times website yesterday sometime---and I thank Phil Barlett for sending it our way.

Zero Hedge pokes excellent fun at Peter Hambro

The ongoing transition of gold price manipulation from conspiracy theory to conspiracy fact just escalated as Bloomberg reports, Peter Hambro, chairman of Russia's 2nd largest gold producer Petropavlovsk Plc, said he was "horrified" by the manipulation of the London fix given its importance to the industry. One wonders just how many of these individuals, involved in the manipulation, Hambro is dinner-party friends with?

While we believe Hambro is right to be "horrified;" after 10 years of manipulation (downwards at least two-thirds of the time in six different years between 2004 and 2013. In 2010, large moves during the fix were negative 92 percent of the time), we suspect he knew something was going on...

I posted the Bloomberg story on which this ZH piece is based in my Wednesday column---and here is what I had to say about it then---"Hambro is more than aware of the price management scheme in gold and the other precious metals, so his comments are certainly disingenuous---and that's being kind."  He, like every other precious metal mining executive, is complicit by their silence.  But it's my opinion that he's more complicit than most.

This Zero Hedge item appeared on their website at 7:04 p.m. EDT yesterday evening---and it's a must read for sure.  I thank GATA's Chris Powell for the headline, but the first reader through the door with the story was Phil Barlett.

¤ The Funnies

¤ The Wrap

In little longer than two or three weeks, gold jumped more than $80 and silver by more than $2, only to revert to a flat price pattern over the next 5 weeks or so, even though world events and tensions have rarely been as nerve wracking over the past month. The price pattern alone seems surreal and the explanation for the sudden lack of volatility seems to prove manipulation without a doubt. But, of course, there’s a lot more pointing to manipulation than the unusual price pattern alone.

The quick jump in price, followed by the flat line, also involved one of the most dramatic shifts in market structure in history. In round numbers, some 50,000 silver contracts and 100,000 gold contracts changed ownership on the COMEX, as technical funds bought and commercials sold. That’s the equivalent of 250 million oz of silver---and 10 million oz of gold. Rarely have such quantities of COMEX contacts changed ownership in such a short time, particularly in silver. In terms of magnitude, if I were describing an earthquake or a hurricane, I would use the maximum levels of strength to describe the COMEX ownership change. - Silver analyst Ted Butler: 23 July 2014

Well, you don't need me to paint you a picture, as you've seen this movie before.  The only questions remaining are how long will it take JPMorgan et al to slice the salami to the downside---and how low will that take the prices of the precious metals involved, silver in particular.

As Ted told me on the phone yesterday, it's not the final price at the bottom that's the issue, it's the number of long contracts puked up by the technical funds, along with the number of short positions that "da boyz" can coax these same brain dead technical funds into buying as they engineer prices lower.

Here are the 6-month charts for both gold and silver updated with Thursday's trading data.

As you can see, the price decline in gold broke through its 50-day moving average---and touched the 200-day moving average before rallying off that mark.

Silver touched its 200-day moving average, but did not break below it.

Unless the powers that be allow a rally to occur from here, it's only a matter of time before the remaining  moving averages are broken to the down side.  Then we'll see some major volume and price moves as the technical funds dump their long positions in a panic---and probably get set up on the short side once again.

Wash, rinse, spin, repeat.

As Ted mentioned in his quote above, in the five weeks since the gold and silver rallies began on June 5, the 50,000 Comex long positions in silver, along with the 100,000 Comex contracts in gold that the technical funds have bought, are now in the crosshairs as the Commercial traders ring the cash register for fun, profit---and price management.  We got a taste of what was in store for us on Monday, June 14---and again, but briefly, on the following day.  Now we got the next slice taken out of the salami yesterday.

So the question still remains---how long and how many contracts?  Only JPMorgan et al know the answer to that.

But could we blast higher from here?  Absolutely, but it won't be the forces of supply and demand that determines that, because as Ted Butler pointed out recently, the key Commercial traders have captured the price-setting mechanism for all four precious metals [plus copper] in the Comex futures market.  They---and they alone, will determine what happens going forward.

But there's still that black swan out in left field that could come along and bite the boyz on the ass---and it's a distinct possibility.  This week I reread Roger Lowenstein's classic tome from 2000: "When Genius Failed: The Rise and Fall of Long-Term Capital Management".   It was wall-to-wall black swans and fat tails in 1998---and when things come unglued now, it will make that incident a footnote to what's coming our way this time around.

And as I write this paragraph, London has been open for 45 minutes---and up until this point in Friday trading, not much has happened.  Gold is down a dollar or so, but the other three precious metals are all up a bit from Thursday's close.  Net gold volume is very light---and silver's volume is a bit heavier.  The dollar declined a handful of basis points up until a few minutes before the London open, but has rallied sharply back to unchanged on the day.

Today we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday, July 22---and I'm not about to make any prediction as to what the report might contain.  But whatever the numbers are, I'll have them for you in tomorrow's missive.

And as I hit the send button on today's column at 4:55 a.m. EDT this morning, nothing much has changed with all four precious metals.  Prices have flat-lined, especially in gold and silver.  Platinum and palladium aren't doing much, either---and gold and silver volumes have barely budged since I reported on them about ninety minutes ago.  There's almost no trading going on at all---and I can't remember the last time I've seen it this quiet.  Does it mean anything?  Beats me.

That's all I have for today.  I hope your weekend goes well, or you enjoy what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.

Fri, 25 Jul 2014 06:10:00 +0000
<![CDATA[CFTC Commissioner Bails to Head Regulator’s Biggest Opponent]]> http://www.caseyresearch.com/gsd/edition/cftc-commissioner-bails-to-head-regulators-biggest-opponent/ http://www.caseyresearch.com/gsd/edition/cftc-commissioner-bails-to-head-regulators-biggest-opponent/#When:09:07:00Z "At some point though, price volatility will return in force"

¤ Yesterday In Gold & Silver

It was a nothing day in gold yesterday, as it traded within a $6 range for the entire Wednesday session---and the low and high ticks are immaterial.  Gold finished the day at $1,304.00 spot, down $3.50 from Tuesday's close.  Net volume was very light at only 65,000 contracts, the same volume as Monday.

It was almost the same chart pattern in silver.  After the obligatory sell-off at the New York open on Tuesday evening, the price did nothing until the noon silver fix in London on Wednesday---and the subsequent rally over $21 spot got capped minutes after the Comex opened.  From there it got sold down for a small loss on the day.  Gold's highs and lows aren't worth looking up, either.

Silver finished the Wednesday trading day at $20.905 spot, down six cents from Tuesday.  Volume, net of July and August, was around 26,000 contracts.

Platinum and palladium didn't do much, either---and both ended down a few dollars on the day.  Here are the charts.

The dollar index closed late on Tuesday afternoon at 80.78---and barely moved on Wednesday.  It closed at 80.81---which was up three ticks from Tuesday's close.

The gold stocks rallied into positive territory right at the open on Wednesday.  They held those gains until noon---and then some kind soul sold enough stock to drop them below the unchanged level---and they slid a bit more into the close from the there.  The HUI finished down 0.46%.

The silver equities followed a very similar price path---and they finished the Wednesday trading session down 0.61%.

The CME Daily Delivery Report shows that zero gold and 17 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  The link to yesterday's Issuers and Stoppers Report is here.

There was another small deposit in GLD yesterday.  This time an authorized participant deposited 19,246 troy ounces---and as of 9:44 p.m. yesterday evening, there were no reported changes in SLV.

Since there was no in/out movement in SLV for the second week in a row, Joshua Gibbons, the "Guru of the SLV Bar List," had little to say in his weekly report on this Web site yesterday evening.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs for the week ending July 18---and this is what they had to report.  There were declines in both gold and silver ETFs.  In gold it was 13,569 troy ounces---and in silver it was 307,811 troy ounces, which was a pretty big chunk.

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

There was a decent amount of gold received at the Comex-approved depositories on Tuesday, as 67,158 troy ounces was taken into inventory, with almost all of it going into Canada's Scotiabank.  Nothing was shipped out.  The link to that activity is here.

It was another busy day in silver, as 300,006 troy ounces were reported received---and 604,652 troy ounces were shipped out the door.  The link to that action is here.

I have another large assortment of stories for you again today---and I'll happily leave the final edit up to you.

¤ Critical Reads

Atlantic City’s Credit Rating Cut Two Steps to Junk by Moody’s

The reduction to Ba1 from Baa2 on the city’s $245 million of general-obligation debt reflects a weakened tax base resulting from anticipated casino closings, the New York-based ratings company said today in a statement. The outlook remains negative.

“The downgrade to Ba1 reflects the city’s significantly weakened tax base, revenue-raising ability and broader economic outlook,” analysts Vito Galluccio and Julie Beglin said in the statement. “These result from ongoing casino revenue declines, expected near-term casino closures, and the impact of sizable casino tax appeals, all of which has stemmed from increased competition from casinos in neighboring states.”

Atlantic City lost its regional monopoly as states including Pennsylvania, Maryland and New York legalized casinos or expanded betting to increase tax revenue. Casino revenue in the city has dropped for seven straight years, falling to $2.86 billion last year from a high of $5.07 billion in 2006, according to Bloomberg Industries.

The city’s 11 gambling houses account for almost half its jobs: 5,883 positions in a workforce of 13,500. The Atlantic Club closed in January, putting 1,600 people out of work. The closing of Caesars Entertainment Corp.’s Showboat on Aug. 31 will wipe out 2,133 jobs. Trump Plaza Hotel & Casino said it plans to close Sept. 16, taking away another 1,009. Revel, the $2.4 billion complex that employs 3,106 people, is seeking a buyer in bankruptcy.

This short Bloomberg news item, filed from Trenton, N.J., was posted on their Internet site at 3:20 p.m. Denver time yesterday---and today's first story is courtesy of Howard Wiener.

Illinois Workforce Shrinks By Largest Margin in State History

In June, Illinois suffered the largest monthly workforce loss in recorded state history.

June’s workforce loss was worse than the worst month of the Great Recession. Overall, 21,700 Illinoisans gave up and left the workforce in June; in September 2008, 17,500 Illinoisans quit the workforce.

This hefty workforce loss has driven state’s unemployment rate down to 7.1% from 7.5%, creating a superficial appearance of improvement. And Gov. Pat Quinn says Illinois needs to “keep the momentum.”

Keeping up this sort of “momentum” would be disastrous.

This news item appeared on the illinoispolicy.org Internet site on Sunday---and it's something I found in yesterday's edition of the King Report.

Jobs Hold Sway Over Yellen and Carney as Central Banks Splinter

Before the Federal Reserve and fellow central banks go to work raising interest rates, they first need others to go to work.

That’s the signal from policy makers worldwide, as even those whose mandates focus on inflation put the health of labor markets at the heart of their decision making. The approach leaves investors bracing for global monetary policies to diverge after the post-crisis embrace of easy money.

Accelerating job creation -- and the hope this will spur wages -- leaves the U.S. central bank and the Bank of England preparing for higher rates by the end of 2015. At the other end of the spectrum, double-digit unemployment in the euro area and stagnant pay in Japan mean stimulus remains the only option.

Nothing has changed, dear reader, as it's still "print or die"---and forget about higher interest rates anytime this year or next.  Even a hint of an imminent interest rate hike would crush the bond market.  This longish Bloomberg article, co-filed from Washington and London, was posted on their Web site at 3:25 a.m. MDT on Wednesday morning---and it's courtesy of West Virginia reader Elliot Simon.

The "Gates" Are Closing: SEC Votes Through Money Market Reform

It was nearly five years ago when Zero Hedge first wrote: "This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied" in which we predicted as part of the ongoing herding of investors away from every other asset class and into stocks, regulation will be implemented to enforce that "money market fund managers will have the option to 'suspend redemptions to allow for the orderly liquidation of fund assets" or in other words implement redemption "gates." The logic: spook participants in the $2.6 trillion money market industry with the prospect of being gated (i.e., having no access to ones funds) and force them to reallocate funds elsewhere.

Moments ago the gates arrived, when following a close 3-2 vote (with republican commissioner Piwowar and democrat Stein dissenting), the SEC adopted new rules designed to curb the risk of investor runs on money market funds, capping the end of a years-long heated debate between regulators and the industry dating to the financial crisis according to Reuters.

Among the changes, funds will have to switch to a floating share price instead of the current $1/share (hence the term breaking the buck). But the key part: "The SEC's rule will require prime money market funds to move from a stable $1 per share net asset value, to a floating NAV. It also will let fund boards lower redemption "gates" and fees in times of market stress."

This longish piece appeared on the Zero Hedge Web site at 1:18 p.m. EDT yesterday afternoon---and I thank Dr. Dave Janda for sending it around.

Tale of the Tapes: IRS Head Confirms Investigators Have Found Backup Tapes in Lerner Probe

The head of the IRS confirmed Wednesday that investigators looking into missing emails from ex-agency official Lois Lerner have found and are reviewing "backup tapes" -- despite earlier IRS claims that the tapes had been recycled. 

IRS Commissioner John Koskinen, testifying before a House oversight subcommittee, stressed that he does not know "how they found them" or "whether there's anything on them or not." But he said the inspector general's office advised him the investigators are reviewing tapes to see if they contain any "recoverable" material. 

The revelation is significant because the IRS claimed, when the agency first told Congress about the missing emails, that backup tapes "no longer exist because they have been recycled." 

It is unclear whether the tapes in I.G. custody contain any Lerner emails, but Koskinen said investigators are now checking.

Tapes in this day and age?  Would they be cassette, 8-track, or reel-to-reel?  Just asking.  This Fox News item showed up on their Web site yesterday sometime---and I thank reader M.A. for sending it our way.

Super bear Marc Faber: Here Are the Markets I Like

Investment guru Marc Faber, famed for his gloomy views on financial markets, took some time out from being the voice of doom on Wednesday to highlight areas of the market that he actually liked.

On CNBC Asia's Squawk Box, the author of the Gloom, Boom and Doom Report singled out the agriculture sector, Chinese and Hong Kong stocks and precious metals as places he thought investors should put their money into.

"In general I like plantation companies – I like everything to do with agriculture," said Faber, who is also widely known as Dr. Doom.

This 3:54-minute video clip was posted on the CNBC Web site late yesterday morning Hong Kong time---and I thank reader Ken Hurt for sharing it with us.

UK Hastens Negotiations for Currency-Rigging Settlement

Talks to reach the first settlement in the currency-rigging probe are accelerating, with Britain's markets regulator preparing to reach a deal with a group of banks this year, people with knowledge of the talks said.

The Financial Conduct Authority is in talks with banks including Barclays Plc, Citigroup Inc., JPMorgan Chase & Co., and UBS AG, said the people, who asked not to be identified because the discussions are private. Royal Bank of Scotland Group Plc and HSBC Holdings Plc may also be part of the group settlement, one of the people said.

The FCA is trying to fast-track the process and may levy any fines in the coming months, three of the people said. The watchdog is seeking to keep the scope of the deal narrow to speed up the settlement, two of the people said.

The talks are still continuing and an agreement may stretch into next year, the people added.

This article showed up on the Bloomberg Web site at 5 p.m. MDT yesterday afternoon, but it was posted there earlier than that because I received it in a GATA release at 12:37 p.m. MDT.

Defying UK, France to Proceed with Warships Sale to Russia

French Foreign Minister Laurent Fabius responded with a strong dose of sarcasm to British criticism of France’s planned sale of two warships to Russia, saying the UK should put its own house in order before criticising others.

British Prime Minister David Cameron said Monday that Paris’s plan to press ahead with the €1.2 billion ($1.7 billion) order of two French warships following the downing of Malaysia Airlines flight MH17 in Ukraine would be “unthinkable” in Britain.

“The English, in particular, were very pleasant so to speak, saying, 'We would never do that'. But I told my dear British friends, let’s talk about the financial sector,” Foreign Minister Laurent Fabius told TF1 television after returning from a European foreign ministers meeting in Brussels.

“I am led to believe that there are quite a few Russian oligarchs in London,” he said.

When asked if that meant Britain should take care of its own business first, Fabius said: “Exactly.”

This is a big "UP YOURS!" with a French twist.  It was posted on the france24.com Internet site yesterday sometime---and it's the first offering of the day from Roy Stephens.

Europe Braced for Any Gas Crisis as Russia Sanctions Escalate

Europe has enough spare capacity in liquefied natural gas (LNG) to meet a large part of the region’s needs if Russia retaliates against the latest EU sanctions by restricting gas supplies.

The showdown with Russian president Vladimir Putin comes at moment of surging global supplies of LNG, which can be diverted to European markets and reduce the Kremlin’s political leverage. The price of LNG in Asia has crashed from $20 to $11 per million British thermal unit (BTU) since February.

The pan-EU group Gas Infrastructure Europe said the network of LNG terminals in Britain and the Continent is currently operating at just 20% of its full capacity. It could in theory boost flows by 160bn cubic metres (BCM), if there is available gas.

This is more than Russia’s entire shipments, which reached 155 BCM last year. The European network of pipelines does not cover every region and would leave pockets in eastern Europe without supply.

What b.s.!!!  This is wall-to-wall disinformation, but Ambrose Evans-Pritchard is always one to stoop to the occasion when it does arise---and when his master calls.  This commentary was posted on the telegraph.co.uk Internet site at 10:20 p.m. BST on Tuesday evening.

Black Boxes of Crashed Malaysian Plane to Be Deciphered in 2 Days

It will take about two days to retrieve and decipher data from flight recorders of the Malaysian airliner that crashed in eastern Ukraine last week killing nearly 300 people, a spokesman for the UK Department for Transport told reporters Wednesday.

Air Accidents Investigation Branch experts in Farnborough, Hampshire, will study the flight data recorders, known commonly as black boxes. The spokesman said that the process might take about two days, depending on their condition.

“Experts received flight recorders at the lab in Farnborough, Hampshire. Experts will attempt to extract data from the recorders at the request of Dutch authorities, which are conducting the investigation. Based on the damage [to black boxes] the process can take about two days,” the spokesman said.

He stressed that he was only referring to the extraction of data from the flight recorders and its transfer to the Netherlands, not about the conclusions about the cause of the crash. One of the flight recorders stored technical parameters of the plane, while the other recorded the sounds on board.

This RIA Novosti news item, filed from London, was posted on their Internet site at 3:53 p.m. yesterday afternoon Moscow time, or 7:53 a.m. New York time.

Crashed MH17 Flight "Was 300 Miles Off Typical Course"

Robert Mark, a commercial pilot who edits Aviation International News Safety magazine, said that most Malaysia Airlines flights from Amsterdam to Kuala Lumpur normally travelled along a route significantly further south than the plane which crashed.

Malaysia Airlines has insisted its plane travelled on an "approved route" used by many other carriers.

But Mr Mark said: "I can only tell you as a commercial pilot myself that if we had been routed that way, with what's been going on in the Ukraine and the Russian border over the last few weeks and months, I would never have accepted that route.

"I went into the FlightAware system, which we all use these days to see where airplanes started and where they tracked, and I looked back at the last two weeks' worth of MH17 flights, which was this one---And the flight today tracked very, very much further north into the Ukraine than the other previous flights did...there were MH17 versions that were 300 miles south of where this one was."

This story appeared in The Telegraph a week ago, but it's still worth your time.  I thank Harry Grant for sending it along at midnight MDT last night.

The Saker: The Most Pathetic Case of Backpedaling I Have Seen in My Life

Senior U.S. intelligence officials said Tuesday that Russia was responsible for "creating the conditions" that led to the shooting down of Malaysia Airlines Flight 17, but they offered no evidence of direct Russian government involvement.

The intelligence officials were cautious in their assessment, noting that while the Russians have been arming separatists in eastern Ukraine, the U.S. had no direct evidence that the missile used to shoot down the passenger jet came from Russia.

The officials briefed reporters Tuesday under ground rules that their names not be used in discussing intelligence related to last week's air disaster, which killed 298 people.

The plane was likely shot down by an SA-11 surface-to-air missile fired by Russian-backed separatists in eastern Ukraine, the intelligence officials said, citing intercepts, satellite photos and social media postings by separatists, some of which have been authenticated by U.S. experts.

But the officials said they did not know who fired the missile or whether any Russian operatives were present at the missile launch. They were not certain that the missile crew was trained in Russia, although they described a stepped-up campaign in recent weeks by Russia to arm and train the rebels, which they say has continued even after the downing of the commercial jetliner.

Have you counted the "caveat words"?  I counted 15 (depending on what you want to include).  Notice that they consider the Ukie missile as "implausible" but that they never explain why this would be implausible.  And they admit relying in part on social media and Ukie government info?  How absolutely utterly pathetic.  I mean - I feel sorry for them.  For any self-respecting intelligence official to admit such things is to commit a seppuku of your professional pride.  It's admitting that you are an amateur and a drooling moron.  And here is the deal - I very much doubt that these men are amateurs or morons.  So, yet again, they were back-stabbed by imbecile politicians like Obama and Power who just are not used to consulting with their own specialist before flapping their lips and never mind if they make an entire intelligence community look like cretins.

But of course the big news here is this: the U.S. fairy tale about Putin the terrorist is falling down in flames.  Yet again the Neocons by their sheer arrogance, hubris and boundless stupidity manged to lie their way into a corner from which there is no exit.  Not that the U.S. had much street-cred anyway, not after Colin Powell's dishwasher powder in a vial at the UNSC.  But, of course, there is bad, very bad, even worse and outright terrible.  But now the U.S. has reached the "terminal" stage.  The AngloZionists sure had this one coming.

And I couldn't agree more!  This must-read commentary showed up on the vineyardsaker.blogspot.ca Web site yesterday---and I thank Roy Stephens for sending it our way.

Pepe Escobar: A Chessboard Drenched in Blood

"The intelligence and facts were being fixed around the policy." Everyone remembers the Downing Street Memo, which unveiled the Bush/Blair "policy" in the run-up to the 2003 bombing/invasion/occupation of Iraq. The "policy" was to get rid of Saddam Hussein via a lightning war. The justification was "terrorism" and (non-existent) weapons of mass destruction (WMD), which had "disappeared", mounted in trucks, deep into Syria. Forget about intelligence and facts.

The tragedy of MH17 - turned, incidentally, into a WMD - might be seen as a warped rerun of imperial policy in Iraq. No need for a memo this time. The "policy" of the Empire of Chaos is clear, and multi-pronged; diversify the "pivot to Asia" by establishing a beachhead in Ukraine to sabotage trade between Europe and Russia; expand the North Atlantic Treaty Organization to Ukraine; break the Russia-China strategic partnership; prevent by all means the trade/economic integration of Eurasia, from the Russia-Germany partnership to the New Silk Roads converging from China to the Ruhr; keep Europe under US hegemony.

The key reason why Russian President Vladimir Putin did not "invade" Eastern Ukraine - as much as he's been enticed to by Washington/NATO - to stop a U.S. military adviser-facilitated running slaughter of civilians is that he does not want to antagonize the European Union, Russia's top trading partner.

Crucially, Washington's intervention in Kosovo invoking R2P - Responsibility to Protect - was justified at the time for exactly the same reasons a Russian intervention in Donetsk and Luhansk could be totally justified now. Except that Moscow won't do it - because the Kremlin is playing a very long game.

Here's another must read for you today.  It was posted on the Asia Times Internet site yesterday---and it's another contribution from Roy Stephens.

David McWilliams: Deadly Game of Human Chess

When seen from the Russian perspective, Ukraine is just another example of the gradual but definitive encroachment of the West into all things Russian. Russia and Ukraine are not different cultures. They are part of the same broader Russian/Slavic family. Our narrative is that the Russians are happy to keep Ukraine unstable and that what happened to the Malaysian airliner was the risk Russia was running by arming the separatists with sophisticated weapons.

Seen from the Russian side, it isn’t the Russians who are doing the destabilising but the Americans.

For them, the Americans arming and financially supporting an opposition in Ukraine would be like the Scottish Nationalists being financed by Russia. How do you think London and Washington would react to that? How do you think they’d react to the idea of a Russian puppet running an independent Scottish state from Edinburgh?

This is how close Ukraine is to Russia.

Now when you think about it in those terms, do you think Putin will back down and do what the West wants him to do?

This commentary by David McWilliams also falls into the must-read category---and it was posted on his Web site on Monday.  I thank reader M.A. for bringing this article to our attention.

Why Putin Isn't Afraid of Europe

Why can't Europe's leaders bring themselves to impose tough sanctions on Russia after the Malaysia Airlines passenger jet disaster? One explanation is that economic ties to Russia, a major supplier of energy, trump the moral imperative to punish President Vladimir Putin for his support of separatists in Ukraine.

A look at trade data for selected European countries offers an indication of the incentives in play. The Netherlands, which had 193 citizens aboard Flight MH17, is among the most connected: Russia accounted for about 6.4% of its imports in the 12 months through February, according to data compiled by Bloomberg. Germany, the most politically powerful country in Europe, is roughly three times more tied to Russia than the U.S. or the U.K., which have been much more aggressive in pushing sanctions.

Europe's economic ties to Russia are much stronger than they were when Putin came to power. Back in February 1999, soon after he took over from former President Boris Yeltsin, Russia's share of German exports and imports was less than half what it is today. Apparently, building new pipelines to Europe has served Russia's geopolitical interests well.

This opinion piece by Mark Whitehouse showed up on the Bloomberg Internet site at 1:50 p.m. EDT on Wednesday afternoon---and once again I thank Roy Stephens for sending it.

Putin Recalls State Duma From Vacation, "Planning Something" on Ukraine Situation

In a somewhat disconcerting move, Russian President Vladimir Putin has recalled The State Duma from a planned vacation to participate in an unscheduled meeting because of the situation in eastern Ukraine. As Ukrinform reports, sources confirm "Something is being planned, because many deputies come, probably for a quorum." Rumors are spreading that Putin is set to issue Kiev an ultimatum over recognizing separatists or face military intervention.

Given that Poroshenko has demanded the separatists be labeled "terrorists" under international law, we suspect this is one demand they cannot fulfill... and of course, Ukraine is claiming that the 2 fighter jets shot down this morning were shot down by and from Russia... sure, with the whole world watching, Putin would do that?

This very interesting news item appeared on the Zero Hedge website at 11:46 a.m. EDT yesterday morning---and I thank Bill Busser for finding this for us.

Opening Remarks of Vladimir Putin at the Russian Security Council Meeting

Note: normally the meetings of the Russian Security Council are held behind closed doors.  This time, however, the press was allowed in just to record the beginning of the opening remarks of Vladimir Putin.  Then the press was asked to leave.  Clearly, this is intended as a message to the Russian people.  I have bolded out the part which appear the most important to me. - The Sakar

Good afternoon, colleagues.

Today we will consider the fundamental issues of maintaining the sovereignty and territorial integrity of this country. We all understand how many political, ethnic, legal, social, economic and other aspects this topic encompasses.

Sovereignty and territorial integrity are fundamental values, as I have already said. We are referring to the maintenance of the independence and unity of our state, to the reliable protection of our territory, our constitutional system and to the timely neutralization of internal and external threats, of which there are quite a few in the world today. I should make it clear from the start that, obviously, there is no direct military threat to the sovereignty and territorial integrity of this country. Primarily, the strategic balance of forces in the world guarantees this.

We, on our part, strictly comply with the norms of international law and with our commitments to our partners, and we expect other countries, unions of states and military-political alliances to do the same, while Russia is fortunately not a member of any alliance. This is also a guarantee of our sovereignty.

These longish remarks by Vladimir Putin were posted on the vineyardsaker.blogspot.ca website yesterday sometime---and worth reading if you have the time.  It's also courtesy of Roy Stephens.

China’s Terrifying Debt Ratios Poised to Breeze Past US Levels

The China-US sorpasso is looming. I do not mean the much-exaggerated moment when China’s GDP will overtake America's GDP – which may not happen in the lifetime of anybody reading this blog post – as China slows to more pedestrian growth rates (an objective of premier Li Keqiang.)

The sorpasso may instead be the ominous moment when China’s debt ratios overtake the arch-debtor itself.

I had presumed that this inflection point was still a very long way off, but a new report from Stephen Green at Standard Chartered argues that China’s aggregate debt level has reached 251% of GDP, as of June.

This is up 20 percentage points of GDP since late 2013. The total is much higher than normal estimates, though it tallies with what I have heard privately from officials at the IMF and the BIS.

This Ambrose-Evans Pritchard blog appeared on The Telegraph's Web site on Tuesday sometime---and it's the final offering of the day from Roy Stephens.

Four King World News Blogs

1. Michael Pento: "This is the Timeline For the Terrifying Endgame of Destruction"  2. Frank K: "Switzerland Has Exported a Shocking Amount of Gold to Asia"  3. Investors Intelligence: "Here is the Chart That Has the Central Planners Worried"  4. William Kaye: "Is This the Real Reason Why Malaysian MH17 Was Shot Down?"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

A Revolving Door Farce: CFTC Commissioner Bails to Head Regulator's Biggest Opponent

There is no better way to describe what the recently departed CFTC commissioner Scott O'Malia just did when he bailed from the commodity watchdog to become the new head of the International Swaps and Derivatives Association, aka ISDA, the biggest banking group that has constantly opposed every intervention and attempt to regulate the swaps market by the CFTC since the Lehman crisis, than an epic farce.

For those who are unaware ISDA is a global OTC derivative lobby group, counting the world's largest investment banks among its members, and has frequently fought regulatory efforts to reform the market after the financial crisis. ISDA itself was exposed as a complete joke during the European crisis when due to the overhang of avoiding Europe's insolvent reality, it made CDS protection obsolete as protection from sovereign restructurings and credit events, in the process crushing one of the key ways to hedge for credit event risk.

Even an otherwise impartial Reuters appears outraged by this blatant and painfully clear example of government capture of "public servants" by those who have dangle carrots of money in exchange for lobby (and future employment promise) favors, and thus set the rules, courtesy of people like O'Malia.

If there was any more proof needed that the CFTC is a compromised and crooked organization, here it is.  O'Malia handed in his notice on Tuesday---and look where he is 24 hours later.  This Zero Hedge piece was posted on their Web site at 11:29 a.m. EDT on Wednesday morning---and I thank Phil Barlett for sending it our way.

US Gold ETF Delivers First Physical Bullion Coins; Holdings Grow

Merk Gold Trust, a bullion-backed exchange-traded fund that allows its shares to be redeemed for physical gold, said on Wednesday it has made its first delivery in dozens of U.S. gold coins to an investor.

The ETF, launched by Palo Alto, California-based Merk Funds in May to offer a liquid trading product with the benefits of physical gold bullion, has accumulated 40,000 ounces in two months even in a bearish gold market.

The fund, trading on the NYSE Arca platform with the ticker OUNZ, owns less than 1 percent of gold held by SPDR Gold Shares , the world's biggest gold ETF. However, many participants are warming to the idea that the product could bridge the gap between the physical and paper gold markets.

This very interesting Reuters piece, filed from New York, showed up on their Internet site at 3:46 p.m. EDT on Wednesday afternoon.  I found it embedded in a GATA release late last night MDT.

Smoking Out Indian Gold, Central Bank Relaxes Loan Rules

In a major relief, the Reserve Bank of India has relaxed the limit of loan that banks can sanction against the pledging of gold ornaments and jewellery, and where the end use of the loan is not for agricultural purposes.

The move is expected to protect the interest of the customers who can continue to opt for gold loans based on merits of the case, rather than rely on the loan to value ratio. The RBI has however retained the loan to value ratio at 75% of the value of gold.

The apex bank has left it to individual banks to decide on a lending cap. On December 30, the apex bank had restricted loans with a cap of $1,661 (Rs 100,000) against the pledge of gold ornaments and jewellery.

With many individuals pledging household gold ornaments to avail of personal loans, the aim is also to smoke out gold lying within homes and bank lockers across the country, said analysts.

This news item, filed from Mumbai, put in an appearance on the mineweb.com Internet site on Wednesday sometime---and it's worth skimming.

Kalgoorlie's Golden Hotel Prices

Car dealers, doctors and now a hotel in Western Australia's Kalgoorlie are accepting payments of gold.

Weary travelers will be able to pay to rest their head at a hotel in the wild west Goldfields town of Kalgoorlie with gold.

Rydges Kalgoorlie Resort and Spa general manager Nicholas Parkinson-Bates said while the idea to allow people to pay for a room with the precious metal was inspired by the annual Diggers and Dealers mining conference in August, he was keen to extend the payment method for life.

This short gold-related news item was posted on The West Australian Web site yesterday at 6:16 p.m. local time 'down under'---and it found a home over at the au.news.yahoo.com Internet site.  I thank reader Michael Donovan for sliding it into my inbox yesterday morning.

¤ The Funnies

¤ The Wrap

On an historical basis and given the extreme technical fund long position in silver, I will not be shocked if the COMEX commercial crooks rig it the downside. But it’s also possible for an upside resolution, as occurred under similar, if not identical, circumstances in late 2010. I know some are pointing to the COT structure and pounding the table for prices to rise and others are pointing to the exact same circumstances as a reason prices will surely fall. What I do know most of all is that no one knows for sure, even if they don’t want to admit that. At some point though, price volatility will return in force. - Silver analyst Ted Butler: 23 July 2014

I don't have a thing to say about the gold market yesterday, but it was obvious that silver's attempt to break above the $21 spot price mark was turned back by a not-for-profit seller.

Here are the six-month charts for both metals.

I got an email from reader Bill Higgins yesterday, who was questioning the accuracy of something I'd said, not only in my Tuesday column, but in my Wednesday column as well---and this is what he had to say: "If the tech funds are massively short as you said yesterday and again today, how can an engineered sell-off be accomplished by the commercials? I read your column every day first thing. Is that a misprint?"

Upon reading the offending paragraph to which he was referring, I discovered to my horror and embarrassment that he was absolutely correct.  But it wasn't a misprint---I just made a mistake, pure and simple.

Here's the offending paragraph once again, with the correct word underlined and in bold lettering.

"So, where do we go in price from here?  Could we go higher from here, as the RSI traces shows that we're not 'overbought' in any of the four precious metals at the moment.  Sure, but as I mentioned a few paragraphs ago, we're almost at a five-year high long position in silver for the technical funds---and unless the commercial traders get over run by some black swan event, the usual engineered price decline outcome is a foregone conclusion.  And if that turns out to be the case, only the timing remains unknown.  Of course gold will also meet the same fate at the same time."

I had 'short' instead of long, which is patently false.  It's JPMorgan et al. that are massively short---and it's they who will determine the time that the cash register is rung for fun, profit---and price management purposes.

That's what happens when I'm trying to think straight at 2 a.m. when I'm writing The Wrap section.  My apologies to you---and my thanks to Bill.

As I write this paragraph, the London open is about 20 minutes away.  Gold got sold down about $10 starting shortly after 9 a.m. Hong Kong time on their Thursday---and silver got sold down about 20 cents, but has since recovered a bit.  Not surprisingly, the volumes in both these metals have blown out since the down-side price activity began.  Net gold volume is around 27,000 contracts---and silver's volume is a bit over 8,000 contracts.   Platinum got hit as well, but palladium was mostly spared.  The dollar index, which had been flat for most of the Far East session, suddenly headed north shortly before 2 p.m. Hong Kong time---and is up about eight basis points at the moment.

And as I send this off to Stowe at 4:50 a.m. EDT, there hasn't been much in the way of price action since the London open about two hours ago---and all four precious metals are still down on the day.  Volumes in both gold in silver have slowed since the open---and the dollar index is now down a couple of points from yesterday's close.

That's all I have for today---and I'll see you here tomorrow.

Thu, 24 Jul 2014 09:07:00 +0000
<![CDATA[Lawrence Williams: Escalating Ukraine Crisis Could Blow Gold Sky High]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-escalating-ukraine-crisis-could-blow-gold-sky-high/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-escalating-ukraine-crisis-could-blow-gold-sky-high/#When:09:05:00Z "The powers that be only put in an appearance where required"

¤ Yesterday In Gold & Silver

It wasn't much of a trading day in gold on Tuesday.  After trading flat until 12:30 p.m. Hong Kong time, gold got sold down about seven bucks between then and 9 a.m. BST in London.  It dipped a bit more at the Comex open, but at 8:30 a.m. EDT, the gold price spiked up a meaningful amount, but by about 20 minutes after the London p.m. gold fix, the price as back in the box again.  The tiny rally attempt after that ran into a not-for-profit seller---and gold chopped sideways for the remainder of the day.

The low and high ticks were recorded by the CME Group as $1,302.20 and $1,316.80 in the August contract.

Gold finished the Tuesday session at $1,307.50 spot, down $4.70 from Monday's close.  Net volume was 110,000 contracts, so JPMorgan et al. had to throw a decent amount of Comex paper at that early morning Comex rally to get the price back under control.

The silver price rally had a lot of characteristics that were similar to the gold price action.  The low price tick of the day came at the noon London silver fix---and the 8:30 a.m. EDT rally met a similar fate as gold's rally at the same time.  But that rally didn't get sold down as much---and the rally that began at precisely 11:30 a.m. in New York, took silver to its high of the day just minutes after 12 o'clock noon EDT.  That rally got capped---and the silver price sold down a bit into the Comex close.  From there it traded flat.

The low and high ticks were $20.785 and $21.12 in the September contract.

Silver finished the day at $20.965 spot, up four cents from Monday's close.  Volume, net of July and August, was up there at 38,000 contracts.

Platinum got sold down a bit in Far East trading---and its attempted rally above its Monday closing price shortly after the Comex opened in New York yesterday, got sold down.  Platinum closed down $4.

Palladium also got sold off in Far East trading, with the low tick coming at 1 p.m. Hong Kong time on their Tuesday afternoon.  The subsequent rally lasted until a few minutes after 12 o'clock noon in New York, just as it was about to break above the unchanged mark---and from there it got sold down a few handful of dollars as well.  Palladium was also closed down $4.

The dollar index closed at 80.56 in New York late on Monday afternoon---and traded mostly flat until noon Hong Kong time.  At that point it developed a positive bias---and the rally quickened starting at the 8 a.m. BST London open.  The rally topped out at 80.82 around 10:40 a.m. EDT---and from there gave up a small handful of basis points going in the close, as the index closed at 80.78, up 22 basis points on the day.

The gold stocks spent the entire day in negative territory---and the HUI closed down 1.03%.

Despite the fact that silver rallied strongly in New York yesterday---and actually finished up on the day, the stocks got sold down pretty hard.  Nick Laird's Intraday Silver Sentiment Index closed down 1.67%---and almost on its low tick.

The CME Daily Delivery Report showed that five gold and four silver contracts were posted for delivery within the Comex-approved depositories on Thursday.

After the withdrawal of all Thursday's GLD deposit on Monday, I was surprised to see that an authorized participant added 48,115 troy ounces on Tuesday.  The other surprise was in SLV, as an authorized participant withdrew 1,583,746 troy ounces.

9.5 million ounces of silver have been withdrawn from SLV since the silver rally began during the first week in June.  Ted figures that this particular ETF is owed around 7 million ounces of silver.

There was another sales report from the U.S Mint.  They sold 2,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 290,000 silver eagles.

There was no reported activity in gold over at the Comex-approved depositories on Monday.  But, as is almost always the case, it was another huge day for in/out movement in silver, as 1,457,097 troy ounces were reported received---and 542,498 troy ounces were shipped out the door.  And just as a matter of interest, there were 1,160,619 troy ounces of silver moved from the Registered to the Eligible category at the CNT Depository.  That doesn't mean much, but I thought I'd report on it, as it is a change.  The link to yesterday's action in silver, is here---and it's worth a quick peek.

I have a decent number of stories again today---and the final edit is yours.

¤ Critical Reads

IRS Seeks Help Destroying Another 3,200 Hard Drives

Days after IRS officials said in a sworn statement that former top agency employee Lois G. Lerner’s computer memory had been wiped clean, the agency put out word to contractors Monday that it needs help to destroy at least another 3,200 hard drives.

The Internal Revenue Service solicitation for “media destruction” reflects an otherwise routine job to protect sensitive taxpayer information, but it was made while the agency’s record destruction practices remain under a sharp congressional spotlight.

Congressional investigators of the IRS targeting of conservative groups have been hampered by the unexplained destruction of emails and other records of Ms. Lerner, the former head of the IRS tax-exempt division and a central figure in the scandal.

The loss of Ms. Lerner’s hard drive also raised broader questions about why the tax agency never reported the missing records to the National Archives and Records Administration, as required by the Federal Records Act.

Today's first story is from The Washington Times.  It was posted there on Monday sometime---and I thank reader M.A. for sending it.

Wall Street Cut From Guest List for Jackson Hole Fed Meeting

Wall Street doesn’t lead to Jackson Hole this year.

As the Federal Reserve Bank of Kansas City prepares to host next month’s annual gathering of central bankers in Wyoming, seasoned Fed watchers from the financial markets, including the chief U.S. economists of the biggest American banks, aren’t being invited, according to past participants.

Among those who didn’t make the guest list: Vincent Reinhart of Morgan Stanley, Jan Hatzius of Goldman Sachs Group Inc., and Bank of America Corp.’s Ethan Harris. Onetime conference regulars, including Mickey Levy of Blenheim Capital Management LLC and Meredith Whitney of Kenbelle Capital LP, also lose out.

They’ll miss a conference that has foreshadowed some of the Fed’s biggest monetary-policy shifts since the financial crisis, and a keynote speech by Chair Janet Yellen. Perhaps as importantly, they also will be deprived of the opportunity to mingle with policy chiefs over meals and on mountain trails.

This longish Bloomberg piece, filed from London, was posted on their Internet site at 4:27 a.m. Denver time on Tuesday morning---and it's the first offering of the day from West Virginia reader Elliot Simon.

Have Central Banks Been Breaking the Law?

The best way to destroy the capitalist system, the Russian revolutionary leader Vladimir Lenin is reputed to have said, is to debauch the currency. The world’s major central banks have certainly been having a fair old go at it. In the six years since the financial crisis first broke, they’ve been printing money like there is no tomorrow.

Fortunately, they have not yet managed to bring down the free market system. On the other hand, they have succeeded in putting a rocket under asset prices and, in so doing, they have greatly exaggerated the wealth divide.

In a number of cases, including the U.S. and the U.K., they have also significantly assisted governments in financing burgeoning fiscal deficits. To the extent that quantitative easing (QE) has had any effect at all, it is asset prices and governments that have been the prime beneficiaries.

Where has Jeremy been all these years?  This is what central banking is all about.  This commentary was posted on the telegraph.co.uk Web site at 5:55 p.m. BST on their Monday afternoon---and I found the story embedded in a GATA release.  The link is here.

Draghi Cedes Euro Control to Yellen on Fed Rate Wagers

Mario Draghi’s ambitions to weaken the euro are at the mercy of Federal Reserve Chair Janet Yellen.

The U.S. central bank chief sent the euro sliding below $1.35 last week for the first time since February when she said U.S. interest rates may rise sooner than investors expect. Her European Central Bank peer is having less impact: Draghi’s unprecedented decision to drop a key interest rate to below zero last month pushed the shared currency up 0.2% before Yellen’s speech. The euro is also losing its link with the continent’s bond market, as its correlation to the yield spreads of Italy, Spain and Portugal approaches zero.

Dealers in euro-dollar, the world’s most-traded currency pair, say they’re increasingly influenced by the U.S. because they’ve assimilated the interest-rate cuts Draghi unveiled and concluded he has no further surprises in store. The prospect of a Fed rate boost is also deemed more important than the conflict in the Gaza Strip and international anger over the downing of a Malaysian airliner last week in Ukraine.

This is another Bloomberg story---and this one was filed from New York.  It was posted on their Internet site at 4:15 a.m. MDT yesterday---and it's the second offering of the day from Elliot Simon.

Global Stock Markets at Risk from Black Swan Spike in Oil Price

Global stock markets are at risk from a spike in oil prices which could derail the fragile economic recovery and lead to a major correction in share prices, warns Steen Jakobsen, chief economist at Saxo Bank.

Geopolitical risk has increased sharply following the events of last week, a point that has been largely ignored by the ever Panglossian global equity markets that march on upward---and it's at this point I'll hand over to the analysis by Mr Jakobsen:

"The simplest way to 'measure' geopolitical risk is to look at the price of energy. Energy is everything for a macro economist as it is a tax on the economy when high, and a discount when low.

"The way I measure this geopolitical risk is through measuring the spread between the fifthth contract of the WTI Crude and the first contract. Of course, there are other factor workings, but lacking a better alternative, it is what I use."

This article showed up on The Telegraph's website at 11:30 a.m. BST on Tuesday---and it's the first contribution of the day from Roy Stephens.

Bank of England Leads Push for Deposit Confiscation - Japan, China, Russia Against Bail-Ins

Bank of England officials led by Mark Carney, the Bank of England governor, are attempting to bridge sharp differences among leading G20 countries as they prepare a landmark set of proposals aimed at tackling the problem of “too big to fail” banks according to the Financial Times today.

Talks under the auspices of the global Financial Stability Board (FSB) over the summer are approaching a key stage as officials aim to clinch an agreement on bail-ins and the bailing in of creditors including depositors of banks.

Finance officials are hoping to pave the way for proposals to be tabled at the G20 leaders meeting at the Brisbane summit in November.

The issue is of major consequence to globally systemic lenders such as Citigroup, Barclays and BNP Paribas, as some will have to issue billions of dollars of fresh bonds earmarked to carry losses.

The issue is of major consequence also to depositors who could see their savings confiscated as happened in Cyprus.

This Zero Hedge piece was posted on their Web site at 4:38 a.m. EDT yesterday morning---and it's courtesy of South African reader B.V.

France Sticks to Warship Sale to Russia Despite Calls for European Arms Embargo, Sanctions

France says it will go ahead with the sale of a warship to Russia despite calls for an arms embargo against the country, highlighting how Europe's strong business ties are hindering its ability to punish Moscow over the crisis in Ukraine.

Western powers say Russia is supporting the insurgents in eastern Ukraine who allegedly shot down a Malaysian Airliner last week, killing all 298 people on board.

European Union foreign ministers met Tuesday to consider more sanctions against Russia but agreed only to impose more asset freezes on individuals, leaving economic relations untouched.

Some countries, like Britain, argue the plane crash has raised the stakes and Europe should not go soft on Russia.

This CP/AP story from yesterday was picked up by the ca.news.yahoo.com Internet site.  I posted a story on this subject about 10 days ago, but there are new details added to this one---and I thank reader Doug Milne for sharing it with us.

N.Y. Fed Slams Deutsche Bank (and Its €55 Trillion in Derivatives): Accuses it of "Significant Operational Risk"

First it was French BNP that was punished with a $9 billion legal fee after France refused to cancel the Mistral warship shipment to Russia (which promptly led to French National Bank head Christian Noyer to warn that the days of the USD as a reserve currency are numbered), and now moments ago, none other than the 150x-levered NY Fed tapped Angela Merkel on the shoulder with a polite reminder to vote "Yes" on the next, "Level-3" round of Russia sanctions when it revealed, via the WSJ, that "Deutsche Bank's giant U.S. operations suffer from a litany of serious problems, including shoddy financial reporting, inadequate auditing and oversight and weak technology systems."

What could possibly go wrong? Well... this. Recall that as we have shown for two years in a row, Deutsche has a total derivative exposure that amounts to €55 trillion or just about US$75 trillion. That's a trillion with a T, and is about 100 times greater than the €522 billion in deposits the bank has. It is also five times greater than the GDP of Europe and more or less the same as the GDP of...the world.

Well, dear reader, one wonders if the New York Fed has had a gander at JPMorgan's derivatives book recently?  This Zero Hedge piece was posted on their website yesterday sometime---and a lot earlier than the 8:41 p.m. dateline shown on the article, as Washington state reader S.A. sent it our way about five hours before that.  It's definitely worth reading.

Six Ukraine/MH17/Russia-Related Stories

1. Russia Says Has Photos Of Ukraine Deploying BUK Missiles In East, Radar Proof Of Warplanes In MH17 Vicinity: Zero Hedge  2. Putin: West should demand Kiev obey ceasefire during plane crash probe: Russia Today  3. U.S. coy on Malaysian plane evidence, points to social media and 'common sense': Russia Today  4. Expert access to MH17 crash site 'fairly good' - OSCE mission: Russia Today  5. Warhead That Downed Flight MH17 Will Have Left Widespread Traces: Bloomberg  6. U.S. intelligence: No direct link to Russia in Malaysia plane downing: Russia Today

The second-last story [Bloomberg] sports a new headline.  It now reads "Wreckage From MH17 Shows Telltale Signs of Missile Strike."

[The above stories are courtesy of Bill Busser and Roy Stephens.]

Developing Situation in Ukraine Unacceptable, Counterproductive, Destabilizing - Putin

Russian President Vladimir Putin said Tuesday that scenarios in the developing crisis in Ukraine are unacceptable, counterproductive and destabilizing the situation in the world.

“If we return to similar scenarios, as a whole, as I have already said, then this is absolutely unacceptable and counterproductive. This is destroying the modern world and order. Undoubtedly, such methods in regard to Russia won’t work,” Putin said during a Security Council meeting.

“Our people, our citizens of Russia won’t let that happen and they will never accept [this],” he said.

This short article appeared on the RIA Novosti Web site at 4:30 p.m. Moscow time yesterday afternoon---and it's another story from Roy Stephens.

Russia to Respond Adequately to NATO Expansion - Putin

Moscow will respond adequately and equitably if NATO continues its military presence expansion closer to the Russian borders, President Vladimir Putin said on Tuesday.

Russia will respond adequately and equitably to the expansion of NATO military infrastructure closer to the Russian borders and the ongoing buildup of NATO forces," Putin said at a meeting of the Russian Security Council.

He also said that Moscow clearly sees that NATO is demonstratively strengthening its presence in Eastern Europe.

Following Crimea’s reunification with Russia in March, the alliance has been systematically stepping up its presence near the Russian border, citing the need to protect its members from potential Russian aggression. Moscow has repeatedly expressed concerns over Western pressure on Russia.

This is another story from the RIA Novosti Web site.  This one put in an appearance at 6:03 p.m. Moscow time on Tuesday evening---and once again my thanks go out to Roy Stephens.

Russia Vastly Outgunned in Economic Showdown with West

The economic showdown unfolding between Russia and the West is almost entirely one-sided.

The U.S. has the power to bring Russia to its knees through hegemonic control over the world’s banking system, using an array of lethal financial weapons developed by a cell at the U.S. Treasury, and already deployed against Iran and North Korea.

Richard Christopher Granville, from Trusted Sources, said the U.S. “crossed the Rubicon” last week even before the apparent missile strike against Malaysia Airlines flight 17, imposing sanctions that effectively shut the energy trio of Rosneft, Novatek, and Gazprombank out of international finance.

“The Americans have the power to throttle Russia unilaterally because no European or Western bank of any importance is going to defy the U.S. after the fines imposed on BNP Paribas,” he said.

Guilty until proved innocent.  This is typical of the anti-Russia swill that fills the main stream media in Britain and the U.S. these days---and I, for one, wouldn't want to predict the outcome of this because, as Ambrose Evans-Pritchard so correctly points out, the hammer will fall on Europe the hardest.  This commentary appeared on the telegraph.co.uk Internet site at 8:39 p.m. BST on Monday evening---and it's another offering from Roy Stephens.   And the anti-Russia sentiment aside, it's definitely worth reading---especially in conjunction with that Zero Hedge piece on Deutsche Bank posted further up.

Greek Sovereign Debt at 174.1 Percent of GDP in First Quarter

Eurozone public debt rose to 93.9% of economic output in the first quarter of this year, approaching the peak it is expected to reach later in 2014, official data showed on Tuesday.

Government debt of the 18 countries sharing the euro stood at 9.055 trillion euros ($12.21 trillion) in the first three months of this year, compared to 8.905 trillion euros in the last quarter of 2013, the EU's statistics office Eurostat said.

The EU's executive arm - the European Commission - expects the debt to peak at 96.0% of gross domestic product this year and then ease to 95.4% of GDP in 2015.

Nearly 80% of the bloc's debt is in bonds and treasury bills. Loans account for 17.9% of the debt.

Twice bailed-out Greece was the eurozone's most indebted country with sovereign debt of 174.1% of GDP, followed by the bloc's third-biggest economy Italy, with debt equivalent to 135.6% of GDP in the first quarter.

This short Reuters piece, filed from Brussels, showed up on the ekathimerini.com Internet site earlier this morning Athens time---and I thank reader Harry Grant for sliding it into my in-box just before 4 a.m. EDT this morning.  It's worth reading.

Turkey's Erdogan: "I Stopped Talking to Obama"

Turkish Prime Minister Recep Tayyip Erdogan said he ceased direct phone contact with US President Barack Obama once the U.S. backed away from use of military force against Syria last fall.

Erdogan, a supporter of rebel fighters opposed to Syrian President Bashar Assad’s government, was upset, he said, that the United States did not follow through with military action against Damascus amid the fierce civil war there.

"In the past, I was calling him (Obama) directly. Because I can't get the expected results on Syria, our foreign ministers are now talking to each other," Erdogan said Monday in an interview with the pro-government ATV channel.

"And I have talked to (US Vice President Joe) Biden. He calls me and I call him.”

This news item was posted on the Russia Today Web site at 3:18 p.m. yesterday afternoon Moscow time, which was 7:18 a.m. in New York.  It's also courtesy of Roy Stephens.

China Warns Against Politicizing Malaysian Boeing Crash Until Investigation Is Over

“Pending the outcome of the investigation, the parties should not speculate or prejudge, and most importantly we should not artificially politicize [the situation],” Wang Yi said in a statement published on the ministry’s website.

China’s Foreign Minister also welcomed the U.N. Security Council’s resolution adopted late Monday, which condemns the downing of the passenger plane, and called to implement it.

“The primary focus at the moment is to implement the resolution, in particular, to provide international investigators access to the site of the catastrophe for a full fledged investigation,” Wang Yi added.

Excellent advice!  Now there are two adults in the room.  This story, filed from Moscow, was posted on the RIA Novosti Web site at 4:46 p.m. Tuesday afternoon Moscow time---and it's the final offering of the day from Roy Stephens.

Argentine Default in Balance as Government Refuses to Capitulate

Argentine President Cristina Fernandez's unflinching poker face in the battle against "holdout" investors suing the country is increasing the odds that her government will default for a second time in 12 years at the end of this month.

She has refused to budge from her stance that Argentina cannot pay out in full to the holdout hedge funds, which snapped up bonds on the cheap after its $100 billion default in 2002. That is despite indirect talks aimed at cutting a deal.

Fernandez last week told leaders of the BRICS emerging economies that it was "impossible" to pay holdouts the full face value of the debt they hold. The funds, she said, could enter a bond swap matching the terms of restructuring deals in 2005 and 2010, which saw creditors accept large write-downs.

It is an old offer the holdouts have previously scoffed at and they have no reason to take it now given that U.S. courts have ruled in their favor and put Argentina, Latin America's No. 3 economy, on the verge of default.

This Reuters story, filed from Buenos Aires, put in an appearance on their Web site yesterday---and I thank reader D.W. Mong for sending it our way.

Venezuela Admits Its Ever-Growing Dependency from China

Venezuela confirmed Monday that its relations with China have become a fundamental pillar for making progress in almost all sectors of its economy. With a new portfolio of accords and almost 5.7 billion in loans, Beijing will provide support in many key areas.

Facing China's Xi Jinping at the closing ceremony of the 13th bilateral Mixed Commission, President Nicolas Maduro told his Chinese counterpart that his visit of little more than 24 hours had “surpassed all expectations.”

Maduro and Xi closed the meeting having added a number of new pacts to the more than 500 already accumulated in their bilateral relations.

This article was posted on the mercopress.com Internet site early yesterday morning---and I thank Casey Research's own Louis James for passing it around.

Three King World News Blogs

1. Dr. Stephen Leeb: "Gold and Silver to Skyrocket as We Move to a New World Order"  2. KWN Special Feature: "Gold and Silver Set to Make History---Art Cashin---and 3 Great Charts"  3. Rick Rule: "A 2008-Style Event, Propaganda---and the $64 Billion Question"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

London Zinc Hits Three-Year High, Aluminium a 16-Month Peak

Zinc hit a three-year high and aluminium touched a 16-month peak on Tuesday as investors sought more exposure to commodities with tightening supply-demand balances and were encouraged by falling inventories and firm equity markets.

London Metal Exchange stocks of zinc fell by 400 tonnes to 656,275 tonnes, their lowest in 3-1/2 years, while aluminium stocks fell by 9,075 tonnes to 4.938 million tonnes, their lowest in nearly two years.

Investors are slowly being drawn back into commodities, attracted by stronger global economic growth and more volatility within some sectors, typified by current investment flows out of grains into industrial metals.

"There's a certain amount of relative value going on where investors prefer one metal over another," Macquarie analyst Vivian Lloyd said.

One wonders how much money would plow into silver if the big investors understood the real supply/demand fundamentals in silver.  But JPMorgan et al are doing a fine job of making sure that fundamentals are never reflected in the silver price---and the prices of the other three precious metals as well.  This Reuters story, filed from London, appeared on their Web site at 9:02 a.m. EDT yesterday---and my thanks go out to Elliot Simon for sending it our way.

Credit Suisse to Exit Commodities, Posts Big Quarter Loss

Credit Suisse Group AG said it will abandon commodities trading as a $2.6 billion fine to settle a U.S. tax investigation pushed the Swiss bank to its biggest quarterly loss since 2008.

The bank’s net loss in the second quarter was 700 million Swiss francs ($779 million), compared with a profit of 1.05 billion francs a year earlier and a 691 million-franc estimate from analysts. Zurich-based Credit Suisse posted higher-than-forecast earnings at the investment bank and lower profit in wealth management even as it attracted more net new money from rich clients than analysts had estimated.

Chief Executive Officer Brady Dougan is reporting a second quarterly loss in less than a year as Credit Suisse grapples with regulatory probes. Analysts and investors have said Credit Suisse should step up efforts to shrink its investment bank and focus on wealth management to boost returns and shore up capital eroded by the U.S. fine. The bank reaffirmed plans to cut at least 4.5 billion francs in annual costs by the end of next year compared with 2011.

Of course they're not going to "abandon" precious metals trading.  How can banks rig these markets if they can't trade them?  I would guess that Credit Suisse has a decent short position in the Comex precious metal market, but they're not a really big player.  This Bloomberg story, filed from Zurich, showed up on their Internet site at 5:29 a.m. Mountain Daylight Time on Tuesday---and I thank Elliot Simon for his final contribution to today's column.

Hambro "Horrified" by Tampering of London Gold Fix

Peter Hambro, chairman of gold producer Petropavlovsk Plc, said he was "horrified" by the manipulation of the London fix given its importance to the industry.

"When I read the reports on what people had been doing to it, I was horrified," Hambro said in an interview today. "It is something that is really important to people in the industry. It's something that we use in a big way as we deliver our gold. That's how we price."

"To have something that we can rely on is vitally important," said Hambro, who previously traded bullion at Marc Rich Group and Mocatta & Goldsmid Ltd. "I look forward to its continuing existence."

Hambro is more than aware of the price management scheme in gold and the other precious metals, so his comments are certainly disingenuous---and that's being kind.  This short gold-related "news" item, filed from London,  showed up on the Bloomberg Web site in the wee hours of Tuesday morning Denver time---and I found it embedded in a GATA release.

Lawrence Williams: Escalating Ukraine Crisis Could Blow Gold Sky High

It is thus perhaps a wonder that gold, as the safe haven of choice, is not flying far and away higher than it is at the moment---and the logic here is that it is indeed being held down by a bullion banking sector which could find itself in serious default if the gold price ran sky-high.  And if some of the analysts on the bullish side of the gold equation are correct in their assumptions that many Western central banks (with the approval of their governments whether they are deemed independent or not) have leased out much of their gold reserves, and that the banks to which they have leased them are in no position to return the bullion, then the proverbial could well be set to hit the fan as banks default in their commitments – should government allow that to happen!

This observer is thus more and more being drawn to the possibility of a big gold price escalation looming sooner rather than later, as opposed to the $1,050 year-end call being reiterated by the perhaps exposed banks like Goldman Sachs.  But this viewpoint is very much one’s own interpretation of what is going on in global geopolitics which itself is reliant on attempts to interpret the various media spin coming from  both sides and, as can be seen from the above commentary, this is no easy thing to do.  Who can one really believe in this day and age of political spin?

This very well-balanced commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and it's definitely a must read.

¤ The Funnies

¤ The Wrap

Now that the technical funds are so overloaded to the long side of Comex copper futures, the copper market is in the same dangerous territory as is Comex silver and gold. And just as is the case in Comex gold and silver, if there is a substantial price decline in copper, it will undoubtedly be caused by technical fund selling (after the collusive commercials pull the price rug out from the funds). At the very least, all three markets are set up for disorderly pricing regardless of price direction, the exact thing that the regulators should be striving to avoid.  There is too much outsized speculation on the Comex---and it only exists because the CME greedily seeks trading volume without regard for the consequences to the rest of the world. Why else would the crooks at the CME preside over such a scam? - Silver analyst Ted Butler: 19 July 2014

It was another reasonably quiet trading day on Tuesday---and the powers that be only put in an appearance where required---and it was required a few times yesterday, as both the gold and silver charts indicate.

Here are the six-month charts for both metals once again---and it was just another day off the calendar where prices were forced to trade in a tight range. 

Yesterday at the close of trading was the cutoff for Friday's Commitment of Traders Report---and based on the price capping, I'd guess that "da boyz" were shorting all comers, or selling long positions to put those rally fires out.  We'll know in a couple of days.

As I write this paragraph, the London open is less than 10 minutes away.  The gold price hasn't done much of anything except chop around in a two- or three-dollar price range since the close in New York late yesterday afternoon---and silver has traded within a dime.  Volumes are vanishingly small---barely over 8,000 contracts in gold---and 3,200 contracts in silver.  The HFT boyz and their algorithms are nowhere in sight.  But, without doubt, they are ever watchful---and ready to pounce if their price management services are required.  The dollar index is trading ruler flat---and unchanged.  Not a creature is stirring out there at the moment.

As for what might happen going forward, the best I can do is cut and paste a paragraph from The Wrap section of yesterday's column:

"So, where do we go in price from here?  Could we go higher from here, as the RSI traces shows that we're not 'overbought' in any of the four precious metals at the moment.  Sure, but as I mentioned a few paragraphs ago, we're almost at a five-year high short position in silver for the technical funds---and unless the commercial traders get over run by some black swan event, the usual engineered price decline outcome is a foregone conclusion.  And if that turns out to be the case, only the timing remains unknown.  Of course gold will also meet the same fate at the same time."

This is more or less what Lawrie Williams had to say in his piece posted further up---and as Ted Butler mentioned in his quote above.

The other thing I mentioned yesterday was the Pentagon's Full Spectral Dominance policy.  I can also add the Wolfowitz Doctrine, of which the Full Spectral Dominance policy would be a key component.  In a nutshell it states that "Our [the U.S.] first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power."  There's a 3-minute read about this posted at Wikipedia---and I highly recommend it.  The link is here.

And as I prepare to send this off into cyberspace at 4:45 a.m. EDT, I see that nothing much has changed now that London has been open about two hours.  Prices still aren't doing much---and volumes in both metals are still extremely light.  And starting around 9 a.m. in London, the dollar index has declined by 5 basis points.

It's too quiet out there---but there's no way of knowing if this will continue for the remainder of the Wednesday trading session or not.  If things do change, it's a coin toss as to which direction precious metal prices will go.  So nothing should come as a surprise as the trading day continues to unfold.

Enjoy your day---and I'll see you here tomorrow.

Wed, 23 Jul 2014 09:05:00 +0000
<![CDATA[Chinese Wholesale Gold Demand Year to Date Is Nearly 1,000 Tonnes]]> http://www.caseyresearch.com/gsd/edition/chinese-wholesale-gold-demand-year-to-date-is-nearly-1000-tonnes/ http://www.caseyresearch.com/gsd/edition/chinese-wholesale-gold-demand-year-to-date-is-nearly-1000-tonnes/#When:09:04:00Z "JPMorgan et al. showed up as required"

¤ Yesterday In Gold & Silver

After the obligatory downtick at the open, the gold price didn't do much in Far East trading on their Monday---and shortly before the London open, it was back in positive territory---albeit barely.  There was a rally shortly before 1 p.m. BST in London, but that ran into a not-for-profit seller within 15 minutes or so---and by the 10 a.m. EDT London p.m. fix, the gold price was basically back to unchanged.  It managed to rally a few dollars from there, but that was it.

The low and high ticks were recorded by the CME Group as $1,307.90 and $1,319.00 in the August contract.

Gold finished the Monday trading session in New York at $1,312.20 spot, up $1.30 from Friday's close.  Net volume was very light at only 65,000 contracts, so anyone with an agenda had no problems influencing the price if they wished to do so---and some obviously did.

It was virtually the same price action in silver---and the late lunchtime rally in London ran into the same not-for-profit seller as soon as it broke above $21 spot, but the rally in that metal didn't get completely contained until shortly after the 8:20 a.m. Comex open.  And also by 10 a.m. EDT, the silver price was back to unchanged as well---and it chopped sideways into the 5:15 p.m. electronic close.

The low and high were reported as $20.86 and $21.165 in the September contract.

Silver closed yesterday at $20.925 spot, up 3.5 cents, but safely back under $21 the ounce.  Volume, net of July and August, was 23,500 contracts, which was pretty light.

Platinum followed a very similar price pattern on Monday as it did on Friday---and closed up $2.  Palladium didn't do much until shortly before 2 p.m. Zurich time.  That spike---and the one that followed shortly after 9 a.m. in New York---got dealt with in the usual manner, and from there palladium got sold down for a $4 loss on the day.  Here are the charts.

It was another day where not much happened with the dollar index.  It closed on Friday at 80.53---and when it opened on Sunday night in New York, it got sold down to its 80.43 low by 12:30 p.m. Hong Kong time, which was 30 minutes after midnight EDT.  The subsequent rally made it to its 80.59 high by the London p.m gold fix---and from there got sold down to close at 80.56---up 3 whole basis points.  Nothing much to see here.

The high tick for the gold stocks was right at the open of the equity markets in New York on Monday morning----and it was all downhill to their lows, which occurred at 12 o'clock noon EDT.  From there they crawled higher, making it almost back to unchanged, with the HUI closing down 0.10%.

The silver stocks followed virtually an identical path, but got sold down a bit lower than their golden brethren.  The  rally that began in the silver equities at 1 p.m. EDT only managed to get Nick Laird's Intraday Silver Sentiment Index back up to a loss of 0.88%.

The CME Daily Delivery Report showed that zero gold and 12 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  The link to yesterday's Issuers and Stoppers Report is here.

Over at GLD yesterday, every single ounce of gold that was deposited last Thursday was withdrawn on Monday.  And as of 7:02 p.m. yesterday evening, there were no reported changes in SLV.  The last activity in SLV was a withdrawal on July 2.

There was a small sales report from the U.S. Mint yesterday.  They sold 2,000 troy ounces of gold eagles---and 325,000 silver eagles.

There was no in/out gold activity worth mentioning at the Comex-approved depositories on Friday.  But it was a busy day in silver once again, as 1,835,523 troy ounces were reported received---and 548,249 troy ounces were shipped out the door.  The link to the silver action is here.

Since this is my Tuesday column, I have three days' worth of stories for you, so I hope you have the time for the ones that interest you.

¤ Critical Reads

First Detroit, Now Flint Warns Bankruptcy "Train Is Headed For the Cliff"

Flint may be Michigan’s second city to plunge into bankruptcy unless retirees accept cuts in health benefits that threaten to unravel a balanced budget. As Crain's Detroit reports, Emergency Manager Darnell Earley (Flint’s third emergency leader since it was placed under state control in 2011) warned "If we have no ability to mitigate the cost of retiree health care, that’s going to make it very difficult for the city to remain financially stable over the next few years." As Eric Scorsone notes, "Flint's at the forefront, but a lot of cities are on the same train, and that train is headed for the cliff."

Like Detroit, which a year ago this week filed the largest U.S. municipal bankruptcy, Flint has struggled with loss of population, jobs and revenue. The birthplace of General Motors Co. has only half its population of 1960.

Today's first news item was posted on the Zero Hedge Web site at 7:38 p.m. on Saturday---and I thank Brad Robertson for sending it our way.

Former Fed Vice Chairman Alan Blinder Rips House Bill to Regulate Fed More Tightly

Former Federal Reserve Vice Chairman Alan Blinder isn't too impressed with the new House bill designed to increase the central bank's accountability and transparency.

"While the House can't manage to engage on important issues like tax reform, immigration reform and the minimum wage, it's more than willing to propose radical 'reform' of one of the few national policies that is working well," he writes in The Wall Street Journal.

To be sure, the Federal Reserve Accountability and Transparency Act does include some good ideas, such as shortening the news blackouts before and after meetings of the Fed's policy-making Federal Open Market Committee, Blinder says.

Accountability and transparency are worthy goals, he says. But the bill "includes some corkers, such as requiring public disclosures—in advance—before entering into international negotiations, disclosures that could make such negotiations next to impossible," Blinder writes.

This story appeared on the moneynews.com Internet site at 10:21 a.m. EDT last Friday---and it's courtesy of West Virginia reader Elliot Simon.

The Dollar's 70-Year Dominance Is Coming to an End

In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.

The U.S. was already the world’s commercial powerhouse, having eclipsed the British Empire several decades earlier. America was also on course to be among the victors of “Europe’s conflict”, even though its economy was largely unscathed by war. As such, Bretton Woods was U.S.-dominated and produced a settlement largely on US terms.

Seventy years ago this week, that fateful summit ended. Its close marked the moment the dollar’s unquestionable supremacy was secured. Since then, global commerce has been conducted largely in dollars and leading economies have held the greenback as their primary reserve currency.

The same system remains intact today, with the lion’s share of commercial settlements worldwide still clearing the U.S. banking system – even if the parties involved have nothing to do with the States.

This commentary, which is definitely worth reading, was posted on the telegraph.co.uk Internet site at 5:30 p.m. BST on Saturday afternoon London time---and the first person through the door with it was Elliot Simon, with his second contribution in a row to today's column.

Government Agents "Directly involved" in Most High-Profile US Terror Plots

Nearly all of the highest-profile domestic terrorism plots in the United States since 9/11 featured the "direct involvement" of government agents or informants, a new report says.

Some of the controversial "sting" operations "were proposed or led by informants", bordering on entrapment by law enforcement. Yet the courtroom obstacles to proving entrapment are significant, one of the reasons the stings persist.

The lengthy report, released on Monday by Human Rights Watch, raises questions about the US criminal justice system's ability to respect civil rights and due process in post-9/11 terrorism cases. It portrays a system that features not just the sting operations but secret evidence, anonymous juries, extensive pretrial detentions and convictions significantly removed from actual plots.

"In some cases the FBI may have created terrorists out of law-abiding individuals by suggesting the idea of taking terrorist action or encouraging the target to act," the report alleges.

This very interesting [and not very surprising] story appeared on theguardian.com Internet site at 2:30 p.m. BST yesterday afternoon---and I thank South African reader B.V. for sharing it with us.

Serious Fraud Office to Launch Criminal Probe into Forex Rigging

The Serious Fraud Office is poised to launch the first criminal investigation into alleged rigging of the £3 trillion-a-day foreign exchange markets at leading City banks.

The financial watchdog is expected to announce the move as early as this week, according to reports, raising the spectre of further multimillion-pound fines for Britain’s biggest banks over their behaviour during and after the financial crisis.

Investigators are expected to examine whether individual traders personally benefited by manipulating benchmark forex prices. It is claimed that traders colluded via online chatrooms in groups with names such as the Bandits’ Club, the Dream Team and the Cartel.

The SFO’s criminal inquiry into alleged currency markets rigging in London, home to more than 40% of the world’s foreign exchange trading, will join global investigations into forex market abuse by watchdogs across Europe, Asia, and the U.S.

This very interesting article put in an appearance on The Telegraph's website at 12:22 p.m. on Sunday afternoon London time---and it's something I found in a GATA release.

Berlin Wants to Prosecute US Handlers of German Spies

Criminal prosecution is likely to be expanded on Americans involved in recruiting and supervising activities of German officials spying for the U.S. intelligence, Germany’s Justice Minister Heiko Maas told Welt am Sonntag.

If investigators find a body of evidence that alleged double agents in Germany’s federal intelligence service and Defense Ministry have been spying to the benefit of American intelligence, “the investigation would extend on their feasible patrons,” Maas declared.

According to Welt am Sonntag, the alleged spymaster is the U.S. citizen Andrew M., a 52-year-old international political consultant, who allegedly received confidential military documents from the Germans.

“The law applies to everyone without discrimination,” Maas said, stressing that intelligence security laws apply on friendly states either. “Those who do not abide by the law in this country may have to face criminal prosecution,” he said.

This news item was posted on the Russia Today Web site at 1:30 p.m. on Sunday afternoon Moscow time---and it's the first offering of the day from Roy Stephens.

Juncker Faces Political Test As Fines Loom on Illegal German Trade Surplus

Germany’s current account surplus is the largest ever recorded in proportional terms and far above the threshold for EU sanctions, posing a major political test for the incoming commission of Jean-Claude Juncker.

The International Monetary Fund said the country’s surplus has reached 8.25pc of GDP when adjusted for the economic cycle and has become economically destructive, making it ever harder for eurozone crisis states to claw their way out of trouble.

The surplus is between three and six percentage points higher than is either “desirable” or justified by fundamentals, the IMF said in its annual health check on Germany.

This is unlikely to change much unless Berlin takes active steps to reduce the imbalance. The Fund called on Germany to do more to help weaker EMU states in “liquidity traps” by boosting its own internal demand.

What???  You couldn't make this stuff up.  Take two blue pills---and hope they work!  This Ambrose Evans-Pritchard offering put in an appearance on the telegraph.co.uk Internet site at 3:52 pm. BST yesterday---and it's the second contribution in a row from Roy Stephens.  It's worth reading.

The Boomerang Effect: Sanctions on Russia Hit German Economy Hard

It wasn't that long ago that Kremlin officials could hardly avoid laughing when asked about the economic sanctions imposed on Russia by the West. As long as every NATO member state jealously sought to protect its own business interests, things "weren't all that bad," they gloated.

But since last week, their moods have darkened. For months, the European Union in particular had been reluctant to enact effective penalties against Moscow. Last Wednesday, though, the 28 EU heads of state and government cleared a psychological hurdle: For the first time, they opted go beyond sanctions targeting individual political leaders in Moscow, adding prohibitions against doing business with specific Russian companies that contribute to the destabilization of the situation in Ukraine. A concrete list is to be presented by the end of the month. European development banks have also been banned from providing loans to Russian companies.

The US, for its part, penalized a dozen leading Russian conglomerates, including oil giant Rosneft, natural gas producer Novatek, Gazprombank and the weapons manufacturer Kalashnikov. From now on, they are forbidden from borrowing money from American monetary institutions and from issuing medium- and long-term debt to investors with ties to the US.

For the companies involved, the penalties are a significant blow. It has become difficult to acquire capital in Russia itself, with both domestic and foreign investors withdrawing their money from the country in recent months. It is hardly surprising, then, that Russian Prime Minister Dmitry Medvedev spoke of a return to the Cold War and President Vladimir Putin warned that sanctions "usually have a boomerang effect."

This article appeared on the German Web site spiegel.de at 5:11 p.m. Europe time on Monday---and it's the third story in a row from Roy Stephens.

Obama Seen Gaining on Putin As US Prods EU on Sanctions

President Barack Obama’s response to the downing of Malaysian Airlines Flight 17 over Ukraine reflects the consensus of U.S. officials that time, evidence, and world opinion are increasingly on his side as he takes on Russian President Vladimir Putin.

Secretary of State John Kerry cited the tragedy yesterday in an effort to prod Europeans into expanding sanctions against Russia, even at some peril to their own economies, in an effort to break Putin’s support for pro-Russian Ukrainian separatists.

“We are trying to encourage our European friends to realize this is a wake-up call,” Kerry said on “Fox News Sunday,” invoking a phrase used last week by Obama.

This is what passes as serious journalism in the U.S., U.K.---and Canada these days.  This is warmongering by insinuation, as there's not a shred of proof that Russia was either directly or indirectly involved. This Bloomberg offering appeared on their Web site at 11:25 Denver time yesterday---and once again my thanks go out to Roy Stephens for sending it.

EU Under Pressure to Broaden Russia Sanctions

The U.S. and the U.K. are putting pressure on the E.U. to impose tougher sanctions on Russia in the wake of the Malaysia Airlines disaster.

The calls come ahead of an E.U. foreign ministers’ meeting in Brussels on Tuesday (22 July) - the first opportunity for the bloc to discuss the incident, in which hundreds of Europeans, mostly Dutch people, lost their lives.

The U.S. and the U.K. have said pro-Russia rebels shot down the plane using a Russian-supplied missile.

U.S. secretary of state John Kerry added on Sunday on Fox News: “We are trying to encourage our European friends to realise this is a wake-up call, and hopefully they will also join us in these tougher sanctions”.

This article, filed from Brussels, was posted on the euobserver.com Internet site at 10:25 a.m. Europe time yesterday [5:25 a.m. EDT]---and it's another story courtesy of Roy Stephens.

Five Ukraine, Russia, and Flight MH17 Stories

1. "Putin: Task force at Malaysia MH17 crash site not enough, full-scale international team needed" - Russia Today  2. ‘Too good opportunity to miss’: MH17 blame game has political motives, may lead to warRussia Today - Op Edge  3. Ukrainian militia hand over MH17 flight recorders to Malaysia: Russia Today  4. Blogger finds missile believed to have shot down Flight MH17: The New York Post  5. Ukrainian Su-25 fighter detected in close approach to MH17 before crash: Russia Today

[The above stories are courtesy of Brad Robertson, Harry Grant---and Roy Stephens]

Note:  I had no luck getting on the Russia Today Web site early yesterday evening---and I had the same problem at times on the weekend.  I'm not sure what to make of it, but the Web site hasn't complained of a DoS attack, so I'm not sure what the reason might be.  Maybe it's just my ISP.

Guilt By Insinuation: How American Propaganda Works — Paul Craig Roberts

Why hasn’t Washington joined Russian President Putin in calling for an objective, non-politicized international investigation by experts of the case of the Malaysian jetliner?

The Russian government continues to release facts, including satellite photos showing the presence of Ukrainian Buk anti-aircraft missiles in locations from which the airliner could have been brought down by the missile system and documentation that a Ukrainian SU-25 fighter jet rapidly approached the Malaysian airliner prior to its downing. The head of the Operations Directorate of Russian military headquarters said at a Moscow press conference today (July 21) that the presence of the Ukrainian military jet is confirmed by the Rostov monitoring center.

The Russian Defense Ministry pointed out that at the moment of destruction of MH-17 an American satellite was flying over the area. The Russian government urges Washington to make available the photos and data captured by the satellite.

President Putin has repeatedly stressed that the investigation of MH-17 requires “a fully representative group of experts to be working at the site under the guidance of the International Civil Aviation Organization (ICAO).” Putin’s call for an independent expert examination by ICAO does not sound like a person with anything to hide.

Always controversial, but never too far off the mark in my opinion, this commentary by Paul was posted on his website on Monday sometime---and I thank Brad Robertson for being the first reader through the door with it yesterday.  It's definitely worth reading.

Russia Calls for Investigation of Foreign Mercenaries' Participation in Ukraine Hostilities

Russia’s Foreign Ministry on Monday demanded that Sweden, Finland, the Baltic states and France conduct a thorough investigation into alleged involvement of mercenaries from these countries in hostilities in eastern Ukraine.

“We demand the authorities of the above-mentioned countries to conduct a thorough investigation into these facts and condemn the participation of mercenaries in the hostilities in eastern Ukraine,” the ministry said in a statement.

The ministry said this while commenting on an article in Italy’s Il Giornale newspaper which was published over the weekend. The publication reported that mercenaries from ex-Soviet Baltic states, as well as Sweden, Finland and France fought in the Azov Battalion, a paramilitary group supporting the Kiev government troops and financed by Ukrainian oligarch and governor Ihor Kolomoiskyi.

This short RIA Novosti article, filed from Moscow, appeared on their Internet site at 8:57 p.m. on Monday evening Moscow time---and once again I thank Roy Stephens for finding it for us.

Neighborhood Ravaged on Deadliest Day So Far for Both Sides in Gaza

The mayhem began in the early hours of Sunday morning in Shejaiya, an eastern neighborhood of Gaza City, where Israeli forces battled with Hamas militants. Terrified civilians fled, sometimes past the bodies of those struck down in earlier artillery barrages. By dusk it was clear that Sunday was the deadliest single day for the Palestinians in the latest conflict and the deadliest for the Israeli military in years.

At least 60 Palestinians and 13 Israeli soldiers and officers were killed in Shejaiya alone, and the shattered neighborhood was quickly becoming a new symbol of the long-running Israeli-Palestinian conflict, underlining the rising cost of this newest Gaza war.

The death tolls and the withering assault on Shejaiya appeared to shake the international community, with world leaders continuing to carefully call for both sides to step back but with criticism of Israel rising. Within hours, President Obama had called the Israeli prime minister for the second time in three days, the United Nations Security Council had called an emergency session at the urging of the Palestinians, and Secretary General Ban Ki-moon had issued a statement calling the attack on Shejaiya “an atrocious action.”

This New York Times story, filed from Gaza City, was posted on their Web site on Sunday sometime---and it's the final offering of the day from Roy Stephens.

Renminbi Swap Deal Brings Swiss Hub Dream Closer

The Swiss National Bank (SNB) and China have signed a currency swap agreement in a bid to allow Beijing to expand its renminbi business in Switzerland. The finance ministry has hailed the accord as an important step.

The three-year deal, signed in Beijing on Monday, sets the conditions for the central banks of the two countries to purchase and re-purchase Chinese renminbi or Swiss francs up to CHF21 billion ($23.4 billion).

“The swap agreement is a key requisite for the development of a renminbi market in Switzerland,” the SNB said.

The SNB can also buy up to CHF2 billion worth of Chinese bonds, helping it diversify its foreign-exchange reserves which have swelled to almost CHF450 billion.

This article appeared on the swissinfor.ch website at 3:39 p.m. on Monday Europe time---and it's the second offering of the day from reader B.V.

Three King World News Blogs/Audio Interviews

1. John Embry: "This is the Most Dangerous Period in 69 Years"  2. James Turk: "Historic Shift in the Gold and Silver Markets"  3. Richard Russell: "War, $10,000 Gold---and Worldwide Collapse"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

"Dr. Doom" Faber: Stocks in a Bubble, Buy Gold

Marc Faber, publisher of the Gloom, Boom & Doom Report, talks about his view that stocks are in a "bubble" and not a good value. Faber speaks with Alix Steel on Bloomberg Television's "Surveillance"---and she goes out of her way to bait Marc at every opportunity, to the point of being obtuse.

This 5:25-minute video clip was posted on the Bloomberg Web site yesterday---and I thank Washington state reader S.A. for bringing it to our attention.

Gold Worth Millions Recovered from 1857 Shipwreck

Millions of dollars worth of gold has been recovered from a famous 19th-century shipwreck off South Carolina being fought over in court, the first inventories of the salvaged cargo show.

A federal judge in Virginia overseeing the recovery effort from the S.S. Central America released the mid-April-to-mid-June tallies late Wednesday, the Associated Press and The Columbus Dispatch reported Thursday. An updated list is likely soon.

AP based the estimated value of the gold coins and bars on treasure that was sold for $50 million to $60 million after the shipwreck was found in 1988 by Tommy Thompson of Columbus, Ohio, now a fugitive and the target of lawsuits from jilted investors who bankrolled his expedition.

This interesting article was posted on the usatoday.com Web site at 10:40 p.m. EDT last Thursday---and it's another offering from Elliot Simon.

Farmers Flock to Gold-Backed Loans in India

Farmers in Andhra Pradesh appear to have taken more loans by pledging gold bars and ornaments, than loans from banks for purely agricultural purposes. Some have even diverted the agri loan and bought gold.

According to official records, up to March 31, 2014, farmers have taken loans worth $5.7 billion (Rs 348 billion) by putting up gold as collateral, while $4.2 billion (Rs 257 billion) was taken as crop loans.

In their review meetings, bank officials have noted that a majority of the loans, particularly by pledging gold, were taken by farmers after January 2014. Officials said the reason for this could be attributed to the fact that the interest rate on loans meant for agriculture is far less, than other loans like personal loans, education loans, or home building loans, etc.

Another reason for the rising number of loans was Chief Minister N Chandrababu Naidu’s election promise of waiving off all farm loans after coming to power. This spurred farmers to go all out and take more loans, with some diverting loans, ostensibly taken for agriculture, to actually buy bullion.

This very interesting read, filed from Mumbai, was posted on the mineweb.com Internet site yesterday sometime---and it's the final contribution of the day from Elliot Simon.

Silver Imports Slump in India in June

India's silver imports have slid by 53.4% to $212.8 million in June from $457 million in June last year, according to the data released by the Union ministry of commerce.

In volume terms, imports fell from 579 tonnes last June to 323 tonnes this year.

In May last year, the Reserve Bank of India had directed banks not to import gold on a consignment basis, denting inflows in June. This year, with some easing in the number of entities allowed to import, gold imports have surged to $3.1 billion in June, from $1.9 billion a year earlier.

This is another story filed from Mumbai and posted on the mineweb.com Internet site yesterday.

Koos Jansen: Chinese Wholesale Gold Demand Year to Date Is Nearly 1,000 Tonnes

Chinese wholesale gold demand for the year through July 11 has reached 998 tonnes, gold researcher and GATA consultant Koos Jansen reported yesterday. While off-take from the Shanghai Gold Exchange for the week ending July 11 was somewhat diminished, Jansen writes, copper has been trading in backwardation in Shanghai for two weeks.

Jansen's commentary is posted at bullionstar.com Internet site---and I found this gold-related news item embedded in a GATA release yesterday.  It's worth reading.

New Gold Miner ETF Avoids Primary Investment in Barrick

It looks like you can now buy a gold-mining stock exchange-traded fund without putting the biggest part of your money in Barrick Gold, the biggest gold hedger and enabler of gold price suppression, the company that 11 years ago, by virtue of its enormous hedging, claimed to be the agent of central banks in the gold market.

The new ETF is the Sprott Gold Miners ETF, which began trading last week. According to its announcement, the ETF is based on the Sprott Zacks Gold Miners Index and "uses a transparent, rules-based methodology designed to identify 25 gold stocks that historically have the highest beta to the spot price of gold, with each stock's weighting in the index adjusted based on its quarterly revenue growth and long-term debt to equity."

The ETF received favorable notice from the Wall Street Cheat Sheet, which noted that "each quarter the fund is re-weighted. This means that the fund is going to take profits on its out-performers and reallocate this capital to the under-performers. The Market Vectors Gold Miner ETF does no such thing. In fact, when the fund sees capital inflows, it pumps more money into the top performers because these are the companies that become the highest-weighted stocks in the fund."

Of course GATA is no investment adviser, but nobody who wants a free and transparent market in the monetary metals can be enthusiastic about any investment that abets gold price suppression.

This commentary by Chris was posted on the gata.org Internet site just before midnight EDT last night.

Wary Investors Slow to Warm to Barrick Gold's Latest Shakeup

Worried they may be given the cold shoulder by an imperious leadership, shareholders of Barrick Gold Corp, the world's biggest gold miner, are taking a "show me" approach to the company's latest management shakeup.

Barrick said last week that Chief Executive Jamie Sokalsky will leave the company in September. He will be replaced by two co-presidents, a move that concentrates power in the hands of Executive Chairman John Thornton, a man handpicked for the job by Peter Munk, who founded the company and headed it his way for decades.

"The concern in this situation is that the person setting the strategy does not listen to the shareholders, who are the real owners of the company," said Chris Mancini, an analyst at Gabelli Gold Fund, which owns more than 2.4 million shares in Barrick according to Thomson Reuters data.

"There was a concern within the market that Mr. Munk was not listening to shareholders...And so if Mr. Thornton also doesn't listen to shareholders that could be a problem again."

The problem, dear reader, as you already know, is the fact that none of the precious metal mining companies gives a flying %$&@ about their shareholders.  They're quite happy to sell their products at, or below, the cost of production---and will never lift a finger to do what has to be done.  John Embry was quite right.  The mining companies are either ignorant, naïve---or complicit.  Barrick fits into the last category.  I found this story, filed from London this morning, on the mineweb.com Internet site just before I hit the send button on today's missive.

¤ The Funnies

¤ The Wrap

Leaving aside whether my contention that the technical funds are being snookered by their commercial counterparties is accurate, neither would anyone argue that technical funds, as their name implies, don’t follow technical fund signals or price changes. These funds buy on higher prices and sell on lower prices - period. Therefore, while it may appear that the technical funds bought on Thursday’s rally due to the airline disaster, the actual news had little to do with why the technical funds bought. The technical funds bought because prices moved higher, no less, no more. This may seem to be a distinction without a difference, but it is a key fact to be aware of.

Recently, I read a report which claimed these funds (which weren’t referred to as technical funds) bought so many gold and silver contracts because of what Fed Head Janet Yellen said. These funds couldn’t care less what anyone said as far as buying or selling gold and silver contracts; all that matters to them is price action. The downside to this is that if prices are controlled on the COMEX by the commercials (as I contend), the technical funds can be influenced to buy and sell at the commercials’ control. That’s why I get an uneasy feeling when the technical funds are overloaded on the long side (like now). - Silver analyst Ted Butler: 19 July 2014

With low volume, it wasn't much of a day in the precious metals on Monday---but JPMorgan et al. showed up as required and killed whatever rallies developed in any of the four precious metals.   Here are the six-month gold and silver charts.

There's not much to be read into either chart except to note what I pointed out a week ago---and that's the fact that the overbought situations in both gold and silver no longer exists, but the danger of an engineered price decline is ever present, especially in silver.

Today, at the 1:30 p.m. Comex close, is the cutoff for this Friday's Commitment of Traders Report. So if nothing goes bump in the night between now and then, we should get a pretty good read on the reporting week's price activity, including the remainder of the engineered price decline early last week, along with the price/volume data that accompanied the airplane crash in Ukraine last Thursday.  And after my last two 'guesses' as to what might be in the previous two Friday's COT Reports, I'm batting zero for two, so I'll just quietly wait for the numbers and report what they are.  However, I will set the tone by saying I'm not optimistic.

I started today's column mid-afternoon yesterday, so I'm miles ahead of where I normally am this time of evening, so as I report on what's happening in the Far East, it's shortly after 11 a.m on their Tuesday morning---and the London open is still about four hours away.  Both gold and silver began with the usual sharp sell-off at the New York open, but as I write this, both metals are back in the black, but by the tiniest of amounts---and both platinum and palladium are down a few bucks.  Volumes in both gold and silver are virtually nonexistent--- well under 4,000 contracts in gold, and less that 1,300 in silver.  The dollar index is unchanged from its New York close on Monday.

Looking at the gold price these days, it's sure hard to believe that there is so much economic and monetary strife going on out there---and the geopolitical icing on the cake is the Ukraine/Russia situation---along with the Israel/Palestine military action currently underway.  And I believe it was just last week the China told the U.S. to keep its nose out the South China Sea as well.

I suspect that commodity prices in general, along with the four precious metals in particular, have become crucial elements in the Pentagon's "Full Spectrum Dominance" doctrine that F. William Engdahl wrote about back in October of 2009---and if you haven't read the book, you should!  JPMorgan et al. are just doing the dirty work in the Comex futures market on their behalf---and it's not just American bullion banks, either.

So, where do we go in price from here?  Could we go higher from here, as the RSI traces shows that we're not 'overbought' in any of the four precious metals at the moment.  Sure, but as I mentioned a few paragraphs ago, we're almost at a five-year high short position in silver for the technical funds---and unless the commercial traders get over run by some black swan event, the usual engineered price decline outcome is a foregone conclusion.  And if that turns out to be the case, only the timing remains unknown.  Of course gold will also meet the same fate at the same time.

We got a taste of that on Monday and Tuesday of last week.  But why "da boyz" didn't press the issue on Wednesday is still a mystery---and then there was the airplane incident in Ukraine on Thursday.  So we await developments.

And as I send this off to Stowe, Vermont at 4:45 a.m. EDT, all four precious metals got sold down since late morning trading in the Far East---and are now a bit off their current low ticks of the day now that London has been open 90 minutes, but none are back to anywhere near their Monday closing prices in New York yesterday afternoon.  Gold and silver volumes are up substantially from many hours ago, but still on the lighter side.  The dollar index has been crawling slowly higher since noon in Hong Kong---and is currently up 11 basis points on the day.

Absolutely nothing will surprise me for the rest of the Tuesday trading session, nor should it you---and I'll see you here tomorrow.

Tue, 22 Jul 2014 09:04:00 +0000
<![CDATA[Russia’s Central Bank Purchases 500,000 Ounces of Gold in June]]> http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchases-500000-ounces-of-gold-in-june/ http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchases-500000-ounces-of-gold-in-june/#When:10:03:00Z "When it does, it will be ugly"

¤ Yesterday In Gold & Silver

The gold price showed signs of going parabolic in what had all the hallmarks of a 'no ask' market shortly after trading began at 6 p.m. EDT in New York on Thursday evening.  But, as I mentioned in The Wrap yesterday, "da boyz" were at the ready---and within a couple of hours, the gold price was in full retreat.  The low tick came about 9:15 a.m. in New York yesterday morning---and from there the price chopped quietly higher until shortly before 2 p.m. EDT.  From there it traded basically flat into the 5:15 p.m. close.

The high and low tick were recorded by the CME as $1,325.50 and $1,305.00 in the August contract.

Gold closed in New York on Friday at $1,310.90 spot, down $7.30 from Thursday's close.  Volume, net of roll-overs, was around 98,000 contracts.

The price pattern in silver was similar, except the sell-off after the price spike in New York on Thursday evening was much more intense---and the spike low didn't occur until around 11:40 a.m. EDT in New York trading.  The price bounced back quickly, but then traded quietly higher into the close.  JPMorgan et al obviously wasted little time in getting silver back below the $21 spot price mark.

The high and low tick were recorded as $21.315 and $20.78 in the September contract.

Silver closed in New York yesterday at $20.89 spot, down 27 cents from Thursday's close.  Volume, net of July and August, was 36,000 contracts.

Platinum spiked up as well, but also got sold down until about noon in Zurich.  The subsequent rally ended/got capped shortly before 9 a.m. in New York---and from there it got sold down to its low of that day, around 1 p.m. EDT.  From there it rallied a few dollars into the close.  Platinum closed down 13 bucks on the day.

The palladium price chart was a mini version of the platinum price chart.  Palladium closed down only 5 bucks from Thursday's close.

The dollar index closed at 80.53 late on Thursday afternoon in New York and, like Thursday, didn't do much during its respective trading session.  It chopped sideways in a 2 basis point range until around 9:40 a.m. EDT, when a spike took it up to 80.68---but by 2 p.m. it was back to unchanged on the day---and that's where it closed, at 80.53.  That's the third day in a row that the dollar index has closed at that value.  Here's the 3-day chart so you can see it for yourself.

The gold stocks gapped down a bit less than 2 percent at the open---and then chopped sideways until the 1:30 p.m. Comex close.  A rally commenced at that point which lasted right into the close, as the HUI cut its losses on the day to only 0.30%.

It was more or less the same chart pattern in the silver stocks, but because "da boyz" were more aggressive with silver to the downside, the rally off their 1:30 p.m. lows was only able to get Nick Laird's Intraday Silver Sentiment Index back up to a loss of 0.70%.

The CME Daily Delivery Report showed that 25 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.

I was happy to see that after two days of withdrawals from GLD, there was an increase yesterday---as an authorized participant added 57,741 troy ounces.  And as of 8:16 p.m. EDT yesterday evening, there were no reported changes in SLV.  To tell you the truth, dear reader, I'm not expecting to see any deposits into SLV for a considerable period of time, as the authorized participants are still attempting to cover their short positions in lieu of metal they never deposited during the June rally.

The U.S. Mint had a tiny sales report yesterday as 1,000 troy ounces of gold eagles were sold---and 30,000 silver eagles.  Month to date the mint has sold 24,500 troy ounces of gold eagles---4,000 one-ounce 24K gold buffaloes---and a pitiful 1,025,000 silver eagles.

Ted Butler nailed this a month ago, as it's obvious to anyone who wishes to objectively examine the U.S. Mint data, that silver eagles sales have crashed by at least two thirds in July, as the 'big buyer' that has been sucking up silver eagles [and Canada's silver maple leaf] for the last several years, has obviously stepped away from the table for the moment.

Whether this is going to turn into a permanent withdrawal remains to be seen---and because the Royal Canadian Mint only provides quarterly sales reports for their bullion products---we won't know what's going on there for about another three months.  But the crashing silver eagles sales don't bode well for silver maple leaf sales going forward, either.  It's certainly my suspicion that it's the same buyer at the trough in both.

Over at the Comex-approved depositories on Thursday, there was a decent amount of gold received---103,561 troy ounces to be exact.  Virtually all of it went into the Manfra, Tordella & Brookes, Inc. depository.  Nothing was reported shipped out.  The link to that activity is here.

It was another big day in silver again, as nothing was reported received, but 999,492 troy ounces were shipped out the door.  All the activity was at the CNT Depository---and HSBC USA.  The link to that action is here.

Since the 20th of the July falls on a weekend, the always punctual and predictable Central Bank of the Russia Federation updated their website with June's data on Friday.  Included in that update was the amount of gold bullion they purchased for their reserves that month.  It turned out to be a chunky 500,000 troy ounces.

In the last three months, the central bank has purchased 1,500,000 troy ounces of gold, which is pretty close to 100 percent of their own production.  If you look at Nick Laird's excellent chart above, you'll note that Russia has stepped up its gold purchases in the last three months.

One wonders if that has anything to do with the Crimea/Ukraine situation?  Now if they could be convinced to buy all their silver production as well, then the fox would certainly be amongst the pigeons, as Russia's 1,700 tonne yearly production represents a bit over 6.5 percent of yearly world silver production, which is a material amount.

Well, the Commitment of Traders Report for positions held at the close of Comex trading on Tuesday, July 15 was certainly not what I had hoped for, at least in silver.

The Commercial net short position in silver increased again, this time by 678 contracts, or 3.4 million ounces.  The Commercial net short position now sits at 293.5 million troy ounces.  The Big 4 trader's short holdings [read JPMorgan] increased by around 1,200 contracts---and Ted Butler pegs JPMorgan's short-side corner in the Comex silver market at about 19,000 contracts, or 95 million troy ounces.  The '5 through 8' largest short holders covered about 3,000 contracts of their short position during the reporting week.

In gold, the Commercial net short position actually improved by 9,097 contracts, or 909,700 troy ounces.  The Commercial net short position in gold has obviously declined by that amount---and is down to 15.69 million troy ounces, which is still a horrendously large number.

The 8 largest short holders added 1,000 contracts to their short positions---and Ted says that JPMorgan sold another 3,000 contracts during the reporting week---and their long-side corner in the Comex gold market continues to shrink, and is now down to 2.2 million troy ounces, or 22,000 Comex contracts.

Ted said---and I agree---that probably not all of the decline on Monday and Tuesday was reported to the CFTC in a timely manner, so hopefully there's some spill-over into next Friday's Report.  If that doesn't prove to be the case however, it's a given that next Friday's COT Report will be even uglier than even I imagined it might be, because in my comments in The Wrap yesterday, I stated that JPMorgan et al threw everything they had at that spike in gold and silver prices in New York Thursday morning.  That data alone should be enough to curl your hair.

Of course we have two more reporting days between now and the Tuesday cut-off---and anything can happen between now and then---but as it stands at the moment, the next COT will be pretty horrific, because almost the entire technical fund short positions in both metals are still in place, plus there will be more to add.  This does not bode well for gold and silver prices somewhere down the road.

Here's Nick Laird's "Days of World Production to Cover Comex Short Positions"---and it looks just as grotesque as it always does in all four precious metals.

I have a decent number of stories for you today---and I hope you can find the time in what's left of your weekend to read the ones you like.

¤ Critical Reads

Fed Inflation Hawks Are Pressing for Rate Hikes: CNN Money

A trio of inflation hawks at the Federal Reserve — Richard Fisher, Esther George and Charles Plosser — believe it's about time to take the punch bowl away.

The three regional Fed bank presidents are on a mission to urge their colleagues to take a tougher monetary policy stance, CNNMoney reported.

"Not only do they want the Fed to stop buying bonds (there's already a plan in place to eliminate those as early as October)—they also want the central bank to raise its short-term interest rate sooner than investors are expecting," CNNMoney stated.

This story appeared on the moneynews.com Internet site at 7:21 a.m. EDT Friday morning---and I thank West Virginia reader Elliot Simon for today's first story.

Jim Grant: Watch Out For a 'Thunderclap' in the Economy

Grant’s Interest Rate Observer founder Jim Grant believes the Fed Reserve is "constitutionally behind the curve" and that a thunderclap of unexpected problems could strike the economy as a result.

Grant told Fox Business Network that the uncharted territory the Fed has been in with its vast monetary stimulus means no one can predict the eventual outcome.

“The Fed is in the business of reacting to things instead of acting on things,” he said.

This is another story from the moneynews.com Internet site yesterday morning---and it's also courtesy of Elliot Simon.

Exclusive: SEC targets 10 firms in high frequency trading probe - SEC document

The U.S. Securities and Exchange Commission has been seeking information on 10 registered broker dealers as part of an ongoing investigation into high-frequency trading strategies, according to an internal SEC document reviewed by Reuters.

The regulator told its staff in late March that it was interested in seeing any tips, complaints, or referrals that they receive concerning the brokers and high frequency trading.

The firms listed are Allston Trading LLC; Hudson River Trading LLC; Jump Trading LLC; Latour Trading LLC, which is an affiliate of Tower Trading; Merrill Lynch, Pierce, Fenner & Smith, owned by Bank of America Group; Octeg LLC, which has been merged into a unit of KCG Holdings Inc; Tradebot Systems Inc; Two Sigma Investments LLC; Two Sigma Securities LLC; and Virtu Financial.

Let's see if anything positive comes out of this.  If it accidentally does, it will certainly take a while.  This Reuters story, filed from New York, showed up on their Internet site at 5:19 p.m. EDT on Friday afternoon---and it's the third contribution of the day from Elliot Simon.

Policing Wall Street: David Nelson, Belpointe Asset Management

Just take a look at BNP Paribas, that case. When you read the indictment it reads like treason. And certainly, management knew what they were doing was a criminal act, yet there's no prosecution of those responsible, and that's what justice is supposed to do---it's supposed to root out criminal activity, protect the public and also bring to justice those responsible.  Where are the perp walks---and why has nobody gone to jail?

This very interesting 2:36 minute video interview was posted on the CNBC website at 2:50 p.m. EDT on Wednesday---and it's worth watching.  I thank reader Joe Kahan for sending it our way.

Nanex: 15 July 2014---Perfect Pilfering

A detailed exposé on how the market is rigged from a data-centric approach

We received trade execution reports from an active trader who wanted to know why his large orders almost never completely filled, even when the amount of stock advertised exceeded the number of shares wanted. For example, if 25,000 shares were at the best offer, and he sent in a limit order at the best offer price for 20,000 shares, the trade would, more likely than not, come back partially filled. In some cases, more than half of the amount of stock advertised (quoted) would disappear immediately before his order arrived at the exchange. This was the case, even in deeply liquid stocks such as Ford Motor Co (symbol F, market cap: $70 Billion, NYSE DMM is Barclays). The trader sent us his trade execution reports, and we matched up his trades with our detailed consolidated quote and trade data to discover that the mechanism described in Michael Lewis's "Flash Boys" was alive and well on Wall Street.

"This is just beautifully done. clean, simple, irrefutable. I hope it gets read far and wide." -- Michael Lewis after reading this article.

This no-punches-pulled essay will be way over most reader's heads---and most of it was way over mine---but it's not the parts that you don't understand that will bother you.  This is definitely worth struggling through---as it's certainly no puff piece.  It was posted on the nanex.net website on Tuesday---and my thanks go out to reader "Fazl" for bringing it to our attention.

Up next: A double whammy of high unemployment and inflation

History has taught printing too much money usually fires up inflation, and once ignited, inflation is darn painful to douse. That has already occurred in prices for assets like some social media stocks, commercial real estate and farm land, and now it is spreading more broadly. Since March, consumer price inflation has accelerated and is now about 4 percent.

Fed Chairwoman Yellen in her recent testimony expressed little appreciation for the nagging structural problems causing unemployment and denied inflation is much of a problem at all.

Americans should expect the Fed to flail about, recklessly printing money and brace for a bout with stagflation -- high unemployment, stagnant wages and rising prices.

This opinion piece by Peter Morici showed up on the upi.com Internet site at 9:26 a.m. EDT on Thursday---and I thank Roy Stephens for his first contribution of the day.

Big jump in number of millennials living with parents reported

More Americans than ever live in multi-generational households, and the number of millennials who live with their parents is rising sharply, according to a study released Thursday.

A record 57 million Americans, or 18.1% of the population, lived in multi-generational arrangements in 2012, according to the Pew Research Center. That's more than double the 28 million people who lived in such households in 1980, the center said.

A multi-generational family is defined as one with two or more generations of adults living together.

The sluggish job market and other factors have propelled the rise in millennials living in their childhood bedrooms.

This short article appeared on the latimes.com Internet site on Thursday morning PDT---and it's something that I found in yesterday's edition of the King Report.

Eric Sprott: Markets at a Glance: The Ongoing Rot in the Economy

While most have been conveniently blaming the tepid first quarter -2.9% GDP growth figure on the weather, we believe that it is just another symptom of a much deeper malaise. As we have argued many times before (see, for example, the March 2014 Markets at a Glance), the U.S. economy has been on life support, graciously provided by Central Planners. However hard they try, they will soon realize that no amount of money printing can cleanse the rot of the U.S. economy.

Most tellingly, in a recent interview with Reuters, Bill Simon, Wal-Mart’s Chief Executive Officer for the U.S., said that “We’ve reached a point where it’s not getting any better but it’s not getting any worse – at least for the middle (class) and down.”

Indeed, if one looks past headline figures, things are not really getting better. As shown in Figure 1, real disposable income per capita in the U.S. has increased only modestly since the Great Recession. However, all of this increase is due to Government Transfers, not from an improvement in the real economy. If we exclude those transfers from the numbers, disposable income per capita is actually lower than it was at the end of 2005 and has been painfully flat since 2011. Also, those numbers assume that the headline Consumer Price Index (CPI) accurately represents people’s purchasing power.

In this Markets at a Glance, we investigate the U.S. consumer and show that for a large portion of the population, things are not anywhere close to being better, in fact they are worse than before the recession.

This Markets at a Glance by Eric certainly falls into the must read category.  It was posted on the sprott.com Internet site late yesterday morning EDT.

Doug Noland: Druckenmiller the Statesman

And while on the subject of a “natural rate,” I think it’s worth pondering this concept in terms of today’s extraordinarily low Treasury and corporate yields. I believe central bank policies – especially “open-ended” QE3 – have comprehensively distorted asset markets. First, the unprecedented purchases of Treasuries and MBS created liquidity/purchasing power that inflated securities prices generally. Secondly, this liquidity onslaught incited dangerous self-reinforcing excess throughout corporate debt and equities markets. And a runaway corporate securities Bubble has of late boosted the safe haven appeal of Treasuries, with sinking yields further stoking the historic Bubble throughout virtually all asset markets.

Importantly, the willingness to adopt an open-ended approach to the third round of QE has been viewed throughout the marketplace as the Fed (in concert with the global central bank community) having adopted a regime of boundless securities market support. This has profoundly affected market perceptions, hence securities pricing, with the greatest impact upon the traditionally higher-risk segments of the corporate and “structured finance” securities markets.

Stated somewhat differently, the collapse in risk premiums – risk asset price inflation – is this inflationary cycle’s greatest market distortion. Indeed, I would strongly argue that unprecedented liquidity injections coupled with implied (ok, explicit) central bank market backstops has inflated the biggest Bubble yet. Any semblance of a “neutral rate” – or a stable securities market price “equilibrium” – would require that central banks extricate themselves from the securities market liquidity and backstopping business. Good luck with that.

I found Doug's weekly Credit Bubble Bulletin posted on the prudentbear.com Internet site yesterday evening.

Rickards: Stock market reality check

Listening to mainstream market commentary on television and reading the financial press leaves one with the impression that the economic recovery is gaining strength and that stock market indices, at or near all-time highs, will go higher still.

The litany of market happy talk is impressive. The unemployment rate has dropped to 6.1%, down about 4 percentage points from its peak, and is expected to go lower in the months ahead. The economy created about 230,000 jobs per month in the first half of 2014, which brings the increase in jobs to nine million since the economic recovery began in mid-2009. Interest rates remain low, which supports high asset valuations in stocks and housing. Inflation is tame and expectations about future inflation are well anchored. To hear the stock market bulls tell the story, all is right with the world.

But all is not right. In fact, the fundamentals of the U.S. economy are in awful condition and are getting worse. Almost everything about the happy talk story is superficial, and falls apart under scrutiny. There is an alternative narrative of bad news that is seldom discussed on mainstream business channels but is well known to analysts. When these adverse trends are taken into account one conclusion in inescapable. The stock market and economic fundamentals are on a collision course. One or the other will have to swerve. Either the economy will have to improve rapidly and unexpectedly and reverse its fundamental weakness, or inflated stock values are heading for a precipitous fall. The evidence suggests that the latter is more likely.

This commentary by Jim Rickards appeared on the Darien Times website yesterday sometime and, as usual, it's courtesy of Harold Jacobsen.  It's definitely worth reading.

West tightens noose on Russia's energy sector as geopolitical crisis deepens

The apparent shooting down of a Malaysian Airlines jet over eastern Ukraine with 295 people on board is a dramatic turn in the region’s simmering crisis.

Any proof that the passenger aircraft was blown out of the sky at 32,000 feet by a Russian fighter jet by mistake or by Russian missiles supplied to separatist rebels in the Donbass region may have huge political consequences, risking Cold War sanctions of such severity that Russia would be shut out of the global financial system.

Both Russia and Ukraine deny responsibility.

The incident comes a day after sweeping U.S. sanctions against Russia’s top oil producer and key energy companies had already shattered the illusory summer calm on Moscow’s markets, raising fears of an investment freeze and a protracted crisis that could last for years.

Here's Ambrose Evans-Pritchard's assessment of the situation as it stood on Thursday evening BST.  It's not exactly friendly to Russia, which should come as no surprise to anyone.  It was posted on The Telegraphs' website---and I thank Roy Stephens for his second contribution to today's column.

Tragedy on Top of Crisis May Strengthen Stand Against Russia in U.S. and Europe

The downing of a commercial Boeing 777 in the Ukrainian war zone on Thursday inflamed an already volatile international crisis and may bolster President Obama’s efforts to isolate Russia if evidence points to complicity by Moscow’s separatist allies.

Mr. Obama was careful not to offer any judgments in his only public comments on the crash. But Vice President Joseph R. Biden Jr. said bluntly that the aircraft with 298 people on board was “blown out of the sky,” and the White House late Thursday issued a statement linking the crash to a crisis “fueled by Russian support for the separatists.”

If investigators are able to confirm suspicions that the Malaysia Airlines jet was brought down by a surface-to-air missile fired by pro-Russian rebels who mistook it for a military aircraft, American officials expressed hope that the tragedy will underscore their case that Moscow has been violating Ukrainian sovereignty. While Mr. Obama imposed new sanctions on Russia just a day before, Europeans refused to adopt measures as stringent out of fear of jeopardizing their own economic ties.

This article on the same issue appeared on The New York Times website on Thursday sometime---and it's also courtesy of Roy Stephens.

Questions over why Malaysian plane flew over Ukrainian war zone

As the world tries to cope with the tragic loss of almost 300 people in the apparent downing of a Malaysian Airlines plane over Ukraine, questions have arisen over why the civil aircraft was directed over a war zone.

MH17, carrying passengers from Amsterdam to Kuala Lumpur, crashed on Thursday in Ukraine’s Donetsk Region, the scene of intensive battles between Ukrainian troops and local militias defying Kiev’s rule. In the last several days the militias scored a number of successes, including the reported downing of three Ukrainian military aircraft.

Despite the violence on the ground and apparent danger to aircraft, the Malaysian airliner was directed to pass right over the war zone and was apparently shot down by a sophisticated anti-aircraft missile fired by a Buk-type launcher. No one has claimed responsibility for the act, which resulted in the largest loss of life in the Ukrainian armed conflict so far.

“There are still question to answer like why this plane was flying over that area, whether it was on the correct flight path. It was flying over a war zone where missiles have been fired. It’s a war zone, so why was it flying over there?” blogger and writer Neil Clark asked in an interview with RT.

This news item appeared on the Russia Today website at 10:48 a.m. Moscow time Friday morning, which was 2:48 a.m. in New York.  Once again I thank Roy Stephens for sharing it with us.

Ukrainian Buk battery radar was operational when Malaysian plane downed - Moscow

On Thursday, when a Malaysian Airlines plane was apparently shot down over Ukraine, a Ukrainian Buk anti-aircraft missile battery was operational in the region, the Russian Defense Ministry said, contradicting Kiev’s statements.

The battery was deployed at a site from which it could have fired a missile at the airliner, the ministry said in a statement. It said radiation from the battery’s radar was detected by the Russian military.

“The Russian equipment detected throughout July 17 the activity of a Kupol radar, deployed as part of a Buk-M1 battery near Styla [a village some 30km south of Donetsk],” the ministry said in a statement.

The ministry said the radar could be providing tracking information to another battery deployed in the region, which was at a firing distance from the plane’s flight path.

This news story is, once again, from the Russia Today Internet site.  It was posted there at 9:31 a.m. Moscow time yesterday morning---and I thank Roy Stephens for sending it.

Lavrov: Russia won’t take control of Malaysian plane’s black boxes

Moscow has no plans to seize the flight recorders from the Malaysia Airlines flight MH17, which crashed in eastern Ukraine on Thursday, Sergey Lavrov, Russia’s foreign minister, told Rossiya 24 channel.

The seizure of flight records would violate international law as it’s up to relevant international agencies to investigate of the incident, he explained.

The analysis of the flight recorders “is the responsibility of ICAO [International Civil Aviation Organization]; it’s the responsibility of those states which have the most direct connection to this tragedy – the Netherlands, Malaysia and the states whose citizens were on board, and of course Ukraine,” Lavrov said.

The minister also called on the U.N. Security Council to urgently launch an open and impartial investigation into the plane crash in Ukraine.

This article is also from the Russia Today website.  This one was posted there at 11:46 a.m. Moscow time on Friday---and it's also courtesy of Roy Stephens.

Moscow calls for International probe into Malaysia MH17 flight crash – Russia’s U.N. envoy

Russia urges an impartial and open investigation into the Malaysian Boeing 777 crash in Ukraine and an international commission to be set up. Addressing the U.N., Russia’s envoy Churkin said a probe into Ukraine's aviation authorities is also necessary.

“As we see it, it is necessary to investigate not only the crash itself but also how Ukraine's aviation authorities performed their professional duties,” Russia's Ambassador to the UN Vitaly Churkin said as he questioned why a passenger flight was allowed over an area of armed conflict.

Malaysia Airline said in a statement on Friday that Ukraine’s traffic controllers ordered the Boeing-777 to lower by 500 meters when the aircraft entered Ukrainian airspace. It added that pilots were supposed to fly at 35,000 ft (10,660 meters) throughout Ukrainian airspace, but air traffic control on the ground instructed MH17 to fly at 33,000 ft (10,058 meters).

Russia’s envoy said ensuring the security of civilian aviation in a state's airspace is the responsibility of the state.

This is another Russia Today news item.  It appeared on their Internet site at 8:19 p.m. Moscow time on Friday evening---shortly after noon in New York.  The RT stories from Roy just keep on coming.

Malaysia MH17 crash: 10 questions Russia wants Ukraine to answer

Some Western states and Kiev rushed to find Russian involvement in the MH17 crash having no evidence to back their claims, Russia’s Deputy Defense Minister told RT. He invited Ukraine to answer 10 questions to prove their commitment to an impartial probe.

Speaking to RT, Russia’s Deputy Defense Minister Anatoly Antonov has criticized Western countries for jumping to conclusions just “24 hours after the crash” while there is no evidence.

“They try to show to the whole world that we are responsible for the crash. It is very strange that without any evidence my colleagues from western media would like to find somebody who is responsible for the crash,” Antonov said. “It seems to me that this is part of information warfare which has been started against the Russian Federation and armed forces.”

“As for me, I don’t want to use this opportunity to blame anybody. I would just like to raise few questions for my colleagues from the armed forces of Ukraine,” Antonov said. “I hope they try to answer the questions, it will be a good opportunity for us to realize where we are, whether there is a possibility for us to restart cooperation and to find who is really responsible for the tragedy.”

This article was posted on the Russia Today website at 8:59 p.m. on Friday evening Moscow time---and it's also courtesy of Roy Stephens.

Sanctions and Airliners — Paul Craig Roberts

NOTE: Photos are now available of the wreckage from the Malaysian airliner crash. Notice the extensive debris and the large section of fuselage. You are observing remains of an airliner that was hit with a missile at 33,000 feet and fell to impact land. Remember, no such debris was present at the site where the airliner is alleged to have hit the Pentagon and at the alleged crash site in Pennsylvania of the 4th 9/11 hijacked airliner. Give that some thought. No doubt but that the 9/11 Commission will conclude that only Malaysian airliners leave debris.

The unilateral U.S. sanctions announced by Obama on July 16 blocking Russian weapons and energy companies access to U.S. bank loans demonstrate Washington’s impotence. The rest of the world, including America’s two largest business organizations, turned their backs on Obama. The U.S. Chamber of Commerce and the National Association of Manufacturers placed ads in the New York Times, Wall Street Journal, and Washington Post protesting US sanctions. NAM said that the manufacturer’s association is “disappointed that the U.S. is extending sanctions in increasingly unilateral ways that will undermine U.S. commercial engagement.” Bloomberg reported that “meeting in Brussels, leaders of the European Union refused to match the U.S. measures.”

In attempting to isolate Russia, the White House Fool has isolated Washington.

The sanctions will have no effect on the Russian companies. The Russian companies can get more bank loans than they need from China, or from France and Germany.

The commentary by Paul was posted on this Internet site on Thursday---and falls into the  must read category, especially for all serious students of the New Great Game.  It's also courtesy of Roy Stephens.

15 civilians killed and 53 injured in Lugansk shelling

At least 15 have been killed and 53 wounded as the city of Lugansk has come under shelling attack. The city’s center and civilian areas have been targeted leaving areas in ruins.

"Today intense bombardment of Lugansk has continued. Shells are falling in almost all districts of the city,” the administration said in a statement.

The Lisichansk Oil Refinery, property of the Russian oil company Rosneft - recently sanctioned by the U.S. - has also been attacked and set on fire.

This is another story from the Russia Today Internet site.  It was filed there at 11:10 a.m. Moscow time on their Friday morning---and my thanks go out to Roy Stephens again.

Berlusconi cleared of underage sex charges and abuse of office for cover-up

The flagging career of Italy's former prime minister, Silvio Berlusconi, was given a dramatic boost on Friday after a court in Milan cleared him of both charges in a lurid trial that cemented his international reputation as an ageing playboy politician and made "bunga bunga" a household term.

More than 12 months after he was sentenced to seven years in prison and slapped with a lifetime ban on holding public office, Berlusconi was acquitted on appeal of paying for sex with an underage prostitute and abusing his office to cover it up.

Prosecutors will be able to launch another appeal against that ruling, but the judgment nonetheless marks a boost for the 77-year-old, who denied the charges and insists he is the victim of a personal vendetta by left wing Italian judges.

This story appeared on theguardian.com Internet site at 5:59 p.m. BST on Friday---and it's the final offering of the day from Roy Stephens.

Football superstars donate their World Cup prize money

The World Cup may be over for Germany and Argentina, but players on both teams are putting their cash winnings to good use by donating them to worthy causes.

According to the U.K.-based Express, 25-year-old German football star Mesut Ozil has donated his World Cup prize money – totaling more than $400,000 for winning the tournament – to various charity projects in Brazil. The hefty sum is reportedly going to fund surgeries for 23 Brazilian children.

Ozil made the announcement official on his Facebook page, where he wrote the following:

“Dear fans, prior to the #WorldCup I supported the surgery of eleven sick children. Since the victory of the #WorldCup is not only due to eleven players but to our whole team, I will now raise the number to 23. This is my personal thank-you for the hospitality of the people of Brazil.”

This heart-warming article appeared on the Russia Today website at 2:34 a.m. Moscow time on their Friday morning---and I thank Harry Grant for sending it our way.

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How far is Saudi Arabia complicit in the Isis takeover of much of northern Iraq, and is it stoking an escalating Sunni-Shia conflict across the Islamic world? Some time before 9/11, Prince Bandar bin Sultan, once the powerful Saudi ambassador in Washington and head of Saudi intelligence until a few months ago, had a revealing and ominous conversation with the head of the British Secret Intelligence Service, MI6, Sir Richard Dearlove. Prince Bandar told him: "The time is not far off in the Middle East, Richard, when it will be literally 'God help the Shia'. More than a billion Sunnis have simply had enough of them."

The fatal moment predicted by Prince Bandar may now have come for many Shia, with Saudi Arabia playing an important role in bringing it about by supporting the anti-Shia jihad in Iraq and Syria. Since the capture of Mosul by the Islamic State of Iraq and the Levant (Isis) on 10 June, Shia women and children have been killed in villages south of Kirkuk, and Shia air force cadets machine-gunned and buried in mass graves near Tikrit.

In Mosul, Shia shrines and mosques have been blown up, and in the nearby Shia Turkoman city of Tal Afar 4,000 houses have been taken over by Isis fighters as "spoils of war". Simply to be identified as Shia or a related sect, such as the Alawites, in Sunni rebel-held parts of Iraq and Syria today, has become as dangerous as being a Jew was in Nazi-controlled parts of Europe in 1940.

This longish commentary by Patrick Cockburn showed up on the independent.co.uk Internet site last Sunday BST---and for length and content reasons, had to wait for today's column.  I thank South African reader B.V. for sending it our way.

The ultimate goal of the NSA is total population control

William Binney is one of the highest-level whistleblowers to ever emerge from the NSA. He was a leading code-breaker against the Soviet Union during the Cold War but resigned soon after September 11, disgusted by Washington’s move towards mass surveillance.

On 5 July he spoke at a conference in London organised by the Centre for Investigative Journalism and revealed the extent of the surveillance programs unleashed by the Bush and Obama administrations.

“At least 80% of fibre-optic cables globally go via the US”, Binney said. “This is no accident and allows the US to view all communication coming in. At least 80% of all audio calls, not just metadata, are recorded and stored in the US. The NSA lies about what it stores.”

The NSA will soon be able to collect 966 exabytes a year, the total of internet traffic annually. Former Google head Eric Schmidt once argued that the entire amount of knowledge from the beginning of humankind until 2003 amount to only five exabytes.

This chilling article put in an appearance on theguardian.com Internet site on Friday, July 11---and I thank reader B.V. for sending it to me last Saturday.  For content reasons as well, it had to wait until this Saturday's column.

Three King World News Blogs

1. Nigel Farage: "Terrifying Banking Crisis is About to Accelerate"  2. Gerald Celente: "The World is Now Headed into a Major War"  3. John Ing: "Legend Says China Will Buy 100 Tons of Gold Each Month"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Alasdair Macleod: BIS seems to be edging away from dollar and toward gold

A recent interview with the general manager of the Bank for International Settlements, Jaime Caruana, suggests that the bank is edging away from Keynesianism, monetarism, and the U.S. dollar and becoming more partial to gold as the base of the international monetary order, GoldMoney research director Alasdair Macleod writes today.

"Even though central bankers in the political firing line only know expansionary monetary policies," Macleod writes, "it is clear that influential opinion in many quarters is building against them. It is too early to talk of a new monetary regime, but not too early to talk of the current one's demise."

Macleod's commentary is titled "Monetary Discord" and it was posted at the goldmoney.com Internet site yesterday---and I found 'all of the above' over at the gata.org Internet site yesterday.

Options expiration will help gold more than international turmoil, Sprott says

Sprott Asset Management CEO Eric Sprott, interviewed by Sprott Money News for their weekly market roundup, says he doesn't expect international turmoil to do much for gold, but economies are not recovering and he expects gold to do well after the price suppression connected to this month's futures options expiration.

The interview runs for 8:40 minutes---and can be heard at the sprottmoney.com Internet site.  I thank Chris Powell for wordsmithing the above paragraph of introduction.

SNL points to drastic fall in new gold discoveries

SNL Metals & Mining is nowadays one of the sector’s leading suppliers of statistical information having, in recent years, absorbed the highly respected Metals Economics Group, based in Halifax, Nova Scotia, and Australian headquartered Intierra, which itself had absorbed Sweden’s Raw Materials Group. Its latest major report is titled Strategies for Gold Reserves Replacement and points to some hugely significant data which will affect global newly mined gold production way into the future.

The report points out that over the past 24 years mining companies have discovered some 1.66 billion ounces of gold in 217 major discoveries, BUT – and it’s a big BUT – while this may sound a huge amount, over the same period the industry has actually produced 1.84 billion ounces of gold, so discoveries have not been keeping pace with production. But the report goes much further in showing that the number of significant discoveries (defined as deposits with a minimum of 2 million ounces of contained gold) is diminishing and this diminishing trend seems to be accelerating. In the 1990s some 124 deposits containing 1.1 billion ounces of gold were discovered while since the year 2000 this has fallen to only 605 million ounces in 93 such discovered deposits. And most recently significant new discoveries appear to have slowed to a trickle.

No surprises here for me.  This must read commentary by Lawrence Williams was posted on the mineweb.com Internet site yesterday.

¤ The Funnies

¤ The Wrap

The herd instinct among forecasters makes sheep look like independent thinkers.” - Edgar R. Fiedler, author of The Three Rs of Economic Forecasting—Irrational, Irrelevant and Irreverent

Today's pop 'blast from the past' is by a Canadian rock group that needs no introduction, as their name is known world-wide.  This hit dates from the early 1970s---and has an unusual story behind it.  The link is here.

Today's classical 'blast from the past' is an old chestnut from Peter I. Tchaikovsky.  It's the Polonaise from his opera Eugene Onegin.  I'd be the most surprised person in the world if you haven't heard this piece in one form or another during your lifetime.  The link is here.

Except for the brief price spikes shortly after the precious metal market opened early in Far East trading on their Friday, it was a nothing sort of day all around.  But it should be obvious to all but the willfully blind that "da boyz" were involved in gold and silver yesterday when they had to be.

Here are the 6-month gold and silver charts updated with Friday's data.

It's also obvious that the situation in the precious metal market---and particularly in silver---is getting stranger by the day.

1]  There's no physical silver available to deposit in SLV, so the authorized participants have had to short the shares in lieu of depositing real metal.

2] The frantic in/out movement in silver within the Comex-approved warehouse system is approaching the absurd.  According to Ted Butler's calculations from the Comex warehouse reports, the extrapolated turnover year-to-date is somewhere between 200 and 300 million troy ounces per year at the moment.

3] The big buyer of silver eagles [and probably silver maple leafs as well] has stepped away from the table.  Silver eagles sales have imploded as a result---and we'll find out in October whether the same applies to silver maple leafs.

4] The silver charts show a neutral RSI, but the Commercial net short position is sky high---and back where it was about four years ago---and the technical funds net long positions are almost at a record high.

5] With all of this going on, silver is sitting under $21 the ounce---and below the cost of production of most primary silver producers.  One can scarcely imagine what the price will be when JPMorgan et al get through harvesting this near-record technical fund long position for fun, profit and price management purposes.

How all this is going to resolve itself---and over what time period---is unknown, but when it does, it will be ugly.

How did it come to this?

After almost twelve hours of writing this column, I'm done for the day---and the week.

Enjoy what's left of your weekend---and I'll see you on Tuesday.

Sat, 19 Jul 2014 10:03:00 +0000
<![CDATA[Strong Investor Interest and Industrial Usage Lead to Sturdy Silver Demand in 2014]]> http://www.caseyresearch.com/gsd/edition/strong-investor-interest-and-industrial-usage-lead-to-sturdy-silver-demand/ http://www.caseyresearch.com/gsd/edition/strong-investor-interest-and-industrial-usage-lead-to-sturdy-silver-demand/#When:06:17:00Z "The powers that be' don't want any excitement"

¤ Yesterday In Gold & Silver

The gold price rallied quietly until shortly after 2 p.m. Hong Kong time on their Thursday afternoon---and from there it got sold down to almost unchanged by 1 p.m. BST in London, which was twenty minutes before the Comex open.  The tiny rally that followed only added six bucks to the price---and from there it drifted lower until the news of the Malaysian airliner crash hit the wires.  Gold rallied twenty or so dollars, but the price got capped at noon in New York.  By 12:45 p.m. some of those gains had vanished---and gold chopped sideways until the 5:15 p.m. electronic close.

The low and high ticks were recorded by the CME Group as $1,298.10 and $1,325.90 in the August contract.

Gold finished the Thursday trading session at $1,318.20 spot, up $18.40 from Wednesday's close.  Net volume was way up there at 158,000 contracts, as the Commercial traders in New York threw everything that was necessary at the rally to cap the price before they headed out the door for lunch.

The price chart for silver was almost a carbon copy of the gold chart, so I shall spare you the play-by-play on it.

The low and high in silver were reported as $20.76 and $21.30 in the September contract.

Silver closed yesterday at $21.155 spot, up 36.5 cents, but well off its high.  Volume, net of July and August, blew out to 51,500 contracts.

The platinum and palladium price patterns were mini versions of the gold and silver charts and, by no coincidence I'm sure, their respective rallies ended minutes after 12 o'clock noon in New York as well.  Nothing free market about any of this.  Platinum was closed up 20 bucks---and palladium 10 bucks.  Here are the charts.

The dollar index closed late on Wednesday afternoon at 80.53---and proceeded to chop sideways in a very narrow range for the entire Thursday session, closing unchanged.

The gold stocks opened in positive territory, but only just, but rallied smartly on the gold spike that began a 11:15 a.m. EDT.  The stocks topped out a minute or so before noon---and traded pretty flat for the rest of the day.  The HUI finished up 2.47%.

The silver equities opened a bit stronger---and rallied more on the crash news.  The high tick in the silver equities came around 3:15 p.m. EDT---and slid a bit from there.  Nick Laird's Intraday Silver Sentiment Index closed up 3.61%.

The CME's Daily Delivery Report showed that 79 gold and 44 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  In gold, the only two short/issuers were Jefferies and ABN Amro with 50 and 29 contracts respectively.  The largest long/stoppers was Canada's Scotiabank with 76 contracts.  In silver, it was Barclays and Jefferies as short/issuers on 42 of those contracts---and Scotiabank and JPMorgan were the two biggest stoppers with 34 contracts in total.  The link to yesterday's Issuers and Stoppers Report is here if you wish to dig into the rest of the details.

GLD Not surprisingly, there was another withdrawal from GLD.  This time an authorized participant took out 86,640 troy ounces.  And as of 9:46 p.m. EDT last evening, there were no reported changes in SLV.

Since yesterday was Thursday, Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the internal goings-on inside SLV for their business week ending on Wednesday afternoon in London---and this is what he had to say:  "Analysis of the 16 July 2014 bar list, and comparison to the previous week's list.  No bars were removed, added, or had a serial number change.  As of the time that the bar list was produced, it was overallocated 519.2 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

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

For some reason I had problems accessing the CME's Comex-approved depositories stocks in both gold and silver for Wednesday---and I had to fall back on the data over a Jon De Weese's excellent website troyozgold.com.  His data showed that gold stocks rose by 5,000 troy ounces---and nothing was shipped out.  In silver it was another busy day, as 52,170 troy ounces were reported received---and 663,783 troy ounces were reported shipped out.  The link to silver activity is here.

Here's the 5-minute gold chart from yesterday courtesy of reader Brad Robertson.  Note the volume chart on the bottom---and you have to add 2 hours to the time on the bottom if you want New York time.

I don't have all that many stories for you today---so this section of my daily column shouldn't take you too long unless you read every one.

¤ Critical Reads

Microsoft to cut 18,000 jobs this year as it chops Nokia

Microsoft Chief Executive Officer Satya Nadella kicked off one of the largest layoffs in tech history on Thursday, hoping to reshape the aging PC industry titan into a nimbler rival to Apple and Google, and jolt a culture at the company that is used to protecting its existing Windows and Office franchises.

Microsoft Corp said on Thursday it will slash up to 18,000 jobs, or 14 percent of its workforce, over the next 12 months as it almost halves the size of its newly acquired Nokia phone business and tries to become a cloud-computing and mobile-friendly software company.

The larger-than-expected cuts are the deepest in the software giant's 39-year history and come five months into Nadella's tenure.

Beyond the Nokia reductions, Nadella gave few clues about where the ax will fall or what areas will receive more funding.

This Reuters article, filed from Seattle, showed up on their website at 2:58 p.m. EDT on Thursday---and today's first offering is from reader M.A.

The New York Sun: The Fed in danger

Congress, The New York Sun editorializes, is beginning to notice the growing arbitrariness of the Federal Reserve's power, its involvement in presidential politics, and its failure to improve economic conditions, and critical questions are arising.

I found this editorial in a GATA release from yesterday.   It was posted on the nysun.com Internet site---and I thank Chris Powell for wordsmithing the above paragraph of introduction.

Fed kicks off global dollar squeeze as Janet Yellen turns hawkish

The U.S. Federal Reserve has begun to pivot. Monetary tightening is coming sooner than the world expected, with sober implications for overheated bourses, and for those in Asia, eastern Europe and Latin America that drank deepest from the draught of dollar liquidity.

We can expect a blistering dollar rally, perhaps akin to the early 1980s or the mid-1990s. It is fortuitous that the BRICS quintet of Brazil, Russia, India, China and South Africa have just launched their $100bn monetary fund to defend each other's currencies. Some of them may need it.

America's unemployment rate has fallen from 7.5pc to 6.1pc in 12 months. The country has been adding 230,000 jobs a month in the first half of this year.

Since Fed chief Janet Yellen targets jobs above all else, this was bound to force capitulation by the Fed before long. It happened this week in her testimony to Congress. "If the labour market continues to improve more quickly than anticipated, then increases in the federal funds rate likely would occur sooner and be more rapid than currently envisioned," she said.

This Ambrose Evans-Pritchard commentary appeared on the telegraph.co.uk Internet site at 9 p.m. BST on their Wednesday evening---and it's worth reading.  However, I'd take it with a grain of salt, as he's the only media-type that has spun Janet Yellen's Congressional testimony with this particular slant.  Make up your own mind on this one, is another way of putting it.  I found this article in yesterday's edition of the King Report.

Barclays, Deutsche Bank Face U.S. Senate Hearing

Barclays Plc and Deutsche Bank AG face scrutiny over their sale of products to a hedge-fund firm that allowed it to skirt borrowing limits and avoid taxes, according to people with knowledge of the matter.

The U.S. Senate Permanent Subcommittee on Investigations plans a hearing next week on what it calls abusive transactions by financial institutions, according to a notice from the panel. The companies, which aren’t named in the notice, are Barclays, Deutsche Bank and hedge-fund manager Renaissance Technologies LLC, the people said. Representatives for each of the firms plan to testify at the July 22 hearing, the people said.

The investigation is another blow for Antony Jenkins, chief executive officer of London-based Barclays, as he seeks to restore the firm’s reputation after it became the first lender to be fined for rigging Libor. For Deutsche Bank, the hearing comes less than four years after the Frankfurt-based lender paid $554 million to avoid unrelated U.S. criminal charges involving the sale of tax shelters.

This Bloomberg article, filed from New York, was posted on their website at 10:00 p.m. Denver time on Wednesday evening---and I thank West Virginia reader Elliot Simon for sending it our way.

Jetliner Explodes Over Ukraine; Struck by Missile, Officials Say

A Malaysia Airlines Boeing 777 with 298 people aboard exploded, crashed and burned on a flowered wheat field Thursday in a part of eastern Ukraine controlled by pro-Russia separatists, blown out of the sky at 33,000 feet by what Ukrainian and American officials described as a Russian-made antiaircraft missile.

Ukraine accused the separatists of carrying out what it called a terrorist attack. American intelligence and military officials said the plane had been destroyed by a Russian SA-series missile, based on surveillance satellite data that showed the final trajectory and impact of the missile but not its point of origin.

There were strong indications that those responsible may have errantly downed what they had thought was a military aircraft only to discover, to their shock, that they had struck a civilian airliner. Everyone aboard was killed, their corpses littered among wreckage that smoldered late into the summer night.

This description of events was posted on The New York Times website yesterday---and since I read it initially, it has obviously been changed a few times.  I thank Roy Stephens for sending it our way.

Here is the Real-Time Flight Path of the Shot Down Malaysian Airlines Flight MH 17

First it was MH-370. Now, it appears tragedy has struck again, this time on Malaysian Airlines flight MH-17, on route from Amsterdam to Kuala Lumpur, which disappeared from radar moments ago and was reportedly shot down over Ukraine. While there is nothing yet officially confirmed by the carrier, the radar tracked path of the airplane is shown below.

This Zero Hedge article was posted on their Internet site at 11:24 a.m. EDT yesterday---and contains a couple of excellent charts.  I thank Michael Cheverton for sharing it with us.

Moscow: Kiev allegations that Russian jet downed Ukraine plane absurd

Kiev’s accusations that Russia shot down a Ukrainian Su-25 fighter jet are “absurd,” the Russian Ministry of Defense said.

“This is absurd, like all previous accusations from Kiev officials concerning Russia’s Ministry of Defense,” a ministerial official told journalists on Thursday.

Kiev has accused Russia of downing its Su-25 fighter jet on June 16. Andrey Lysenko, spokesman of the Ukrainian National Security and Defense Council, said a Russian military jet shot down a plane that was fulfilling a military operation over the east of Ukraine at 19:00 local time. Earlier Kiev blamed the attack on self-defense forces.

The high-ranked Defense Ministry official said that “almost every day” Russia "gets exposed" and receives threats that “irrefutable evidence” will be released, but every time “this evidence disappears somewhere.”

This Russia Today story was posted on their website at 2:24 p.m. Moscow time on their Thursday afternoon, which was 6:24 a.m. in New York.  It's another contribution from Roy Stephens.

Kiev deployed powerful anti-air systems to E. Ukraine ahead of the Malaysian plane crash

The Ukrainian military has several batteries of Buk surface-to-air missile systems with at least 27 launchers, capable of bringing down high-flying jets, in the Donetsk region where the Malaysian passenger plane crashed, Russian Defense Ministry said.

“According to the Russian Defense Ministry information, units of the Armed Forces of Ukraine located in the crash-site are equipped with anti-aircraft missile systems of "Buk-M1” ... These complexes in their tactical and technical characteristics are capable of detecting air targets at ranges of up to 160 kilometers and hit them at full altitude range at a distance of over 30 kilometers,” the ministry’s statement reads as cited by Ria.

Earlier, Itar-Tass and Interfax news agencies were citing a source familiar with the issue, who said that another battery of Buk systems is currently being prepared for shipment to Donetsk region from the Ukrainian city of Kharkov.

This is another article from the Russia Today Internet site.  This one appeared there at 6:35 p.m. Moscow time on their Thursday evening, which was 10:35 a.m. EDT.  Once again I thank Roy Stephens for finding it for us.

Ukraine’s anti-aircraft missile system dispatched to Donetsk Wednesday

Ukraine’s armed forces dispatched the Buk anti-aircraft missile system battalion to the area of the city of Donetsk on Wednesday, a well-informed source said referring to the data recording system.

Another battalion of the same weapons is said to be in the process of embarkation in the city of Kharkiv, northwest of Donetsk, the source said adding that the aircraft at an altitude of over 10,000 meters could be shot down only with the weapons of the S-300 or Buk (Beech) missile systems.

In the meantime, militias of the self-proclaimed republics of Donetsk and Luhansk have said they do not possess armament systems of this class.

Militias of the self-proclaimed republics in Ukraine's east are not armed with the Buk anti-aircraft missile systems, the press service of the self-proclaimed Luhansk People's Republic said in comments on the Ukrainian authorities' statements about a possible involvement of the Donetsk and Luhansk militias to the downing of the Malaysian plane.

This news item, filed from Moscow, appeared on the itar-tass.com Internet site at 8:33 p.m. Moscow time yesterday evening---and I thank reader 'David in California' for bringing it to our attention.

Was Flight MH-17 Diverted Over Restricted Airspace?

While there are various questions that have already emerged from what was supposed to be Ukraine's "slam dunk" proof confirming Russian rebel involvement in today's MH-17 tragedy, perhaps one just as gaping question emerges when one looks at what is clearly an outlier flight path in today's final, and tragic, departure of the Malaysian Airlines Boeing 777.

Perhaps the best visualization of what the issue is, comes from Vagelis Karmiros who has collated all the recent MH-17 flight paths as tracked by Flightaware and shows that while all ten most recent paths pass safely well south of the Donetsk region, and cross the zone above the Sea of Azov, it was only today's tragic flight that passed straight overhead Donetsk.

This very interesting Zero Hedge news item was sent to me by reader M.A. last evening.  It was posted on their Internet site at 8:55 p.m. EDT on Thursday evening.  The Flightaware link is worth clicking on.

Russia: U.S. sanctions revenge for Ukrainian failure, Moscow may retaliate

Russia considers the latest package of sanctions against it issued by the U.S. as revenge for the failure of Washington’s schemes in Ukraine and blackmail. Moscow reserves the right to retaliate.

Moscow believes that America is targeting it with sanctions “because the events in Ukraine have not developed the way Washington scripted them,” the Russian Foreign Ministry said in a statement on Thursday.

“The outrageous and groundless desire to blame Russia for the civil war in a neighboring country, which was caused by a deep internal crisis and already resulted in the loss of many lives, proves that the US and its clients in Kiev have failed to pacify the wide public dissent,” the ministry said.

Moscow said Washington is cynical in attempting to dodge responsibility for the bloodshed perpetrated by the Ukrainian troops in the east of the country, which the U.S. is de facto encouraging.

This must read commentary appeared on the Russia Today website at 7:15 a.m. Moscow time on their Thursday morning---and it's courtesy of Roy Stephens.

What Does The U.S. See In Cypriot Natural Gas?

Following a tumultuous few years of political and economic upheaval, the small European nation of Cyprus has suddenly found itself the subject of more official U.S. interest than it has seen in 50 years. In addition to visits from James Townsend, the assistant undersecretary of Defence for Europe and NATO issues  and Amanda Sloat, the assistant US Undersecretary of State for European Affairs this month, the capital welcomed Vice President Joe Biden, the highest ranking U.S. official to arrive in five decades.

“I wanted to come to primarily underscore the value the United States attaches to our growing cooperation with the republic of Cyprus,” Biden said shortly after arriving in May, according to a Guardian report. “This relationship is now a genuine strategic partnership which holds great promise.”

Although the visits have focused on everything from security cooperation to reunification with the island’s Turkish held northeast, the diplomatic push appears rooted in the issue of energy security and regional unity – two issues that are increasingly aligned.

This very interesting commentary appeared on the forbes.com Internet site at 11:26 a.m. EDT on Wednesday---and I thank Casey Research's own Laurynas Vegys for sending this around yesterday.

Israeli Military Invades Gaza, With Sights Set on Hamas Operations

Israeli tanks rolled into the northern Gaza Strip on Thursday night and naval gunboats pounded targets in the south as Israel began a ground invasion after 10 days of aerial bombardment failed to stop Palestinian militants from showering Israeli cities with rockets.

Israeli leaders said the incursion was a limited one focused on tunnels into its territory like the one used for a predawn attack Thursday that was thwarted. They said it was not intended to topple Hamas, the militant Islamist movement, from its longtime rule of Gaza.

As rockets continued to rain down on Israeli cities, a military spokesman said the mission’s expansion was “not time bound” and was aimed to ensure Hamas operatives were “pursued, paralyzed and threatened” as it targeted “terrorist infrastructure” in the north, south and east of Gaza “in parallel.”

This news item put in an appearance on The New York Times website yesterday sometime---and it's the final contribution of the day from Roy Stephens.

Pepe Escobar: Listen to the sound of the Global South

The BRICS summit in northeast Brazil has already made history for one key reason; the creation of the New Development Bank.

Call it the Global South antidote to that structural adjustment racket, the IMF. Over and over again, BRICS member nations and others have insisted on an institutional IMF reform that would recognize the economic weight of the Global South. Reform packages have been languishing in the U.S. Congress since 2010. And once again they were blocked last April.

The New Development Bank will be way more democratic than the US/EU-controlled IMF. Look at the funding; a flat $10 billion contribution by each member country. This means, sooner or later, that other developing nations will also join. I have called it casino capitalism versus a productive capitalism model.

This commentary by Pepe, which is definitely worth reading, showed up on the Russia Today website at 11:02 a.m. Moscow time on their Thursday morning---and I thank reader Thorsten Winkler for bringing it to my attention, and now to yours.

Australia Becomes First Developed Nation to Repeal Carbon Tax

After almost a decade of heated political debate, Australia has become the world's first developed nation to repeal carbon laws that put a price on greenhouse-gas emissions.

In a vote that could highlight the difficulty in implementing additional measures to reduce carbon emissions ahead of global climate talks next year in Paris, Australia's Senate on Thursday voted 39-32 to repeal a politically divisive carbon emissions price that contributed to the fall from power of three Australian leaders since it was first suggested in 2007.

Australia, the world's 12th largest economy, is one of the world's largest per capita greenhouse gas emitters due to its reliance on coal-burning power stations to power homes and industry. In 2011, daily emissions per head amounted to 49.3 kilograms (108 pounds), almost four times higher than the global average of 12.8 kilograms, and slightly ahead of the U.S. figure of 48.2 kilograms.

This longish article was last updated on The Wall Street Journal website at 5:51 a.m. EDT on Thursday morning---and for the moment, it's posted in the clear.  My thanks go out to Michael Cheverton for his second contribution to today's column.

Three King World News Blogs

1. Keith Barron: "Gold, Silver and How People Are Getting Creative Just to Survive"  2. Egon von Greyerz: "Exchange Controls---and Perfect Fake Gold and Silver Coins"  3. Tom Fitzpatrick: "Gold, Euro, Dollar & Where the Chinese Are Buying Real Estate"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

CME looks to bid for London gold price solution, after claiming silver

CME Group has expressed interest in taking part in the proposal for reform to the London gold fix, the exchange's head of metals said Thursday.

In reaction to news that the London Gold Market Fixing Ltd. and London Bullion Market Association are working together to reform the current London gold fix, CME's head of metals Harriet Hunnable said the exchange would be "delighted" to be part of this process.

LGMFL said Wednesday that -- with support from the LBMA-- it is looking at the possibility of appointing a third party to administrate the London Gold Fix.

The company said that it "has commenced an request for proposal process with a view to appointing a third party to assume responsibility for the administration of the London gold fixing. LGMFL will continue to liaise with the LBMA, the FCA, and other stakeholders as appropriate, as the RFP process develops."

With the silver fix in the bag, the CME Group is now going after the gold fix.  Ted has been calling the CME "crooks" for years---and for good reason.  This news item showed upon the platts.com Internet site at 12:57 p.m. BST in London yesterday---and I found it on the sharpspixley.com Internet site.

Strong Investor Interest and Industrial Usage Lead to Sturdy Silver Demand in 2014

Investor and industrial consumption of silver has advanced at a healthy pace in 2014, reflected in the silver price increasing 5 percent as of July 15 from the beginning of the year.

Building on an impressive 2013, investors continued to boost silver holdings in the first half of 2014.  Silver exchange traded funds (ETF) backed by physical silver added  7.0 million ounces (Moz)  of silver bullion through June; in contrast, gold ETF holdings dipped by 1.4 Moz ounces over the same time period.  Globally, silver bullion coin sales are up 4.5 percent through the 1st quarter of 2014, according to precious metals consultancy Thomson Reuters GFMS.  U.S. Mint sales of American Eagle Silver Bullion coins maintained near record level sales, totaling 24.1 Moz for the first six months of 2014, just shy of the 25.0 Moz sold in the first half of 2013, threatening to overtake the record sales of 42.7 million American Eagle coins acquired by investors last year.  Other silver investment products, such as silver bar consumption, appear to be easing so far this year after a strong showing in 2013.

Industrial demand for silver in critical sectors, such as ethylene oxide production, has increased significantly in the first half of the year and is expected to increase 23 percent this year to 8.0 Moz, according to Thomson Reuters GFMS. Ethylene oxide is a vital building block chemical, critical to production of detergents, solvents, plastics and a broad range of organic chemicals, and is an example of the unmatched importance of silver in industry.

Demand for silver in the photovoltaic industry has been driven by a global increase in renewable energy over the past decade, leading to a proliferation of solar module production.  Metals Focus, the precious metals consultancy, forecasts that silver demand in photovoltaics will rise by close to 10 percent in 2014.

Here's news from the dark side of The Force, dear reader.  It was posted on the silverinstitute.com Internet site yesterday---and it is worth reading.  It's the final offering of the day from Elliot Simon.

¤ The Funnies

¤ The Wrap

I'm still amazed that the equivalent of 240 million oz of COMEX silver were sold by commercials over the past five weeks at prices below the primary cost of silver production. I’d like to see someone try to explain how that could possibly be legitimate. While the long term prospective rewards of higher silver prices are as strong as ever, the collusive and manipulative sale of 240 million oz of COMEX silver will be the sole explanation of any near term price declines. - Silver analyst Ted Butler: 16 July 2014

Although I was happy to see the precious metals spike up on Thursday, I was more than saddened by the reason---which I discovered as soon as I opened my in-box yesterday morning.

It's impossible to tell whether this rally has any legs or not, but the associated volume that went along with the price spikes indicated that JPMorgan et al were going short against all comers, or selling longs as short holders covered.  As far as I could tell after reading the tea leaves when all was said and done, it was just another case of "da boyz" doing what was necessary to prevent the precious metals from blowing sky high.

Here are the 6-month charts for both gold and silver.  Yesterday's price action certainly threw a spanner in the works for in the Commercial traders efforts to force the technical funds to liquidate, even if only temporarily.

As I write this paragraph, it's just under an hour to the London open.  Both gold and silver moved sharply higher in the first hour or so of trading once New York opened yesterday evening, but those rallies were dealt with in the usual manner in early Far East trading---and now both metals are trading back below their Thursday closing prices in New York.  Platinum and palladium had much smaller price moves at the same time---but they're now trading lower as well.  The dollar index is chopping sideways.

It's obvious, at least to me that 'the powers that be' don't want any excitement to develop in the precious metals regardless of the reason---at least for the moment.

Today we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday.  Last week, when I stuck my neck out and tried to predict what the COT Report would say, I was so spectacularly wrong that I'm reluctant to make a prediction here.  But, after the pounding that both gold and silver received on Monday and Tuesday, I'd guess that we'll see some improvement in the Commercial net short position but, sadly, I doubt that it will be a meaningful amount.

And it's a pretty good bet that the rallies we had on Wednesday---and again yesterday---have pretty much negated any gains that today's COT Report will show.  Of course that won't be know for sure until next Friday's report---and we still have three more trading days before the cut-off for it, so it's rather presumptuous of me to project that outcome from this distance.

Yesterday I posted a chart in this space that Nick Laird provided.  It didn't show up correctly---and even the 'click to enlarge' feature didn't help---so here it is again.  It shows the slow turn in the accumulation of physical gold in all the world's visible depositories.

And as I hit the send button on today's column, I note that not much has changed from a price perspective now that London has been open for an hour and change.  All four precious metals are a bit lower than they were a couple of hours ago.  Gold and silver volumes are higher than I like to see for this time of day, so it's obvious that JPMorgan et al had to throw a decent amount of Comex paper at those early rallies in Far East trading on their Friday morning, to keep their respective prices in line.  The dollar index is still chopping sideways.

Since today is Friday, I have no idea what to expect for the remainder of the day as far as price action goes.  I would guess that anything major will occur during the Comex trading session in New York---and nothing will faze me when I check out the Kitco charts later this morning when I roll out of bed.

Enjoy your weekend, or what's left of it if you live on the west side of the International Date Line---and I'll see you here tomorrow.

Fri, 18 Jul 2014 06:17:00 +0000
<![CDATA[Scorching June For Gold Imports in India]]> http://www.caseyresearch.com/gsd/edition/scorching-june-for-gold-imports-in-india/ http://www.caseyresearch.com/gsd/edition/scorching-june-for-gold-imports-in-india/#When:06:12:00Z "I'm not sure what to make of it"

¤ Yesterday In Gold & Silver

The gold price had a positive bias to it all Wednesday, but the smallish rally that began a the Comex open wasn't allowed to get very far---and got sold down a bit as the New York trading day progressed.

Gold traded within about a ten dollar price range---and the low and high ticks worth looking up.

The gold price closed in New York on Wednesday afternoon at $1,299.80 spot, up $6.20 from Tuesday's close.  Net volume was reasonably light at only 92,000 contracts.

Silver chopped around within a dime of unchanged until noon in London---and then rolled over to hit its low of the day, which came at the Comex open in New York.  The subsequent rally didn't get far, or wasn't allowed to get far---and the price chopped sideways from about 9:40 a.m. until the 5:15 p.m. electronic close.

The low and high ticks were posted as $20.63 and $20.88 in the September contract.

Silver finished the day at $20.79 spot, up 7.5 cents from its Tuesday close.  Volume, net of July and August, was down substantially from Monday and Tuesday, but still very decent at 36,500 contracts.

Platinum didn't do much, or wasn't allowed to do too much---and the smallish rally that began around 9:30 a.m. EDT got capped shortly after 11 a.m.---and got sold down from there, as platinum was closed unchanged.

Palladium traded pretty flat until shortly after 10 a.m. EDT---then it rallied a bit, before trading flat from around 1 p.m. onward.  Palladium finished the Wednesday trading session up eight dollars.

The dollar index closed late on Tuesday afternoon at 80.38---and proceeded to rally to its 80.56 high, which occurred around 8:30 a.m. in New York on Wednesday morning.  After that it didn't do much---and the index closed at 80.53---which was up 15 basis points on the day.

The gold stocks gapped up a bit over a percent at the open---and hit their highs around 12:45 p.m. EDT---and then sold off a bit as the Wednesday trading session wore on.  The HUI finished up 1.75%.

The silver equities traded in a similar pattern---and Nick Laird's Intraday Silver Sentiment Index closed up 1.58%.

The CME Daily Delivery Report showed that 2 gold and 202 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  In silver, the biggest short/issuer was Barclays with 180 contracts, followed distantly by ADM with 21 contracts.  The long/stoppers included Canada's Scotia bank with 96---JPMorgan in its client account with 59---and Jefferies with 32 contracts. The link to yesterday's Issuers and Stoppers Report is here.

Not surprisingly, there was a withdrawal from GLD yesterday, as an authorized participant took out 86,613 troy ounces.  And as of 9:30 p.m. yesterday evening, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank for the week ending July 11, they reported that their gold ETF added 16,016 troy ounces---and their silver ETF declined by 39,417 troy ounces.

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

There wasn't much activity in gold over at the Comex-approved depositories on Tuesday, as only 4,000 troy ounces were reported received---and 321.500 troy ounces [10 kilobars] were shipped out.  The link to that activity is here.

It was another big day in silver, as 1,180,973 troy ounces were reported received, but only 131,699 ounces were shipped out the door.  The big receipts were at Brink's, Inc. and CNT.  The link to that action is here.

I have a very decent number of stories again today and there should be one or two that interest you.

¤ Critical Reads

Federal Tax Revenues Set Record Through June; Feds Still Running $385.8B Deficit

Federal tax revenues continue to run at a record pace (in inflation-adjusted dollars) in fiscal 2014, as the federal government’s total receipts for the fiscal year closed June at an unprecedented $2,258,565,000,000 according to the Monthly Treasury Statement.

With $323.646 billion in revenue coming into federal coffers in June alone, the federal government spent $253.127 billion, and ran a surplus for the month of $70.519 billion.

However, despite this one-month surplus, the government has still run a cumulative deficit of $385.855 billion in the first nine months of fiscal 2014. (The federal fiscal year  began on Oct. 1, 2013 and will end on Sept. 30, 2014.)

This news item appeared on the cnsnews.com Internet site at 5:33 p.m. on Monday afternoon---and today's first story is courtesy of reader Brad Robertson.

IPOs near 1999 levels: Druckenmiller

This 1:38 minute video clip from CNBC was posted on their website on Wednesday at 11:50 a.m. EDT---and it's definitely worth watching.  I thank reader Dan Lazicki for sending it.

There was also a Druckenmiller commentary posted on the moneynews.com Internet site at 2:04 p.m. EDT yesterday as well.  This one is headlined Druckenmiller on Fed: 'Once-in-a-Century Measures No Longer Necessary'---and this article is courtesy of West Virginia reader Elliot Simon.

Bank of America takes $4 billion litigation hit

Bank of America said Wednesday that its second-quarter earnings were hit by higher litigation expenses.

The Charlotte, N.C.-based bank earned $2 billion in the second quarter after payments to preferred shareholders, compared with $3.6 billion in the same period a year earlier, a decline of 43 percent.

Revenue fell 4 percent to $21.9 billion from $22.9 billion.

Per share, the bank's earnings worked out to 19 cents, compared with 32 cents a year ago.

The bank's litigation costs of $4 billion crimped earnings by 22 cents a share.

This AP story showed up on the finance.yahoo.com Internet site around 1:30 p.m. EDT yesterday---and it's another contribution from Elliot Simon.

U.S. wants law to clamp down on firms moving overseas

The Obama administration has added its voice to the growing chorus of criticism of U.S. companies shifting their legal addresses overseas, in many cases to Ireland, urging Congress to curb the tax-cutting practice.

The Wall Street Journal reported late on Tuesday that U.S. treasury secretary Jack Lew urged members of Congress in a letter to pass legislation immediately “to shut down this abuse of our tax system.”

The U.S. administration joined critics of a practice known as “inversions” where a U.S. company acquires or merges with a foreign company allowing the firm to relocate its legal address for tax purposes to a low corporate-tax country such as Ireland where the rate is 12.5 per cent avoiding the higher U.S. corporation tax rate of 35 per cent.

This news item appeared on the irishtimes.com Internet site at 7:35 a.m. BST on their Wednesday morning---and it's the first offering of the day from Roy Stephens.

Global equity melt-up in full swing even if investors hate themselves

There is no longer much doubt. We are in the midst of a late-cycle blow-off in global equity markets.

Bank of America’s monthly survey of world fund-managers shows that investors have their second highest allocation to stock markets in thirteen years at 61pc. It is lead by shares in technology, energy, and even banks, and is stretched to a net 35pc overweight in Europe. “The summer 'melt-up' is likely to be followed by an autumn correction,” it said.

This happened in 2007 as you can see from the chart below, and again in early 2011 just before the European Central Bank triggered Part II of the EMU debt crisis by raising rates twice.

Investors seem determined to keep dancing until the music actually stops, even though the largest majority since the height of the dot com bubble think equities are overvalued. They are chasing momentum. It is irresistible to try to eke a little more out of the rally.

This Ambrose Evans-Pritchard blog appeared on the telegraph.co.uk Internet site on Tuesday sometime---and it's the second offering of the day from Roy Stephens.  It's also worth reading.

The Buzz in Berlin: Is Merkel Thinking of Stepping Down?

Several days ago, a young boy asked Angela Merkel a profound question. The chancellor was on a trip to China and found herself in the central city of Chengdu, where she was visiting a social project that provides assistance to migrant worker families. The German leader had already asked a few questions herself, but it was the children's turn. The boy, in shorts and a T-shirt, wanted to know: "Ms. Chancellor, do you have a happy life?" One person in attendance said that Merkel smiled for a moment, paused for a second and then said, "Yes, I live a happy life."

On July 17, Merkel will turn 60. There will be a party and a speech, both taking place at the Berlin headquarters of her conservative Christian Democratic Union party. Merkel will take pains to ensure that the celebrations aren't too extravagant. She would like the event to seem inconsequential and prefers sparkling wine over Champagne. Regardless, it will still be a momentous day, one likely to draw attention to the fact that Merkel has joined Konrad Adenauer and Helmut Kohl as the most influential chancellors in Germany's postwar history.

But the event will also be accompanied by a question just as profound as that asked by the boy in China: How much longer will she remain in office?

I posted a Russia Today story about this rumour in my column yesterday, but the story was expanded on the German website spiegel.de yesterday at 2:42 p.m. Europe time.  It's worth skimming---and it's also courtesy of Roy Stephens.

Ukrainian troops encircled by Lugansk self-defense fighters in Izvaryno

Militia fighters in the self-proclaimed Lugansk People's Republic (LPR) have encircled the Ukrainian government forces near the border checkpoint in Izvaryno, with the Ukrainian army sustaining tangible losses, Interfax reports with reference to the Novorossiya agency.

"Militiamen fired grenade launchers against Ukrainian special forces from Kirovohrad at the Izvaryne border checkpoint in the Lugansk region. A source said eight soldiers were killed and around ten injured. The Ukrainian side also reported having been encircled in Izvaryno, the punitive forces' self-propelled artillery launcher has been knocked down," the statement said.

Meantime, "in the Sverdlovsk district of the Lugansk region, militiamen fired artillery and mortars against Ukrainian troops from the 72nd brigade. There is no data on army losses," the agency also reported.

This news item appeared on The Voice of Russia website at 7:42 p.m. Wednesday evening Moscow time---and once again I thank Roy Stephens for sending it.

Self-defense fighters downed two Ukrainian strike aircraft – Donetsk People's Republic

The self-proclaimed Donetsk People's Republic downed two Sukhoi Su-25 assault aircraft belonging to the Two Ukrainian Air Force, which were attacking the positions of the region’s self-defense fighters, Interfax cites Donbas militia’s information center as saying.

"One of the aircraft was shot from a portable air defense system near Horlivka. It flew into clouds of smoke in the direction of Myrhorod airdrome. The situation with the second one is being clarified," the militia stated---but other sources have not confirmed the fact as of yet.

In the last five days starting with July 12 self-defense forces have shot down four Su-25 aircraft and one Antonov An-26 military transport plane, according to reports of the Donbas militia.  The Ukrainian army, however, confirmed only one instance involving an Su-25 shot down on July 12.

This is another Voice of Russia story.  This one showed up on their Internet site at 7:08 p.m. Moscow time yesterday evening---and it is, of course, courtesy of Roy Stephens.

Death of Russian citizen in cross-border shelling not enough to call Kiev to account - Psaki

The U.S. Department of State has made another attempt to exonerate Kiev from responsibility for what's happening in eastern Ukraine.

Briefing reports on July 15, State Department spokesperson Jen Psaki commented on the recent shelling of Russian territory from the Ukrainian side of the border and the follow-up visit to the scene by a group of foreign military attaches who had been specially invited on a fact-finding trip organized by Russia.

Psaki predictably accused Russia of failing to provide sufficient evidence confirming that Ukraine was indeed behind the July 13 cross-border mortar shelling in which a Russian citizen, a father of four, was killed.

This is the third story from The Voice of Russia website.  This one appeared on their website at 3:48 p.m. Moscow time on Wednesday afternoon.  It's courtesy of Roy Stephens as well.

Leaked: E.U. to cut loans and investment for Russia, punish Crimea

E.U. leaders may impose a new round of sanctions against Russia at Wednesday’s summit, including blocking trade and investment in Russia and Crimea, according to media sources that have obtained a copy of a draft statement.

E.U. leaders may impose a new round of sanctions against Russia at Wednesday’s summit, including blocking trade and investment in Russia and Crimea, according to media sources that have obtained a copy of a draft statement.

New sanctions may include expanding the blacklist of Russian companies and individuals to match the US, trade barriers, more asset freezes, and economic relations with Crimea.

The E.U. may expand asset freezes and target companies "that are supporting materially or financially actions undermining or threatening Ukraine's sovereignty, territorial integrity and independence," the statement says, Bloomberg reports.

This article appeared on the Russia Today website at 2:10 p.m. Wednesday afternoon Moscow time, which was 6 a.m. on Wednesday morning in New York.  Once again I thank Roy Stephens for bringing it to our attention.

Raising Stakes on Russia, U.S. Adds Sanctions

President Obama imposed a new round of sanctions against Russia on Wednesday, targeting some of the crown jewels of the country’s financial, energy and defense industries in what officials described as the most punishing measures taken to date by the United States in retaliation for Moscow’s intervention in Ukraine.

The new actions will, among other things, restrict access to American capital markets for Russian giants like the Rosneft oil company and Gazprombank that operate worldwide. While the latest moves did not cut off entire sectors of the Russian economy, they went significantly further than the financial and travel limits imposed previously on several dozen individuals and their businesses.

The announcement reflected a decision by Mr. Obama to take more stringent steps than those taken by the United States’ European allies, which have far deeper economic ties to Russia. Meeting in Brussels, leaders of the European Union refused to match the American measures and instead adopted a more tempered plan that blocks new development loans to Russia and threatens to target more Russian individuals.

This news item appeared on The New York Times website yesterday sometime---and it's another contribution from Roy Stephens.

Italian P.M. Renzi speaks against building Europe in opposition to Russia

Commenting on the Ukrainian crisis Italy's Prime Minister Matteo Renzi urged to give up calls for a new Cold War and underlined that Europe should not be built in opposition to Russia.

"Within the E.U. we need to respect the cry for freedom of the Ukrainian people but we cannot build Europe in opposition to our neighbor - Russia," Renzi said speaking at the Democratic Party PD National Assembly late Tuesday.

The Prime Minister of Italy, which has recently taken over the Presidency of the Council of the European Union from Greece, noted that "today we do not need to declare a Cold War, but should be capable of creating means for a dialogue."

This story showed up on The Voice of Russia website at 11:44 a.m. yesterday morning Moscow time [EDT+8]---and I thank Roy Stephens one more time for sending it our way.

Hospital chief with bogus ID is suspended in Greece

Health Minister Makis Voridis on Wednesday ordered the immediate suspension of the director of a public hospital in western Macedonia, northern Greece, amid suspicions that he secured the post with a fake diploma.

In the latest case of doctors and hospital directors accused of gaining their positions with bogus qualifications, the doctor in western Macedonia was dismissed after health authorities determined that both his degree certificate and other professional diploma bore his name but a different place and date of birth from those on his birth certificate.

The case came to light just a few months after the dismissal of a deputy director of an Athens hospital and the director of a hospital on the island of Skyros, in the Sporades, after their degrees were found to be fake. The Skyros doctor, who was recruited in 2000 on the basis of a forged degree from an Italian university, is alleged to have owned a Ferrari and a private jet.

It boggles the mind---and it's a good bet that this sort of problem is not confined to Greece, but without question, the problem is probably endemic in that country.  This news item appeared on the ekathimerini.com Internet site early this morning Athens time---and I thank Harry Grant for bringing it to my attention, and now to yours.

NATO puts brakes on enlargement

NATO announced earlier this July that it is shelving plans to welcome any new members during its forthcoming Wales summit.

The hopes of four countries - Bosnia, Macedonia, Georgia and Montenegro – which were expecting to deepen their co-operation with NATO, are now all but dashed, as senior NATO officials have hit the pause button on future enlargement.

Just like the European Union, it seems that NATO is also suffering from enlargement fatigue.

Unlike the Union though, NATO is shying away from even awarding the equivalent of the EU’s association agreement, namely the Membership Action Plan (MAP), to Georgia, over fears of provoking Moscow’s ire.

This article put in an appearance on the euobserver.com Internet site at 8:32 a.m. Europe time yesterday morning---and it's the final contribution of the day from Roy Stephens.

Pepe Escobar: BRICS against Washington consensus

The headline news is that this Tuesday in Fortaleza, northeast Brazil, the BRICS group of emerging powers (Brazil, Russia, India, China, South Africa) fights the (Neoliberal) World (Dis)Order via a new development bank and a reserve fund set up to offset financial crises.

The devil, of course, is in the details of how they'll do it.

It's been a long and winding road since Yekaterinburg in 2009, at their first summit, up to the BRICS's long-awaited counter-punch against the Bretton Woods consensus - the IMF and the World Bank - as well as the Japan-dominated (but largely responding to US priorities) Asian Development Bank (ADB).

The BRICS Development Bank - with an initial US$50 billion in capital - will be not only BRICS-oriented, but invest in infrastructure projects and sustainable development on a global scale. The model is the Brazilian BNDES, which supports Brazilian companies investing across Latin America. In a few years, it will reach a financing capacity of up to $350 billion. With extra funding especially from Beijing and Moscow, the new institution could leave the World Bank in the dust. Compare access to real capital savings to US government's printed green paper with no collateral.

I posted this essay in yesterday's column---but both the essay and the Asia Times website are now M.I.A.---so here's the same Escobar essay posted over at the globalresearch.ca website.  It's still an absolute must read and I thank reader Peter Corlis for digging it up for us.

Jim Rickards: The significance of a BRICS development bank

This 3:39 minute video interview was posted on the CNBC website at 6:46 p.m. EDT on Monday.  Jim explains how the new bank differs from the World Bank and the International Monetary Fund.

I thank reader Harold Jacobsen for sending this our way in the wee hours of Wednesday morning, but I received it after I filed yesterday's column, so here it is today.

Three King World News blogs/audio interviews

1. Rick Rule: "A Full-Blown Crisis is Coming---and There Will Be Hell to Pay"  2. KWN Commentary: "Chart of the Day Signals Major Move That Will Shock the World"  3. The audio interview is with Eric Sprott.

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

U.S. gold dealer launches first digital currency backed by bullion

U.S. precious metals dealer Anthem Vault Inc said on Wednesday it has launched the first digital currency backed by physical gold, with an aim to increase the use of bullion as an accepted form of electronic money.

Las Vegas-based Anthem said it will launch 10 million "INNCoins" backed by 100 grams (3.5 ounces) of gold, with all coins expected to be in circulation by July 2015.

"It should make gold more acceptable as a form of currency by combining its appeal as a store of value and a much more efficient medium of exchange," said Anthem Blanchard, chief executive of Anthem Vault, who previously worked at online precious metals market GoldMoney.

This Reuters new item appeared on their website at 4:58 p.m. EDT on Wednesday---and I thank reader Dave Malek for sending it our way.

ICBC: A New Global Currency Setup Is Being Conceived

At the LBMA Bullion Market Forum in Singapore on June 25, 2014, two very important speakers attended; Xu Luode, chairman of the Shanghai Gold Exchange, and Zhou Ming, General Manager of the Precious Metals Department at ICBC.

Tony Persson and I have written about the speeches from Xu and Zhou in previous posts, in this post we will take a closer look at what Zhou said, based on what Chinese media have written about it (whereas Western media are reluctant to cover this).

His statements are not entirely new as he already had revealed some objectives of ICBC's precious metals department in an interview conducted on January 7, 2014; ICBC's main goal is to become a significant player in the international gold market. Yet, he made a few remarkable statements in Singapore.

This longish commentary by Koos Jansen showed up on the bullionstar.com Internet site at 5 p.m. Singapore time yesterday afternoon.  I found it embedded in a GATA release.

Bron Suchecki: GLD worries about failure of unallocated gold

GLD has some amendments to its terms up for vote, one of which is "that creations may only be made after the required gold deposit has been allocated to the Trust Allocated Account from the Trust Unallocated Account". What is interesting is the explanation of why they are making this amendment:

"This amendment provides additional security for Shareholders by eliminating potential risks related to issuing baskets of Shares against unallocated gold if the Custodian was to become insolvent or if the unallocated gold was otherwise not allocated for some other unforeseen reason."

My emphasis on the bold bid. The risk they are referring to here is because the Authorised Participants only deliver unallocated to the Custodian and it is up to the Custodian to find the physical to allocate. This puts all the pressure on the Custodian. The amendment does raise the following questions.

This commentary was posted on his blog yesterday sometime---and it's another gold-related news item that I found on the gata.org Internet site yesterday.

Gold fix banks said to propose changes to pricing process

The banks running the century-old London gold fixing that's used by miners and central banks to trade and value metal are proposing changes to the process, according to two people with knowledge of the matter.

The proposal is for an independent chairman and third-party administrator, said the people, who asked not to be identified because the information is private. Deutsche Bank AGs exit from the process this year as it scales back its commodities business left Societe Generale SA, Bank of Nova Scotia, HSBC Holdings Plc and Barclays Plc to set the fixing price twice a day by phone.

This Bloomberg story, filed from London, showed up on their website at 6:50 a.m. Denver time yesterday morning---and it's another news item that appeared on the GATA website.

World Gold Council: Now Is 'Prime Opportunity to Add Gold'

Although gold has been falling recently, the metal increased 9.2 percent in the first half of the year, which took many market participants by surprise, as most analysts predicted lower gold prices this year.

While investment demand has remained tepid, many market participants are bullish on the precious metal.

"We consider that the current environment of high bond issuance, tight credit spreads and record low volatility continues to offer a prime opportunity for investors to add gold," the World Gold Council said in its mid-year report. 

This article was posted on the moneynews.com Internet site at 8:02 a.m. Wednesday morning EDT---and I thank Elliot Simon for sharing it with us.

Scorching June for gold imports in India

The Indian government knew what was coming. India's exports growth has remained in double digit for the second month in a row in June at 10.22%, but a spurt in gold imports has marginally pushed the trade deficit to $11.76 billion.

After registering a negative growth since October last year, gold imports in June has scorched higher at 65.13% to $3.12 billion from $1.88 billion during the same month last year.

In October 2013, gold imports stood at $1.3 billion, registering a growth of 62.5%.

By ignoring the protests of the bullion community and not reducing the import duty at 10% in the recently concluded budget session, the Indian government has ensured that trade deficit does not go off the rails altogether.

This mineweb.com article, filed from Mumbai, was posted on their Internet site on Wednesday sometime---and I thank Elliot Simon for his third and final contribution to today's column.  It's worth skimming.

Koos Jansen: Huge increases in silver imports by India

In April 2014 India gross gold import was 43 metric tonnes, net import accounted for 35 tonnes, according to the DGCIS. Gross import was down 28 % m/m, 70 % y/y. Year to date gross import stands at 171 tonnes, down 60 % from last year. Note, these are official numbers, because of the high import duties there is a lot more gold being smuggled into India, unfortunately it is impossible to know how much.  

The central bank of India (RBI) plans to swap some of its official gold holdings in Nagpur with gold in London of a higher purity, according to Reuters. Holding gold in England has advantages as it can be leased, used as collateral or sold if necessary in the London Bullion Market. I called the RBI today to ask if there is an official press release on the planned swap. The answer was no. Though they didn't deny it, at this point only a letter has been sent from the RBI to bullion banks to ask for swap ratios, they told me. I couldn't get a copy of the letter, therefore I don't feel confident to speculate on the the details of the swap, I rather wait for more information.

In contrast to the distorted gold import figures, the numbers on silver are likely to be accurate. In April India gross silver import was a staggering 713 tonnes and only 2 tonnes was exported. M/M gross import is up 148 %, January to April gross import stands at 1,921 tonnes, up 24 % y/y.

This commentary showed up on the bullionstar.com Internet site early this morning Singapore time---and it's another article I found in a GATA release late last night.

Bron Suchecki: How Eastern gold demand is transforming the gold market

The Perth Mint's Bron Suchecki adds his comments about last month's London Bullion Market Association conference in Singapore, where speakers emphasized that Asia is increasingly serious about getting its hands on metallic gold rather than paper gold.

Suchecki writes: "There is a big difference in 'integrityness' between a market with the option of physical settlement and where only a few percent of contracts physically settle (for example, Comex) and one where you have to physically settle and there is a 10-percent penalty if you don't (for example, the new Singapore Gold Exchange kilobar contract)."

Suchecki's commentary is headlined "How Eastern Gold Demand is Transforming the Gold Market" and it's posted at his blog, goldchat.blogspot.com.au.  It's another article from the gata.org Internet site.

Lawrence Williams: Bulls might take heart from latest gold smashdown failure

As we predicted yesterday the second phase of the gold price smashdown took place yesterday with, apparently, a sell order for another $2.3 billion hitting the gold futures market.  It knocked the gold price back all of $15!  Now it may have achieved its initial objective of pushing gold down below the psychological $1300 level, but not by much as it doesn’t seem to have triggered the stop loss orders that might have been anticipated.  And given the amount of money it took to achieve this one suspects there is either more to come, or the protagonists will beat a retreat licking their financial wounds.

This morning, gold has been holding up remarkably well just a few dollars below the $1300 level.  The markets are probably nervous ahead of New York opening again today – but given there were no significant sales into the thin overnight markets, COMEX could, in the absence of any other major sales (and some $4 billion of sales over two days has been a major attempt to spook the markets), see a recovery back above $1,300 which could presage a move substantially higher.  One is loath to predict this given the big sellers may not be done yet, but it looks like substantially more money might be needed to drive the gold price down significantly further and this may just not be forthcoming at the present time.

As we said yesterday: Interesting times in the gold market.

The above three paragraphs are all there is to this commentary by Lawrie that was posted on the mineweb.com Internet site yesterday.  It's definitely worth reading---and let's all hold hands and pray that he's right.

¤ The Funnies

Here's a pair of mating damselflies that I took about a month ago.

This is a photo that Nick Laird took the other day.  It's a Rock-wallaby.  There's lot of interesting things to photograph in Australia---and I wish I was there with camera gear in hand.  Nick and I would have more than a few beers.

¤ The Wrap

On the (less than) $3 silver rally, the commercials sold more than 48,000 net contracts (240 million oz), with the raptors accounting for more than 40,000 contracts of that. Almost unbelievably, the technical funds bought more than 51,500 net silver contracts or the equivalent of 257.5 million oz. These totals are truly staggering. 

While the physical movements of real metal reported in the COMEX warehouses and in SLV were significant and indicative of physical tightness, the equivalent amount of paper silver transacted on the COMEX so dwarf movements of actual metal as to prove beyond question that paper trading on the COMEX sets the price of silver (and gold). In this regard, it makes perfect sense that the crooked CME would take over the London Silver Fix (as reported), as I can’t think of a single entity more experienced or proficient in artificially setting silver prices. - Silver analyst Ted Butler: 12 July 2014

Well, the gold price bounced off its 50-day moving average on Tuesday---and closed below the $1,300 spot mark, but off its low tick.  Yesterday the gold price didn't quite make it back to its 50-day moving average on the downside---and closed right at $1,300 spot, give or take a dime.  Here are the 6-month charts.

I'm not sure what to make of it, but I still can't shake the feeling that JPMorgan et al aren't done to the downside quite yet.  And as I said in my Tuesday column---"There's always a chance we could be done to the downside already.  But if I had to bet ten bucks, that's not how I'd bet it, at least not using past history as a guide."

And as I write this paragraph, the London open is about 35 minutes away.  All four metals are up from their Tuesday close in New York.  Gold is up five bucks or so, but platinum and palladium are stealing the show at the moment.  I'm happy to see that volumes in both gold and silver aren't that heavy considering the positive price action---and one can only hope that it continues this way---rallies on very little volume.  The dollar index is basically unchanged from its close in New York yesterday.

Here's a chart that Nick Laird sent our way just after midnight MDT this morning---and it shows the slow turn in the accumulation of physical gold in all the world's visible depositories.

And as I send today's effort off to Stowe, Vermont, I note that all four precious metals are off their earlier highs by a bit---and silver is the only metal that's down on the day.  Volumes are still very much on the lighter side---and the dollar index is down a small handful of basis points.

I haven't the foggiest notion how the rest of the Thursday trading session will turn out, but whatever price action there is, either up or down, will undoubtedly be greatly influenced by JPMorgan et al.

Enjoy what's left of your day---and I'll see here tomorrow.

Thu, 17 Jul 2014 06:12:00 +0000
<![CDATA[Chris Powell: The More Obvious They Are, the Closer the Day of Deliverance]]> http://www.caseyresearch.com/gsd/edition/chris-powell-the-more-obvious-they-are-the-closer-the-day-of-deliverance/ http://www.caseyresearch.com/gsd/edition/chris-powell-the-more-obvious-they-are-the-closer-the-day-of-deliverance/#When:06:13:00Z "We'll have to wait and see how the salami is sliced"

¤ Yesterday In Gold & Silver

The gold price did virtually nothing for most of the Tuesday trading session.  There was the smallest hint of a rally in early morning trading in London---but from it's 'high' gold got quietly sold down until it was back to basically unchanged from Monday's close.  That point came minutes before 11 a.m. in New York---and the London close.  Then the HFT boyz put in an appearance---and gold was down twelve bucks in minutes.  After that it chopped sideways into the close.

The high and low ticks were recorded as $1,314.00 and $1,294.30 in the August contract.

Gold closed in New York on Tuesday at $1,293.60 spot, down $13.20 from Monday.  Net volume was pretty decent at 148,000 contracts.

The silver price had a bit more shape to it.  After trading flat in the Far East, silver began to crawl higher starting at the London open---and hit its high at the London p.m. gold fix.  From there it got sold down a bit before meeting the same fate as gold just minutes before 11 a.m. EDT.  The silver price recovered off its low, but a willing seller appeared about an hour after the Comex close---and down went the price.  Silver closed basically on its low of the day.

According to the CME Group, the high and low tick were recorded as $21.13 and $20.67 in the September contract.

Silver closed yesterday at $21.715 spot, down 18.5 cents from Monday's close.  Volume, net of July and August, was pretty heavy at 56,000 contracts, only 2,000 contracts less than Monday's volume.

Platinum was up a few dollars for most of the Monday trading session, but once the p.m. gold fix arrived, it got the same treatment as gold and silver.  Palladium's spike high came at 2 p.m. Zurich time, but then got sold off as well, before getting slammed moments before 11 a.m.  Platinum was closed down nine bucks---and palladium five bucks.  Here are the charts.

The dollar index closed in New York on Monday afternoon at 80.17.  From there it didn't do much until 1 p.m. BST in London, which was 8 a.m. EDT in New York.  Three hours later at precisely 11 a.m. EDT, the index was at its 80.40 high---and from there it didn't do much, closing the Tuesday session at 80.38---up 21 basis points.

The gold stocks opened in positive territory---and stayed there until "da boyz" put in an appearance minutes before 11 a.m.---and that was it for the day.  The HUI closed on its absolute low tick, down 2.98%.

The price action in the silver equities was very similar---and Nick Laird's Intraday Silver Sentiment Index barely closed off its low---and down 3.26%.

The CME Daily Daily Delivery Report showed that 88 gold and 132 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  In gold, the two short/issuers were Morgan Stanley and ABN Amro with 48 and 40 contracts respectively.  Canada's Scotiabank stopped 82 of them.  In silver, the two short issuers were Jefferies and ABN Amro with 84 and 48 contracts respectively.  The largest long/stoppers were Scotiabank with 65 contracts, JPMorgan with 40 contracts in its client account---and Jefferies with 22 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD---and as of 9:45 p.m. EDT yesterday evening, there were no reported changes in SLV, either.  Ted pointed out on the phone yesterday that Tuesday was the cut-off for the next short position report for GLD and SLV---and that data will be posted on the shortsqueeze.com Internet site about two weeks from now.

There was another sales report from the U.S. Mint yesterday.  They sold 5,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 160,000 silver eagles.

Over at the Comex-approved depositories on Monday, there was no in/out activity in goldSilver, as always, was an entirely different kettle of fish, as 1,807,100 troy ounces were reported received, but only 25,337 troy ounces were reported shipped out.  All of this activity occurred at Brink's, Inc.  The link to the silver action is here.

Here's yesterday's 2-minute gold tick chart courtesy of reader Brad Robertson.  Note the volumes at the bottom.  This chart shows Mountain Daylight Time.  Add two hours for EDT.

I have considerably fewer stories today---and I hope you'll find some of them of interest.

¤ Critical Reads

Fed's Yellen: 'High Degree' of Easing Needed Amid Job-Market Slack

Federal Reserve Chair Janet Yellen said Tuesday that the economic recovery is not yet complete and for that reason the Fed intends to keep providing significant support to boost growth and improve labor market conditions.

In delivering the Fed's semi-annual economic report to Congress, Yellen said the Fed's future actions will depend on how well the economy performs. She says if labor market conditions continue to improve more quickly than anticipated, the Fed could raise its key short-term interest rate sooner than currently projected. But she said weaker conditions will mean a longer period of low rates.

Many economists believe the federal funds rate, which has been at a record low near zero since December 2008, will not be increased until next summer. Yellen said current monthly bond purchases will likely end in October.

Today's first news item was posted on the moneynews.com Internet site at 10:13 a.m. EDT on Tuesday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

Elizabeth Warren Destroys Janet Yellen Over JPMorgan's 'Living Will'

In the Dodd-Frank Act, there is a provision, known as a living will, that must describe a company's strategy for, "rapid and orderly resolution in the event of material financial distress or failure of the company."

This provision comes out of the Lehman Brothers bankruptcy, which triggered the financial crisis and took three years to resolve.

Warren has some concerns regarding JPMorgan's living will, which she notes has been approved each of the last years.

Compared to JPMorgan, Warren said Lehman was "tiny."  Warren noted that at the time of its bankruptcy Lehman had $639 billion in assets; today, JPMorgan has nearly $2.5 trillion in assets.

This very interesting article showed up on the businessinsider.com Internet site at 1:28 p.m. EDT on Tuesday---and I thank Roy Stephens for his first contribution to today's column.

More Lost E-mails: FEC Destroyed Hard Drive of Ex-Lerner Employee

In addition to the destruction of former IRS official Lois Lerner's computer hard drive, the Federal Election Commission recycled the hard drive of one of her former employees, adding to the list of e-mails that have gone missing in relation to the IRS's targeting of conservative groups.

In a letter to the FEC, House Oversight and Government Reform Committee Chairman Darrell Issa and committee member Jim Jordan blasted the destruction of FEC attorney April Sands' hard drive, saying it has hindered the investigation.

"The FEC's failure to retain Ms. Sands' hard drive prevented the FEC Office of Inspector General from fully pursuing appropriate criminal sanctions for Ms. Sands' admitted violation of federal law," the letter said. "Like the IRS's destruction of Lois Lerner's hard drive, the FEC’s recycling of Ms. Sands' hard drive may have also destroyed material responsive to Freedom of Information Act and congressional oversight requests."

This news item showed up on the newsmax.com Internet site at 12:17 p.m. EDT yesterday---and it's the second offering in a row from Roy Stephens.

Is Paul Krugman Leaving Princeton In Quiet Disgrace?

Not long, as these things go, before his departure was announced Krugman thoroughly was indicted and publicly eviscerated for intellectual dishonesty by Harvard’s Niall Ferguson in a hard-hitting three-part series in the Huffington Post, beginning here, and with a coda in Project Syndicate, all summarized at Forbes.com.  Ferguson, on Krugman:

"Where I come from … we do not fear bullies. We despise them. And we do so because we understand that what motivates their bullying is a deep sense of insecurity. Unfortunately for Krugtron the Invincible, his ultimate nightmare has just become a reality. By applying the methods of the historian – by quoting and contextualizing his own published words – I believe I have now made him what he richly deserves to be: a figure of fun, whose predictions (and proscriptions) no one should ever again take seriously."

Princeton, according to Bloomberg News, acknowledged Krugman’s departure with an extraordinarily tepid comment by a spokesperson. “He’s been a valued member of our faculty---and we appreciate his 14 years at Princeton.”

This commentary showed up on the forbes.com Internet site at 8:00 a.m. EDT on Monday morning---and it's worth skimming.  My thanks go out to reader Michael Cheverton for digging this up on our behalf.

Experts report potential software "back doors" in U.S. standards

U.S. government standards for software may enable spying by the National Security Agency through widely used coding formulas that should be jettisoned, some of the country’s top independent experts concluded in papers released on Monday.

Such mathematical formulas, or curves, are an arcane but essential part of most technology that prevents interception and hacking, and the National Institute of Standards and Technology (NIST) has been legally required to consult with the NSA’s defensive experts in approving them and other cryptography standards.

But NIST’s relationship with the spy agency came under fire in September after reports based on documents from former NSA contractor Edward Snowden pointed to one formula in particular as a Trojan horse for the NSA.

NIST discontinued that formula, called Dual Elliptic Curve, and asked its external advisory board and a special panel of experts to make recommendations that were published on Monday alongside more stinging conclusions by the individual experts.

Wow!  You couldn't make this stuff up!  This Reuters story, filed from San Francisco at 9:07 p.m. on Monday evening EDT is a pretty tough read, but worth reading if you can even remotely follow what they're talking about.  Harry Grant sent me this story on Monday---and it's another one that had to wait for today's column, as it would have got lost in yesterday's missive.

Doug Casey on Opting Out

Doug Casey recently spoke with Kenli Schoolland of the International Society for Individual Liberty (ISIL). ISIL is a nonprofit organization that has been the helping libertarians connect all around the world for decades.

Doug and Kenli spoke about international diversification and opting out—from the state, formal education, and the standard employment rat race.

This longish written interview was posted on the internationalman.com Internet site on July 12---and it's certainly worth reading.  I thank Nitin Agrawal for bringing it to my attention on Monday, but for space reasons, had to wait for today's column.

Mark Carney blasts BIS for calling for rate rises in a "vacuum"

Mark Carney has rejected calls by the Bank for International Settlements (BIS) for a swift return to normal interest rates, lambasting the lauded Swiss institution for operating “in a vacuum” and “outside political and economic reality”.

The Governor of the Bank of England said that BIS, considered to be the “bank of central banks” and a bastion of monetary policy, was issuing recommendations from a false premise.

Mr Carney views, which are the strongest dismissal of BIS yet among global central bankers, came hours after a shock rise in inflation led to more calls for a rise in interest rates. The jump in the Consumer Prices Index, from 1.5pc in May to 1.9pc in June, was the biggest monthly rise since October 2012.

This news item appeared on the telegraph.co.uk Internet site at 5:22 p.m BST on Tuesday---and I thank South African reader B.V. for bringing it to our attention.

IMF warns ECB credibility at risk over deflation paralysis

The International Monetary Fund has issued a blistering attack on Europe’s authorities for allowing the eurozone to remain stuck in a low-growth trap, warning that they may have to print money with “full conviction” to head off deflation.

“Inflation has been too low for too long. A persistent failure to meet the inflation target could undermine central bank credibility,” said the IMF with remarkable bluntness in its annual health report on the currency bloc.

“A negative external shock could tip the economy into deflation. The recovery is neither robust nor sufficiently strong. Financial markets are still fragmented, with contracting credit and high borrowing costs constraining investment in countries with large output gaps, large debt burdens and high unemployment,” it added.

This Ambrose Evans-Pritchard offering appeared on The Telegraph's website at 8:58 p.m. BST on Monday evening---and it's courtesy of Roy Stephens.

Germany's plan to take on NSA: Block eavesdroppers with classical music, and use typewriters

Politicians in Germany have devised an ingenious solution to combat the threat of eavesdropping by American spies: playing classical music during their meetings.

MPs who sit on the spying committee had become so concerned that U.S. agents might listen in to their discussions that they had ordered classical music to be played, to drown out the discussions.

On arrival at the meeting, The Suddetusche Zeitung reported that for "security reasons" MPs had to put their mobile phones and computers into a large metal box to ensure that they were not subjected to outside surveillance.

"Then the committee chairman, Patrick Sensburg switched the music on," a source told the paper. "Edvard Grieg's piano concert in A minor. Just for security."

Edvard Grieg---Norway's most famous classical composer?  What's wrong with great German composers such as Beethoven---or how about Richard Wagner?  Off with their heads, I say!!!  Seriously, Grieg's first piano concerto is one of the most popular works in the entire classical repertoire---and I've posted it as my classical "blast from the past" at least once.  This article appeared on the telegraph.co.uk Internet site at 1:25 p.m. BST yesterday---and it's the second offering of the day from reader B.V.

Kiev aircraft fire missiles at apartment block in E. Ukraine, 11 dead

Kiev’s Air Force fired three missiles to destroy a multifamily apartment building in the city of Snezhnoe, eastern Donetsk Region. At least eleven civilians have been pronounced dead as rescue teams cleared out debris of the collapsed building.

“At least 11 people have been killed, as of 17:00 local time. Eight have been wounded, including one child,” the Donetsk regional administration said, adding that the all the wounded are receiving medical treatment.

Assault aircraft fired four missiles at approximately 6:27am, when most of the citizens of Snezhnoe were fast asleep. One of the missiles hit the local tax administration building, which was empty at that early hour. The other three hit a five-story residential building at the 14 Lenin Street, reports RIA Novosti.

This Russia Today news item was posted on their Internet site at 12:34 p.m. Moscow time on Tuesday---and edited at 1:13 a.m. Moscow time this morning.  It's another contribution from Roy Stephens.

BRICS Announce $100 Billion Reserve To Bypass Fed, Developed World Central Banks

As we suggested on Monday night, the anti-dollar alliance among the BRICS has successfully created a so-called "mini-IMF" since the BRICS are clearly furious with the IMF as it stands currently: this is what the world's developing nations just said on this topic "We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness."

As Putin explains, this is part of "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies." Initial capital for the BRICS Bank will be $50 Billion - paid in equal share among the 5 members (with a contingent reserve up to $100 Billion) and will see India as the first President. The BRICS Bank will be based in Shanghai and chaired by Russia. Simply put, as Sovereign Man's Simon Black warns, "when you see this happen, you’ll know it’s game over for the dollar.... I give it 2-3 years."

This Zero Hedge piece appeared on their website at 2:38 p.m. EDT on Tuesday---and I thank reader M.A. for sending it our way.

Pepe Escobar: BRICS against Washington consensus

The headline news is that this Tuesday in Fortaleza, northeast Brazil, the BRICS group of emerging powers (Brazil, Russia, India, China, South Africa) fights the (Neoliberal) World (Dis)Order via a new development bank and a reserve fund set up to offset financial crises.

The devil, of course, is in the details of how they'll do it.

It's been a long and winding road since Yekaterinburg in 2009, at their first summit, up to the BRICS's long-awaited counter-punch against the Bretton Woods consensus - the IMF and the World Bank - as well as the Japan-dominated (but largely responding to US priorities) Asian Development Bank (ADB).

The BRICS Development Bank - with an initial US$50 billion in capital - will be not only BRICS-oriented, but invest in infrastructure projects and sustainable development on a global scale. The model is the Brazilian BNDES, which supports Brazilian companies investing across Latin America. In a few years, it will reach a financing capacity of up to $350 billion. With extra funding especially from Beijing and Moscow, the new institution could leave the World Bank in the dust. Compare access to real capital savings to US government's printed green paper with no collateral.

This absolute must read commentary was posted on the Asia Times website yesterday sometime---and it's the final offering of the day from Roy Stephens, for which I thank him.

Breathing The Air In Venezuela? Prepare To Pay

There is something to be said about every socialist paradise in the history of socialist paradises: they always run out of other people's money. And when they do, stuff like this happens: the biggest international airport in Venezuela is charging a fee for the right to inhale clean air.

As the BBC correctly notes, we're used to a seemingly endless range of taxes and surcharges when we fly - passenger taxes, departure taxes, fuel levies. But Maiquetia International Airport in Caracas has taken this a step further - passengers flying out now have to pay 127 bolivars tax ($20) for the air they breathe.

Wait, a tax to breathe the air? Why yes - it is meant to cover the cost of a newly-installed system which uses ozone to purify the building's air conditioning system. A press release from the Ministry of Water and Air Transport says it's the first airport in South America and the Caribbean to use the technology, which it claims will eliminate bacterial growth to "protect the health of travellers," as well as deodorizing and sanitising the building.

This item of interest showed up on the Zero Hedge website at 5:21 p.m. EDT yesterday---and it's another contribution from reader M.A.

Three King World News Blogs

1. Eric Sprott [#1]: "The Bank of England Gold Vaults Are Empty"  2. Eric Sprott [#2]: "Here is the Road Map to $10,000 Gold"  3. Dr. Stephen Leeb: "Now Germany Will Never Get Its Gold Back From the Fed"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

John Dizard: U.S. dollar-clearing rules make gold the new green

There is a fresh wind behind the dollar price of gold, which is also increasing the reported and unreported volumes of physical trading in the metal.

Thanks to what one (non-banker) friend of mine calls the "dangerously stupid" punitive actions and fines levied on banks using the international dollar clearing system by the US government, the world is finding ways to get along without the dollar.

It is a difficult and expensive process, as the transaction costs of the dollar system have been so low, liquidity so great, and the range of instruments so convenient. Alternatives, such as the euro or the Chinese renminbi, have been less universalistic and flexible. Also, investing or paying for the exchange of goods and services in euros, Swiss francs, sterling, or renminbi is accompanied by almost as many intrusive compliance rules and oversight as one finds in the dollar world.

Arguably, gold is the most expensive and least convenient of all of the monetary alternatives to the dollar. It is very heavy to carry and often has to be re-assayed by the person accepting it as payment, since there is often a lack of trust among participants in the off-the-books transactions that use it. Not many transactions or investments are actually invoiced in gold as such; instead gold is used as the settlement medium rather than for the price quotation.

This commentary by John Dizard appeared on the Financial Times website last Friday.  Somehow it ended up in my junk mail folder---and I didn't discover it until early yesterday afternoon, so here it is now---posted in the clear in this GATA release.  During the last fifteen years, John normally mentions gold in order to disparage it.  Not this time---and for that very reason, this article is worth reading.

Lawrence Williams: Gold and silver smashdown: More to come?

Well, hardly had our article yesterday on a potential smashdown in gold and silver been published on site for a couple of hours than, hey presto, it seems to have happened. Or at least started. According to reports a massive $1.37 billion sale of gold futures hit the market at New York open. This initially drove the gold price down by around $20 before it recovered a little maintaining a level just above $1300 an ounce where it stayed overnight and in choppy morning trade in Europe. This morning has seen some strength on a rebound, though, taking the yellow metal back up above $1,310 at the time of writing suggesting greater resilience than yesterday’s heavy seller(s) may have contemplated. Silver has been following gold’s lead as it is wont to do. True there had been weakness with some strong selling ahead of yesterday’s London open into a thin market as well so it looks like gold may have been seen as vulnerable and the heavy sellers – no doubt the holders of the big short positions – were quick to take advantage with a total knockdown of around $35 on the day.

But, one suspects, the heavy seller (or sellers) of the paper gold may not yet have achieved the desired objective and there could well be more to come designed to breach the psychological $1300 level on the downside and attempt to push gold down perhaps another $100. There is indeed money to be made by so doing and then buying back and letting the price rise. There is no level playing field in any of today’s financial markets it would seem.

Well, dear reader, Lawrie's comments above sound like a rehash of some of what I had to say in The Wrap section of my Tuesday column.  I certainly don't mind, as I'm happy to see someone of his stature in the gold world use my work---accredited, or otherwise---as I know a lot of people read his offerings.  This certainly falls into the must read category---and it was posted on the mineweb.com Internet site yesterday morning BST.

Chris Powell: The more obvious they are, the closer the day of deliverance

With the only news today that seemed to have any bearing on the gold price being bullish -- Federal Reserve Chairwoman Janet Yellen's testimony to a Senate committee that interest rates will remain low long after the current round of "quantitative easing" ends, how could gold futures prices be smashed for $25 out of the blue?

Maybe the best general financial letter in the world, Bill King's The King Report, published by M. Ramsey King Securities in Blue Ridge, Illinois nailed it in Tuesday's edition, which arrived in subscriber e-mailboxes at 1 a.m.  Tuesday morning Eastern time. King wrote: "The gold debacle on Monday also smells of a scheme to push gold to or below $1,300 for expiration." Futures option expiration, that is.

Or maybe the smashing was the moral support for the dollar that is often bestowed by a big market player when a Fed chairman is speaking to Congress. The U.S. government can hardly want the currency market to hiss and jeer her testimony and for gold to hit her in the face with a cream pie mid-sentence, and the government has mechanisms ever-ready to prevent such humiliation, like the Treasury Department's Exchange Stabilization Fund, fully and long authorized by law to trade secretly at any time not just in the gold and currency markets but in any markets at whatsoever.

This commentary by GATA's secretary/treasurer Chris Powell was posted on the gata.org Internet site late yesterday evening EDT---and it, too, is worth reading.

¤ The Funnies

A Black-crowned night heron photographed in the same storm-water pond that I took the photo of the Double-Crested Cormorant that appeared in yesterday's column.

¤ The Wrap

The concentrated short position of the 8 largest silver shorts, at nearly 68,000 contracts (340 million oz) is the highest in four years. As I believe I indicated before the rally commenced, the key would be if the concentrated short position---and that of JPMorgan---increased dramatically. Up until this week, the increase in concentrated shorts hasn’t been dramatic, but I still get the sense that the big 8 shorts---and certainly JPMorgan---are the DH’s, or designated hitters on the short side of silver – that come into the game at critical times. Now is such a critical time in silver.

On the buy side of COMEX silver, it was all technical funds, as these traders bought more than 7,700 contracts, including nearly 6,300 new longs, while buying back more than 1,400 short contracts. The extreme market structure change in COMEX silver since June 3 is truly stunning. In a matter of six weeks, the technical funds have gone from a record large net short position to very close to a record net long position. Never has that occurred before. - Silver analyst Ted Butler: 12 July 2014

Well, "da boyz" didn't take a very big slice out of the precious metals during the New York session yesterday, so we'll have to see what today brings.  Gold's net volume was down quite a bit from Monday, but silver's volume on Tuesday was about the same as Monday's, even though silver got closed down only 18.5 cents.  I'm hopeful that most of Tuesday's trading volume will appear in Friday's Commitment of Traders Report.

Here are the 6-month charts for gold and silver updated with yesterday's data.

Gold touched, but did not break through, its 50-day moving average.  Silver still has miles to go to reach that target---and I'm still of the opinion that they're after that moving average, plus a lot more.  We'll have to wait and see how the salami is sliced in the days leading up to options and futures expiry in the August contract, which is just under two weeks away.

And as I type this paragraph, the London open is twenty minutes away---and all the precious metals are about unchanged from where they closed in New York yesterday afternoon.  Volumes in gold and silver are pretty light, but a touch higher than they were this time yesterday morning.  The dollar index isn't doing much.

Along with the Lawrie Williams commentary from yesterday---posted above---I note that Brien Lundin pointed out the obvious in his Gold Newsletter Alert #747 to his subscribers on Tuesday.  His note was headlined "Slammed---Gold takes it on the chin as speculators dump tonnes of [paper] gold for---no discernable reason."  He went on to say that "I’ve reported for a very long time about these kinds of not-for-profit sell-offs in gold, most of them coming at key points in the market that seem perfectly timed, like a small explosive charge placed at the top of a mountain, to instigate an avalanche of selling by others on the way down."

And as I send this out the door at 5:02 a.m. EDT, not much has changed.  Three of the four precious metals are up a dollar or so from Tuesday's close---and silver is about even.  Gold and silver volumes have picked up, of course, but are still on the lighter side.  The dollar index is now up about 10 basis points.

I wish I knew what to expect during the remainder of the Wednesday trading session.  I'm still expecting JPMorgan et al to continue to pressure prices to the downside to cover their still-enormous short positions in silver especially, as that's what past history indicates will happen.  They seem to be strangely unaffected by their price shenanigans, even though it's obvious that most market observers are now wise to their game.

I suppose the best we can hope for is what Chris Powell said in the title to his article posted further up---and that is that "The more obvious they are, the closer the day of deliverance."

We can only hope.

See you tomorrow.

Wed, 16 Jul 2014 06:13:00 +0000
<![CDATA[Lawrence Williams: Are We Due For Another Massive Gold and Silver Price Smash?]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-are-we-due-for-another-massive-gold-and-silver-price-smas/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-are-we-due-for-another-massive-gold-and-silver-price-smas/#When:06:23:00Z "The overbought situations in both metals no longer exist"

¤ Yesterday In Gold & Silver

As is usually the case, the gold price ticked down at the 6 p.m. Sunday evening open in New York---and it was all down hill from there, with at lot of help from "da boyz" and their algorithms within a hour of the London open.  The decline continued once the noon silver 'fix' was in---and the low tick came at precisely 9:30 a.m. at the open of the equity markets in New York.  The price recovered a couple of dollars after that, but chopped sideways in a very tight range for the remainder of the day.

The high and low tick according to the CME Group was $1,341.10 and $1,303.70 in the August contract.

Gold closed at $1,306.80 spot, down $32.20 on the day.  Net volume was very heavy at 177,000 contracts.

It was more or less the same price pattern in silver, with most of the damage done by 9 a.m. EDT in New York.   After that, the silver price didn't do much.

The high and low ticks were $21.53 and $20.90 in the September contract.

Silver finished the Monday trading day at $20.90 spot, down 54.5 cents from Friday's close.  Volume, net of July and August, was 58,000 contracts---of which 3,580 were trade in December.  If that amount was, in fact, a roll-over out of the September contract, you can reduce yesterday's 58,000 contract volume by that amount.

Platinum wasn't spared, either---and it's low came shortly before the Comex close---but it recovered a handful of dollars from there.  It closed down $22 on the day.  Palladium sort of got caught in the crossfire---and it traded in less than one percent price range for the whole day, finishing down 3 bucks.  Here are the charts.

The dollar index finished the Friday trading session at 80.19---and topped out at 80.24 around 2:20 p.m. in Hong Kong trading---about the same moment that gold really got hit hard for the first time.  The low tick of 80.09 roughly came around 10:40 a.m. BST in London---and then it 'rallied' back to 80.22 shortly after the Comex close.  From there it slid a few basis points into its 80.17 close---basically unchanged on the day.

I'm sure you've figured out by now, dear reader, that the machinations in precious metal prices have virtually nothing to do with what's happening in the currency markets.  Sometimes there is correlation, but yesterday wasn't one of them.

The gold stocks gapped down a bit over 3 percent at the open---and had really cut their loses by a goodly amount by shortly before 11 a.m. EDT. Unfortunately, the rally didn't last---and the stocks got sold down as the day progressed.  However, they did rally a titch into the close---and the HUI finished down only 2.53%.  It could have been worse.

It was the same price pattern in the silver equities, but they got hit harder at the open---and as a result, Nick Laird's Intraday Silver Sentiment Index closed down 3.36%.

The CME's Daily Delivery Report showed that 4 gold and 3 silver contracts were reported for delivery within the Comex-approved depositories on Wednesday.  There are still around 190 gold contracts open in July---and about 580 contracts or so in silver.  There are still a couple of weeks left to go in the July delivery month---and it will be interesting to see how many of these contracts disappear between now and then---and how many actually stand for delivery.

I was surprised to see a really big deposit into GLD yesterday.  An authorized participant added a very decent 229,094 troy ounces, a bit over 7 tonnes.  And as of 7:32 p.m. EDT yesterday evening, there were no reported changes in SLV.

Just as a note of interest.  Since June 1 there has been 753,913 troy ounces of gold added to GLD since the recent rally began.  Since June 1 there has been 7.91 million ounces of silver withdrawn from SLV.

But after yesterday's smack down, it's a good bet that some of that gold is headed out the GLD door---and the authorized participants over at SLV are covering their short positions like mad.  That's one of the reasons that this price decline is being engineered in the first place, so JPMorgan doesn't have to deposit real metal.  They short the shares---and then cover at no cost to them, or a small profit as they whipsaw the technical funds in and out of their positions.  How slick is that?

The CFTC and the CME Group are obviously [as Ted Butler has so correctly pointed out] complicit in all this.  Don't expect The World Gold Council or The Silver Institute to help, as it's their job to keep the miners in line.  It would be wonderful for all of us stockholders in these companies if one one of them would develop a conscience and realize that they have this thingy called fiduciary responsibility.  But I suppose it's a bit too much to ask at this stage of the game.

The U.S. Mint had a sales report to start off the week.  They sold 3,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes----and 400,000 silver eagles.  We are halfway through June and the mint has sold only 835,000 silver eagles.  Ted Butler's big buyer has obviously backed away from the table.

There was some gold movement over at the Comex-approved depositories on Friday, as 32,159 troy ounces were reported received---all of it at HSBC USA---and 198 troy ounces were shipped out.  The link to that activity is here.

Of course there was much more movement in silver, as 312,979 troy ounces were reported received---and 604,721 troy ounces were shipped out.  The link to that action is here.

Here's the 5-minute gold chart courtesy of reader Brad Robertson.  The times on the chart are Mountain Daylight Time, so you have to add two hours for EDT.  Note the high volumes as the HFT boyz spun their algorithms and hit the technical funds' sell stops on their engineered price decline.  They were forced to cover---and "Bob's your uncle!"

Since this is my Tuesday column, I have more than a decent number of stories for you today and, the final edit is yours.

¤ Critical Reads

Individuals Pile Into Stocks as Pros Say Bull Is Spent

Main Street and Wall Street are moving in opposite directions.

Individual investors are plowing money back into the U.S. stock market just as professional strategists say gains for this year are over. About $100 billion has been added to equity mutual funds and exchange-traded funds in the past year, 10 times more than the previous 12 months, according to data compiled by Bloomberg and the Investment Company Institute.

The growing optimism contrasts with forecasters from UBS AG to HSBC Holdings Plc, who say the stock market will be stagnant with valuations at a four-year high. While the strategists have a mixed record of being right, history shows the bull market has already lasted longer than average and individuals tend to pile in at the end of the rally.

This Bloomberg story, filed from New York, was sent to me by reader Harry Grant in the wee hours of Monday morning MDT---but it certainly doesn't match the dateline on the story, so it's probably been edited in the interim.

Traders Flood U.S. With $3.4 Trillion of Bond-Auction Demand

The intensifying debate over when the Federal Reserve raises interest rates is little more than a sideshow when it comes to the ability of the U.S. to borrow.

For all the concern fixed-income assets will tumble once the central bank boosts rates, the Treasury Department still managed to get investors to submit $3.4 trillion of bids for the $1.12 trillion of notes and bonds sold this year, according to data compiled by Bloomberg. That represents a bid-to-cover ratio of 3.06, the second-highest on record and up from 2.88 in all of last year.

Attracting investors is critical for the U.S. as it finances a debt load that has more than doubled to almost $18 trillion since before the financial crisis. The appeal of Treasuries was on display last week as benchmark 10-year notes rallied the most since March while investors sought a haven amid rising concern over the health of a Portuguese bank.

This is another Bloomberg piece---and this one is filed from New York as well.  West Virginia reader Elliot Simon sent it to us yesterday morning.

Economists lower forecasts for U.S. growth

U.S. business economists have sharply cut their growth forecasts for the April-June quarter and 2014, though they remain optimistic that the economy will rebound from a dismal first quarter.

The average forecast for growth in the second quarter has fallen to 3 percent, according to a survey released Friday by the National Association for Business Economics. That's down from 3.5 percent in a June survey. Growth in 2014 as a whole will be just 1.6 percent, they project, sharply below a previous forecast of 2.5 percent. If accurate, this year's growth would be the weakest since the Great Recession.

The lower 2014 forecast largely reflects the impact of a sharp contraction in the first quarter. The economy shrank 2.9 percent at an annual rate, the biggest drop in five years. That decline will weigh heavily on the economy this year, even if growth resumes and stays at 3 percent or above, as most economists expect.

This AP story from Friday was picked up by the news.yahoo.com Internet site---and its an article I found in yesterday's edition of the King Report.

Yellen tells magazine Fed's easy money will be needed even after recovery

The Federal Reserve will still need to deliver "unusually accommodative" monetary policy even once the U.S. economy returns to "where we want it to be," Fed Chair Janet Yellen was quoted as saying in a magazine article.

The New Yorker, which interviewed Yellen three times in the last few months, in its July 21 issue quoted her as saying the economy still faced headwinds.

"And so even when the headwinds have diminished to the point where the economy is finally back on track and it's where we want it to be, it's still going to require an unusually accommodative monetary policy," she is quoted as saying in the article that stresses Yellen's role as public servant.

This Reuters article was posted on their Internet site at 9:30 a.m. EDT on Monday---and I found it embedded in a GATA release.

David Stockman: The Implosion is Near: Signs of the Bubble’s Last Days

The central banks of the world are massively and insouciantly pursuing financial instability. That’s the inherent result of the 68 straight months of zero money market rates that have been forced into the global financial system by the Fed and its confederates at the BOJ, ECB and BOE. ZIRP fuels endless carry trades and the harvesting of every manner of profit spread between negligible “funding” costs and positive yields and returns on a wide spectrum of risk assets.

Moreover, this central bank sponsored regime of ZIRP and money market pegging contains a built-in accelerator. As carry trade speculators drive asset prices steadily higher and fixed income spreads steadily thinner—- fear and short interest is driven out of the casino, making buying on the dips ever more profitable and less risky. Indeed, the explicit promise by central banks that the money market rate will remain frozen for the duration and that ample warning of any change in rate policy will be “transparently” announced is the single worst policy imaginable from the point of view of financial stability. It means that the speculator’s worst nightmare—–suddenly going “upside down” due to a sharp spike in funding costs—-is eliminated by central bank writ.

Stated differently, ZIRP systematically dismantles the market’s natural stability mechanisms. One natural deterrent to excessive financial gambling, for example, is the cost of hedging a speculator’s portfolio of “risk assets” against a broad market plunge. In an honest market environment, hedging costs consume a high share of profits, thereby sharply limiting risk appetites and the amount of capital attracted to speculative trading.

This commentary by Stockman showed up on his website yesterday---and it's the first offering of the day from Roy Stephens.

Eric Sprott: Central bank policy is failing and metals are firming

Central bank policy is failing to revive economies, in the United States part-time jobs are replacing full-time jobs, and the monetary metals are standing up well against enormous shorting in the futures market, Sprott Asset Management CEO Eric Sprott tells Jeff Rutherford of the Sprott Money News Weekly Market Wrap Up.

The audio interview runs for 8:18 minutes---and I thank Chris Powell for the above introductory paragraph.  This was supposed to have been in my Saturday column, but the e-mail containing it disappeared into cyberspace right out of my in-box.

CNBC’s Rick Santelli Loses It Over Fed Policy

We’re used to seeing CNBC reporter Rick Santelli rant. He established it as part his brand at the start of the financial crisis, in a tirade against the bailout that called for a new “tea party” protest.

But today he cut loose on the Federal Reserve, and CNBC economics reporter Steve Liesman seems to have lost all patience with him:

“There is no single piece of advice you’ve given that’s worked, Rick. Not a single one.”

Watch it here. It gets heated about 2:30 in, boils over at around 6 minutes, and Santelli walks off camera at about 11 minutes.

There are two embedded CNBC video clips in this time.com story from yesterday afternoon---and they're worth watching.  I thank reader M.A. for sending it our way.

Investigators needn't have left Washington to search for forex riggers

U.S. prosecutors are offering immunity deals to junior traders in London as they try to gather evidence against banks and more senior staff in the investigation into alleged currency market manipulation.

U.S. Department of Justice staff have flown to the U.K. in recent weeks to interview foreign exchange traders, who have been offered partial immunity in exchange for volunteering information about superiors, people familiar with the situation said.

The above two paragraphs are all that's available in the clear from this Financial Times story that appeared on their Internet site on Monday.  Chris gave the article that title, but the actual headline reads "Junior Traders Offered Immunity in Forex Probe".

Dark pool probe builds pressure on Barclays boss

Barclays boss Antony Jenkins faces one of the biggest tests of his leadership this month when he decides whether the bank, Britain's third largest, should fight accusations it deceived and defrauded customers in the United States.

If Jenkins accepts the allegations, made in a lawsuit filed by New York's Attorney General, he will face a dilemma arising from his pledge to jettison any business that does not fit into the bank's new, squeaky-clean image.

But the U.S. trading desk at the centre of the allegations is part of Barclays' equities business, an area it had planned to keep largely intact while shrinking its investment bank.

It comes at a time of mounting discontent among investors. Some say that after almost two years in the CEO hot seat Jenkins is failing to turn around both culture and performance.

Barclays' shares are down around 9 percent, close to two-year lows, since the lawsuit was filed, compared with a 3.5 percent fall in European bank stocks in the same period. They have also underperformed their European peers since Jenkins was appointed in 2012.

This longish, but very interesting Reuters story was posted on their website at 9:21 a.m. EDT on Sunday morning---and it's the second offering of the day from Elliot Simon.

'It defies belief': Snowden condemns U.K.’s new surveillance bill

During an exclusive interview in Moscow with the Guardian, the whistleblower suggested it was highly unusual for a state to process legislation so hastily other than at a time of acutely endangered national security.

"I mean we don't have bombs falling. We don't have U-boats in the harbour”, he emphasised. Yet suddenly this legislation has become an absolute priority. "It defies belief", he said.

Snowden found the duress with which the UK government processed the Data Retention and Investigation Powers Bill to be remarkable, comparing it to the Bush administration’s introduction of the Protect America Act in 2007. The Protect America Act was issued after the New York Times exposed a “warrantless wire-tapping programme” that was both illegal and “unconstitutional”, he stated.

This Russia Today news item appeared on their website at 3:04 p.m. Moscow time on their Monday afternoon---and I thank Roy Stephens for sending it.

Hunting American Spooks: Germany Prepares Further Spying Clampdown

The latest revelations of U.S. spying on Germany have unleashed unprecedented levels of distrust in Berlin. The government has already expelled the CIA's chief here and may soon be planning additional measures as it seeks answers from Washington.

It was an unusual invitation that took four members of a German parliamentary control committee to London early last week. For the ninth time, lawmakers in the so-called "Five Eyes" countries tasked with supervising their respective intelligence services were meeting in the British capital. They had faced serious accusations of spying within the last year. This time, the British, Americans, Canadians, Australians and New Zealanders had invited their somewhat disgruntled German counterparts to join the group.

A casual reception was being held at the British Foreign Office to herald the beginning of the conference. On Monday evening, a limousine appeared at St. James's Hotel near Hyde Park to pick up the German delegation. But due to an error on the driver's part, the German parliamentarians were taken to the wrong destination. Realizing that they would be late by then, the lawmakers decided to skip the reception.

The unexplained absence of the Berlin guests was the source of some anxiety among the Five Eyes delegates. Had they boycotted the reception because of the latest unpleasant surveillance scandal?

This 2-page essay showed up on the German website spiegel.de at 6:40 p.m. Monday evening Europe time---and my thanks go out to Roy Stephens for his second contribution in a row.

ECB interest rates too low for Germany, says Bundesbank chief

The European Central Bank's interest rates are too low for Germany, Bundesbank chief Jens Weidmann said on Saturday, adding that ECB monetary policy should remain expansive for no longer than absolutely necessary.

Speaking at a Bundesbank open day for the public, Weidmann noted that many savers in Germany were irritated by low interest rates but said these were aimed at supporting investment and consumption.

The ECB cut interest rates to record lows last month as part of a package of measures to breathe life into a sluggish euro zone economy, where inflation is running far below the central bank's target and there is a dearth of credit to smaller firms.

This Reuters piece, filed from Frankfurt, was posted on their Internet site at 7:58 a.m. EDT on Saturday morning---and it's another article I found in yesterday's edition of the King Report.

Draghi Seen Handing $1 Trillion to Banks in ECB Offer

Mario Draghi’s newest stimulus tool will hand banks more than 700 billion euros ($950 billion) of cheap funding, economists say.

The European Central Bank president’s targeted lending program for banks will boost credit for the real economy as planned, and at the same time help keep the financial system flush with cash, according to the Bloomberg Monthly Survey of 45 economists. Draghi highlighted the measure in testimony to lawmakers today in Strasbourg, saying that it has “strong incentives” built in to spur lending.

The ECB has identified loans to companies and households as a key weakness in the euro area’s fragile recovery. The so-called TLTRO program, part of a wider package of measures announced in June, offers as much as four years of low-cost funding tied to bank lending that Draghi said this month could ultimately provide as much as 1 trillion euros.

"Fragile recovery?"  Surely they jest?  Europe is in a full-blown deflationary spiral---and this ain't going to help.  It's the age-old problem of pushing on a string when the entire financial system is choked with debt already.  This Bloomberg news item showed up on their website at 12:51 p.m. Denver time on Monday---and I thank Harry Grant for sending it to me in the wee hours of Monday morning, so it's obvious that it, too, has been revised since it was originally posted.

Der Spiegel claims Merkel considers stepping down

German Chancellor Angela Merkel is determined to resign ahead of term without waiting for an election or change of leadership in the Christian-Democratic Union (CDU), Der Spiegel reports, quoting government and CDU sources.

In an article coinciding with Merkel’s 60th birthday, Der Spiegel alleges that the chancellor’s party and Cabinet entourage are convinced that she may step down voluntarily so as not to share the fate of former chancellors, Konrad Adenauer and Helmut Kohl, who were both highly popular in Germany yet, were forced to quit due to internal party struggle or by an electoral defeat.

Mass media have repeatedly speculated about Merkel’s early resignation before.

Meanwhile, Merkel has dismissed these speculations, saying she is not planning to step down.

This brief article showed up on The Voice of Russia website at 10:17 a.m. Moscow time on Monday---and this story is also courtesy of Roy Stephens.

BIS chief fears fresh Lehman from worldwide debt surge

The world economy is just as vulnerable to a financial crisis as it was in 2007, with the added danger that debt ratios are now far higher and emerging markets have been drawn into the fire as well, the Bank for International Settlements has warned.

Jaime Caruana, head of the Swiss-based financial watchdog, said investors were ignoring the risk of monetary tightening in their voracious hunt for yield.

“Markets seem to be considering only a very narrow spectrum of potential outcomes. They have become convinced that monetary conditions will remain easy for a very long time, and may be taking more assurance than central banks wish to give,” he told The Telegraph.

Mr Caruana said the international system is in many ways more fragile than it was in the build-up to the Lehman crisis. Debt ratios in the developed economies have risen by 20 percentage points to 275pc of GDP since then.

This longish, but must read commentary by Ambrose Evans-Pritchard, appeared on the telegraph.co.uk Internet site at 8:10 p.m. BST on Sunday evening.  I thank reader 'h.c.' for being the first through the door with this story yesterday.

Farnborough visa scandal is politically motivated – Russian Foreign Ministry

Britain's failure to issue entry visas to representatives of a Russian delegation to the Farnborough Airshow is politically motivated, Russian Deputy Foreign Minister Alexei Meshkov said on Monday, the RIA Novosti news agency reports. Moscow sees the move as "purely political and unfounded," he said.

The diplomat confirmed that the Russian embassy in London had filed a formal protest over the incident.

The Farnborough International Airshow, one of the world's largest aviation exhibitions, is opening at Farnborough, near London on Monday, July 14.

The majority of those who were to represent Russia at the Farnborough show have been denied U.K. visas over the crisis in Ukraine.

This article is another from The Voice of Russia website.  This one, also courtesy of Roy Stephens, appeared on their website at 2:45 p.m. on Monday afternoon Moscow time.

Putin signs nuclear energy deal with Argentina

Russian President Vladimir Putin signed a nuclear energy cooperation deal with Argentina on Saturday on a trip to bolster trade ties and strengthen Russia's influence in Latin America.

Putin's energy minister, Alexander Novak, told reporters in the Argentine capital that the Russian state atomic energy corporation, Rosatom, had made an offer to tender for the construction of two new nuclear power units in Argentina.

Novak said Rosatom could offer "comfortable" financial terms to Latin America's No. 3 economy, which has struggled to advance its nuclear energy program and lure foreign investors deterred by a raft of punishing capital and import controls.

This Reuters news item from Saturday showed up on the chicagotribune.com Internet site---and I thank Casey Research's own Louis James for passing this around yesterday.

This AP story put in an appearance on the news.yahoo.com Internet site Monday afternoon---and I thank Elliot Simon for sharing it with us.

Putin vows to help develop offshore Cuba

Russian President Vladimir Putin said at the conclusion of a regional visit his government would help Cuba's state oil company develop offshore reserves.

Putin met in Havana with Cuban President Raul Castro during a tour of Latin American countries. Putin said Russian oil company Rosneft would help its counterparts at state-owned Cubapetroleo develop offshore Cuban reserves.

"Developing new blocks on Cuba's offshore shelf is (expected) in the very near future," the Russian president said Sunday.

Cuba has limited proven reserves of its own and relies on imports from Latin American countries to meet its energy demands.

This short UPI article, filed from Havana, showed up on their Internet site at 8:59 a.m. EDT yesterday---and it's the final offering of the day from Roy Stephens.

Secret Path Revealed for Chinese Billions Overseas

For years, wealthy Chinese have been transferring billions worth of their money overseas, snapping up pricey real estate in markets including New York, Sydney and Vancouver despite their country’s currency restrictions.

Now, one way they could be doing it is clearer. Last week, when China Central Television leveled money-laundering allegations against Bank of China Ltd., the state-run broadcaster’s report prompted the revelation of a previously unannounced government program that enables individuals to transfer their yuan and convert it into dollars or other currencies overseas.

Offered by some banks in the southern province of Guangdong, across the border from Hong Kong, the trial program was introduced in 2011 for overseas property purchases and emigration and doesn’t constitute money laundering, Bank of China said in a July 9 statement. The transfers were allowed by regulators and reported to them, the bank said.

This Bloomberg article, filed from Shanghai, appeared on their Internet site at 3:37 a.m. EDT on Monday morning---and it's the third an final offering of the day from Harry Grant.

Emerging nations plan their own World Bank, IMF

Fed up with U.S. dominance of the global financial system, five emerging market powers this week will launch their own versions of the World Bank and the International Monetary Fund.

Brazil, Russia, India, China and South Africa —the so-called BRICS countries — are seeking "alternatives to the existing world order," said Harold Trinkunas, director of the Latin America Initiative at the Brookings Institution.

At a summit Tuesday through Thursday in Brazil, the five countries will unveil a $100 billion fund to fight financial crises, their version of the IMF. They will also launch a World Bank alternative, a new bank that will make loans for infrastructure projects across the developing world.

Seven King World News Blogs/Audio Interviews

1. John Embry: "Gold and Silver Smash---and the Derivatives Time Bomb"  2. James Turk: "Bank Shorts Orchestrating Gold and Silver Smash"  3. Richard Russell: "People Are Going Broke---and It Will Get Ugly"  4. Michael Pento: "Wall Street's Fantasy is About to Morph Into a Nightmare"  5. Robert Fitzwilson: "Central Planners Now "All In" as Endgame Draws to a Close"  6. The first audio interview is with David Stockman---and the second audio interview is with Bill Fleckenstein

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Koos Jansen: Demand on Shanghai Gold Exchange remains steady

Withdrawals from the Shanghai Gold Exchange for the week ending July 4 were very close to withdrawals for the previous week, continuing at a rate that, annualized, would reach 1,900 tonnes, according to gold researcher and GATA consultant Koos Jansen's report today. But, Jansen writes, Shanghai gold has been trading at a slight discount to London gold, indicating no shortage in China at the moment.

Jansen's analysis has begun to be posted at the Bullion Star Internet site bullionstar.com---and I found all of this over at the gata.org Internet site yesterday.

Lawrence Williams: Are we due for another massive gold and silver price smash?

The signs are all there. The big investment banks – JPMorgan in particular – which have the financial clout to move the markets on their own through massive paper sales in the futures markets have, it is reported, been building short positions in gold and silver to a level not seen since just ahead of the big gold price smashdown of April last year.

Is history about to repeat itself? If we get another high profile bank analyst issuing a strong ‘sell short, or ‘slam dunk sell’ gold recommendation in the next few days then it may presage another attempt to knock the gold price, and the silver price, down very sharply. As was shown last April, such a move could negate any gold price gains so far this year – and more.

As Ed Steer commented in his most recent newsletter in an analysis of the latest COT report which showed that the Commercial net short position on COMEX increased by 5,548 contracts, or 554,800 troy ounces. The Commercial net short position now stands at 16.6 million troy ounces. “You'd have to go back to March of 2013 to see the Commercials holding this big a net short position in gold. It was from that point in March of last year where gold got clocked for $400 the ounce by the end of July. One wonders what fate is in store for us in gold going forward? One would have to presume that it would be similar to the fate that awaits silver.”

I was flattered that Lawrie thought enough of what I had to say in my Saturday column to post part of it in his very widely-read commentary over at the mineweb.com Internet site on Monday---and I thank Casey Research's own Jeff Clark for bringing it to my/our attention.

Sprott's Embry, MineWeb's Williams criticize Casey's claim to omniscience

Sprott Asset Management's John Embry and MineWeb's Lawrence Williams today criticize Casey Research founder Doug Casey's assertion last week that complaints of gold price suppression are "ridiculous."

"I take that as a personal affront," Embry says in an interview with King World News. "I've been around markets on a day-to-day basis longer than he has, and I can guarantee you I can identify a market that is being manipulated. And both the gold and silver markets are classic examples of manipulated markets."

Williams writes that Casey's disparagement comes "despite GATA's evidence to the contrary suggesting that some central banks may indeed be supporting some form of suppression, at least from time to time, to protect currencies."

Needless to say, this GATA release from yesterday is definitely a must read, as Chris Powell has a bit more to say than what's shown above.

Ted Butler: The Silver Conspiracy

It’s now going on close to 30 years since I first discovered that silver was manipulated by excessive and concentrated short selling on the COMEX. I remember the exact moment like it occurred yesterday. It’s hard to believe I was in my 30’s when this started. As I’ve explained previously, I was looking for an answer to Izzy Friedman’s question as to how and why silver prices remained so low when the market was in a supply/demand deficit.

Through no great accomplishment on my part, aside from having a futures market background of almost 15 years at the time, it suddenly dawned on me that silver prices were dictated on the COMEX, to the point of price manipulation. Everything that has transpired since has only confirmed to me that silver prices are still manipulated on the COMEX.

That is not to say that there haven’t been many historical developments since 1985 in the silver market; just that none of those events do anything but confirm the ongoing silver manipulation. Not even an extreme price surge from $4 to $49 detracts from the manipulation premise; as how could any commodity jump that much with no big change in supply and demand if it wasn’t artificially priced too low to begin with?

Some, but not all, of the big silver developments to me were the sudden doubling of prices and even faster decline in 1987, the buying of silver by Warren Buffett in 1998 (perhaps due to my writing of metals leasing), the depletion of US Government stockpiles in 2001, 60 years after being the world’s largest holder of silver with nearly 6 billion oz, the introduction of the world’s first silver ETF, SLV, in 2006 and my discovery in 2008 that the rescue of Bear Stearns resulted in its massive concentrated short position being transferred to JPMorgan according to CFTC correspondence.

This very long commentary from Ted easily falls into the absolute must read category---and is certainly the most important story in today's column.  I urge you to read it more than once, as it just isn't possible to digest it all in one go.  It showed up on Peter Spina's silverseek.com Internet site yesterday.

¤ The Funnies

Saturday night's "perigee moon".  I took the photo about 11:15 p.m. Mountain Daylight Time---and cropped the shot off centre, as I'm now using it as my desktop background.  It's a stunning image full screen.

A Double-Crested Cormorant drying in the summer sun here in Edmonton---a shot from about a month ago.

¤ The Wrap

Both the increase in the short position of SLV as well as the hefty withdrawals of metal, point to physical tightness. For sure there was net buying in SLV over the past six weeks, as it would be virtually impossible for there not to have been given price action and trading volume. For silver to be withdrawn---and for the short position of SLV to have increased---is a double-whammy pointing to physical tightness.

Combined with the extraordinary level of physical turnover in the COMEX silver warehouses, it’s hard to imagine more compelling signs of wholesale tightness in silver, shy of a public announcement of a physical silver shortage. After all, the COMEX silver warehouses and SLV are, by far, the two largest repositories of physical silver in the world; holding a combined total of nearly 500 million silver oz, or close to 60% of all the recorded and visible silver bullion in the world. - Silver analyst Ted Butler: 12 July 2014

As I said in the closing paragraphs in The Wrap section of Saturday's column---"one should be on red alert for an engineered price decline at some point in the not-too-distant future."  I was hoping that I had called it right, but couldn't imagine that JPMorgan et al were going to show up as quickly as they did.

Here are the 6-month gold and silver charts complete with Monday's data.

As you can see, the overbought situations in both metals no longer exist---and now the 50 and 200-day moving averages beckon.  Is this their target?  Beats me.  Ted figures that they could carve a hundred bucks off the gold price real easy---along with three bucks or so in silver.  Then it remains to be seen whether JPMorgan et al will be satisfied with that, or will they take prices lower.  All questions with no answers at the moment.

The only other questions remaining are, how low in price---and over what time period, will "da boyz" continue this engineered price decline in both metals, especially silver.  Ted Butler calls it "slicing the salami"---and it remains to be seen how many more slices there are to go, and how big they will be when they occur.  But there's always a chance we could be done to the downside already.  But if I had to bet ten bucks, that's not how I'd bet it, at least not using past history as a guide.

And as I type this paragraph, the London open is about 25 minutes away.  Gold and silver prices have traded pretty flat so far on Tuesday---and at the moment, gold is up a buck or so---and silver is down about 6 cents.  Volume in both metals is extremely light---and the dollar index is up a handful of basis points.  Platinum and palladium aren't doing much, either.

The only good thing about this engineered price decline is that the opening salvo began on a Monday, so that means that nearly all the trading data associated with yesterday's activity should be in Friday's Commitment of Traders Report.  The cut-off for that report is at the close of Comex trading this afternoon.

And as I fire this out the door to Stowe, Vermont at 4:47 a.m. EDT, I see that not much has happened since my last update before London opened.  All four precious metals are higher by tiny amounts, but nothing you would call a trend.  I see that gold volume has more than doubled since the open---and is now about 24,000 contracts net---and silver's volume is not quite double.  I don't know what that's about, as there's nothing in the price action to indicate that volumes should be this high.  Maybe it was more technical fund long liquidation.  The dollar index is back to almost unchanged.

And before heading off for bed, I'd like to mention that Casey Research's 2014 Summit Thriving in a Crisis Economy, is being held in San Antonio, Texas - September 19-21 at the beautiful Hyatt Hill Country Resort & Spa.  I'll be presenting at that conference---and I'd like to meet you there as well but---this is your last opportunity to sign up at the early-bird discount and save $400 - as it expires TONIGHT, Tuesday, July 15 at 11:59 p.m. EDT.  So please, if you're interested, act fast---or more specifically, act before midnight tonight.  You can view the list of faculty, the schedule, and access the secure early-bird registration form through this link.

That's it for today---and I'll see you here tomorrow.

Tue, 15 Jul 2014 06:23:00 +0000