<![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[It’s Official—China’s Gold Demand in 2013 Was 2,199 Tonnes]]> http://www.caseyresearch.com/gsd/edition/its-official-chinas-gold-demand-in-2013-was-2199-tonnes/ http://www.caseyresearch.com/gsd/edition/its-official-chinas-gold-demand-in-2013-was-2199-tonnes/#When:06:26:00Z "Mining executives don't care what happens to their public stockholders"

¤ Yesterday In Gold & Silver

The gold price didn't do much of anything in Far East or early London trading on their Wednesday---and the smallish rally that developed once the noon London silver 'fix' was in, got in the neck at precisely 8:30 a.m. EDT---ten minutes after the Comex open.  From there it chopped sideways until the 1:30 p.m. Comex close.  Then further selling pressure entered the market---and gold got closed almost on its low tick.

The high and low were recorded by the CME Group as $1,250.20 and $1,240.70 in the December contract.

Gold finished the trading day in New York yesterday at $1,241.00 spot, down $8.40 from Tuesday's close.  Net volume was 103,000 contracts.

As usual, silver got hit the moment that trading began in New York on Tuesday evening---and never recovered.  The tiny rally that developed right at the Comex open ran into 'da boyz' and their algorithms---and silver, like gold, was closed almost on its low tick.

The high and low were recorded as $17.535 and $17.115 in the December contract, which was an intraday move of more than 2 percent.

Silver closed in New York yesterday at $17.17 spot, down 34.5 cents.  Net volume was pretty decent at 36,000 contracts.

Platinum hit its high at 9 a.m. Tokyo time---and then got sold down to unchanged.  The real selling pressure began the moment that Zurich opened---and platinum was closed on its absolute low of the day, down twenty bucks from Tuesday.

Palladium did very little on Wednesday, at least up until its brief spike shortly after 11:30 a.m. in New York yesterday morning.  From that spike high it got sold down with a vengeance as the powers-that-be closed it down an even 10 bucks from Tuesday's close.

The dollar index closed late on Tuesday afternoon in New York at 85.40---and after a brief dip to its 85.24 low around 2:10 p.m. Hong Kong time on their Thursday afternoon, it chopped higher until around 2:40 p.m. EDT---and from there it traded pretty flat into the close.  The index finished the Wednesday session at 85.75---up another 35 basis points.

Here's the 6-month U.S. dollar index so you can see what's happened since its low in early May.

The gold stocks gapped down at the open---and the rally that developed shortly after the London p.m. fix didn't last.  It was down hill all the way from there, as the HUI closed on its absolute low tick, down 3.17%.  [NOTE: My new HUI chart is courtesy of Nick Laird, for which I thank him]

The performance of the golds stocks looked terrific compared to the silver equities, as they got crushed to the tune of 6.37%.

Once again the sell-off in the precious metal shares was out of all proportion to the loses in the underlying metal.

The CME Daily Delivery Report showed that 1 gold and 10 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in October dropped to 235 contracts---and October o.i. in silver was cut from 102 contracts down to 14 contracts, from which must be subtracted the deliveries posted in the previous paragraph.  The October delivery month, which concludes one week from today, will go off the board without incident.

There was anther withdrawal from GLD yesterday.  This time an authorized participant took out 67,293 troy ounces.  And as of 9:27 p.m. EDT yesterday evening, there were no reported changes in SLV.

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

There were no in/out movements in gold at the Comex-approved depositories on Tuesday but, as usual, it was a totally different story in silver, as  585,333 troy ounces were received---and 446,684 troy ounces were shipped out.  Almost all the action was at Brink's, Inc. and the CNT Depository.  The link to that action is here.

I don't have all that many stories today, so I hope you have the time to read the ones you like.

¤ Critical Reads

Kyle Bass warns Q.E. end will shake up markets

Central banks meeting next week will expose a huge divergence in monetary policy between several major economies, putting the macro environment in focus and weighing on foreign exchange, hedge fund manager Kyle Bass said Wednesday.

The founder of the $1.7 billion hedge fund Hayman Capital thinks the Fed likely will taper its bond-buying stimulus to zero next week. The Bank of Japan, however, likely will announce it will do whatever it takes to prevent the world's third-largest economy from heading into a major crisis.

"They still run 10 percent fiscal deficits. We think they're going to run a current account deficit of 2 to 4 percent next year and Japan is going to have to buy more bonds and the U.S. is going to buy no more," Bass said on "Squawk on the Street." "And so when the training wheels come off the market in central bank land, macro becomes functionally much more relevant."

There are three CNBC video clip with Kyle that run concurrently.  In total, all three run for 7 minutes.  They showed up on their website around 9 a.m. EDT on Wednesday morning.  They're worth watching.  I thank reader David Ball for today's first story.

McDonald's Franchisees Say the Company is Bankrupting Them

McDonald's franchisees are furious that the company's aggressive promotions and costly restaurant upgrades are squeezing their profits, according to a new survey.

"Growth for McDonald's is over," one franchisee wrote in response to the survey by the financial services firm Janney Capital Markets.

"I am just hoping to be flat," another franchisee said. "[The] customer has lost faith in the brand."

"We are leaderless," said a third. A fourth franchisee complained, "They are being successful in bankrupting us."

This very interesting news item appeared on the businessinsider.com Internet site at 4:48 p.m EDT on Monday---and it's courtesy of reader Brad Robertson.

Manufacturing moving from China to U.S. - survey

Large manufacturers are increasingly moving production back to the United States from China, according to a new report by The Boston Consulting Group released Thursday.

In the third annual survey of US-based senior executives at manufacturing companies with annual sales of at least $1 billion, the number of respondents who said their companies were currently reshoring to the U.S. from China increased 20 percent from a year ago.

Given the fact that China's wage costs are expected to grow, do you expect your company will move manufacturing to the United States?" the August survey asked executives at an unspecified number of companies that currently manufacture in China.

The executives who said "Yes, we are already actively doing this" rose to roughly 16 percent in the "Made in America, Again" survey in August from 13 percent a year earlier and seven percent in the first survey in the series, in February 2012.

This AFP news item appeared on the france24.com Internet site at 9:05 a.m. Europe time this morning---and I thank South African reader B.V. for sliding it into my in-box shortly before I filed today's column.

Fed spotted JPMorgan 'Whale' risks years before scandal: inspector

The Federal Reserve's New York branch knew about risks JPMorgan Chase & Co was taking with its massive "London Whale" derivatives bets four years before they imploded, but it failed to act properly to head them off, the U.S. central bank's inspector general said.

The Fed's Office of Inspector General said on Tuesday one of the key flaws it uncovered in its probe of the 2008 transaction at the Wall Street bank was the New York Fed's over-reliance on certain personnel who left the supervisory team in 2011. That created a "significant loss of institutional knowledge" within the team assigned to inspect JPMorgan, the report said.

In what amounts to another recent black eye for the New York Fed's bank supervision unit, the report also noted that competing supervisory priorities and limited resources contributed to a failure to conduct key follow-up examinations.

This Reuters article, co-filed from New York and Washington, put in an appearance on their Internet site at 1:59 p.m. EDT on Tuesday afternoon---and it's a story I found in yesterday's edition of the King Report.

All the Markets Need is $200 Billion a Quarter From the Central Bankers

The central-bank put lives on.

Policy makers deny its existence, yet investors still reckon that whenever stocks and other risk assets take a tumble, the authorities will be there with calming words or economic stimulus to ensure the losses are limited.

A put option gives investors the right to sell their asset at a set price so the theory goes that central banks will ultimately provide a floor for falling asset markets to ensure they don’t take economies down with them.

Last week as markets swooned again, it was St. Louis Federal Reserve President James Bullard and Bank of England Chief Economist Andrew Haldane who did the trick. Bullard said the Fed should consider delaying the end of its bond-purchase program to halt a decline in inflation expectations, while Haldane said he’s less likely to vote for a U.K. rate increase than three months ago.

Just a softer way of saying the President's Working Group on Financial Markets, now shortened to the Plunge Protection Team.  This Bloomberg offering, filed from London, showed up on their Internet site at 5:18 a.m. Mountain Daylight Time on Tuesday morning---and it's the second item in a row that I plucked from yesterday's edition of the King Report.

Currency wars are back: 'Export your deflation to someone else'

Brazil Finance Minister Guido Mantega popularized the term “currency war” in 2010 to describe policies employed at the time by major central banks to boost the competitiveness of their economies through weaker currencies. Now, many see lower exchange rates as a way to avoid crippling deflation.

Weak price growth is stifling economies from the euro region to Israel and Japan. Eight of the 10 currencies with the biggest forecasted declines through 2015 are from nations that are either in deflation or pursuing policies that weaken their exchange rates, data compiled by Bloomberg show.

“This beggar-thy-neighbor policy is not about rebalancing, not about growth,” David Bloom, the global head of currency strategy at London-based HSBC Holdings Plc, which does business in 74 countries and territories, said in an Oct. 17 interview. “This is about deflation, exporting your deflationary problems to someone else.”

This Bloomberg news item, filed from London, appeared on their Internet site at 8:24 a.m. Denver time yesterday morning.  It---and the headline---were something I found at the gata.org Internet site.

Why it’s now too late for Germany to rescue the eurozone alone

The eurozone is yet again in a nasty state.

As it suffers from low growth and low inflation, the two combine to make a nasty cocktail. Without much of either, unemployment remains stuck at an eye-watering high 11.5pc, and government debt burdens are likely to feel increasingly heavy.

The European Central Bank (ECB) has announced a variety of acronyms - CBPP3, TLTROs, and an ABS purchase scheme - all stimulus measures designed to combat the euro area’s low inflation crisis.

Yet so far, they’ve been insufficient to raise expectations of future inflation, implying that the firepower just isn’t strong enough. Economists are hoping that the ECB will deploy outright quantitative easing, and start buying up the sovereign bonds of eurozone governments.

This article appeared on the telegraph.co.uk Internet site at 2:14 p.m. BST on their Wednesday afternoon---and it's courtesy of South African reader B.V.

France moves to make presidents impeachable

The French parliament voted Tuesday in favour of a draft law that could, for the first time, make it possible to remove the country’s president from office through a US-style impeachment.

The bill, already passed by France’s lower house, was approved by the Senate by 324 votes to 18.

It will now go to France’s Constitutional Council, which must decide if the bill complies with the French constitution, before becoming law.

If approved, the law would represent a radical change to the legal status of the French head of state – who has so far enjoyed greater legal protection than almost any other Western leader.

This news item was posted on the france24.com Internet site yesterday---and it's the second offering in a row from reader B.V.

Christophe de Margerie: Total’s mustachioed maverick

Asked in 2010 if oil companies were right to make deals with the world’s despots and dictators, Christophe de Margerie, the boss of Total who died in a plane crash in Russia Monday night, gave a typically unequivocal answer: “bloody right.”

It was a reply that summed up a man unapologetic about doing whatever was necessary to keep the oil and profits flowing, no matter the opinion of the public, politicians or regulators.

De Margerie’s bushy, walrus-like facial hair earned him the nickname “Big Moustache”, but in his younger years he went by a different sobriquet – “Mr Middle East” – heading Total’s operations in that area from 1995.

It was a job that saw him scour for oil in some of the world’s most politically volatile places and made him a natural choice to head the French oil giant’s exploration and production department when the role became vacant in 2002.

This very interesting but longish commentary/obituary appeared on the france24.com Internet site on Tuesday Europe time---and it's the fourth article of the day from reader B.V.

Ukraine's multi-billion dollar gas debt: Who pays?

Ukraine plans to buy $770 million worth of gas (2 billion cubic meters) from Russia this winter to keep the heat on. The question is: who is going to pay the bill?

All three parties, Russia, the E.U., and Ukraine met in Brussels on Tuesday and confirmed Kiev will pay $385 per 1,000 cubic meters of Russian supplied gas through the end of March. Before Ukraine can start purchasing gas, they need to pay off $1.45 billion in debt.

“There’s one obstacle: Ukraine failed to pay for Russian-supplied gas for seven months,” Oettinger said Tuesday. It will be difficult for Ukraine to find a benefactor, since, as Oettinger pointed out, its credit history is less than stellar. The economy is in ruin and may already need extra IMF money to stay afloat.

This Russia Today article showed up on their website at 2:53 p.m. Moscow time on their Internet site yesterday---and I thank Roy Stephens for sending it our way.  Reader Jim Skinner sent a story from the fortune.com Internet site on this issue.  It's headlined "Russia calls Europe's bluff on Ukraine gas deal."

Russia says Ukraine should find money to pay for gas within a week

Ukraine should be able to find ways of paying for Russian gas supplies within a week, Russian Energy Minister Alexander Novak said on Wednesday, suggesting a standoff would end once Moscow received financial guarantees from Kiev.

The latest round of gas talks between Moscow and Kiev ended late on Tuesday in Brussels with no agreement in a dispute that prompted Russia to cut off gas supplies to its neighbor in mid-June, potentially hurting flows west to the European Union.

But while Novak said he was optimistic for new talks on Oct. 29, Ukrainian Prime Minister Arseny Yatseniuk said he was skeptical about building ties with Russia, underlining how efforts to reach a deal are hampered by a wider political conflict between the two countries.

Another conflicting story on Ukraine's gas issue.  This Reuters article, filed from Moscow, was posted on the their website at 7:14 a.m. EDT on Wednesday---and it's the second offering of the day from reader Jim Skinner.

Russia Loses Oil Ally in de Margerie after Moscow Crash

Christophe de Margerie’s last act as chief executive officer of Total SA left no room for doubt about his feelings toward Vladimir Putin’s Russia.

In a Moscow speech hours before the plane crash that took his life two days ago, de Margerie said U.S. and European Union sanctions on the country were “unfair and unproductive,” and that he opposed efforts to render it “isolated from the major global economic and political process.”

Appearing before a receptive audience that included Prime Minister Dmitry Medvedev and a host of Russian executives, he cited his work as co-chair of a Franco-Russian business body alongside Gennady Timchenko -- a commodities billionaire who was one of the first targets of U.S. sanctions.

De Margerie’s death removes from the scene a businessman who rarely shied away from geopolitical debates and became one of Russia’s most outspoken allies in its efforts to avoid economic quarantine, willing to say what others only dared think. Although European corporate giants from Siemens AG to Renault SA have built close relationships with Russia, most business leaders have preferred to keep their lobbying private to avoid offending governments committed to punishing Putin.

This very interesting Bloomberg article appeared on their website at 6:24 a.m. MDT yesterday---and I thank reader M.A. for sending it.

Good fundamentals make ruble ‘stable’ currency - Russian Central Bank

Russia’s currency has taken a significant 20 percent plunge this year against the dollar and euro, but analysts are confident that Russia’s sturdy stash of foreign reserves and miniscule external debt make the ruble one of the ‘most stable’ currencies.

Russia’s vast gold and foreign currency reserves will help weather the ruble’s rough patch. At more than $450 billion, they are the third largest reserves in the world.

"We believe that the fundamental factors that determine the value of our currency were unchanged. Fundamentally the balance of our budget, the absence of significant external debt of our state. Precisely because of this ruble is one of the most stable currencies," Deputy Chairman of the Bank of Russia, Mikhail Sukhov, told TASS Wednesday.

The Central Bank has already spent more than $10 billion in October to stymie the ruble’s fall, and $50 billion since the beginning of the year. However, the bank has signaled it won’t continue to prop up the ruble with billions more.

This must read article appeared on the Russia Today website at 4:16 p.m. Moscow time on their Tuesday afternoon---and it's the final offering of the day from Roy Stephens.

U.S. Embassy in Baghdad Shelled With Rockets: Reports

The U.S. Embassy in Iraq located in central Baghdad has been shelled with rockets, Al-Mustakillah news agency reported Wednesday citing a security source.

"On Tuesday night the US Embassy was hit with three rockets. They were fired from a park area in the Dora district [in southern Baghdad]," the agency's source said.

Earlier on Tuesday, Al-Sumaria TV channel reported a mortar shelling of the so-called "green zone" in the center of the capital, housing government buildings and foreign missions. Security forces surrounded the area to repel a potential attack.

The above three paragraphs are all there is to this brief story that appeared on the RIA Novosti website yesterday at 2:02  p.m. Moscow time.  It's the second offering of the day from reader M.A.

Big nations snub Beijing bank launch after U.S. lobbying

China will officially launch a new $50 billion Asia Infrastructure Investment Bank on Friday as it steps up its challenge to global financial institutions like the World Bank that it feels are dominated by America and its allies.

But only 20 mostly small economies, many of them effectively client states of China, will become founding members of the bank at Friday's ceremony in Beijing after Washington lobbied furiously to stop other countries from signing up.

When it first unveiled its plan to establish the bank last year, Beijing extended a broad invitation and several European states, as well as Australia, Indonesia, and South Korea initially showed interest.

But thanks to pressure from the US -- conveyed by US diplomats in Beijing, Washington, and other capitals -- none of these countries will join the bank at this stage, although some are hoping to be involved later.

This Financial Times article, which is worth reading, appeared on their website yesterday---and it was posted in the clear in this GATA release.

Nelson Bunker Hunt, 88, Oil Tycoon With a Texas-Size Presence, Dies

Nelson Bunker Hunt, the down-home Texas oil tycoon who owned a thousand race horses, drove an old Cadillac and once tried to corner the world’s silver market only to lose most of his fortune when the price collapsed, died on Tuesday in Dallas. He was 88.

His death, at an assisted living center, followed a long period of treatment for cancer and dementia, The Dallas Morning News reported.

“A billion dollars ain’t what it used to be,” he said in 1980 after silver stakes he had amassed with two brothers, Herbert and Lamar, fell to $10.80 from $50.35 an ounce. In barely two months, their holdings and contracts for purchases — corralling a third to half the world’s deliverable silver — had plunged from a $7 billion value in January to a $1.7 billion loss in March.

With the Hunts unable to cover enormous margin calls, the debacle endangered financial markets and brokerage houses, forcing federal regulators and the nation’s banks to step in with a $1 billion line of credit, a bailout that saved the system from a stampede and the Hunts from a meltdown.

This very interesting fairy tale, at least considering what's mentioned in the above four paragraphs, showed up on The New York Times website yesterday---and I thank Casey Research's BIG GOLD editor, Jeff Clark, for bringing it to my attention---and now to yours.  It's worth reading---but I hope its written with less bias than their reporting on the Ukraine/Russia situation.  For that reason you should read it with your b.s. meter on its most sensitive setting.

Gold Is Undervalued – Ned Goodman

Ned Goodman, president and chief executive officer of Dundee Corp., believes gold is undervalued while equities are poised for a crash.

Speaking at a keynote luncheon at the Quebec Mining Exploration Xplor 2014 Convention in Montreal, Quebec, Goodman was blunt regarding gold prices and where they’re heading.

“We think gold is very undervalued at current gold prices,” Goodman said. “I think gold will hit $1,200, and when it does, be a buyer because I think that will be a good place to be.”

Touching on stock markets, Goodman didn’t pull any punches, calling it a Botox market where all deficiencies are simply covered and propped up to look healthy.

This story appeared on the kitco.com Internet site yesterday at 2:38 p.m. EDT yesterday---and it's the second contribution in a row from BIG GOLD editor Jeff Clark.

Keith Barron, PhD: "I believe we’ve seen Peak Gold*"

On behalf of Matterhorn Asset Management, financial journalist Lars Schall talked with exploration geologist and mining entrepreneur Dr. Keith Barron.

Keith is a scientist and he explains in no uncertain terms what is going on in the mining industry, the false accounting relative to the cost of exploration, what happened when gold went up to 1,900, why gold versus USD simply must go to at least 5,000, why ‘gold above ground’, if anything, is overstated and why the Swiss Gold Initiative is indeed very important and not just for the Swiss People, as well as Keith Barron’s view on Silver.

Barron is a day late and a dollar short on this topic, as several other gold commentators/mining executives have already been down this road already this year.  This 47:17 minute interview was posted on the goldswitzerland.com Internet site yesterday---and I found it in a GATA release.

Gold miners' outstanding forward sales jump 61 percent in Q2/14 - report

The volume of gold sold forward by mining companies jumped 61 percent in the second quarter after Russia's Polyus Gold added a major new hedge position, an industry report showed on Wednesday.

In their quarterly Global Hedge Book Analysis, released on Wednesday, Societe Generale and GFMS analysts at Thomson Reuters said they are predicting net hedging for the year of 40 tonnes, the most since 1999.

They forecast in July that gold producers would return to net hedging this year for the first time since 2011.

Volumes of hedging predicted for this year are still well below the levels seen in the late 1990s. Net producer hedging in 1999 reached 506 tonnes, according to GFMS data.

I'm sure you've heard the expression "much ado about nothing."  Well, despite the headline, that's what this Reuters story is.  However, it's worth your while as a trip down memory lane---and I thank Manitoba reader U.M. for sending it.

Goldcorp chief says Asian buying will support price of gold

Demand from China and other parts of Asia will support the price of gold, the chief executive of one of its largest miners said, as the precious metal traded near its strongest level in six weeks.

Chuck Jeannes of Goldcorp said he saw "as much clarity in the market as there has ever been," with a "floor" created by strong demand whenever gold reached or fell below about $1,200 per ounce.

"The anecdotal evidence is that gold goes down and physical demand goes up," Mr. Jeannes said in an interview with the Financial Times. "A huge number of physical buyers in the world see gold as a bargain below $1,200."

You wonder how people such as him make it to positions of responsibility when they don't know anything about how their product is priced in the market---and run screaming when you attempt to explain it.  The above three paragraphs from a Financial Times article from yesterday, is all that's posted in the clear in this GATA release.  The rest is subscriber protected.

Koos Jansen: It's official -- China's gold demand in 2013 was 2,199 tonnes

The China Gold Association has confirmed that China's gold off-take in 2013 reached 2,200, Bullion Star market analyst and GATA consultant Koos Jansen reported yesterday. That would constitute most of world gold mine production and the figure apparently does not include purchases by the People's Bank of China, which remain the most sensitive state secret.

"Why the Western media don't report on these numbers is a mystery," Jansen writes. "This data is not a secret. Yet the Chinese have been trying to hide it as much as possible---and it looks like either they're being helped by Western institutions, or these institutions are ignorant."

Of course there is still another explanation: that Western financial news organizations and the World Gold Council very much intend not to deal with this issue honestly, since doing so would impugn the whole Western financial system, built as it is on currency and commodity market rigging.

This must read commentary was posted on the Singapore website bullionstar.com on Tuesday---and this is another gold-related news item I found posted on the gata.org Internet site.

This Dhanteras, gold coins are in, jewellery is out

Instead of the usual rush for jewellery, this Dhanteras sees a reversal of buyer's preferences, with more people opting for the traditional gold coin. We talk to some shopkeepers and buyers to understand this shift in choices

For many families in the city, a visit to their family jeweller today is as important as lighting lamps on Diwali. Jewellers too look forward to the festival of Dhanteras all year long, in the hope of making up for slow sales and the lean months. Unlike last year, this Dhanteras, the gold rate is lower compared to the last few months, which has given many store owners hope for a busy shopping day today.

But in an interesting twist, the low gold rate hasn't motivated people to increase their Dhanteras budget and buy jewellery instead of the traditional gold coins. Shoppers told DT why they would prefer to wait for the remaining festive days to pass before making any major ornamental purchases and why they will stick to the traditional coin purchases instead. Crowded shops, busy salespeople and `formality shoppers' make Dhanteras a bad day for investing in jewellery because like they say, buying an ornament is an experience that can be done once the hustle and bustle of Diwali is over.

This article showed up on the Times of India website at 11:41 a.m. IST on Tuesday---and I thank reader U.M. for finding it for us.

Kolkata’s gold panners reap rewards at India festival time

As 40-year-old Mohammed Iqbal sifts through sludge in the back alleys of Kolkata’s jewellery market for gold dust, his weathered face brightens slightly at the recent uptick in work.

For generations, the city’s group of “newaras” — gold dust scavengers — have been scratching a living by panning for fine particles swept from the 2,000-odd jewellery workshops operating in the alleys.

Iqbal estimates he normally earns just 150 to 200 rupees ($2.40 to $3.20) a day from selling flecks of the precious metal that he painstakingly finds on the ground and in the drains of the grimy alleys.

But the onset of India’s raucous festival season, especially the biggest Hindu celebration of Diwali on Thursday, brings a relative bonanza for Iqbal, with his income more than doubling.

This extremely interesting AFP story appeared on the aquila-style.com Internet site early yesterday morning EDT---and I thank reader U.M. for sliding it into my in-box late yesterday evening MDT.  It's also her final contribution to today's column.

Huge, honkin’ gold nugget hits the market in San Fransisco

Here we go again — what is believed to be the biggest gold nugget found in modern times in California’s historic Gold Country is going on sale Thursday in San Francisco.

This 6.07-pound whopper is being sold by Tiburon coin dealer Don Kagin, the same dealer who is selling the $10 million worth of gold coins that made such a stir this year after they were found in a couple’s backyard in the Sierra.

The “Butte Nugget,” so named because it was found by a gold hunter in the Butte County mountains, will be unveiled at the prestigious San Francisco Fall Antiques Show. The show opens Thursday at Fort Mason.

This very interesting news item put in an appearance on the sfgate.com Internet site at 10:33 a.m. Pacific Daylight Time yesterday---and my thanks go out to reader Carl Lindfors for digging it up for us.  And if you don't want to read the article, you should at least look at the picture.

¤ The Funnies

This drake mallard duck was dabbling in the shallows a bit more than 10 meters away, which is point blank range for a 400mm lens.  He is resplendent in his new breeding plumage, as the drakes all look so drab in in the summer/early fall when they're in the eclipse phase.

I don't normally crop creature photos this close, but wanted to show the iridescent green head from two different angles as the late-morning sun shone on it.  Plus it also accentuates two common English phrases so well---'water off a duck's back' and 'duck tail'.  Both of which show their lineage in these two shots.  The red reflection in the water is, as usual, from the building in the distant background.

¤ The Wrap

Based strictly on price action---and as I indicated in Saturday's weekly review---most likely there has been further technical fund buying and commercial selling in COMEX gold futures in the reporting week [that] ended on Tuesday, October 21. I would guess at least 15,000 additional technical fund contracts were bought net in gold---and perhaps more than 20,000 contracts. I don’t sense much technical fund buying in silver, copper, palladium and platinum in the COT report to be issued this Friday, but if there was any technical fund buying in silver, it was flushed out in Wednesday’s rotten silver price performance.

Gold appears to be the only metal experiencing technical fund buying to date---and that still raises the possibility of the commercials rigging gold prices lower temporarily to lure the technical funds who bought, back to the sell side. In that case, silver may come under pressure, but it’s hard to see how many technical funds can be maneuvered to sell, seeing as managed money shorts are already at an all-time record high. - Silver analyst Ted Butler: 22 October 2014

I must admit that the price action in all four precious metals on Wednesday didn't surprise me in the slightest.  But the shocker was the hammering that their associated equities took, especially the silver stocks.  As you know, I've commented on the disconnect between the movements in the metals themselves and their underlying share prices on several occasions since the low of two weeks ago---and yesterday's action draws a similar response from me.

The gold stocks are now back to where they were when gold painted its $1,184 low tick in the wee hours of Thursday morning on Monday, October 6---and the silver shares are even lower than that.

If you're looking for answers, the only one I can think of is that some precious metal mutual fund[s] had to unload a pile of shares because of redemptions---and its only a matter of time before Rick Rule is out telling all and sundry that it's a perfect buying opportunity.  I don't know how you feel about it dear reader, but after more than three years of this, I'm tired of somebody telling me to buy the dips.  I, like you, just want to see the stocks that we already own, do what we know they're supposed to do.

Of course the mining executives don't care what happens to their public stockholders, because they'll just get their respective boards of directors to reprice their millions/billions in stock options---so it's no skin of their noses if their shareholders are getting wiped out in a rigged market.

Here are the 6-month charts for the 'Big 6' commodities.  Note that we've had 'failure' in gold at its 50-day moving average, something I mentioned yesterday---and it only remains to be seen whether JPMorgan et al will continue this downward trend, or this is just a blip as we continue to move higher in price.

 

 

 

 

 

And as I write this paragraph, the London open is five minutes away.  All four precious metals, which had been up a bit on the day, had their prices turned lower starting about 45 minutes before the London open---and only platinum remains in positive territory at the moment.  Gold volume is a bit under 13,000 contracts---and silver's volume is around 2,900 contracts.  The dollar index is up a handful of basis points.

As October winds down, we have options and futures expiry for the November contract/delivery month in both gold and silver coming up next week.  But unless there's surprise, I expect November deliveries to be a mere shadow of what transpired during the October delivery month.  The reason I say that is because the current gold open interest in November is only 352 contracts---and in silver, it's 122 contracts.  Nothing to see here.  The big delivery month of the year in both metals is December---and what transpires in that month could prove interesting.

And as I hit the send button on today's column at 4:55 a.m. EDT, I note that all four precious metals are under renewed selling pressure now that London has been open a couple of hours---and all four are down a bit more from their New York closes on Wednesday.  Net volume in gold is around 23,000 contracts at this point---and silver's net volume is about 5,200 contracts, neither of which are particularly large numbers for this time of day.  The dollar index is now down a couple of basis points.

That's all I have for today---and I await the New York open with great interest to see what JPMorgan et al have in store for us during the Comex trading session.

See you tomorrow.

]]>
Thu, 23 Oct 2014 06:26:00 +0000
<![CDATA[Chinese and Indian Gold Buyers Back in the Market in a Big Way]]> http://www.caseyresearch.com/gsd/edition/chinese-and-indian-gold-buyers-back-in-the-market-in-a-big-way/ http://www.caseyresearch.com/gsd/edition/chinese-and-indian-gold-buyers-back-in-the-market-in-a-big-way/#When:09:05:00Z "JPMorgan et al. aren't going to let prices run too far to the upside"

¤ Yesterday In Gold & Silver

The gold price didn't do much in early Far East trading, but began to chop higher starting shortly after 11 a.m. Hong Kong time.  It peaked out at the 10:30 a.m. BST London a.m. gold fix---and then got sold down to it's closing price on Monday.  The short covering rally that began minutes after the Comex open ran into the usual not-for-profit sellers about 15 minutes later---and then gold chopped lower until shortly before 4 p.m. in electronic trading.  From that point it rallied a few dollars into the close.

The low and high ticks, such as they were, were reported by the CME Group as $1,245.70 and $1,255.60 in the December contract.

Gold finished the Monday trading session in New York at $1,249.40 spot, up $2.50 on the day---and obviously well off its high, as is usually the case.  Net volume was 128,000 contracts with about a third of that coming before 9 a.m. BST in London trading.

The silver price action was almost a carbon copy of the gold chart, so I'll spare you the details; and as usual, silver got sold down the moment trading began in New York on Monday evening.

The low and highs were reported as $17.355 and $17.655 in the December contract.

Silver closed yesterday in New York at $17.515 spot, up 9 cents from Monday.  Net volume was decent at 32,500 contracts.

Both platinum and palladium also followed a very similar price path as gold and silver right up until the Comex open.  Rallies in both began shortly after that---and both ran out of gas/got capped at the London p.m. gold fix.  The platinum price drifted lower into the close---and the palladium price traded almost ruler flat from 10 a.m. EDT onwards.  Platinum closed up $10---and palladium closed up $14.  Here are the charts.

The dollar index closed late on Monday afternoon at 85.02---and after dipping to its Tuesday low of 84.75 about 35 minutes before the London open, the index began to rally---and closed right on its 85.40 high, up 38 basis points on the day.

The folks over at finance.yahoo.com decided to provide access to only their interactive HUI chart starting yesterday---and have blocked access to their basic chart, which is what I've always used.  Unfortunately, you can't copy an interactive chart---and the new chart I was thinking of using doesn't have the line on it for the previous day's closing prices, so I'm stuck with this little one for now.  If you have a favourite HUI chart that you like to use, please send me the link, as I need something other than the dinky chart below.

Having got that out of the way, the gold stocks gapped up about 2% at the open---and then chopped sideways until shortly after 12:30 p.m. EDT.  Then, mysteriously, the shares got sold down into negative territory once again, although they did rally a bit during the last 30 minutes of trading.  The HUI closed down 0.28%.

The silver equities started the day off well into the black, but they too ran into a seller at the same time as the gold shares, but managed to hang on to some of their gains, as Nick Laird's Intraday Silver Sentiment Index closed up 0.86%.

The CME Daily Delivery Report showed that 154 gold and 100 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  Once again it was the "Barclays Show" in gold, as their proprietary trading account issued 154 contracts---and 152 of those contracts were stopped in its client account.  In the last three business days, 604 gold contracts have been transferred from one Barclays pocket to another.

In silver, the only short/issuer was ABN Amro with 100 contracts---and the three long/stoppers were Jefferies, Scotiabank and R.J. O'Brien.  There have already been 754 silver contracts posted for delivery in October, which is quite a few considering that October is not a traditional delivery month.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in October dropped by 219 contracts---and those were the Barclays deliveries scheduled for today.  Open interest in the current month is now down to 388 contracts---minus the 154 Barclays contracts mentioned in the previous paragraph.  Silver open interest in October now stands at 102 contracts, down 3 contracts from Monday's report.

There were no reported changes in GLD yesterday---and as of 9:42 p.m. EDT yesterday evening, there were no reported changes in SLV.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in their gold and silver ETFs for the week ending, Friday, October 17---and this is what they had to report:  Their gold ETF declined by another 12,660 troy ounces, but their silver ETF went in the other direction for the second week in a row, adding 71,103 troy ounces.

It was a big sales day over at the U.S. Mint.  They sold 8,000 troy ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---and 715,000 silver eagles.  Knowing what's going on in the physical retail market in real time, I can tell you without a word of lie that a huge chunk of these sales are not to the average retail investor.  This is most likely Ted Butler's 'Mr. Big' in action.

Over at the Comex-approved depositories on Monday, they didn't receive any gold, but 24,278 troy ounces were shipped out, with virtually every bar coming out of Scotiabank's warehouse.  The link to that activity is here.

In silver, there were 607,638 troy ounces received---and 425,900 troy ounces shipped out the door.  The link to that action is here.

I have a more reasonable number of stories for you in today's Critical Reads section---and I hope you'll find the odd one that interests you.

¤ Critical Reads

"Plunge Protection" Behind Market’s Sudden Recovery

Mysterious forces were trying their best, but they couldn’t keep the stock market from swooning [last] Wednesday.

They failed in the morning, despite massive purchases of stock index futures contracts. Within minutes of the market’s opening, the Dow Jones Industrial Average was down 350 points. Later in the day — after a lot of shocking ebb and flow — the Dow bottomed out with a decline of 460 points.

It was only in the last hour of trading that the market saviors managed to trim the Dow loss to just 173 points. And they succeeded only after Janet Yellen’s private, upbeat remarks about the economy were leaked.

Welcome to a new kind of stock market — one that the average investor should refuse to be invested in.

No surprises here, dear reader.  New York Post columnist John Crudele calls it the way it was.  This article appeared on their Internet site at 11:08 p.m. EDT on Monday evening---and I thank Howard Wiener for today's first story.  It's worth reading.

Top Mortgage Firm Accused of Abuses

One of the nation's largest servicers of home loans may have denied struggling borrowers the chance to fix loan problems and avoid foreclosures, New York's financial regulator has alleged.

An investigation by the state's Department of Financial Services found that Ocwen Financial Corp. inappropriately backdated foreclosure warnings and letters that rejected mortgage loan modifications, making it nearly impossible for borrowers to appeal the company's decision.

Many borrowers who had fallen behind on loan payments also received warning letters months after the deadline for avoiding foreclosure had passed, department investigators found.

Potentially hundreds of thousands of backdated letters may have been sent to borrowers, likely causing them "significant harm," Benjamin Lawsky, New York's Superintendent of Financial Services, wrote in a letter to Ocwen released Tuesday.

This AP story showed up on their Web site at 5:11 p.m. EDT on Tuesday afternoon---and I thank Manitoba reader U.M. for her first offering of many in today's column.

New Rules Adopted in Hopes of Spurring Home Loans

With the financial crisis and subprime mortgage bust receding further into history, the government is loosening some financial rules, hoping to inject more life into the country's still-recovering housing market.

Both banks and borrowers stand to benefit from the new rules unveiled Tuesday by six federal agencies. While banks will see relaxed guidelines for packaging and selling mortgage securities, fewer borrowers likely will need to make hefty down payments. The board of the Federal Deposit Insurance Corp. voted 4-1 Tuesday to adopt the new rules, and two other agencies approved them as well. The Federal Reserve has scheduled a vote for Wednesday, and two other agencies are expected to adopt the rules soon.

The regulators have dropped a key requirement: a 20% down payment from the borrower if a bank didn't hold at least 5% of the mortgage securities tied to those loans on its books. The long-delayed final rules include the less stringent condition that borrowers not carry excessive debt relative to their income.

Borrow and spend till you puke, but these changes are still a year away at least.  This AP story was picked up by the news.yahoo.com Internet site mid afternoon EDT---and it's courtesy of West Virgina reader Elliot Simon.

Fed Emergency Update - Mike Maloney

"Ever since the 2008 crisis, I've been telling audiences that that crisis never ended, that the Federal Reserve is doing extreme emergency manoeuvres that show that there's still something very wrong with the world economy. Right now the entire economy really is on artificial life support." - Mike Maloney - October 20, 2014.

This 10:40-minute video commentary, complete with attached charts, was posted on the hiddensecretsofmoney.com Internet site on Tuesday sometime---and from what I've seen so far, it's worth watching.

Dr. Dave Janda Interviews Your Humble Scribe

I spent about 25 minutes talking to the good doctor on a variety of issues on Sunday---and it was posted on the davejanda.com Internet site on the same day.

Forex-Rigging Fines Against Banks Could Reach $41 Billion Worldwide, Citi Report Says

Probes into allegations that traders rigged foreign-exchange benchmarks could cost banks as much as $41 billion to settle, Citigroup Inc. analysts said.

Deutsche Bank is seen as probably the "most impacted" with a fine of as much as 5.1 billion euros ($6.5 billion), Citigroup analysts led by Kinner Lakhani said yesterday, estimating that the Frankfurt-based bank's settlements could reach 10% of its tangible book value, or its assets' worth.

Using similar calculations, Barclays could face as much as 3 billion pounds ($4.8 billion) in fines and UBS penalties of 4.3 billion Swiss francs ($4.6 billion), they wrote in a note first sent to clients on Oct. 3.

But nobody will go to jail, so the ethics don't change.  This Bloomberg article, filed from London, showed up on their Web site at 9:37 a.m. Denver time yesterday morning---and I found it in a GATA release.

EU Fines JPMorgan, UBS, Credit Suisse for Taking Part in Cartels

JPMorgan, UBS and Credit Suisse were fined a total of 94 million euros ($120 million) by the European Commission for taking part in cartels in the financial sector.

The Commission handed JPMorgan a 61.7-million-euro fine for rigging the Swiss franc Libor benchmark interest rate between March 2008 and July 2009. It was also fined 10.5 million euros for participating in a cartel on Swiss franc interest rate derivatives.

UBS' penalty in the derivatives cartel came to 12.7 million euros and that of Credit Suisse was 9.2 million euros. Royal Bank of Scotland alerted the Commission about both cartels and escaped total fines of 115 million euros.

The penalties are the latest by the European Commission, which along with authorities around the world, has handed down billions of euros in fines against top banks for rate-rigging, breaking trade sanctions and other misbehavior.

But nobody is going to jail, so what's the point?  This Reuters story, filed from Brussels, was updated at 11:31 a.m. EDT yesterday, as reader Harry Grant sent it to me at 8:01 a.m. EDT yesterday.  Reader U.M. sent the Zero Hedge take on this headlined "Europe Demands Banks Hand Over Their Lunch Money Following Swiss Franc Libor Rigging".  The ZH folks are certainly less charitable than those over at Reuters.

ECB to Spend €1 Trillion on Covered Bonds to Kick-Start Euro Economy

The European Central Bank (ECB) has embarked on a spending spree that could see it pump €1tn (£790bn) into the eurozone’s financial system.

After months of debate, on Monday the Frankfurt-based central bank began buying covered bonds in the next stage in its battle to revive the eurozone economy and keep deflation at bay.

ECB president Mario Draghi has made it clear the programme should return the ECB’s accumulated assets to 2012 levels, which means that by the time officials in Frankfurt have finished, its balance sheet could have risen from €2tn to €3tn. The aim of the move is to ease bank credit in the 18-member currency union after a difficult year that has seen a decline in business lending hamper recovery.

Covered bonds have an income stream of debt repayments backed by pools of home or commercial property loans; 90% of the global market is based in Europe, especially in Denmark, Germany, Spain, France and Sweden.

Mortgage-backed securities [MBS] Europe style.  I posted a story about this in Tuesday's column, but this offering from theguardian.com Web site at 5:17 p.m. BST on Monday is more comprehensive---and is something I borrowed from yesterday's edition of the King Report.

No Russia-Ukraine Gas Deal at EU Talks; Moscow Queries Finances

Russia and Ukraine failed to reach an accord on gas supplies for the coming winter in EU-brokered talks on Tuesday but agreed to meet again in Brussels in a week in the hope of ironing out problems over Kiev's ability to pay.

After a day of talks widely expected to be the final word, European Energy Commissioner Guenther Oettinger told a news conference the three parties agreed the price Ukraine would pay Russia's Gazprom - $385 per thousand cubic meters - as long as it paid in advance for the deliveries.

But Russian Energy Minister Alexander Novak said Moscow was still seeking assurances on how Kiev, which earlier in the day asked the EU for a further 2 billion euros ($2.55 billion) in credit, would find the money to pay Moscow for its energy.

Dependent on Western aid, Ukraine is in a weak position in relation to its former Soviet master in Moscow, though Russia's reasons were unclear for wanting further assurances on finances, beyond an agreement to supply gas only for cash up front.

This Reuters news item, filed from Brussels, appeared on their Web site at 5:29 p.m. EDT on Tuesday afternoon---and I thank Jim Skinner for digging it up for us.  It's worth reading.

Ukraine Used Cluster Bombs, Evidence Indicates

The Ukrainian Army appears to have fired cluster munitions on several occasions into the heart of Donetsk, unleashing a weapon banned in much of the world into a rebel-held city with a peacetime population of more than one million, according to physical evidence and interviews with witnesses and victims.

Sites where rockets fell in the city on Oct. 2 and Oct. 5 showed clear signs that cluster munitions had been fired from the direction of army-held territory, where misfired artillery rockets still containing cluster bomblets were found by villagers in farm fields.

The two attacks wounded at least six people and killed a Swiss employee of the International Red Cross based in Donetsk.

If confirmed, the use of cluster bombs by the pro-Western government could complicate efforts to reunite the country, as residents of the east have grown increasingly bitter over the Ukrainian Army’s tactics to oust pro-Russian rebels.

This article, filed from Donetsk, Ukraine, put in an appearance on the New York Times Web site on Monday sometime---and I thank Roy Stephens for sending it.

Turkey to Let Iraqi Kurds Cross to Syria to Fight ISIS

Turkey will allow Iraqi Kurdish forces, known as peshmerga, to cross its border with Syria to help fight militants from the group called the Islamic State who have besieged the Syrian town of Kobani for more than a month, the Turkish foreign minister announced Monday.

The decision represents an important shift by the Turkish government, which has angered Kurdish leaders and frustrated Washington for weeks by refusing to allow fighters or weapons to cross its border in support of the Kurdish fighters defending the town. Speaking at a news conference in Ankara, the Turkish foreign minister, Mevlut Cavusoglu, said that his government was “helping the pesh merga cross over to Kobani.”

The announcement, along with an American decision to use military aircraft to drop ammunition and small arms to resupply Kobani, reflected escalating international pressure to push back Islamic State militants. As the United States-led coalition has increased its airstrikes as well as its coordination with the Kurdish fighters, who have provided targeting information, the militants have lost momentum after appearing close to overrunning the town.

This is another story from the New York Times Web site.  This one was posted there on Monday as well---and filed from Mursitpinar, Turkey---and it's also courtesy of Roy Stephens.

Jim Rickards: China GDP Figures Are Bogus

Jim Rickards, chief global strategist at West Shore Funds, explains why he's not closely watching China's gross domestic product figures.

This 4:21-minute CNBC Squawk Box video clip appeared on their Web site at 8:15 p.m. EDT on Monday evening---and I thank Harold Jacobsen for bringing it to our attention.  It's worth your time if you have it.

James G. Rickards: In the Year 2024

Writing for The Daily Reckoning, fund manager, author, and geopolitical strategist James G. Rickards imagines life in the year 2024 as being under the totalitarian control of a world central bank that has outlawed not only gold but also markets and money itself.

While Rickards' nightmare scenario is the perfectly logical consequence of the trend of central banking, we still have a few years to push the world toward a different future.

Rickards' essay is headlined In the Year 2024 and it's posted at The Daily Reckoning Web site---and it falls into the absolute must-read category.  [NOTE: I posted a story that critiqued Jim's article in yesterday's column.  It was headlined All the world’s gold to be confiscated and buried in Switzerland by 2020 argues Jim Rickards.  Now that I've read the original Rickards article, courtesy of reader Dan Lazicki, the title to the story is highly misleading, as is the author's commentary in spots, and I'm glad that I have the real deal for you today. Ed]

The first two paragraph of introduction are courtesy of GATA's Chris Powell---and I found the original Rickards essay posted on the gata.org Internet site yesterday.

Citi Buys Deutsche Commodities Trading Book in Expansion Push

Citigroup Inc has bought Deutsche Bank AG's energy and metals book, a source familiar with the matter said, in the latest sign of expansion from the U.S. firm in commodities trading as rivals retrench.

Citi won Deutsche's oil, metals and power books this summer and autumn, the source said, after a bidding round that saw several Wall Street firms and trading houses chasing the opportunity to take on the positions of a once top-five commodities bank.

The deal will help Citi close the gap with top banking rivals in commodities trading, even as some exit the sector under increased regulatory scrutiny and lower margins.

Deutsche Bank, which once competed with Barclays and JPMorgan Chase & Co to challenge the long-running energy and metal franchises of Goldman Sachs and Morgan Stanley, announced it was largely exiting the sector late last year.

But, dear reader, Deutsche Bank is keeping its precious metal trading division.  This Reuters news item, filed from London, was posted on their Web site at 1:59 p.m. EDT on Monday afternoon---and I thank reader M.A. for another offering in today's column.

First Swiss Gold Poll Shows Pro-Gold Side in Lead at 45%

GoldCore's Mark O'Byrne reported yesterday that the first opinion poll on Switzerland's gold repatriation referendum proposal shows 45% of respondents in favor and 39% opposed.

Chris Powell wrote the above---and I borrowed the headline from a GATA release as well, but the first person through the door with this story was reader U.M.

UBS: Swiss Gold Exports At 7-Month High; Physical Demand Absorbing Investor Liquidations

Swiss trade data show gold exports hit a seven-month high in September and that the flow to Eastern from Western nations continues, says UBS. Swiss exports were 172.6 metric tonnes last month, the most since February.  Gold shipments to China jumped to 12 tonnes after averaging around three tonnes during the previous four months.

Shipments to Hong Kong increased to 24.7 tonnes, the most since April. Switzerland exported 58.5 tonnes to India last month, the largest shipment year to date and nearly twice the average monthly volume, UBS says.

Meanwhile, September gold imports into Switzerland were also high at 194.6 tonnes. Inflows from the U.K. jumped to 63.3 tonnes from 8.6 in August. “This suggests that a good portion of investor liquidations in September, that pushed the prices through the $1,200 psychological level, were absorbed by physical demand, with metal making its way from London vaults into Swiss refineries for refining/recasting and ultimately shipped to physical buyers in Asia,” UBS says.

This short commentary appeared on the kitco.com Internet site yesterday at 9:38 a.m. EDT---and you may have to scroll down a bit to get to it, but you've read most of it already.  It's another contribution from Manitoba reader U.M., for which I thank her.

Dhanteras Sales Jump 20% over Lower Gold, Silver Prices

This Dhanteras saw jump in sales of jewellery in various parts of the country by at least 20% over last year following lower gold and silver prices in the retail markets. People are preferring lightweight jewellery and gold coins over traditional jewellery. In Ahmedabad the local jewellers expected the business to cross Rs 250-300 crore till Diwali (October 23).

Average gold prices that were around Rs 32,500 per 10 grams during last Diwali, were hovering around Rs 27,500 per 10 grams this year. Also, silver prices this year before Diwali were around Rs 39,000 per kg compared to around Rs 49,000 per kg last year during Diwali.

In Ahmedabad, upbeat over the lower prices of the yellow metal, as many as 60 jewellers under the Ahmedabad Jewellers' Association had launched the grand shopping festival "Swarna Utsav" which concludes on Diwali, with primary objective to recover the losses incurred by them in the past six months due to lack of business.

"During Dhanteras the sales of gold and silver has been significantly higher than last year. We expect sales to rise by 15-20% this year over last season," said Shantibhai Patel of the Ahmedabad Jewellers' Association. He said that this was due to lower price of the precious metals.

This gold-related news item appeared on the bullionbulletin.in Internet site at yesterday IST sometime---and it's another story from reader U.M.

Chinese and Indian Gold Buyers Back in Market in a Big Way

What has been particularly strange about the gold market over the past two years is that the stronger the physical demand appearing for gold, the weaker the gold price has tended to get.

In the past few months, the gold price has fallen back from around $1,340 down at one time to $1,190 and now hovering back seemingly trying to breach $1,250 on the upside again, yet by all accounts demand in the two biggest consuming nations has been soaring and they are, between them, taking in virtually everything the world’s gold mines can produce.

The two countries are India and China. A mild relaxation of some of the import controls put on gold in the former saw gold imports rise to around 95 tonnes in September, while the weekly withdrawal statistics from the Shanghai Gold Exchange show that gold demand has latterly also picked up extremely well in China after a good start to the year, but then a marked downturn from March to August.

Indeed the latest weekly figures from the SGE could be seen as particularly strong given that the markets were closed for half the period due to China’s Golden Week holiday. While the total for the two weeks at around 68 tonnes may not seen spectacular, given that these purchases were actually made in only five days (September 29 and 30 and October 8, 9 and 10) due the long holiday market closure could suggest that Chinese demand is indeed soaring enormously.

Supply and demand no longer matter in all key commodities as the banks have hijacked the price discovery mechanisms on the Globex/Comex---and Lawrie knows that.  This commentary appeared on the mineweb.com Internet site yesterday---and it's worth skimming.

Top Bullion Consumer China Works on First Gold Forwards, Options

The Shanghai Gold Exchange (SGE) is working on plans for China's first forwards and options in gold, sources say, potentially putting China ahead in the race to set an Asian pricing benchmark that might eventually rival the London gold fix.

China, which overtook India last year to become the world's biggest consumer of gold, bans trading in commodity options and forwards at present to limit speculation.

But Beijing is setting the stage for the launch of such derivatives as it opens up its markets, and gold could be among the first commodities on the list, although it remains unclear when trading might start.

The state-run SGE, at the forefront of China's efforts to dominate bullion pricing, opened an international bourse last month and foreign banks have shown strong interest in trading its yuan-denominated contracts. The exchange now wants to expand its product line to boost liquidity.

This longish Reuters article, co-filed from Singapore and Shanghai, appeared on their Web site at 2:50 a.m. IST on their Wednesday morning---and it's also courtesy of reader U.M.  It's also her last contribution to today's column, for which I thank her on your behalf.

China Admits 40% of Magnetic Rare Earths Supply Is Illegal

World's dominant supplier of rare earth elements reveals a huge portion of supply used in magnets is illegally mined; much larger than initially anticipated

China – the world's leading producer of rare earth elements – has revealed that 40% of its supply used in high strength magnets is from illegally mined sources in the country.

The figure was revealed by rare earths expert Prof. Dudley Kingsnorth of Industrial Minerals Company of Australia (IMCOA) at a high level conference in Milan, the European Rare Earths Competency Network (ERECON).

Prof. Kingsnorth, who is the leading source of data in the rare earths market, was citing experts within China who are not only involved in the mining of the elements but also the government-led rare earths association.

I had a story about this in my Tuesday column, but this one is far more comprehensive.  It was posted on the mining.com Web site yesterday---and I thank reader M.A. for bringing it to my attention, and now to yours.

¤ The Funnies

Here are two of the four photos that I kept from my hour or so of sitting around the old pond late Sunday morning.  At this time of year---and at this latitude in North America---all that's left in the way of birds is the migratory waterfowl, plus a few magpies---and they won't head south until the arrival of the first snow of the season finally forces them to leave.

This first photo is a group of Canada geese neatly surrounding an immature common goldeneye duck.  This shot is from about 50 meters or so.

The second shot is from less than 20 meters---and it's a study in depth of field, as even though I had the f-stop cranked up to the DLA of the camera, at this distance and using a 400mm telephoto lens, sharp depth of field is only about a meter at most, as the geese in the foreground and background are progressively more out of focus.  The red colour in the water is the reflection of a building in the distant background.  I have too many photos of Canada geese already---and I only took this one because they were all nicely lined up.

I didn't take this seagull photo below, but I can tell you that it was taken with an ultra-wide angle lens---14mm or wider---as everything from 10 centimeters to 10 kilometers away is in razor-sharp focus.  And because of that, the photo looks almost surreal.

¤ The Wrap

There were additional withdrawals from the big silver ETF, SLV, this [past] week and again the withdrawals seem counterintuitive when held up against [the] price action (mostly flat) and trading volume (mostly subdued). From the recent top of 350 million oz, some 6.5 million oz of silver have been delisted from the SLV, as shares outstanding has dropped accordingly. I can’t prove it, but my strong sense is that a big buyer might be converting shares of SLV to direct physical metal ownership so as to avoid reporting more than a 5% stake to the SEC. My strong sense results from me wanting to do exactly the same thing were I so fortunate to be able to do so financially. Try to imagine having the money to buy as much silver as you could. Next, imagine how you would actually go about it and didn’t want to openly disclose the purchase while it was being made. If you can imagine a better way than by what I am speculating might be occurring in SLV presently, please drop me a line.

I confess to maybe hearing and seeing things that might not exist, particularly when so many unusual things appear to be present in silver, but the sales reporting pattern for Silver Eagles from the U.S. Mint still suggests a big buyer is present.  Sales for the month are impressive, but more notable is the uneven pattern of daily sales; some days 50,000 coins are reported sold, or none at all---and on other days, more than 500,000. If broad public retail demand was behind the recent surge in Silver Eagles, that would manifest itself with steady day-to-day reported sales. Since that is not the pattern at all, the most plausible explanation would be a single big buyer picking the time and price for purchase. Regardless, it should still be close to a record year for sales of Silver Eagles. - Silver analyst Ted Butler: 18 October 2014

With the obvious price capping in both gold and silver at the Comex open yesterday morning and, to a certain extent, platinum and palladium as well---it leaves little doubt in my mind that JPMorgan et al. aren't going to let prices run too far to the upside, regardless of the supply/demand fundamentals.

Of course the Managed Money shorts in both gold---and particularly silver---still have boat loads of positions to cover, but based on the price action since the lows of last week, especially in gold, any rally that is allowed, will be well contained.

There's always the possibility that something could go sideways that changes all that, but at the moment, that's the way I see it.  The share price action is equally as lousy---and as I've stated several times since the lows in both metals, it appears that they are being actively managed as well.

The message from the powers-that-be is clear, as it appears they don't want investors anywhere near the precious metal complex, at least for the time being.

Here are the six-month charts for the "Big 6" commodities---

And as I type this paragraph, the London open is about 20 minutes away.  Both gold and silver are down small amounts---and platinum and palladium are both trading unchanged at the moment.  Gold volume is just under 12,000 contracts---and silver's volume is just under 2,700 contracts.  The dollar index is down 13 basis points.  Nothing much to see here.

Just looking at the six-month gold chart above, you can see some of the Managed Money headed for the exits the moment the price broke above gold's 50-day moving average---and how the seller of last resort and their algorithms were there to drive the price back down to its 50-day moving average once again, just to stop more shorts from getting the same idea.  I'll be extremely interested in how the price is allowed to react once that moving average is broken with some authority---and I'm also concerned, as I mentioned yesterday, that 'da boyz' could engineer a rally "failure" at this juncture as well.

So we wait some more.

And as I send this off to Stowe, Vermont at 4:45 a.m. EDT, I note that all four precious metals are trading lower since London opened, with silver down the most of all, of course---and these smallish selloffs are probably coming on the back of the reversal in the dollar index.  It was down 13 basis points two hours ago---and is now up 10 basis points.  Gold volume is up to a bit over 21,000 contracts---and silver's volume is now at 5,700 contracts---neither of which is very heavy for this time of day.

I'm off to bed---and I'll see you here tomorrow.

]]>
Wed, 22 Oct 2014 09:05:00 +0000
<![CDATA[Russia’s Central Bank Purchases 1.2 Million Ounces of Gold in September]]> http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchases-1.2-million-ounces-of-gold-in-september/ http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchases-1.2-million-ounces-of-gold-in-september/#When:06:25:00Z "I'm not prepared to read much into yesterday's price action"

¤ Yesterday In Gold & Silver

The gold price got sold down a few dollars in the first two hours of trading after the market opened at 6 p.m. EDT on Sunday evening---and then traded flat until noon Hong Kong time on their Monday.  From that point, gold had three tiny rallies, with the last one ending in a vertical spike just a few minutes before the Comex opened in New York.  And just minutes after the Comex open, that spike got dealt with in the usual manner.  The New York low came shortly before 11:30 a.m.---and from there the price rallied quietly higher into the close.

The low and high ticks were recorded by the CME Group as $1,234.90 and $1,249.30 in the December contract.

Gold finished the Monday trading session in New York at $1,246.90 spot, up $8.70 from Friday's close.  Net volume was pretty light at only 91,000 contracts, so it wasn't difficult for anyone with an agenda to move the price---either up or down.

Silver also got sold down at the 6 p.m. EDT open in New York on Sunday---and its low tick of the day came shortly before 9 a.m. Hong Kong time on their Monday morning.  From there, the silver price rallied in a similar fashion to gold, but began to rally anew shortly after the price was capped at the Comex open in New York. The high tick of the day came at, or shortly after, the London p.m. gold fix---and then it got smoked for all its New York gains, plus a bit more.  From its 11:30 a.m. EDT low in New York, it chopped quietly higher for the remainder of the trading day.

The low and high were reported as $17.25 and $17.52 in the December contract.

Silver finished the Monday session at $17.425 spot, up 15.5 cents, but would have obviously closed considerably higher if JPMorgan et al hadn't been in the room.  Net volume was pretty light as well, only 22,000 contracts.

Platinum traded mostly flat for the first two hours of the Monday trading session---and then it quickly rallied about fifteen bucks.  From that point it chopped slowly higher, hitting its high tick shortly after 1 p.m. in Zurich.  From there it got sold down a bit, before trading sideways from 11 a.m. EDT onwards.  Platinum finished the day up 11 bucks.

Palladium rallied five bucks after two hours of trading---and then tacked on another five in mid-morning trading in New York.  Price couldn't get, or wasn't allowed, over the $762 spot price---and it closed at $760 spot, up nine bucks from Friday's close.

The dollar index closed late on Friday afternoon in New York at 85.20.  It rallied a bit during Far East trading, with the 85.37 high tick coming about ten minutes before London opened.  It was all down hill from there, with the 84.92 low tick coming about 3:10 p.m EDT---and from there it rallied back and closed a hair above the 85.00 mark at 85.02---down 18 basis points on the day.

The gold stocks opened up a bit more than a percent---and didn't do much until their 10:20 a.m. EDT low.  From there they rallied in a choppy fashion for the rest of the day---and the HUI closed up 2.22%.

The silver equities gapped up about 1.5 percent at the open, before falling back almost immediately---and from there they spend the remainder of the Monday session crawling back to their earlier high.  It took a large portion of the day to get there---and then stay there.  The silver equities closed just off their high tick---and Nick Laird's Intraday Silver Sentiment Index closed up 1.69%.

The CME Daily Delivery Report showed that 220 gold and 5 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  For the second day in a row it was Barclays as the only short/issuer out of its in-house [proprietary] trading account---and also for the second day in a row, they were also the biggest long/stopper with 218 contracts in their client account.  The link to yesterday's Issuers and Stoppers Report is here.

As I just mentioned, the delivery activity in gold on Monday was a carbon copy of what was reported on Friday, where Barclays issued 230 gold contracts from its proprietary trading account---and stopped 228 of them in its client account.  I'd sure to know what that's all about.

The CME Preliminary Report for the Monday trading session showed that October open interest in gold dropped by 230 contracts---and that was the 230 contracts issued by Barclays on Friday for delivery today.  Gold open interest in October is now down to 607 contract---minus the 220 that was posted, also by Barclays, for delivery tomorrow.  October open interest in silver is down to 105 contracts after deducting the 72 contracts from Friday being delivered today as well.  October o.i. is now down to an even 100 contracts after subtracting the 5 contracts being delivered tomorrow.

GLD reported a good-sized withdrawal yesterday, as an authorized participant withdrew 288,402 troy ounces---a hair under nine tonnes of the stuff.  And as of 6:48 p.m. EDT yesterday evening, there were no reported changes in SLV.

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

It was a pretty busy day in both gold and silver over at the Comex-approved depositories on Friday.  In gold, there was 12,860.000 troy ounces reported received---and 96,482.150 troy ounces shipped out.  The entire deposit, which works out to 400 kilobars, was made into the vaults over at Canada's Scotiabank---and of the exactly 3,001 kilobars reported shipped out, 3,000 were removed from JPMorgan's vault.  The link to that action is here.

Is it just me, or is a larger percentage of the in/out activity in Comex gold now in the form of kilobars, rather than the standard LBMA 100 and 400 troy ounce good delivery bars?

It was another very decent day in silver too, as 417,902 troy ounces were reported received---and 870,227 troy ounces were shipped out the door.  The link to that activity is here.

Since the 20th of the month fell on a week day, the good folks over at The Central Bank of the Russian Federation updated their website with their September data, including their gold reserve activity.  It was a big month for them, as they added a very chunky 1.2 million troy ounces.  This is the biggest one-month purchase they've ever made, besting their next biggest addition of 1.1 million ounces back in May of 2010.

Russia's Central bank reserves now stand at 37.0 million troy ounces---and Nick Laird's most excellent chart tells all.

Just as a matter of interest, the 1.2 million troy ounces [37.33 metric tonnes] is considerably more gold than Russia digs out of the ground in one month.  I get the impression from this big deposit in September that they have gold stashed away somewhere that doesn't show up in the books of the central bank, as a deposit that size can't be explained any other way.

It's my Tuesday epistle, so I have a fair number of stories for you today---and the final edit is yours.

¤ Critical Reads

Blood Red From Big Blue: Why IBM is Crashing---in Charts

Remember when three short months ago we revealed what was "the scariest chart in IBM's history", namely the one, showing IBM's total debt to equity ratio, which has exploded and surpassed Lehman highs, as the company scrambled to issue more and more debt and use it to repurchase more and more stock?

With this chart, incidentally, we also explained why IBM's ridiculous stock repurchasing strategy, which had seen $37.7 billion in stock buybacks since 2012, or more than the total debt issuance of $33.6 billion during the same period could not continue and why, inevitable, IBM would have a massively disappointing quarter.

Well, that quarter just hit, when moments ago in an early press release, IBM reported abysmal adjusted EPS of only $3.68, a huge miss to the $4.32 Wall Street expected, mostly a function of one simple thing: the buyback "strategy" finally hit a brick wall.

This very interesting Zero Hedge article appeared on their website at 7:42 a.m. EDT yesterday morning---and I thank reader Dan Lazicki for today's first story.

Santelli & Schiff: "A Messy Exit is a Given... Ending Q.E. Will Plunge U.S. Into Severe Recession"

"Markets are slowly coming to grips with reality is not going to be as easy as everybody thought," Peter Schiff tells CNBC's Rick Santelli, noting the pick up in volatility across asset classes recently.

What The Fed clearly does not understand, Schiff blasts, is that "you cannot end quantitative easing without plunging the U.S. into a severe recession." Because of the Fed's extreme monetary policy and the mal-investment that flows from it, Schiff says, "The US economy is more screwed up now than it's ever been in history."

Most prophetically, we suspect, Santelli agrees that "a messy exit is a given," and Schiff believes they know that and that is why QE4 is coming simply "because it hasn't worked and they can't admit it's been a dismal failure."

This 2:40 minute CNBC video clip showed up on the Zero Hedge website yesterday at 5:49 p.m. EDT---and I thank Manitoba reader U.M. for her first contribution of the day.

Fears That Pimco and Other Big Firms Could Be Unable to Unload Risky Bonds

When it comes to high-risk bonds, the asset management giant Pimco has pretty much cornered the global market.

Be it bonds issued by the automotive financier Ally Financial or the student loan financier SLM in the United States, or government bonds in Spain and Italy, Pimco holds a commanding position in these high-yielding securities.

But as Pimco’s portfolio managers double down on their bet that high-risk bonds will thrive in a world of low interest rates, a growing number of global regulators are warning that the positions being taken on by the big asset management firms pose a broad danger to the financial system.

These concerns were amplified this week as stock markets gyrated, the yields of high-risk corporate and European bonds spiked upward and, crucially, trading volumes evaporated.

This longish article showed up on The New York Times website last Thursday---and is worth reading, at least until your eyes begin to glaze over.  I found it in yesterday's edition of the King Report.

FBI Director: If Apple and Google Won't Decrypt Phones, We'll Force Them To

Everyone is stoked that the latest versions of iOS and Android will (finally) encrypt all the information on your smartphone by default. Except, of course, the FBI: Today, its director spent an hour attacking the companies and the very idea of encryption, even suggesting that Congress should pass a law banning the practice of default encryption.

It's of course no secret that James Comey and the FBI hate the prospect of "going dark," the idea that law enforcement simply doesn't have the technical capability to track criminals (and the average person) because of all those goddamn apps, encryption, wi-fi network switching, and different carriers.

It's a problem that the FBI has been dealing with for too long (in Comey’s eyes, at least). Today, Comey went ballistic on Apple and Google's recent decision to make everything just a little more private.

This very interesting news item showed up on the motherboard.vice.com Internet site early afternoon last Thursday---and my thanks go out to Roy Stephens for his first offering of the day.

Vote all you want. The secret government won’t change.

The voters who put Barack Obama in office expected some big changes. From the NSA’s warrantless wiretapping to Guantanamo Bay to the Patriot Act, candidate Obama was a defender of civil liberties and privacy, promising a dramatically different approach from his predecessor.

But six years into his administration, the Obama version of national security looks almost indistinguishable from the one he inherited. Guantanamo Bay remains open. The NSA has, if anything, become more aggressive in monitoring Americans. Drone strikes have escalated. Most recently it was reported that the same president who won a Nobel Prize in part for promoting nuclear disarmament is spending up to $1 trillion modernizing and revitalizing America’s nuclear weapons.

Why did the face in the Oval Office change but the policies remain the same? Critics tend to focus on Obama himself, a leader who perhaps has shifted with politics to take a harder line. But Tufts University political scientist Michael J. Glennon has a more pessimistic answer: Obama couldn’t have changed policies much even if he tried.

Though it’s a bedrock American principle that citizens can steer their own government by electing new officials, Glennon suggests that in practice, much of our government no longer works that way. In a new book, “National Security and Double Government,” he catalogs the ways that the defense and national security apparatus is effectively self-governing, with virtually no accountability, transparency, or checks and balances of any kind. He uses the term “double government”: There’s the one we elect, and then there’s the one behind it, steering huge swaths of policy almost unchecked. Elected officials end up serving as mere cover for the real decisions made by the bureaucracy.

No surprises here.  This author has just stumbled on the "powers that be" but doesn't give them a name.  G. Edward Griffin spells it out exactly in his book "The Creature From Jekyll Island"---or James Perloff's "The Shadows of Power: The Council on Foreign Relations and the American Decline".  This article appeared on the bostonglobe.com Internet site on Sunday---and I thank reader M.A. for sending it along.

7 weeks of eruption: Stunning aerial video of Iceland’s Bardarbunga volcano

A breathtaking video filmed by an Icelandic helicopter pilot has documented the continuous eruption of the Bardarbunga volcano in northeast Iceland. Enormous fiery bubbles of lava and steam can be seen bursting from the ridges in the ground.

Helicopter pilot Gísli Gíslason captured the wondrous images while on several trips over the volcano – some of which were taken on Friday, and others a few days previously.

“Almost seven weeks have now passed since the Holuhraun lava eruption began. The eruption is continuing with few changes. The eruption is showing no signs of slowing down,” he wrote in the video’s description.

The Bardarbunga (Bárðarbunga) volcano is part of the second-tallest mountain in Iceland and located in the country’s Holuhraun lava fields - a volcanic system that spans some 200 kilometers by 25 kilometers.

This very interesting article, with lots of photos to along with the video clip, appeared on the Russia Today website at 8:48 p.m. Moscow time on their Thursday evening, which was 12:48 p.m. in New York.  It's courtesy of reader M.A.

One simple reason why global stock markets are reeling

It is no mystery why global liquidity is evaporating. Central banks have turned off the tap. They have reduced net stimulus by roughly $125 billion a month since the end of last year, or $1.5 trillion annualized.

That is a shock for the financial system. The ratchet effect has been incremental, but relentless. We are finally seeing the consequences, with the usual monetary policy lag.

The Fed and People‘s Bank of China (PBOC) have stopped their two variants of global QE altogether (for now). Others have chopped their purchases of bonds by half or more. The Brazilians are net sellers, and in a sense they carrying out reverse QE. The Russians have just joined them again.

Fed tapering has taken out $85bn a month. The markets are having to go it alone as of this month, without their drip feed. Less understood is the effect of global reserve accumulation by the BRICS, emerging Asia, and the Petro-states. This has collapsed.

Here's Ambrose Evans-Pritchard, on behalf of his handlers, wringing his hands that the money printing is coming to a halt.  At the end, he echoes Jim Rickards when he states "...until the blinking starts at the Fed and the People‘s Bank. QE4 is creeping onto the table already."  It's the second offering of the day from Roy Stephens.

Mark Carney launches investigation after real-time payment system crash delays house purchases

Mark Carney has launched an investigation into how one of the central pillars of the UK’s payments infrastructure collapsed for 10 hours, delaying hundreds of billions worth of deals.

The Bank of England Governor pledged to discover what had gone wrong and whether officials had responded properly after the enforced closure of the £277bn-a-day CHAPS payment system, which affected thousands of house purchases and major interbank money transfers.

The Bank said it would be carrying out “a thorough, independent review of the causes of today’s disruption”. “The review will cover the causes of the incident, the effectiveness of the Bank’s response and the lessons learned for future contingency plans. Its findings will be presented to Court which will then publish the full report and the response,” it added.

MPs had earlier in the day called on the Bank to explain the fault, attributed to a “technical issue related to some routine maintenance”.

This news item put in an appearance on the telegraph.co.uk Internet site at 9:30 p.m. BST on their Monday evening---and I thank West Virginia reader Elliot Simon for sending it our way.

ECB Unleashes (Covered) Bond Buying Program, Sovereigns Sell O

Draghi, we have a problem. Just as Coeure 'promised' the ECB, according to he FT, began its bond-buying program this morning. However, peripheral sovereign bond-buying front-runners banking on the ECB greater fool to offload to are disappointed as they are go no easy money love. The initial program is covered-bond-buying (similar to U.S. MBS, but a considerably smaller market) and the ECB will reveal how much it has bought each Monday afternoon (starting next week). Greek bonds are suffering the most with 5Y yields at cycle highs once again and prices at lows (vanquishing all of Friday's gains).

As the Financial Times reports:

The European Central Bank has started to buy covered bonds, launching its latest attempt to stave off a vicious bout of economic stagnation in the eurozone.

The purchases are the first in a bond-buying programme that is expected to see the ECB place billions of euros of covered bonds and asset-backed securities on its balance sheet over the next two years in an attempt to revive lending and growth across the region.

The ECB confirmed that the central bank had begun purchasing the assets on Monday. The purchases of asset-backed securities are expected to start later this year.

The central bank will reveal how much it has bought every Monday afternoon, starting next week.

This story appeared on the Zero Hedge website at 8:40 a.m. EDT on Monday morning---and it's worth reading.  It's the second contribution of the day from reader U.M.

Credibility meets compromise in Europe's bank stress test

When Europe announced its latest health check of top banks early last year it promised a "comprehensive assessment" of how well prepared they were to withstand another financial crisis.

In practice, a spirit of comprehensive compromise has been just as important. 

A series of Reuters interviews with officials, bankers and others involved in the European Central Bank's financial inspection of the euro zone's biggest banks shows that in the seven months since it began, the ECB has had to shoot down countless pleas from banks and national supervisors for special treatment.

At the same time, according to sources who spoke on condition of anonymity, supervisors have revised the way they value assets and banks have failed to provide all the data demanded - multiple compromises that could cumulatively threaten the tests' reputation as tough and consistent.

This Reuters article, filed from London, was posted on their website at 7:12 a.m. EDT yesterday---and I thank Harry Grant for sharing it with us.

The Reckoning For Swiss Banks is Far From Over

IN 2008 Bradley Birkenfeld, an American working for UBS, blew the whistle on the giant Swiss bank's offshore operations, which had helped thousands of rich Americans to dodge their taxes.

Among the lurid details that he revealed was the use of encrypted laptops, the smuggling of diamonds in toothpaste tubes for clients, and evidence of bankers travelling to America on tourist visas to avoid arousing suspicion.

UBS was sent reeling by the revelations. In recompense, in 2009 it paid a $780m fine to the American government and turned over data to the authorities on more than 4,000 clients.

The biggest fish to be caught in the net is now about to have his day in court. On October 14th jury selection started in a federal court in Florida for the trial of Raoul Weil, who as head of UBS's global private-banking business was responsible for the division that had fallen foul of the authorities. In 2009 America issued an international arrest warrant for Mr Weil. He was nabbed last year at an Italian hotel, while on holiday with his wife, and was extradited to the United States, where he has been under house arrest.

This news story showed up on the businessinsider.com Internet site at 4:40 p.m. EDT on Sunday afternoon---and it's the second article in a row from Harry Grant.

Deadly Ukraine Crash: German Intelligence Claims Pro-Russian Separatists Downed MH17

After completing a detailed analysis, Germany's foreign intelligence service, the Bundesnachrichtendienst (BND), has concluded that pro-Russian rebels were responsible for the crash of Malaysian Airlines Flight MH17 on July 19 in eastern Ukraine while on route from Amsterdam to Kuala Lumpur.

In an Oct. 8 presentation given to members of the parliamentary control committee, the Bundestag body responsible for monitoring the work of German intelligence, BND President Gerhard Schindler provided ample evidence to back up his case, including satellite images and diverse photo evidence. The BND has intelligence indicating that pro-Russian separatists captured a BUK air defense missile system at a Ukrainian military base and fired a missile on July 17 that exploded in direct proximity to the Malaysian aircraft, which had been carrying 298 people.

Evidence obtained shortly after the accident suggested the aircraft had been shot down by pro-Russian militants. Both the governments of Russia and Ukraine had mutually accused each other of responsibility for the crash. After a Dutch investigative commission reviewed the flight recorder, it avoided placing any blame for the crash. Some 189 residents of the Netherlands perished in the downing of Flight MH17.

The news item appeared on the German website spiegel.de at 8:08 a.m. Europe time on their Sunday---and I thank Jim Skinner for finding it for us.  A companion story appeared on the RIA Novosti website on Sunday evening Moscow time.  It's headlined "German Intelligence Agency Chief Says Kiev Falsified Data on MH17 Crash" and it's courtesy of reader M.A.

Oil prices won’t recover above $100 – Russian Finance Ministry

Decreasing oil prices are “inevitable” and the chance they will exceed $100 per barrel is “unlikely” the Russia’s Finance Ministry said. However, the Russian budget can withstand lower prices.

“The market is biased in favor of excess supplies. That is why price reduction is inevitable; it will have a structural character. We are unlikely to see prices higher than $100 per barrel in the near future,” Maksim Oreshkin, the head of the Russian Finance Ministry's strategic planning department told RBC TV in an interview.

“In general, the current downward price movement is structural. Investments in oil production have increased dramatically in the past ten years,” Oreshkin said.

Russian officials have stressed there will be no sharp rise in Russia’s budget deficit, but the country's largest bank, Sberbank, says an oil price of $104 is required to balance the 2015 budget. A drop of prices to $80 per barrel could cost Russia 2 percent of GDP.

The Russians have to look no further than the Comex to discover why oil prices are where they're at.  This Russia Today article showed up on their Internet site at 11:19 a.m. Moscow time on their Monday morning, which was 3:19 a.m. in New York.  I thank reader 'h c' for digging it up on our behalf.

Egypt signs with six international firms to dredge new Suez Canal

Egypt signed contracts with six international firms on Saturday to carry out dredging of the new Suez Canal, the flagship project in President Abdel Fattah al-Sisi's program to revive an economy battered by years of political turmoil.

The companies are National Marine Dredging Company of the United Arab Emirates; Royal Boskalis Westminster and Van Oord, both based in the Netherlands; Jan de Nul Group and Deme Group, both of Belgium; and U.S.-based Great Lakes Dredge and Dock Company.

Lieutenant General Mohab Memish, head of the Suez Canal Authority, announced the consortium at a news conference in Cairo alongside Prime Minister Ibrahim Mehleb.

Egypt hopes the new canal will more than double revenues from the waterway by 2023 to $13.5 billion from $5 billion. It also plans to develop 76,000 sq km (29,000 sq miles) in the area into an international industrial and logistics hub to attract more ships and generate income.

This Reuters news story, filed from Cairo, showed up on their Internet site at 2:30 p.m. EDT on Saturday afternoon---and I thank South African reader B.V. for bringing it to our attention.

U.S. airdrops supplies to Kurds battling IS militants in Kobane

U.S. military aircraft dropped weapons, ammunition and medical supplies late on Sunday to Kurdish forces battling the Islamic State (IS) group, also known as ISIS or ISIL, in the Syrian border city of Kobane.

U.S. Central Command said C-130 cargo aircraft had made "multiple" drops of supplies provided by the authorities in Iraq’s autonomous region of Kurdistan that were "intended to enable continued resistance against ISIL's attempts to overtake Kobane".

Early on Monday, a spokesman for Kurdish forces in Kobane confirmed they had received a large quantity of weapons and ammunition.

The airdrops Sunday were the first of their kind and followed weeks of U.S. and coalition airstrikes in and near Kobane, which is located on Syria’s northern border with Turkey.

This news item put in an appearance on the france24.com Internet site yesterday sometime---and it's courtesy of Roy Stephens.

The Iraqi Army Never Was

In a bloody ISIS attack on an Iraqi Army base just north of Fallujah on September 21, upwards of 500 government soldiers perished or disappeared, fleeing into the marshlands, the woods, or to the next base camp four miles away. Few were left behind alive, surrounded by militant fighters who by all accounts were supposed to be less equipped, less trained, and less organized than Iraq’s professional fighting force.

But the Iraqi security forces, into which American taxpayers poured some $25 billion over the course of a decade, had in the span of a summer, crumbled.

While pro-war critics blame the Iraqi military’s failures on the current administration for leaving the country too soon, American veterans and journalists who spoke with TAC say the army was corrupt, incompetent, and unmotivated from the beginning, and that top U.S. officials papered over this inconvenient fact for years in order to protect their commands and maintain public support for the U.S. intervention.

No surprises here.  This longish, but very interesting article appeared on theamericanconservative.com website back on Thursday, October 9---and is definitely worth the read if you have the time and/or the interest.  It's the second offering of the day from reader Dan Lazicki.

Iran acts to comply with interim nuclear deal with powers: IAEA

Iran is taking further action to comply with an interim nuclear agreement with six world powers, a monthly U.N. atomic agency report showed, a finding the West may see as positive ahead of a November deadline for clinching a long-term deal.

The report by the International Atomic Energy Agency (IAEA), seen by Reuters, made clear that Iran is meeting its commitments under the temporary deal, as it and major powers seek to negotiate a final settlement of a decade-old nuclear dispute.

It said Iran had diluted more than 4,100 kg of uranium enriched to a fissile concentration of up to 2 percent down to the level of natural uranium. This was one of the additional steps Iran agreed to undertake when the six-month accord that took effect early this year was extended by four months in July.

Refined uranium can be used to fuel nuclear power plants, Iran's declared goal, but can also provide the fissile core of a nuclear bomb if processed to a much higher degree, which Western states fear may be the country's ultimate aim.

This Reuters article, filed from Vienna, appeared on their Internet site at 1:36 p.m. EDT on Monday---and it's another contribution from reader U.M.

Saudi, Kuwait Seen Curbing Oil Output at ’Opportune Time’

Saudi Arabia and Kuwait halted production at a jointly run oil field late this week, a move that could help ease a supply glut that has pushed global prices down 25 percent.

The 300,000-barrel-a-day Khafji field, located in the neutral zone between the two countries, was being shut because of environmental concerns, a person familiar with Saudi Arabian oil policy said yesterday, who asked not to be identified because the information isn’t public.

The shutdown comes as Saudi Arabia and other OPEC members face increasing pressure to scale back production while supply expands from the U.S. and other countries and demand growth slows. Asia’s oil market has become particularly flooded as the U.S. imports fewer cargoes.

This oil-related Bloomberg news item was co-filed from San Francisco, Manama, Bahrain---and Houston.  It appeared on their Internet site at 7:20 p.m. Denver time last Friday evening---and it's the second article I borrowed from yesterday's edition of the King Report.

China sets tougher restrictions on illegal mining, exporting of rare earths

China is stepping up efforts to restrict illegal mining and exporting of rare earths with a five-month campaign that ultimately aims mainly to avoid a further plunge in prices.

Launched earlier this month and until March 31, five official bodies will work together to investigate and punish illegal miners and smugglers of the highly coveted elements.

Provincial and city governments will supervise the effort, Investor Intel reports.

This is not the first time China attempts to streamline the rare earth industry by giving control to state-owned miners and setting production quotas on a small number of authorized companies.

This article appeared on the mining.com website on Monday---and it's another offering from reader M.A.

All the world’s gold to be confiscated and buried in Switzerland by 2020 argues Jim Rickards

In what pretends to be a history looking back from the future ‘Currency Wars’ author and fund manager Jim Rickards argues that by 2020 all the gold of the G-20 nations will be confiscated and buried in a former nuclear bunker under a mountain in Switzerland to take it out of the global financial system.

This is the conclusion to the astonishing tour de force article that kicks off his new monthly newsletter ‘Rickards’ Strategic Intelligence’ for Agora Financial, publisher of highly successful financial newsletters like Chris Mayers’ ‘Capital & Crisis’. Has the normally sober and thoughtful Mr. Rickards lost his marbles?

I must confess to having my doubts on reading his first issue with one absurd conclusion leading to another and then to a totally unrealistic world gold confiscation scenario. How would that happen? The G-20 meetings struggle to agree on a final communique. How could they agree something like that?

Mr. Rickards doesn't stop there. In his world not only does money die and cease to exist but there is a sort of death of capitalism that Marx prescribed and Stalin tried to implement without notable success. There are no markets, bonds nor money by 2024 and equality rules.

WTF!  Whatever Jim is smoking, I don't want any of it.  And don't look to me for answers on this one, dear reader, as I'm just as much in shock as you are.  This amazing commentary appeared on the arabianmoney.com Internet site on Sunday evening---and it is certainly a must read.  I thank Dr. Dave Janda for sending it along.

Taking Your Gold for “The Greater Good”

But returning to the subject of a crash in the paper-gold market, this suggests that the spin that allows the banks of the world to simply steal all deposits over €100,000 could easily be applied to a similar, ongoing banking scam in the paper-gold market.

Let’s say that, rather than wait for the Emperor’s new clothes to be seen to be an illusion, the banks of the world decide to preempt this embarrassment in a proactive manner. Let’s say that, with the support of their friends in the governments, an announcement is made to the public that a decision has been reached that will aid tremendously in saving the “essential” banks. And—here’s the best part—it would not impact the “little man” who has already had to bear so much abnegation as a result of the greed of the rich.

The announcement states that the banks have been given the go-ahead to simply cancel the paper-gold certificates that they have sold. This will enrich the banks by billions of dollars, and the only losers will be the greedy rich who have so much money to burn that they have purchased gold certificates.

Were the banks to do this, they would, instead of being vilified for selling assets that they did not possess, be praised for taking affirmative action for “The Greater Good.”

This commentary appeared on the internationalman.com Internet site on Monday.

In Silver Doctors interview, GATA secretary discusses developments in market manipulation

Interviewed for about a half hour last week by Silver Doctors, your secretary/treasurer discussed recent developments in market manipulation, speculated that gold will be revalued overnight by major central banks as part of a general world currency revaluation, and cautioned that China's drive to obtain gold isn't intended to establish a free market in gold but to wrest control of the gold market from the United States.

The interview was conducted last Wednesday---and the audio interview, which runs for 32:17 minutes, appeared in a GATA release on Saturday.  It's worth your time.

Mad about yellow: India's love affair with gold

We worship it, buy it for investment, wear it as jewellery, weave it into cloth and even eat it. India's love affair with gold crosses the boundaries of religion and also class — and reaches its zenith in the run-up to Diwali.

"We buy at least a small gold coin in our family every Dhanteras and get the house repainted after Dussehra to welcome Goddess Lakshmi home," says Kandivali resident Ravindra Dave.

Dave is not alone, of course. Most Hindu families work towards purchasing gold at this time. "The ritual is akin to inviting Lakshmi, the goddess of wealth and prosperity," explains Anant Joshi, a priest from Bhuleshwar. "While some prefer jewellery, most buy gold coins with Lakshmi embossed on the front and her symbol, the Shri Yantra, embossed on the other side. Some have both Lakshmi and Lord Ganesha, the remover of obstacles, embossed on the coins."

This gold-related news article, filed from Mumbai, showed up on the dnaindia.com Internet site at 9:09 a.m. IST on their Sunday morning.  It's another offering from reader U.M.

Government to Re-Impose Gold Import Curbs to Check Trade Deficit

Barely months after gold import rules were eased, the government is looking to re-impose curbs as the country's insatiable appetite has led to a surge in the yellow metal coming into India, threatening to undermine the improvement in external balances.

The finance ministry's revenue department has flagged the issue and asked the Department of Economic Affairs and the Reserve Bank of India to review the May 21 relaxation in the import rules issued by the latter.

The so-called 80-20 rule was relaxed in May by the RBI at the behest of the finance ministry after jewellers, bullion dealers, authorised dealer banks, and trade bodies sought easier rules. Under the 80-20 scheme, nominated agencies were allowed to import gold on the condition that 20 percent of the import would be exported. The easing of rules meant more entities were allowed to import gold.

The trade deficit worsened to an 18-month high of $14 billion in September following a 450 percent rise in gold imports as importers rushed to take advantage of lower prices. "Gold imports have risen since the norms were relaxed....There is a concern," a finance ministry official said. "We have written to the DEA and the RBI."

This article, filed from New Delhi, put in an appearance on The Economic Times of India website at 4:02 a.m. India Standard Time on their Monday morning---and I found it posted on the gata.org Internet site.

Reserve bank of India will not change gold import rules, says sources

Reserve bank of India will not change its gold import rules, sources with knowledge of the matter said, responding to a report that the world's second-largest consumer of the precious metal was keen to limit imports.

The central bank has already eased some import controls by allowing seven trading houses to import the metal, driving a sharp jump in overseas buying despite a record import duty of 10 percent.

A surge rise in gold imports widened the trade deficit to an 18-month high of $14.25 billion in September, creating concerns for the new government of Prime Minister Narendra Modi, an unidentified Finance Ministry official told the Economic Times newspaper.

The ministry also sent a letter to the central bank seeking a review of the May relaxations, according to the report. But two officials familiar with the central bank's policies told on Monday it was not considering any change.

This article, also from the Economic Times of India appeared on their website at 7:47 p.m. EST on their Monday evening---17 hours before the previous Times of India article posted above.  It's the final offering of the day from Manitoba reader U.M.---for which I thank her.

Koos Jansen: The Chinese precious metals market is on fire

China's gold demand, as signified by off take from the Shanghai Gold Exchange, has reached "extraordinary" levels in recent days, while silver is growing shorter in supply as well, according to gold researcher and GATA consultant Koos Jansen.

Jansen's analysis is headlined "The Chinese Precious Metals Market is on Fire" and it was posted on the Singapore Internet site bullionstar.com at 11:07 p.m. local time on their Sunday evening.  It's worth reading---and it's another gold-related item I found in a GATA release yesterday.

¤ The Funnies

The first photo below is one I took a couple of Sunday's ago at the usual location, but never bothered to download off the camera until this past Sunday evening.  It's a female common merganser with Canada Geese all around.  It was taken from over 100 meters away---and even though I used a 400mm telephoto lens, I still had to crop the heck out of it to get the bird to appear a decent size---and it's at the limit of what I consider to be an 'acceptable' shot.

¤ The Wrap

As I mentioned previously, JPMorgan’s concentrated short position in COMEX silver is now lower than it has been since acquiring Bear Stearns in early 2008. If anything, JPM’s COMEX silver short may even be lower than I have calculated, simply because it is no longer that large relative to the holdings of the three other big shorts. With just over 34,000 contracts held short by the big 4, once you subtract JPM’s 10,000 short contracts, the remaining three shorts average 8,000 contracts each. This is a far cry from years earlier when JPMorgan singlehandedly held as many as 40,000 contracts of COMEX silver net short and represented close to 70% of the big 4’s total silver shorts. Both the longer term and recent trends seem to indicate JPMorgan may not wish to remain the prime silver manipulator as it clearly had been in the past.

Throw in my previous speculation that JPMorgan has been buying physical silver over the past three and a half years with a reckless abandon and may, in fact, be Mr. Big when it comes to buying in SLV and in Silver Eagles; it is easy to conclude that JPM may hold an extreme net long position in silver despite holding 10,000 COMEX contracts (50 million oz) short. As such, it would appear JPMorgan could be positioned much better for an upside move in silver than at any time in the bank’s history, both before and after Bear Stearns. And as a bonus to the bank, none of its suspected holdings on the long side of silver would appear to be reportable; thus keeping the holdings and any eventual gains undisclosed. - Silver analyst Ted Butler: 20 October 2014

With such low volume, I'm not prepared to read much into yesterday's price action in gold or silver, although seeing their respective rallies get capped either at the Comex open, or the London p.m. gold fix, should have come as no surprise, as the New York bullion banks are up and running during those hours.

Here are the 6-month charts for the 'Big 6'---and there's not much to see in the four precious metals, but both copper and West Texas Intermediate were under selling pressures again yesterday.

Gold came within a dollar or so of closing above its 50-day moving average yesterday---and is now at that point as of 12:30 p.m. Hong Kong time on their Tuesday afternoon.  It will be interesting to see what JPMorgan et al do at this point as the Managed Money starts to cover their short positions.  Will 'da boyz' let the price run, or will we see a 'failure' at this point?  Beats me, but we won't have long to wait to find out.

And as I type this paragraph, the London open is an hour and forty minutes away.  The gold price didn't do much in morning trading in the Far East on their Tuesday, but did add a couple of dollars to the price with a tiny rally that started shortly after 11 a.m. Hong Kong time and, as I mentioned above, is now at, or a hair above, its 50-day moving average.  Silver, which got sold down about 15 cents by 11 a.m. Hong Kong time is now a nickel above the unchanged mark.  Platinum and palladium are a few dollars higher as well.  The volume in gold is already very decent at 19,000 contracts---and silver's volume is about 3,800 contracts.   The dollar index, which had made it just above the 85.00 mark by the close of trading on Monday in New York, is now down 20 basis points.

Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report, so I'll be paying particular attention to the price action in all of the 'Big 6' commodities as the Tuesday trading session in New York plays out, especially in gold.

As I hit the 'send' button on today's column at 4:55 a.m. EDT, I see that gold rallied up until shortly before 9 a.m. in London trading---and has been trading flat since.  But it's much too soon to tell if that's the end of the 'rally' or not.   Volume has now blown out to 38,000 contracts, so it's obvious that even this tiny rally is being met with a blizzard of Comex paper---and I'm certainly not happy about that.  The silver price is now back to unchanged, but has been trading mostly lower since its 11 a.m. low tick in Hong Kong.  Volume is now up to 6,200 contracts.  Platinum is up 8 dollars----and palladium is currently up two bucks.  The dollar index is down 15 basis points.

And as I head off to bed, I'd like to mention Marin Katusa's new book one more time.  Marin is the Chief Energy Investment Strategist here at Casey Research---and the book is titled "The Colder War: How the Global Energy Trade Slipped from America's Grasp".  There's a 1-minute video clip about it at the youtube.com Internet site---and you can watch it by clicking here.  But the real 'juice'---along with how to pre-order it---is linked here.

It could prove to be an interesting day for gold---and the price action during the New York session could tell us a lot about what may happen going forward, at least in the short term.

See you here tomorrow.

]]>
Tue, 21 Oct 2014 06:25:00 +0000
<![CDATA[China Gold Production Seen Falling, Prompting More Imports]]> http://www.caseyresearch.com/gsd/edition/china-gold-production-seen-falling-prompting-more-imports/ http://www.caseyresearch.com/gsd/edition/china-gold-production-seen-falling-prompting-more-imports/#When:09:59:00Z "Sooner or later the forces of nature---and the markets---will not be denied"

¤ Yesterday In Gold & Silver

There wasn't a lot of price action in gold yesterday.  What action there was occurred between the noon silver fix in London---and the Comex close in New York.

The high and low tick are barely worth the effort of looking up---and the CME Group recorded them as $1,242.10 and $1,232.00 in the December contract.

Gold finished the Friday session at $1,238.20 spot, down 70 cents from Thursday's close.  Net volume was very much on the lighter side at only 109,000 contracts.

The price chart in silver looked very similar to the gold chart---and silver traded in a two bit range for the entire day.

The high and low in silver were recorded as $17.44 and $17.22 in the December contract.

Silver closed in New York yesterday at $17.27 spot, down 9.5 cents from Thursday's close.  Net volume was pretty light at only 25,000 contracts.

Platinum rallied right from the moment that the markets opened in New York on Thursday evening, but that ended/got capped just after 10 a.m. Hong Kong time.  It got sold down a bit going into the Zurich open---and then didn't do much for the remainder of the day.  Platinum closed up 12 bucks.

Palladium also rallied in the early going---and then developed a negative bias around noon Hong Kong time---and slid a hair until about 10:15 a.m. in Zurich.  Then it rallied anew until noon Europe time---and then traded pretty flat for the remainder of the Friday session, closing up 13 dollars.

The dollar index closed late Thursday afternoon in New York at 84.96---and then chopped around before sliding to its 84.77 low at precisely 8 a.m. in New York.  The subsequent rally topped out at 85.23 around 11:25 a.m. EDT---and it didn't do a lot for the rest of the day.  The index finished back above the 85.00 mark at 85.20.

The gold stocks spent all of two minutes in the black at the open of trading at 9:30 a.m. EDT yesterday---and it was all down hill from there, as the HUI closed virtually on its low tick of the day, down 3.47%.  This sell-off was out of all proportion to the tiny loss in the metal itself.

And as bad  as the gold shares performed, the silver equities got shelled, as Nick Laird's Intraday Silver Sentiment Index closed down an eye-watering 4.62%.  There was no reason for this magnitude of sell-off either.

The CME Daily Delivery Report showed that 230 gold and 72 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  In gold, it was the strangest thing, as Barclays was the only short/issuer with 230 contract out of its in-house [proprietary] trading account.  They were also the biggest long/stopper with 228 contracts in their client account. One has to wonder what that was all about.  In silver, the two short/issuers were Jefferies and ABN Amro with 52 and 20 contracts apiece.  There were four different long/stoppers, but Jefferies stopped 26 of them.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold's open interest in October declined by 129 contracts, and is now down to 837 contracts.  Silver's October open interest was unchanged at 174 contracts.  From these numbers, one must subtract the deliveries mentioned in the previous paragraph.

There were no reported changes in GLD yesterday---and as of 7:44 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I was editing at 5:02 a.m. EDT this morning, I see that the folks over at the iShares.com Internet site showed a withdrawal from SLV of 1,150,380 troy ounces.

There was another sales report from the U.S. Mint.  They sold 6,000 ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---and 50,000 silver eagles.

Month-to-date the mint has sold 42,500 troy ounces of gold eagles---17,000 one-ounce 24K gold buffaloes---3,100,000 silver eagles---and 400 platinum eagles.  Based on these sales, the silver/gold sales ratio stands at 52 to 1.

There was a small amount of gold shipped out of the Comex-approved depositories on Friday, as 2,411 troy ounces were withdrawn from Scotiabank's depository.

Of course, things were a lot different in silver.  Nothing was reported received, but a huge 1,716,910 troy ounces were shipped out the door---and the link to that action is here.

The Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, October 14, was pretty much what I was expecting to see in both silver and gold.

In silver, the Commercial net short position was virtually unchanged, as it only declined by 20 contracts, which isn't even a rounding error.  The Commercial net short position still sits at 16,260 contracts, or 81.3 million ounces.

But under the hood in the Disaggregated COT Report, things were a little different, but in a good way.  The Managed Money in the technical fund category sold another 572 long contracts and went short an additional 1,226 contracts.  That, I believe is a new record short position in the Managed Money category, so the rubber band is stretched about as tight as it can get in silver.

Ted Butler said it appeared that JPMorgan covered another 500 contracts of their short-side corner in the Comex silver market, which is another new low since they inherited that gargantuan short position from Bear Stearns back in 2008.  They now hold 10,000 contracts net short, or 50 million ounces, which is a sizeable chunk of the total Commercial net short position which, from two paragraphs ago, worked out to 81.3 million troy ounces.

In gold, the Commercial net short position increased by a rather chunky 15,416 contracts, or 1.54 million ounces of paper gold---and that's all because of the rally in gold during the reporting week.  The Commercial net short position in gold is now up to 7.88 million troy ounces.

The traders in the Managed Money category accounted for most of the buying as they went net long to the tune of 12,333 contracts.

Ted said that JPMorgan sold another 3,000 contracts of their long-side corner in the Comex gold market---and their long position is now down to 18,000 contracts, or 1.8 million ounces.

And because of last week's rally in gold, Ted's concern now is that gold has become vulnerable to a sell-off, as the Commercials may attempt to engineer a decent price decline in order to force these newly minted long contract holders into puking up all these long contracts they just bought.

As it stands three days after Tuesday's cut-off, the traders in the Managed Money category are pretty much maximum short in all of the 'Big 6' commodities now, except for gold.  'Da boyz' may certainly be tempted to make it six out of six.

We'll see.

Since this is my Saturday column, I get to unload my in-box---and I have quite a few for you today that I've been saving from earlier in the week.

¤ Critical Reads

Mike Maloney: Massive Market Divergence in 3 Charts

In his latest video update, Mike Maloney shows one of the most concerning data points for today's stock markets: decreasing volume. This is happening even while markets are levitated by Federal Reserve stimulus and negative interest rates.

After showing the volume action of the DOW, Maloney adds his thoughts: "This is not a healthy market. This means that less and less of the real investors are in there, and more and more of this is black box trading. The problem with that is that when the markets change every black box is going to be selling at once, so what is being set up here is probably the biggest market crash in history."

This 4:19 minute video clip by Mike was posted on the hiddensecretsofmoney.com Internet site on Tuesday---and I've been just too busy to get to it.  It's definitely worth watching---and there's a transcript [with charts] as well.

Doug Noland: The Downside of "Do Whatever it Takes"

Considering the global backdrop, I actually see a curious lack of extreme views (at least from the bear side). Instead, we’re at the stage of the cycle where even “bearish” pundits go out of their way to distance themselves from “the world is ending” prognosis. I guess I would be considered an extremist, though I don’t see the world ending anytime soon. But this week did offer further evidence that history’s greatest financial Bubble is at significant risk.

Friday’s rally did a lot to paper over what was a disturbing week for global markets. The mini-melt-up successfully took a great deal of value out of index and stock put options that expired Friday. Those wanting market protection will now have to pay up for expensive puts that expire in November, December or later.

But don’t let the S&P 500’s modest 1.0% decline fool you. It was an extraordinary week. Japan’s Nikkei index was hammered for 5.0%, increasing 2014 losses to 10.8%. Japanese two-year yields traded to a record low 0.005%. After beginning the week at 6.60%, Greek 10-year bond yields traded to 9% on Thursday (before closing the week at 8.07%). Wild instability returned to European debt (and equities) markets. Portugal’s 10-year yields were up 75 basis points by Thursday, before a rally cut the week’s increase to 35 bps. Germany’s DAX equities index dropped 2.87% on Wednesday then rallied 3.12% on Friday. Italian stocks sank 4.44% and then rallied 3.42%.

If only Bubbles lasted forever. And, unfortunately, the longer they persist and the bigger they inflate, the more problematic the unavoidable collapse. This important reality is ignored at everyone’s peril. Determination to avoid collapse only ensures greater and more precarious Bubble distortions and maladjustment. “World Braces as Deflation Tremors Hit Eurozone Bond Markets,” read another U.K. Telegraph headline. And Bullard and the global central bank community fret a “collapse in inflation expectations.” It is important to recognize that disinflation and collapsing “inflation expectations” are symptomatic of a bursting global financial Bubble. They provide early evidence of what will be a spectacular failure in experimental “activist” central banking.

Doug doesn't miss a thing in this week's edition of his Credit Bubble Bulletin, posted at the prudentbear.com Internet site yesterday evening.  It certainly falls into the absolute must read category.

Jim Rickards on Fox Business News

The first part of this interview runs for 3:33 minute---and is linked here.  The second part of the video interview runs for 1:24 minutes---and it's linked here.  You've heard some of this before, but some of it has been modified---and there's new material as well.  I thank reader Harold Jacobsen for sending it our way.

Friday Humor: Forget QE4, Presenting QE5

Forget helicopters---here's the future of central-planning.

Don't leave The Eccles Building without one.

I thank Joe Nordgaard for sending this Zero Hedge funny, which he sent our way in the wee hours of this morning.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott Share his Views on Ebola, the Economic Slump Around the World and the Disingenuousness in the Precious Metals Markets.

Jeff Rutherford interviews Eric for 15:17 minutes---and the audio commentary was posted on the sprottmoney.com Internet site yesterday.  It's a must listen, especially the first part where discusses the current Ebola situation.

The CIA owns everyone of any significance in the major media.”

As a former member of the major media prior to its concentration in few hands by the Clinton regime, I have reported on many occasions that the Western media is a Ministry of Propaganda for Washington. In the article below one of the propagandists confesses. -Paul Craig Roberts

Published on Russia Insider News

“The CIA owns everyone of any significance in the major media.” — former CIA Director William Colby

Our Exclusive Interview with German Editor Turned CIA Whistleblower

Fascinating details emerge. Leading U.S.-funded think-tanks and German secret service are accessories. Attempted suppression by legal threats. Blackout in German media.

Repenting for collaborating with various agencies and organisations to manipulate the news, Ulkotte laments, “I’m ashamed I was part of it. Unfortunately I cannot reverse this.

This absolute must read commentary showed up on the Paul Craig Roberts website on Thursday sometime---and my thanks go out to Roy Stephens for his first contribution of the day.

James Perloff: A Century of Mainstream Media Lies

Newspapers were the first vehicle that mainstream media (MSM) used to manipulate Americans into war. The Spanish-American War (1898) was fought over Cuba, which had been a colony of Spain since 1511. By the 19th century, Cuba had become the world’s wealthiest colony and largest sugar producer, and its assets were coveted by the Illuminist cabal, which also wanted Spain neutered as a world power. National City Bank, then America’s preeminent bank, controlled the McKinley White House, loaned the government $200 million to fight the war, and took control of Cuba’s sugar industry afterwards (see Ferdinand Lundberg’s classic 1937 book, America’s Sixty Families).

To get young men to fight and die in Cuba for the banksters, it was necessary to persuade Americans – for the first time – that the U.S. military’s duty was not only self-defense, but “righting wrongs” overseas. It was before and during this war that the media honed a skill that would prove perennially useful: manufacturing fake atrocity stories.

The “Yellow Press,” as it was then appropriately called, was spearheaded by William Randolph Hearst’s New York Journal and Joseph Pulitzer’s New York World. Together they fabricated outlandish atrocity tales about Cuba, such as Spaniards roasting Catholic priests. On October 6, 1896, Hearst’s Journal carried this headline: “CUBANS FED TO SHARKS. Cries Heard at Night – They are Taken Outside the Harbor, and the Silent Ferryman Comes Back Alone.” Pulitzer’s World raved: “RAIDED A HOSPITAL– More than Forty Sick and Wounded Cubans Butchered.” But no hospital even existed in the region the World described.

Hearst’s reporters rarely ventured outside Havana’s bars. Some never even traveled beyond Florida, where they forwarded tales spun by Cuban émigrés. And some stories Hearst invented himself in New York.

I've read James Perloff's classic tome "The Shadows of Power: The Council on Foreign Relations and the American Decline."  It's right up there with G. Edward Griffin's "The Creature From Jekyll Island: A Second Look at the Federal Reserve"---and if you haven't read these two books, it's not too late to correct that oversight.  And, like the Paul Craig Roberts piece posted above, this falls into the absolute must read category as well.  I thank South African reader B.V. for sending it our way last Sunday, but for content reasons, it had to wait for today.

Kudos to Herr Weidmann For Uttering Three Truths in One Speech

Once in a blue moon officials commit truth in public, but the intrepid leader of Germany’s central bank has delivered a speech which let’s loose of three of them in a single go. Speaking at a conference in Riga, Latvia, Jens Weidmann put the kibosh on QE, low-flation and central bank interference in pricing of risky assets.

These days the Keynesian chorus in favor of policy activism is so boisterous that a succinct statement to the contrary rarely gets through—-especially at Rupert Murdoch’s Wall Street yarn factory. But here’s what penetrated even Brian Blackstone’s filters:

The biggest bottleneck for growth in the euro area is not monetary policy, nor is it the lack of fiscal stimulus: it is the structural barriers that impede competition, innovation and productivity,” he said.

This commentary appeared on David Stockman's website on Wednesday---and I thank Mark Hancock for sharing it with us.

Handelsblatt: "Four German Banks on the Brink"

Several days ago we were confused why, out of the blue, a €1 billion loan BWIC appeared that was dumping German non-performing loans. After all, the whole point of the European "recovery" fable to date has been to deflect all the attention from the "pristine" German banks, up to an including world-record derivatives juggernaut Deutsche Bank,  and to focus on Greece and other insolvent peripheral European nation. Earlier today, German Handelsblatt provided an answer, when it reported that "four German banks are on the brink", i.e., four banks of which three are known, HSH Nordbank, IKB and MunchenerHyp, will likely fail the ECB's stress test whose results are due to be announced next Friday.

Keep in mind that this is a significant fraction of the 24 German banks that are undergoing the ECB's Stress farce test. So one wonders: if one in six German banks is so unsafe even the ECB (which kept Cypriot banks going well past their insolvency) will give them a black stamp (because in Europe failing a bank stress test is first of all impossible since both Bankia and Dexia passed theirs with flying colours, but more importantly a death sentence), what does that leave for the rest of Europe's banks, all of which are in far more dire shape than sleepy Germany?

This very interesting news item appeared on the Zero Hedge website at 11:05 a.m. EDT on Thursday morning---and it's the first offering of the day from Manitoba reader U.M.

The Reckoning: Helmut Kohl Tapes Reveal a Man Full of Anger

Schwan recorded more than 600 hours of interviews with Kohl in a total of 105 conversations between March 12, 2001 and October 27, 2002. Even during his tenure in office, Kohl had ruminated over his place in history. He sees himself on a level with former German Chancellors Otto von Bismarck, Konrad Adenauer and Willy Brandt. He is probably justified in doing so.

In the Schwan conversations, Kohl's objective was to document his own view of the Kohl era -- they are an extremely valuable treasure for historians. And the tapes served as the basis for Kohl's three-volume memoirs, which were ghost-written by Schwan. The relationship between the two, however, has soured of late, with Kohl having sued Schwan for possession of the tapes, a spat which is likely to worsen with the release this week of Schwan's book about the interviews.

The interviews contain, at least in part, Kohl's "historic legacy," according to the December 2013 ruling of a Cologne court on the ownership of the tapes. And they add new facets to Kohl's image. They reveal him to be a man who views both his rivals and the world at large through the lens of a calculating machtpolitiker (power politician).

This long 4-part exposé appeared on the German website spiegel.de late Tuesday afternoon Europe time---and for content and length reasons, had to wait for today's column.  It is, of course, courtesy of Roy Stephens.

Europe will reconcile with Russia, and soon. It can’t afford not to

After months of escalating tensions over Ukraine and talk of a new cold war, Russia and the West could soon reach a surprising rapprochement. The eurozone economy is suffering badly and sanctions against Russia are partly to blame. Winter is also upon us, and that reminds every-one Vladimir Putin still holds the cards when it comes to supplying gas.

The clincher, though, is that Ukraine is heading towards financial meltdown. Unless an extremely large bailout is delivered soon, there will be a default, sending shock waves through the global economy. That’s a risk nobody wants to take — least of all Washington, London or Berlin.

Sanctions against Russia were always going to hit western Europe hard. The eurozone did 12 times as much trade with Russia as the United States did last year — that’s one reason Washington’s attitude towards corralling Russia’s economy has been somewhat more gung-ho.

This article appeared on the spectator.co.uk Internet site on Friday---and it's another contribution from reader B.V.

Putin says gas deal with Ukraine for winter months only, Poroshenko says no deal at all

Kiev and Moscow have failed to resolve their gas supplies dispute, Ukrainian President Petro Poroshenko said after meeting Russia’s leader. According to Putin, only an agreement for winter supplies has been reached, but details are still to be worked out.

“We agreed on the basic parameters of the gas contract,” Poroshenko told reporters in Milan where leaders from Europe and Asia gathered for the ASEM Summit. According to the Ukrainian president, the Ukrainian side is looking for sources of funding to pay off the arrears.

The optimistic statement came after Poroshenko met with Russian Energy Minister Aleksandr Novak and the head of Gazprom Aleksey Miller.

But emerging from a meeting Russia’s President Vladimir Putin later in the day, the Ukrainian leader said that no agreement had been reached. New talks have been scheduled for October 21; the E.U. is once again set to mediate the process.

This story showed up on the Russia Today website at 1:19 p.m. Moscow time on their Friday afternoon, which was 5:19 a.m. in New York.  It's the second offering of the day from Roy Stephens.

Putin: Ukraine's new Donbass law 'not perfect, but a step in right direction'

The new law giving special status to troubled regions in eastern Ukraine is 'not perfect,' but might be used to finally stabilize the situation in the area, Russian President Vladimir Putin said after a meeting with his Ukrainian counterpart in Milan.

"Perhaps it's not a perfect document, but it's a step in the right direction, and we hope it will be used in complete resolution of security problems," Putin said after closed-door talks with Ukrainian President Petro Poroshenko on Friday.

The two presidents met in Milan privately on the sidelines of the Asia-Europe Meeting (ASEM), a summit of Asian and European leaders.

The document on special status for the Donetsk and Lugansk regions was signed by Poroshenko on Thursday.

This Russia Today news item was posted on their Internet site at 5:51 p.m. Moscow time yesterday afternoon---and it's another contribution from Roy Stephens.

Putin says both sides in Ukraine’s conflict fail to implement Minsk accords

Russian President Vladimir Putin said that the warring sides in Ukraine are not implementing the Minsk accords to the full extent.

“The landmark for Ukraine’s settlement must be the Minsk agreements,” Putin told reporters after the Asia-Europe Meeting summit. “Unfortunately, these agreements are not being implemented by the both sides, either by Novorossiya’s militias or by Ukraine’s representatives.”

The Russian president said that “the Minsk agreements are not being implemented to the full extent due to a number of reasons - objective and subjective.”

“I proceed from the fact that all the sides should work for putting these agreements into practice,” he said.

This news item, filed from Milan, appeared on the itar-tass.com Internet site at 10:15 p.m. Moscow time yesterday evening---and I thank Roy Stephens for sending it.

U.S. dusted off old USSR-break-up strategy for use in Ukraine - former FSB chief

The current turmoil in Ukraine and the military conflicts in Georgia and the Caucasus are a direct result of the anti-Russian policy of the US administration, claims the former head of Russia’s Federal Security Service.

Nikolai Patrushev who headed the FSB from 1999 until 2008 said in an interview with the Russian government daily Rossiiskaya Gazeta that intelligence analysts established a current anti-Russian program being executed by American special services dates back to the 1970s, and is based on Zbigniew Brzezinski’s “strategy of weak spots”, the policy of turning the opponent’s potential problems into full scale crises.

The CIA decided that the most vulnerable spot in our country was its economy. After making a detailed model US specialists established that the Soviet economy suffered from excessive dependency from energy exports. Then, they developed a strategy to provoke the financial and economic insolvency of the Soviet state through both a sharp fall in budget income and significant hike in expenditures due to problems organized from outside,” Patrushev told reporters.

The result was the fall in oil prices together with the arms race, the war in Afghanistan, and anti-government movements in Poland, all of which eventually led to the breakup of the Soviet Union, said the former Russian security chief. He stressed that each of these factors bore hallmarks of US influence.

The Russians have long memories for those who transgress against them---and they certainly haven't forgotten what happened to them under Ronald Reagan back in the 1980s.  The piece I posted in yesterday's column headlined "How the Soviet Empire's Fall Was Engineered" is precisely what he's talking about in this Russia Today story.  It was posted on their website at 1:06 p.m. Moscow time on their Thursday afternoon---and this article is courtesy of reader B.V.

Russian Foreign Minister Lavrov speaks to the World — Paul Craig Roberts

Dear Readers, I now have for you the complete English transcript of Russian Foreign Minister Sergey Lavrov’s speech to the United Nations. Lavrov’s speech, together with President Putin’s remarks in his Serbian press conference (excerpts posted on this site) clearly indicate that the moral leader of the world is Russia, not Washington.

The Russians have come out of tyranny as America descends into tyranny. Washington’s barbarity in the world is unprecedented. For 13 years Americans have permitted their government to bomb women, children and village elders in seven countries based entirely on lies and the selfish interests of the ruling elite. Washington has spewed depleted uranium everywhere, causing massive birth defects and health problems. We must remember that Washington is the only government that dropped nuclear weapons on helpless civilian populations. The victims were Japanese when the Japanese government was trying to surrender.

Putin’s warning to the White House Fool that humanity’s existence requires that Obama “remember what consequences discord between major nuclear powers could bring for strategic stability” is a pointed demand that the White House Fool halt Washington’s aggression toward Russia. We have had enough, Putin said. We are a patient people, but we are running out of patience with your idiocy.

This is long, but definitely worth reading if you have the time.  It was posted on Paul's Internet site yesterday---and once again it's Roy Stephens bringing this story to our attention.

U.S. in controversial first talks with Syrian Kurdish party

U.S. officials have held direct talks for the first time with a Kurdish political party in Syria linked to Turkey’s PKK, seen by the U.S. and others as a terrorist organisation, the U.S. State Department said Thursday.

The talks with Syria’s Kurdish Democratic Union Party, known as the PYD, took place in Paris over the weekend and come as the U.S. seeks to build a wider coalition against the Islamic State group (IS).

“We have for some time had conversations through intermediaries with the PYD (Kurdish Democratic Union Party). We have engaged over the course of just last weekend with the PYD,” State Department spokeswoman Jen Psaki told a briefing.

The PYD has close ties to the PKK, a Turkish Kurdish party that waged a militant campaign for Kurdish rights and has threatened to abandon a peace process with Turkey in response to the current attack on the Syrian town of Kobane by IS militants.

This news story put in an appearance on the france24.com Internet site on Thursday sometime---and I thank Roy Stephens for another contribution to today's column.

ISIS fighters withdraw from Syria's embattled Kobani - Russia Today sources

Islamic State fighters have been driven out of Kobani, the Kurdish town that straddles the Syrian-Turkish border, after weeks of heavy fighting, according to Kurdish sources speaking to RT.

A Kurdish commander said that ISIS retreated overnight – withdrawing by 2 km east and 9 km west.

The Kurds are now clearing the city. The Islamists have left behind suicide bombers hiding in the ruins of the various buildings in the city.

"We can still hear sporadic gunfire and explosions coming from Kobani," RT's Murad Gazdiev reports from the Turkish-Syrian border.

However, a victory announcement from the Kurdish fighters is yet to be made because the whole of the city has not been secured.

This news item showed up on the Russia Today Internet site at 12:15 p.m. Moscow time on their Friday afternoon, which was 4:15 a.m. EDT.  My thanks go out to Roy Stephens once again.

The Chinese in Africa: Empire builders or new pioneers?

The influx of investment and people from China has become one of the defining narratives of Africa over the past two decades.

China, by all accounts, has identified Africa as the source of much-needed raw materials for its phenomenal growth, and Chinese business entrepreneurs see its sparsely populated interiors as a potential new frontier for manufactured goods.

This story of China in Africa has, however, largely been couched in government rhetoric and clouded by stereotypes.

Former New York Times Shanghai bureau chief Howard French attempts to lift the veil of secrecy that clouds many of the Chinese business dealings and give readers a glimpse of who the Chinese living and working in Africa really are.

This extremely interesting story is worth reading in my opinion.  It was posted on the South African website Mail & Guardian on Friday, October 10---and I thank South African reader B.V. for sending it our way last Saturday.

China Flinches---and Injects $32 Billion Into Banks

The country's central bank will inject $32 billion into the country's banking system, according to The Wall Street Journal. The capital will go to 2o major and regional banks.

This is what the government refers to as "targeted easing," but many analysts say that these small jolts of stimulus will simply worsen China's mounting debt problems without solving the root of the issue.

"China’s debt problem lies with the corporate sector," wrote Societe Generale analyst Wei Yao in a recent note. "The cure should be capacity consolidation and debt restructuring, rather than another stimulus package targeted to boost investment demand."

This article showed up on the businessinsider.com website at 11:47 a.m. EDT on Friday morning---and it's the second-last contribution from Roy Stephens.

China, Russia said to mull high-speed Moscow-Beijing rail line

China and Russia are considering building a high-speed rail line thousands of kilometres from Moscow to Beijing that would cut the journey time from six days on the celebrated Trans-Siberian to two, Chinese media reported Friday.

The project would cost more than $230 billion and be over 7,000 kilometres (4,350 miles) long, the Beijing Times reported -- more than three times the world's current longest high-speed line, from the Chinese capital to the southern city of Guangzhou.

The railway would be a powerful physical symbol of the ties that bind Moscow and Beijing, whose political relationship has roots dating from the Soviet era and who often vote together on the U.N. Security Council.

I had a companion story to this in yesterday's column headlined "China to put Russia on fast track to high-speed rail"---and that dealt with the new rail line from Moscow to Kazan, with a comment about the Beijing/Moscow system.  The above story is only about this huge project---and the Moscow/Kazan high-speed rail line is not even mentioned.

This AFP article appeared on the france24.com Internet site at 9:25 a.m. yesterday morning Europe time---and it's the final offering of the day from South African reader B.V., for which I thank him.

North Korea in grip of leadership tension

North Korean leader Kim Jong-eun's extended absence from public view opened a flood gate of rumors. It went from a military coup to broken ankles, with gout, diabetes and obesity also mentioned. International concern with Kim's absence was justified, given the immense power this 31-year-old leader inherited from his father, Kim Jong-il, who passed away in December 2011.

An objective assessment of Kim's dismal performance during the past two-and-one-half years is compelling: North Korea has become a more isolated and despised nation. The missile launches, nuclear test, threats of a pre-emptive nuclear attack, the brutal execution of his uncle, Jang Song-thaek, and the routine vitriol coming out of Pyongyang all contributed to North Korea's pariah status.

Thus the initial hope that this young leader would move North Korea in a more positive direction gave way to despair, when North Korea assumed a more strident and belligerent attitude; an attitude that alienated its leadership from all countries, including China. It would not have been unreasonable to assess that this period of failed leadership was the catalyst for a military coup by those seniors in North Korea who wanted to reverse this negative trajectory; who wanted North Korea to engage economically with the international community and have United Nations sanctions lifted. Indeed, it could have been those in North Korea who wanted to re-establish North Korea's special relationship with a China that provides North Korea with the crude oil, aviation fuel and food aid necessary for the well-being of the country.

This commentary showed up on the Hong Kong website Asia Times site on Friday---and it's the final offering of the day from Roy Stephens, for which I thank him on your behalf.

LBMA gets 8 proposals to replace century-old gold fixing

Intercontinental Exchange Inc., the London Metal Exchange, and CME Group Inc. and Thomson Reuters Corp. are among firms shortlisted to develop and run a replacement for the century-old London gold fixing benchmark.

Autilla Ltd. (Sapient) and EBS are also on the short list, the London Bullion Market Association said in a statement today. Ten companies submitted eight proposals, some of them joint.

The LBMA, which said last week firms will present at a seminar on Oct. 24, expects a market consensus to emerge next month and the chosen method adopted by year-end or early 2015.

The 'fix' will still be in no matter who runs it---and it certainly won't be any more transparent than it already is.  This Bloomberg story, filed from London, appeared on their website at 10:13 a.m. Denver time yesterday morning---and I found it embedded in a GATA release.

LBMA names Morgan Stanley as gold/silver market maker

The London Bullion Market Association (LBMA) said on Thursday it appointed Morgan Stanley as a market maker, underscoring the ambitions of some banks to expand into precious metals trading while others exit due to stringent regulations.

LBMA said it named Morgan Stanley & Co International Plc, a unit of U.S. investment bank Morgan Stanley, as a spot and options market-making member effective Thursday.

Currently, LBMA has 13 market makers which serve in either one, two or all three of the spot, options and forwards markets. They make markets by quoting two-way prices in both gold and silver products to other market makers.

Just three weeks ago, LBMA named Citigroup as a spot market-making member.

It's a very safe bet that Morgan Stanley and Citigroup are two of the big gold and silver shorts on the Comex---and handily fall into the 'Big 4' or 'Big 8' Commercial trader category.  They've always been there, but not as market makers.  I found this Reuters story, which was filed from New York yesterday, on the mineweb.com Internet site in the wee hours of this morning.

LME takes battle to Washington after London warehouses win

Fresh from a court win in Britain, the London Metal Exchange now faces one of its biggest hurdles yet in its years-long crisis over its warehousing policy that consumers say has inflated prices: convincing U.S. lawmakers its reforms are enough.

When Britain's Court of Appeal handed a victory to the LME last week, knocking out a challenge to the reforms by Russian aluminum giant Rusal last week, the LME's head of business development, Matt Chamberlain, was in Washington, a source familiar with the matter said.

Chamberlain was there to plead the exchange's case with lawmakers who have been pushing for even greater change to the LME's warehouse policy.

Senator Sherrod Brown was among the people the LME visited, a spokeswoman for the Senator said. The Ohio Democrat has been a fierce critic of the LME, urging U.S. regulators to crack down on the 137-year old exchange, and threatening to write rules that would compel regulators to intensify oversight of the exchange on U.S. turf.

This Reuters news item, filed from New York, showed up on the mineweb.com Internet site on Friday sometime---and it's courtesy of Manitoba reader U.M.

Riddle of inventory levels keeps platinum investors shy

Investors are unlikely to rush back into platinum any time soon after a minimal price reaction to its biggest-ever supply shock highlighted a major problem: no-one knows how much metal exists above ground or more importantly who holds it.

Analysts predicted a surging market as a record five-month labour stoppage in top producer South Africa wiped out more than one million ounces of output worth $1.28 billion.

Yet platinum, used mostly in automotive catalytic converters which clean up exhaust emissions, also failed to react to a 2.4 million ounce accumulation of metal into exchange-traded funds since 2010. The metal has lost seven percent this year and now sits close to 2009 levels around $1,200 an ounce.

Well, dear reader, I'd like to remind you of the two earlier stories in today's column about 'media lies and fabrications'---and I'd just like you to keep that it mind when you read this Reuters piece, filed from London yesterday---and posted on the mineweb.com Internet site.  It's the second offering in a row from reader U.M.

“Save Our Swiss Gold ” - Game Changer For Gold?

We believe that the “Save Our Swiss Gold” campaign has the potential to be a game changer in the gold market - both in terms of the ramifications for the current global monetary system and in terms of higher gold prices. 

There has been a lack of coverage of this important story and there is therefore a lack of awareness about the possible implications for the gold market. Thus, in the weeks prior to the referendum on November 30th, we are going to analyse the referendum, the important context to the referendum and the ramifications of a yes or a no vote. - Mark O’Byrne, Head of Research, GoldCore

Here's another longish commentary on what the ramifications of a 'yes' vote in Switzerland will have on the gold market.  It's certainly worth reading if you have the time---and it was posted on the goldcore.com Internet site yesterday.  I thank reader M.A. for sending it along.

Jim Rickards Interviewed for Anglo Far-East's Physical Gold Fund

This 40:15 minute interview conducted by John Ward appeared on the physicalgoldfund.com Internet site---and I thank Harold Jacobsen for sharing it with us.  But if you go through the list of topics being discussed, you'll see a lot of familiar themes, which I'm sure he's updated based on current events.

I haven't listened to it yet, but it will be on my "to do" list for today or tomorrow.

China gold production seen falling, prompting more imports

Growth in gold mine output from number one producer China is set to slow significantly in coming years in the face of declining ore grades and waning profitability, analysts Business Monitor International said on Friday.

Lower mine production will pave the way for rising imports to meet persistent strength in demand from Chinese consumers, BMI analyst Xinying Chia said, while domestic mining companies will also look overseas to boost production.

In an interview with the Reuters Global Gold Forum, Hong Kong-based Chia said Chinese mine output growth was expected to slide to 0.9 percent in 2018, from around 6 percent this year.

"Many domestic miners are grappling with the problems of depleting reserves, falling ore grades and rising cash costs," Chia said.

This Reuters article, filed from London, appeared on their Internet site at 8:28 a.m. EDT on Friday---and it's another article I found posted on the gata.org Internet site.

The sky is falling! Should you buy gold and silver?

Fear is stalking the global stock markets. Stock indices have been falling back sharply seeing a move to what might be seemed safer assets like bonds and gold. The falls have been precipitated by some poor economic data suggesting that most major economies are not out of the recessionary mire yet and, in the U.S. in particular, the realisation that the Fed is getting down to near eliminating its latest Quantitative Easing programme in total, although there may be some succour in that it tends to be putting back the day that it may allow interest rates to rise. And what happens in the U.S. markets tends to have a strong follow-through impact on markets in other parts of the world. 

A number of pundits have been predicting a stock market crash for some time now. The investing public though, just as it has in the past ahead of previous stock price crashes, has ignored this, seeing the market as an ever-increasing money-making mechanism. Thus the world’s major stock indices have been on a tear moving higher and higher without there being anything serious in the way of increasing corporate profits to support this. Suddenly it could all come crashing down – that’s what has happened in the past. While the Dow, S&P, TSX, FTSE, DAX etc. are not yet in free fall they are beginning to look like they could be heading that way.

So, should one buy gold as the safe haven it has proven to be in the past. Inflation – which is generally assumed to be gold-positive – just has not happened despite the vast amounts of liquidity the U.S. Fed and other central banks have pumped into the markets. Indeed much of the talk now is about the increasing possibility of deflation. What most don’t realise is that gold performs just as well, if not better, in a deflationary environment vis-a-vis the stock markets than it does in an inflationary scenario.

This commentary by Lawrence Williams showed up on the mineweb.com Internet site on Friday---and my thanks go out to Manitoba reader U.M. for her final offering in today's column.

¤ The Funnies

¤ The Wrap

While both fell about the same percentage over the past few months, some important distinctions between oil and silver are that silver is at record extremes of managed money short selling---and well below the cost of production for primary producers.  Crude oil prices may have fallen enough to reverse upward here or soon, but silver is more advanced on both counts. Plus, there are continued signs that the supply/demand situation is relatively tighter in silver than they are in crude oil.

Lastly, silver is a natural as a safe haven demand in what are increasingly tenuous financial times. Yes, it’s true that silver has been underperforming just about everything under the sun for some time, but that has only resulted in it becoming more of an outstanding undervalued asset. Silver investment demand has, can, and will turn into a torrent at a moment’s notice and if ever there were a time for it to soar, that time would appear to at hand. - Silver analyst Ted Butler: 15 October 2014

I've got two pop 'blasts from the past' for you today---and both by the same group, as they were the only two big hits they had back in the late 1970s---but what hits they were!  It's been more than a year since I posted them last, so it's time for a revisit.   The group is 'The Babys'---and although the name may not ring a bell, the tunes are classics.  The lead singer, John Waite, as wonderful as he is, is bested by the girls singing back-up vocals.  They're just terrific.  The link to the first recording is here---and the second one is linked here.

Today's classical 'blast from the past' was first performed in what is now called Oslo in Norway back on 24 February 1876.  It's the incidental music from Henrik Ibsen's 5-act play, Peer Gynt.  The play is not performed often in North America; but the music, written by Norway's legendary composer Edvard Grieg---who composed this music in his very early 30s---has found a permanent home in the classical repertoire---and rightfully so.

I, for one, never tire of listening to it.  This youtube.com video was uploaded on 05 May 2013---and has already had 675,000 hits, which is a monstrous number for a classical work.  The quality of the audio and video is first rate---and best watched 'full screen'.  The Spanish Radio and Television Symphony Orchestra [based out of Madrid] do the honours here---and the performance is as good as it gets.  Guillermo Garcia Calvo conducts. The link is here.

The memories of the potential for a global meltdown in all things paper---and the melt up in all things physical everywhere on Planet Earth on Wednesday---is almost a distant memory now.  There were lots of voice out there saying that everything was fine---and that there was "nothing to see here, folks---please move along."  But, as Doug Noland pointed out in his weekly Credit Bubble Bulletin in the Critical Reads section, The Truman Show continues---as "this past week did offer further evidence that history’s greatest financial Bubble is at significant risk."

That would be an understatement.

Since that event, the gold and silver prices have been mostly in lock down, even though JPMorgan et al continued to engineer the price lower on platinum, palladium, copper and crude oil, which continued up until trading ended on Thursday in New York.

Here are the 6-month charts for all the 'Big 6' commodities.  Copper matched its Thursday low tick in Friday trading---and platinum, palladium and copper all finished off their low ticks of Thursday.

Looking at the precious metal equities, the price action yesterday was out of all proportion to the intraday and closing price of these two metals---and that's not the first time that we've seen this counterintuitive share price action lately.

As I mentioned earlier this week, John Embry has always suspected [as have I] that the powers-that-be were actively intervening in the precious metal equity markets---and yesterday's share price action seemed to fall into that category as well.

Looking back at the week, it's a certainty that if it hadn't been for the Plunge Protection Team's active intervention in the markets at 9:40 a.m. EDT on Wednesday, it would certainly be a different world today.

Doug Noland put it this way: "I find the backdrop surreal. And the more everyone acts as if it’s all business as usual, the more worried I get. As crazy as I know it sounds, I am these days reminded of my bewilderment when studying the period leading up to the 1929 stock market crash. How could they not have seen it coming? How could everyone remain so bullish (“a permanently high plateau”) considering what in hindsight was an obvious – and quite ominous – deterioration in the market and global economic outlook. I also think often of a quote from that period: “Everyone was determined to hold their ground, but the ground gave way.” Can the world’s central bankers hold everything up?"

Who knows for sure, dear reader, but they've been at it in the U.S. ever since the PPT intervened in the crash of 1987---and 27 years later, the bubble in all thing paper has become global in scope.  The attempt by the world's stock markets to return to their intrinsic values on Wednesday was, once again, thwarted---but Jim Rickards' snowflakes continue to fall.

Sooner or later the forces of nature---and the markets---will not be denied.  At that point the Fed will get buried---and the ball will be in the IMF's court, SDRs in hand.   It's my bet that they'll be backed by gold---and the gold price used to back them will be many orders of magnitude higher than it is now.

Before heading off to bed, I'm excited to announce the premiere of Casey Research's documentary-style film on the only way for American’s to legally minimize their taxes without leaving the U.S. in America’s Tax-Free Zone, a FREE online video – which premiered on Thursday to the International Man audience.

This documentary runs almost half an hour and features a discussion of the current tax situation in Puerto Rico and, generally, how to take advantage of it---with guest commentators, Doug Casey and Peter Schiff, as well as several others.  You can check it out by clicking here.

That's all I have for the day---and the week.  I hope you enjoy what's left of your weekend---and I'll see you here on Tuesday---Wednesday if you live just west of the Dateline.

]]>
Sat, 18 Oct 2014 09:59:00 +0000
<![CDATA[With Seizures Up, Indian Gold Smuggling Loses Its Shine]]> http://www.caseyresearch.com/gsd/edition/with-seizures-up-indian-gold-smuggling-loses-its-shine/ http://www.caseyresearch.com/gsd/edition/with-seizures-up-indian-gold-smuggling-loses-its-shine/#When:06:38:00Z "'Da boyz' have sliced about $190 per ounce off the palladium price"

¤ Yesterday In Gold & Silver

It was a nothing sort of trading day in the gold market everywhere on Planet Earth on Thursday, as every rally, no matter how tiny, was nipped in the bud before it could break above the $1,245 spot mark.  The gold price was kept corralled within a ten dollar price range for the entire day.  The low and high ticks aren't worth bothering with.

Gold closed in New York on Thursday afternoon at $1,238.90 spot, down $2.20 on the day.  Net volume was still pretty chunky at 176,000 contracts.

It was more or less the same price chart for silver, as it traded in a 20 cent range for all of the Thursday session---and I shall dispense with the low and high for this metal as well.

Silver finished the trading day at $17.365 spot, down 8 cents from Wednesday.  Net volume was pretty decent in that metal as well---36,000 contracts.

Platinum traded within a few dollars of $1,250 spot right up until 9:15 a.m. BST in London.  At that point the price got engineered lower by the HFT boyz and their algorithms to the tune of twenty bucks.  It rallied in fits and starts after that---and managed to cut its loss by almost half by the close.  Platinum was finished the Thursday session down 13 bucks.

The palladium price traded virtually unchanged from the time the market opened in New York on Wednesday evening, right up until the London a.m. gold 'fix' was done for the day---and then JPMorgan et al went after palladium with a vengeance for the second day in a row.  By 11:40 a.m. EDT they had peeled about 35 dollars off the price---and set a new low in the process.  It gained back about 15 of that in pretty short order---and then traded sideways into the 5:15 p.m. EDT close of electronic trading.  Palladium was closed down 24 bucks, but was down 38 dollars at its low.

When I was discussing palladium in the context of the October Bank Participation Report [BPR] in last Saturday's column, this is what I had to say at the time:

"In palladium, '3 or less' U.S. bullion banks are net short 8,687 Comex contracts, which is down from the 10,643 contracts they were net short in the September BPR, but virtually the same as they were short back in the July BPR.  So even though JPMorgan et al engineered the price down by about $150 during the reporting month, to its lowest level since mid April, that's the best they could do.  The non-technical traders on the long side in the Managed Money category flatly refused to puke up their positions, or go short by much.  That situation holds true to a certain extent in platinum as well."

"Also in palladium, '13 or more' non-U.S. banks were net short 3,765 Comex contracts, which is down big from the 5,937 Comex contracts they held net short in September's BPR.  But it's only a marginal improvement in their 4,694 short position they held back at the end of June."

"Try as they might, da boyz can't get any traction in palladium---and that's certainly obvious over the last 18 months in the chart below.  And as an aside in Chart #5, look at the obscene short positions compared to their puny long positions held by the '3 or less' U.S. banks.  It's so grotesque, one doesn't know whether to laugh or cry." [The 'click to enlarge' feature works wonders here]

Well, dear reader, since they got nowhere with the 'investors' in the Managed Money category of the Disaggregated COT Report with their efforts in September, they're doubling down this month---and it's time to place your bets as to how low they can get the price.  All proceeds will be divided up between South Africa and Mother Russia---the two countries getting royally screwed over by all these Comex paper games.

The dollar index closed late on Wednesday afternoon in New York at 84.87.  From there it crept up to the 85.00 mark---and stayed there until the 10:30 a.m. BST London morning gold fix was in.  Then it jumped up to its 85.37 high shortly after 11 a.m. BST, before chopping lower for the remainder of the Thursday session, closing back below the 85 mark at 84.96---up 9 basis points on the day.

The gold stocks opened slightly in the red, but were back in positive territory---and hit their high around 10:30 a.m. EDT.  Then they didn't do much until 1:45 p.m. when a thoughtful soul sold them into negative territory, just like what happened on Wednesday---and a couple of other days in the last week or so.  And though they rallied off their lows, they couldn't quite make it back into the black, as the HUI closed down another 0.30%.

The silver equities ploughed a slightly different path.  They, too, started off in the red, but rallied to their high tick shortly after 1 p.m. EDT.  Like the gold shares, they got sold off a bit as well, but Nick Laird's Intraday Silver Sentiment Index still finished up a decent 1.85%.

The CME Daily Delivery Report showed that no gold or silver contracts were posted for delivery on Monday.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in October dropped by one contract---and now sits at 966 contracts.  In silver, the October open interest declined by 14 contracts, the number that were posted for delivery in yesterday's Daily Delivery Report---and now sits at 174 contracts.

After a deposit on Monday---and a withdrawal on Tuesday, an authorized participant added another 57,683 troy ounces to GLD yesterday.  And as of 10:21 p.m. EDT yesterday 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 in/out activity from the iShares.com Internet site for the reporting week---and this is what he had to say: "Analysis of the 15 October 2014 bar list, and comparison to the previous week's list --- 4,505,960.9 troy ounces were removed (all from Brinks London). No bars were added or had a serial number change."

"The bars removed were from: Britannia Refined Metals (1.7M oz), Degussa (0.6M oz), Handy Harman (0.6M oz), and 37 others."

"As of the time that the bar list was produced, it was overallocated 369.9 oz.  All daily changes are reflected on the bar list---and of the 4.5M oz removed, about half was from the 08 October 2014 deposit, and about half that had been in there for many years."  The link to Joshua's website is here.

The U.S. Mint had a sales report yesterday.  They sold 100,000 silver eagles---and that was it.

Over at the Comex-approved depositories on Wednesday, there was no reported in/out activity in gold, but another 1,102,428 troy ounces of silver were shipped out, almost all of it from Scotiabank's vault---and the link to that activity is here.

Here's the 1-year VIX chart updated with yesterday's data.

Here's a chart that Nick Laird passed around late last night MDT.  It's the weekly gold withdrawals from the Shanghai Gold Exchange for the week ending Friday, October 10.  They reported that 68.369 tonnes were withdrawn---and that's quite a bit.

I have the usual number of stories for a mid-week column---and I hope there are some in here that you like.  There are also some absolute must reads that shouldn't be missed.

¤ Critical Reads

Data Dependent Fed Ignores 'Data' - Bullard Joins Williams in Call for QE4

As yet another fed speaker takes the jawboning lectern yesterday, it is becomingly increasingly clear that The Fed truly has only one mandate - to keep stocks up. While claiming to be "data-dependent", which judging by the general trend of government-supplied data (and President Obama), things are going great; Jim Bullard joins his intervention-prone colleague Williams.

This short commentary appeared on the Zero Hedge website at 10:29 a.m. EDT yesterday---and it's courtesy of Manitoba reader U.M.  A more in-depth story on this appeared on the newsmax.com Internet site at 12:39 p.m. EDT yesterday afternoon.  It's headlined "Bullard: Fed Should Consider Delay in Ending Q.E."---and I thank West Virginia reader Elliot Simon for sending it.

Morgan Stanley's Parker: 'Calm Down ... We're Near the Bottom'

Adam Parker, chief equity strategist at Morgan Stanley, doesn't see the stock market correction going much further, if at all.

The reason: third-quarter profits.

"I'm focused on the corporate earnings," he tells CNBC. "I think that generally you're going see earnings grow year over year, and I don't think the S&P 500 really ever goes down 10 percent unless people are afraid of that."

The index has slid 7.8 percent from its Sept. 19 record high, closing Wednesday at 1,862.49.

"I'm trying to keep my eye on the ball here and say, 'Guys, calm down,'" Parker notes. "Earnings are growing. There are buybacks. There is a dividend. We have a good set of companies here."

Well, it's only the bottom if the Plunge Protection Team has decided that Wednesday's low print at 1:30 p.m. EDT was indeed it.  This article showed up on the moneynews.com Internet site at 8:46 a.m. EDT on Thursday---and it's the second story of the day from Elliot Simon.

Wolf Richter: Silicon Valley mega-startups go parabolic. Flame-out already happening

It’s anecdotal evidence, but it’s everywhere in San Francisco and Silicon Valley. A neighbor was cooling her heels by the curb, suitcase next to her. She’s going to Europe on a “vacation-thing,” organized and paid for by her company, she told me. A team-building perk. She’s a coder at a startup, her first job out of college. When she moved in less than two years ago, trucks kept pulling up to deliver her latest acquisitions. One day, she gingerly parked a new BMW in the garage. As we were chatting about her trip to Europe, a limo pulled up for her ride to the airport. That too was part of the perk. No expenses will be spared.

This startup occupies super-expensive San Francisco office space that’s way too big for the number of employees. It’s embellished with designer furniture. Free lunches are de rigueur. All paid for with the boundless money it is getting from investors.

But who cares, except for a few wayward souls in the venture capital [VC] community who lament those sizzling burn rates. Bill Gurley, partner at Benchmark, had stepped to the forefront a few weeks ago to warn that “the average burn rate at the average venture-backed company” is at an “all-time high since ‘99 and maybe in many industries higher than in ‘99”.

Marc Andreessen, founder of long-forgotten Netscape, then warned in a series of tweets: “When the market turns, and it will turn, we will find out who has been swimming without trunks on. Many high burn rate companies will VAPORIZE.” His final and most eloquent tweet: “Worry.”

Some other VCs chimed in when they had a minute, in between throwing even more cash at these companies to drive their valuations ever deeper into the stratosphere: in the first half, they’d thrown $15.6 billion at them in later-stage financing rounds, The Wall Street Journal reported, on track to break the record of $28.4 billion set in 2000, the year of peak craziness as the whole scheme was already collapsing.

This essay is definitely worth reading---and the embedded chart is not to be missed.  It was posted on the wolfstreet.com Internet site back on Thursday, October 9---and my thanks go out to Mark Hancock for bringing it to our attention.

HFT Firm Athena Engaged In Massive Closing Price Manipulation, Called It "Gravy"

And to think it was only yesterday when The Wall Street Journal unleashed this epic puff piece about HFT shop Hudson Trading with the following bulls hit:

In their minds, they are making the markets more efficient through their trading... Critics of high-frequency trading are not likely to be easily won over, however. It’s going to take a lot of frank discussions between firms like Hudson River Trading and the market commentators who see them as parasites.

Sadly, what makes it complicated is that they are parasites, the only question if they are law-abiding parasites or criminal parasites. Enter the daily exhibit of yet another HFT firm busted for rigging everything it touches.

Today's culprit: Athena Capital, which did what every other algorithmic, HFT firm does - rig the market of course, but at least it had a sense of humor about it: Athena called the market-rigging algorithm that "manipulated the closing prices of tens of thousands of stocks during the final seconds of almost every trading day during the Relevant Period" by the very amusing name "Gravy." But remember: HFTs are really your friend - they just provide liquidity and stuff.

Why should anything surprise us anymore?  This longish article appeared on the Zero Hedge website at 2:12 p.m. EDT yesterday---and I thank Elliot Simon for his third offering of the day.

Mish Shedlock: How Can There Not Be a Currency Crisis?

The Fed claims that signs of economic stress are very low, but savvy investors feel otherwise. With geopolitical unrest expanding and central banks doing the opposite of the right things, is a currency crisis barreling toward us? See what Mish Shedlock had to say about the state of world finance at the 2014 Casey Research Summit.

Mish's 31:27 minute presentation at the Summit was posted in the clear over at the caseyresearch.com Internet site yesterday---and it's worth watching if you have the time.

Thomas L. Friedman: a Pump War?

Is it just my imagination or is there a global oil war underway pitting the United States and Saudi Arabia on one side against Russia and Iran on the other? One can’t say for sure whether the American-Saudi oil alliance is deliberate or a coincidence of interests, but, if it is explicit, then clearly we’re trying to do to President Vladimir Putin of Russia and Iran’s supreme leader, Ayatollah Ali Khamenei, exactly what the Americans and Saudis did to the last leaders of the Soviet Union: pump them to death — bankrupt them by bringing down the price of oil to levels below what both Moscow and Tehran need to finance their budgets.

Think about this: four oil producers — Libya, Iraq, Nigeria and Syria — are in turmoil today, and Iran is hobbled by sanctions. Ten years ago, such news would have sent oil prices soaring. But today, the opposite is happening. Global crude oil prices have been falling for weeks, now resting around $88 — after a long stretch at $105 to $110 a barrel.

The price drop is the result of economic slowdowns in Europe and China, combined with the United States becoming one of the world’s biggest oil producers — thanks to new technologies enabling the extraction of large amounts of “tight oil” from shale — combined with America starting to make exceptions and allowing some of its newfound oil products to be exported, combined with Saudi Arabia refusing to cut back its production to keep prices higher, but choosing instead to maintain its market share against other OPEC producers. The net result has been to make life difficult for Russia and Iran, at a time when Saudi Arabia and America are confronting both of them in a proxy war in Syria. This is business, but it also has the feel of war by other means: oil.

The Russians have noticed. How could they not? They’ve seen this play before. The Russian newspaper Pravda published an article on April 3 with the headline, “Obama Wants Saudi Arabia to Destroy Russian Economy.” It said: “There is a precedent [for] such joint action that caused the collapse of the U.S.S.R. In 1985, the Kingdom dramatically increased oil production from 2 million to 10 million barrels per day, dropping the price from $32 to $10 per barrel. [The] U.S.S.R. began selling some batches at an even lower price, about $6 per barrel. Saudi Arabia [did not lose] anything, because when prices fell by 3.5 times [Saudi] production increased fivefold. The planned economy of the Soviet Union was not able to cope with falling export revenues, and this was one of the reasons for the collapse of the U.S.S.R.”

Like Ted Butler mentioned in yesterday's column, oil prices are being engineered lower by JPMorgan et al, just like what's happening in the four precious metals, plus copper.  But having said that, this absolute must read op-ed commentary appeared on The New York Times website on Tuesday sometime---and I thank reader Jim Skinner for sending it our way.

Dirty money: 19 U.K. firms alleged ‘complicit’ in $20bn laundering scam

Some 19 British firms are at the center of an investigation into in a mammoth global money-laundering operation. The scheme was allegedly contrived to make $20bn (£12.5bn) worth of ill-gotten gains appear legitimate.

The illicit funds are thought to have originated from criminal gangs and corrupt officials across the globe, attempting to make their dirty money appear 'clean' so it can be spent free of suspicion.

An investigation carried out by The Independent and UK NGO the Organised Crime and Corruption Reporting Project (OCCRP) uncovered a complex international web of companies, which are implicated in the scheme. As part of the probe, a minimum of 19 UK firms are currently under investigation, it emerged on Thursday.

The criminal operation highlights how Britain’s lax regulatory architecture has made the UK a particularly alluring destination for global organized crime syndicates looking to launder ill-gotten gains. Because directors of British firms are afforded a high degree of financial secrecy under UK law, the identities of the scam's primary architects are extremely difficult to determine.

This news item was posted on the Russia Today website at 3:48 p.m. Moscow time yesterday---and I thank Harry Grant for his first offering in today's column.

Nazi row rattles Belgium's new 'kamikaze coalition'

A few years ago, Belgium famously went 589 days without a government. Its new ruling coalition, which includes Flemish separatists and alleged far-right sympathizers, will do well to last that long.

On Tuesday, Belgium's new prime minister faced a turbulent first day in parliament as opposition lawmakers hijacked his policy speech, demanding that he explain the attitude of two ministers towards wartime collaboration with Nazi occupiers.

Chaos erupted as Charles Michel, the 38-year-old French-speaking PM, dodged repeated questions about the behaviour of the two Flemish nationalist ministers in his new centre-right coalition, which was sworn in last Saturday.

One of them, the country’s new interior minister, Jan Jambon, had appeared to justify collaboration with Nazi occupiers during World War II in an interview published on Monday by French-speaking daily La Libre Belgique.

“Collaboration was a mistake, but those who collaborated with Germany had their reasons,” Jambon was quoted as saying.

This very interesting article showed up on the france24.com Internet site on Wednesday---and I thank Roy Stephens for sharing it with us.

Eurozone woes drag back Swiss GDP forecasts

Switzerland has reduced its economic growth forecasts on the back of the declining performance of its main trading partners in Europe, most notably Germany. Gross domestic product (GDP) is now tipped to expand 1.8% this year, rather than 2%.

The State Secretariat for Economic Affairs (SECO) has also cut GDP growth predictions to 2.4% for 2015, down from the 2.6% it forecast earlier this year. But SECO warned that changes to the way it calculates growth make a direct comparison between these figures difficult.

“In light of the dampened short-term economic outlook for the euro region, including Germany, the conditions deteriorated compared with the last forecasts in June,” SECO said in a statement.

“Even six years after the outbreak of the global financial crisis, the global economic recovery remains fragile and prone to many risks. A sweeping, broadly based improvement in the international economic situation is still not in sight. As uneven global recovery continues, there is no uniform picture in terms of country and region.”

This news item appeared on the swissinfo.ch Internet site at 2:21 p.m. Europe time yesterday afternoon---and I thank South African reader B.V. for his first contribution of the day.

Putin: If Ukraine siphons gas from pipeline, Russia will reduce Europe supplies

Moscow will reduce gas supplies if Kiev starts siphoning deliveries destined for Europe, said Russia’s President Vladimir Putin during a visit to Serbia.

“There are large transit risks. If we see that our Ukrainian partners start illegally taking our gas from the export pipeline as it was in 2008, we will equally reduce the amount of supply as happened in 2008,” warned Putin on Thursday at a news conference in Belgrade, stressing he was "hopeful" it would not come to that.

However, the Russian president pledged that Moscow will supply enough gas to Europe this winter.

"I can tell you for sure, and I am saying with absolute responsibility, there will be no crisis in Europe due to the fault of Russian participants in energy cooperation," Putin stressed. "Russia has always been a reliable supplier, we have enough resources."

This news story appeared on the Russia Today website at 2:15 p.m. Moscow time on their Thursday afternoon, which was 6:15 a.m. EDT in New York---and it's the second contribution in a row from Roy Stephens.

Pentagon Statements Hint on Plans for 'Action' on Russian Border: Russian Military

Russian Defense Minister Sergei Shoigu expressed concern on Thursday about a recent statement by U.S. Defense Secretary Chuck Hagel outlining the need to prepare U.S. troops for the fight against the Russian army "on the NATO's doorstep."

Hagel said in his keynote address to the Association of the U.S. Army that the U.S. troops must be prepared to deal with Russia "with its modern and capable army on NATO's doorstep".

"This statement leads us to believe that Pentagon is working on scenarios of military action near the borders of our country," Shoigu told reporters in Moscow.

"Instead of fueling tensions, we need to encourage a candid dialogue on all issues on the agenda of our relations with Western partners," Shoigu noted, adding that "this is the only way to find mutually acceptable solutions aimed at keeping the existing balance of forces and strengthening strategic stability".

This news item was posted on the RIA Novosti website at 7:30 p.m. EDT Moscow time yesterday---and it's the first contribution of the day from Roy Stephens.

Dana Allen: How the Soviet Empire’s Fall was Engineered

In March 1999 I was privileged to hear from John Browne, Margaret Thatcher's Foreign Policy Advisor the story of how a plan was developed to end the Soviet Empire.

Browne said the key individuals in this were President Reagan, Bill Casey of the CIA, Thatcher, Browne and the Pope.  Reagan thought differently than previous presidents and the State Department, who thought just containing and living with the Soviets was the best policy. Reagan wanted to actively topple them.

Remember the 2nd prong in bankrupting the Soviets, reducing their Foreign Exchange income? The first step on that was to determine where the Soviets income mostly came from. It turned out to be Oil and Gold. Then Browne said that this is where the CIA came in, they in a very sophisticated manner went around the world and manipulated markets to drive down the price of both Oil and Gold. Remember where Oil and Gold were when Reagan took over? They were in the neighborhood of $30 a barrel and $500 an ounce. Both fell dramatically under Reagan. As Browne made this and other points I would look across the patio and look at Mrs. Casey and Al Haig and both would be nodding in agreement with Browne's points.

The conclusion of the speech was that it worked, and the Soviets ran out of money and fell.

There are people who believe that the American government is today manipulating the price of gold downward for their own purposes. I do not know if this is true, however I do know they have the capability to do so as they did it in the 1980s to bankrupt the Soviets.

One of the incredible things about this story is that it was written on August 17, 2001---that's 13 years ago.   It was this essay that sent me in search of what happened to Canada's gold---and my rather lengthy tome: "When Irish Eyes are Smiling: The Story of Canada's Gold?" was the result.  This story by Dana Allen is one I posted in The Wrap section of last Saturday's column, but I though it important enough to drag it out and stick it in today's Critical Reads section.  If you haven't read it, it's probably the most important article in today's column---and falls into the absolute must read category.  It's posted on GATA Chairman Bill Murphy's website lemetropolecafe.com.

Greece's Plan To End Its Bailout Is Now Looking Ridiculous

The European Commission says it's standing ready to give Greece whatever support it needs and that it doesn't want a hasty end to the bailout program, according to Reuters.

"Europe will continue to assist Greece in whatever way is necessary," a spokesman for the Commission said.

The Financial Times also reports that the European Central Bank will extend another €10 billion in liquidity to Greece's banks, which have been hit hard as the Athens Stock Exchange crashes — it's down 1.74% Thursday and more than 25% since the start of the year.

Just days ago, the Greek government planned to exit its bailout a year early. Not only does that now seem completely impossible, but it looks as if the existing level of support might not even be enough.

This article appeared on the businessinsider.com Internet site at 7:08 a.m. EDT on Thursday morning---and if the story doesn't interest you, then you should at least look at the embedded chart.  I thank reader Harry Grant for finding it for us.

Istanbul skyscraper casts shadow over Greece's banking ambitions

Istanbul’s Crystal Tower is a 35- story symbol of diverging fortunes.

Due for completion next year, the 303 million-euro ($383 million) glass diamond-shaped skyscraper will be the headquarters of Finansbank AS in the biggest city of a country whose economy has more than doubled in the past decade. For the Turkish bank’s Greek owner, National Bank of Greece SA, it reflects what might have been.

The purchase of Finansbank eight years ago was a rare success in Greece’s drive to make its banks supreme in southeast Europe, while also forging ties between two traditional enemies. Now, National Bank faces the prospect of selling almost half the lender on the cheap to satisfy European banking rules after receiving state aid during a debt crisis triggered in Athens.

“The acquisition paved the way, at least on paper, for the creation of a major banking group in southeastern Europe,” said Wolfango Piccoli, managing director at Teneo Intelligence in London. “It was the first major Greek-Turkish deal at a time when the improvement in the relationship between Athens and Ankara was still not an easy sell in Turkey.”

This very interesting article put in an appearance on the Greek website ekathimerini.com at 12:01 p.m. Europe time on Wednesday---and it's the third contribution of the day from Harry Grant, for which I thank him.

China to put Russia on fast track to high-speed rail

A planned $10 billion Russian high-speed rail system is a key project covered under the strengthened cooperation that Russia and China agreed to Monday.

The China Railway Construction Corp., rail car manufacturer CSR and other government-owned Chinese companies will help link Moscow to Kazan, about 770 km east of the capital. With a maximum speed of 400 kph, this would be Russia's first high-speed rail system. The plan is to begin operations in 2018 before the World Cup soccer tournament.

The Chinese side will not only help build tracks and stations as well as provide cutting-edge tech in rail cars and related systems, but also offer low-interest loans to finance the construction.

 "We will work to build a high-speed transportation network to connect Beijing and Moscow," Chinese Premier Li Keqiang said.

This interesting story appeared on the asia.nikkei.com Internet site at 3:49 p.m. Japan Standard Time [JST] on their Wednesday afternoon---and it's the final offering of the day from Roy Stephens.

Canadian diamond output could more than double in 4 years

Canada’s diamond output could more than double in the next four years, underpinned by De Beers Canada and Mountain Province Diamonds’ Gahcho Kué project, in Canada’s Northwest Territories, and Stornoway Diamond Corp’s Renard project, in Quebec – with both projects now in the construction phase – an independent industry analyst and consultant has said.

Paul Zimnisky on Tuesday said Canada currently accounted for about 14.2% of global diamond production in value, and 8.7% in carat volume. The two new mines, set to start production in 2016/17, would probably boost Canada's global market share to 25.2% in value, and 15.1% in volume by 2018.

This would give Canada the highest compound annual production growth rate – 20.2% in value and 17.4% in volume – among the world's top eight largest diamond-producing nations over the next four years.

This interesting article appeared on the miningweekly.com Internet site on Wednesday---and even if you're not interested in the story itself, the headline photo is worth the trip.  It's another offering from reader B.V.

LME to take over London platinum, palladium fixes

The London Metal Exchange, owned by Hong Kong Exchanges and Clearing Ltd, will take charge of London's platinum and palladium pricing, also known as "fixes", from Dec. 1, replacing a teleconference with an electronic platform.

The unexpected move marks a stunning comeback for the LME, which failed to secure administration of the century-old London silver price benchmark - the first to go electronic in a wave of reform for precious metals pricing procedures.

It also puts the world's biggest metals marketplace back in contention to take over the much larger gold benchmark.

"We built (our electronic platform) primarily to participate platinum and palladium but the gold fixing process is very similar, so what we said is that if the market would like to use (it) for gold as well then we are very happy to discuss that," the LME Head of Business Development Matthew Chamberlain said in a phone interview with Reuters.

Needless to say, I'm underwhelmed by this news, dear reader.  The Reuters article, co-filed from Singapore and London, showed up on the mineweb.com Internet site yesterday---and it's another contribution to today's column from reader U.M.

Is Gold as Dead as This Year's Hurricane Season?

It’s been 3,279 days since a hurricane hit Florida. As hurricane season comes to a close next month, only Mother Nature knows how long the streak will last.

Like many Floridians, we stayed home and rode out a hurricane—once! We’d built a home on Perdido Key, a barrier island west of Pensacola. It was engineered to withstand 150-plus mph winds, and it was a beautiful home with a master bedroom spanning the entire third floor, looking out across the Gulf of Mexico.

Hurricane Danny hit the Gulf shortly after we moved in. It was a fast-moving Category I with winds gusting in the 75-80 mph range. Full of confidence and a bit curious, we decided to hunker down and ride it out. At the speed it was traveling, it should have been over in a matter of hours. Then, Danny caught everyone by surprise and stalled in Mobile Bay, pounding us for three days.

We tried to get some sleep in our bedroom, but we could feel the house move with each gust of wind. We moved downstairs to the guest room, but sleep was impossible as the wind howled, making sounds we’d never heard before. We watched bits and pieces of our neighbor’s tile roof fly off and smash a few feet from our house. We were trapped and terrified for three days. Never again! It took months for our island recover.

This very interesting commentary from Dennis Miller, was posted on the millersmoney.com Internet site yesterday.  It's certainly worth reading if you have the time.

Jewellery sales double on the occasion of Gurupushya Nakshatra

Gold jewellery sales doubled on the occasion of the Gurupushya Nakshatra, one of the most auspicious occasions celebrated largely in the western Indian states. Jewellery retailers attracted customers through massive discount on making charges. While the occasion is celebrated every year on Thursday ahead of Diwali, this year the significance was unique as the day coincided with the stars coming together making thereby, the most sacred day for owning a piece of gold.

"We marketed today's occasion differently this year. In all our advertisements, we mentioned that all lucky stars are coming together on Thursday after 95 years. Such occasion will come next only after 70 years in 2085 and hence, giving the rarest of the rare lifetime opportunity for consumers to own a piece of gold. Therefore, all our 14 retail stores are witnessing a bumper sale with an estimate to achieve at least 100% growth on Thursday," said R K Sharma, chief executive officer of Delhi based P C Jewellers (PCJ).

In a complete shift of perennial mode of business through usual means of advertisements and event sponsorships, jewellery retailers have identified celebrations of different geographies to boost sales. Jewellery retailers have picked up dozens of region specific celebrations with religious connection to focus on marketing accordingly. Similar to Akshaya Tritiya celebrated in the South, jewellers have picked up Gurupushya Nakshatra in the west which is largely celebrated in Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh etc.

This gold-related story appeared on the bullionbulletin.in website yesterday sometime---and I thank reader U.M. for sharing it with us.

Singapore Exchange meets demand for physical gold

THE big news of the week, which went unnoticed by the mainstream media, was the launch of the new gold kilogram bar contract by the Singapore Exchange. The new Singapore Kilobar Gold contract is for 25kg of 99.99% pure gold and began trading on the Singapore Exchange on Monday, introducing centralised trading and clearing of a physically delivered gold contract in Singapore.

The contract is the result of collaboration between International Enterprise Singapore, the Singapore Bullion Market Association, the Singapore Exchange and the World Gold Council.

Asia’s incessant demand for physical gold is the biggest driver for the implementation of a new gold contract trade on the Singapore Exchange. The move comes after the Singapore government in 2012 exempted investment in precious metals from a 7% goods and services levy.

Meanwhile, the Shanghai Gold Exchange was launched in September inside the city’s free-trade zone, offering yuan-denominated contracts backed by gold held in Shanghai. Furthermore, the recent rally in the dollar is unjustified by the economic fundamentals and will not be sustainable in the long term. Gold, therefore, remains a crucial portfolio diversifier for the potential dangers ahead.

Here's another gold-related story from the bullionbulletin.com Internet site yesterday---and it's another offering from Manitoba reader M.A.

With seizures up, Indian gold smuggling loses its shine

Gold smuggling into India, the world's second-biggest consumer of the precious metal, is becoming more risky for couriers following a surge in seizures and less profitable for the gangs behind the practice.

After being caught off guard by a jump in smuggling on the back of a hike in import duty last year, government agencies have stepped up seizures to the extent that couriers are demanding more money to carry in gold, according to customs intelligence officials and an industry analyst.

At the same time, a drop in the gap between local and global prices also means there is less profit to be made by smuggling in gold, giving banks more business and higher revenue for a government struggling to rein in a fiscal deficit.

"Gold smuggling was highly profitable ... but now with the drop in premiums and tight security, legal imports are increasing," said Milind Lanjewar, additional commissioner of customs intelligence at Mumbai international airport.

This Reuters article, filed from Mumbai, showed up on their website at 5:16 a.m. IST on their Friday morning---and I thank Manitoba reader U.M. for her final contribution to today's column.

¤ The Funnies

¤ The Wrap

Considering how long it has taken silver producers to recognize and acknowledge the silver manipulation, I suppose it is possible that the big oil producers might continue to remain unaware of my premise. But there is a big difference between oil and silver when it comes to dollar value. Simply put, the budgets of Saudi Arabia and Russia and other oil exporters are dependent on a certain price for their oil exports; that’s not the case in silver. What this translates into is that these countries, whether they wake up to the price scam on the CME’s NYMEX or not, they must and will take measures to bolster the price. And in time, they will succeed because history has shown that oil producers, not consumers, will set the price in the end or in a crunch. It’s been 40 years since I waited on line due to gasoline rationing and I vividly remember the feeling that I would pay any price to fill the tank on my VW bug. Deprived sufficient supply, I expect most would feel the same way in the future in similar circumstances.

But one potential good outcome is if the oil exporters (or any oil producer) came to realize that the speculators on the NYMEX were responsible for the price plunge and moved against this manipulation, could be to shine the light on the silver scam. After all, it’s not that great a distance between the CME’s NYMEX manipulating oil prices and the CME’s COMEX doing the same in silver (and gold). - Silver analyst Ted Butler: 15 October 2014

Thursday's trading action in gold and silver didn't amount to much, or wasn't allowed to amount to much, depending on your point of view.   The only action was in platinum to a certain extent---but mainly in palladium where JPMorgan et al engineered a new low price for this move down.

From it's absolute high tick on September 1, to its intraday low yesterday, 'da boyz' sliced about $190 per ounce off the palladium price, which is a bit over 20 percent.  And it had zero to do with supply and demand. They also engineered a new low in copper---and a new low [but only by only a few pennies] in crude oil as well.

As you cast your eyes on the 6-month charts for all these six key commodities, I want you to keep in mind the Dana Allen story in the Critical Reads section entitled "How the Soviet Empire’s Fall was Engineered"---and ask yourself how it may fit into the events of the last six months or so.

And as I write this paragraph, the London open is only a couple of minutes away.  Price activity in all four precious metals during the Far East trading session on their Friday has been on the quiet side---and only platinum and palladium are up on the day at the moment.  Gold volume is pretty light at just over 13,000 contracts---and silver's net volume is microscopic at only 2,300 contracts.  The dollar index is comatose---and has traded basically flat up until this point, so there's nothing to see here at the moment.

Today, at 3:30 p.m. EDT, we get the new Commitment of Traders Report for positions held at the close of Comex trading on Tuesday.  There shouldn't be a lot of change in silver, platinum or palladium---however, I'm not looking forward to the numbers that we're probably going to get in gold, as they could be ugly.

I'd love to be proven dead wrong---and have JPMorgan et al lay a positive surprise on us---but I must use the past as prologue and assume the worst.

But whatever they turn out to be, I'll have the numbers for you tomorrow, warts and all.

And as I prepare to send this off to Stowe, Vermont at 5:25 a.m. EDT, I see that there isn't much going on with gold and silver.  Gold volume is now up to 23,000 contracts---and silver's net volume is barely over 4,000 contracts.  Platinum and palladium are resuming their rallies that began in early Far East trading.  Platinum is up 16 bucks---and palladium is up 17 dollars.  The dollar index, which hadn't been doing much, started heading lower shortly after 9 a.m. in London---is now down 16 basis points.

I see nothing in the current price action that indicates much will happen during the remainder of the trading session, but since today is Friday, we'll see what the charts look like once JPMorgan et al are done for the day in New York.

I'm off to bed, but before heading in that direction, I'd like to mention one last time The Grand Cayman Liberty Forum that's being held at Marriott - Grand Cayman from November 16 to November 20, 2014Casey Research presenters will be Doug Casey, Terry Coxon, Jeff Clark, Nick Giambruno and Paul Rosenberg.

Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.

]]>
Fri, 17 Oct 2014 06:38:00 +0000
<![CDATA[India’s Gold Imports Soar 450% in September]]> http://www.caseyresearch.com/gsd/edition/indias-gold-imports-soar-450-in-september/ http://www.caseyresearch.com/gsd/edition/indias-gold-imports-soar-450-in-september/#When:06:35:00Z "The Plunge Protection Team is not only alive and well, but was at battle stations"

¤ Yesterday In Gold & Silver

As has been the case recently, gold got sold down a few bucks right at the open of Globex trading at 6 p.m. EDT in New York on their Tuesday evening.  From that point it chopped lower in fits and starts, hitting its low tick shortly after 9 a.m. BST in London on their Wednesday morning.  The price didn't do much until the London silver fix was done at noon BST---and then away went the price to the upside.  The rally gathered more momentum at the Comex open, but at 9:40 a.m. EST, the powers-that-be hit the 'Sell Precious Metals/Buy the Dollar Index' as the gold price was about to go 'no ask', at the same moment as the dollar index was going 'no bid'.  At that moment, the Dow was already down 370 points.

'Da boyz' had the gold price back in the box within 30 minutes.  However once the London p.m. gold 'fix' was in, the price rallied anew, but began to get sold down starting just before the 1:30 p.m. Comex close---and from about 2:45 p.m. EDT onwards, the gold price traded flat into the close of electronic trading.

The low and high ticks were reported by the CME Group as $1,222.00 and $1,250.30 in the December contract.

Gold finished the Wednesday trading session at $1,241.10 spot, up $8.90 from Tuesday---and well off its high.  Net volume was over the moon at 243,000 contracts, so it should be obvious to all and sundry that JPMorgan et al threw whatever Comex paper was necessary at this rally to make it go away.

Here's the 5-minute tick gold chart courtesy of Brad Robertson---and you can see the volume explode at the 8:30 a.m. EDT Comex open---and that high volume level lasted for a bit over two hours.    After that, the volume settled down nicely.  Don't forget to add 2 hours to this chart for EDT.   The 'click to enlarge' feature works well here.

The silver price action, with the odd minor exception, was almost the same as the gold rally, so I shall spare you the play-by-play.

The low and high ticks were recorded as $17.02 and $17.82 in the December contract---an intraday move of just under 5 percent.

Silver closed yesterday at $17.445 spot, up 5.5 cents.  Volume was enormous as well---62,500 contracts, as the technical funds covered some of their short positions---and JPMorgan et al were more than willing sellers in order to stop the rally in its tracks.

The chart for platinum looks suspiciously familiar as well---and the 'da boyz' even managed to close platinum down 9 dollars on the day.

The palladium chart, up until the powers-that-be hit the "Sell Precious Metals/Buy Dollar Index" button, looked the same as the other three precious metals.  But at that point the HFT boyz and their algorithms went to work---and palladium got pounded for 26 bucks, finishing the day a few dollars off its low tick.

The dollar index closed late on Tuesday afternoon at 85.88---and then didn't do much until it began to fade a little starting just before noon in London.  The roof caved in at the Comex open, with the 84.62 low tick coming at 9:40 a.m. EDT.  'Da boyz' pumped it back up to around 85.25 by the London p.m. gold fix---and from there it chopped lower into the close, finishing the Wednesday session at 84.87---down 101 basis points.

As I said yesterday---and will repeat myself again today---it should be obvious to anyone with two synapse to rub together that the dollar would have crashed---and taken the stock market with it, if the Plunge Protection Team hadn't intervened when they did.  But all they're doing is delaying the inevitable.

I guess one should be thankful that the gold stocks opened in the black, hitting their highs of the day at the point where the Dow was down 370 points, which was ten minutes after the markets opened.  They stayed in positive territory until the gold price got turned over starting about 10 minutes before the Comex close.  They rallied off their lows during the last forty-five minutes of trading---and the HUI closed down only 0.19%.

The silver equities traded in a similar pattern, but the rally at the end of the day took their shares back into positive territory, as Nick Laird's Intraday Silver Sentiment Index closed up 1.09%.

The CME Daily Delivery Report showed that 1 lonely gold contract, along with 14 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  Jefferies was the short/issuer for the second day running. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that October open interest in gold declined another 20 contracts---and is now down to 967 contracts.  Silver's October o.i. increased by 5 contracts up to 188 contracts, from which one must subtract the 14 contracts mentioned in the previous paragraph.

Over at GLD yesterday, an authorized participant withdrew 67,298 troy ounces, which was about 9,000 more ounces than was deposited on Tuesday.  And as of 9:59 p.m. EDT yesterday evening, there were no reported changes in SLV.

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

Over at the Comex-approved depositories on Tuesday, they reported receiving 19,933 troy ounces of gold, most of which went into JPMorgan's vault.  Nothing was reported shipped out.  The link to that activity is here.

In silver, nothing was reported received, but a very chunky 1,564,962 troy ounces were shipped out, with almost all the activity coming at the Brink's, Inc. and Scotiabank's vaults.  The link to that action is here.

Here are a couple of charts from yesterday.  First is the Dow which, as I pointed out earlier, was down 370 points within ten minutes of the open---and that's where the PPT showed up.  The low [down about 450 points] was at the 1:30 p.m. EDT close of Comex trading---and from there 'da boyz' made sure that the equity markets closed well off that mark.

And here's the 6-month VIX chart.

I have the usual number of stories for you today---and I'll happily leave the final edit up to you.

¤ Critical Reads

The Depressing Signals the Markets Are Sending About the Global Economy

It wasn’t very long ago that the dread hovering over global financial markets was that things were getting too calm. Just this summer, Federal Reserve officials were fretting over markets being so stable that it might create complacency, and we were writing about a global boom in asset prices.

Even if many Americans don’t fully realize it yet—though an unnerving drop in a wide range of global markets Wednesday may have gotten our collective attention—the autumn has brought a rather darker set of worries with a series of dives in financial markets across the globe.

On Wednesday alone, the Standard & Poor's 500 briefly fell into negative territory for the year and the interest rate investors were willing to accept on 10 year U.S. Treasury bonds edged below 2 percent for the first time since June 2013. (As of late morning, the S&P was down 1.4 percent for the day and narrowly up for the year, and the 10 year Treasury bond was back up to 2.05 percent).

But those moves underlie a bigger story: Many crucial indicators in markets for international bonds, currency and commodities are pointing toward a heightened risk of a worldwide economic slowdown that may be beyond the ability of policy makers to halt. It would inevitably have ripple effects even on the relatively strong American economy.

This commentary/opinion piece was posted on The New York Times website yesterday sometime---and I thank Phil Barlett for today's first news item.

BIS warns on 'violent' reversal of global markets

The global financial markets are dangerously stretched and may unwind with shock force as liquidity dries up, the Bank of International Settlements has warned.

Guy Debelle, head of the BIS’s market committee, said investors have become far too complacent, wrongly believing that central banks can protect them, many staking bets that are bound to “blow up” as the first sign of stress.

In a speech in Sydney, Mr Debelle said: “The sell-off, particularly in fixed income, could be relatively violent when it comes. There are a number of investors buying assets on the presumption of a level of liquidity which is not there. This is not evident when positions are being put on, but will become readily apparent when investors attempt to exit their positions.

“The exits tend to get jammed unexpectedly and rapidly.”

This commentary by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 9:00 p.m. BST on their Tuesday evening---and I thank Roy Stephens for his first contribution of the day.

World economy so damaged it may need permanent Q.E.

Combined tightening by the United States and China has done its worst. Global liquidity is evaporating.

What looked liked a gentle tap on the brakes by the two monetary superpowers has proved too much for a fragile world economy, still locked in "secular stagnation". The latest investor survey by Bank of America shows that fund managers no longer believe the European Central Bank will step into the breach with quantitative easing of its own, at least on a worthwhile scale.

Markets are suddenly prey to the disturbing thought that the five-and-a-half year expansion since the Lehman crisis may already be over, before Europe has regained its prior level of output. That is the chief reason why the price of Brent crude has crashed by 25pc since June. It is why yields on 10-year US Treasuries have fallen to 1.96pc, and why German Bunds are pricing in perma-slump at historic lows of 0.81pc this week.

We will find out soon whether or not this a replay of 1937 when the authorities drained stimulus too early, and set off the second leg of the Great Depression.

This is the second commentary in a row from Ambrose, but this one showed up on The Telegraph's website at 9:36 p.m. BST yesterday evening---and I found it embedded in a GATA release.  It's definitely worth reading.

Bank of America moves past worst legal costs, posts loss

Bank of America Corp said on Wednesday that it has moved past the worst of its legal settlements linked to the financial crisis, after its latest big legal charge brought the bank's common shareholders a net loss for the third quarter.

Since 2010, the second-largest U.S. bank has agreed to pay at least $70 billion to resolve disputes linked to home loans, mortgage bonds and other problems stemming from before and during the crisis.

In the most recent settlement, the bank paid $16.65 billion to resolve Department of Justice charges that it misled investors in its mortgage bonds. Money was already set aside to cover most of that, but the bank took a $5.6 billion charge in the third quarter to cover the rest.

"The DoJ settlement from everything we can see was the most significant matter that’s out there," Chief Financial Officer Bruce Thompson told reporters, signaling that investors can stop fearing outsized legal settlements every quarter.

This Reuters story appeared on their website at 2:40 p.m. EDT on Wednesday afternoon---and I thank West Virginia reader Elliot Simon for sharing it with us.

For Bank of America, Crime is Now an Ordinary Course of Business

Once upon a time banks made money in one of two ways: either by borrowing short and lending long, aka the conventional banking way, or through investment banking, which includes advisory, underwriting and trading with the backstop of billions in deposits, aka the proto-hedge fund way.

Then things changed.

How does this nearly $30 billion in legal "add-backs" over the past three years compared to the so-called Net Income Bank of America generated over the same time period?

Between Q4 2011 and Q3 2014 Bank of America produced "Net Income" of $15.9 billion. However, the amount of added back "one-time, non-recurring" legal expenses is a stunning $28.9 billion: two of every three dollars, non-GAAP as they may be, comes from Bank of America engaging in criminal activity... and that's just the stuff it got caught for.

So perhaps an even more relevant question than how long will the EPS "add-back" bulls hit continue, is how long will the regulators and enforcers allow Bank of America to exist as an organization for which two-thirds of its "ordinary course business" is, for lack of a better word, crime?

Ditto for JPMorgan.  This must read article appeared on the Zero Hedge Internet site at 7:11 p.m. EDT yesterday evening---and I thank reader Harry Grant for sliding it into my in-box just before midnight last night MDT.

U.S. bid for oil supremacy shakes crude market

Propelled by surging shale output, the United States is fighting for supremacy in the global oil market even as a pullback in crude prices threatens to challenge the boom.

The U.S., which only a few years ago seemed to be in the midst of an inexorable decline in domestic petroleum production, may have already overtaken other petroleum giants.

In terms of crude alone, the US pumped 8.8 million barrels a day in September, still a distance from Russia's 10.6 million barrels and Saudi Arabia's 9.7 million, according to official sources.

But when natural gas liquids are included, the U.S. extracted 11.5 million barrels in August, essentially level with OPEC kingpin Saudi Arabia, according to data from the International Energy Agency.

As you already know, dear reader, current crude oil prices are 100 percent caused by game-playing between the technical funds and Commercial traders on the Comex---just like the precious metals.  This AFP story showed up on the france24.com Internet site at 5:05 p.m. Europe time yesterday---and I thank South African reader B.V. for sending it our way.  It's worth reading.

A Former SWIFT Insider on Financial Warfare, the Fate of the Dollar, and Bitcoin

One of the great things about Casey Summits is that you get to meet some truly fascinating people among the attendees. The opportunity to network with successful, like-minded people is one that should not be missed.

And this year’s Summit was no different. I had the pleasure of meeting many interesting people. Among them was Tjerk Veenstra.  Tjerk spent nearly 30 years with SWIFT (Society for Worldwide Interbank Financial Telecommunication) as one of its most senior managers.

SWIFT is truly integral to the international financial system, specifically in transferring money from a bank in country A to a bank in country B. More than 10,500 financial institutions and corporations in 215 countries use SWIFT millions of times every day. We’ll get into more detail below.

Suffice to say, it behooves you to appreciate how SWIFT works to better understand some of the big-picture trends in the world today—like the decline of the dollar as the world’s premier currency, financial warfare, geopolitics, and the emergence of game-changing technologies like Bitcoin and cryptocurrencies. Tjerk and I will discuss all of these things.

This interview by Nick Giambruno, Senior Editor of the International Man, appeared on his website yesterday---and it's definitely worth reading.

Dublin to scrap 'double Irish' tax loophole

Ireland will scrap a controversial tax instrument which allows companies to legally shift huge profits from Ireland to countries with low taxes, the country's budget minister has announced.

Speaking in the Irish parliament on Tuesday (14 October), Michael Noonan told deputies that the scheme, known as "double Irish" would be closed to new entrants in 2015 and gradually phased out between now and 2020.

He added that in the future all companies registered in Ireland would have to pay tax there.

The double Irish enables companies to make royalty payments to separate Irish-registered subsidiaries whose parent company is based in another country, allowing them to avoid paying corporate tax.

This story, filed from Brussels, showed up on the euobserver.com Internet site at 9:26 a.m. Europe time on their Wednesday morning---and it's courtesy of Roy Stephens.

Bumper French wine grape harvest clouded by threat of wood decay

The French grape harvest has produced a bumper crop for 2014 after two years of adverse weather conditions.

But the smiles could be wiped off winegrowers’ faces if wood decay disease, which now affects 12 per cent of vines in all of France’s wine-growing regions, continues its relentless march across the country.

The spread of the disease by three types of fungi which attack the vines has so alarmed experts that it is being compared to phylloxera, the deadly disease which decimated French vineyards at the end of the 19th century.

“There’s no miracle solution in sight,” said specialist Olivier Yobregat from the south-western branch of the French Wine Institute, located in Lisle-sur-Tarn. “Winegrowers want answers, but this disease is very complex. A lot of the research being done will only bring results in the long term,” he said.

This is a grape vine disease I've not heard of before, although I've very familiar with phylloxera.

This very interesting story, filed from Paris, appeared on the independent.co.uk Internet site sometime on Tuesday---and it's the second offering of the day from reader B.V.

Rebel commander wages fight to the death for east Ukraine airport

From an empty flat overlooking the shattered remains of eastern Ukraine's biggest airport, Givi is leading an all-out assault against the last government outpost in the main pro-Russian stronghold.

The camouflage-clad guerrilla, a Russian tricolour on his arm, heads one of two units tasked with flushing out government soldiers from a site at the heart of the six-month war, which has already claimed 3,400 lives.

Despite a five-week truce, his "Somali battalion" has been aiming tanks and rockets at Prokofiev International Airport, inflicting daily losses and reducing the futuristic structure to piles of rubble and twisted steel.

Ukrainian soldiers have been confined to the grounds' vast bunkers and other underground areas, giving the rebels de facto control, Givi boasts.

This AFP story put in an appearance on the france24.com Internet site at 9:45 a.m. Europe time on their Tuesday morning---and I thank reader B.V. for bringing it to our attention, which is also his third contribution of the day.

Vladimir Putin warns over rise of neo-Nazism before Serbia visit

Vladimir Putin will seek to use a military parade in Belgrade on Thursday to portray Russia and its allies as a bulwark against the rise of neo-Nazism across Europe.

The cold war-style parade involving tanks, phalanxes of soldiers and a flyover by military jets will be the first of its kind that Serbia has held for nearly three decades. The last time, the country was still part of socialist Yugoslavia.

The event is to commemorate the liberation of Belgrade from Nazi occupation by Yugoslav Partisans and the Red Army 70 years ago. The date of the ceremony was moved forward four days to fit in with Putin’s timetable.

At a time of deep rifts between Russia and the European Union over Ukraine, Putin’s one-day visit will be an opportunity to show he has friends and influence close to the heart of Europe. For the Serbian government it is a chance to curry favour with an important friend and energy supplier at a time of chronic economic crisis with winter approaching, and to counter right-wing criticism that it is leaning too far towards the west in the hope of eventual EU membership.

This news item was posted on theguardian.com Internet site at 6:42 p.m. EDT yesterday evening---and I thank Roy Stephens for sending it along.  Then there's this story from the euobserver.com---"Serbia refuses to join E.U. sanctions on eve of Putin parade" that Roy sent last night as well.

Calling Russia ‘threat to humanity’ puts Obama’s sanity in doubt - Medvedev

The Russian PM has suggested that Obama’s charges against Russia were caused by a “brain aberration” and added that such rhetoric saddened him.

I am very upset by the fact that President Obama, while speaking from the United Nations’ podium and listing the threats and challenges humanity is currently facing, put Ebola in first place, the Russian Federation second and the Islamic State organization was only in the third place. I don’t even want to comment on this, this is some sort of aberration in the brain,” Dmitry Medvedev said in an interview with CNBC television.

The top Russian official stressed that his country was not isolating itself from the rest of the world, but sought mutually beneficial cooperation with foreign nations. “We want to communicate with all civilized peoples on friendly grounds. Of course, this includes our partners from the United States of America, but for this the situation must be leveled,” Medvedev said.

However, the Russian PM also noted that the Western sanctions have inflicted considerable damage to Russia’s cooperation with the US, and without cancellation of this policy there can be no return to partnership.

This news item appeared on the Russia Today website at 10:58 a.m. Moscow time on their Wednesday morning---and I thank Roy Stephens for sending it.

Russians’ approval of Putin hits near all-time high, poll shows

President Putin’s average approval marks from the Russian public have approached the record level of early 2008, independent research has shown.

The poll conducted in late September by the Levada sociology center shows that the average mark given by Russians to their leader is now 7.33 out of 10. This figure has been higher only once before – a mark of 7.49 reached in January 2008 at the very end of Putin’s first two terms as president.

17 percent of all respondents think Putin deserved the top mark – 10 out of 10 – for his work.

In the same poll, 38 percent of Russians said the head of state was worthy of their trust because his current performance was strong and successful.

This article appeared on the Russia Today website at 2:37 p.m. Moscow time on their Wednesday afternoon---and one again I thank Roy Stephens for sending it.

Last leader of USSR urges Russia and the West to stop sanction war

Ex-Soviet president Mikhail Gorbachev called on Russia and its western partners to give up the logic of reciprocal accusations and sanctions in their relations.

Western partners’ refusal to take account of Russia’s views and interests is one of the main causes behind the current crisis in global politics, Gorbachev told Rossiyskaya Gazeta daily in an interview on Wednesday.

"Today we need to acknowledge that the European and world politics is in crisis. The unwillingness of our western partners to take account of Russia’s views and lawful security interests is one of its causes though not the only one,” the ex-Soviet leader said.

Western politicians used to applaud Russia, especially under the rule of Boris Yeltsin, but in fact paid no regard to it and its interests, Gorbachev went on to say.

This worthwhile commentary by Gorbachev appeared on the itar-tass.com Internet site at 9:50 p.m. Moscow time on their Wednesday evening---and I thank Roy Stephens for sending it our way.

Greek P.M. tries to restore calm after market upheaval

Greece’s government held a cabinet meeting on Wednesday as Prime Minister Antonis Samaras sought to restore calm after a terrible day for the Athens Stock Exchange and Greek bonds.

Although the gathering of ministers had been planned on Monday, it came at an opportune moment. After seeing the stock market fall 6.25 percent and the yield on 10-year bonds rise to as high as 7.85 percent, Samaras used his opening address to ministers as an attempt to counter the apparent panic over Greece’s prospects.

This news item appeared on the Greek website ekathimerini.com at 8:12 p.m. Europe time on their Wednesday evening---and it's the second offering of the day from Harry Grant.  It's definitely worth reading.

Turkish Airstrike Hits Kurds, Complicating Fight Against Islamic State

In the face of increasing international pressure, Turkey took decisive military action on Monday — not against the Islamic State militants that Turkey’s Western allies have urged it to fight, but rather against the Kurdish militant group that has been battling the Islamic State.

Turkish warplanes struck positions of the Kurdistan Workers’ Party, known as the P.K.K., in southeastern Turkey late Monday. The group, long an enemy of the Turkish state, had put down its weapons last year to talk peace. But on Tuesday, Turkish officials said the Kurdish militants had attacked a military outpost, leading to the government’s first airstrikes against the group in nearly two years.

The action immediately reverberated well beyond Turkey’s borders, because it is an offshoot of the P.K.K. that is struggling to defend the Syrian Kurdish city of Kobani, which has been besieged by Islamic State for weeks.

You couldn't make this stuff up!  This news item, filed from Istanbul, was posted on The New York Times website on Tuesday sometime---and it's the second contribution of the day from Roy Stephens.

When It Comes to Beheadings, ISIS Has Nothing Over Saudi Arabia

The escalation of the war against the Islamic State was triggered by widespread revulsion at the gruesome beheading of two American journalists, relayed on YouTube. Since then, two British aid workers have met a similar grisly fate. And another American has been named as next in line by his terrorist captors.

Yet, for all the outrage these executions have engendered the world over, decapitations are routine in Saudi Arabia, America’s closest Arab ally, for crimes including political dissent—and the international press hardly seems to notice. In fact, since January, 59 people have had their heads lopped off in the kingdom, where “punishment by the sword” has been practiced for centuries.

The Saudi legal system is based on Islam’s Sharia law. Some countries that use Sharia possess a penal code, but Saudi Arabia does not, although some activists have been calling for reform.

If you're on the squeamish side, this Newsweek story may not be for you.  But, now that I've warned you, it's worth reading anyway.  It was posted on their website at 12:56 p.m. EDT on Tuesday---and I thank reader A.V. for bringing it to my attention---and now to yours.

U.S. Treasury: China does not manipulate yuan

The U.S. Treasury said Wednesday that China does not manipulate its currency, but pushed Beijing to do more to focus on domestic demand, not exports, to drive economic growth.

In a twice-yearly report to Congress, which would set sanctions on any country officially branded a "manipulator," the Treasury said the yuan, or renminbi (RMB), had "partially recovered" from a sharp plunge earlier in the year and appreciated by 1.9 percent since late April.

I almost believe that---and I'm sure you're convinced as well. The above two paragraphs are all there is to this AFP news item that appeared on the france24.com Internet site yesterday---and it's the final offering of the day from Roy Stephens.

China's Economic Rise Challenges The IMF's Relevance

The International Monetary Fund was launched in 1944 with the world's new superpower, the United States, in position as the key force and shareholder in the global crisis bank.

Today, China is on the verge of becoming the world's largest economy. 

But its voice at the IMF -- wrapping up its annual meeting this weekend in Washington -- remains that of a minor country, and some worry this could undermine the crucial, 70-year-old institution.

The IMF estimates that by the end of this year, China's economy will surpass the US in size: $17.63 trillion versus $17.42 trillion, based on the purchasing power parity standard.

This AFP story, filed from Washington, was posted on the businessinsider.com Internet site early Sunday afternoon EDT---and it's certainly worth reading.  I thank reader Mark Hancock for sending it our way.

Miner Fresnillo looks to hedge some gold output

Mexican miner Fresnillo Plc reported a small drop in quarterly silver production and said it could hedge a part of its gold output to protect its recent investment in the Herradura corridor in northern Mexico.

Shares in the miner fell as much as 3.4 percent on Wednesday morning, making the stock one of the top percentage losers on the FTSE 100 index.

An increasing numbers of precious metals miners, battered by last year's steep drop in prices, are selling planned output forward to better control their cash flow.

"This is going to be discretionary to the management ... This is going to be done very slowly. So we are not going to immediately hedge all the production," Gabriela Mayor, head of investor relations, said on a media call.

The media can make news out of any rumour these days---and this is a case in point.  It will be a real news story if/when it happens.  The Reuters article was posted on their website at 11:45 a.m. BST on Wednesday morning---and it's another story that I found posted on the gata.org Internet site.

Jeff Deist/Claudio Grass: The Upcoming Swiss Gold Referendum

Jeff Deist, the president of the Mises Institute, and Claudio Grass discuss the uniquely Swiss mindset behind the upcoming Swiss gold referendum, and how decentralization of political power is part of Swiss DNA; the tremendous geopolitical aftershocks that would occur if the referendum passes — including the physical repatriation of gold to Switzerland; and how the Swiss people may be waking up to the sellout of their country by the Swiss National Bank and the IMF.

This 17:42 minute audio interview showed up on the mountainvision.com Internet site yesterday---and I thank Casey Research's own Dennis Miller for finding it for us.

Gold Imports by India Seen Rising More Than Fourfold Last Month

Gold imports by India, the largest user after China, probably surged more than fourfold last month on expectations declining prices would boost festival demand.

Purchases are estimated at about 95 metric tons compared with 15 tons to 20 tons in September last year, said Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation. The government raised import taxes for a third time in August last year after a month earlier obliging importers to set aside 20 percent of purchases for re-export as jewelry.

India represented 25 percent of global demand in 2013. Imports of gold were valued at $3.75 billion in September, 450 percent more than a year earlier, the Commerce Ministry estimates. Buying and gifting of gold is considered auspicious and the most favorable time is the festival of Dhanteras, two days before Diwali which occurs on Oct. 23. Festivals run through November and the wedding season follows to early May.

“These are normal imports before Diwali,” Bamalwa said in a phone interview from Kolkata today. “There is no abnormal feature. Prices have fallen in the international market and this is good for Indian consumers.”

This gold-related news item, filed from New Delhi, appeared on the Bloomberg Internet site at 3:53 a.m. Denver time on Wednesday morning---and I found it embedded in a GATA release.  Reader U.M. sent us another story on this.  This one is headlined "Country's gold imports rising on price slide & festive demand"---and it showed up on Economic Times of India website at 7:02 p.m. IST on their Wednesday evening.

Gold imports soar 450% in India

The Indian government has been proved right once again in not lifting its curbs on gold. Trade deficit has widened the most in 18 months, as imports of the precious metal have surged.

Gold imports jumped about 450% to a new high of $3.75 billion in September (versus $682.5 million y/y). In August 2014, gold imports stood at $2.04 billion.

This as the trade deficit widened to $14.25 billion in September, from $10.84 billion a month before.

Falling inflation might just not be enough, say trade experts. With a muted export performance in September, the trade figures have raised concerns of worsening external account, especially if the global economy continues to remain sluggish.

I know that the headline is similar, as is part of the story, but this article goes into far more depth.  It was filed from Mumbai yesterday as well---and showed up on the mineweb.com Internet site.  It's the final offering of the day from Manitoba reader U.M., for which I thank her.  It's worth reading.

¤ The Funnies

Here's a photo that Nick Laird's entomologist friend Jack Hasenpusch took the other day.  It's the larva of the Hercules Moth---and for obvious reasons the caterpillar stage of its short life is equally as gargantuan.  Nick, who lives in a tin shack in the outback of Northern Australia, says it normally takes two beers to wash these thing down!  Great shades of Crocodile Dundee!

]

The moth itself can get as large as 27cm/11 inches across, as the photo of a female Hercules moth below, indicates.  I've posted a photo of one of these creatures before, but the hand in each photo puts their actual sizes in perspective.





¤ The Wrap

The CFTC has reported that the traders in the managed money category have sold roughly 150,000 contracts of NYMEX crude oil futures contracts (apart from selling in other energy contracts) since June. Since each futures contract covers 1,000 barrels of crude oil, that means the technical funds have sold the equivalent of 150 million barrels of oil since June. I know that actual crude oil is different than a futures contract equivalent, but I also know that 150 million barrels of equivalent selling is a massive amount compared to the one million barrels that would put oil in a daily surplus or deficit. In other words, how could the selling of the equivalent of 150 million barrels of oil not cause the price to plunge?

In a very real sense, the crude oil market, along with all COMEX/NYMEX metals has contracted the silver disease – or the sickness of having the price of vital commodities manipulated by a relative handful of speculators – of having the tail of derivatives wagging the dog of the actual market.  I have nothing against speculators (as I am one), but I have everything against letting speculators determine the price of anything. I know that the markets need speculators to provide liquidity to legitimate hedgers and that stands at the core of economic justification for futures trading.  But that is not occurring in crude oil, or silver, or the other metals. Instead, we have speculators (technical funds) trading with other speculators (mostly U.S. and foreign banks) in a private betting game. For allowing this to develop, full blame and everlasting shame must be placed on the regulators, the CFTC and the CME. - Silver analyst Ted Butler: 15 October 2014

Well, dear reader, yesterday's action in the equity markets, the currencies---and the precious metals---should leave no doubt in anyone's mind that the Plunge Protection Team is not only alive and well, but was at battle stations yesterday.

Only the willfully blind, along with those whose jobs depend on them not seeing or speaking the obvious, will consider it to be free-market forces at work.  And the word egregious doesn't begin to adequately describe it all, as it was a complete perversion of everything that capitalism really stands for.

As I get sick of writing---and as you're getting sick of reading---if the powers-that-be put their hands in their pockets and let the markets do what they want so desperately to do, the world's financial system would be a smouldering ruin in five business days, or less.  Wednesday's price action in all things financial, before 'da boyz' stepped in at 9:40 a.m. EDT, should leave no doubt in anyone's mind that this would have been the outcome by the close of trading in New York yesterday.

It will all come tumbling down sooner or later, of course---and as I said before, the forces that prevented it from occurring, are only delaying the inevitable.

Here are the 6-month charts for the 'Big 6' commodities.

None of the precious metals came anywhere near their respective 50-day moving averages, not even gold.  But as Ted Butler pointed out in his bi-weekly commentary yesterday, headlined "Oil Catches the Silver Disease," gold has now closed above its 20-day moving average for the last six trading days in a row---and no doubt the technical funds that use that moving average as a short-covering signal were doing exactly that---and probably going long as well.  And it's an absolute certainty that JPMorgan et al were selling longs---and taking the short side of the long trade.

The two other things that are of note was the big 9 cent intraday move in copper, along with the fact that the price decline in WTIC is continuing unabated, as JPMorgan et al engineered the price to a new low for this move down.

And as I type this paragraph the London open is less than twenty minutes away.  The tiny rally in gold in early Far East trading ran into a not-for-profit seller at exactly 10:00 a.m. Hong Kong time on their Thursday morning---and since then, the gold price has developed a slightly negative bias.  It, along with the other three precious metals, are now all down from yesterday's New York closes---and it's almost like they're painting a "nothing to see here, folks---please move along" type of chart pattern.

Gold volume is already pretty heavy at 35,000 contracts, but silver's volume is far more subdued at 3,800 contracts.  The dollar index is now on the rise again, up 22 basis points.

It's unfortunate that yesterday's price/volume action won't be in tomorrow's Commitment of Traders Report.  Although the volumes were over the moon in all four precious metals, I was rather surprised that the increase in the open interest numbers in gold and silver from the CME's Preliminary Report for the Wednesday trading session, weren't as bad as I feared they might be.  However, I've learned from past experience that these numbers can be wildly misleading, so I shan't stick my neck out at this point, but wait until next Friday's COT Report---the one on October 24.

Here's one last chart that Nick passed around last night.  It shows the amount of gold sold by all countries [including the IMF] in each of the four iterations of the Central Bank Gold Agreement that have existed since it was first signed on 26 September 1999---and I remember it all too well, I'm afraid.

This is another chart where the 'click to enlarge' feature makes life easier.

And as I send this out the door at 4:55 a.m. EDT, I note that little has changed in the four precious metals from a price perspective.  The positive biases that developed shortly after London opened have all vanished---and all four are still below their respective closes on Wednesday.  Gold volume is now 44,000 contracts---and silver's volume is 6,300 contracts.  The dollar index is still up, but now only by 11 basis points.

I have no idea how the Thursday trading session will unfold in New York today, but it's a fairly safe bet that 'da boyz' will be prepared to act in any market that they feel needs their attention.

See you here tomorrow.

]]>
Thu, 16 Oct 2014 06:35:00 +0000
<![CDATA[Gold Stubs Swiss National Bank’s Toe, and the Financial Times Says ‘Ouch!’]]> http://www.caseyresearch.com/gsd/edition/gold-stubs-swiss-national-banks-toe-and-the-financial-times-says-ouch/ http://www.caseyresearch.com/gsd/edition/gold-stubs-swiss-national-banks-toe-and-the-financial-times-says-ouch/#When:06:24:00Z "West Texas Intermediate hit a new low for this move down"

¤ Yesterday In Gold & Silver

The gold price got sold down a few dollars starting at the 6 p.m. EDT open in New York on Monday evening---and from there it traded sideways in a very tight range, but began to rally once the noon London silver fix was done for the day.  'Da boyz' put an end to that at the 8:20 a.m. EDT Comex open fifty minutes later---and it was all down hill into the close.

The lows and highs aren't worth mentioning.

Gold finished the Tuesday session in New York at $1,232.20 spot, down $4.90 from Monday.  Net volume was reasonably light at 111,000 contracts, a few thousand contracts less than Monday's volume.

Silver also got sold down at the open as per usual on Monday evening---and then pretty much followed the gold price path for the remainder of the Tuesday session.

The high and low are barely worth looking up, but the CME Group recorded them as $17.57 and $17.325 in the December contract.

Silver was closed down 11 cents yesterday to $17.39 spot.  Net volume was pretty light at only 24,500 contracts.

Platinum rallied a bit in the early going in Far East trading on their Tuesday, with the high tick coming about 1:30 p.m. Hong Kong time.  By noon in Zurich, it was back to about unchanged on the day---and didn't do much after that, finishing the day up 4 dollars.

Palladium rallied about ten bucks by 2 p.m. Hong Kong time---and then chopped around from there, closing up 7 bucks.

The dollar index closed in New York late on Monday afternoon EDT at 85.22---and continued its rally that began off the 85.09 low that began around 5:05 p.m. just before Monday's close.  Most of the indexes gains yesterday were in by 11 a.m. BST in London---and the index crawled higher from there, closing at 85.88---up 66 basis points, which was everything it lost during the Monday trading session.

Forgive me for mentioning this, but it appeared that, once again, a buyer of last resort showed up to catch the proverbial falling dollar index knife at 5:05 p.m. EDT on Monday, as it was about to slice through the 85.00 mark.

Here's the 3-day chart so you can see this rally from its beginnings late on Monday afternoon EDT.

The gold stocks opened in the black---and rallied to their highs at exactly 11 a.m. EDT.  From there they chopped lower, as the HUI gave up a large portion of its earlier gains, finishing the day up 1.05%.

It was about the same for silver equities, but they rallied much more vigorously---and also sold off much more vigorously as well, as Nick Laird's Intraday Silver Sentiment Index finished up only 1.07%.  At its high, the index was up 3.5%.

The CME Daily Delivery Report showed that zero gold and 10 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The short/issuer in silver was Jefferies once again.

The CME Preliminary Report for Tuesday showed that gold's open interest in October dropped by 72 contracts down to 987 contracts---and in silver, the o.i. for October declined by 11---down to 183 contracts.

There were no reported changes in GLD yesterday---and as of 9:45 p.m. yesterday evening, there were no reported changes in SLV, either.

Earlier this morning Europe time, the good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs for the week ending on Friday, October 10---and this is what they had to report: Their gold ETF declined by 11,571 troy ounces, but their silver ETF actually rose by 25,505 troy ounces.

The U.S. Mint had a very decent sales report yesterday.  They sold 3,500 troy ounces of gold eagles---4,000 one-ounce 24K gold buffaloes---and 430,000 silver eagles.

There wasn't much in/out activity in gold at the Comex-approved depositories on Monday, as only 9,645 ounces were reported received---and one kilobar was shipped out.  The link to that activity is here.

And, much to my amazement, there was no in/out activity in silver at all.  It's been a while since I've seen that.

I have a decent number of stories for you again today---and I hope you have the time to read the most important ones.

¤ Critical Reads

More Q.E. would be appropriate if U.S. economy faltered - Fed's Williams

A bellwether Federal Reserve policymaker on Tuesday downplayed concerns about weakness in the global economy, saying the U.S. central bank should only delay an interest rate hike next year if inflation or wages fail to perk up.

John Williams, president of the San Francisco Fed, said in an interview with Reuters that the first line of defense at the central bank, if needed, would be to telegraph that U.S. rates would stay near zero for longer than mid-2015, when he currently expects them to rise.

If the outlook changes "significantly," with inflation showing little sign of returning to the central bank's 2-percent target, he said he would even be open to another round of asset purchases.

Jim Rickards was right---QE4 in 2015---watch for it!  This Reuters story, filed from Washington, was posted on their website at 3:54 p.m. EDT yesterday afternoon---and falls in to the absolute must read category.   You'll note that the 'Thought Police' at Reuters changed the headline to a far softer sounding "Exclusive: Fed's Williams downplays global risks, eyes U.S. inflation".  Today's first story is courtesy of Manitoba reader U.M.

The $11 Trillion Advantage That Shields U.S. From Turmoil

Call it America’s $11 trillion advantage: Consumer spending is likely to steer the U.S. economy safely through the shoals of deteriorating global growth and turbulent financial markets.

The combination of more jobs, falling gasoline prices and low borrowing costs will help lift household purchases. Such tailwinds probably matter more than Europe’s struggles or the slackening in emerging markets that caused the Dow Jones Industrial Average last week to erase its gains for the year.

Household purchases make up almost 70 percent of the $16.8 trillion U.S. economy and have climbed an average 2 percent in the recovery that’s now in its sixth year. Spending growth will accelerate to 2.7 percent next year after 2.3 percent in 2014, according to the latest Bloomberg survey of economists.

“We’ve got a lot of things working in favor of the consumer right now,” said Nariman Behravesh, chief economist in Lexington, Massachusetts, at IHS Inc. “To have that kind of strength is the biggest asset for the U.S. It’s a pretty rock solid footing.”

As we know already, consumer 'confidence' can vanish in an instant if given the right/wrong circumstances, as we've seen it before.  This Bloomberg news/propaganda item  was posted on their website at 8:01 Denver time yesterday morning---and I thank Howard Wiener for sharing it with us.

JPMorgan sets aside $1 billion for forex-rigging penalty

JPMorgan Chase set aside $1 billion in legal reserves, depressing third-quarter results, as the largest U.S. bank by assets prepares to pay big penalties over allegations it manipulated the foreign exchange market.

The bank has paid billions of dollars in penalties over regulatory violations and lawsuits in the past two years -- ranging from the "London whale" trading fiasco to mis-selling mortgage-backed securities.

Bulking up its reserves by $1 billion was more than analysts expected and took the bank's profits for the three months to the end of September below expectations, at $5.6 billion.

It is a sign, according to people familiar with the matter, that JPMorgan is close to settling enforcement action, which is being led by authorities in the U.K. and U.S., and affects several of the worlds biggest currency trading banks.

Another licensing fee---and nobody goes to jail.  Just the cost of doing business.  This news item appeared on the Financial Times website yesterday---and it's posted in the clear in this GATA release.

All That is Broken With the U.S. Financial System in One Chart

We have shown this chart before. We will show it again because, to nobody's surprise, nothing has changed since then.

The chart in question, which we believe demonstrates all that is wrong with the US financial and banking system, shows JPM's quarterly deposits, which in Q3 just hit a new all time record of $1.335 trillion, and its loans, which despite the much hyped rebound in Q2, once again declined to $743 billion from $747 billion in Q2 (so much for that lending-driven recovery?) leading to a new record low Loan-to-Deposit ratio of 56%.

So while deposits are obviously hitting new record nominal highs quarter after quarter, when was the last time JPM's loans printed at all time highs? The answer: just as Lehman filed for bankruptcy, when the number was $761 billion.

This brief Zero Hedge piece appeared on their website at 10:54 a.m. EDT yesterday morning---and I thank Manitoba reader U.M. for her second offering of the day.  It's worth reading.

This Time is Different—–For the First Time in 25 Years the Wall Street Gamblers are Home Alone

Except this time is indeed different, but not in a good way. When Bernanke & Co. stalled off the August 2007 correction for nearly a year, they still had plenty of dry powder. The federal funds rate was 5.25% and the Fed’s balance sheet was only $850 billion.

But now, however, we are on the far side of the great monetary experiment known as ZIRP and QE. The money market rate is at the zero bound and has been pinned there for 69 months running—a stretch never before experienced even during the Great Depression. Likewise, the Fed’s balance sheet has grown by 5X to nearly $4.5 trillion—again a previously unimaginable eruption.

But what is profoundly different this time is that the Fed is out of dry powder. Its can’t slash the discount rate as Bernanke did in August 2007 or continuously reduce it federal funds target on a trip from 6% all the way down to zero. Nor can it resort to massive balance sheet expansion. That card has been played and a replay would only spook the market even more.

So this time is different.  The gamblers are scampering around the casino fixing to buy the dip as soon as white smoke wafts from the Eccles Building.  But none is coming. For the first time in 25 years, the Wall Street gamblers are home alone.

This commentary by David Stockman appeared on his Internet site yesterday---and Roy Stephens sent it to me in the wee hours of this morning.  It's a longish read, but well worth it if you have the time.

Americans face post-foreclosure hell as wages garnished, assets seized

Many thousands of Americans who lost their homes in the housing bust, but have since begun to rebuild their finances, are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets.

By now, banks have usually sold the houses. But the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees. The two big government-controlled housing finance companies, Fannie Mae and Freddie Mac, as well as other mortgage players, are increasingly pressing borrowers to pay whatever they still owe on mortgages they defaulted on years ago.

Using a legal tool known as a "deficiency judgment," lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come. Before the housing bubble, banks often refrained from seeking deficiency judgments, which were seen as costly and an invitation for bad publicity. Some of the biggest banks still feel that way.

But the housing crisis saddled lenders with more than $1 trillion of foreclosed loans, leading to unprecedented losses. Now, at least some large lenders want their money back, and they figure it’s the perfect time to pursue borrowers: many of those who went through foreclosure have gotten new jobs, paid off old debts and even, in some cases, bought new homes.

This Reuters story, filed from New York, showed up on their website at 3:35 a.m. EDT on Tuesday---and I thank reader 'h c' for sending it along.

Citigroup to Exit Retail Banking in 11 Markets

Citigroup customers across Central America and parts of Eastern Europe will be looking for a new place to bank next year.

Citigroup said Tuesday that it will bow out of the retail banking business in 11 markets, part of its ongoing effort since the financial crisis to restructure and slim down. The news came as the bank announced third-quarter earnings.

Citi said the impact would primarily be smaller countries in Latin America: Costa Rica, El Salvador, Guatemala, Nicaragua, Panama and Peru. It will also exit consumer banking in Egypt, Japan, the Czech Republic, Hungary and Guam.

The bank is exiting those areas to focus on market share and growth potential in places where it believes it can be competitive, Citigroup CEO Michael Corbat said in a statement. It will still have institutional banking operations in these areas.

This AP story appeared on the abcnews.go.com Internet site at 3:00 p.m. EDT on Tuesday---and I thank West Virginia reader Elliot Simon for finding it for us.

Too-Big-to-Fail Banks Face Up to $870 Billion Capital Gap

Too big to fail is likely to prove a costly epithet for the world’s biggest banks as regulators demand they increase holdings of debt securities to cover losses should they collapse.

The shortfall facing lenders from JPMorgan Chase & Co. to HSBC Holdings Plc could be as much as $870 billion, according to estimates from AllianceBernstein Ltd., or as little as $237 billion forecast by Barclays Plc.

The range is so wide because proposals from the Basel-based Financial Stability Board outline various possibilities for the amount lenders need to have available as a portion of risk-weighted assets. With those holdings in excess of $21 trillion at the lenders most directly affected, small changes to assumptions translate into big numbers.

This Bloomberg article, filed from London, showed up on their website in the wee hours of yesterday morning MDT---and its another contribution from reader U.M. It's definitely worth your time.

Richest 1% own 50 percent of world wealth - Credit Suisse report

World wealth has reached a record $263 trillion but is concentrated in fewer hands. The richest 1 percent have accumulated more wealth, and own almost 50 percent of it, which could trigger recession, according to a new report by Credit Suisse.

The Credit Suisse Global Wealth Report, released Tuesday warns that the “abnormally high wealth income ratios” may spark a recession, as high disparity leads to economic friction.

Global wealth has grown to a record $263 trillion in mid-2014, $20.1 trillion more, and an 8.3 percent increase, over mid-2013. Household wealth has more than doubled since 2000, when the same report calculated it at $117 trillion.

Leading the money trail is the United States, dubbed 'Land of Fortunes' by the report, which again boasts the highest average wealth. It is home to 34.7 percent ($91 trillion) of global wealth. Europe’s portion comes in a close second with 32.4 percent, followed by India and China’s 23.7 percent share, and then the 18.9 percent concentrated in the Asia-Pacific region.

This rather short story appeared on the Russia Today website at 2:36 p.m. yesterday afternoon Moscow time, which was 6:36 a.m. EDT in New York.  I thank Harry Grant for sending it along in the wee hours of this morning.  It's worth skimming---and the embedded chart is certainly worth a look, even if you don't want to read the whole thing.

Sprott Money Weekly Wrap Up

Jeff Rutherford interviews Eric Sprott---and he shares his views on the European and U.S. economy, the Ebola outbreak, and the set-up in the precious metals market.

It runs for 7:59 minutes---and it was posted on the sprottmoney.com Internet site on Monday.

Economics Nobel laureate tells France to 'downsize the state'

Speaking on FRANCE 24, French economist Jean Tirole advocated Scandinavian-style labour market policies and government reform as a way of preserving France’s social model.

Hours after he won the economics Nobel Prize, Tirole said he felt “sad” the French economy was experiencing difficulties despite having “a lot of assets”.

“We haven’t succeeded in France to undertake the labour market reforms that are similar to those in Germany, Scandinavia and so on,” he said in telephone interview from the French city of Toulouse, where he teaches.

France is plagued by record unemployment and Tirole described the French job market as “catastrophic” earlier on Monday, arguing that the excessive protection for employees had frozen the country’s job market.

This article showed up on the france24.com Internet site on Monday---and I thank South African reader B.V. for digging it up for us.

France Tells Brussels 'Bullies' "Non! Non! Non!", Won't Change Treaty-Busting Budget

Having noted last week of the rising tensions between the French (pushing forward with plans for a budget deficit that far exceeds E.U. Treaty rules) and Germany (letting a Frenchman run E.U.'s finances is "an unwise personnel decision") and Brussels (planning to reject the French budget); it seems the French are unimpressed. As Les Echos reports, French finance minister Michel Sapin has proclaimed he won't change the budget, arguing that the EU commission has no power to reject a budget as sovereignty belongs to France's parliament... fighting words for a 'union'! In addition, the E.U. is now planning to reject Italy's budget, due to its "serious violation" of E.U. rules.

Italy is now up for rejection:

  • ITALY BUDGET PLANS LIKELY TO BE SEEN AS "SERIOUS VIOLATION" OF EU RULES AND REJECTED BY COMMISSION - EU SOURCE

As France previously did, but is now fighting back---as Bloomberg reports---

The E.U. Commission has no power to reject a budget as sovereignty belongs to France’s parliament, Finance Minister Michel Sapin says in an interview with Les Echos.

France will give nature and calender of planned structural reforms very soon, Sapin says in the Interview.

When Italy and France both give the 'driver's salute' to Brussels, you just know that there's big trouble in River City.  This Zero Hedge piece appeared on their website at 2:33 p.m. EDT yesterday---and it's worth skimming.  I thank reader 'David in California' for sending it our way.

E.U. risks €40bn hemorrhage from Russia sanctions in 2014 – Foreign Minister

Economies across the European Union will lose about €40 billion this year, with the damage estimated to widen to €50 billion in 2015, Russia’s Foreign Minister Sergey Lavrov said, citing figures from the EU itself.

There are so far no exact figures for the damage incurred, but the European Union has made some preliminary estimates and said the damage could be as high as €40 billion this year, Sergey Lavrov said.

The Foreign Minister was addressing a group of business leaders at the Association of European Businesses, a Moscow-based lobby group that represents the interests of more than 600 European companies in Russia.

This story showed up on the Russia Today website at 7:53 a.m. Moscow time on their Tuesday morning, which was minutes before midnight in New York on their Monday evening.  I thank reader 'h c' for his second offering in today's column.

E.U. to Consider Lifting Sanctions on Russia This Month: Diplomat

European Union member states will discuss the lifting of sanctions against Russia in late October, the head of European Union's delegation in Russia, Vygaudas Usackas said Tuesday.

"The sanctions will be reviewed in the end of this month, it depends on progress and how the situation stabilizes, [as well as on] troop withdrawal and border control. On the basis of these results we will make our decision on possible partial or full removal of sanctions," Usackas told reporters.

On September 5, representatives of Kiev and southeastern Ukraine's independence leaders reached a ceasefire deal at a meeting of the Contact Group on Ukraine, also comprising Russia and the Organization for Security and Cooperation (OSCE) in Europe. The Group's next meeting in Minsk on September 19 resulted in signing of a memorandum outlining steps for ceasefire implementation.

Among other points, Minsk memorandum specified that all the foreign armed groups, military equipment, as well as fighters and mercenaries shall withdraw from the Ukrainian territory under the supervision of the OSCE. Border demarcation between the Ukrainian forces and eastern Ukraine independence supporters would also pass along the line of contact of September 19.

This RIA Novosti story put in an appearance on their website at 12:45 p.m. Moscow time on their Tuesday afternoon---and it's worth reading.  My thanks go out to reader M.A. for finding this for us.

Meanwhile in Kiev...

Not satisfied with fighting pro-Russian separatists, Ukrainians are fighting among themselves in Kiev.

As Russia Today reports, Kiev police deployed additional forces around the parliament building after a group of demonstrators started throwing smoke bombs and firecrackers at guards in an apparent reprisal over MPs' failure to honor past nationalists.

More than 15 officers have been hurt as far-right protesters clash with riot police at the government buildings on the anniversary of UPA (Ukrainian Insurgent Army). Perhaps more troubling is, if this is the internal tension now, how bad will it get in the winter when they are freezing as Ukraine says it won't prepay for Russian gas.

This Zero Hedge story, with lots of photos and videos embedded, showed up on their website at 9:36 a.m. EDT Tuesday morning---and it's another item from reader M.A.

Kerry: U.S., Russia to Intensify Intelligence Cooperation Against Islamic State

The United States and Russia agreed to strengthen intelligence exchanges related to the fight against the Islamic State and other terrorist organizations in the Middle East and Central Asia, US Secretary of State John Kerry said Tuesday.

The United States and Russia can overcome their differences on Ukraine and cooperate in the fight against Islamic State (IS) militants in Iraq and Syria, Kerry said.

“In our discussions today I suggested to minister Lavrov that we intensify intelligence cooperation with respect to ISIL and other counter-terrorism intelligence in the region and we agreed to do so," Kerry told reporters in Paris following talks with Russian Foreign Minister Sergei Lavrov.

"We also agreed to explore whether Russia could do more to support Iraqi security forces, and the foreign minister indeed acknowledged their preparedness to help with respect to arms, weapons … and also potentially with the training and advising aspects."

This RIA Novosti article, filed from Paris, appeared on their Internet site at 10:18 p.m. EDT on their Tuesday evening---and I thank reader M.A. for his third contribution in a row.

Saudis Deploy the Oil Price Weapon Against Syria, Iran, Russia, and the U.S.

Asian stock markets continued to fall today, propelled at least in part by the adverse reaction to the Saudi announcement yesterday that they would let oil prices fall to $80 a barrel. And further reports indicate that the Saudis intend to keep oil prices low enough to force a realignment of prices not just among various grades of crude, but also for intermediate and long-term substitutes.

It is critical to remember that the Saudis have no compunction about imposing costs on other nations to maximize the value of their oil resource long term and hence the power they derive from it. The 1970s oil shock produced a nasty recession in the US and most other advanced economies and gave a further impetus to inflation, which was already hard to manage and dampened growth by discouraging investment.

The current alignment of factors gives the Saudis the opportunity to make life miserable for a long list of parties they would like to discipline, including the US.

The sharp rise in the dollar means that lowering the price of oil in dollar terms is unlikely to leave the desert kingdom worse off in local currency terms. But it undermines US energy development, both fracking and development in the Bakken, as well as more development by the majors, who were regularly criticized by analysts for how much they were spending on exploration when the math didn’t pencil out well at over $100 a barrel. Countries whose oil is output is mainly heavy, sour crude, like Iran and Venezuela, find it hard to sell their oil when prices are below $100 a barrel (or at least when the dollar was weaker, but the $80 price point, even with a strong dollar, may be low enough to cause discomfort).

In other words, this is a classic case of predatory pricing: set your price low enough long enough to do real damage to competitors, and reduce their market share, not just immediately, but in the middle to long term.

This amazing commentary appeared on the nakedcapitalism.com Internet site yesterday---and it falls into the absolute must read category.  My thanks got out to reader U.M. for bringing it to our attention.

Ebola Vaccine Available for Mass Use in Summer 2015 at Earliest: WHO

The Ebola vaccine will be available for mass use in summer 2015 at the earliest, the assistant director general of the World Health organization (WHO) told RIA Novosti on Tuesday.

"I think by January we will be able of doing larger scale studies with this thing. But in terms of large scale use, no, not until middle of the next year. That's our target," Bruce Aylward said, answering a question on when an Ebola vaccine would be ready for mass use.

Earlier the WHO said that the first anti-Ebola vaccine could be available as early as November 2014 and would first be given to the health care workers most at risk of exposure to the disease. The vaccine had been expected to become available for mass use early in 2015.The organization said that the Canadian VSV-EBOV vaccine and the ChAd-EBO vaccine developed by the British GlaxoSmithKlein are the most promising counters to Ebola.

The Ebola virus is transmitted through direct contact with the bodily fluids of the infected. There is no officially approved medication for the disease, but several countries are currently working on developing Ebola vaccines, with Russia planning to introduce three vaccines within the next six months.

Filed from Geneva, the above four paragraphs are all there is to this brief article from the RIA Novosti website. It was posted there at 9:34 p.m. Moscow time yesterday evening---and it's courtesy of reader M.A. once again.

Ebola Fears Sends Price Volatility Surging in...Chocolate

The world's candy-makers are worried.

As Politico reports, Ivory Coast, the world’s largest producer of cacao, the raw ingredient in all your favorite candy, has shut down its borders with Liberia and Guinea, putting a major crimp on the workforce needed to pick the beans that end up in chocolate bars.

While Ivory Coast (which produces around a third of the world's total cacao beans) has yet to see a single case of Ebola yet, the price of Cocoa futures has become extremely volatile in recent weeks breaking notably higher than its normal range between $2,000 and $2,700 per tonne. Simply put - and not wanting to spread panic and fear - Ebola is threatening much of the world's chocolate supply.

This very interesting news item put in an appearance on the Zero Hedge website at 8:06 a.m. EDT on Tuesday morning---and it's courtesy of reader M.A. once again.

Silver price-fixing lawsuits consolidated in Manhattan federal court

Litigation alleging that Deutsche Bank, Bank of Nova Scotia, and HSBC illegally fixed the price of silver has been centralized in Manhattan federal court.

Lawsuits filed by investors since July over the alleged price-fixing were consolidated on Tuesday in the U.S. District Court for the Southern District of New York, following an order issued last Thursday by the U.S. Judicial Panel on Multidistrict Litigation, a special body of federal judges that decides when and where to consolidate related lawsuits.

The panel ruled that the cases should be handled by U.S. District Judge Valerie Caproni in Manhattan, who is already overseeing similar litigation over alleged gold price-fixing.

This Reuters story appeared on their Internet site at 2:26 p.m. EDT on Tuesday afternoon---and I found it over at the gata.org Internet site.

Fighting back, First Majestic delays sale of silver amid price weakness

Ninety-nine point nine percent of gold and silver mining companies and their executives are brain-dead, merely geologists and accountants, unaware of the monetary nature of their product and how their product is priced by surreptitious market intervention by central banks. But here and there certain companies and their executives have a clue, and First Majestic Silver Corp. today again proclaimed itself to have far more than a clue.

First Majestic announced that it won't sell its metal into the recent weakness in the silver futures markets. In a statement the company said:

"Silver prices declined 19 percent in the third quarter, representing the second largest quarterly decline since the financial crisis in 2008. As a result of this weakness, the company decided to temporarily suspend silver sales in an attempt to maximize future profits. This suspension of sales will result in lower revenues and earnings for the third quarter. However, it is likely that these inventories of unsold ounces will instead be sold in the fourth quarter. As of September 30, 2014, approximately 934,000 ounces of silver were held in inventory."

CEO Keith Neumeyer and his company First Majestic Silver, not being a member of The Silver Institute, can do what he wants---not like the other bought and paid for companies that are listed as members.  I'm a shareholder in this company---and have been for almost as long as it has been around.  I applaud this move---and so should you, as it takes real courage to lead in times like this.  I just hope that there's no surprise blowback from left field in the near future.  This GATA release is definitely worth reading.

Mark O'Byrne: Swiss Gold Referendum “Propaganda War” Begins

The referendum for the Swiss Gold Initiative is scheduled for November 30th and the propaganda war - between the Swiss National Bank (SNB) and the Swiss Parliament on one side and the Swiss People's Party (SVP) on the other - has begun and we expect it to escalate  as the day draws nearer.

The SNB, who oppose the initiative, has warned that a 'yes' vote would severely hamper the ability of the central bank to conduct its business. A proposal that the SNB should hold a fifth of its assets in gold and be prohibited from selling the precious metal in the future would severely restrict its ability to conduct monetary policy, Vice President, Jean-Pierre Danthine, told the Wall Street Journal. 

The gold referendum was proposed by the SVP and backed by the necessary 100,000 signatures required the put an issue to referendum in Switzerland. The SVP is one of the largest political parties in Switzerland. The party is the largest party in the Swiss Federal Assembly, with 54 members of the National Council and 5 of the Council of States.

This indicates a degree of popular support for the measure and all eyes are on November 30th. If the referendum is passed, it would result in the following---

This Tuesday commentary by Mark was posted on the goldcore.com Internet site yesterday morning BST---and is worth your time.  I thank reader M.A. for sending it our way.

Gold stubs Swiss National Bank's toe, and the Financial Times says 'ouch!'

On its own hook this Financial Times "news" story accuses the Swiss gold initiative of "absurdities," mockery the newspaper has yet to hurl against central banks even as they intervene openly in every market and resort to "negative interest rates."  Yes, in the FT's view only gold as money can be "absurd." And largely surreptitious control of the valuation of all capital, labor, goods, and services in the world by an unelected, supra-national elite isn't totalitarian -- it's good government! Central banking, heil!

This must read story appeared on the Financial Times website yesterday---and is posted in the clear in this GATA release.  The actual headline to the story reads "Swiss Fight to Block Public Gold Vote".

Labour strife, safety concerns push South Africa platinum mechanisation

For decades, production in South Africa's platinum mines has rested on the muscular shoulders of men risking life and limb to drill into the rock face with jackhammers.

Three years of labour upheaval and a political push to make the shafts safer and transform the low-wage workforce have set in motion a drive to replace such rock drillers with machines.

"Labour militancy is dictating our push to mechanization and boardrooms will rubber stamp this stuff," said Peter Major, a fund manager at Cadiz Corporate Solutions.

The costly change is happening despite the obstacles thrown by geology, low platinum prices and capital constraints.

This interesting Reuters story, filed from Rustenburg, South Africa, was reposted on the South African Internet site sharenet.co.za at 11:32 a.m. SAST on their Tuesday morning.  It's courtesy of South African reader B.V.

South Africa's gold CEOs ready for mergers as prices decline

South Africa’s gold miners are ready for mergers and acquisitions as the falling price of bullion forces companies to cut costs and repay debt.

“Maybe there’s some smart consolidation that can take place on a regional basis,” Sibanye Gold Ltd. Chief Executive Officer Neal Froneman said last week. “I think there will be. I think it’s the right time. I think it’s necessary. I don’t think my counterparts in the industry are on completely different pages either.” The company is the country’s biggest producer of the metal.

Gold’s 27 percent drop since the start of last year has prompted executives to consider deals as a way of cutting costs in South Africa’s aging mines and insulating investors from risks such as labor strikes in the country that’s the world’s sixth-biggest producer of the metal. AngloGold Ashanti Ltd. failed in its attempt last month to split its local mines from its international operations only because investors balked at the accompanying $2.1 billion share sale.

“We’re probably a good target right now,” Graham Briggs, CEO of Harmony Gold Mining Co., South Africa’s third-largest bullion producer, said in an interview last week. “A low share price, we’re fairly good with our cost control. If we had bigger management fees to take out it would be even more of an advantage. We have low debt.”

No gonads here.  They all know that the precious metal prices are managed, but won't say a word---and rather go under then speak the truth.  This Bloomberg article, filed from Johannesburg, appeared on their website at 2:25 a.m. MDT yesterday morning---and it's another story I found on that gata.org Internet site.

World's top 10 silver producers updated – companies & countries

While it has always been relatively easy to collate the world’s top 10 gold miners because they are all primary producers, to do the same for silver is not nearly such an easy task as most of the world’s silver is produced as a by- or co-product of gold and base metals mining. Thus in the table of the top 10 global silver producers shown below only four could be classified as primary silver miners – and virtually all those will, in any case, also be producing other metals – notably gold, lead and zinc – as very significant by products without which they would perhaps not be profitable mining companies.

What this tends to mean is that global silver output is not for the most part wholly dependent on the silver price, but is more likely to rise and fall with the fortunes of the base metals miners, and to a lesser extent the gold miners, implying that output is much more subject to global industrial demand than is gold alone which tends to plough its own furrow. 

In its latest analysis of the global silver market, UK specialist consultancy Metals Focus sees silver output continuing to rise, mainly through recent primary silver mine openings, although by only a small annual percentage and suggests that demand may increase at a more rapid rate keeping silver in supply deficit.

This commentary by Lawrie Williams put in an appearance on the mineweb.com Internet site yesterday---and it's courtesy of reader U.M. once again.  It's definitely worth reading.

Lawrence Williams: Expect big silver price surge if gold stays positive

What a difference 10 days makes. A little over a week ago the gold market was all doom and gloom with the yellow metal crashing back below $1200 an ounce. But with a few extraneous geopolitical and global health factors positively impacting the market, and the possibility of a general stock market crash in the minds of investors, gold has seen positive action on the price front in something of a safe haven turnaround. But silver, on the other hand, has hardly moved at all. Compare the 30-day kitco gold and silver charts below – courtesy kitco.com and kitcosilver.com .

Historically, silver prices have sharply outperformed gold when precious metals prices are rising, and sharply underperformed when they are falling yet this pattern on the upside has just not yet started to appear. But if the recent gold price rise isn’t just a blip then we would expect silver to start to move upwards – and move upwards fast.

After all, as we pointed out in our recent article looking at silver supply and demand – see: Silver in supply deficit but price unmoved so far there is no big surplus of silver coming to the market although admittedly there have been some strange movements in and out of the big silver ETFs which could affect short term supplies.

Most recently perhaps the most respected silver analyst, Ted Butler, who scrutinises such matters more closely than anyone else, commented “There was some unusual activity in the big silver ETF, SLV, this week as 4 million oz were withdrawn. I say unusual because deposits into and withdrawals from SLV have been somewhat counterintuitive recently, namely, deposits have come on price weakness and withdrawals on (relative) price strength. One would normally expect the opposite to occur.”

The silver price will rise when JPMorgan et al are instructed to let it happen---and not before.  This commentary by Lawrie appeared on the mineweb.com Internet site yesterday---and it's worth reading as well.

1,000-year old Viking treasure hoard found in Scotland

A hoard of Viking gold and silver artifacts dating back over 1,000 years has been discovered by a treasure hunter with a metal detector in Scotland, in a find hailed by experts as one of the country's most significant.

Derek McLennan, a retired businessman, uncovered the 100 items in a field in Dumfriesshire, southwest Scotland, in September.

Amongst the objects is a solid silver cross thought to date from the 9th or 10th century, a silver pot of west European origin, which is likely to have already been 100 years old when it was buried and several gold objects.

"Experts have begun to examine the finds, but it is already clear that this is one of the most significant Viking hoards ever discovered in Scotland," Scotland's Treasure Trove unit said in a statement.

This very interesting Reuters story, filed from London, appeared on their website at 7:14 a.m. EDT on Monday---and I thank Manitoba reader U.M. for today's last story---and her final contribution to today's column.

¤ The Funnies

¤ The Wrap

One thing I’ve been meaning to report on is the movement in other silver ETFs, such as SIVR and the Swiss ZKB. Over the past month, more than 11 million oz of silver have been withdrawn from these two ETFs alone, despite an overall growth in total silver holdings in all visible sources. To me, this is further proof of increased physical turnover in silver pointing to wholesale tightness. Total visible world silver holdings are near the record 900 million oz level, which is mirrored in the holdings of SLV which are up 10% for the year and within 5% of the record highs of early 2011.

In stark contrast, world ETF and exchange holdings of gold are down more than 30% since the beginning of 2013 and holdings in the big gold ETF, GLD, are still down more than 40% from the start of 2013---and at five year lows. Since the world has added, thru mining, more than 400 million oz of gold over the past five years, it’s certainly not the case that we have less gold in the world than we had five years ago; it’s just that investment holdings in gold ETFs are lower. - Silver analyst Ted Butler: 11 October 2014

As I sort of expected based on the price/volume during the first couple of hours of London trading yesterday morning, the rest of the day didn't amount to much.  But in some respects that's not a fair statement to make, as the rallies in gold and silver that began around the noon London silver fix, got snuffed out the moment that trading began in New York at 8:20 a.m. EDT.  So it's not possible to tell how well they would have really done if the not-for-profit sellers hadn't put in an appearance when they did.

Here are the 6-month charts for the 'Big 6' critical commodities.  You'll note that West Texas Intermediate hit a new low for this move down---and I would bet that a good chunk of that decline was the technical funds putting on new short positions.  Hopefully Friday's Commitment of Traders Report will tell us more.

And as I write paragraph, the London open is about 25 minutes away.  All four precious metals came under selling pressure during the Far East trading session, but all are off their current low price ticks.  Net gold volume is already around 24,000 contracts---and silver's net volume, is just over 5,900 contracts.  The dollar index, which managed to make it just above the 86.00 mark during mid-morning trading in the Far East, has now eased back a bit---and is basically unchanged at the moment.

As I mentioned in passing in a previous paragraph, yesterday, at the close of Comex trading, was the cut-off for this Friday's Commitment of Traders Report.  Just eye-balling the above charts, if there is any major deterioration in the Commercial net short positions in the six commodities above, it will be most obvious in gold and copper, as those are the only two that have had net price gains during the reporting week.

And as I send today's column off into cyberspace at 4:55 a.m. EDT, I see that the HFT boyz and their algorithms have been busy in all four precious metals---and only platinum, for the moment, hasn't hit a new low during early London trading.  Gold volume is now 38,000 contracts---and silver's volume is right at the 13,000 contract mark.  The dollar index is now down a couple of basis points on the day.

It's obvious that JPMorgan et al aren't about to let up on the precious metals at the moment---and with today's aggressive engineered price declines in progress, nothing will surprise me when I check the charts later this morning.

I'm off to bed---and I'll see you here tomorrow.

]]>
Wed, 15 Oct 2014 06:24:00 +0000
<![CDATA[China Now Takes Nearly All World Gold Production, Shanghai Exchange Chief Confirms]]> http://www.caseyresearch.com/gsd/edition/china-now-takes-nearly-all-world-gold-production-shanghai-exchange-chief-co/ http://www.caseyresearch.com/gsd/edition/china-now-takes-nearly-all-world-gold-production-shanghai-exchange-chief-co/#When:06:22:00Z "I wasn't overly surprised to see the sellers of last resort show up in force"

¤ Yesterday In Gold & Silver

The gold price rallied the moment that trading began at 6 p.m. EDT on Sunday night in New York, but it was immediately apparent that there was a willing seller laying in wait, as volume blew out right away.  The Far East high came about fifteen minutes before the London open at around 2:45 p.m. Hong Kong time.  From there, it was down hill into the noon London silver fix.  The gold price rallied anew at that point---and showed real signs of life starting at exactly 1 p.m. EDT.  It rallied without a break, past the 1:30 p.m. EDT Comex close---and through all of electronic trading---and closed on its high tick at 5:15 p.m. in New York.

The low and high of the day were recorded by the CME Group as $1,223.60 and $1,238.00 in the December contract.

Gold finished the Monday session at $1,237.10 spot, up $14.10 from Friday's close.  Volume was only 113,000 contracts, but around 40 percent of that volume came before the 10:30 a.m. BST London morning gold fix.

Silver didn't do much of anything on Monday, but a more correct way of putting it would be that silver wasn't allowed to do much.  The high tick of the day came shortly before 2 p.m. Hong Kong time---and would have blasted off from there if allowed to do so, which it wasn't.  The low came at 1 p.m. EDT and, like gold, rallied from there into the close of electronic trading.

The low and high were reported as $17.28 and $17.68 in the December contract, an intraday move of more than 2 percent.

Silver was closed at $17.50 spot, up 10.5 cents from Friday.  Volume was only 27,500 contracts, but more than half of that was traded by the London a.m. gold fix.

Platinum's opening rally on Sunday night in New York got hammered to a standstill as well, with the high tick coming at  8 a.m. on the button Hong Kong time.  It traded flat from there until an hour before the London open--and then down it went, hitting its low tick shortly after 9 a.m. EDT in New York.  It rallied ten bucks from there, before chopping sideways for the remainder of the Monday trading session. Platinum closed up 8 bucks.

The palladium trading day was a mini version of platinum's chart.  The low tick came at 10:30 a.m. EDT in New York---and the metal rallied back above unchanged to close up 2 dollars on the day.

The dollar index closed late on Friday afternoon in New York at 85.85---and then headed lower the moment that trading got under way at 6 p.m. EDT on Sunday evening.  The 85.41 Far East low came around 8 a.m. Hong Kong time---and then it rallied a bit into the 8:00 a.m. BST London open---and began to weaken from there, before starting to head lower with some authority around 3 p.m. EDT.  The low tick of 85.09 came minutes after 5 p.m.---and less than 15 minutes before the precious metal market closed in New York.  From that day's low, the index rallied a handful of basis points into the close.  The dollar index finished the Monday session at 85.22---down a chunky 63 basis points from Friday's close.

The gold stocks gapped up a couple of percent at the open--and then began to climb higher starting at 10:30 a.m. EDT.  The stocks were up 5 percent at their highs, but got unceremoniously sold off starting just before 3:00 p.m EDT.  The HUI manged to finish up only 1.94% on the day.

The silver equities followed a similar path, as Nick Laird's Intraday Silver Sentiment Index closed up 1.90%.

The CME Daily Delivery Report showed that zero gold and 21 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.   October is not a normal delivery month for either metal, so these low delivery numbers, or lack of them, is not a surprise.

The CME Preliminary Report for the Monday trading session showed that another 77 gold contracts disappeared from the October contract---and that number is now down to 1,057 contracts still open.  October open interest for silver is now up 10 contracts to 194 outstanding.

For a change, there was a deposit in GLD yesterday, as an authorized participant added 57,685 troy ounces.   But over at SLV, another 1,150,471 troy ounces were reported withdrawn.

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

There was very little activity in gold at the Comex-approved depository on Friday, as only 3,200 troy ounces were reported shipped out.

In silver, there was 585,986 troy ounces reported received---and 88,177 troy ounces were shipped out the door.  All the silver received was deposited at JPMorgan Chase.  From zero ounces on May 1, 2011---the day of the drive-by shooting in silver---JPMorgan is now the tallest silver hog at the Comex-approved depository trough, with 48,296,488 troy ounces of the stuff.  The link to that activity is here.

While I'm on the subject of the Comex-approved depositories  Here are a couple of charts that Nick Laird sent our way on Sunday.  These 2-year charts show the total Eligible and Registered gold and silver stock held by all these same depositories.

And still on the subject of Comex depositories.  I mentioned that JPMorgan had gone from 'zero to hero' since May 1, 2011.  Here's the chart showing the miraculous rise.

Another 'zero to hero' depository is CNT, which came out of nowhere in late August 2012.

Between these two depositories, they have taken in 76 million ounces of silver since their respective inceptions---and I've always wondered why they suddenly appeared out of nowhere when they did.

I have a decent number of stories for a Tuesday, so I hope you have the time to read the ones that interest you.

¤ Critical Reads

This Is What Happens When Someone Is Desperate To Sell $750 Million Of Stocks

At 3:32 p.m. EDT on Monday (Columbus Day - with half the market absent), someone - apparently having waited to see if the almost 'ubiquitous' 330pm Ramp would occur - decided it was time to dump three-quarters of a billion dollars notional of U.S. equity market exposure in 1 second. The results of this forced liquidation (or utter disregard for fiduciary duty) were as follows...

A complete collapse of all liquidity in the S&P 500 e-mini futures contract - the world's most liquid equity exposure vehicle.

This Zero Hedge story from yesterday, complete with lots of charts, was posted on their Internet site at 6:22 p.m EDT---and I thank reader U.D. for passing it around.  It's worth reading.

Faber: The global economy is not healing

This 10:38 minute Fox News video clip with Marc showed up on their Internet site last Thursday---and I thank reader Ken Hurt for sharing it with us.

Banks accept derivatives rule change to end 'too big to fail' scenario

The $700 trillion financial derivatives industry has agreed to a fundamental rule change from January to help regulators to wind down failed banks without destabilising markets.

The International Swaps and Derivatives Association (ISDA) and 18 major banks that dominate the market will now allow financial watchdogs to apply temporary stays to prevent a rush to close derivatives contracts if a bank runs into trouble, the ISDA said on Saturday.

A delay would give regulators time to ensure that critical parts of a bank, such as customer accounts, continue smoothly while the rest is wound down or sold off in an orderly way. ...

Under the new contract terms, default clauses in derivatives contracts such as interest rate or credit default swaps would be suspended for a maximum of 48 hours.

I posted a story about this in Friday's column, I believe---but this Reuters piece, filed from London, adds more clarity---and I found it in a GATA release on Saturday.

World leaders play war games as the next financial crisis looms

Press the uniform. Check the battle plans. Call up the reservists. Arm the bombers and refuel the tanks. Field Marshal George Osborne is going on manoeuvres.

On Monday in Washington, the chancellor of the exchequer will see if Britain is ready for war. A financial war that is. Along with his allies from the United States, he will play out a war game designed to show whether lessons have been learned from the last show, the slump of 2008.

Like all commanding officers, Osborne thinks he is ready. He will have general Mark Carney at his side. He has studied the terrain. He has a plan that he insists will work.

Let’s hope so. Because the evidence from last week’s meeting of the International Monetary Fund in Washington was that it won’t be long before the real shooting starts. The Fund’s annual meeting was like a gathering of international diplomats at the League of Nations in the 1930s. Those attending were desperate to avoid another war but were unsure how to do so. They can see dark forces gathering but lack the weapons or the will to tackle them effectively. There is an uneasy, brooding peace as the world waits to see whether lessons really have been learned or whether the central bankers, the finance ministers and the international bureaucrats are fighting the last war.

Only a real scare, as with Ebola, will lead to meaningful action. Until then, though, the Fund can sit behind its Maginot Line---and Field Marshal Osborne can play his war games. But be in no doubt: our chancellor is less Monty in the desert, than Neville Chamberlain declaring peace in our time.

That's the best put-down I've seen in years!  However, it sums up the situation perfectly.  This commentary by The Guardian's economic editor, Larry Elliott, easily falls in the the must read category---and I thank reader 'h c' for sending it along.

James Rickards: Next Crash Exponentially Larger than Any Financial Panic in History

James Rickards, best-selling author of “The Death of Money,” says a huge financial panic is a mathematical certainty. Rickards explains, “It is a mathematical certainty, but I can take it further . . . what you don’t hear is this will be exponentially larger than any financial panic in the past."

"The next time, the Fed is going to be in trouble. They are already insolvent on a mark- to-market basis. Each bailout gets much bigger than the one before. The Fed has a 10-foot seawall, and they are going to get hit with a 50-foot tsunami.”

This 31:37 minute video interview with Jim appeared on the youtube.com Internet site on Sunday sometime---and it is, as always, courtesy of reader Harold Jacobsen.   I've watched it from start to finish---and it's definitely worth your time.

Snowden Vindicated—'Citizenfour' Documentary Untangles the NSA Leak Saga

Citizenfour must have been a maddening documentary to film. Its subject is pervasive global surveillance, an enveloping digital act that spreads without visibility, so its scenes unfold in courtrooms, hearing chambers and hotels. Yet the virtuosity of Laura Poitras, its director and architect, makes its 114 minutes crackle with the nervous energy of revelation.

Poitras, the first journalist contacted by National Security Agency whistleblower Edward Snowden, mirrors her topic. She rarely appears on news programs or chat shows. She is a mysterious character in her own movie, heard more than she is seen.

But surreptitiously, Poitras has been a commander of a stream of disclosures for 16 months that have forced the NSA into a new and infamous era. Citizenfour demonstrates to the public the prowess that those of us who have worked with her on the NSA stories encountered. Her movie, the culmination of a post-9/11 trilogy that spans a dark horizon from Iraq to Guantánamo, is a triumph of journalism and a triumph for journalism.

At its heart, Citizenfour is the story of how Snowden’s disclosures unfolded through Poitras’ eyes, from the first communications Snowden sends Poitras, hinting at what is to come, until Snowden sees himself vindicated through emulation.  Citizenfour opens in U.S. cinemas on 24 October.

This film review, originally posted in The Guardian, showed up on the alternet.org Internet site on Saturday---and it's the first contribution of the day from Roy Stephens.

S&P lowers France’s credit outlook to 'Negative'

S&P maintained France’s rating at “AA” – two notches below the firm’s highest investment grade. But the lowered outlook indicates the rating could be downgraded sometime in the next two years if France’s economy deteriorates, the firm said.

The French economy may run into trouble because the government may not be able to implement reforms need to spur growth, S&P said.

The firm lowered its projections for France’s economic growth over the next three years and predicted that government deficits will take up a larger portion of the country’s gross domestic product.

This short AP story found a home over at the france24.com Internet site on Saturday---and my thanks go out to Orlando, Florida reader Dennis Mong.

Draghi The Dictator: "Working With the Germans is Impossible"

The war of words between Europe's unelected monetary-policy dictator Mario Draghi and Germany's "but it's us that pays for all this" Bundesbank has been gaining momentum since Jens Weidmann penned his Op-Ed slamming Draghi's OMT 'whatever it takes' as "too close to state financing" in 2012.

A week ago, Weidmann stepped up the rhetoric by claiming ECB policy is "hostage to politics" and has lost its independence - warning Draghi's dictatorial policies were leading Europe down a "dangerous path."

But now, as pressure grows from the Spanish (record unemployment, record bad debt, record low yields), Italian (record unemployment, record debt-to-GDP, record low yields) and French (record unemployment, treaty-busting-deficits, record low yields) for Draghi to monetize more assets, he has struck back in Focus magazine, blasting Weidmann is "impossible" to work with because the Germans "say no to everything." Dis-union...

In other words, the Germans won;t let me do what I want - so I'm going to ignore them... this leaves the Germans with few options - none of them 'good' for a European Union.

This short Zero Hedge commentary, which is worth skimming, appeared on their website at 12:44 p.m. EDT last Friday afternoon---and it's the first of many offerings today from Manitoba reader U.M.

Ditch euro, defend Italy’s sovereignty!’ Eurosceptic leader calls for referendum

The leader of an influential Italian Eurosceptic political party, the Five Star Movement (M5S), says he will collect one million signatures required to petition the Parliament to conduct a referendum on Italy leaving the Eurozone as soon as possible.

The Italian government is not effective in restoring jobs and helping people, said Beppe Grillo, the leader of Italy's anti-establishment M5S, which burst onto the political scene last year winning 25 percent of the vote in its first parliamentary election in 2013.

“Leave the euro and defend the sovereignty of the Italian people from the European Central Bank,” Grillo told his supporters at a M5S event in Rome.

“We have to leave the euro as soon as possible,” he said. “We will collect one million signatures in six months and bring them to the Parliament to ask for a referendum to express our opinion.”

This article appeared on the Russia Today website at 1:56 a.m. Moscow time on their Sunday morning---and it's courtesy of reader Harry Grant.  Ambrose Evans-Pritchard waded into this mess as well, with a commentary headlined "The great Lira revolt has begun in Italy"---and I thank I thank South African reader B.V. for his final contribution to today's column.  It was posted on the telegraph.co.uk Internet site at 6:15 p.m. BST Monday evening---and it's an absolute must read.

Ukraine crisis: Putin orders thousands of troops away from border

Russian President Vladimir Putin has ordered thousands of Russian troops near the Ukrainian border to return to their usual bases, according to his spokesman.

Dmitry Peskov told Russian news outlets late Saturday that Putin had ordered approximately 17,600 troops to return home from Rostov, a southern region that borders east Ukraine, where pro-Russian insurgents have been battling government troops since April.

The Kremlin has said that troops stationed in Rostov were participating in drills, but Ukraine and the West have repeatedly accused Russia of fueling the insurgency with arms, expertise, and fighters, and have slapped Moscow with sanctions in response to its moves in the region. Previous Russian claims of troop withdrawals have been countered by NATO, which said the moves were not actually carried out.

The above three paragraphs are all there is to this tiny AP story that was picked up by the foxnews.com Internet site on Sunday---and its something I found in yesterday's edition of the King Report.

Russia's Putin to attend G20 leaders summit: Australia

Australian Treasurer Joe Hockey confirmed Sunday Vladimir Putin will attend the G20 leaders' summit in November, despite concerns about Russia's actions in Ukraine in recent months.

Australia's confirmation that the Russian leader would attend the high-powered summit came after Ukraine's President Petro Poroshenko said he would also meet Putin next week.

"I spoke with the Finance Minister of Russia only yesterday... and he did confirm that President Putin will be coming to the G20 leaders' summit in Brisbane," Hockey told the Australian Broadcasting Corporation on Sunday morning.

"That has certainly been the consensus of other members of the G20 that President Putin should attend. And I think there will be some full and frank dialogue with President Putin at that meeting."

This AFP news item, showed up on the france24.com Internet site in the wee hours of Sunday morning Europe time---and I found this story all by myself!

Russian oil exec accuses Saudis of manipulating oil price down

The surplus of oil on the world market is a temporary phenomenon, the vice president of Russian oil giant Rosneft, Mikhail Leontyev, said Sunday.

"The current price dynamic, which has been developing for the last few months, may not reflect the objective trend," Leontyev told the Russkaya Sluzhba Novostei radio.

"Prices can be manipulative. First of all, Saudi Arabia has begun making big discounts on oil. This is political manipulation, and Saudi Arabia is being manipulated, which could end badly.

They would be right about that, along with a lot of other commodities as well.  This brief RIA Novosti news item appeared on their website at 6:30 p.m. Sunday evening Moscow time, which was 9:30 a.m. EDT.  I found this over at the gata.org Internet site.

Privately, Saudis tell oil market- get used to lower prices

Saudi Arabia is quietly telling the oil market it would be comfortable with much lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the U.S. shale patch.

Some OPEC members including Venezuela are clamoring for production cuts to push oil prices back up above $100 a barrel.

But Saudi officials have given a different message in meetings with investors and analysts: the kingdom, OPEC’s largest producer, will accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two, according to people who have been briefed on the recent conversations.

The discussions, some in New York over the past week, offer the clearest sign yet that the kingdom is setting aside its longstanding de facto aim of holding prices at around $100 a barrel for Brent crude in favor of retaining market share in years to come.

This Reuters article, co-filed from London and New York, showed up on their Internet site at 10:47 a.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for sending it.

Rich, bikini-clad Iranians on Instagram: ‘So, where’s the problem?’

Plunging cleavage, mini-skirts, bleached hair and champagne: it’s all there... in the Islamic Republic of Iran. On the Instagram account "Rich Kids of Tehran", young Iranians from the Iranian elite post pictures to show off their bling. The Western media can’t believe its eyes. But in Tehran, it’s basically a non-event.

It’s THE most talked about Instagram in the Western media right now. The Iranian account is based on the "Rich Kids of Instagram," an account that reposts photos of young and wealthy Americans. "Rich Kids of Tehran" shares photos that young Iranians have posted showing the gleaming bodywork of their luxury cars, their poolside afternoons with friends at private villas, and their lavish parties. More than 90,000 followers tune into this account to get glimpses of these glamorous lifestyles.

If the Kim Kardashian-style pics are intriguing so many people, it’s because they were taken in Iran. It’s a country where alcohol is forbidden, where women must be veiled and wear loose clothing in public and where even men are advised to adopt “Islamic hairstyles."

This very interesting article showed up on the france24.com Internet site last Friday sometime---and it's the second offering of the day from Roy Stephens.

South Africa-China Relations - Evolving Cooperation, Collaboration and Competition

South Africa, a leading economy on the African continent, and China, the largest developing country in the world, have forged a unique partnership. Operating at bilateral, continental and multilateral levels, the governments are actively striving to realise the comprehensive strategic partnership envisaged in 2010.

Enhancing these developments is South Africa's status as home to the continent's largest and oldest Chinese community, a concentration of Confucian Institutes and an active Chinese media presence. With the pace of trade and investment picking up, coupled to closer international cooperation with Beijing through the G-20 and BRICS grouping, South Africa-China ties are assuming a significant position in continental and even global affairs.

It is also a relationship of paradoxes, breaking with many of the assumptions that underpin contemporary analyses of 'China-Africa' ties. For instance, until recently South African investment into China far exceeded in depth that of China into South Africa.

Moreover, while economic ties between the two countries have extended beyond the conventions of resource extraction and infrastructure financing seen in other African countries, this appears to be changing.

This short essay appeared on the allafrica.com Internet site a week ago---and it's the first story of the day from South African reader B.V.

China, Russia Sign CNY150 Billion Local-Currency Swap As Plunging Oil Prices Sting Putin

While it is beyond a doubt that the primary catalyst for Europe's triple-dip recession has been the nearly two quarters and counting of escalating Russian sanctions that were supposed to solely harm Putin (because who could have possibly foreseen that plunging German exports to Russia would have a far greater impact on the export-driven German economy), the truth is that the Kremlin itself is starting to hurt, if not so much as a result of the European trade embargo but mostly due to crashing oil prices, which have been driven lower almost exclusively by Saudi Arabia as part of its most recent secret bargain with the U.S., a bargain which as we read today is likely to tear OPEC apart.

One place where Russia has been hit the hardest as a result of tumbling oil prices, is the crashing currency, with the Ruble hitting new record lows against the USD on a daily basis. In fact, as Bloomberg reported, Russia has been forced to spend a whopping $6 billion in just the past 10 days to slow down the tumble of the ruble.

Needless to say, Saudi Arabia is hardly getting a Christmas card from Putin this year, although one wonders, just what channels will the former KGB spy use to retaliate against the Saudi princes. Because retaliate he will.

This must read Zero Hedge commentary put in an appearance on their website at 7:57 a.m. on Monday---and it's the second offering of the day from reader U.M.

Time ripe for innovative China-Germany partnership: Commentary

Chinese Premier Li Keqiang's trip to Germany, the second time since he took office last year, will see the two countries navigate their partnership to a more innovative path.

Economic and trade cooperation between the two partners has expanded rapidly in recent years. Germany is now China's biggest European partner in trade, investment and technological cooperation, while China is Germany's largest trading partner in Asia. Bilateral trade exceeded 160 billion U.S. dollars last year.

The huge potential in economic cooperation is unlocked by frequent exchanges of high-level visits between Beijing and Berlin, which have deepened political mutual trust and injected sustained strong momentum into their partnership.

Germany will be the first country that Li has visited twice as Chinese premier. The trip comes after a state visit in March by Chinese President Xi Jinping and a tour of German Chancellor Angela Merkel to China four months later.

This very interesting commentary appeared on the news.xinhuanet.com Internet site last Thursday sometime---and is worth your time, if you have any left.

China's Zhou says some countries already use yuan in reserves

Some countries are already using the Chinese yuan in their foreign-currency reserves without announcing it, China central bank governor Zhou Xiaochuan said.

While China's yuan has begun to be used as a reserve currency for several years, some countries "may not be willing to say so," Zhou told Bloomberg on the sidelines of the International Monetary Fund meetings in Washington.

China has stepped up efforts to promote the yuan's use overseas since the global financial crisis, as expansion in the world's second-largest economy provides more clout while Europe has yet to fully recover. The European Central Bank will discuss next week whether to begin laying the groundwork to add the Chinese yuan to its foreign-currency reserves, Bloomberg reported yesterday.

This Bloomberg story, filed from Washington, appeared on their website at 11:21 a.m. Denver time on Saturday morning---and it's another news item I found in a GATA release.

Record bust in Cambodia signals Thai dollar counterfeiting boom

Brigadier General Sar Theth is the police chief of Battambang, a languid riverside town in western Cambodia. You could also call him the seven million dollar man.

On Sept. 19, Sar Theth's officers tracked three Thai men in a pick-up truck as it passed through a remote border checkpoint from Thailand. When the truck stopped in the Cambodian district of Phnom Proek, the police pounced.

Inside, said Sar Theth, they found three cardboard boxes packed with $7.16 million in counterfeit hundred-dollar bills, the largest seizure of fake U.S. notes in Southeast Asia for about a decade and the biggest ever in Cambodia.

"If I close my eyes and touch it, I wouldn't know it was fake," he said, rubbing one of the seized notes between thumb and forefinger at Battambang police headquarters.

This Reuters story, filed from Battambang in western Cambodia, appeared on their Internet site at 6:36 p.m. EDT on Sunday evening---and it's the second contribution of the day from reader 'h c'.

Australian coal exports at record as miners ride out price downturn

Australian coal exports have risen nearly 12% in the first nine months of 2014 to a record 158-million tonnes, the Queensland Resources Council [QRC] reported on Monday.

QRC CEO Michael Roche said that the higher production in the January to September period confirmed the determination of the coal industry to ride out the current price downturn.

“Volume is replacing price, reflected in record export production,” he said.

Australia is the world’s largest exporter of high-quality metallurgical coal and the second largest exporter of thermal coal.

This story, filed from Perth, appeared on the miningweekly.com Internet site on Monday local time---and it's another contribution from reader B.V.

Faber's likely last time on BNN: Gold and silver markets are manipulated

Financial letter writer Marc Faber made on Friday what likely will be his last appearance on Business News Network in Canada -- not because of failing health or retirement but because he declared that the monetary metals markets are manipulated.

As soon as Faber made his declaration on BNN's "Business Day" program, moderator Frances Horodelski cut him off, asserting that time had run out.

Horodelski asked Faber if gold would reverse upward with other commodities when the U.S. dollar falls. Faber replied: "Precious metals can still go lower, because, as some knowledgeable people have proven, the markets are manipulated. But I don't think they will stay low. I think they may go lower temporarily and then rebound strongly, and if I were a reader, I would no longer trust central banks, and [instead] say, 'I want to be my own central bank and have some gold and silver stored in a safe place, certainly not in the U.S."

BNN's likely final interview with Faber is 9:22 minutes long, with the comments about gold and silver market manipulation coming at the 8:15 mark. Until BNN takes it down, it can be watched at the network's Internet site.  I thank Chris Powell for wordsmithing 'all of the above'---but the first person through the door with this video clip was Ken Hurt.

Russia gold production: Too much of a good thing?

Russia is the world’s third-largest gold-producing country.

Over much of the past decade, the rising price of gold made it a safe haven for investors put off by the volatility of stock markets. But in 2013, gold prices began to fall, and many market forecasters today think this trend is set to continue – due in part to a glut of gold on the market.

Russian gold producers remain undeterred. By the end of 2013, for the first time in 25 years, Russia surpassed the U.S. in the total output of mined gold, reaching third place among gold-producing countries. Gold mining in Russia has been growing rapidly in recent years. According to the Federal State Statistics Service, also known as Rosstat, the amount of mined gold was 12% in 2013 and 7% in 2012.

“We see that the consumption of physical gold is stable,” says Nikolai Zelensky, general director of Nordgold. “It is mostly consumed by developing countries such as China and India.” In his words, for example, China’s demand for gold in 2014 is approximately 1,000 tons a year, which is about 25% of world consumption.

Of course China consumed 2,000 tonnes in 2013, but that was unknown to Zelensky when he said that, or he just reads the bilge from the World Gold Council.  The rest of the article contains other inaccuracies, so I'd take what's said in this article with a big grain of salt, although Russia's production figures for 2014 are of interest.  This article appeared on the rbth.com Internet site back on September 30---and it's courtesy of reader U.D.

Gold sparkles ahead of Diwali

Much to the delight of jewellers, Indian consumers are making a scramble for gold in the build-up to Diwali on October 23, after a lacklustre festive season last year.

Sales of gold jewellery and coins in October so far have accelerated in the range of 15-25% more than a year before, although it is still early to firm up a precise forecast of demand this Diwali and Dhanteras, considered auspicious for the precious metal purchases.

Last year, jewellers were badly hit by a crunch in raw material supplies following imposition of a 10% import duty and the central bank’s 80:20 rule, which mandated that at least one-fifth of imported gold must be reserved for re-exports. Many jewellers in Delhi and Mumbai witnessed up to 40% drop in sales last Diwali.

“After months of slowdown, things are finally beginning to look up,” a spokesperson for Tanishq, the country’s largest jewellery chain, told FE. “All the purchases that people had postponed are finally being made,” he said, adding that lower gold rates in recent days had helped accelerate demand. Gold prices in Delhi dropped over 8% in 2014 so far to R27,370 per 10 grams as of October 10, tracking a subdued trend overseas and aiding the sales.

This gold-related news item, filed from New Delhi, showed up on The Financial Express website at 1:22 a.m. IST on their Sunday morning---and I thank reader U.M. for sending it our way.

Indian gold import curbs to stay, advises former Finance Minister

India’s former Finance Minister, P. Chidambaram, has advised not to lift gold import curbs earlier imposed by his government. According to him, the benefits from these restrictions are sure to outweigh the menace caused by gold smuggling. He added that the time is not ripe now to lift the sanctions imposed on gold imports, as it may result in economic imbalance.

According to Mr. Chidambaram, the country should concentrate more on pushing exports in the long term. A sudden rise in exports is unlikely to happen. Hence the country must persist with controls on imports. Gold and crude oil are the goods that contribute to the high import bill. Continuing with gold import restrictions is the only option left to contain rising CAD, he added.

This news item was posted on the resourceinvestor.com Internet site on Monday sometime---and it's the second offering in a row from reader U.M.

Asian Market Hubs Move Into Gold

Asians buy most of the world's gold, but nearly all of it trades in London. Now, with Western investors souring on the metal, the region is making a bid for some of the action.

Three big financial hubs in Asia are separately launching trading in a gold contract, each backed with physical gold.

If they draw enough investors, the contracts could influence the price of gold, which is set by a daily fix in London. ...

China is now the world's largest producer and consumer of gold, and the biggest importer, as domestic demand has outstripped supply. India also is a major buyer and importer. Two-thirds of global gold purchases come from Asia, the World Gold Council says.

This gold-related story is subscriber protected.  What's above, plus a bit more, is posted in the clear in this GATA release where I found it on Sunday.

China sees rapid growth in gold leasing

Chinese banks saw an over 30% surge in their precious metal assets, namely gold, as gold leasing has become the new money maker in a more conservative credit market, the Shanghai-based First Financial Daily reports.

According to a report published by China's Minsheng Bank, publicly listed Chinese banks held a combined asset of 477 billion yuan (US$77.70 billion) in precious metals as of the end of June.

Since the metal Chinese banks dealt with is mostly gold, that amount is equivalent to 1,863 tons of gold, based on the average market price between January and June, and well above the country's gold reserve of 1,054 tons, the newspaper said.

I'm not sure what to make of this news item, so I'm posting it without comment.  It appeared on the Taiwan Internet site wantchinatimes.com at 10:44 a.m. local time on Sunday---and it's the final contribution of the day from Manitoba reader U.M., for which I thank her.

China now takes nearly all world gold production, Shanghai exchange chief confirms

China's annual non-government gold consumption has been officially confirmed as having reached 2,000 tonnes, gold researcher and GATA consultant Koos Jansen reports. That figure is close to annual world gold mine production.

The figure, Jansen writes, was repeated several times by the chairman of the Shanghai Gold Exchange, Xu Luode, in an address to the London Bullion Market Association conference in Singapore in June.

Xu's disclosure confirmed Jansen's longstanding formula for calculating Chinese gold demand, repudiated the World Gold Council's longstanding and gross underestimation of that demand, and calls into question all reporting about Chinese gold demand by mainstream Western financial news organizations.

One wonders how much more gold disappears into the reserves of the People's Bank of China every year?  Whatever amount it is, it's far from inconsequential.  Jansen's commentary is headlined "SGE Chairman: 2013 Chinese Gold Demand Was 2,000 Tonnes" and it was posted on the Singapore website bullionstar.com at 6:23 p.m. on their Friday evening.  It's a must read for sure---and I found it over at the gata.org Internet site on Saturday.

¤ The Funnies







¤ The Wrap

There was some unusual activity in the big silver ETF, SLV, this week as 4 million oz were withdrawn. I say unusual because deposits into and withdrawals from SLV have been somewhat counterintuitive recently, namely, deposits have come on price weakness and withdrawals on (relative) price strength. One would normally expect the opposite to occur. The most plausible explanation to me is something I have speculated about previously. I don’t think that the previous buying and deposits on price weakness and the withdrawals this week on relative price strength are the work of large numbers of traders and investors. I think it may be the work of a single large trader or two. I’ll leave it to you to guess who I think it is.

My reasoning is that a large trader this week was responsible for the 4 million oz withdrawal due to a conversion of SLV shares into physical metal for the purpose of avoiding the 5% reporting threshold that the SEC mandates. Since there is no reporting requirement for holdings of physical metal (as there is for futures and stock ownership), by converting shares of SLV into actual metal holdings, a single entity could use SLV as a vehicle to acquire a significant silver position without having to publicly reveal ownership. One needn’t even have to move the silver, just transfer from shares to metal. If this is the case, then the withdrawal can hardly be considered bearish to price. Alternatively, the metal being withdrawn from SLV could have been needed more urgently elsewhere, also hardly a bearish development. - Silver analyst Ted Butler: 11 October 2014

I must admit that I wasn't overly surprised to see the sellers of last resort show up in force minutes after the New York open on Sunday evening---but the trading volume was pretty quiet once the London morning gold fix was done, as the rallies had obviously been dealt with in the usual manner.  But the rallies that began at 1 p.m. EDT yesterday in both gold and silver were a bit of surprise, as activity such as that doesn't happen much in the electronic trading session after the Comex close.  I'm careful not to read too much into it, but it is worth noting.

And if you check the 6-month silver chart below, you'll see that silver has been kept on a pretty tight leash for the last six trading days in a row---and you just have to know that there's nothing free market about that, as you can tell from the high ticks that the price will blow sky high the moment it's allowed to.

The 50-day moving average in gold is still twenty bucks away---and it will be interesting to see what the Commercial traders do as the Managed Money begins to cover their short positions.  Silver still has $1.20 to go, which is light years away based on the price action of the last week.  But until those moving averages are breached, the prices of both metals could wander around in "no-man's land" for a while.

Time will tell.

And as I write this paragraph, there's still a bit more than an hour to go before London opens.  Gold and silver are both down a bit, but platinum and palladium are up decent amounts.   Volumes are pretty light in both metals---and the dollar index is up 7 basis points.

I've rather unhappily noted that even though gold is up about $47 from its low of October 6, the performance of the gold stocks has not come close to keeping pace.  As a matter of fact, the HUI is up only 1.5 percent since that low.  Half of the 7 percent gain we had last Wednesday went away on Thursday, even though gold closed up on that day---and yesterday's 5 percent gain melted away to just under 2 percent.

For the last ten years or so, John Embry has been of the opinion that 'da boyz' are managing the precious metal equities prices along with the precious metals themselves---and what's been happening in the last seven trading days has certainly done nothing to dispel such an opinion.

And as I hit the send button on today's efforts at 4:55 a.m. EDT, not much has changed now that London has been trading for about two hours.  Gold and silver are still down a bit---and both platinum and palladium are up decent amounts.  Gold volume is not overly heavy at just under 24,000 contracts---and silver's volume is 6,200 contracts.  The dollar index is now up 33 basis points from its New York close late yesterday afternoon.

Today, at the close of Comex trading, is the cut-off for this Friday' Commitment of Traders Report---and based on the price/volume activity in both gold and silver at the moment, it looks like Tuesday may be a 'nothing' sort of day from a price perspective.  But with the New York open looming, I'm not prepared to bet the farm on it.

See you tomorrow.

]]>
Tue, 14 Oct 2014 06:22:00 +0000
<![CDATA[Lawrence Williams: Silver in Supply Deficit, But Price Unmoved So Far]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-silver-in-supply-deficit-but-price-unmoved-so-far/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-silver-in-supply-deficit-but-price-unmoved-so-far/#When:10:17:00Z "Well, we're back at the brink once again"

¤ Yesterday In Gold & Silver

It was a 'nothing' sort of day in the gold market yesterday, with the price trading within a five dollar range for the entire Friday session everywhere on Planet Earth.  The highs and lows aren't worth looking up.

Gold was closed in New York yesterday at $1,223.00 spot, down 60 cents from Thursday's close.  Net volume was pretty quiet at 115,000 contracts.

The silver price action had a bit more shape to it, but only just.  After getting sold down about 15 cents in early Far East trading, it bumped along the bottom in a very tight range until the noon silver fix in London.  At that point it chopped quietly higher until noon in New York---and that was it for the day.

The low and high ticks, such as they were, were reported by the CME Group as $17.205 and $17.42 in the December contract.

Silver finished the day at $17.395 spot, up 4.5 cents from Thursday's close.  Net volume was only 29,000 contracts.

Platinum continued its downward trend from Thursday afternoon into early morning trading in the Far East on their Friday, hitting its low around 10:20 a.m. Hong Kong time.  After that it didn't do much---and was closed down 15 dollars on the day.

Palladium had a somewhat similar sell-off, although it took longer to get to its low of the day, which came in mid-morning trading in New York.  It rallied a few bucks off that low before trading sideways for the remainder of the Friday session.  Palladium was closed down another 12 bucks.

The dollar index closed late on Thursday afternoon in New York at 85.55---and then didn't do much until 2 p.m. Hong Kong time.  From there it rallied to its 85.97 high, which came around 10:40 a.m. EDT.  The index sold off a handful of basis points into the close, finishing the Friday session at 85.85---up 30 basis points from Thursday's close.

The gold stocks opened weaker, hitting their mid-morning low minutes after 10:30 a.m. EDT.  From that point they rallied into positive territory, but couldn't hold even those tiny gains---and sold back into the red as the Friday trading session wore on.  The HUI finished down another 2.44%---and back at its low of the day.

The silver equities followed a similar pattern, but they fared somewhat better, as the sell-off after the noon EDT high tick wasn't quite as severe as gold's---and Nick Laird's Intraday Silver Sentiment Index closed down 'only' 1.29%.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the Comex-approved warehouses on Tuesday.  There were, however, 401 platinum contracts posted for delivery.  All were issued by JPMorgan Chase out of its in-house [proprietary] trading account---and the biggest stopper [out of 7 in total] was HSBC USA with 230 contracts, also out of its in-house [proprietary] trading account.  The link to yesterday's Issuers and Stoppers Report is here.

As I mentioned here yesterday, the folks over at the CME Group posted the wrong day for Thursday's Preliminary Report, so here are the final numbers for that day.  There was little change in the number of gold contracts still open in October.  There were 1,316 contracts open, down 1 contract from Wednesday.  In silver, the number of contracts still open declined by 46 contracts---down to a total of 178 contracts still outstanding.

The CME Preliminary Report for the Friday trading session showed that October open interest in gold slid another 182 contracts down to 1,134---and silver added 6 contracts to 184.

There was 85,039 troy ounces of gold withdrawn from GLD yesterday---and 1,917,484 troy ounces of silver were withdrawn from SLV, the second withdrawal in as many days.

The U.S. Mint finished the week with another decent sales report.  They sold 8,000 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and 270,000 silver eagles.

Month-to-date the mint has sold 33,000 troy ounces of gold eagles---11,000 one-ounce 24K gold buffaloes---2,520,000 silver eagles---and 400 platinum eagles.  Based on these numbers the silver/gold sales ration stands at a hair over 57 to 1.

There was a big gold shipment out of JPMorgan's vault at the Comex-approved depositories on Thursday, as they sent 128,698 troy ounces off for parts unknown.  19,933 troy ounces were reported received by Canada's Scotiabank.  The link to that activity is here.

The in/out activity in silver was rather subdued for the second day in a row, as only 300,251 troy ounces were reported received---and nothing was shipped out.  What activity there was came at Brink's, Inc.---and the link is here.

The Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, wasn't what I was expecting, but as Ted Butler pointed out on the phone yesterday afternoon, the silver price ended flat for the reporting week---and gold actually closed up a couple of bucks.

Yes, we set new low ticks for all four precious metals during the reporting week, with all but silver occurring just after the markets opened at 6 p.m. EDT on Sunday.  Ted said that these lows didn't mean much, as there was so little volume associated with them, that they were more fishing expeditions by JPMorgan et al and their HFT buddies, than anything else---and the powerful rallies [with high volume] off those lows pretty much negated any improvements in the COT Report that would have shown up if those rallies hadn't occurred.

So the report is what it is.

In silver, the Commercial net short position actually increased by 1,479 contracts, or 7.4 million ounces.  The Commercial net short position now stands at 81.2 million ounces.  Ted says that JPMorgan's short-side corner dropped by about 500 contracts during the reporting week---and now stands at 10,500 contracts, or 52.5 million ounces of the stuff, which is a huge percentage of the total Commercial net short position.  Ted also said that this is JPM's smallest short position in silver since they took over Bear Stearns back in mid 2008.

Under the silver hood in the Disaggregated COT Report, the Managed Money sold 1,200 long contracts---and covered 835 short contracts, so their net short position is a new record high, albeit by a small amount---365 contracts.

In gold, the Commercial net short position also increased, but it was only by 2,678 contacts, or 267,800 troy ounces.  Their  net short position now stands at 6.34 million troy ounces.  Ted says that JPMorgan's long-side corner in gold is now 2.1 million troy ounces.

In the Managed Money category, these traders sold 1,200 longs and covered 140 shorts, so they increased their net short position in gold by the difference between those two numbers.

In copper, the Commercial traders' net long position increased by another 1,409 contracts.

Here's Nick Laird's "Days of World Production to Cover Short Positions" for the 4 and 8 largest short holders in all the physically-traded commodities on the Comex.

And now for the October Bank Participation Report.  There were improvements in the Comex net short positions of all the world's banks in all four precious metals---from big changes to small ones.

Don't forget that this BPR data is extracted directly from the current COT Report data, so for this one day a month we can compare apples to apples---and see what the bullion banks have been up to versus the rest of the traders.

In gold, '3 or less' U.S. banks were net short 2,633 Comex contracts.  In the September BPR, these same '3 or less banks' were net short 10,064 Comex contracts, so there has been an improvement of about 8,400 contracts during the reporting month.  Since Ted puts JPMorgan's long-side corner in the Comex gold market at 21,000 contracts, this means that the other '2 or less' U.S. bullion banks---which would be HSBC USA and Citigroup---have to be net short about 18,400 Comex contracts between them to make the math work out properly.

Also in gold, '19 or more' non-U.S. banks held 49,887 Comex contracts net short.  In the September report, these same banks were short 60,925 Comex contracts.  I would be prepared to bet a decent amount of money that Canada's Scotiabank is short a third of those 60,925 contracts all by itself.  That would make the remaining 40,000 contracts or so, divided up between the remaining 18 non-U.S. banks, are more or less immaterial.

Below is the BPR chart for gold going back to 2000.  Note the blow-out in the short position in gold in the U.S. banks [red bars on Charts 4 and 5] in August of 2008.  This is when JPMorgan took over the Comex short positions of Bear Stearns.  Also note the blow-out in gold in the non-U.S. banks [the blue bars on Chart #4] when Scotiabank got 'outed' in October of 2012.  The net Comex short position there blew out by almost double.  The net long position also increased.  The 'click to enlarge' feature really helps here.

In silver, '3 or less' U.S. bullion banks were net short 9,867 Comex contracts. [In the September report, the same number of banks were short 15,953 Comex contracts]  Since Ted pegs JPM's short position in silver at 10,500 contracts, this means that the other U.S. banks must be net long the Comex futures market to the tune of 700 contracts or so.  Obviously JPMorgan holds the largest silver short position of all the U.S. banks.

Also in silver, '11 or more' non-U.S. banks are net short 19,585 Comex silver contracts. [In the September BPR these same banks were short 22,298 Comex silver contracts]  Just like in gold, I'd bet money that the lion's share of the non-U.S. banks' short position in silver is held by Canada's Scotiabank---approaching 90 percent, if not higher.  It's my opinion that their short position in the Comex silver market now dwarfs that of JPMorgan.  It's almost not worth mentioning, but the Comex short positions in silver held by the other 10 bullion banks are totally immaterial.

Below is the BPR chart for silver and, once again, cast your eyes on the events of August 2008 on charts #4 and #5---and October 2012 in chart #4---to see where JPMorgan took over the silver short position once held by Bear Stearns---and where Canada's Scotiabank was 'outed' by the CFTC.  Both events stand out like the proverbial sore thumbs that they are.

In platinum, '3 or less' U.S. bullion banks are net short 6,196 Comex contracts, which is a huge decrease compared the prior three reports.  Note on chart #5 the tiny long positions held by these U.S. banks, compared to their massive short positions.  This is proof positive that these positions are held solely for price management purposes.  I would bet that JPMorgan is the proud owner of the lion's share of these positions as well.

Also in platinum, '14 or more' non-U.S. banks are net short 4,453 Comex contracts, which is also a massive improvement from prior months.  As a 'for instance' these same banks were short 8,880 Comex platinum contracts in the July BPR, which was the low before the last rally in gold and silver began.  Divided up more or less equally, which they probably aren't, most of the positions held by these 14 banks approach immaterial as well, at least compared to the outrageous short positions held by the U.S. bullion banks, principally JPMorgan Chase.

In palladium, '3 or less' U.S. bullion banks are net short 8,687 Comex contracts, which is down from the 10,643 contracts they were net short in September, but virtually the same as they were short back in the July BPR.  So even though JPMorgan et al engineered the price down by about $150 during the reporting month, to its lowest level since mid April, that's the best they could do.  The non-technical traders on the long side in the Managed Money category flatly refused to puke up their positions, or go short by much.  That situation holds true to a certain extent in platinum as well.

Also in palladium, '13 or more' non-U.S. banks were net short 3,765 Comex contracts, which is down big from the 5,937 Comex contracts they held net short in September's BPR.  But it's only a marginal improvement in their 4,694 short position they held back at the end of June.

Try as they might, da boyz can't get any traction in palladium---and that's certainly obvious over the last 18 months in the chart below.  And as an aside in Chart #5, look at the obscene short positions compared to their puny long positions held by the '3 or less' U.S. banks.  It's so grotesque, one doesn't know whether to laugh or cry.

So, once again, it's Citigroup, HSBC USA, Scotiabank---along with the ring leader JPMorgan Chase that run the show in all four precious metals.  And it's a good bet that they, at least the U.S. banks, have their little piggy noses in the copper, crude oil and dollar index troughs as well.

Here' the Global Indices chart that Nick Laird sent around very late yesterday evening MDT---and it tells you pretty much everything you need to know.

I have a very decent number of stories for you today, so I hope you can find the time in what's left of your weekend.

¤ Critical Reads

Jim Grant: Time to stop government-imposed bull market

The Federal Reserve needs to return interest rates to more normal levels and free financial markets from government-sponsored price control, said Jim Grant, founder of Grant's Interest Rate Observer.

The real value of asset prices would come in "clearer focus" if rates were not so artificially low, he said on CNBC's "Squawk Box" Friday, a day after a 334-point drop in the Dow Jones industrial average—the worst day since February and the third straight move in either direction of 200 points or more.

"Interest rates now are not discovered as one discovers prices in a free market. They are administered and imposed," he said.

Since the financial crisis, the central bank's easy money policies have been encouraging a shift into riskier assets, said Grant. "The Fed was wanting us all to get out of savings accounts and into junk bonds and equities. It was very pleasant when the getting in was going on. Now perhaps, it's time for the getting out."

This must watch 2:02 minute CNBC video clip was posted on their website around 7 a.m. EDT on Friday morning---and I thank reader Ken Hurt for today's first story.

Marc Faber: Investors Recognizing Global Growth Slowdown

Marc Faber, publisher of The Gloom, Boom & Doom Report, talks about global stocks, the economy and gold prices. Faber speaks with Matt Miller, Scarlet Fu and Olivia Sterns on Bloomberg Television's "In the Loop." Bloomberg View columnist Barry Ritholtz also speaks.

This 9:02 minute video clip appeared on the Bloomberg Internet site yesterday sometime---and it's worth your while.  I thank Nitin Agrawal for sharing it with us.

It Doesn't Get Any Scarier Than This (Literally)

The Fear and Greed meter is pretty much pegged in the red on the Fear side at the moment---and you can read all about it in chart form in this commentary that was posted on the Zero Hedge website at 7:28 p.m. EDT on Friday evening.   I thank reader U.D. for passing it around.

A 14% Student Loan Default Rate Isn’t ‘Good News’

The Department of Education just published its latest report on cohort default rates for student loans that entered repayment in 2011, which officials characterized as “good news” because the rate declined to 13.7% versus 14.7% for the prior year.

Despite what the officials say, perhaps it would be wise to keep the champagne on ice for a while longer.

The calculation behind the CDR divides the total number of students who defaulted on government loans that entered repayment in a particular year (the so-called cohort year), by the total number of borrowers who began to repay their education-related debts in the same cohort year. Colleges and universities are especially focused on this metric, not least because their access to federal grants and loans hinges upon default rates that are no more than 30% for three consecutive years or 40% in any one year.

This very interesting opinion piece appeared on the credit.com Internet site on Tuesday---and it's the second offering of the day from Ken Hurt.

S&P 500 Companies Spend 95% of Profits on Buybacks, Payouts

Companies in the Standard & Poor’s 500 Index really love their shareholders. Maybe too much.

They’re poised to spend $914 billion on share buybacks and dividends this year, or about 95 percent of earnings, data compiled by Bloomberg and S&P Dow Jones Indices show. Money returned to stock owners exceeded profits in the first quarter and may again in the third. The proportion of cash flow used for repurchases has almost doubled over the last decade while it’s slipped for capital investments, according to Jonathan Glionna, head of U.S. equity strategy research at Barclays Plc.

Buybacks have helped fuel one of the strongest rallies of the past 50 years as stocks with the most repurchases gained more than 300 percent since March 2009. Now, with returns slowing, investors say executives risk snuffing out the bull market unless they start plowing money into their businesses.

“You can only go so far with financial engineering before you actually have to have a business with real growth,” Chris Bouffard, chief investment officer who oversees $9 billion at Mutual Fund Store in Overland Park, Kansas, said by phone on Oct. 2. “Companies have done about all that they can in terms of maximizing the ability to do those buybacks.”

This Bloomberg story from Monday was something I found in yesterday's edition of the King Report.

Casey Research: The Broken State and How to Fix It

The United States of America is not what it used to be. Unsustainable mountains of debt, continuous meddling by the government and Fed to “stimulate the economy,” and the US dollar’s dwindling status as the world’s reserve currency are very real threats to Americans’ standard of living. Here are some opinions from the recently concluded Casey Research Fall Summit on the state of the state and how to fix it.

This commentary showed up on the Casey Research website yesterday---and it's certainly worth skimming.

Dennis Miller---Casey Research: Prepare Your Retirement for Crisis

With markets up and down, people are starting to show some real concern. Retirees and income investors, in particular, are having a  hard time finding safe places to grow their money. But there one publication that should be the starting point for anyone concerned about their retirement nest egg. If people are asking about investing money earmarked for retirement, I tell them Miller's Money is where they should start.

This 11:14 video interview was conducted at the Casey Summit in San Antonio last month---and it was posted on the youtube.com Internet site on Sunday.

Alasdair MacLeod: A market reset is due

Parts of the Eurozone are in great difficulty, and only last weekend S&P the rating agency warned that Greece will default on its debts "at some point in the next fifteen months". Japan is collapsing under the wealth-destruction of Abenomics. China is juggling with a debt bubble that threatens to implode. The US tells us through government statistics that their outlook is promising, but the reality is very different with one-third of employable adults not working; furthermore the GDP deflator is significantly greater than officially admitted. And the UK is financially over-geared and over-dependent on a failing Eurozone.

This is hardly surprising, because the monetary inflation of recent years has transferred wealth from the majority of the saving and working population to a financial minority. A stealth tax through monetary inflation has been imposed on the majority of people trying to earn an honest living on a fixed salary. It has been under-recorded in consumer price statistics but has occurred nonetheless. Six years of this wealth transfer may have enriched Wall Street, but it has also impoverished Main Street.

The developed world is now in deep financial trouble. This is a situation which may be coming to a debt-laden conclusion. Those in charge of our money know that monetary expansion has failed to stimulate recovery. They also know that their management of financial markets, always with the objective of fostering confidence, has left them with market distortions that now threaten to derail bonds, equities and derivatives.

This commentary by Alasdair easily falls into the absolute must read category---and it was posted on the goldmoney.com Internet site yesterday sometime---and I found it embedded in a GATA release.

Doug Noland: Derivatives Story 2014

At this point, I’ve seen sufficient market evidence to posit that the global financial Bubble has serious fissures. Emerging market currencies, bonds and equities are in trouble. Commodities are in trouble. The global leveraged speculating community appears close to, if not already in, trouble. Geopolitics is full of trouble. Global “risk off” liquidity issues are becoming a bigger issue – and are now being transmitted to U.S. securities markets through liquidity-challenged sectors such as small cap equities, corporate Credit and surging prices for risk protection. Corporate credit default swap (CDS) prices this week surged to multi-month highs. The VIX stock market volatility index jumped to an eight-month high. Moreover, this week’s bludgeoning in the over-loved and over-owned technology sector could have pushed some to the edge. Examining it all, the unfolding backdrop has me pondering previous vulnerable Bubbles along with the soundness of global derivatives markets.

The global “reflation trade” is imploding. WTI crude sank 4.4% this week to $85.82. Natural gas dropped 4.5%. Heavily leveraged balance sheets – abroad and at home – in the energy and commodities universe are increasingly suspect. The ability of EM economies to service external debt is becoming an increasing concern. Ongoing currency market instability is causing losses and de-risking/de-leveraging in various derivative “carry trades.” The global leveraged speculating community is close to some serious problems. Losses would be met with redemption notices and forced liquidations. And with lots of players all crowded into similar trades, things could quickly topple into a panic for the exits. Such a circumstance would quickly crack wide open serious shortcomings in derivatives trading, in the securities markets and for leveraged participants in these markets.

The closer we get to the 'end of all things'---the more important it becomes to devour the weekly Credit Bubble Bulletin from Doug.  This one is a must read as well.

William K. Black: Too Big to Jail?

Attorney General Eric Holder’s resignation last week reminds us of an infuriating fact: No banking executives have been criminally prosecuted for their role in causing the biggest financial disaster since the Great Depression.

“I blame Holder. I blame Timothy Geithner,” veteran bank regulator William K. Black tells Bill Moyers. “But they are fulfilling administration policies. The problem definitely comes from the top. And remember, Obama wouldn’t have been president but for the financial contribution of bankers.”

And the rub? While large banks have been penalized for their role in the housing meltdown, the costs of those fines will be largely borne by shareholders and taxpayers as the banks write off the fines as the cost of doing business. And by and large these top executives got to keep their massive bonuses and compensation, despite the fallout.

But the story gets even more infuriating, the more Black lays bare the culture of corruption that led to the meltdown.

“The Clinton, Bush and Obama administrations all could have prevented [the financial meltdown],” Black tells Moyers. And what’s worse, Black — who exposed the so-called Keating Five — believes the next crisis is coming: “We have created the incentive structures that [are] going to produce a much larger disaster.”

This 25:24 minute video interview with William Black was posted on the billmoyers.com Internet site back on October 3---and I thank reader Wayne Wilcox for bringing it to my attention on Wednesday.  But for length reasons, it had to wait for my Saturday column.  It's worth watching if you have the time.

U.S. and U.K. to test big bank collapse in joint model run

Regulators from the United States and the United Kingdom will get together in a war room next week to see if they can cope with any possible fall-out when the next big bank topples over, the two countries said on Friday.

Treasury Secretary Jack Lew and the UK's Chancellor of the Exchequer, George Osborne, on Monday will run a joint exercise simulating how they would prop up a large bank with operations in both countries that has landed in trouble.

Also taking part are Federal Reserve Chair Janet Yellen and Bank of England Governor Mark Carney, and the heads of a large number of other regulators, in a meeting hosted by the U.S. Federal Deposit Insurance Corporation.

"We are going to make sure that we can handle an institution that previously would have been regarded as too big to fail. We're confident that we now have choices that did not exist in the past," Osborne said at the International Monetary Fund's annual meeting.

This very interesting news item appeared on the Reuters website at 6 p.m. EDT on Friday evening---and the first reader through the door was Dr. Dave Janda.  Reader Harry Grant sent the Russia Today take on this a few minutes later.  It's headlined "Bankocalypse drill: U.S. and U.K. to run ‘too big to fail’ collapse simulation".  One, or both, are worth your time.

U.S. firms could make billions from U.K. via secret tribunals

Britain faces a real risk of being ordered to pay vast sums to US multinationals under the controversial TTIP trade deal being negotiated between Washington and the EU, an analysis of similar agreements has revealed.

The Government has repeatedly played down concerns that secret tribunals established by TTIP will lead to large numbers of American corporations suing the UK in trade disputes.

But United Nations figures uncovered by The Independent show that US companies have made billions of dollars by suing other governments nearly 130 times in the past 15 years under similar free-trade agreements.

This is not the first time this scenario has come to my attention---and I was always somewhat skeptical of how bad it was going to get.  Not any more.

This commentary was posted on the independent.co.uk Internet site on Thursday---and is worth your time if you have it.  I thank South African reader B.V. for his first contribution to today's column.

Eurosceptic UKIP wins first British parliament seat in landslide victory

The anti-E.U. U.K. Independence Party has secured its first seat in parliament, with former Tory MP Douglas Carswell taking the by-election seat of Clacton. He won 59.75 percent of the vote, far ahead of the ruling Tories with 24.64 percent.

Carswell's resounding victory reveals the threat UKIP poses to both Labour and the Conservatives in the upcoming general election. While UKIP is unlikely to win more than a dozen of the 650 seats on offer, the party’s increasing success threatens to rupture Britain’s center-right vote and erode the nation’s center-left vote making it more difficult for Labour or the Conservatives to win by a majority.

The Eurosceptic party, which has campaigned for Britain to withdraw from the EU and considerably curb immigration, was expected to do well in the Clacton by-election vote. However, its victory in the coastal town by such a large margin has come as a surprise to many.

This news item appeared on the Russia Today website at 5:58 a.m. Moscow time on their Friday morning, which was 8:58 p.m. on Thursday evening in New York.  It's the first contribution to today's column from Roy Stephens.

Our suicidal newspapers [in the U.K.] are throwing press freedom away

With the possible, although far from certain, exception of the men and women who hire me, it is fair to say that Britain’s editors have a death wish. They suppress their own freedom. They hold out their wrists and beg the state to handcuff them. They are so lost in ideological frenzy that they cannot see that free journalism is the first casualty of their culture wars.

The Daily Mail acclaimed David Cameron’s threat to repeal the Human Rights Act and pull out of the European Convention on Human Rights as ‘triumphant’. Within days, we learned how the ‘triumphant’ state treats the Mail on Sunday when it thinks no one is looking. Without a warrant from a judge, Kent police officers trawled records of thousands of calls to its news desk. In other words, they hacked its phones. The police hate the comparison, but it still holds. Just as celebrities could accuse tabloid journalists of threatening their right to privacy under the Human Rights Act, so journalists can now accuse the police of threatening their right to free expression, which the judges in Strasbourg have ruled includes protection for a journalist’s sources.

The police targeted the Mail on Sunday because it was on the fringes of the Chris Huhne affair. You will remember that a roadside camera caught him speeding. Huhne persuaded his wife, Vicky Pryce, to pretend she was driving so that he could escape a ban, thus involving them in a (rather small) conspiracy to pervert the course of justice. Huhne would have got away with it, had he not enraged his wife with the surest method known to man: running off with another woman. But Pryce did not come out and tell the truth. Instead, her friend Constance Briscoe — a judge, no less — briefed the Mail on Sunday. I have my notes of a conversation I had with an excited Huhne just before his trial began. ‘Briscoe [has been] dealing with a MoS news executive called David Dillon,’ he said. She was ‘feeding the Mail information from the police investigation’, throwing the whole case against him in doubt. Huhne thought he could escape justice and save his career by proving that he was the victim of a vast right-wing conspiracy, led by Tory newspapers that were out to destroy him.

This very interesting and right-on-the-money commentary appeared on the spectator.co.uk Internet site on Friday---and in their print edition today.  I thank reader B.V. for digging it up for us.

Eurozone recession is biggest risk to U.K., says George Osborne

The threat of a triple-dip recession in the eurozone poses the biggest risk to the UK and global economy, George Osborne has warned.

Speaking on the sidelines of the International Monetary Fund's annual meeting, the Chancellor said "serious clouds were gathering on the horizon" for the global economy, and a third recession since the financial crisis for the 18-nation bloc would hit UK growth.

"We have a set of external shocks from the conflicts in the Middle East, the Ukrainian [crisis] to the horrific disease of Ebola in West Africa, which are increasing uncertainty. But most seriously, the biggest risk to the global economy at the moment and certainly the biggest external risk to the UK is the risk of the eurozone falling back into recession and into crisis," he said.

Mr Osborne's comments came amid a slew of poor economic data on Friday that suggested Europe was slowing down. UK construction figures showed that output contracted 3.9pc in August, while French industrial production stagnated and reports emerged that Germany's central bank would cut its official growth forecast next week.

Mr. Osborne has a keen grasp of the obvious.  This item appeared on the telegraph.co.uk Internet site at 4:43 p.m. BST on their Friday afternoon---and it's the second story of the day from reader B.V.

Germany’s energy industry a ‘disaster’ – France’s EDF chief

Profits have declined for German energy companies since Angela Merkel decided to shake up the power industry by cutting nuclear energy in favor of renewables. The impact on the energy sector is severe, and may be having a domino effect across Europe.

Henri Prolio, the Chief Executive of France’s state-owned EDF, has openly criticized Germany’s two biggest energy suppliers, RWE and E.ON.

“When it comes to energy they are in a disaster. Their two major companies – E.ON and RWE – are under huge pressure. One is more or less dead, the other one is in a very difficult situation," Henri Prolio claimed, adding that his company was doing “quite well.”

The “dead” comment refers to Germany’s second biggest utility company RWE, which posted a 62 percent drop in profit is in the process of shutting down power stations to save money.

This story was posted on the Russia Today website at 2:14 p.m. Moscow time on their Thursday afternoon---and it's courtesy of reader B.V. as well.

ECB to publish results of bank audit on Oct 26

The European Central Bank said on Friday it will publish the results of new stress tests of eurozone banks on October 26, before it takes over as the region's banking supervisor.

These tests have been carried out under new powers given to the ECB as a result of the financial and debt crises, and are expected to be far more rigorous than previous tests which turned out to have missed weaknesses in some banks.

The ECB audits have focused attention in banks' boardrooms on whether they need to boost their capital base, since the purpose is to ensure that banks are strong enough to withstand sudden shocks and loss of confidence.

The ECB "will publish the results of its comprehensive assessment of 130 banks on October 26", the bank said.

This AFP article was posted on the france24.com Internet site at 3:45 p.m. Europe time on their Friday afternoon---and it's another offering from reader B.V.

Luxembourg court declares Portugal's Espirito Santo Holdings bankrupt

Two holding companies of Portugal's bailed out Espirito Santo banking group have been declared bankrupt by a Luxembourg court, an official announcement said Friday.

The widely expected bankruptcy ruling of Espirito Santo Financial Group and Espirito Santo Financiere came one week after the same court refused a request for creditor protection for the entities.

The companies are part of the complex web of assets that controlled the fortune of Portugal's prominent Espirito Santo family, including one of the country's biggest banks.

The collapse of Banco Espirito Santo came just months after Portugal successfully emerged from a €78-billion ($99-billion), three-year bailout financed by the EU-IMF.

This is another story from reader B.V.---and it was posted on the South African website moneweb.co.za at 15:26 p.m. South Africa Standard Time yesterday afternoon.

Dam breaks in Europe as deflation fears wash over ECB rhetoric

A key gauge of deflation risk in Europe is flashing red, dropping to record lows on fears of fresh recession and lack of decisive action by the European Central Bank.

The sudden lurch downwards came as Bank of America warned that France’s debt ratio could rocket to 120pc of GDP within five years, unless the EU authorities take radical steps to reflate the region’s economy. Italy’s debt could threaten 150pc even earlier.

The 5-year/5-year forward swap rate monitored closely by traders plummeted beneath 1.77pc on Friday morning as a global growth scare drove European stock markets to a 12-month low.

“This rate is the most important market signal on the planet right now. Everybody is watching the chart, and it has just gone off a cliff,” said Andrew Roberts, credit chief at RBS.

Ambrose Evans-Pritchard, most likely at his master's bidding, joins the 'sky is falling' crowd braying for more ECB money printing.  His commentary was posted on The Telegraph's website at 4:55 p.m. BST yesterday afternoon---and I thank Roy Stephens for sending it along.

Merkel Hints at Economic Policy Shift in Germany

As evidence grows that the German economy, the largest in Europe, is beginning to stall, Chancellor Angela Merkel expressed a growing willingness on Thursday to use government spending to stimulate growth, a possible shift in position that could ripple across the entire eurozone.

Ms. Merkel’s new tack, signaled in a Berlin news conference, may be partly a response to increasingly clamorous criticism from the International Monetary Fund, independent economists and fellow Europeans that her longstanding emphasis on balancing the federal budget needs to give way to pumping more money into the lethargic German economy.

If Germany in fact gives itself a bit more spending latitude, it would no doubt fuel the demands from its eurozone neighbors, most notably France, to have more budgetary flexibility to stimulate their own economies.

Mainly, though, its neighbors are counting on Germany to lead by example.

Will she---or won't she?  This 'story' showed up on The New York Times website on Thursday sometime---and it's courtesy of Roy Stephens.

ECB Weighing First Step to Buying Yuan for Foreign Reserves

The European Central Bank will discuss next week whether to begin laying the groundwork to add the Chinese yuan to its foreign-currency reserves, according to two people with knowledge of the matter.

Governing Council members gathering in Frankfurt for their Oct. 15 mid-month meeting will consider the move, said the people, who asked not to be named because the discussions aren’t public. Should officials eventually decide to buy the currency, initial purchases would be small and might start in a year at the earliest, one of them said.

Such a measure by the ECB would mark a major step in the internationalization of China’s currency, also known as the renminbi. While China is the world’s second-largest national economy, the yuan isn’t ranked among the most-held foreign reserve assets, according to data from the International Monetary Fund. The U.S. dollar leads at 61 percent of holdings.

This news item, co-filed from Washington and Frankfurt, appeared on the Bloomberg Internet site at 4:00 p.m. MDT yesterday---and I thank reader 'David in California' for passing it around.

Kiev, Donetsk Militia Sign 'Buffer Zone' Agreement

Self-proclaimed Donetsk People's Republic (DPR) in eastern Ukraine has signed an agreement with Kiev authorities on the establishment of a 'buffer zone' separating the sides of the conflict, DPR leader Alexander Zakharchenko said Friday.

"We have signed an agreement on a buffer zone. The document stipulates that Kiev-led forces will pull out from several towns, including Peski," Zakharchenko told members of his Oplot movement.

Peski is a suburb of Donetsk where Kiev-led forces deployed artillery to carry out the shelling of the city controlled by independence supporters.

According to Zakharchenko, Kiev will retain control of the key towns of Mariupol, Slavyansk and Kramatorsk in the region.

This news item put in an appearance on the RIA Novosti website at 5:00 p.m. Moscow time on their Friday afternoon---and it's another offering from Roy Stephens.

Russia Bans Re-export of Fruit and Vegetables from Poland After Bypass Attempt

Rosselkhoznadzor, a Russian agency which is responsible for ensuring food quality and safety, has banned the re-export of fruit and vegetables through Poland, Kommersant reports.

The agency’s press secretary Yulia Trofimova told the press that the agency had “identified cases of [Poland] supplying us with their products under the guise of re-export.”

The ban will subsequently affect not only the hidden Polish produce, but also that of other countries which send their goods through Poland for unloading and reshipment to Russia.

Earlier, Polish Minister of Foreign Affairs Grzegorz Schetyna noted that Poland had planned to demand the further tightening of sanctions against Russia. Poland has faced problems offloading some of its agricultural produce, including apples, 677,000 tons of which had earlier gone to Russia. The country has been carrying out a social media campaign, “Eating Apples to Annoy Putin”, in the midst of Russian sanctions against the import of certain food from Europe, the Economist had reported earlier.

This is another news item from the RIA Novosti website---and it's also courtesy of Roy Stephens.  It was was posted there at 6:01 p.m. Moscow time on their Friday evening.

NATO games in Ukraine push world 5 minutes before nuclear midnight - Stephen Cohen

The West and Russia can’t seem to get over their differences, with the tensions between the Washington and Kremlin changing the stakes for the whole world. How far would this confrontation go? Is there another Cold War coming? And finally, will the world once again know the horror of a Nuclear War looming over the humanity? We ask these questions to a prominent American scholar on Russian studies, Professor at New York University and Princeton University. Stephen Cohen is on Sophie&Co today.

This 24:49 minute interview with Stephen Cohen is conducted by Sophie Schevardnadze---and is certainly worth watching, especially if you're a serious student of the New Great Game.  I thank reader Larry Galearis for finding it for us.

"De-Dollarizing" Russia Pays Down Near-Record $53 Billion in Debt in Third Quarter

Despite the reassuring narrative from The West that Russia faces "costs" and is increasingly "isolated" due to sanctions for its actions in Ukraine, the most recent data suggests reality is quite different.

First, capital outflows slowed dramatically in Q3 (from $23.7 billion in Q2 to $13 billion in Q3) with September seeing capital inflows for the first time since Sept 2013. Second, Russia's current account surplus was significantly stronger than expected ($11.4 billion vs $8.8 billion expected) driven by increased trade. Third, and perhaps most crucially, Russia paid down a massive $52.8 billion in foreign debt as Putin "de-dollarizes" at near record pace, reducing external debt to the lowest since 2012.

And don't forget that they're buying gold hand over fist every month as well---and we'll find out in nine days how much they added to their reserves in September.

This Zero Hedge piece appeared on their website at 5:23 p.m. EDT yesterday---and it's the first contribution of the day from Manitoba reader U.M.

Armenia signs up for Moscow-led economic union

Armenia on Friday officially signed up to a Russian-led economic union, cementing a deal that will see the former Soviet country turn its back on closer ties with Europe.

President Serzh Sarkisian signed the agreement to join the Eurasian Economic Union at a meeting of regional heads of state in the Belarusssian capital Minsk.

"We consider the Eurasian Economic Union as the fundamental format for developing the most predictable and profitable relations for our country," Sarkisian told the gathering.

The Caucasus nation of 3 million is now set to join Russia, Belarus and Kazakhstan in the economic bloc when it comes into force at the start of next year.

This AFP article was picked up by the france24.com Internet site at 9:13 p.m. Europe time on their Friday evening---and it's the final offering of the day from South African reader B.V., for which I thank him.

The U.S. is in the Midst of a Full-Scale Strategic Meltdown in Syria

For a while there, he had us going.

When President Obama announced his long-contemplated strategy for confronting the Islamic State (ISIS) last month and made it clear that this would necessitate air strikes in Syria, many Syrians rejoiced at the news, believing that any intervention in their ravaged country was better than no intervention at all.

Mission creep, it was hoped, would force the United States into an eventual showdown with Bashar al-Assad, a mass-murdering dictator who, as Obama was keen to reassure everyone, was not going to be a US partner in this counter-terrorism coalition since he had lost all “legitimacy” through his barbarism and would therefore be negotiated out of power — once the more pressing ISIS menace was dealt with.

Except that there are growing signs that Washington has worked quietly, if indirectly, with Assad to avoid any such confrontation in the skies over Syria.

This long essay appeared on the businessinsider.com Internet site at 10:11 p.m. EDT on Thursday evening---and for length reasons, had to wait for today's column.  It's worth reading if this subject interests you---and I thank reader Harry Grant for bringing it to our attention.

Why the gold bear market may finally be over

After three tough years for gold, could a bullion turnaround finally be in the cards? 

That's the argument made by Lindsey Group's chief market analyst, Peter Boockvar, who says that the Federal Reserve meeting minutes released this week point to a reversal for the precious metal.

"The three-year bear market in gold, in my opinion, is over, because yesterday in their minutes, the Fed officially threw their hat in the global-currency-war ring," Boockvar said Thursday on CNBC's "Futures Now."

Boockvar refers to the unease that Federal Open Market Committee officials voiced about the dollar's strength against foreign currencies.

Boockvar's interpretation is that after standing by and watching a bevy of central banks around the world take measures (lingual or market-based) to reduce the level of their currencies, "the Fed finally decided, 'You know what? I want to be part of this battle.' And to me, that's the last missing piece in the gold bull case in the context of a three-year bear market."

This gold-related news story appeared on the msn.com Internet site early Friday morning EDT---and I thank Casey Research's own Dennis Miller for sending it our way.

Lawrence Williams: Silver in supply deficit but price unmoved so far

Silver has been dubbed the ‘devil’s metal’ and likened to ‘gold on steroids’ because of its vastly more volatile price pattern vis-à-vis gold, with which it is inextricably linked. Indeed the prices of all the so-called precious metals tend to be linked to gold’s price performance although their fundamentals suggest that this should not be the case and, like silver, industrial supply/demand factors should be the main price drivers..

Over the past two years with gold in decline, silver has thus fared even worse, it tending to underperform gold on the downside and outperform on the up. A much followed measure of this is the gold:silver ratio which over the past few years has varied from around 35 to 70 and, at the time of writing is sitting at just over 70 – the worst level (for the silver investor that is) for  4 years.

What is perhaps surprising regarding the current silver price though, is that the latest analysis figures from specialist London-based precious metals consultancy, Metals Focus, suggest that this year silver will again be in supply/demand deficit, as it was last year, yet the price has still continued to fall. The silver bulls – and there are plenty of them – will point to murky goings on in the COMEX silver market as the root cause behind the decline, with huge short silver positions held by big banks with the apparent financial clout to manipulate the market whichever way they wish.

Lawrie understands the situation precisely---and even a cursory glance at my comments on silver in the Bank Participation Report shows that JPMorgan and Canada's Scotiabank are the two largest Comex short holders in silver on Planet Earth.  This commentary appeared on the mineweb.com Internet site on Friday---and I thank reader U.M. for sending it our way.  It's certainly a must read.

Swiss National Bank Explains Why it is Against Repatriating Gold

The Swiss National Bank has lashed out at the so-called "gold initiative" efforts to "Save Our Swiss Gold" unsurprisingly proclaiming it as a bad idea.

As Ron Paul previously noted, "The gold referendum, if it is successful, will be a slap in the face to those elites," and so the full-court press ahead of the Nov 30th vote has begun (a la Scotland fearmongery) as SNB Vice Chairman Jean-Pierre Danthine explains how a 'yes' vote for the initiative "would severely constrain the SNB’s room for manoeuvre in a future crisis," as it "poses danger to the conduct of a successful monetary policy." His reasoning (below) is stunning...

This very interesting commentary appeared on the Zero Hedge website at 10:06 a.m. EDT yesterday---and I thank reader U.M. for bringing it to my attention, and now to yours.  It's worth reading if you have the time.

Nomura Currency Analysts Think Swiss Gold Vote Unlikely To Pass

Although more attention is being focused on Switerland’s gold referendum on Nov. 30, currency analysts at Nomura said a “yes” vote could be difficult to achieve, according to the country’s voting statistics.

According to a research report published Tuesday by Nomura, referendums in Switzerland are fairly popular; however, very few are actually able to pass. Since 2000, the country has voted on 66 different initiatives, about 4.7 referendums per year, and only 15% have passed.

In the Nov. 30 referendum, Swiss citizens will be voting on three initiatives: whether or not the Swiss National Bank should increase its gold reserves to 20%, that the central bank should stop selling its precious metals and that all its gold should be held within the country.

The analysts said that their base case is for the “no” side to win, but they still looked at the implications in the off-chance that the “yes” vote one.

This news item showed up on the kitco.com Internet site at 11:58 a.m. EDT yesterday---and it's another offering from reader U.M.

Chinese gold buying picks up after holiday; Indian premiums rise

Buying activity in China's physical gold exchange ticked up this week, indicating retailers in the top consumer of the metal saw good sales during the week-long National Day holiday.

Prices on the Shanghai Gold Exchange - the platform for all physical trades in China - were about $5-$6 an ounce higher than the global benchmark XAU, compared with about $3 before Chinese markets closed for the holiday.

The increased buying interest shows retailers are probably restocking after sales during the holiday from Oct. 1-7.

The annual holiday, also known as the Golden Week, is a time when millions of people travel and spend more than usual. It also marks a pick-up in weddings, boosting demand for gold jewellery.

This Reuters story, co-filed from Singapore and Mumbai, was posted on their Internet site at 5:00 p.m. IST on their Friday afternoon---and it's the final contribution of the day from Manitoba reader U.M.---and I thank her on your behalf.

Goldcorp CEO visits Australia and predicts 'peak gold' next year

Canada's Goldcorp, the world's biggest gold producer by market value, has renewed its prediction that "peak" gold will arrive next year, setting the scene for the bullion price to rise significantly over the next five to 10 years.

And it expects competition for gold resources will eventually force it out of its "comfort zone" of operating only in North and South America, with Australia's status as a major mining destination making it part of the new location considerations.

Goldcorp president and chief executive Chuck Jeannes told the Melbourne Mining Club yesterday that from next year there would be a steady reduction in global mine supply, due in part to the rate of new discoveries falling dramatically since peaking at 175 million ounces in 1995.

He said while investment demand for gold had been hit with the flight to equities in the past two years, China's cultural affinity for the precious metal, the rising wealth of its population, and the need for asset diversification away from the U.S. dollar meant the supply/demand fundamentals were "very strong" with the coming of peak gold.

This story, filed from Melbourne, was posted on theaustralian.com.au website on Friday---and it's posted in the clear in this GATA release.

This pink diamond sold for a historic record of $18 million

A fancy 8.41 carat, pear-shaped, flawless pink diamond sold for a record $17.8 million in Hong Kong this week, over $3m more than what Sotheby's was expecting to fetch, setting a world auction record on a per-carat basis for this kind of gems.

The auction house did not reveal the buyer's identity, but said than 200 people attended the bidding at the Hong Kong Convention and Exhibition Center in Wan Chai.

Internally flawless clarity is extremely rare in pink diamonds, and the auction house said this, in combination with its "fancy vivid" colour grading, made the stone "amongst the rarest and most desirable of coloured diamonds ever seen at auction".

This very interesting news item appeared on the mining.com Internet site on Friday sometime---and if the story doesn't interest you, you should at least look at the photos.  I thank reader M.A. for the final story in today's column.

¤ The Funnies

¤ The Wrap

So let me complete my speculation. Mr. Big (JPMorgan) having been almost overrun in April 2011 on the short side, but having succeeded in crashing silver prices starting in May 2011, used the price decline to buy silver in any form available for the next 3.5 years, up to and including yesterday. This buying by JPMorgan in Silver Eagles was so great that the U.S. Mint remained in a state of rationing due to Mr. Big’s strong demand and continued to increase daily production capacity to around 130,000 coins a day (4 million a month). Then came a small rally ($3) in silver in June and the COMEX commercials including JPMorgan sold aggressively into that rally as I noted on these pages, setting up the probabilities of a potential price decline which was, in fact, realized. If I could sense a sell-off coming, please be sure that JPMorgan knew such a sell-off would occur.

So what do you do when you know a sell-off is coming, particularly when you control prices, as JPMorgan does in silver? You hold off buying until the prices that you control move lower; and then you buy. This is exactly what JPMorgan did, in my opinion. First, they bought so many Silver Eagles each month for years so as to keep the Mint continuously expanding production capacity. Then, because it knew it would cause silver prices to decline sharply, it stopped buying for a couple of months until it caused prices to decline on the COMEX. Then it swopped in and began buying all the unsold coins it could at the lower prices it, in fact, brought about. - Silver analyst Ted Butler: 08 October 2014 

Today's pop 'blast from the past' dates back to 1970.  I used to play this on CHAR-FM in Alert, NWT/Nunavut back when I had long hair, a headband---and had a continuous split-end problem.  Those were the days!  Neither the tune nor the singer/songwriter needs any introduction whatsoever.  The link is here.

Today's classical 'blast from the past' takes me back to before 1970, as it was one of the first classical LPs I bought once I could afford a stereo system.  It was "Van" Cliburn's performance of Tchaikovsky's Piano Concerto #1 that won him first prize in the International Tchaikovsky Piano competition in Moscow back in 1958 at the height of the Cold War.  He was 23 years old.

What I didn't know was that a video of this event existed---and it turned up on Paul Craig Roberts' website of all places.  It's a classic in every sense of the word---and my profuse thanks goes to reader Rob Bentley who sent it my way last Saturday.  The link is here.

It was another nothing sort of day in the precious metal markets---and with the price action we've seen since the Tuesday cut-off for yesterday's COT Report, I'm sort of wondering out loud if we're going to see JPMorgan et al out in force on Sunday night and all of Monday, turning this market over to the downside, as the rallies in all four precious metals have all been stepped on since that date.  That's wild speculation on my part, as I don't really know for sure, but I'm just looking at the chart patterns being painted at the moment---and that you can see posted below.

Of note is the fact that West Texas Intermediate Crude set another new low for this move down, but did not close there.

Well, we're back at the brink once again---and it remains to be seen if da boyz have enough fire power to prevent the markets from crashing like they did back in 2007/08.  Despite their collective electronic printing of trillions in various currencies, it hasn't changed the fact that world is headed into a deflationary spiral that may be impossible to stop this time around.

As Jim Rickards has been pointing out lately, there's always the BIS/IMF with their Special Drawing Rights, but I get the impression from talking to him in San Antonio, that this plan is still some distance down the road---and that the implosion will come long before the SDR sees the light of day.

Of course there's still gold, which is the last card that the central banks have in their hand right now and, without doubt, they're loath to play it.

However, the big engineered price declines in all six of the key world commodities---the four precious metals, copper and crude oil---has set the stage for a big rally in those commodities, plus all the rest, if JPMorgan et al want to rip the lungs out of the Managed Money.  Of course a runaway bull market in commodities would cause just about as many problems as it would solve---and one has to wonder if the Fed and the BIS really know what they're doing.  Jim Rickards says they haven't a clue---and are making it up as they go along.

Considering the way they're acting, I find that very easy to believe.

I have one other thing today---and I've been debating with myself for the last several hours as to whether I should include it or not, but decided that since it's the weekend edition...

The following comment by Bill King appeared in his daily King Report blog yesterday---and this is what he said:  ""Crude tumbled on Thursday to its lowest level since December 2012. Gold jumped as much as $21.00. Oil’s plunge is harming Russia – shades of the Gipper’s war on the USSR in the Eighties."

It reminded me of an essay I wrote more than a decade ago entitled "When Irish Eyes are Smiling: The Story of Canada's Gold?".  In it I posted a story headlined "How the Soviet Empire's Fall was Engineered"---and it was this particular story that came to mind with Bill's comment.  It's definitely worth reading.

I know that the current powers-that-be in Russia haven't forgotten about it.

There are so many black swans out there at the moment, that it wouldn't take much to turn the world's economic, financial and monetary system into a smouldering ruin virtually overnight.

So place your bets---and I'll see you on Tuesday.

]]>
Sat, 11 Oct 2014 10:17:00 +0000
<![CDATA[Lawrence Williams: World Top 15 Gold Producers—Output Still Rising, But Peaking This Year]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-world-top-15-gold-producers-output-still-rising-but-peaki/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-world-top-15-gold-producers-output-still-rising-but-peaki/#When:06:16:00Z "It was disheartening, but not surprising, to see JPMorgan et al show up"

¤ Yesterday In Gold & Silver

The gold price didn't do much in Far East trading yesterday---and the only rally worthy of the name began once the London a.m. gold fix was done for the day at 10:30 a.m. BST, which was 5:30 a.m. EDT.  Gold rallied until 8:10 a.m. EDT---about ten minutes before the Comex open---and at that point someone hit the 'Buy the dollar index/Sell the precious metals" button.  The low came a minute or so after 12 o'clock noon in New York---when the dollar 'rally' ended at precisely the same moment---and the precious metal traded sideways from there into the 5:15 p.m. EDT electronic close.

The high and low ticks were recorded as $1,234.00 and $1,219.30 in the December contract.

Gold closed in new York yesterday afternoon at $1,223.60 spot, up $2.10 from Wednesday's close.  Net volume was very decent at 159,000 contracts

Silver, of course, got sold down at the 6 p.m. Wednesday evening open in New York, but rallied back into positive territory around 11 a.m. Hong Kong time.  At that point it traded sideways for a few hours, before beginning to rally anew an hour before London opened.  Like gold, the rally got cut off at the knees a few minutes after 8 a.m. EDT---and spent the next forty-five minutes or so heading lower.  Then the silver price had the audacity to rally anew---and hit its high tick of the day shortly before 10:30 a.m. EDT.  At that point the HFT boys and their algorithms showed up---and by noon they had the price back to unchanged and, like gold, silver traded basically flat from there for the remainder of the New York session.

The low and high price ticks were reported by the CME Group as $17.325 and $17.72 in the December contract.

Silver finished the Tuesday session at $17.35 spot, down 3 cents from Wednesday's close.

Platinum and palladium traded similarly, as both had their London rallies capped a few minutes after 1 p.m. BST/8:00 a.m. in New York.  After that they continued to get sold down right into the 5:15 p.m. electronic close.  Both were closed down 8 bucks on the day.  Here are the charts.

The dollar index closed late on Wednesday afternoon in New York at 85.32.  From there it began to chop quietly lower, dipping a few basis points below the 85.00 mark on two occasions---with the last time coming about 12:40 p.m. BST in London.  Then minutes after 1 p.m. BST/8 a.m. in New York, someone hit the "Buy the dollar index/Sell the Precious Metals" button.  The 85.63 high tick came about 12:15 p.m. EDT---and the index shed a handful of basis points going into the close.  It finished at 85.55---which was up 33 basis points from its Wednesday close.

The co-relation between the beginning and end of the dollar 'rally'---and the beginning and end of the sell-offs in all four precious metals [gold and silver in particular]---was hardly coincidental.  It looked totally engineered to me.  But you're free to make up your own mind on this.

The gold stocks opened down a hair---and never looked back until the 3:00 p.m EDT low tick.  After that they rallied fairly sharply into the close.  The HUI finished down 'only' 3.54%---but it was down a bit over 5 percent at its low.

The silver equities followed a similar path as the gold stocks---and even though the silver price only closed lower by 3 cents, their shares got body slammed to the downside to the tune of 5.19%.

The CME Daily Delivery Report showed that zero gold and 4 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  Nothing to see here.

The CME Preliminary Report for the Thursday trading session was a no-show.  When I checked their website at 3:30 a.m. EDT this morning, they had the final trading data posted for September 30.  I'm sure that this will be fixed when the CME office opens in Chicago later this morning.

There were no reported changes in GLD yesterday, but 1,438,131 troy ounces of silver were withdrawn from SLV.  It's hard to say whether that was a 'plain vanilla' withdrawal because of price action---or whether the silver was more desperately needed elsewhere.

While on the subject of SLV---Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with what was happening over at the iShares.com Internet site with regards to silver as of the end of trading on Wednesday.  This is what he had to report:  "Analysis of the 08 October 2014 bar list, and comparison to the previous week's list -- 695,726.3 troy ounces were removed (all from Brinks London) and 3,756,699.6 troy ounces were added (all to Brinks London). No bars had a serial number change."

"The bars removed were from: Britannia Refined Metals (0.3M oz), Handy Harman (0.1M oz), and 13 others."

"The bars added were from: Solar Applied Materials (1.6M oz), Degussa (0.6M oz), Handy Harman (0.5M oz), Britannia Refined Metals(0.4M oz), and 24 others."

"As of the time that the bar list was produced, it was overallocated 244.6 oz.  All daily changes are reflected on the bar list.  Again, about 3.7M oz of the deposits appear to be fresh bars (never in SLV before)."  The link to Joshua's website is here.

I also noted that the good folks over at the shortsqueeze.com Internet site updated their short interest data for GLD and SLV as of the last trading day in September---and this is what they had to say:  In SLV, the short interest increased by 9.37 percent, from 13.73 million shares/troy ounces up to 15.02 million shares/troy ounces.  I would assume, maybe wrongly, that this was 'normal' shorting of the shares.  This is naked shorting because the short seller never had to deposit any physical metal to back it up.  There are now two owners of the same shares, but only one has real silver backing it.

In GLD, the numbers went the opposite way, as the short interest in that ETF declined by 5.32 percent, from 1.55 million troy ounces, down to 1.47 million ounces.

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

Over at the Comex approved depositories on Wednesday, there was a decent withdrawal in gold, as 96,750 troy ounces were shipped out---and 4,179 troy ounces were reported received.  Virtually all the activity was at Canada's Scotiabank---and the link to that is here.

The in/out activity in silver was much quieter than normal, as only 207,500 troy ounces were received---and 4,987 troy ounces were shipped out that door.  The link to that action is here.

Here are a couple of charts Nick sent out to all and sundry last night.  The first shows the weekly and cumulative withdrawals from the Shanghai Gold Exchange for each year going back to 2008---and the second is just the total yearly chart, with the last bars in both charts being the "Withdrawn-to-Date" total.  Both show precisely the same data, but presented differently.  The first one shows the intra-year trend, which is slightly different for each year.  I doubt if it means much, but it does give a birds-eye view over time.

I have very few stories today, so few in fact that I had to check around the Internet to see if anything had been missed.  It was just a very slow news day.  However, having said that, there are some must reads in here that you should find the time for.

¤ Critical Reads

Carl Icahn Is Hedging, Warns a Big Correction is "Definitely Coming"

While he still holds many stocks, Billionaire investor Carl Icahn joins the ranks of many of his billionaire market-watchers and is "hedging with S&P Puts," because he is "concerned about the whole economy." As he explains in this brief clip, "you can't keep an economy up just from The Fed," and with The Fed withdrawing from its money-printing largesse, Icahn concludes, a big correction "is definitely coming, it's just a matter of when."

There's a 2:38 minute CNBC video clip embedded in this Zero Hedge piece from 6:04 p.m. EDT yesterday evening---and it's worth watching.  I thank reader Joe Nordgaard for today's first story.

Schizo Market Has Biggest Plunge in 6 Months Following Most Euphoric Surge Since 2011

Wednesday's panic buying vertical ramp in stocks - decoupling from everything but the trusty partners VIX and AUD/JPY - has been entirely unwound as The Dow drops over 300 points (nearly unchanged for 2014), Trannies tumble and Small Caps slump. Stocks all closed significantly lower - despite a late-day effort to lift - ending the day down from pre-FOMC Minutes.

Treasuries closed 0-2bps higher in yield but had ignored equity exuberance and provided the reality check by the close. Real trading volatility ranges are surging in the major indices which historically has not been a good sign. The US$ retraced some of the FOMC losses as Draghi chatter pushed EUR higher. Oil prices cratered under $85 as gold and silver rose (despite US$ strength). Following yesterday's biggest intraday swing since Nov 2011, the Russell 2000 saw its worst day in 6 months.

This Zero Hedge story is wall-to-wall charts---and they're worth skimming.  It's the second offering in a row from Joe Nordgaard.

Sears Tumbles as Vendor Reportedly Halts Shipments

Sears Holding Corp. shares fell sharply Wednesday morning after a media report said a vendor halted shipments to the department-store chain.

The move comes as suppliers are growing increasingly concerned about Sears’s finances ahead of the crucial holiday shopping season.

Shares slumped as much as 17% to $25.05 on heavy trading volume. The stock has lost about half its value over the past 12 months.

This news item appeared on The Wall Street Journal website at 11:12 a.m. EDT on Wednesday morning---and I found it in yesterday's edition of the King Report.

Former Fed Chair Bernanke takes stand, underscores need for 2008 AIG bailout

Former Federal Reserve Chairman Ben Bernanke testified in federal court Thursday that insurance giant American Group Inc. had to be rescued by the government in 2008 to avert global catastrophe.

Bernanke took the stand at a trial of a lawsuit brought by former AIG Chairman and CEO Maurice Greenberg, who is suing the government over its handling of AIG's bailout loan. Bernanke was one of the key decision makers on the bailout, which began with an $85 billion rescue loan from the New York Federal Reserve in September 2008 and grew to nearly $185 billion in federal aid.

In early questioning, Bernanke kept his answers terse when asked about the potential damage an AIG collapse might inflict.

"Certainly there was an enormous amount of stress on financial institutions" in the fall of 2008 after mortgage financiers Fannie Mae and Freddie Mac had been taken over by the government and fear cascaded through financial markets, Bernanke said.

I'm sure he lied when he had to, which would have probably been most of the time.  However, it would be a tie as to which one was the biggest crook---as Greenberg has an ugly past.  This AP story put in an appearance on their Internet site at 3:36 p.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for sending it our way.

Barclays to pay $20 million to settle U.S. class action over Libor

Barclays Plc has agreed to pay nearly $20 million (£12.43 million) to resolve a U.S. class action lawsuit accusing the British bank of manipulating the Libor benchmark interest rate, according to court papers filed Wednesday.

The proposed deal, disclosed in court papers filed in federal court in New York, is the first such settlement of private litigation in the United States against various banks accused of manipulating the London interbank offered rate.

The deal, which must be approved by a federal judge, follows earlier agreements by Barclays in 2012 to pay $453 million to settle investigations by U.S. and British authorities related to Libor.

As part of the $19.98 million settlement, on behalf of futures contract traders, Barclays has agreed to cooperate with the plaintiffs, who hope documents and information the banks provides will aid in resolving claims against other banks.

This isn't even coffee money, let alone a licensing fee---and nobody goes to jail once again.  This Reuters story, filed from New York, was posted on the uk.reuters.com Internet site at 9:19 p.m. BST on their Wednesday evening, which was 4:19 p.m. EDT.  I thank reader Victor George for sharing it with us.

U.K.'s Treasury hires banks to run first renminbi bond sale by a Western state

The government has today hired three banks to help the UK become the first Western state to issue bonds in the Chinese currency renminbi.

The Treasury has appointed HSBC, Standard Chartered and the state-owned Bank of China to run the sale. The new bonds will help to diversify the UK’s public reserves, which are currently held in US and Canadian dollars, euro and yen.

Chancellor George Osborne said the sale is “another step in cementing Britain’s position as the centre of global finance”.

The Treasury said the issue would be “benchmark-sized”, which typically means in excess of $500m (£308.6m) to allow future issuers to price themselves based on the benchmark's performance in the market.

This news item appeared on the telegraph.co.uk Internet site at 1:40 p.m. BST yesterday afternoon---and I found it all by myself.

Draghi Policies Blunted in Berlin as German Protests Grow

The European Central Bank president has stopped short of large-scale sovereign-bond purchases as efforts to mollify Germany’s political elite do little to silence criticism of his ever-more expansionary measures. Support for anti-euro groups such as Alternative for Germany has risen and the ECB’s latest plan to buy assets sparked an outcry within all major parties.

“German public opinion matters an awful lot,” said Anatoli Annenkov, senior economist at Societe Generale SA in London. “Draghi wants the ECB to be a central bank like any other, one that can go and buy government debt. But he’s perfectly aware of Germany’s opposition, and the storm now is a clear signal that it’ll be much more difficult.”

Draghi, who [spoke at the Brookings Institution in Washington yesterday], may be pressured at this week’s International Monetary Fund meetings in the city to take further measures to revive the 18-nation currency bloc’s recovery. That won’t be easy in the face of a German aversion to quantitative easing that is rooted in the 1920s, when money-printing laid the foundation for a society that still fears rising prices more than deflation.

Well, dear reader, all that central banks have to do is reprice their gold---and that would fix a lot of things, but it would cause a lot of problems as well.  This Bloomberg article, filed from Frankfurt, showed up on their website at 3:47 a.m. Denver time on Thursday morning---and I thank Manitoba reader U.M. for her first contribution to today's column.

IMF chief: eurozone showing symptoms of Japan’s chronic economic ills

Christine Lagarde, the head of the International Monetary Fund, has warned that the eurozone is displaying the symptoms of Japan’s longstanding economic problems and needs fresh moves to avert the threat of recession.

With the IMF’s annual meeting in Washington likely to be dominated by the failure of Europe to emerge from the financial crisis of six years ago, Lagarde dropped a broad hint that she wanted Germany to run down its budget surplus to boost growth. She said there was a “serious risk” of a recession in the eurozone if nothing was done to avert a new downturn.

Her comments came after bad economic news from Germany and as the UK chancellor, George Osborne, said the stalling of the eurozone economy was already having an adverse impact on Britain.

Asked if the eurozone was the new Japan, a country that has never fully recovered from the financial crash at the end of the 1980s, Lagarde said: “We have alerted to the risks of persistently low inflation, which was one of the attributes of Japan.”

This news story, filed from Washington, was posted on theguardian.com Internet site at 5:48 p.m BST yesterday afternoon---and I thank South African reader B.V. for sending it our way.  It's worth reading.

Why the conflict-torn city of Kobane matters so much

A battle for control of the Syrian town of Kobane is raging between Kurdish forces and militants of the Islamic State group. Located on the Turkish border, the city is of great symbolic importance to both sides.

The Islamic State jihadist group, also known as ISIS or ISIL, has partially occupied the city, even after days of coalition air strikes aimed at dislodging them from the area.

On Wednesday, Washington confirmed what Kurdish fighters defending the urban centre already knew: the air assault alone will not be enough to prevent it from falling to Islamists.

But observers say that control of Kobane would do little to change the balance of power in the region, since the IS group already controls parts of the Turkish-Syrian border and several border crossing points between the two countries.

This very interesting story appeared on the france24.com Internet site on Wednesday sometime---and my thanks go out to Roy Stephens for bringing it to our attention.  It's worth your while if you're following this conflict closely.

From Pol Pot to ISIS: “Anything that flies on everything that moves”

In transmitting President Richard Nixon’s orders for a “massive” bombing of Cambodia in 1969, Henry Kissinger said, “Anything that flies on everything that moves”.

As Barack Obama ignites his seventh war against the Muslim world since he was awarded the Nobel Peace Prize, the orchestrated hysteria and lies make one almost nostalgic for Kissinger’s murderous honesty.

As a witness to the human consequences of aerial savagery – including the beheading of victims, their parts festooning trees and fields – I am not surprised by the disregard of memory and history, yet again. A telling example is the rise to power of Pol Pot and his Khmer Rouge, who had much in common with today’s Islamic State in Iraq and Syria (ISIS). They, too, were ruthless medievalists who began as a small sect. They, too, were the product of an American-made apocalypse, this time in Asia.

According to Pol Pot, his movement had consisted of “fewer than 5,000 poorly armed guerrillas uncertain about their strategy, tactics, loyalty and leaders”. Once Nixon’s and Kissinger’s B52 bombers had gone to work as part of “Operation Menu”, the west’s ultimate demon could not believe his luck.

This stunning op-edge piece was written by John Pilger, a London-based journalist, film-maker and author.  A former war correspondent, Pilger has twice won Britain's highest award for journalism; his documentary films have won television Academy Awards in the U.K. and the U.S.

Normally I would save an essay such as this for Saturday, but because it's a slow news day, I'm posting it in today's column.  This essay appeared on the Russia Today and Asia Times websites yesterday---and it's the Russia Today copy that's linked here.  Both are identical.  This falls into the absolute must read category, especially for all serious students of the New Great Game.  I thank New Zealand reader Julian Thomson for being the first of several to bring this incredible commentary to my attention---and now to yours.

Missing Plane: Emirates Head Critical of MH 370 Investigation

Why is there still no trace of flight MH 370? In an interview, Sir Tim Clark, head of Emirates Airline, is sharply critical of the investigation thus far. He believes someone took control of the plane and maintained it until the very end.

Tim Clark has been a senior manager at the airline Emirates since 1985 and has been instrumental in developing it into one of the world's largest airlines. Today, the 64-year-old is seen as a knowledgeable expert and critic of the aviation industry. His view of the vanished Malaysian Airlines flight MH 370 is a provocative one. The plane that disappeared was a Boeing 777 and Emirates operates 127 such aircraft, more than any other airline in the world.

SPIEGEL ONLINE: It's now October, seven months after the disappearance of Malaysian Airlines flight MH 370, and we still don't know what happened. What can still be done to gain some degree of clarity?

Clark: MH 370 remains one of the great aviation mysteries. Personally, I have the concern that we will treat it as such and move on. At the most, it might then make an appearance on National Geographic as one of aviation's great mysteries. We mustn't allow this to happen. We must know what caused that airplane to disappear.

SPIEGEL ONLINE: And what do you think happened?

Clark: My own view is that probably control was taken of that airplane.

The credibility of the source---and the website it's present on---are beyond reproach.  And for that reason this interview that appeared on the German website spiegel.de yesterday at 12:01 p.m. Europe time on Thursday, also falls into the absolute must read category.   My thanks go out to Roy Stephens for digging this up for us.

Asian De-Dollarization Explodes: South Korean Renminbi Deposits Surge 55-Fold in a Year

The Bank of Korea — South Korea’s central bank — released data that says South Korean domestic deposits have reached 16.19 billion Chinese renminbi in July this year, which is a 55-fold increase from the same period last year when renminbi deposits accounted for only 290 million.

According to data from South Korean banks, the proportion of foreign currency deposits held in renminbi was 0.4% at the end of 2012. That number reached 13.7% at the end of last year, while at the end of July this year the renminbi accounted for 25.9% of all foreign currency deposits in South Korea.

That’s an incredible, exponential increase.

This article showed up on the sovereignman.com Internet site on Thursday---and I borrowed the headline from the Zero Hedge piece on this---and I thank reader 'David in California' for sending it along.

Bank of Japan's Kuroda Says Many Options Available for Any Increased Easing

The Bank of Japan has “many options” for additional easing, Governor Haruhiko Kuroda said, emphasizing that the bank would adjust its policy if needed to reach its 2 percent inflation target.

“We have substantially increased our JGB holdings but still it’s about 20 percent of total JGBs outstanding,” Kuroda said in response to questions after a speech in New York, noting that the Bank of England holds roughly 40 percent of government debt. “Our purchases of CP, corporate bonds, ETFs and J-REITs have been quite small compared to the market size.”

Kuroda’s comments come amid increasing signs of doubt at the BoJ that it will achieve its two-year time frame for the target. A majority of board members think the bank should drop it, according to people familiar with discussions at the BoJ.

This Bloomberg article, filed from Tokyo, showed up on their website at 9:00 p.m. MDT on their Wednesday evening---and it's the second story I found in yesterday's edition of the King Report.

Festive buying of gold starts in UAE but lags in India

Indian expats in the UAE (and the Gulf) have gotten around to making their gold and jewellery purchases during the festive season of Diwali, aiming to make full use of the soft pricing for the metal. But their counterparts in India are yet to get into the full swing of it, according to a leading retailer.

That the current government in India — which took over the reins in May — would bring down import duties, currently at 10 per cent, has come to naught. It means that, on average, buying gold in India is costlier by Dh15 or so on a per gram basis compared to what it would be in Dubai. And each time there are fluctuations in the rupee versus the dollar, there are those benefits to be had from buying here.

“Gold retail sales in India are yet to see that pick up in demand typically expected ahead of Diwali,” said Joy Alukkas of Joyalukkas Group, which has an extensive network in southern India apart from what it has in the Gulf.

“In comparison, there’s been an definite pick-up in volumes in the Gulf and across the board — what has helped is that Indian customs has turned more lenient in what travellers to India can bring into the country.

This brief gold-related news item, filed from Dubai, put in an appearance on the gulfnews.com Internet site at 4:29 p.m. Gulf Standard Time [GMT +4] yesterday, which was 7:29 a.m. EDT.  It's the second offering of the day from reader U.M.

Lawrence Williams: World top 15 gold producers - output still rising but peaking this year

According to the latest research report from London-based precious metals analysts – Metals Focus – global mined gold output is still on the increase this year, despite the much lower gold price prevailing. This is primarily due to the build-up to full production of a number of major new gold mining operations which came on stream in 2013, while the start-ups at Kibali in the DRC, Aykem in Ghana and Tropicana in Australia added a further 21 tonnes in the first half of the current year. 

The increased mine production in the first half of the year, however, was at least in part countered by a continuing decline in scrap sales – indeed the consultancy is forecasting a fall in global gold supply for the full year due to a predicted double digit drop in scrap supply. Overall Metals Focus is forecasting a global gold supply figure down 2% at 139 million ounces (4,323 tonnes) for the full year, with supply and demand in predicted balance.

Looking ahead to 2015, though, there is a forecast further fall in scrap sales due to a likelihood of a continuation of low gold prices. If this is coupled with the beginnings of a decline in global mine production as the low gold price further impacts the sector with uneconomic mines no longer being able to be kept open then fundamentals may improve again. Even so, prices are seen as remaining relatively depressed, although a pick-up is seen as the year progresses.

This commentary from Lawrie, which falls into the must read category, was posted on the mineweb.com Internet site yesterday---and it's the third and final offering from reader U.M., for which I thank her.

¤ The Funnies

¤ The Wrap

The emergence of the technical funds on the short side of silver (along with gold and other commodities) over the past two years has transformed a marginal improvement into something so spectacular that I can hardly believe it has occurred. Simply put, the headlong rush by the technical funds onto the short side of silver (and gold and copper) has created the opportunity for a price explosion that didn’t exist in 2008.

At the price bottom in 2008, the total non-commercial short position (and that includes both managed money and other large reportable traders) was less than 11,000 contracts. The current COT report indicates that more than 44,500 contracts (222 million oz) are held short in the managed money category alone. In other words, the technical funds are short 4 to 5 times more silver contracts today than they were short on November 18, 2008. In less than three months, the technical funds have sold short 36,000 additional contracts (180 million oz) of COMEX silver. (For those curious about gold, the technical funds appear to hold twice as many short contracts as they did on November 18, 2008, similar in pattern to silver’s configuration, just not as extreme). - Silver analyst Ted Butler: 08 October 2014

It was disheartening, but not surprising, to see JPMorgan et al show up in the precious metal and currency markets again yesterday shortly after 1 p.m. BST in London.  They still have the six key commodities firmly in their iron grasp and, for the moment, aren't prepared to let them rally.

Here are the 6-month charts for all six commodities.  I have the 20 and 50-day moving averages showing for each, except palladium, which has the 20 and 200-day moving averages, as the 50-day is miles above the 200-day.

The other thing worth noting is that WTIC was crushed to a new low for this move down yesterday---and copper got smacked pretty good as well, but didn't make a new low.

 

 

 

 

During the last three business days, crude oil has been hit for almost six bucks---and it had zero to do with supply and demand.  It had everything to do with JPMorgan et al---and their HFT boyz and their algorithms.  It's unfortunate that none of this will be in today's COT Report, or the companion Bank Participation Report.

And as I write this paragraph, the London open is about twenty minutes away.  Three of the four precious metals are down a bit from Thursday's close.  Palladium is flat.  Volumes are light, as gold is a hair under 14,000 contracts---and silver's volume is only 4,400 contracts.  The dollar index is down a small handful of basis points.

As I mentioned two paragraphs ago, we get both the Commitment of Traders Report and the companion Bank Participation Report at 3:30 p.m. EDT today.  Their should be improvements in the Commercial net short positions in all six commodities but, as I mentioned yesterday, I'm most interested in seeing what the U.S. banks have been up to during the last month of engineered price declines.

And as I send today efforts into cyberspace at 4:55 a.m. EDT, I note that all four precious metals got sold down a bit more in early London trading, but are now rallying a bit off their 9 a.m. BST lows.  Gold volume has doubled to 28,000 contracts---and silver volume is now up to 7,600 contracts.  The dollar index began to rally around 2:30 p.m. Hong Kong time---and is now up 20 basis points.

Since today is Friday, I haven't the foggiest notion as what price action we might see as the rest of the trading session unfolds---and nothing will surprise me once I roll out of bed later this morning.

But, before heading in that direction, I'd like to point out that the MP3 files from the San Antonio Summit are now available---and if you've purchased the Summit in that format, you can download them---and today [Friday] is the last day they can be ordered at a discount.  So if you want to buy the contents of the "Thriving in a Crisis Economy" Summit, you can find all about it here.  You can buy the CDs, or the MP3 files.  The choice is yours.

That's all I have for today---and I hope you enjoy your weekend, or what's left of it if you live west of the International Date Line.  And I'll also take this opportunity to wish all my Canadian readers a happy Thanksgiving long weekend.  Eat lots---and drink lots---as I plan on doing exactly that myself.

See you tomorrow.

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Fri, 10 Oct 2014 06:16:00 +0000