<![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[London Metal Exchange Dismissed From U.S. Price-Fixing Lawsuits]]> http://www.caseyresearch.com/gsd/edition/london-metal-exchange-dismissed-from-u.s.-price-fixing-lawsuits/ http://www.caseyresearch.com/gsd/edition/london-metal-exchange-dismissed-from-u.s.-price-fixing-lawsuits/#When:06:15:00Z "Open interest in the September silver contract took a big hit"

¤ Yesterday In Gold & Silver

Nothing much should be read into the gold price action yesterday, except to note that the tiny gains that were present at the Comex open in New York on Wednesday, got cut in half by around 11:30 a.m. EDT.  After the gold price traded flat into the 5:15 p.m. close of electronic trading.

Once again the low and high ticks aren't worth my effort to look up.

Gold closed in New York at $1,282.70 spot, up $2.10 from Tuesday's close.  Net volume was extremely light at only 55,000 contracts.

Not much happened in silver yesterday, either---although the 'rally' from the London silver fix into the Comex open met the same fate as it has for the last three days in a row.

The price traded well within a two-bit range, so I shan't look up the low and high ticks for silver, either.

Silver finished the Wednesday session at $19.435 spot, up a whole 8 cents from Tuesday's close.  And, as expected, gross volume was enormous at 79,000 contracts as the large traders had to be out of their September futures contracts by the end of Comex trading yesterday.  Net volume was a tiny 3,600 contracts.

Platinum rallied about a percent---and hit its high at 10 a.m. Zurich time---and that was it for the rest of the day, although it rallied a handful of dollars a few minutes before the 5:15 p.m. EDT close.  The metal finished up six bucks.

Palladium chopped around a dollar or two either side of unchanged until 9 a.m. EDT in New York.  Then it rallied up to $891 spot---and wasn't allowed to trade any higher than that.  Palladium got sold off four bucks going into the close of electronic trading---and only finished up 6 bucks at $887 spot.

The dollar index closed late on Tuesday afternoon in New York at 82.67---and then chopped sideways until London opened.  The 82.41 low came around 10:45 a.m. EDT---and from there it rallied a handful of basis points, finishing the Wednesday trading session at 82.47---down 20 basis points on the day.

The gold shares traded basically sideways in a very tight range either side of unchanged---and the HUI finished down 0.12%.  Nothing to see here.

The silver equities rallied into positive territory shortly after trading began at 9:30 a.m. EDT in New York yesterday, but it was quietly down hill from there, as Nick Laird's Intraday Silver Sentiment Index closed down 1.12%.

The CME Daily Delivery Report showed that 39 gold and one silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Morgan Stanley issued all of them---and Canada's Scotiabank stopped most of them.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that 39 gold and one silver contract were still open for August---and once you subtract out the deliveries posted in the previous paragraph, you'll see that the August delivery month is done.  First day notice for delivery into the September silver contract should be posted on the CME's website late this evening EDT---and I'll have all the numbers for you in tomorrow's column.

There were no reported changes in GLD yesterday---and as of 9:15 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

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

There was a decent amount of gold deposited over at the Comex-approved depositories on Tuesday.  Canada's Scotiabank reported receiving 63,993 troy ounces---and none was shipped out.  The link to that activity is here.

In silver, nothing was reported received, but 494,747 troy ounces were shipped out the door, with almost 90 percent of that amount coming out of the CNT Depository.  The rest came out of Scotiabank.  The link to that action is here.

For the second day in a row I don't have all that many stories, at least not compared to Tuesday's Critical Reads section.

¤ Critical Reads

Equities Reach Record $66 Trillion as S&P 500 Hits 2,000

Rallies from Brazil to Japan and the Standard & Poor’s 500 Index’s first trip above 2,000 sent the value of global equities to a record $66 trillion.

Shares worldwide added more than $2.2 trillion in value since Aug. 7, according to data compiled by Bloomberg. Optimism that central banks will support economic growth sent the MSCI All-Country World Index up 3.8 percent from its low this month. It was little changed at 9:40 a.m. in New York today. The S&P 500 has risen for 10 of the last 13 days and the NASDAQ Composite Index is about 10 percent from an all-time high.

Global markets are surmounting crises in Ukraine, the Gaza Strip and Iraq as investors renew bets that stimulus will revive growth. The Stoxx Europe 600 Index posted its biggest two-day gain since April after European Central Bank President Mario Draghi signaled policy makers may consider introducing an asset-buying plan. Japan’s Topix index is near its highest level since January, rebounding from losses earlier this year.

Beam me up, Scotty!  There's no intelligent life down here.  This Bloomberg article appeared on their website at 7:42 a.m. Denver time on Wednesday morning---and I thank West Virginia reader Elliot Simon for today's first story.

Dr. Marc Faber: More Market Volatility in Next 6-12 Months

Marc Faber, publisher of the Gloom, Boom & Doom Report, talks about the outlook for global markets. Faber speaks with Matt Miller on Bloomberg Television's "In the Loop."

This 5:18 minute video interview appeared on the Bloomberg website on Tuesday sometime---and I thank reader Ken Hurt for sending it along.

Doug Noland: Reflexivity, Bubbles and Profits

I expect the next crisis to likely revolve around the harsh reality that central banks cannot guarantee robust and liquid markets. Actually, reflexivity ensures that perceptions of limitless cheap liquidity and market backstops ensure the type of excess that inevitably ends in liquidity crisis. When this historic Bubble bursts, corporate profits will be one of the more prominent casualties. And in the fascinating world of Bubble analysis, I can confidently posit that the Fed is oblivious to the unfolding financial stability problem. They clearly don’t appreciate the Bubble they have induced in corporate profits and the ramifications for the true overvaluation of corporate securities generally – both equities and bonds.

Soros has taken a bearish position through the purchase of put options on the S&P 500. Surely he is not alone in looking at relatively inexpensive market insurance for downside protection (as myriad risks become increasingly apparent). These types of instruments tend to exacerbate market volatility. In market declines, those that have sold/written market insurance must dynamically hedge this exposure, which can lead to self-reinforcing selling. At the same time, these types of bearish bets also provide buying power when markets reverse course and rally. This helps to explain why markets (think 1999 or 2007) tend to go into speculative melt-up mode right into the face of deteriorating fundamentals.

It’s also worth noting that the hedge fund industry is generally struggling with performance again this year. Ironically, all the “money” slushing into index products only makes the job of generating “alpha” from stock picking all the more challenging. There are many reasons I suspect the markets have entered a period of heightened volatility.

This commentary by Doug must have been posted on the prudentbear.com Internet site last Saturday, as it wasn't there late on Friday night when I checked it for inclusion in my Saturday column.

Financial Times still can only hint at market rigging by central banks

In the conclusion of a series of articles about "asset bubbles," Wednesday's Financial Times shows that it is fully aware of market manipulation by central banks but still can't bring itself to put those words together in the same sentence, nor to mention gold in that context.

From yesterday's article, written by the FT's Ralph Atkins:

"Investors have seen central bankers suppressing market volatility; the VIX index of expected U.S. share price movements, known as the 'Wall Street fear gauge,' is at a seven-year low. ...

"With their massively expanded balance sheets, central banks have come to dominate many markets, replacing the private sector. ..."

Too bad that the series ends short of any specification of the most sensitive market central banks are dominating. But mainstream financial journalism in the West can go only so far. Apparently mere hints are supposed to be considered heroic.

This Financial Times article from yesterday is posted in the clear in this GATA release---and I thank Chris Powell for wordsmithing the above preamble.

Lockdown in Cardiff: City turned into high security 'prison' with 10 mile 'ring of steel' ahead of NATO conference

Cardiff city centre has been turned into a high security ‘prison’ with 10 miles of fencing - which is being dubbed the ‘ring of steel’ - ahead of the NATO conference next week.

Police have erected the nine feet high security fencing around Celtic Manor resort in Newport where Barack Obama, David Cameron and other world leaders will meet in Wales on September 4 and 5, as well as the city centre.

It comes as former foreign office minister, Kim Howells, issued fears that home grown Islamic State terrorists could be planning to attack the 2014 summit.

This rather imposing photo essay appeared on the dailymail.co.uk Internet site on Tuesday at 8:14 p.m. BST on Tuesday---and I thank reader Sean McLaren for bringing it to our attention.

The DSKing Of Christine Lagarde: IMF Head Formally Charged In Fraud Probe

Ah, the perils of European power politics.

A day after France revealed its new government, the person who so eagerly stepped in after DSK's [Dominique Strauss-Kahn] infamous and choreographed fall from grace and the IMF presidency (not to mention his derailed French presidential ambitions, green-lighting Hollande as what would become the worst French president ever), Christine Lagarde is about to be DSKed herself after "someone" clearly has set their sights on the former French finance minister.

Several hours ago the news hit that a French court has put Christine Lagarde, head of the International Monetary Fund, under a formal probe for negligence in a corruption investigation dating back to her days as finance minister.

To be sure, this development is hardly a shock: recall that it was over a year ago when "IMF's Lagarde Flat Raided Over French 'Payout' Probe" with her ascent to the head of the IMF also riddled with numerous allegations of impropriety involving the Tapie matter. However, until now, such outside interventions were below the radar, and certainly never escalated to anything formal or official. Alas, it now appears that Madame's time has come, even if Lagarde hasn't grasped it just yet.

This very interesting news item got the Zero Hedge treatment yesterday---and it's worth reading.  I thank reader M.A. for sharing it with us.

Europe will be Russia's hostage over gas supplies for at least another decade

Europe will remain heavily reliant on Russian gas for at least another decade, according to a leading rating agency.

Fitch said a lack of alternative sources meant policymakers would have no choice but to continue buying gas from Russia until at least the mid-2020s and "potentially much longer".

Europe already buys a quarter of its gas from Russia, and analysts expect consumption to increase by a third by 2030 as economies recover from the debt crisis and gas-fired electricity generation replaces old coal and nuclear power.

The fear-mongering never stops.  One thing that this Ukraine/Russia imbroglio has highlighted for me, is that the mainstream Western media have all become propaganda channels for Washington and NATO.  It's shameless, as is this piece that was posted on the telegraph.co.uk Internet site on Wednesday at 3:57 p.m. BST---and it's the first offering of the day from Roy Stephens.

Putin says hands tied on gas issues

Russian President Vladimir Putin said Wednesday his hands are tied in terms of the dispute over natural gas to Ukraine because of pending court issues.

The Ukrainian government filed a case in an international court of arbitration challenging the gas bills sent by Russian energy company Gazprom. In April, Gazprom sent Ukraine an $11 billion bill for not taking enough gas in 2013 under a take-or-pay contract.

Putin said from Minsk, where he met directly with Ukrainian President Petro Poroshenko, that settling the gas issue would have to wait.

"Right now, we cannot even accept any suggestions regarding preferential terms, given that Ukraine has appealed to the arbitration court," he said.

This short UPI article appeared on their website at 9:08 a.m. EDT?---and it's worth skimming.  It's the second offering of the day from Roy Stephens.

Russia Set to Fulfill European Gas Contracts Regardless of Situation in Ukraine – Minister

Russia is set to fulfill its European gas delivery contracts, regardless of political situation in transit nations, including Ukraine, Russian Energy Minister Alexander Novak said Wednesday.

"I would like to stress that Russia’s stance on this issue remains unchanged: we will make maximum efforts to fulfill our contract obligations to European importers regardless of current political situation in this or that transit nation," the Russian minister said.

Ukrainian Prime Minister Arseniy Yatsenyuk claimed earlier in the day that Russia was planning to «cut all delivery of energy resources to Ukraine» and "halt gas transit in winter completely, even to European Union consumers."

Commenting on the reports, Novak said Russia was "perplexed by statements about Russia’s alleged intentions to halt gas transit to E.U. countries, made by certain Ukrainian politicians."

This news item showed up on the RIA Novosti website at 9:30 p.m. Moscow time on their Wednesday evening---and I thank reader M.A. for another contribution to today's column.

Ukraine Says Russian Forces Lead Major New Offensive in East

Determined to preserve the pro-Russian revolt in eastern Ukraine, Russia reinforced what Western and Ukrainian officials described as a stealth invasion on Wednesday, sending armored troops across the border as it expanded the conflict to a new section of Ukrainian territory.

The latest incursion, which Ukraine’s military said included five armored personnel carriers, was at least the third movement of troops and weapons from Russia across the southeast part of the border this week, further blunting the momentum Ukrainian forces have made in weakening the insurgents in their redoubts of Donetsk and Luhansk farther north. Evidence of a possible turn was seen in the panicky retreat of Ukrainian soldiers on Tuesday from a force they said had come over the Russian border.

Russia, which has denied it is helping the insurgents, did not acknowledge the military movements. But the Russians have signaled that they would not countenance a defeat of an insurgency in the heavily Russian eastern part of Ukraine, which would amount to a significant domestic political setback for President Vladimir V. Putin of Russia in his increasingly fractious relationship with the United States and its European allies.

I mentioned a couple of months back that I wasn't going to post any more stories from The New York Times about the Ukraine/Russia situation because they [along with the WSJ] had become such whores for Washington and NATO.  But I just couldn't help myself today, as they really outdid themselves with this one.  This is such bulls hit, that it's hard to believe that any 'reporter' worth his salt would put their names on such shlock.  I'm not sure whether I should thank Roy Stephens for sending it our way, or not.  And by the way, the headline has been changed to read "Ukraine Reports Russian Invasion on a New Front"

Switzerland adopts stricter sanctions on Russia

To prevent Russia from skirting international sanctions via Switzerland, the Swiss government has taken additional steps to reflect sanctions imposed by the EU in connection to the Ukraine crisis.

Taking effect on Wednesday, the new measures strengthen the ordinance that Switzerland adopted in April. The policies – outlined in detail in a statement – affect the finance sector and items requiring an export licence, in particular military supplies and dual-use goods that could be used for civilian as well as military purposes. There is also a ban on imports of such goods from Russia and Ukraine. Another embargo applies to the import and export of key goods used to extract oil and gas.

In addition, the cabinet “acknowledged the measures taken by Russia in respect of agricultural goods” and stressed that “Switzerland is not engaged in any state measures to promote additional Swiss exports to Russia”.

The cabinet said it  would continue to monitor the situation in Ukraine closely, reserving “the right to take further measures depending on how the situation develops”.

So much for Switzerland's famous neutrality.  This article appeared on the swissinfo.ch Internet site  at 5:14 p.m. Europe time on Wednesday afternoon---and I thank South African reader B.V. for finding it for us.

Anti-Russian rhetoric pre-dated Ukraine crisis, Moscow does not want spats - Lavrov

Russia’s Foreign Minister Sergey Lavrov said that the West started its “irrational attacks on Russia long before” this spring’s events in Ukraine, but insisted that Moscow is seeking to avoid “spiraling sanctions” with the EU and the US.

“We are not interested in confrontation, we are not interested in a sanctions spiral,” the minister said in a speech to an audience at the Lake Seliger youth camp in central Russia.

“I can only note that long before events in Ukraine the West’s attacks on Russia assumed an irrational form. It all started long before this spring.”

Lavrov accused Western political leaders of “stirring up” anti-Russian feelings among their electorates, saying that their attitudes towards Russia “require a reevaluation.”

This commentary was posted on the Russia Today website at 1:13 p.m. Moscow time, which was 5:13 a.m. in New York.  It's another offering from Roy S.

Russia to take rubles, yuan for oil

Russian oil company Gazprom Neft said it agreed Wednesday to accept rubles and the Chinese yuan for crude oil deliveries.

For exports from the Novoportovskoye field in the arctic, the company said it would accept the Russian currency, while China could use its own currency for oil delivered from the Eastern Siberia-Pacific Ocean pipeline.

The switch could help the Russian economy reduce its dependency on the U.S. dollar in an era when Western economies are imposing tough sanctions on Moscow in response to the ongoing crisis in Ukraine.

This brief UPI item appeared on their Internet site at 9:57 a.m. yesterday EDT?---and once again I thank Roy Stephens for bringing it to our attention.

Russian Central Bank prepares bill to create SWIFT analog in Russia

The Russian Central Bank and the government’s financial and economic departments have prepared a bill to create a Russian analog of the SWIFT international financial message system, Deputy Finance Minister Alexei Moiseyev said on Wednesday.

“We have prepared a bill. We have consulted with the banking industry and the Central Bank,” Moiseyev said.

Russia will go ahead with the bill as soon as it becomes clear that the Central Bank is technologically prepared “to transfer all operations to internal processing inside Russia.”

Central Bank First Deputy Chairman Georgy Luntovsky said in July that SWIFT was discussing a possibility with the Russian regulator to establish an operational center in Russia. SWIFT Director for Russia, CIS and Mongolia Matvei Gering confirmed this information at that time.

This very interesting news story put in an appearance on the ITAR-TASS website at 3:06 p.m. Moscow time on Wednesday afternoon---and it's certainly worth reading.  I thank 'David in California' for passing it around yesterday.

David Stockman: Bombs Away Over Syria! Washington Has Gone Stark Raving Mad

America’s spanker-in-chief is at it again—threatening to bomb Syria owing to the uncivilized actions of its inhabitants. And when it comes to Syria, Washington avers that there are punishable malefactors virtually everywhere within its borders.

Exactly one year ago Obama proposed to take Bashar Al Assad to the woodshed because he had allegedly unleashed a vicious chemical attack on his own citizens. That was all pretext, of course, because even the CIA refused to sign-off on the flimsy case for Assad’s culpability at the time—-a reluctance corroborated since then by the considerable evidence that hundreds of Syrian civilians were murdered during a false flag operation staged by the rebels with help from Turkey. The aim of the rebels, of course, was to activate American tomahawk missiles and bombers in behalf of “regime change”, which was also the stated goal of the Obama Administration.

Now the White House is threatening to bomb Syria again, but this time its “regime change” objective has been expanded to include both sides! In 12 short months what had been the allegedly heroic Sunni opposition to the “brutal rule” of the Assad/Alawite minority has transmuted into the “greatest terrorist threat ever”, according to the Secretary of Defense.

So Obama has already unleashed the drones and surveillance apparatus to identify targets of attack that will help bring down a regime in northern and eastern Syria—the so-called Islamic State—which did not even exist a year ago. And a regime that is now armed to the teeth with America’s own latest and greatest weaponry as previously supplied to the disintegrated Iraqi army and the Syrian rebels trained by the CIA in Jordan.

This commentary by David showed up on his Internet site yesterday sometime---and it's worth reading as well.  I thank Roy Stephens for his second-last contribution to today's column.

Iran speeds weapons deliveries to U.S. ally in Iraq

U.S. officials are taking a wary view of the disclosure this week that Iran – one of four countries the United States accuses of supporting terrorism – has begun arming the Kurdish Regional Government in northern Iraq, as the Kurds scramble to combat the threat posed by ISIS.

ISIS, also known as the Islamic State, has seized large swaths of territory in Syria and Iraq, and recently came close to overrunning Erbil, the capital of the KRG in the semi-autonomous Kurdish region. It was the immediate threat to Erbil, where the U.S. has a number of diplomats stationed, that prompted President Obama to launch airstrikes against ISIS.

While the Kurds are grateful for American intervention, they also say the central Iraqi government in Baghdad has starved them of cash and military hardware in this time of grave threat. “We asked for weapons and Iran was the first country to provide us with weapons and ammunition," KRG President Massoud Barzani said during an appearance in Erbil on Tuesday with Iran’s foreign minister.

It's hard to know what is fact---and what is propaganda.  This news item appeared on the foxnews.com Internet site on Wednesday sometime---and I thank reader M.A. for his final offering in today's column.

Moscow-Beijing Cooperation Important for International Security

Constructive relations between Russia and China are important for international stability and security, the head of Russia’s General Staff of the Armed Forces, Valery Gerasimov, said after talks with his Chinese counterpart Fang Fenghui and Vice Central Military Commission Chairman Fan Changlong in Beijing Wednesday.

“We put great importance on the development of military links with China. Russia highly appreciates the state of and the prospects for the military departments’ cooperation. Today, this is especially important,” Gerasimov told the press.

Among other issues, the general staff chiefs discussed regional security.

“The military and political state of the region is characterized by the high pace and contradictory character of events. On the one hand, the intention to search for new forms of political and economic interaction is increasing. On the other, there is a political tension in the region Gerasimov said.

This rather short article showed up on the RIA Novosti website at 7:59 p.m. Moscow time on their Wednesday evening, which was 11:59 a.m. in New York.

Two King World News Blogs

The first interview is with Dr. Philippa Malmgren---and it's headlined: "Ex-White House Official - Tragedy, Chaos and Human Suffering".  The second is with Keith Barron---and it's entitled:  "We Are Now Living in a  World That is Teetering on the Brink".

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

Chinese-made U.S. military coins should be outlawed, Stilp says

Learning that U.S. Navy commissioning coins were made in China is more than Middle Paxton Twp. resident Gene Stilp can tolerate.

The citizen activist doesn't like seeing the "Made in China" label on any product, knowing it signals the continued erosion of America's manufacturing base. But having the United States military buying Chinese-made commemorative coins is an insult to those who wear its uniforms, he said.

On Monday, Stilp asked U.S. Sen. Bob Casey, D-Pa., to push for a federal law barring any branch of the military from buying collectible coins minted outside the nation's borders.

This interesting article was posted on the pennlive.com Internet site on Tuesday evening EDT---and I thank Elliot Simon for bringing it to our attention.

Gold Switzerland interview: Alasdair Macleod on the reasons for owning gold

GoldMoney research director Alasdair Macleod, interviewed by financial journalist Lars Schall for Matterhorn Asset Management's Gold Switzerland, offers what he considers the three primary reasons for owning gold.

But just as interesting, Macleod argues that the London gold market is declining because of its lack of transparency, that gold will remain money if only because Asia increasingly says so, that countries are beginning to realize that they cannot be independent if they rely on the U.S. dollar and U.S.-controlled payment systems, and that Germany's Bundesbank has made itself ridiculous by its inability to recover its gold from custody by the United States.

Schall's interview with Macleod is 17 minutes long and can be viewed at the goldswitzerland.com Internet site.  I thank Chris Powell for wordsmithing the above paragraphs of introduction.

London Metal Exchange dismissed from U.S. price-fixing lawsuits

A judge has dismissed London Metal Exchange Ltd as a defendant from U.S. antitrust litigation accusing banks and commodity companies of conspiring to drive up aluminum prices by restricting supply, hurting manufacturers and purchasers.

In a decision made public on Tuesday, U.S. District Judge Katherine Forrest in Manhattan concluded that the LME was an "organ" of the U.K. government, and therefore immune from the lawsuit under the Foreign Sovereign Immunities Act.

Forrest acknowledged that her decision may at first glance seem "somewhat surprising and counterintuitive," noting that the LME is a privately-held, for-profit company subject to extensive regulation. But she said the relevant case law "tips decidedly" toward a grant of immunity, noting that the LME is required by law to perform "the decidedly public function of market regulation".

This Reuters piece, filed from New York, put in an appearance on their website at 2:35 p.m. on Tuesday afternoon EDT---and I found it on the gata.org Internet site yesterday.

Absolute change needed to mine Wits basin’s stranded 1.1 billion gold ounces

South Africa’s Witwatersrand basin contains another 1.3-billion ounces of gold, almost as much gold as has been mined there since 1886 – but miners can only get to another 200-million ounces of it using today’s mining methods.

If the industry does not come up with a new way of mining, more than a trillion dollars worth of gold will not be mined, because the 1.1-billion ounces in question are either below the cutoff for the current mining method, or they are at depths where there are no technical solutions to get to mine those ounces.

Moreover, safety has reached a plateau and unless significant change is made to what creates this plateau, death and injury in mines will continue, which is totally unacceptable.

There is thus an absolute need to change – and senior VP technology and projects Shaun Newberry is at the forefront of an AngloGold Ashanti move that could result in all three billion Wits basin ounces being mined and not merely 1.9 billion of them.

A much higher gold price wouldn't hurt, either.  But as reader B.V. pointed out in an e-mail exchange we had yesterday, that's not the real issue here.  This very interesting article appeared on the miningweekly.com Internet site yesterday sometime---and my thanks go out to reader B.V. for bringing it to my attention---and now to yours.

Koos Jansen: Comparison of Chinese silver price is complicated by 17% tax

Gold researcher and GATA consultant Koos Jansen reports that silver prices reported from Shanghai have been including a 17-percent sales tax, complicating their comparison to prices outside the country. Jansen writes that he'll be investigating this subject.

His commentary was posted on the Singapore-based Internet site bullionstar.com Internet site at 5:00 p.m. local time on their Tuesday afternoon.  It's another article I found on the gata.org Internet site yesterday.

What the Next Gold Confiscation Will Look Like

You may be familiar with the story of how the U.S. government confiscated gold bullion and then made owning it illegal back in 1933.

Actually this event is more accurately termed a nationalization. Americans were forced under harsh penalties to sell their gold at an artificially low “official price.” If it were an outright confiscation, the government would have just taken the gold without giving anything in return. But no matter how you label it, the end result was the same: the theft of purchasing power.

Many have speculated that the U.S. government could once again turn to gold confiscation/nationalization if it became desperate enough. These fears are not unfounded given the abysmal financial situation of the U.S. government that only continues to get worse, coupled with a total lack of political will to cut spending.

But would the US government really turn to a 1933-style grab again?

I would argue that they wouldn’t, but that doesn’t mean the threat to your gold has diminished. Quite the opposite.

This commentary by International Man senior editor Nick Giambruno appeared on his Internet site yesterday---and is certainly a must read.

¤ The Funnies

Today's first photo is one of Australia's many varieties of jumping spiders---munching on its hapless victim.  The photo is courtesy of Nick Laird---and he said that this little fellow is about 7 mm long, which is about average for a jumping spider.  And as you can tell from the photo, depth-of-field is a huge issue in macro photography, as there's about 3 mm worth in this shot.

¤ The Wrap

Try to imagine for a moment that the warehouse movements were occurring, not in silver, but in another commodity, like gold or copper. If the equivalent of two full days of world production were being moved weekly into and out from the COMEX gold or copper warehouses, as is the case in silver, would anyone notice?

I would think that if 550,000 oz of gold came into and out from the COMEX gold warehouses on a weekly basis for years, that movement would be a prime topic of conversation. No, check that – tongues would be wagging in trying to discern why so much gold was being physically moved. Likewise, if 100,000 tonnes of copper (2 days world production) on average came into and out from the COMEX warehouses on a weekly basis, all would be astounded (especially seeing as total COMEX copper inventories are around 26,000 tonnes).

Since gold is not primarily an industrial commodity, it’s hard to imagine the motivation investors would have in physically moving so much metal in and out. And even though copper is very much an industrial metal, it’s almost impossible to imagine that much copper being moved. Then what the heck is going on in COMEX silver? If it isn’t extreme tightness, I don’t know what it is. And I hope no one asks that if silver is experiencing such tightness due to demand then why is the price so low? - Silver analyst Ted Butler: 23 August 2014

I wouldn't read a thing into the price action of either gold or silver yesterday.  As I've been writing about since Saturday, Wednesday was the last day for the large traders to sell or roll their September Comex contracts.  There wasn't much volume in gold, as September is not a traditional delivery month, but it is for silver---and as I said in The Wrap in my Wednesday column, I expected silver volume to pick up substantially as the trading day wore on, and that's exactly what happened.

Glancing at the CME's Preliminary Report for the Wednesday trading session once again, I see that open interest in the September silver contract took a big hit, as it plunged by more than 50 percent from Tuesday---and is now down to 12,328 contracts.  Expect that number to decrease just as dramatically in tomorrow's report, as the rest of the traders in the September contract have to be out by the end of Comex trading at 1:30 p.m. EDT this afternoon.  And as an aside, there are now 579 gold contracts still open in the September delivery month---and that's an increase of 63 contracts from Tuesday.  If forced to bet ten bucks, I'd guess that virtually all these contract holders will be looking for physical delivery next month.

Here, once again, are the 6-month charts for both gold and silver---and although they both show a positive bias at the moment, I'm still choked with caution, as JPMorgan et al show no signs of loosening their iron grip on precious metal prices.

And as I type this paragraph, the London open is about 45 minutes away---and all four precious metals are up a bit from their respective closes on Wednesday afternoon in New York.  Gold's net volume is a bit over 7,000 contracts, which is fumes and vapours---and silver's net volume is only 1,900 contracts.  Absolutely nothing to see here, although I know for a fact, as I mentioned earlier, that we'll see another big volume day in silver once again.  The dollar index is down a handful of basis points.

And as I fire this out the door at 5:05 a.m. EDT, there has certainly been some price activity in the precious metals worthy of the name, especially in silver.  As I mentioned in the previous paragraph, there were tiny rallies underway in Far East trading, but shortly after 2 p.m. Hong Kong time---and about 45 minutes before London opened, silver took off to the upside.  It ran into JPMorgan et al a couple of times, but that didn't slow the rally down by much.  However, shortly after 9 a.m. BST, it looks like they got the job done, at least for the moment.  Here's the Kitco silver chart as of 4:55 a.m. EDT.

Gold volume has now exploded out to a bit over 26,000 contracts, as the rally in gold ran into "da boyz" as well.  Silver's net volume has blown out to around 11,000 contracts, more than five times what it was just 45 minutes before the London open, so it's obvious that JPMorgan et al were at battle station selling however many Comex contracts it took to put out this silver price spike, because if they hadn't, we'd be looking at 3-digit silver price right now.

I'm surprised to see this sort of price action on the last day of the roll-overs out of the September silver contract, as I though it would be rather quiet from a price perspective, sort of like it was on Wednesday.  Obviously that theory is out the window---and I await the New York open with great interest.

See you tomorrow.

]]>
Thu, 28 Aug 2014 06:15:00 +0000
<![CDATA[Ted Butler: How the Coming Silver Bubble Will Develop]]> http://www.caseyresearch.com/gsd/edition/ted-butler-how-the-coming-silver-bubble-will-develop/ http://www.caseyresearch.com/gsd/edition/ted-butler-how-the-coming-silver-bubble-will-develop/#When:06:12:00Z "The Commitment of Traders Report is still an ugly looking document"

¤ Yesterday In Gold & Silver

The gold price showed signs of life in early morning trading in the Far East on their Tuesday---and was up more than ten bucks by around 12:45 p.m. Hong Kong time.  Then about an hour and a half after that, the price looked like it was about to run away to the upside until JPMorgan et al showed up with their HFT algorithms and, as I mentioned in The Wrap on Tuesday, the high of the day was in at the London open.  And except for a capped rally at the Comex open, the gold price slid down hill for the remainder of the day.

The low and high ticks were recorded as $1,275.70 and $1,291.90 in the December contract.

Gold closed on Tuesday in New York at $1,280.60 spot, up only $4.40 on the day after "da boyz" got through with it.  Net volume was 97,000 contracts, which wasn't overly heavy, but a good chunk of that was used to put out the rally fires at the London and New York opens.

Silver followed a similar path to gold, but the rally at the London open was much more anemic, with the real fireworks starting shortly before 1 p.m. BST---and within ten minutes of the Comex open, JPMorgan et al had capped the price and, like gold, it was all down hill from there.

The low and high ticks in silver were reported by the CME Group as $19.305 and $19.66 in the September contract.

Silver closed yesterday at $19.355 spot, up 1 cent from Monday.  Only the willfully blind wouldn't admit the price management that was self evident in the silver market yesterday.  One wonders how much more egregious it can get before they do.

Platinum and palladium both had rally attempts at the London and New York opens---and they, too, got dealt with in a similar fashion.  Both finished down on the day---platinum by 6 bucks and palladium by five.  Here are the charts.

The dollar index closed late on Monday afternoon in New York at 82.58---and then chopped around in a 25 basis point range for the entire Tuesday trading session.  The 80.45 low came at 2:30 p.m. Hong Kong time---and the 82.69 high came around 2:40 p.m. in New York.  It closed at 82.67---up 9 basis points on the day.  Here's the 3-day chart so you can see the action.

The gold stocks gapped up a percent and change at the open---and then began to work their way higher starting around 10 p.m. EDT.  Then from 3 p.m. onward, they traded flat.  The HUI finished up 2.28%.

The silver equities had a very similar price path as the gold stocks---and Nick Laird's Intraday Silver Sentiment Index closed up 2.45%.

I was rather amazed to see the gold and silver equities rise for most of the trading session, while the underlying metals headed south at the same time.

The CME Daily Delivery Report showed that 46 gold and 1 silver contract were posted for delivery within the Comex-approved depositories on Thursday.  Morgan Stanley and ABN Amro issued---and HSBC USA and Scotiabank stopped.  The link to yesterday's Issuers and Stopper Report is here.

The CME Preliminary Report for Tuesday's trading action showed that only 55 gold and 2 silver contracts are left for delivery in the August contract---and after you subtract the deliveries mentioned in the previous paragraph, the August delivery month is pretty much done.

There was another withdrawal from GLD yesterday.  This time it was 48,097 troy ounces.  And as of 9:57 p.m. EDT yesterday evening, there were no reported changes in SLV.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETF holdings as of the close of business on Friday, August 22.  Their gold ETF declined by 12,475 troy ounces---and their silver ETF shed 96,838 troy ounces.

The good folks over at the shortsqueeze.com Internet site updated their short position data for both SLV and GLD [as of the July 15 cut-off] late last night.  Their new report showed that the short position in SLV declined by 8.97 percent---from 17.37 million shares/troy ounces, down to 15.81 million shares/troy ounces.  I was expecting/hoping for more than that, but the numbers are what they are---and that's if all the deposits made during the reporting period were included.  There should be another big decline in the next report in two weeks from now, as 4.5 million ounces of silver have been reported added to SLV since the July 15 cut-off.

The short position in GLD went the other direction, increasing by 16.95 percent, from 1.15 million troy ounces, up to 1.35 million troy ounces.  This increase was probably of the 'plain vanilla' variety.  Regardless, the short position in GLD remains very low on an historic basis.

The U.S. Mint had another sales report yesterday.  They sold 3,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 105,000 silver eagles.

It was very quiet in gold over at the Comex-approved depositories on Monday, as nothing was reported received---and only 321 troy ounces were shipped out.

Of course it was an entirely different kettle of fish for silver, as 890,790 troy ounces were reported received---and 600,040 troy ounces were reported shipped out.  The link to that action is here.

At the moment, I have a lot less stories for you than I did on Tuesday.  However, that could change as the evening progresses.

¤ Critical Reads

Investor Net Worth Drops to New All-Time Low, NYSE Reveals

One can debate whether or not margin debt as reported by the NYSE has any relevance in a world in which the retail investor is long gone, and where the marginal buyer are hedge funds (and primary dealers who use excess reserves as collateral for marginable derivatives and futures) who fund themselves using far more arcane "shadow" repo conduits as we have explained previously, it is indisputable that the leverage statistics disclosed monthly by New York Stock Exchange provide a useful glimpse into how the broader market is obtaining "dry powder" to keep BTFATH.

And while in July margin debt did dip modestly from near all time highs hit back in June when total margin debt was virtually tied with the previous record, at $464 billion, it was that other metric tracked by the NYSE, namely Investor Net Worth, calculated by subtracting margin debt from the notional represented in free credit cash accounts and credit balances in margin accounts, that was the notable highlight in the July report: at a negative $182.1 billion, a decline of $6.3 billion from the prior month, investor Net Worth has never been lower.

This happens to be a deficit which is more than twice as large as the net worth shortfall reached during the last market bubble, which hit ($79) billion, peaking during the quant freakout in the summer of 2007 and subsequently surging to a record high of $184.6 billion in August 2008, as repo desks closed all margin positions with virtually any and every counterparty, leaving everyone in a position of record high "net worth."

This short, but very interesting article, with a 'must see' chart, appeared on the Zero Hedge website at 3:25 p.m. EDT yesterday afternoon---and today's first story is courtesy of reader M.A.

Sprott Money's "Ask the Expert" interviews Jeff Berwick

This 39:21 minute audio interview conducted by Geoff Rutherford---along with a transcript---was posted on the sprottmoney.com Internet site yesterday.

It Begins: Council On Foreign Relations Proposes That "Central Banks Should Hand Consumers Cash Directly"

Moments ago a stunning article appearing in the "Foreign Affairs" publication of the influential and policy-setting Council of Foreign Relations, titled "Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People." 

In it we read the now conventional admission of failure by Keynesians, who however, unwilling to actually admit they have been wrong, urge the even more conventional solution: do more of the same that has lead to the current financial cataclysm, only in this case the authors advocate no longer pretending that the traditional monetary channels work but to, literally, para-drop money. To wit:

To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. And some countries, such as Portugal and Spain, may already be experiencing deflation. At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation.

Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.

This is the first of two absolutely positively must reads today---and this one is the second contribution of the day from reader M.A.

James Grant on Bubbles, Bargains---and Everything in Between

The Daily Reckoning presents… Steve Forbes' Intelligent Investing with Jim Grant, editor of Grant’s Interest Rate Observer

Forbes: Tell us, what is going on? We’ve had the worst recovery from a sharp downturn in U.S. history. Yet the monetary base has exploded far in excess of what it did in the ’70s and yet we haven’t had an explosion, at least in the Consumer Price Index. Gold is down from its highs of three years ago. Stocks are at a record high. What you call the taper tantrum, now the markets are in seeming calm about that. So what in the world is happening?

Grant: Well, I think first and foremost the patient is over-medicated. That is, the economic patient. Stimulus, by the bottle full, by the prescription fill, gradually and by degree are (and I guess not so gradually) the Federal Reserve has moved to substitute price administration for price discovery. And it seems to me that the Fed’s kind of full-court pressed (to switch metaphors) on financial markets and pricing thereof has induced a deep complacency with respect to financial assets and has also introduced a sharp degree of optimism or what we might call even inflation in the financial markets.

I certainly can’t explain why, to date, no such inflation has been visible or very little has been visible in the consumer realm. But you know one would almost expect that in this day and age of miraculous digital enhancements to everything we do and the related improvements and the efficiency of production that prices would, in the absence of these monetary insertions, actually fall, or at least dwindle a little bit. So I suppose that a little bit of inflation is itself an anomaly one ought to have seen, kind of a dividend for the working guy in the shape of low and everyday lower prices.

The video interview runs for 34:26 minutes---and there's a transcript as well.  It was posted on the dailyreckoning.com Internet site on Monday---and I thank West Virginia reader Elliot Simon for sending it our way.

The Daily Reckoning: One World, One Bank, One Currency

The government is very good at making things overly complicated for the purpose of obscuring what’s really going on from the public,” observed hedge fund manager Erik Townsend during our interview in May.

He was making a point about the 2008 bailouts. The Federal Reserve played a leading role, applying trillions in paper-clip and rubber-band solutions. The Fed’s balance sheet swelled from $900 billion in September 2008 to $4.4 trillion as we go to press.

Luckily for you, our friend Jim Rickards is just as good at elucidating the muddled world of finance as the government is at obscuring them.

“Since Federal Reserve resources were barely able to prevent complete collapse in 2008,” Jim writes in his recent New York Times best-seller, The Death of Money, “it should be expected that an even larger collapse will overwhelm the Fed’s balance sheet.”

Simply put, next time, printing another $3 trillion-plus won’t be politically feasible. “The specter of the sovereign debt crisis suggests the urgency for new liquidity sources, bigger than those that central banks can provide, the next time a liquidity crisis strikes. The logic leads quickly from one world to one bank to one currency for the planet.”

This interview/commentary by Jim Rickards was done by The Daily Reckoning's Addison Wiggin---and it was posted on their website a week ago today.  I thank Carl Lindfors for sharing this item with us.

Lars Schall interviews Ambrose Evans-Pritchard---Part 1

This fascinating video interview runs for 29:05 minutes---and it was posted on the goldswitzerland.com Internet site yesterday.  Even though I've been posting his columns from The Telegraph for almost a decade, it's the first time I've ever seen him "in the flesh" so to speak, or even heard what his voice sounded like.

I've just watched the first bit---and will watch the rest after I get out of bed later this morning.  From what I've heard so far, it's definitely worth watching.

Scottish separatist wins TV debate ahead of referendum

Scotland's pro-independence leader Alex Salmond on Monday (25 August) was seen as the winner of a final TV debate before a referendum which could lead to the creation of a new EU member state.

The BBC debate, spiced up by heckling from the audience, saw Salmond continuously interrupting and contradicting Alistair Darling, a former British minister who is head of the "Better Together" campaign to keep Scotland in the U.K.

"If we are Better Together, why are we not better together already?" an audience member shouted at one point.

A snap poll by ICM Research found that 71 percent of viewers said Salmond had won the debate, which took place in Glasgow, Scotland's largest city. Darling, the winner of the previous TV debate, only convinced 29 percent of the polled viewers.

This article appeared on the euobserver.com Internet site at 9:30 a.m. Europe time on Tuesday---and it's courtesy of Roy Stephens.

French government reshuffle expels dissident ministers

France's prime minister reshuffled his Cabinet on Tuesday to silence ministers who had openly criticized Socialist President Francois Hollande's economic policies as he tries to pull the nation out of stagnation and steer it toward growth.

Emmanuel Macron, who had earlier served as top adviser in charge of the economy, took over the Economy Ministry, replacing Arnaud Montebourg, who had publicly railed against government policies as being too austere and unjust to the French.

Macron, a 36-year-old former banker who advised Hollande until June 2014, is known for his pro-business stance and is sure to send a positive signal to the European Union, which is pressuring France to get its finances in order.

Education Minister Benoit Hamon and Culture Minister Aurelie Filippetti, who supported Montebourg in his criticism, also lost their jobs.

This AP story, filed from Paris, showed up on their website at 4:10 p.m. EDT on Tuesday---and it's also courtesy of Roy Stephens.

German business confidence shattered, lowest in 13 months

Business confidence in Germany, which has led the E.U. economic revival over the last year, declined for a fourth month in August, which further clouded prospects of a broader recovery across the E.U.

Germany’s Ifo Business Climate Index in manufacturing, which looks at the confidence of the country’s 7,000 firms, fell to 106.3 in August from 108 in July.

It’s the lowest figure since last July, marking the longest successive monthly decline since 2012, the report said.

Monday’s figures come after frustrating economic data for the second quarter. It showed Europe’s biggest economy contracted 0.2 percent during the period, after it grew 0.7 percent in the first quarter. Much of the unexpected drop is attributed to the effects of the crisis in Ukraine that has led to a tough 'sanctions war.' Even after the disappointing second quarter, Germany believes it will achieve 1.8 percent growth this year. By contrast, the UK, which is not part of the euro currency zone, showed its strongest quarterly economic growth in 6 years, with 0.8 percent in the second quarter.

This article appeared on the Russia Today website at 3:01 p.m. Moscow time on their Tuesday afternoon, which was 7:01 a.m. EDT.  It's another offering courtesy of Roy Stephens.

Europe Does Not Expect Ukraine to Halt Russian Gas Transit – E.U. Energy Chief

The European Union is not concerned by the possibility of Kiev halting Russian gas transit via Ukraine, the vice-president of the European Commission responsible for energy, Gunther Oettinger, said in Minsk Tuesday.

There is no actual concern,” he said on the sidelines of the Customs Union-Ukraine-EU meeting in the Belarusian capital.

Last month, the Ukrainian parliament passed a bill allowing to impose restrictive measures on Russia, including the possibility of halting transit of Russian oil and gas via the territory of Ukraine.

This RIA Novosti news item, filed from Minsk, put in an appearance on their Internet site at 11:28 p.m. Moscow time on their Tuesday night---and once again I thank Roy Stephens for sending it our way.

Russia, Ukraine, E.U. Agree to Continue Three-Party Talks on Gas – Russian Energy Minister

Russia, Ukraine and the European Union agreed to continue the three-party talks on gas issues that stalled this summer, Russian Energy Minister Alexander Novak said Tuesday.

The three-party consultations continued from mid-April to June, but produced no result. Kiev insisted on a sharp reduction in the gas price refusing otherwise to pay its debt that had reached at the moment $4.5 billion. Russia later offered a discount, which however, failed to satisfy Kiev’s demands. After that the Russian side announced it would continue negotiation only after Kiev cleared its debt. On June 16, Gazprom introduced a prepayment system for gas deliveries to the country.

The European Commission has repeatedly called for the consultations to be resumed.

This article, also filed from Minsk, was posted on the RIA Novosti website at 7:40 p.m. Moscow time on their Tuesday evening---and I thank Roy Stephens for sending it.

Embargoed E.U. Goods Actively Re-Imported to Russia via Belarus – Putin

Goods embargoed by Moscow in response to Western economic sanctions are being actively shipped to Moscow via Belarus, Russian President Vladimir Putin said Tuesday.

"Even within the Customs Union framework, embargoed goods are being actively re-imported to the Russian Federation from the European Union countries, namely via Belarus," Putin said.

"I know that the leadership of Belarus and its president are trying to prevent this negative practice."

The Russian leader added that exporters often replace an E.U. label with a new one and send the goods to Russia.

This RIA Novosti news item, also filed from Minsk, showed up on their website at 7:39 p.m. Moscow time yesterday---and the stories from Roy just keep on coming.

Meeting Between Putin and Poroshenko Ends in Minsk – Spokesman Peskov

The meeting between Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko came to an end in the Belarusian capital Minsk; the private conversation of the two leaders lasted for about two hours.

“The meeting is over,” the Russian leader’s spokesman Dmitry Peskov said withholding though any further comments on the results of the talks.

Following the Customs Union-Ukraine-E.U. meeting, Belarusian President Alexander Lukashenko told journalists that Russia and Ukraine “had agreed on a private meeting between the presidents of the two countries to discuss urgent issues.”

Earlier Spokesman Peskov said that the two leaders may discuss the crisis in Ukraine, humanitarian aid to the country’s eastern regions, the flow of refugees to Russia, and the possibility of an internal dialogue between Kiev and eastern Ukraine. Apart from that, during the talks the Kremlin was expected to discuss the bilateral cooperation between Moscow and Kiev following Ukraine’s signing the Association Agreement with the European Union.

Another RIA Novosti news item, also filed from Minsk yesterday afternoon---but this one is courtesy of reader M.A. for a change.

Ukraine’s transition to E.U. trade will cost €165bn - Putin

Switching over to E.U. trade standards and nixing duty-free trade with Russia will cost Ukraine €165 billion over the next 10 years, President Putin warned at a meeting with President Petro Poroshenko in Minsk on Tuesday.

Russia will be forced to cancel all preferential trade agreements for Ukraine’s imports and switch to a standard regime when it ratifies its E.U. trade association agreement in September, the President said.

“In full accordance with the terms of agreement with the CIS free trade zone and WTO standards, we will be forced to cancel preferential imports from Ukraine,” Putin said.

Russia will cancel its duty-free relationship with Ukraine, which will lead to import tariffs of up to 8 percent affecting 98 percent of commodities.

This article was posted on the Russia Today website at 12:42 p.m. Moscow time on their Tuesday afternoon, which was 4:32 a.m. EDT.  I thank Roy Stephens for sending it our way.

The NYT’s Monumental Hypocrisy: Takes Umbrage About Rebel-Held POWs; Ignores Neo-Nazi Militias Sent by Kiev to Attack Donbas Civilians

The New York Times has taken deep umbrage over an unseemly parade staged by ethnic Russian rebels in eastern Ukraine featuring captured Ukrainian soldiers. The Times noted that the Geneva Conventions prohibit humiliation of POWs, surely a valid point.

But the Times – in its profoundly biased coverage of the Ukraine crisis – apparently feels that other aspects of this nasty civil war are less newsworthy, such as the Kiev government’s bombardment of eastern Ukrainian cities sending the death toll into the thousands, including children and other non-combatants. Also downplayed has been Kiev’s dispatch of neo-Nazi storm troopers to spearhead the urban combat in ethnic Russian towns and cities in the east.

When the Times finally noticed this street-fighting role of neo-Nazi militias, that remarkable fact – the first time armed Nazis were dispatched by any government to kill people in Europe since World War II – was consigned to the last three paragraphs of a long article on a different topic, essentially a throwaway reference.

Similarly, the Kiev regime’s artillery fire on residential areas – killing many civilians and, over the weekend, damaging a hospital – has been treated by the Times as a minor afterthought. But Times’ readers are supposed to get worked up over the tasteless demonstration in Donetsk, all the better to justify more killing of ethnic Russians.

This commentary by Robert Parry was posted on David Stockman's website yesterday sometime---and it's another contribution from Roy Stephens.

Russian Central Bank proposes regulating foreign rating agencies

Foreign rating agencies may need to set up subsidiaries in Russia instead of branches or representative offices, so their operations could be subject to Russian legislation. It is seen as another attempt by Russia to better control its domestic finances.

The Central Bank of Russia has proposed a bill that would regulate operations of rating agencies in Russia, Kommersant reports.

Moody`s, S&P and Fitch acknowledged the receipt of the draft law but declined to comment. If the bill becomes law it would be the first regulation of the sort in Russia.

Central to the bill is that the international rating agencies will have to create Russian subsidiaries, which will be Russian legal entities.

This Russia Today article appeared on their Internet site at 12:54 p.m. Moscow time on their Tuesday afternoon---and my thanks go out to Roy Stephens once again.

NATO plans east European bases to counter Russian threat

NATO is to deploy its forces at new bases in eastern Europe for the first time, in response to the Ukraine crisis and in an attempt to deter Vladimir Putin from causing trouble in the former Soviet Baltic republics, according to its secretary general.

Anders Fogh Rasmussen said the organisations' summit in Cardiff next week would overcome divisions within the alliance and agree to new deployments on Russia's borders – a move certain to trigger a strong reaction from Moscow.

He also outlined moves to boost Ukraine's security, "modernise" its armed forces and help the country counter the threat from Russia.

This story appeared on The Guardian Internet site at 9:04 p.m. BST on Tuesday evening---and it's the final offering of the day from Roy Stephens.

Clive Maund: Will the U.S. break Russia to maintain dollar hegemony?

In my essay "Why they are making an enemy of Russia?," we looked at two of the key reasons why the U.S. is making an enemy of Russia, namely the promotion of conflict by the powerful Defense industry lobby in order to keep its order books full, and the value of conjuring up an external enemy as a hate figure for the masses, in order to take the heat off the government. In this article we are going to look at what is arguably an even bigger reason, that was largely omitted in the earlier article, which is that Russia, in alliance with China, is threatening to bring an end to the dollar as the global reserve currency, which would mean the end of the American empire.

We are witness to the greatest struggle of our age – the battle to maintain global dollar hegemony, and with it U.S. economic, military and political dominance of the entire planet – and this struggle is now coming to a head.

Notwithstanding its undeniably great accomplishments of the past hundred years, the relationship of the United States to the rest of the world is parasitic. This is because it creates money and debt instruments out of nothing, requiring virtually no effort, which it then swaps for goods and services with other countries. Because the U.S. dollar is the global reserve currency, it is able to rack up astronomic deficits that would be untenable for any other country.  U.S. debts are now at such levels that if the U.S. dollar loses its reserve currency status, the United States economy will implode and it will quickly be reduced to the status of a banana republic – hence the sense of urgency in the face of growing threats.

I'd never seen Clyde write a thing except about gold and silver as long as I've been following his work.  So when this piece showed up on the gata.org Internet site yesterday, I was more than skeptical about it.  That all changed after just two paragraphs.  This rather long essay is the second absolutely positively must read commentary in today's column, as it describes the end game of the New Great Game perfectly.

U.S. begins surveillance flights over Syria after Obama authorization

The U.S. has started flying surveillance drones over Syria after President Obama authorized the missions, two senior Defense officials told Fox News, in a move that could pave the way for eventual airstrikes against Islamic State targets in the country. 

A decision still has not been made, at least publicly, to launch airstrikes in Syria. But the Obama administration would likely need additional intelligence on possible targets should the president take that step. 

Sources told Fox News that Obama approved surveillance missions in Syria for the first time over the weekend; they have since begun. 

It remains to be seen whether the Syrian government will raise any objections to the move. On Monday, the Syrian regime demanded that the U.S. seek permission before launching any airstrikes on its territory against Islamic State targets, but did not discuss its position on surveillance drones.

This news item, including at 6:21 minute embedded video clip, showed up on the foxnews.com Internet site on Tuesday---and it's the final offering of the day from reader M.A.

Three King World News Blogs

1. Jeffrey Saut: "People Forget One of Jesse Livermore's Greatest Trades Ever"  2. Stephen Leeb: "Expect Skyrocketing Gold as China and Russia Continue Buying"  3. Jean-Marie Eveillard: "Legend Warns More Shocking Global Chaos on the Horizon"

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

State Department agrees to try looking for gold records again

Three years ago GATA more or less won its freedom-of-information lawsuit in U.S. District Court for the District of Columbia against the Board of Governors of the Federal Reserve System, in which GATA sought access to the Fed's records involving gold swaps.

While the court found that most of the Fed's records involving gold swaps were exempt from disclosure under the law, GATA's initial inquiry to the Fed produced an admission that the Fed indeed has secret gold swap arrangements with foreign banks and the court ordered disclosure of one record, the minutes of the April 1997 meeting of the G-10 Gold and Foreign Exchange Committee, at which Western treasury and central bank officials conspired to coordinate their policies in the gold market.

And a few days ago GATA's law firm, William J. Olson P.C. in Vienna, Virginia, received from the State Department a notice that the department has granted GATA's appeal and indeed will reopen its search for gold-related records.

Of course this whole process is silly and ridiculously slow, deliberately so to discourage embarrassing disclosures about the U.S. government's secret involvement in the gold market. But the process establishes, if with great difficulty, that something is going on here and that the government is so desperate to conceal it as to risk looking ridiculous.

This process also establishes again that the crucial prerequisite of the Western gold price suppression scheme is the cooperation of the mainstream financial news media, their agreement not to commit ordinary journalism when it comes to surreptitious intervention by Western governments and central banks in the gold and currency markets.

This commentary by Chris Powell showed up in a GATA release yesterday---and it's definitely worth your while if you have the time.

Lawrence Williams: Is Asian gold demand really slipping so much?

By all accounts in the mainstream media, gold demand in Asia, and in particular in China and India, has been slipping dramatically this year which some see as the principal reason behind current price weakness. But all may not be as the reports suggest. Is Chinese demand, as suggested by the enormous slippage in gold imports though Hong Kong really as bad as the figures appear to show?

Reuters reports Hong Kong net gold exports to mainland China in July as falling to the lowest level since June 2011 at 22 tonnes (Bloomberg reports the figure as 21 tonnes). Compare this with the heady days last year when such gold imports exceeded 100 tonnes monthly for 6 months in a row from May to October. If this is an accurate indication of Chinese gold demand weakness then this is indeed something of a blow for gold bulls. 

But, China has moved the goalposts. While Hong Kong was very much the primary routing for gold entering the Chinese mainland in the past, indications are that this may no longer be the case as China has now designated a number of other points as import points for gold – notably Shanghai and Beijing. But as it does not publish statistics for these, overall import figures are much more opaque.

This commentary by Lawrie showed up on the mineweb.com Internet site in the wee hours of Tuesday morning MDT.  I saw it in time to post it in Tuesday's column, but I was already full up, so here it is now.  It's certainly worth reading. [Note: when I was editing today's column at 4:45 a.m. EDT, the mineweb.com Internet site was down]

Ted Butler: How the Coming Silver Bubble Will Develop

The conclusion is simple – the asset requiring the least amount of buying to create a bubble is, automatically, the best candidate for developing into the biggest bubble. The fuel for any bubble is total (world) buying power versus the actual amount of an asset available for purchase. Previous, as well as prospective, bubbles in stocks, bonds and real estate grew to many trillions of dollars of total valuation. At $200 an ounce, all the silver in the world (bullion plus coins) would “only” amount to $400 billion, not even a rounding error to the total valuation of stocks, bonds, real estate and, even, gold. In other words, due to silver’s current undervaluation and its shockingly small amount in existence, it has more room to the upside than any other asset class.

But I’m not done. Silver’s unique dual role as a vital industrial material and primary investment asset creates a setup for something happening that has never occurred in any previous bubble. As and when sufficient physical investment buying develops in silver to drive prices significantly higher, the industrial consumers of silver, in everything from electrical and solar applications to medical and chemical applications, will likely be subject to delays in the customary delivery timelines of the metal. As is almost always the case, whenever industrial consumers of a commodity are deprived of timely deliveries, they resort to stockpiling that commodity as a remedy, further exacerbating delivery delays to other users.

Thus, the stage is set for something the world has never experienced previously – an asset bubble accompanied with an industrial shortage. The two greatest upward price forces known to man, an asset bubble and a genuine commodity shortage, appear set to combine in silver. Either one, alone, would have a profound impact on the price, but the combination seems both inevitable and almost impossible to contemplate in terms of how high the price of silver could be driven. And it’s hard to see how intense investment buying wouldn’t trip off industrial user attempted inventory stockpiling or vice versa; it doesn’t matter which comes first.

I've already borrowed many paragraphs from this 20 August 2014 Ted Butler commentary as my 'Quote of the Day.'  Now I don't have to steal it in bite-sized chunks, as Taki Tsaklanos has published the entire article over on the goldsilverworlds.com Internet site.  It is, of course, an absolute must read.

¤ The Funnies

¤ The Wrap

Thanks to a heavy 2.7 million oz turnover [on Friday], the physical movement of metal into and out from the COMEX-approved silver warehouses exploded [last] week to 6.25 million oz, well above the torrid 4.5 million oz average turnover this year. Total inventories rose 2 million oz to 178.2 million oz, but total inventories are not the key story; this is all about the remarkable turnover over the past 3.5 years.

We have seen an increase in COMEX silver stocks of almost 80 million oz to current levels since 2011 and much of that might be explained by the liquidation of 60 million oz from the SLV starting in May 2011. But increases or decreases in total COMEX inventories are much less important to me today than the phenomenal turnover since April 2011. Since we’re no longer in a silver deficit, I expect total inventories to grow, all things being equal. But I never expected this frantic turnover, nor did I expect it to continue for as long as it has. - Silver analyst Ted Butler: 23 August 2014

Yesterday's blatant capping of gold and silver prices was obvious to most---and it's important to remember that if JPMorgan et al, along with their HFT algorithms, weren't standing in the way, we would have a market clearing even of biblical proportions not only in those two metals, but in platinum, palladium---and copper as well.

As Jim Rickards said so succinctly, the price management scheme is now so obvious, that the price manipulators should be absolutely embarrassed by what they're doing.  He would be right about that.

Here are the 6-month charts for both gold and silver, updated with Tuesday's price/volume data.

Gold and silver prices haven't been allowed to do much in the last four trading days, but as I said in this space yesterday, the Commitment of Traders Report is an ugly looking document, even factoring in the improvement over the trading week just past---which we won't see until Friday's report.  But as I've also said on many occasions, there will come a day when the COT Report doesn't matter.

As I write this paragraph, the London open is just under twenty minutes away.  The gold price has been sneaking higher all day in Far East trading---and is up about 4 bucks as of this writing.  Silver is up a few pennies, platinum up 9 dollars---and palladium a couple of bucks.  Gold volume is extremely light, under 10,000 contracts---and silver's net volume is microscopic at 1,000 contracts.  The dollar index, which hadn't done much for most of the Hong Kong session, is down 10 basis points in the last hour.

Taking a look at the CME Preliminary Report once again, I note that there are a bit over 500 contracts left to roll out of the September delivery month, but it's a reasonable assumption that a decent chunk of these will be standing for delivery.  I'll have a clearer picture in a couple of days.

In silver, September open interest is still way up there at 27,253 contracts---and except those future contracts holders standing for delivery on Friday's first notice day, the remainder of these contact holders have to sell or roll over into future months before the close of Comex trading on Thursday.  So there has to be decent volume during the next 48 hours to get that all done in time, but so far, the Wednesday volume is off to a real slow start.  All the large traders have to be out of their positions by the end of Comex trading today, so it's pretty much a given that volumes will increase significantly as the trading day progresses.

And as I hit the send button on today's effort, not much has changed in the first 90 minutes of the London trading session, as prices in all four precious metals have changed very little.  Gold volume is a bit over 14,000 contracts, which is very light for this time of day---and silver's net volume is now around 1,500 contracts, however there is decent roll-over activity now.  The dollar index is now down 15 basis points.

While on the subject of the dollar index, here's the 3-year chart---and as you can tell at a glance, the overbought condition is now extreme.  Sooner or later this condition has to reverse itself---and now it's only a matter of how soon we see some sort of sell-off to alleviate this overbought condition---and how low it goes when it does.

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

]]>
Wed, 27 Aug 2014 06:12:00 +0000
<![CDATA[Lawrence Williams: Russia Leading Central Bank Gold Buyer, But China—Who Knows?]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-russia-leading-central-bank-gold-buyer-but-china-who-know/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-russia-leading-central-bank-gold-buyer-but-china-who-know/#When:06:21:00Z "I'm still on the lookout for "in your ear""

¤ Yesterday In Gold & Silver

The gold price got hit for six bucks the moment that trading began at 6 p.m. EDT on Sunday evening in New York.  Then shortly after London opened, the gold price began to struggle back---and made it almost to the unchanged mark by the 8:20 a.m. Comex open---and that was it for the day.

Once again the high and low ticks aren't worth mentioning.

Gold closed in New York on Monday at $1,276.20 spot, down $4.60 on the day.  Volume, because of the fact that the Globex trading system was down for part of the day, was a very anemic 50,000 contracts.

It was more or less the same for silver, expect the low tick came shortly after 10 a.m. BST---and then the subsequent rally into the Comex open in New York met the same price fate as gold.

The low and high ticks are barely worth posting, but here they are.  The low was 19.295---and the high was 19.47 in the September contract.

Silver closed yesterday at $19.345 spot, down a nickel from Friday.  Net volume was a tiny 6,000 contracts.

The platinum price chopped sideways until the Zurich open---and then get sold off a few dollars, closing down four bucks on the day.

The palladium price didn't do a whole lot until the Comex open.  At that point it got sold down a few dollars, with its low coming minutes before 10 a.m. EDT.   The subsequent rally took it back into positive territory---and it printed its high tick in electronic trading after the Comex close.  The metal finished up five bucks.

The dollar index closed in New York late on Friday afternoon at 82.31.  It rallied almost 30 basis points at the open at 6 p.m. in New York on Sunday evening---and then didn't do much for the rest of the Monday trading session, closing at 82.58---up 27 basis points from Friday.  Here's the 3-day chart.

The gold stocks gapped down a bit at the open---and then crawled quietly lower from there, as the HUI finished down 1.44%.

The silver equities turned in a similar performance, as Nick Laird's Intraday Silver Sentiment Index closed down 1.68%.

The CME Daily Delivery Report showed that 162 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  The three largest short/issuers were JPMorgan out of its client account with 95 contracts---and Morgan Stanley and Jefferies with 44 an 21 contracts respectively.  The two largest long/stoppers were HSBC USA and Canada's Scotiabank with 72 and 71 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.

CME's Preliminary Report for the Monday trading session showed that there were 223 gold contracts still open in August, of which 162 contracts will disappear on Wednesday when the above-noted delivery occurs.  There are only a couple of silver contracts left open.

Not surprisingly, an authorized participant withdrew 96,194 troy ounces of gold from GLD---and as of 5:56 p.m. Monday afternoon, there were no reported changes in SLV.

The U.S. Mint had a sales report to start off the new week.  They sold 2,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 292,500 silver eagles.

There wasn't much in/out gold activity at the Comex-approved depositories on Friday, as only 3,858 troy ounces were reported received---and 300 troy ounces shipped out.  All of the activity was at Canada's Scotiabank---and the link to that is here.

There was very decent activity in silver once again, as 766,292 troy ounces were received, but only 62,002 troy ounces were shipped out.  I would guess that the silver being received lately is in preparation for the September delivery month which begins next Monday.  The link to the silver action is here.

As I mentioned in my comments about gold at the top of this column, the Globex trading system was down for several hours early on Monday.  Rather than go into the details myself, Mark O'Byrne over at the goldcore.com Internet site describes it better than I could, so I recommend you read his Monday column, as it's all there.  The link to his webpage his here.

Since this is my Tuesday column, I have three days worth of stories posted below---and I'll happily leave the final edit up to you once again.

¤ Critical Reads

Goldman Sachs to pay US$3.15b to settle mortgage case

Goldman Sachs will pay US$3.15 billion (S$3.94 billion) to resolve claims it misled Fannie Mae and Freddie Mac on mortgage-linked securities it sold them before the US housing bust, officials said on Friday (Aug 22).

The Federal Housing Finance Agency (FHFA), the conservator for Fannie and Freddie, which were rescued by the government during the 2008 crisis, said that Goldman will repurchase the securities it sold to the two effectively government-backed mortgage giants between 2005 and 2007.

Goldman said the agreement will resolve "all" federal and state securities claims for mortgage-backed securities purchased by Freddie and Fannie over the period.

"We are pleased to resolve these matters," said Gregory Palm, executive vice president of Goldman Sachs.

Without doubt, this sum amounted to a licensing fee compared to the overall scam.  This article appeared on the channelnewsasia.com Internet site at 7:31 a.m. Singapore time---and I thank reader Harry Grant for today's first story.

Burger King in Talks to Buy Canadian Chain Tim Hortons

Burger King Worldwide Inc., the second-largest U.S. burger chain, is in talks to buy Tim Hortons Inc. and move its headquarters to Canada, becoming the latest American company seeking to relocate to a lower-tax country.

Burger King would create the world’s third-largest fast-food chain by merging with Canada’s biggest seller of coffee and doughnuts, the companies said in a statement. The Canadian corporate tax rate is typically 26.5 percent, compared with 40 percent in the U.S., according to auditing and tax firm KPMG.

The deal renews debate over American companies shifting their headquarters internationally in search of lower corporate tax bills. The trend drew criticism last month from President Barack Obama, and his aides vowed that the administration would take action to curtail the practice.

This item is big news here in Canada---and the embedded video clip in this Bloomberg story pretty much sums it up.  It was posted on their Internet site on Sunday sometime Denver time---and has been updated since.  I thank Howard Wiener for being the first reader [of many] through the door with it.

Too Much Corn With Nowhere to Go as U.S. Farmers Plan for Record

The ripening corn and soybean fields stretch for miles in every direction from Dennis Wentworth’s farm in Downs, Illinois. As he marveled at his best-yielding crops ever, he wondered aloud where the heck he’ll put it all.

“Logistics are going to be a huge problem for everyone,” the 62-year-old grower said, adding that he has invested in boosting output rather than grain bins. When harvesting starts in a few weeks, Wentworth expects his 150-year-old family farm to produce 10 percent more than last year’s record. “There are going to be some big piles of grain on the ground this fall.”

From Ohio to Nebraska, thousands of field inspections this week during the Pro Farmer Midwest Crop Tour show production of corn could be 1 percent more than the government’s estimate and soybeans 1.2 percent higher, according to a Bloomberg survey of crop scouts.

Months of timely rains and mild weather created ideal growing conditions, leaving ears with more kernels than normal on 10-foot (3-meter) corn stalks and more seed pods on dark, green soy plants.

Well, dear reader, having spent my early years on a farm, I follow the growing season with more than the usual amount of interest---and drive out into the country just about every weekend to see how the crops are doing around Edmonton.  The cereal and canola crops look pretty fantastic---and a lot of canola is laying in swath already---because with the exception of a cool, wet spring, growing conditions have been nothing short of ideal here as well.  The above article, courtesy of West Virginia reader Elliot Simon, was posted on the moneynews.com Internet site last Friday morning EDT.

Four "Currency Wars"- related stories

1. Argentine Peso May Drop Another 25%, Deutsche Bank Says: Bloomberg  2. Dollar Shortage Bites Venezuela as Devaluation Seen: Bloomberg  3. Colombian Peso Posts Biggest Drop in Emerging Markets Last Week: Bloomberg  4. Dollar Strengthens to 11-Month High vs. EuroBloomberg

[All of the above stories are courtesy of reader U.D.---for which I thank him]

Iceland volcano: Bardarbunga remains quiet

Iceland lowered its aviation alert level to orange from red Sunday, saying there was no sign of an imminent eruption at the Bardarbunga volcano. And scientists at the Icelandic Meteorological Office said their announcement Saturday that the volcano had experienced a subglacial eruption was wrong.

However, the office cautioned in a statement that seismic activity at the volcano, which has been hit by thousands of earthquakes over the past week, was not slowing, and an eruption remained a possibility in coming days.

Two earthquakes measuring greater than 5 in magnitude — the biggest yet — shook the volcano beneath Iceland's vast Vatnajokull glacier early Sunday. The Met Office recorded earthquakes of 5.3 and 5.1 in the early hours.

Iceland had raised the alert for aviation Saturday to red, the highest level on a five-point scale, warning that an ash-emitting eruption could be imminent. An orange alert indicates "heightened or escalating unrest with increased potential of eruption."

This CBC story was posted on their website at 5:41 a.m. EDT on Sunday---and was subsequently updated at 4:35 p.m. EDT Sunday afternoon.  I thank Roy Stephens for drawing it to our attention.

France In "Political Turmoil" After Hollande Unexpectedly Dissolves Government

Earlier Monday morning Europe time, those expecting an out-of-control European deflationary tumble got one step closer to their goal when French President Francois Hollande asked his prime minister, who only assumed the post a few short months ago in March, to form a new government, following what Reuters reported was him "looking to impose his will on the cabinet after rebel leftist ministers had called for an economic policy U-turn" spearheaded by economy minister Arnaud Montebourg demanding an end to French "austerity."

The Guardian is somewhat more direct and to the point: "France has entered uncharted political waters after the prime minister, Manuel Valls, presented his government's resignation amid a political crisis triggered by his maverick economy minister who called for an end to austerity policies imposed by Germany."

This very interesting news item is worth skimming.  It appeared on the Zero Hedge website at 8:02 a.m. EDT Monday morning---and I thank reader M.A. for sending it.

Not-so NATO-ally? Germany spying on Turkey for ‘38 years’

German foreign intelligence agency has been tapping Turkey for almost four decades, reports Focus amid the ongoing spy scandal between Berlin and Ankara. Some German officials defend the practice, saying that not all NATO allies can be treated as friends.

The German Federal Intelligence Service, BND, has been eavesdropping on Turkey since 1976 following the Social Democrat Chancellor Helmut Schmidt’s government approval, Focus magazine wrote on Saturday.

Passions over previous spying allegations revealed in the media are still running high, but a new report may add fuel to the fire triggering further tensions between the two long-time North Atlantic Treaty Organization allies.

As for the current BND’s mandate to keep their eye on Turkish political and social institutions, it had also been given a green light by a government working group, which brought together representatives of the chancellor's office, the defense, foreign and economy ministries, reported Focus, citing government sources.

Nothing should surprise us in the spying game these days, dear reader.  This Russia Today story showed up on their Internet site at 2:55 a.m. Moscow time on their Monday morning, which was 6:55 p.m. Sunday evening in New York.  I thank reader Harry Grant for his second contribution to today's column.

German Exports to Russia May Shrink by One Quarter This Year – German Businessmen

Germany’s exports to Russia may shrink by 25 percent this year, the union of leading associations representing German businesses said in a statement Monday.

“It is possible that by the end of the year our exports to Russia will decline by 20-25 percent. It will affect some 50,000 workplaces in Germany,” Eckhard Cordes, the chairman of Germany’s Committee on Eastern European Economic Relations, was quoted as saying in the statement.

Germany’s Committee on Eastern European Economic Relations is an influential organization that represents the interests of German companies doing business in the former Soviet Union countries and in Eastern Europe.

According to the Russian Ministry of Economic Development, who is referring to the Federal Statistical Office of Germany, German exports to Russia amounted to 36.1 billion euros [$47.7 billion], down from 5.2 percent in 2013.

This article appeared on the RIA Novosti website at 7:01 p.m. Monday evening Moscow time---and I thank Roy Stephens for sharing it with us.

Eurozone opens doors to Q.E. as Germany and France stumble

The eurozone has moved closer to adopting further radical measures to ward off a second recession and a spiral of deflation after its two biggest economies fell deeper into trouble yesterday.

The dual shock of a French government reshuffle and weaker-than-expected German figures yesterday threatened to add to the malaise in the eurozone, where unemployment remains stubbornly high and growth is at a standstill.

Somewhat counter-intuitively, this resulted in stock markets across Europe surging and government borrowing costs falling to new lows as traders reacted to indications that Mario Draghi, the European Central Bank president, may be opening the door for large-scale asset purchases and further cuts to interest rates.

This commentary appeared on The Telegraph's website at 6:00 p.m. BST yesterday evening---and I found it on the gata.org Internet site.

German Vice Chancellor Calls for Ukraine's Federalization

German Vice Chancellor Sigmar Gabriel on Saturday said that federalization of Ukraine was the only viable solution to the crisis that has engulfed this East European country.

Speaking in an interview with the German weekly Welt am Sonntag, Sigmar Gabriel said that, “A smart concept of federalization seems to me the only viable solution.”

Gabriel, who also serves as Germany’s minister for economic affairs and energy, added that “an offer” has to be made to those regions in Ukraine where populations are predominantly ethnic Russian.

“Ukraine’s territorial integrity can only be preserved if an offer is made to regions with majority Russian population,” he stressed in an interview to appear on Sunday.

This article was posted on the RIA Novosti website at 7:03 p.m. Saturday evening Moscow time---and I thank South African reader B.V. for sending it.

Militia wants independence, not federalization - DPR

The prime minister of the self-declared Donetsk People's Republic, Alexander Zakharchenko, rejects the prospect of federalization and insists on independence.

"We want independence. Federalization does not suit us," he told the press in Donetsk.

He said the self-proclaimed republic has sufficient resources to exist independently. "We have ample mineral resources and recreation zones. We are a self-sufficient region," he said.

This Interfax story appeared on the Russia Beyond the Headlines website at 11:59 p.m. Moscow time on Sunday evening---and once again I thank Roy Stephens for sending it our way.

'Germans fed up with NATO allies and U.S. wars' – Former German Defense Secretary

German Chancellor Angela Merkel met with Ukraine's President Petro Poroshenko in Kiev.

Willy Wimmer, the former State Secretary of the Minister of Defence of Germany, joins Russia Today for analysis of the joint statements by the leaders of both countries.

This 5:17 minute youtube.com video clip was posted on their on Saturday---and it's worth watching.  I thank Brad Robertson for sending it our way.  I found the interview to be a little disjointed, but the message is clear.

Baltic Fears: NATO Debates Directing Missile Shield against Russia

NATO officials are considering deploying a long-planned missile defense system -- aimed at protecting Europe from attacks from the Middle East -- against Russia as well, SPIEGEL has learned.

Calls for such an expansion to the system's remit, which is backed by the United States, are growing in Poland as well as in NATO member states Lithuania, Estonia and Latvia. In the run-up to next week's NATO summit, the four countries called for the remaining members to agree on language at the summit that would pave the way for the plan. They feel threatened by Russia's intervention in Ukraine.

But the majority of NATO members, especially Germany, are opposed to the proposal, warning that it could result in an unnecessary provocation of Moscow. Representatives of these countries have warned that NATO has for years pledged to Russia that the missile defense system would not be directed at the country. Further debate on the issue has since been delayed until after the summit.

This news story appeared on the German website spiegel.de at 11:16 a.m. Europe time yesterday morning---and it's another offering from Roy Stephens.

Ukraine moves step closer to default - Fitch

The Fitch ratings agency has downgraded Ukraine one step closer to default grade, as the Ukrainian currency the hryvnia hits a record low, and the economy balances on the brink of a collapse.

Fitch cut the long-term local currency Issuer Default Rating (IDR) of Ukraine from B-,signifying a default risk, to CCC, where default is a real possibility, and affirmed its long-term foreign currency IDR at CCC, it said in a statement on Friday.

The downgrade came amid deteriorating economic outlook due to the ongoing military conflict in Ukraine.

The Ukrainian currency has lost 39 percent against the U.S. dollar this year, on Friday reaching an all-time low at 13.7 hryvnia to the dollar. Last week the hryvnia lost 3.1 percent, while in August the currency fell by 9.4 percent.

This article put in an appearance on the Russia Today Internet site at 3:15 p.m. Moscow time on their Monday afternoon.  I thank reader M.A. for sending it our way---and it's certainly worth reading.

Ukraine president pledges $3 billion to rearm military

Ukrainian President Petro Poroshenko on Sunday promised to spend some $3.0 billion to reequip the country's military over the next few years.

"From 2015 to 2017 we are planning to allocate more than UAH 40 billion ($3.0 billion, 2.3 billion euros) to rearmament," Poroshenko said in a speech ahead of an Independence Day parade in Kiev.

And where, pray tell, is the money coming from for this---along with their $5 billion gas bill that's several years in arrears?  Just asking. The above two paragraphs are all there is to this AFP story that appeared n the france24.com Internet site at 10:45 a.m. Sunday morning Europe time.  I thank Orlando, Florida reader Dennis Mong for finding it for us.

Anti-govt forces ‘circle 1000s of Kiev troops, capture 2 tank battalions’ in E.Ukraine

After sustained defensive combat against Ukrainian troops in the self-proclaimed People’s Republic of Donetsk during August, rebels are now reporting entrapping two large groups of Kiev troops and seizing military hardware in a counteroffensive.

The main headquarters of the DPR army has made a decision to stop operations in small groups and form full-bodied independent military units, the anti-Kiev forces say in a summary of their operations filed on Sunday.

They also say they are blocking a large “punitive force” near Alekseevskoe, Blagodatnoe, Voykovsky, Kuteinikovo, Ulyanovskoe and Uspenka.

Some 5,000 Kiev troops “with military hardware” including some 50 tanks, over 200 armored vehicles and 50 artillery rocket systems (including Grad) are trapped in the area, the DPR claims.

I'd take this Russia Today story with a big grain of salt if I were you.  It showed up on their website at 9:41 a.m. Moscow time on their Sunday morning---and I thank reader M.A. for sending it our way.

Ukraine President dissolves parliament, paves way for early election

Ukrainian president, Petro Poroshenko, has made the decision to dismiss the country’s parliament, the Verkhovna Rada, a message on his official Twitter account says.

The decision comes because “the majority of the MPs voted for dictator-style laws,” which cost the lives of Maidan activists, RIA Novosti news agency reports citing Poroshenko's spokesman.

The election of the new parliament will be held on October 26, the spokesman Svyatoslav Tsegolko wrote on his Facebook page.

Poroshenko has called on “democratic forces” in Ukraine to enter the elections as a united “pro-Ukrainian, pro-European team,” Tsegolko’s Facebook post states adding that the Rada was dismissed “because it is the only right and responsible decision.”

This news item appeared on the Russia Today website at 6:49 p.m. Moscow time on Monday---and my thanks go out to Roy Stephens for sharing it with us.

Russia Prepares 2nd Humanitarian Convoy "Invasion"--and Lavrov asks about Flight MH17 once again

Following the 'success' of the first humanitarian convoy, Bloomberg reports that Russian foreign minister Sergei Lavrov said the nation plans to send a second convoy loaded with humanitarian aid to Ukraine. he U.S. and the European Union condemned the decision to send the first convoy of about 280 trucks, which the government in Kiev called an "invasion," and the US accused Russia of painting military vehicles white.

This time will be different, according to Lavrov, as the government in Moscow is maneuvering to avoid the border standoff and uproar that marred its first convoy last week, adding “We’ll work on ensuring security guarantees from the side of the militias." Ironically, Lavrov also reminded a "disinformation"-prone media that Russia remains the only nation that continues to seek an MH17 probe, as Ukraine has still not released Dnipropetrovsk air traffic control recordings.

Yes, that pesky flight MH17 issue just won't go away, no matter how the Western press wishes it would.  After such a long time, I wouldn't give you a nickel for what's on the data flight recorders and ATC tapes, as there has been enough time passed for the British to have cooked them both real good.  This Bloomberg story, embedded in a Zero Hedge commentary, showed up on their website at 8:45 a.m. EDT on Monday morning---and it's the second offering in a row from reader M.A.

Russia Not Planning to Participate in Wales NATO Summit – Permanent Mission

Russia has no plans to participate in any activities during the NATO summit in Wales, Russia’s Permanent Mission to NATO told RIA Novosti on Monday.

Earlier the same day, the Kommersant business daily cited diplomatic sources as saying that Russia's participation in the upcoming summit was deemed "unreasonable."

The summit is expected to attract the leaders of more than 60 countries to discuss topics concerning Russia, such as NATO-Russia relations, as well as strengthening ties with Ukraine and enhancing the collective defense of the alliance.

This very brief article showed up on the RIA Novosti website at 4:44 p.m. Moscow time on their Monday afternoon---and I thank Roy Stephens for sending it.

Russia will do whatever necessary to protect its legitimate interests – Lavrov

Russia doesn’t want to escalate tit-for-tat sanctions with the West, but is ready to do whatever is necessary to protect its legitimate interests, including those of national security in all its dimensions, Russia’s FM told The Daily Telegraph.

Peace in Ukraine can only be attained through a broad national dialogue that includes all regions and its terms cannot simply be dictated by a “government of the winners,” Russian FM Sergey Lavrov said in an interview with The Daily Telegraph.

“The point is for Kiev to stop war games and to abandon the illusion that the deep crisis in Ukraine can be resolved by winning the war against your own people,” Lavrov said, reiterating that with support from US and EU, Kiev continues to ignore its numerous commitments to a “government of national unity.”

“Unfortunately, the logic of “the winner takes it all” remains the thrust of Kiev’s actions resulting in thousands of victims among civilians, hundreds of thousands of refugees and displaced persons, as well as almost totally destroyed social infrastructure in many cities and towns in Eastern Ukraine.”

Lavrov delves into Flight MH17 once again in this commentary on the Russia Today website late Monday evening Moscow time---and it's also courtesy of Roy Stephens.

Press-conference of the Minister of Foreign Affairs of Russia Sergey Lavrov, Moscow, August 25 2014

I blanched when I saw the length of this press conference with Sergey Lavrov, as it runs 1:23:27.  That's why I'm always happy to leave the final edit of each daily missive up to you. 

It was posted on the vineyardsaker.blogspot.ca website at 3:14 p.m. EDT? on Monday---and it's the final offering of the day from Roy Stephens.

Islamist fighters seize Tripoli airport

Islamist fighters in the Fajr Libya coalition said on Saturday they have captured Tripoli's battered international airport after many days of clashes with nationalist militiamen.

The claim followed a setback the previous night when a warplane raided Islamist positions, killing 13 fighters, a Fajr Libya (Libyan Dawn) spokesman said.

If independent sources confirm the airport has changed hands, it would be a major defeat for the nationalist fighters from Zintan west of Tripoli who have held the airport since the fall of long-time dictator Muammar Gaddafi in 2011.

A statement shown on An-Nabaa television, which is regarded as close to the Islamists, said: "Fajr Libya announces that it totally controls Tripoli international airport."

This news story put in an appearance on the france24.com Internet site on Sunday sometime---and it's another story courtesy of Dennis Mong.

Egypt and U.A.E. Said to Secretly Bomb Militias in Libya

Twice in the last seven days, Egypt and the United Arab Emirates have secretly launched airstrikes against Islamist-allied militias battling for control of Tripoli, Libya, four senior American officials said, in a major escalation of a regional power struggle set off by Arab Spring revolts.

The United States, the officials said, was caught by surprise: Egypt and the Emirates, both close allies and military partners, acted without informing Washington, leaving the Obama administration on the sidelines. Egyptian officials explicitly denied to American diplomats that their military played any role in the operation, the officials said, in what appeared a new blow to already strained relations between Washington and Cairo.

Arab autocrats battling Islamist movements seeking to overturn the old order. Since the military ouster of the Islamist president in Egypt last year, the new government and its backers in Saudi Arabia and the United Arab Emirates have launched a campaign across the region — in the news media, in politics and diplomacy, and by arming local proxies — to roll back what they see as an existential threat to their authority posed by Islamist groups like the Muslim Brotherhood.

Several officials said in recent days that United States diplomats were fuming about the airstrikes, believing the intervention could further inflame the Libyan conflict as the United Nations and Western powers are seeking to broker a peaceful resolution. "We don’t see this as constructive at all,” said one senior American official. Officials said the government of Qatar has already provided weapons and support to the Islamist-aligned forces inside Libya, so the new strikes represent a shift from a battle of proxies to direct involvement. It could also set off an arms race on both sides.

I guess that only the U.S., Britain, France and Israel are allowed to drop bombs on Arab countries. This very interesting article, which is definitely worth reading, was posted on The New York Times website on Monday sometime---and once again I thank Roy Stephens for sending it.

Moscow Blames Political Chaos in Libya on Forceful Democratization by U.S., NATO

The United States and its NATO allies caused the current political chaos in Libya by their attempts “to forcefully democratize the country,” the Russian Foreign Ministry said on Monday.

“We are convinced that the current chaos in Libya is a direct consequence of irresponsible interference by the U.S. and its NATO allies into Libya’s internal political conflict, with an aim to overthrow the Muammar Gaddafi regime and forcefully democratize the country,” the ministry said in a statement.

“At present, the Libyans are paying for this, with thousands of lives lost and social infrastructure destroyed in the violent internal struggle,” the statement continues.

“We can now say for sure that the political process of creating a modern democratic state on the rubble of the Gaddafi regime, overthrown in 2011, is now completely deadlocked,” the ministry said.

I think that the Russian Foreign Ministry is being charitable in their assessment of the Libyan situation.  This news story appeared on the RIA Novosti website at 11:27 p.m. Moscow time on their Monday evening, which was 3:27 p.m. EDT.

Militants make renewed push for main Iraq refinery

Militants have launched a renewed push to seize Iraq's main oil refinery north of Baghdad, battling security forces backed by air support, a police officer and witnesses said on Sunday.

The fighting, in which militants attacked the Baiji refinery from three sides, broke out on Saturday evening and continued into the next day, the sources said.

Militants have repeatedly sought to overrun the refinery, which once accounted for some 50 percent of Iraq's supplies of refined oil products.

While they have previously managed to enter the refinery compound, security forces were able to push them back.

This short, but must read AFP story appeared on the france24.com Internet site on Sunday sometime---and it's the third and final offering of the day from Dennis Mong.

Fractures in Arab Gulf alliance a greater threat to oil security than Islamic State

In 1981 six Arab monarchies, which today control about a fifth of the world’s oil supply, formed the Gulf Co-operation Council (GCC).

As the war between Iraq and Iran intensified, the Sunni Arab sheikhdoms of the Gulf peninsula - Saudi Arabia, Oman, United Arab Emirates (UAE), Kuwait, Bahrain and Qatar - originally came together in theory to form a Middle Eastern version of the European Union. Although the group has no formal political charter like the EU, it still provides the only official forum where all six leaders of these oil-rich countries can sit down together to debate and agree on mutually beneficial policies in the region.

But the rise of Islamic extremism across the Middle East, America’s growing willingness to deal with Iran and lingering leadership succession issues amongst member states are now unpicking the ties that have bound the GCC together in a tectonic shift that could have profound implications for the security of the world’s largest oil fields.

Formed in the shadow of war, its initial purpose was to help guarantee security mainly from larger Pan-Arab nationalist despots such as Saddam Hussein and the threat posed by the Shiite Mullah’s in Tehran. But after the US invasion of Iraq in 2003 its focus became increasingly economic. Initiatives such as interconnecting electricity networks across the GCC, regional transportation projects including a railway and the possibility of a formal currency union took hold.

This absolute must read editorial appeared on the telegraph.co.uk Internet site at 6:00 a.m. BST on Sunday morning---and it's another offering from South African reader B.V.

Guest column by Eric Margolis — The Beheading

The alleged beheading of freelance journalist James Foley by the shadowy ISIS (or Islamic State) has sparked outrage and horror around the globe.  I say “alleged” because we are not sure if the decapitation was real or faked.

After three decades of covering wars in the Mideast, Africa, Latin America, and Afghanistan, my reaction as a journalist was also outrage – but cautious outrage.

We westerners have a charming and quaint  belief that killing people from the air by using bombs, rockets, shells, napalm and cluster munitions – or even nuclear weapons – is somehow not really as bad as ramming a bayonet into an enemy, blowing him to pieces with heavy artillery, or slashing his throat the way sheep are killed.

I’ve long travelled the same road as this courageous young man---and countless other field journalists, covering extremely dangerous places all on my own, with no backup or support system. It’s very lonely and often demoralizing work.

Written by a man who has "been there---and done that".  This article by Eric Margolis was posted on the Paul Craig Roberts Internet site yesterday---and it's definitely worth reading.  Rob Bentley was the first in line with this article.

Alasdair Macleod: The Shanghai Co-operation Organisation and Mackinder’s prophecy

There will be a defining geopolitical event next month when India, Pakistan, Iran and Mongolia become full members of the Shanghai Cooperation Organisation (SCO). This will increase the population of SCO members to an estimated 3.05 billion. We should care about this because it is the intention of the SCO to do away with the US dollar for trade settlement.

The nations joining in September are currently designated as Observer States and the only one left will be Afghanistan, which will presumably join when it can untie itself from NATO. Dialog Partners, defined as states which share the goals and principals of the SCO and wish to develop mutually beneficial relations, include Belarus Sri Lanka and Turkey. Turkey is of special interest because it has been a long-standing NATO member. It had hoped to join the EU but it became clear that this was never going to happen. Instead under the leadership of Recep Erdoğan Turkey is moving towards the SCO.

Erdoğan was re-elected earlier this month by a comfortable majority and it will be interesting to see how quickly Turkey's new alignment evolves. Erdoğan must be aware that Asia is on the up while the EU declines, in which case Turkey as a front-line state is better off joining the SCO.

The SCO's influence extends beyond its boundaries, with China and India's diaspora populating much of the rest of south-east Asia. SCO members, particularly China and India, are also the largest consumers of Middle Eastern energy. And because they write the biggest cheques they have primacy over the west; so the swing away from the petrodollar towards Asia is in the making. China also has sub-Saharan Africa sewn up, securing vital minerals such as copper from Zambia.

We must also consider why Russia is aggressively driving the pace of the SCO's development, and it's not just to escape the west's economic sanctions as many observers think. Fundamentally the SCO is about resources and the production of goods: Russia controls Asia's resources and China turns them into goods.

I've posted more than one story about this already, however this very excellent commentary by Alasdair showed up on the goldmoney.com Internet site last Friday---and it's a must read as well.  I thank Howard Wiener for sharing it with us.

Nigerian troops cross border after Boko Haram clashes

Some 480 Nigerian soldiers have crossed into Cameroon following fierce fighting with Boko Haram militants.

Reports claimed that the troops had joined thousands of citizens fleeing the fighting, but Nigeria said they were conducting a "tactical manoeuvre".

Clashes are said to be continuing in the border town of Gamboru Ngala.

Boko Haram on Sunday released a video claiming that it had established an Islamic state in the towns and villages it controls in north-eastern Nigeria.

This article appeared on the bbc.com Internet site at 2:25 EDT yesterday---and it's the final offering of the day from reader B.V.

Eight King World News Blogs/Audio Interviews

1. John Embry: "We Are Headed For a Financial System Apocalypse"  2. Ronald-Peter Stoferle: "Expect Extreme Long Term Systemic and Economic Instability"  3. Richard Russell: "Current Financial System to Tear Itself Apart"  4. Rick Rule: "Sovereign and Strategic Money Pouring Into Gold and Silver"  5. Michael Pento: "Deflationary Depression, Government Lies---and a New Paradigm"  6. Robert Fitzwilson: "Massive Social Unrest Coming as People Struggle to Survive"  7. The first audio interview is with Rick Rule---and the second audio interview is with Dr. Philipa Malmgren

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

Koos Jansen: India's silver imports run ahead of last year's

Gold researcher and GATA consultant Koos Jansen reports that India's silver imports are running slightly ahead of last year's, as the government's heavy restriction of gold imports pushes demand toward the other monetary metal.

Jansen's analysis was posted at bullionstar.com Internet site at 04:47 a.m. Singapore time last Thursday---and I found it on the gata.org Internet site on Saturday.

Silver is almost always knocked down at 6 p.m. ET

Market analyst and GATA consultant James McShirley calls attention to the almost constant knockdown of the silver futures price upon the 6 p.m. Eastern time opening of the access market.

McShirley writes: "Virtually every evening for the last three years at precisely 6 p.m. ET something very odd has happened: Comex silver offers swamped the bids to the tune of a 3-10 cent decline. For this to happen for three consecutive weeks would be strange. If it were to happen for three straight months it would be bizarre. Only MOAMOPE -- Mother of All Management of Perspective Economics -- can describe when it occurs for three straight years. ...

"Silver has had a near-iron clamp imposed on it commencing with the access trade reopen. How severe is this iron clamp? From September 1, 2011, to the present, 621 out of the 744 6 p.m. access trade opens have been lower. All manipulation denialists take note: That's an astounding 83.5 percent."

There's nothing really new here, as I've been commenting on this for weeks now.  However, James has gone where I just didn't have the time to go---and has researched this to the 'nth' degree.  As you should have figured out in an instant, there's nothing free market about this.  The first person through the door with this story yesterday was reader M.A.---and I thank Chris Powell for wordsmithing the paragraphs of introduction.  It was posted on the goldseek.com Internet site on Monday---and it's definitely worth reading.

Will There Be a ‘New Gold Rush?’ -- Ian Gordon, Longwave Analytics

“I do believe this will happen. Even though the amount of dollars is going up, eventually debt will be wrung out of the system. This causes deflation, which is very bullish for gold. In deflation, both creditors and debtors are in dire straits. They’re facing enormous pressure. People tend to turn towards stores of value like gold.

“We saw this happen in the 1930s’. When the stock market bubble collapsed, capital flowed into gold instead. Gold production in Canada rose from 1,928,308 fine oz. in 1929 to 5,311,145 fine oz. in 1940, which amounted to a 175% increase.  There were 100 new gold mines started during that time, and world gold production increased by over 100%. That happened because capital was going into gold.”

“We’re in the same period in the cycle as we were in the 1930’s and after 1873. The economic winter has been muted by the creation of paper money ad infinitum, but we will probably experience another leg down – similar to 2000.

This interview with Ian was conducted by Henry Bonner over at the sprottglobal.com Internet site yesterday.

Jersey hoard: Archaeologists unpick 70,000 coins

Work to separate 70,000 Celtic coins and pieces of jewellery is taking place under the public gaze at Jersey Museum.

Researchers aim to remove and clean up to 500 coins a week for the next three years in a specially built glass-walled lab.

The metal detector enthusiasts who made the find are now part of the team working on the project.

They unearthed the hoard, though to be the world's largest, in 2012 in a field in Grouville.

For the past two years the team, led by Jersey Heritage conservator Neil Mahrer, has been documenting the hoard, which is about 2,000 years old.

This very interesting article showed up on the bbc.com Internet site at 7:27 EDT last Friday---and I thank Elliot Simon for finding it for us.

China's Hong Kong gold imports drop - fifth month in a row

China’s gold imports from Hong Kong in July fell by 42 percent from a month earlier as an anti- corruption campaign and price declines deterred Chinese consumers.

Net imports totaled 21.1 metric tons, compared with 36.4 tons in June and 113.2 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department today. Exports to Hong Kong from China fell to 17.9 tons last month from 19.7 tons in June, the statistics department said in a separate statement. Mainland China doesn’t publish such data.

The continued weakness adds to signs of slowing demand in China, which in 2013 overtook India as the biggest user after gold entered a bear market, spurring a buying frenzy among Chinese consumers. President Xi Jinping’s anti-graft drive this year hurt demand for luxury goods, according to the World Gold Council. Prices fell by the most since December last month amid bearish forecasts from banks including Goldman Sachs Group Inc.

As I, along with others, have been saying for months, with China now importing gold through Beijing, the importance of importing through Hong Kong in the full glare of the public eye has gone the way of the Dodo bird.  And as I said this time last month, there will come a point where the imports through Hong Kong will be meaningless when trying to figure out China's gold import numbers---and that time has obviously arrived.  This Bloomberg story found a home over at the mineweb.com Internet site yesterday.

Lawrence Williams: Russia leading central bank gold buyer, but China - who knows?

Despite the lower gold price – or perhaps because of it – it is apparent that Central Banks outside Western Europe and North America are continuing to increase their gold holdings. Is this perhaps some kind of prelude to a re-evaluation of the world’s monetary system with gold holding an important role in some kind of new world economic order?

According to World Gold Council statistics as published in its quarterly Gold Demand Trends reports, if anything Central Banks have been buying at a higher rate this year than last with a reported 240 tonnes of purchases in the first half as against 180 tonnes in H1 2013. But these are figures as reported to the IMF and, of course, do not include anything China may have done to boost reserves over the period.

The biggest recent buyer as far as published data are concerned has been the Russian Federation, although here it may in part be building a ‘war chest’ as it continues to consider its options over Ukraine. It has just been announced that in July it increased its holdings by a further 9.33 tonnes, following an 18.6 tonne increase in June which brings its total gold holdings to comfortably over 1,100 tonnes representing about 10% of its foreign currency reserves. This is the world’s fourth largest national official holding (disregarding the IMF’s holdings), but lags substantially behind the U.S. and three European nations (Germany, Italy and France which all hold very significantly higher proportions of their foreign exchange reserves in gold), but ahead of China’s official reserves, which are widely believed to be very substantially understated at 1,054.1 tonnes.

This commentary by Lawrie was posted over at the mineweb.com Internet site last Friday---and I don't know how I missed it for my Saturday column.  It definitely falls into the must read category.

¤ The Funnies

The first photo is one that Nick Laird sent me---and it's just one of many strange bugs that inhabit the land 'down under'.  This one is weevil of some kind.







This last cartoon is from the early 18th century---and the person at the center of this is John Law, the infamous Scottish economist.  The French establishment is shown pouring gold and silver coins into his top end---and paper money comes out the other, which people are crowded around to accept.  Nothing much has changed in three centuries, has it?

¤ The Wrap

But just this [past] week for example, the technical funds sold and the commercials bought more than 30 million oz of silver futures, an amount close to what the U.S. mines in a year and the U.S. is in the top ten of silver producing countries. It is not possible that the concerted one-week sale of the equivalent of such an amount of metal not to have been the primary influence on price. Over the past four weeks, the technical funds have sold to the commercials, 105 million oz of silver contracts, or three times what the U.S. produces in a year. What difference could it make what else may be going on in the world or in the metals world if such massive amounts are being transacted in full view?

The world’s gold, silver and copper producers, consumers and investors have been shut out from the price discovery process at the hands of large speculators plunging into and out from derivatives positions on the COMEX. Not only is this preposterous, it's illegal. Most responsible for this sorry state of affairs is the crooked CME and CFTC. Funny how no part of me ever wants to apologize for calling them (along with JPMorgan) crooks. - Silver analyst Ted Butler: 23 August 2014

With the Globex trading system down for a good chunk of time yesterday, it's hard to make a case that anything substantial happened as far as price is concerned.  However, if you look at the charts carefully, it's easy to spot the price capping in both gold and silver that began at the Comex open.  But considering the fact that all traders have to roll their Comex futures and options contracts by the end of Thursday's trading, I must admit that I was expecting far heavier volume.  So whatever is left in the September contract, has to be dealt with within the next three days---except those who are standing for delivery.

Here are the 6-month charts for both gold and silver with Monday's data included.

Although gold is approaching oversold---and silver has been there for a while, I'm still on the lookout for "in your ear," as the JPMorgan et al are still massively short both metals compared to the huge long positions they held at the last price low at the end of May.

As you are aware, I've been harping on this situation for several weeks now, but it's all that matters at the moment.  We could certainly blast off from here, but if I were thinking like a crook that wanted to stick it to the brain-dead technical funds in the 'Managed Money' category, the current configuration of the Commitment of Traders Report is not the launching pad for higher prices that I would want---or choose, if it was within my power to change it in my favour.

So we await developments.

And as I type this paragraph, the London open is less than 15 minutes away.  Gold rallied a few bucks in the early going in Far East trading, but then really made a move starting around noon in Hong Kong---and at this moment it's up twelve bucks from Monday's close in New York.  Ditto for silver, but it's price spike ran into 'da boyz' almost immediately---and it's now up less than a dime.  Platinum's rally is also running into resistance, but it, too, is up on the day---7 dollars at the moment.  Only palladium is down from yesterday.  Gold volume is a bit under 25,000 contracts---and almost all of it is in the December contract, so it's obviously HFT related.  Silver's volume, net of roll-overs, is very light at only 3,600 contracts, but its substantially higher than it was just an hour before this, so whatever is happening in that metal isn't taking place on very much volume, so it's easy for anyone with an agenda, such as JPMorgan et al, to keep the price in check---which is what they're obviously doing.

Today, at the close of Comex trading, is the cut-off for this Friday' Commitment of Traders Report.  There should be decent volume today, regardless of the price action, but the really big volume days will be Wednesday and Thursday, as all the large traders have to be out of the September contract by the end of Comex trading on Wednesday---and all the rest by the end of trading on Thursday.  What will be of interest, of course, is the price action associated with it.

And as I fire this out the door at 5:05 a.m. EDT, I see that the rallies in all four precious metals have come to an end, at least for the moment.  However,  I'd say they're also done for the day, as it's obvious that the sellers of last resort were there to throw whatever Comex paper was necessary to put out the fires.  Gold volume is now up to 36,000 contracts---and over 95% of it is in the December contract.  Silver's net volume is up to 5,400 contracts, which is very much on the lighter side, but very decent for this time of day. 

The dollar index took a bit of a header starting in early Far East trading on their Tuesday, but began to rally back shortly before the London open---and about the time the precious metals began to run into 'resistance.'  At the moment, it's down 8 basis points.

If the price action around the London open is any indication, the New York trading session may prove interesting as well.  But if forced to bet ten bucks, I'll stick my neck out and say that we've already seen most of the price excitement for the day, unless the proverbial black swan shows up.

That's all I have, which is more than enough---and I'll see you here tomorrow.

]]>
Tue, 26 Aug 2014 06:21:00 +0000
<![CDATA[New Orleans Investment Conference Will Debate Gold Market Manipulation]]> http://www.caseyresearch.com/gsd/edition/new-orleans-investment-conference-will-debate-gold-market-manipulation/ http://www.caseyresearch.com/gsd/edition/new-orleans-investment-conference-will-debate-gold-market-manipulation/#When:07:54:00Z "JPMorgan et al decided to take the day off"

¤ Yesterday In Gold & Silver

Friday was a real yawner as far as price action in gold was concerned and, once again there was little volume associated with it, either---and it followed the dollar index around for the most part.  Once again, the high and low ticks aren't worth looking up.

Gold finished the Friday trading session at $1,280.80 spot, up $4.50 from Thursday's close, saved by a five dollar rally that started just before 11 a.m. EDT in New York.  Net volume was only 87,000 contracts.

Silver spent most of Friday in positive territory but, like gold, got sold down to its low of the day a few minutes before London closed for the weekend, which was a few minutes before 11 a.m. EDT.  The subsequent rally back into positive territory got met by the usual not-for-profit sellers---and silver was closed down on the day.

The low and high ticks were reported as $19.285 and $19.55 in the September contract.

Silver closed yesterday at $19.395 spot, down 2 cents from Thursday.  Gross volume was heavy because of roll-overs out of the September contract, but it netted out at only 22,000 contracts.

The platinum price did even less---and finished Friday up two bucks.

Palladium was in positive territory all day long yesterday---and then caught a bid at the Comex open, with all of the gains in by 10 a.m. EDT.  After that it traded flat, before getting sold off a couple of bucks just before the close of electronic trading.  Palladium finished up seven dollars.

The dollar index closed late Thursday afternoon in New York at 82.16.  It trade pretty flat in the early going in Far East trading before rolling over and hitting its 82.07 low about 2:40 p.m. Hong Kong time.  It rallied from there, hitting its 82.45 high minutes before 11 a.m. EDT, which just happened to coincide with the low ticks for both gold and silver.  From that point it sold off a bit and closed the Friday session at 82.31---up 15 basis points on the day.

The gold stocks headed lower right from the open---and hit their nadir minutes before 11 a.m. EDT when gold hit its low---and the dollar index hit its high.  From there they rallied sharply back into positive territory, but couldn't hold even those tiny gains, despite the fact that gold closed in positive territory.  The HUI finished down 0.30%.

The silver equities followed a very similar path---and Nick Laird's Intraday Silver Sentiment Index closed down 0.27%.

The CME Daily Delivery Report showed that 100 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The only short/issuer was Morgan Stanley out of its in-house [proprietary] trading account.  The two largest stoppers were Canada's Scotiabank with 71 contracts---and JPMorgan with 22 contracts for its client account once again.  The link to yesterday's Issuers and Stoppers Report is here.

The CME's Preliminary Report for the Friday trading session showed that there are still 226 gold contracts open in August, from which you can subtract the 100 contracts shown above that are to be delivered on Tuesday.

There were no reported changes in GLD yesterday---and as of  9:36 p.m. yesterday evening, there were no reported changes in SLV, either.

And, for the first time this week, there was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Thursday, there was a deposit of 46,279 troy ounces of gold into Brink's Inc.  Ted Butler pointed out that this was the same gold, to the ounce, that had been transferred out of the Manfra, Tordella & Brookes warehouse on Wednesday.  So there was no net change in gold stocks over those two days, just inter-depository movement. The link to that activity is here.

It was a huge day in silver once again, as 1,899,945 troy ounces were reported received---and 785,557 troy ounces were shipped out.  The bulk of the movements were at Brink's, Inc. and Canada's Scotiabank.  The link to that action is here.

The Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, was more or less what I was expecting to see, as there was very decent improvement in the Commercial net short positions in both silver and gold---and I'm just going to hit the highlights.

In silver, the Commercial net short position declined by a chunky 6,343 contracts, or 31.7 million ounces.  The Commercial net short position is now down to 186.9 million troy ounces.

The Big 4 traders reduced their net short position by 1,800 contracts, but the '5 through 8' traders increased their net short position by 1,500 contracts.  Ted pegs JPMorgan's short-side corner in the Comex silver market at 17,500 contracts.

The big surprise for me was that the brain-dead/black-box technical fund traders in the 'Managed Money' category only reduced their long position by 575 contracts, although they jumped on the short side to the tune of 5,411 contracts.  I was expecting much more long liquidation that that.  Ted had the answer---and it amazed me---but that info is for his paying subscribers only.

As an aside to all of the above in silver, at the low at the end of May, the Commercial net short position in silver was only around 14,000 contracts, or 70 million ounces of silver.  So you can see that we have miles to go to the downside in both contract [and price] terms if 'da boyz' really want to hammer the silver market like their quite capable of doing.

In gold, the Commercial net short position also declined by a bunch, to the tune of 13,025 Comex contracts, or 1.30 million troy ounces of paper gold.

The 'Managed Money' technical funds did pretty much as I expected they might, as they sold 9,959 long contracts---and piled onto the short side to the tune of 3,263 contracts.

Ted says that JPMorgan actually increased its long potion by 2,500 contracts during the reporting week---and their long-side corner in the Comex gold market is back up to 17,500 contracts, which is exactly the same number of contracts they hold short in the Comex silver market.

Here's Nick Laird's "Days of World Production to Cover Comex Short Positions" for the Big 4 and Big 8 traders in the Comex futures market as of yesterday's COT Report.

I have a lot of stories today, including several that I've been saving for my Saturday column because of content or length issues.

¤ Critical Reads

Fed's Yellen calls for caution on rates; Draghi says ECB ready to act

The Federal Reserve should move cautiously in deciding when to raise interest rates given the U.S. labor market remains bruised from the Great Recession, Fed Chair Janet Yellen said on Friday amid calls from policy hawks for a near-term rate hike.

In a speech at the Fed's annual central bank conference, Yellen laid out in detail why she feels the unemployment rate alone is inadequate to evaluate the strength of the jobs market and why the central bank needs to step gingerly.

Her remarks were followed by a speech by the head of the European Central Bank, Mario Draghi, who said the ECB was ready to use all the tools at its disposal to lift euro zone inflation if it continued to drop. He said, however, that most factors that had weighed on prices appeared temporary.

Together, the comments from Yellen and Draghi underscored how both central banks were wrestling with the complexities of labor markets still-wracked by the 2007-2009 financial crisis.

This Reuters article, filed from Jackson Hole, Wyoming, showed up on their Internet site at 5:45 p.m. EDT on Friday afternoon---and today's first story is courtesy of Orlando, Florida reader Dennis Mong.

The Chart That the U.S. Police Force Does Not Want You to See

The U.S. is #1 once again---that'll teach the cynics.

That's all the words there are to this Zero Hedge piece from early yesterday evening---and the chart is definitely worth the trip.  I thank reader M.A. for sending it along.

More Scaremongery: Inhofe Warns ISIS "Developing a Method to Blow Up a Major U.S. City"

Thursday night it was SecDef Chuck Hagel who warned ISIS was a bigger threat to America than 9/11 and primed the narrative for the next round of defense-spending (and this deficit-boosting, QE-enabling money printing). Today it is Senate Armed Services Committee member Jim Inhofe who told Fox that "we're in the most dangerous position we've ever been in as a nation."

While that seems a little bit of stretch (oh and hasn't the Senator seen stocks?) he adds - rather ominously, "they're crazy out there and they're rapidly developing a method of blowing up a major U.S. city and people just can't believe that's happening." But then again, when have we ever needed to 'believe' anything anyway (especially without YouTube clips to prove it).

As I said yesterday, the U.S. is being primed for its next false flag operation, which will certainly top the one the powers-that-be pulled for 9/11.  This commentary showed up on the Zero Hedge website at 2:19 p.m. EDT yesterday---and I thank reader 'David in California' for sending it around.

Eric Sprott: Weekly Market Wrap-Up

In this week's commentary, Eric talks with Jeff Rutherford about the economy, Ebola---and next week's silver expiry.  This 7:47 minute audio interview was posted on the sprottmoney.com website on Friday afternoon.

Two Jim Rickards Interviews

This first audio interview is with Craig Griffin over at ITM Trading---and it runs for 28:27 minutes---and was posted on the marketsanity.com Internet site on Wednesday.  The interview covers terrorism-backed insider trading, gold's role as a currency---and exponential risk.

The second interview was posted on the Russia Today website on Thursday.  It begins at the 4:55 minute mark and runs for a bit over 6 minutes.  The link to that is here---and I thank Harold Jacobsen for sharing both of these with us.

Google Maps is tracking everywhere you go

Google probably already knows your age, your interests, and everything you've looked at online. But now, there's proof that Google knows where you are pretty much all of the time as well. And it's proof Google gave us!

Google's location tracking site shows exactly where you and your cell phone have been. It even conveniently breaks down the locations it shows by day, proving that not only is the tech giant aware of users' locations, but it's also keeping a detailed record.

All of this is either fine or incredibly creepy. Luckily, it's very easy to turn off the tracking ability on your phone. For Google to record data on your phone's location, you must have enabled both location reporting and location history.

Luckily, Google has provided step-by-step instructions for how to turn those off in case you're entirely creeped out. And if you're not, well, now you have Google to help you remember all those times you've gone down to the corner store for milk because it was the only thing open at 4 a.m.

This very interesting article appeared on the news.yahoo.com Internet site last Sunday---and for content reasons, had to wait for today's column.  I thank Casey Research's own Doug Hornig for bringing it to my attention---and now to yours.

Argentina accuses U.S. Judge Griesa of "imperialist" attitude

Argentina on Friday accused the U.S. judge who called the country's debt restructuring plan illegal of making "imperialist" comments against the South American nation.

Argentine Cabinet Chief Jorge Capitanich said U.S. District Judge Thomas Griesa's choice of words were "unfortunate, incorrect and even, I would say, imperialist expressions".

Griesa on Thursday said a proposed law announced by Argentina's president this week would violate orders he imposed favoring creditors who refused to accept restructured bonds following the country's record 2002 default.

These three paragraphs are all there is to this brief Reuters story. It was filed from Buenos Aires at 7:21 a.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for finding it for us.

France to miss deficit target as economy hits standstill

France’s hopes of cutting its ballooning public deficit took a blow Thursday as new figures revealed that the country’s flagging economy remained at a standstill in the second quarter.

For the second quarter in a row, France’s gross domestic product saw zero growth in the three months to July, according to figures from national statistics office INSEE.

The figures prompted Finance Minister Michel Sapin to slash the government's forecast for growth in 2014 to "around 0.5 percent", compared with a previous projection of 1.0 percent.

This article appeared on the france24.com Internet site on Thursday sometime---and it's the first offering of the day from Roy Stephens.

Facebook given deadline in ‘largest privacy class action in Europe’

Facebook has been given four weeks to respond to a class action, launched against it by an Austrian activist and supported by 60,000 users. The suit claims Facebook violated users' privacy, by cooperating with the NSA's PRISM program.

The class action initiated by Max Schrems, an Austrian lawyer, data privacy activist and founder of Europe vs. Facebook group has passed its first review in the Vienna Regional Court.

Facebook Ireland, which runs the social network’s activities outside the U.S. and Canada, has been given four weeks to respond to the action.

"The order is very likely on the way to Facebook. The first step in the legal procedure is hereby taken," said a statement by Europe vs. Facebook on Thursday.

This article appeared on the Russia Today website at 12:53 p.m. Moscow time on Friday---and I thank reader Harry Grant for sliding it into my in-box in the wee hours of this morning.

Russian Humanitarian Convoy Enters Ukraine Without Authorization; Ukraine Considers Move "Direct Invasion"

The farce is complete, although at least this time it didn't take Ukraine several hours to fabricate then unfabricate its plot line, because literally minutes after it accused Russia of invading, Ukraine's foreign minister said the convoy was "allowed" to avoid provocations.

He added that the rebel militants are using mortars on the convoy route and that it had taken all necessary steps to ensure cargo safety but that Russia wouldn't discuss security for the convoy.

Nonetheless it still accused Russia's convoy of breaking international law and said that convoy would go to separatists, not civilians, and called on its "international partners" (we suppose it means the CIA here, which apparently is feeding it this ridiculous script) to condemn the Russian convoy.

This Zero Hedge article put in an appearance on their website at 9:02 a.m. EDT on Friday morning---and I thank reader M.A. for sharing it with us.

Trucks with Russian aid reach Lugansk, East Ukraine

Moscow has accused Kiev of placing political interests above humanism, adding that it is confident it made the right decision to order a convoy with Russian humanitarian aid to proceed to the conflict zone without waiting for further Ukrainian permission.

The Russian aid convoy on Friday finally reached Lugansk in eastern Ukraine, which has been devastated by repeated shelling. White Kamaz trucks delivered essentials such as food, water, medications, sleeping bags, and electric generators.

Twenty-four aid distribution centers have been set up in the city, 12 of which will open on Saturday morning, according to the administration of the self-proclaimed People’s Republic of Lugansk.

This article showed up on the Russia Today website at 7:49 a.m. Moscow time on their Friday morning which was ten minutes minutes before midnight in New York on Thursday night.  It's the second contribution of the day from Roy Stephens.

Russia Moves Artillery Units Into Ukraine, NATO Says

The Russian military has moved artillery units manned by Russian personnel inside Ukrainian territory in recent days and was using them to fire at Ukrainian forces, NATO officials said on Friday.

The West has long accused Russia of supporting the separatist forces in eastern Ukraine, but this is the first time it has said it had evidence that the Russian military was operating in Ukrainian territory.

The Russian move represents a significant escalation of the Kremlin’s involvement in the fighting there and comes as a convoy of Russian trucks with humanitarian provisions has crossed into Ukrainian territory without Kiev’s permission.

The bulls hit out of the American press is beyond shameless.  This piece of pure propaganda appeared on The New York Times website yesterday sometime---and I thank Roy Stephens for sending it.

Russian Intrusion Hoax Exposed as Mistrust for Kiev Grows

The Ukrainian military authorities have failed to confirm their earlier claim that a Russian column, consisting of 1,200 military servicemen and 150 armored vehicles including tanks and Grad missile launchers, had entered the territory of Ukraine near Luhansk, Western mass media sources report.

"Muddled security officials in Ukraine were… forced to deny that a huge Russian military convoy had been deployed in the eastern rebel-run city of Luhansk. The strong rebuttal suggested an earlier claim about an invasion by Vladimir Putin's troops amounted to a crude propaganda move by the pro-Western Kiev government - or deep confusion in its own ranks," the Daily Mail emphasizes.

The controversial information came from Lt.-Gen. Igor Voronchenko, the head of the Ukrainian Anti Terrorist Operation (ATO) in Luhansk and was immediately "confirmed" by Dmitry Tymchuk, a Ukrainian military analyst.

"Unfortunately, we can confirm the fact that the column of Russian military equipment broke through to Luhansk to back up the local militants," wrote Tymchuk on his Facebook page on August 19. The military analyst, however, failed to explain how the column remained undetected by the Ukrainian forces while breaking through ATO's blockade line.

The Russian invasion hoax had been instantly disseminated via the mainstream Ukrainian media and had rapidly spread across the Internet.

This commentary appeared on the RIA Novosti website at 12:29 p.m. Moscow time yesterday---and it's another contribution from Roy Stephens.

U.S. demands Russia withdraw aid convoy from Ukraine

The United States on Friday demanded Russia "immediately" withdraw an aid convoy of vehicles from Ukraine and warned of further international sanctions if Moscow did not respect Kiev's sovereignty.

Russia sent dozens of aid trucks into rebel-held eastern Ukraine earlier on Friday without Kiev’s approval, saying its patience had worn out with the Ukrainian government’s stalling tactics.

"Russia must remove its vehicles and its personnel from the territory of Ukraine immediately. Failure to do so will result in additional costs and isolation," Pentagon spokesman Rear Admiral John Kirby told reporters.

The United Nations Security Council was to hold emergency consultations on the convoy Friday at the request of Lithuania.

This story was posted on the france24.com Internet site yesterday sometime---and once again I thank Roy Stephens for sending it.

By Blocking U.N. Resolution, U.S. Shows That It Seeks Ukrainian Conflict Escalation – Moscow

By blocking the U.N. Security Council statement on the ceasefire in Ukraine, Washington has demonstrated that it wants to see further escalation of the Ukrainian conflict, the Russian Foreign Ministry said Friday.

“If the U.S. opposes an absolutely non-confrontational, reconciliatory text, there can be no doubts that Washington intends to have the armed confrontation in Ukraine continued. It could be seen only as an attempt to ‘undermine’ the humanitarian mission,” the ministry said in a statement.

Moscow believes that such policy is hypocritical, the ministry added.

"Cynical disregard for the fate of civilians and 'couldn't care less' attitude toward the international humanitarian law when it comes to geopolitical interests, becomes the core of the policy of the United States and its European satellites regarding Ukrainian," the statement read.

This is another RIA Novosti story from yesterday.  It was posted on their website at 7:06 p.m. Moscow time yesterday evening, which was 11:06 a.m. EDT.  Once again I thank Roy Stephens for sending it our way.

Russia Reminds U.N. that Ukraine Agreed to Let Russia Deliver Aid on August 12

Russia has sent a humanitarian convoy to the east of Ukraine, considering that it has received official authorization of Kiev government, Russian Ambassador to the U.N. Vitaly Churkin said.

The corresponding note was received on August 12, Churkin said, noting that the humanitarian aid to Syria was delivered without the consent of the authorities of the country.

"If we are talking about respect for sovereignty, we have received a formal agreement from them [the Ukrainian authorities]. We have discussed this issue with them, and if they decided to cheat, then it's their problem," Churkin told Russian reporters after the closed meeting of the UN Security Council on Ukraine on Friday.

The note that gave consent for the passage of the humanitarian convoy through the Ukrainian border was received on 12 August, Churkin said.

This news item appeared on the RIA Novosti website at 2:20 a.m. Moscow time on their Saturday morning---and the contributions from Roy just keep on coming.

Kiev Says Ukraine Needs 5 Billion Cubic Meters of Russian Gas for Winter

Ukraine needs to purchase additional five billion cubic meters of gas from Russia for the forthcoming winter season, Ukrainian Prime Minister Arseniy Yatsenyuk said Friday.

“Can Ukraine now survive without Russian gas? No, it can’t. How much Russian gas do we need to buy? About 5 billion cubic meters,” he said in an interview with Ukrainian TV channels.

He said that three-party gas talks, involving Ukraine, Russia and the European Union, are scheduled to take place next month.

“I hope there will be some final stage to these talks,” he said.

But where is the money coming from to pay for the gas that the Ukraine has already used, let alone this new amount?  A question with no answer at the moment.  This article appeared on the RIA Novosti website at 7:24 p.m. Moscow time on their Friday evening---and it's courtesy of Roy Stephens once again.

Russia's Rosneft grabs Norwegian drilling assets

Russian energy company Rosneft said Friday it signed an agreement to acquire a stake in a Norwegian drilling company in exchange for drilling rigs.

Rosneft signed a framework agreement with North Atlantic Drilling Ltd.

"This deal will allow Rosneft to acquire new capabilities in the sphere of oilfield services, by engaging the best professionals, with unique expertise in operations in harsh climate conditions," Rosneft Chief Executive Officer Igor Sechin said in a statement Friday.

Rosneft was the target of sanctions imposed by Western powers in response to Russia's stance on crises in Ukraine. Sechin himself was sanctioned by the U.S. government.

This UPI news item, filed from Moscow, appeared on their Internet site at 10:07 a.m. yesterday, but the time zone it was filed from wasn't stated, so EDT must be assumed.

Veteran Russian nationalist demands Obama be stripped of Nobel Peace Prize

Russia’s Liberal Democratic Party will press for depriving President Barack Obama of the Nobel Peace Prize on the grounds that the U.S. leader is disgracing the award by organizing wars instead of fighting for peace.

The statement, posted on the party’s website, quotes its leader Vladimir Zhirinovsky as saying that the fact that the Peace Prize was given to Obama in 2009 caused bewilderment from the very beginning – the award went to the man who had occupied his post for less than a year and had not claimed any real achievements.

Usually the Nobel Peace Prize is handed to people who fought for peace for 20, 30, 40 or 50 years, who did prison time. This man has not moved a finger. And in recent years he has organized wars. Ukraine is in flames, the Mideast is troubled, and there are problems in Afghanistan. Throughout his term in power – not a single peacekeeping operation; we see only death, aggression and refugees. The Peace Prize should be recalled immediately to avoid disgracing of the award!” Zhirinovsky stated.

The Russian politician added that he himself had worked in the Peace Committee and previously the whole world had been proud of Nobel laureates. He noted that giving the Peace Prize to Obama “had done huge damage” but the mistake could still be corrected.

He would be exactly right about that, dear reader. This article put in an appearance on the Russia Today website at 9:01 a.m. Moscow time yesterday---and I thank Roy Stephens once again.

Interview with Sergei Glaziev---a MUST WATCH/LISTEN!

Thanks to the superb work of the Russian Team, it is my huge pleasure to present you with one of the most interesting interviews about the war in the Ukraine and the global struggle for the future of the planet and the views of one of the best informed men in Russia: Sergei Glaziev.

Glaziev is an advisor to President Putin and a close friend.  I personally believe that the western media is either wrong or deliberately lying when then say that Dugin is Putin's ideological mentor. I am not sure that Putin has - or needs - any kind of mentor, but over the years I have found that Glaziev seems to say out loud what Putin does not, but seems to be acting on.

Glaziev, who was born in the Ukraine and who is an economic himself, has a superb understanding of the behind-the-scenes power plays in the Ukraine and in Russia.  This man really *knows* what is going on.  Furthermore, he is one of the leading "Eurasian Sovereignists" and he is therefore absolutely hated by the pro-U.S. circles in Russia.  He is equally hated in the USA who put him on their recent sanctions list for no other reason then the fact that they don't like what he has to say.

I cut and paste the above three paragraphs of introduction from the vineyardsaker.blogspot.ca website, which is what you will read when you click on this article.  The interview is in Russian, so if you need to read the English subtitles to what he is saying, you have to click on the little 'cc' icon at the bottom of the youtube.com video that's imbedded in this story.  The video interview runs for 15:34 minutes---and is, without question, the most important 'story' in today's column.  It's a must watch from start to finish---and should be of special interest to any serious student of the New Great Game, which has now begun in earnest---and that Sergei talks about at length.

The story, is of course, courtesy of Roy Stephens.  He sent it to me on Wednesday, but because of length and content reasons, it had to wait for my Saturday column.

Four stories about the Russia/Europe trade war

1. Can Europe afford a Russia trade war?: E.U. Observer  2. Serbia ready to start dairy deliveries to Russia in 2-3 weeks: Russia Today  3. Peach protest: Spanish farmers burn E.U. flag in anger over Russia sanctions warRussia Today  4. Russia food ban protest: Spanish farmers dump potatoes outside supermarket: Russia Today

[I thank Roy Stephens for digging up all these stories on our behalf]

Egypt launches Suez Canal II project, reasserts image as building nation

New President al-Sisi announces the US$4-billion, 72-kilometre waterway whose construction will be carried out by the country’s armed forces.

The announcement by Egypt that it will build a new waterway parallel to the Suez Canal is aimed not just to keep pace with growing international trends but also to boost revenue in a country that has been forced to become the world’s largest wheat importer to feed its 84 million people.

And, at the same time it is designed to tell the world that while other Arab states are plunged in chaos and violence, the nation from which the term “pharaonic” was coined to describe mammoth public works, is resolved “to build,” international relations pundits told the Herald.

Revenue from the new project is expected to reach US$13.5 billion by 2023 versus the current US$5 billion from its 145-year-old predecessor.

This very interesting news story appeared on the buenosairesherald.com Internet site way back on August 11.  Reader M.A. sent it to me last Sunday---and for obvious reasons it had to wait for today's column.

Baku, Tehran sign energy agreements

Azerbaijan said it signed a memorandum of understanding to broaden energy ties in the Iranian oil and natural gas sector.

The State Oil Co. of the Azerbaijan Republic said its delegates have spent the last three days in Iran visiting with ministers and representatives from the energy sector.

SOCAR said it reviewed interests expressed by Iran's Khazar Exploration and Production Co. to work on oil and gas issues ranging from production to transportation of reserves between the two Caspian nations.

"The event ended with signing of a memorandum of understanding between Iran's Khazar Exploration & Production Co. and SOCAR," the Azeri company said Thursday.

This story, filed from Tehran, appeared on the upi.com Internet site at 10:33 a.m. EDT[?] on Friday---and I thank Roy Stephens once again for bringing it to our attention.

Mongolia Seeks Economic Lifeline With Pivot to China, Russia

After two decades courting Western investors and political allies, Mongolia is refocusing on foreign ties closer to home seeking to revive its economy.

China’s President Xi Jinping is scheduled to arrive tomorrow in the country landlocked between his nation and Russia, as Mongolia’s economic woes mount. Growth is the weakest in four years, foreign investment has plummeted, inflation is rising and the currency has plunged to a record low.

Xi’s trip to the mineral-rich nation, the first by a Chinese president in 11 years, comes ahead of the expected visit of Russian President Vladimir Putin about two weeks later. As analysts anticipate deals or negotiations from energy to infrastructure, the visits signal a pivot to Russia and China as a prolonged spat with Rio Tinto Group over Mongolia’s biggest ever investment has cooled foreign interest in the nation.

“The timing is critical,” said Peter Morrow, partner at NovaTerra LLC, which advises on projects including energy, from Ulaanbaatar. “Both China and Russia are keenly interested in Mongolia’s resources, and both know that the country is going through a rough economic patch.”

This very interesting article, co-filed from Tokyo---and Ulaanbaatar in Mongolia, appeared on their Internet site at 9:55 p.m. on Tuesday evening Denver time---and is another news item that had to wait for today column.   My thanks go out to reader Harold Wiener for bringing it to our attention---and it's definitely worth reading.

Tour 20 Cities Through Videos Taken by Drones

If you can't make it to Venice, Istanbul, and Macao this summer, you can experience them via stunning aerial views thanks to drone videographers (and the internet). These forward-thinking photographers travel the world with their remote-controlled flying cameras and capture the world as only a small helicopter with advanced video skills could.

Drones get a bad rap in the press for their more nefarious talents, such as launching military airstrikes in remote places, but they have become more and more common in architecture and urban photography. First-person view, as it is sometimes called, involves cameras mounted on an unmanned aerial vehicle (UAV) or radio-controlled aircraft. Perhaps the leader in this art form for architecture is Iwan Baan and his famous aerial shots.

The moment I played the London video clip out of this group posted in this article, I realized that what I was looking at was not only going to revolutionize aerial photography, but all of video photography.  It was stunning.  I hope you have a good time here, as I had fun---and was totally blown away.  You will be too.  It was posted on the architizer.com Internet site on Monday---and is something else that had to wait for today's column.  I thank Roy Stephens for sharing it with us.

Ex-White House Official - Gold, Capital Controls---and Inflation: King World News

Former presidential adviser and Plunge Protection Team member Philippa Malmgren tells King World News that governments have an interest in suppressing the price of gold and silver and in otherwise blocking the exits from currency devaluation as official inflation figures begin to be exposed as lies.

This interview was posted on the King World News website yesterday---and I thank Chris Powell for wordsmithing the above paragraph of introduction.

New York Sun: Krugman's kryptonite

The journalistic establishment's refusal to engage in an honest and candid discussion of gold's place in the international financial system was ridiculed brilliantly in an editorial in The New York Sun on Friday, which targeted New York Times columnist Paul Krugman particularly.

"Put a piece of specie next to Mr. Krugman and he shrivels up and like Superman on a slab from Krypton," the Sun writes, "It wouldn't surprise us were Mr. Krugman to keep his Nobel 'gold medal' in a lead-lined case, lest he get woozy when he walks past it. He calls for analysis? Analyze this: During Bretton Woods, under which the dollar was fixed at a 35th of an ounce of gold, unemployment averaged 4.7 percent. Since then it has averaged above 6 percent. Is that related to the fiat nature of money?"

This editorial was posted on The New York Sun's website---and I found it on the gata.org Internet site.  Once again I thank Chris Powell for writing the above paragraph of introduction.

New Orleans investment conference will debate gold market manipulation

As always unafraid of controversy, the New Orleans Investment Conference in October will feature a debate on whether central banks manipulate the gold market, with GATA's secretary/treasurer Chris Powell arguing in the affirmative---and Casey Research founder Doug Casey arguing in the negative.

The debate will be moderated by money manager, financial commentator, and fellow conference speaker Adrian Day.

The rest of this GATA release from yesterday falls into the must read category.

Rick Rule sounds suspicious about gold market manipulation

Sprott Asset Management's Rick Rule told financial letter writer Jay Taylor this week that he doesn't want to believe in conspiracies to manipulate the gold market but is "very impressed by the amount of data" GATA has collected.

Rule said the heavy selling of gold and silver at illiquid times in the market suggests attempts to drive prices down. If the LIBOR interest rate could be manipulated, Rule added, it would be much easier to manipulate the gold and silver markets, which are much smaller.

The interview with Rule is, at this moment, the third item on the audio page of Taylor's Internet site, jaytaylormedia.com---and Rick's comments on gold market manipulation begin at the 16:20 mark.  This is definitely worth your time as well, dear reader.  The pattern for Rick's tin-foil hat is at the millinery on Savile Row at this very moment.

India's anti-gold rules to stay in place - Finance Secretary

In a major blow to the Indian bullion industry, the Finance Ministry has ruled out easing its curbs on gold imports any time soon. India's retail sector has been seeking the softening of import duty for some time now.

Finance Secretary Arvind Mayaram told a media gathering on Thursday, during an industry and government meeting organised by industry chamber Assocham, that the government would consider easing the norms at some time in the future, when it was more comfortable with the current account deficit (CAD) situation and could start earning more from other exports.

Though CAD had fallen significantly in 2013-14, India's apex bank RBI has noted that potential risks could emanate from both domestic and global factors.

He made it clear that India could not afford 1,000 tonnes of gold import at a bill of $55 billion any more.

This gold-related news item, filed from Mumbai,  showed up on the mineweb.com Internet site yesterday--and it's definitely worth reading.

China gold exchange gains traction as yuan reforms stir interest

China's planned global gold exchange has signed up more members than targeted, as foreign banks and trading houses seek direct access to the world's top physical gold consumer and to test out reforms allowing them to trade commodities in the yuan currency.

The strong response from foreign players will boost efforts by China -- also the world's biggest producer of gold -- to gain pricing power over the metal and to challenge the dominance of London and New York in trading.

This Reuters article, filed from Singapore, showed up on their website at 3:20 p.m. IST on their Friday afternoon---and it's anther gold-related news item I found on the gata.org Internet site.

This surprising metal, palladium, is crushing gold

While everyone is staring at gold, one surprising precious metal is trouncing it: palladium.

The metal is up 22 percent this year, and earlier this week, it made 13-year highs as it broke above $900 per troy ounce. Gold, meanwhile, is only up 5 percent in 2014.

And according to David Seaburg, head of equity sales trading at Cowen &  Co., the palladium run isn’t over just yet.

“Depletion of the Russian inventory has been a big issue,” said Seaburg. That country is the world’s largest palladium producer.

And Russia could make it an even bigger issue if the choose to do so---and they just might, as I said before, if push really becomes shove.  This article appeared on the finance.yahoo.com Internet site at 5:23 p.m. EDT on Thursday afternoon---and I thank Elliot Simon for digging it up on our behalf.

Netherlands refuses to return Crimean Scythian gold to Russia or Ukraine

The Allard Pierson Museum of Amsterdam has reported that it has decided not to return the exhibits which were on display at the exhibition "Crimea: a golden island in the Black Sea" either to Ukraine or to Russia for the time being.

In a statement, the museum said that it planned to wait for a legal investigation into the problem to be completed before taking further steps. “This matter [of to whom the treasure should be returned, to Kiev or to Crimea] is both unique and complex. The Allard Pierson Museum felt it was important to investigate the matter thoroughly and find a solution.” “The Allard Pierson Museum will abide by a ruling by a qualified judge or arbitrator, or further agreement between parties,” the museum adds.

The exhibition opened at the Allard Pierson Museum of the archeological museum at Amsterdam University in early February. It featured collections from five museums - one in Kiev and four in Crimea - and displayed over 500 archeological finds that included artifacts of Scythian gold, a ceremonial helmet, precious stones, swords, armor, and ancient Greek and Scythians household items

This amazing ITAR-TASS article, posted on the Russia Beyond the Headlines website on Friday Moscow time---and I thank Roy Stephens for his final offering in today's column.  It's definitely worth reading.

¤ The Funnies

Today's first photo is of our neighbour's 5-month old cat, Luna.  Because it's too young to be boarded at a kennel, we volunteered to look after it while they were on vacation for two weeks.  What a hellion she turned out to be!  Climbing drapes and speakers became her spécialité de la maison---and to get her to sit still long enough for a photo was challenge in itself. Pure black cats do not photograph well, because there's just no contrast, but the sidelight from the kitchen window helped in this circumstance.  We were oh, so happy to return her to her owners.







¤ The Wrap

I’ve been mentioning COMEX copper more frequently this year because it has become quite clear that copper prices have been involved in the same manipulative scam as is true in COMEX silver and gold. It’s the same story in copper that exists in silver and gold, namely a rigging of prices by the commercials to induce technical fund buying and selling. Copper price movement has had nothing to do with real world copper supply and demand fundamentals and everything to do with the collusive commercials tricking the technical funds in COMEX dealings.

Clearly, all blame for this outrageous and illegal copper manipulation must be placed on the CME and the CFTC (and probably JPMorgan). What makes the copper manipulation particularly egregious is that the market is so large, with annual mine production worth upwards of $130 billion, and because it wouldn’t seem probable that the manipulation exists for some of the reasons given for the silver and gold manipulations, namely to protect the dollar or some such effect.

Thus, it would appear likely that it’s just a game of the collusive commercials stealing from the technical funds for pure avarice, promoted by the CME and protected by the CFTC. The scam is as simple and straight forward in copper as it is in silver and gold, namely, the commercials rig prices higher and lower through important moving averages to sucker the technical funds in and out of massive positions. - Silver analyst Ted Butler: 20 August 2014

Today's pop 'blast from the past' dates back to 1968.  Both the tune---and the artist---need no inroduction at all.  The link is here.  If I've posted this before, it's been a while.

Today's classical 'blast from the past' is the waltz form Act 1 of Tchaikovsy's 1875/6 ballet, Swan Lake, Op. 20.  The Philadelphia Orchestra does the honours---and Riccardo Muti conducts.  The tempo is a little faster than I'm used to, or like, but I'm running late this morning---and I just don't have the time to look for another version.  The link is here.

There's not much to talk about regarding yesterday's price action in either gold or silver.  It was almost like JPMorgan et al decided to take the day off.  Except for roll-over action, volume wasn't particularly high once again.

Here are the 6-month charts for both gold and silver---and there's not much change from Thursday.

As I said in Friday's wrap, it's still my opinion that gold and silver prices haven't seen their lows for this move down as of yet.  That was confirmed in my conversation with Ted Butler yesterday.  I asked him how far along we were in the silver liquidation process---and his answer was not encouraging.

He said that as of yesterday's Commitment of Traders Report, the technical funds were still 23,000 Comex contracts higher than we were at the absolute low at the end of May.  To get back to the contract low at the end of May, these long contracts would have to disappear---and that could happen in two ways, which is a combination of long liquidation and new shorting that add up to that number of contracts.  What the silver price would be at that point is anyone's guess, but it would be considerably lower than it is right now.  The same situation exists in gold, although I'm not sure of the number of contracts, because I didn't ask.  Maybe Ted will mention it in his weekly review which will be posted for his paying subscribers later today.

Of course, there's always the chance that JPMorgan et al aren't going to target those lows again during this particular engineered price decline, but the possibility exists, so I thought you should know about it.

Nothing has changed in the economic, financial or political world since last Saturday.  The American and European militaries---and their associated governments---are still attempting to provoke Russia into armed intervention in the Ukraine.  Of course Putin is way too smart for that. Since the lies they---and the whores in the Western press---are telling, are no longer working, we'll just have to wait and see what happens, because the West will continue to hammer away at the Russians, as they are still itching for war.  All we can do is wait for the next shoe to drop.  I'm thinking a 'false flag' operation of some kind.

Of course the powers-that-be could also drop another 9/11-type event on us sometime in the future---and as I said in the comments in one of the Critical Reads---there will probably be several simultaneously in various parts of the world, as the forces of Mordor, along with the bought and paid for press, are now becoming more brazen with each passing day, as the Nazgûl have been given free rein on Planet Earth.

There are four trading days left in August---and I'm not sure what to expect.  One would think that JPMorgan et al will push their advantage through options and futures expiry early next week, as that's what I would be doing if I were them.  But they were nowhere to be seen yesterday.  However, I don't have a criminal mind---and who knows what they've been instructed to do.  Because even though they're doing the dirty work, it's my opinion that they aren't calling the shots.

So we'll have to see what next week's trading action brings---and I'll be watching the 6 p.m. EDT Globex open on Sunday evening with great interest.

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

]]>
Sat, 23 Aug 2014 07:54:00 +0000
<![CDATA[U.S. Mint Platinum Coins Bypassed in Rush For Gold]]> http://www.caseyresearch.com/gsd/edition/u.s.-mint-platinum-coins-bypassed-in-rush-for-gold/ http://www.caseyresearch.com/gsd/edition/u.s.-mint-platinum-coins-bypassed-in-rush-for-gold/#When:06:19:00Z "This is the way these engineered price declines always work"

¤ Yesterday In Gold & Silver

Well, JPMorgan et al, backed by their HFT specialists, were a force to be reckoned with right from the 6:00 p.m. EDT open on Wednesday evening in New York.  The low tick came about twenty minutes before the Comex close on Thursday afternoon---and the subsequent rally made it until 3:40 p.m. EDT before running into the algorithms once again.

The high and lows ticks were reported by the CME Group as $1,292.00 and $1,273.40 in the December contract.

Gold finished the Thursday trading session at $1,276.30 spot, down $15.10 from Wednesday's close.  Net volume was pretty decent at 136,000 contracts.

Here's the 10-minute tick gold chart courtesy of reader Brad Robertson---and the 'click to enlarge' feature works wonders here.  Note the monster volume at 2 a.m. EDT [midnight MDT on this chart] when the HFT boyz showed up with their algorithms.

Silver set a new low price for this move down just before 10 a.m. BST in London on their Thursday morning.  From there it rallied into the London p.m. gold fix where it ran into JPMorgan et al---and that was pretty much it for the day, although it did manage to poke its nose into positive territory just before 4 p.m. EDT.  That's when the gold price got sold down off its rally as well.  Ditto for silver.

The low and high ticks were reported as $19.285 and $19.48 in the September contract.

The silver price closed yesterday at $19.415 spot, down 3.5 cents from Wednesday's close.  Net volume wasn't overly heavy at 23,500 contracts.

Platinum was under a bit of selling pressure during Far East trading---and that continued until the Comex open, where the low tick was set for the day.  It recovered about five bucks off its low---and then traded flat for the rest of the day and closed down about 8 bucks.

Palladium didn't do much until Zurich opened.  At that point it dipped a few dollars before heading higher until about noon in New York.  After that it traded flat as well---and finished the Thursday session up 12 bucks.

The dollar index closed at 82.25 late on Wednesday afternoon in New York.  It rose to its 82.36 high at noon Hong Kong time.  From there it chopped quietly lower until around 11 a.m. EDT---and after that it pretty much traded ruler flat, finishing the day at 82.16---down 9 basis points on the day.  Here's the 2-day dollar index chart.  Note the noon high tick in Hong Kong on their Thursday.

Here's the 6-month dollar index with Thursday's data added.  Using the past as prologue, I'd say this dollar rally is getting a little long in the tooth---and if I were long this index, I'd be hitting the bid about now.

The gold stocks gapped down almost 2 percent at the open---and from there they sank to their low of the day around 12:10 p.m. EDT.  Then they traded flat before catching a bit of a bid in the last hour of trading.  The HUI finished down 1.99%---but well off its low.

The chart pattern in the silver equities was almost a carbon copy of the gold shares.  At one point the shares were down over 3 percent but, like gold, rallied a bit in the last hour of trading---and Nick Laird's Intraday Silver Sentiment Index closed down 'only' 2.37%.

The CME Daily Delivery Report showed that 233 gold and 6 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  In gold, the two big short/issuers were Morgan Stanley with 150 contracts---and Barclays with 77 contracts---and both out of their in-house [proprietary] trading accounts.  The two long/stoppers of note were Canada's Scotiabank with 133 contracts---and JPMorgan with 82 contracts in its client account once again.  The link to yesterday's Issuers and Stoppers Report is here.

The CME's Preliminary Report for Thursday shows that there are 372 gold contracts still open in August.  From that number you can subtract the 233 contracts mentioned in the above paragraph, so there are about 140 contracts left to deliver sometime before first notice day for September, which is next Friday.

There were no reported changes in GLD yesterday---and as of 10:15 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with what happened in SLV for their reporting week ending on Wednesday---and here's what he had to say.  "Analysis of the 20 August 2014 bar list---and comparison to the previous week's list:  4,078,051.2 oz were added---and no bars were added or had a serial number change."

"The bars added were from: Inner Mongolia Qiankun (0.9M oz), Solar Applied Materials (0.6M oz), Nippon Mining (0.6M oz), Henan Yuguang (0.6M oz), and 19 others."

"As of the time that the bar list was produced, it was overallocated 194.5 oz. All daily changes are reflected on the bar list, except for a 1,439,175.0 oz deposit Wednesday night."  The link to Joshua's website is here.

The U.S. Mint had a tiny sales report yesterday.  They sold 1,500 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes.

Over at the Comex-approved depositories on Wednesday, the didn't report receiving any gold, but 46,279 troy ounces were shipped out---and all out of Manfra, Tordella & Brookes, Inc.  The link to that activity is here.

It was quite a bit busier in silver, as it normally is.  394,615 troy ounces were reported received---and 650,056 troy ounces were shipped out.  All the activity was at HSBC USA and Canada's Scotiabank.  The link to that action is here.

I have a lot fewer stories for you today---and that suits me just fine.

¤ Critical Reads

The Schizophrenic U.S. Housing Market in One Chart

For those who are looking for just one chart with which to summarize the U.S. housing market, here it is courtesy of the NAR, which earlier today reported July existing home sales, which despite beating expectations, were still 4.3% below the 5.38 million annualized homes sold a year ago.

The chart shows that while the housing market for the low-end continues to collapse (the 12.9% drop was "only" -12% three months ago), and the mid-range is virtually frozen, all the upside activity, activity which pushes the median price ever higher ( in July it was $222,900, 4.9% percent above July 2013 and the 29th consecutive month of year-over-year price gains), was in the ultra-luxury segment, or houses which cost over $1 million as the "1%", both foreign and domestic, continues to convert their pieces of fiat paper into hard real-estate assets.

That's all there is to this brief article that appeared on the Zero Hedge website yesterday---and the chart is definitely worth the trip.  I thank reader M.A. for today's first story.

Philly Fed Surges to Highest Since March 2011 Despite Plunge in Jobs and New Orders

Philly Fed has beaten expectations for 6 months in a row with its biggest surge since the 2009 lows. Against expectations of 19.3, Philly Fed printed 28.0 - highest since March 2011 all-time highs. All sounds awesome right? Ummm, no, as 7 of 9 internal declined including - New Orders tanked, Employment tumbled, Prices Paid plunged, and Prices Received slumped.

So, in case you were wondering how it is possible that Philly Fed surged given such shitty internals, the 6-month forecast index ("hope") just surged to 22-year highs. And not only that: put all hopes of that long-delayed CapEx renaissance on hold: "While most broad indicators of future growth have been improving, the survey’s future capital spending index has been slipping. Although the index decreased just 1 point this month, its reading, at 17.5, is now the lowest it has been in seven months."

Look forward to Yellen talking soon about lack of capital spending as a pretext to keep ZIRP on for much, much longer.

The three charts embedded in this second Zero Hedge story are also worth a quick look---and today's second story is also courtesy of reader M.A.

New York Sun: The mystery of Jackson Hole

In commentary headlined "Mystery of Jackson Hole," The New York Sun today reflects on the wreckage of the United States economy as the annual economic conference of the Federal Reserve Bank of Kansas City convenes at the famous Wyoming resort. The Sun writes:

"Savers have been devastated. The market isn't what it seems. No one wants to lend and no one wants to borrow. Unemployment is still above where it was when Congress gave the Fed a mandate to bring it down. A new Fed chairman has made jobs her signature. But will anyone at Jackson Hole ask whether it is the fiat nature of our money that got us into this hole in the first place?"

This short editorial appeared on The New York Sun website yesterday--and it's definitely worth reading.  I found it over at the gata.org Internet site.

Nobel guru fears it may be nigh impossible to stop deflation

A quick word from Lindau, where half the world's Nobel economists are gathered on a beautiful island with cobbled streets on Lake Constance, looking out across the Alps. It is a Wittlesbach jewel.

Christopher Sims – a monetary expert, who now thinks money indicators have been rendered "essentially obsolete" by modern finance – says it may be impossible to reverse deflation in the Western economies by any normal means, in which case we are in trouble.

He argues that the public (including investors) are convinced that there will have to be some sort of payback for all the debts accumulated during the great era of leverage and excess. They have "internalised" the prospect of future tax rises and spending that will make them feel poorer.

"Some 60pc of people in the U.S. say they doubt there will be any government benefits for them when they retire, and 60pc of those already retired think their benefits will be reduced," he said.

This Ambrose Evans-Pritchard blog showed up on the telegraph.co.uk Internet site yesterday sometime---and it's the first offering of the day from Roy Stephens.

High-frequency trading critic Chilton joins HFT lobby effort

Former CFTC Commissioner Bart Chilton, who famously blasted high-frequency traders as "cheetahs" when he was a regulator, has gone to work with a leading high-frequency trading association, the group said Thursday.

The switch is a dramatic example of a regulator becoming a paid consultant for an industry he once criticized—and it says as much about how the high-frequency trading industry is changing its approach as it does about Washington's often-criticized revolving door.

Chilton, who left the CFTC earlier this year, joined the law and lobbying firm of DLA Piper as a senior policy advisor in April. On Thursday, the Modern Markets Initiative announced that Chilton and DLA Piper will work with the association's newly appointed CEO Bill Harts on "regulatory and public policy matters."

Both Ted Butler and I thought he was a good guy until we realized that although he talked the talk, there was no way he was ever going to walk the walk.  Now he's just another paid whore for Wall Street.  This 2:39 minute video clip, plus transcript, was posted on the CNBC website very early Thursday morning EDT---and I thank Dr. Dave Janda for passing it around yesterday.

Chuck Hagel Goes Full Fearmonger: "ISIS Poses Greater Threat Than 9/11, Prepare For Everything"

U.S. Secretary of Defense Chuck Hagel talks about the "imminent threat" ISIS poses to the US and the World.. .and pulls no punches in his total fearmongering..."ISIL poses a threat greater than 9/11. ISIL is as sophisticated and well funded as any group we have seen. They're beyond just a terrorist group. They marry ideology with a sophisticated strategic and tactical military prowess and they're tremendously well-funded. This is way beyond anything we have seen. We must prepare for everything. Get Ready!"

Time for some QE-funded deficit-busting war spending...

Or maybe it's just a warning for the next big false-flag operation, such as a 9/11 redux---except maybe in several countries at once, dear reader.  We'll find out soon enough I would think.  This is another Zero Hedge posting---and it appeared on their website at 4:47 p.m. EDT yesterday afternoon.  I thank reader 'David in California' for sending it.  Then there's this related ZH piece headlined "Rick Perry "ISIS Could Be in U.S., Need to Be Eliminated Now"" that David sent as well.

‘Only’ American fighter within Kiev forces dies in battle in East Ukraine

The only American known to have joined a volunteer unit within the Ukrainian military, fighting the anti-government forces in the country’s east, has been killed in action, authorities confirm.

The killed fighter is Mark Paslawsky, a New York-born 55-year-old investment banker and US army veteran who took Ukrainian citizenship just before joining the Donbas battalion - a volunteer unit fighting alongside Kiev troops - in April. He adopted codename ‘Franko’ there.

News of his death came in an August 20 Facebook post by Ukrainian Interior Ministry adviser Anton Gerashchenko, who said four fighters of the Donbas battalion died in a battle near the town of Ilovaysk, 35km from Donetsk, eastern Ukraine.

Among those dead is a Ukrainian citizen of American origin, codename ‘Franko’,” Gerashchenko wrote.

This news item, filed from Moscow, showed up on the Russia Today Internet site at 10:48 a.m. Moscow time on Thursday morning, which was 2:48 a.m. in New York.  I thank Roy Stephens for sending it.

Red Cross Warns Against Indiscriminate Attacks in Ukraine's Populated Areas

The International Committee of the Red Cross (ICRC) on Thursday called on both sides of the conflict in Ukraine to avoid selecting military targets in populated areas and carrying out indiscriminate attacks, the ICRC statement said.

"Equally, each party to the conflict must, to the extent feasible, avoid locating military objectives within or near densely populated areas. Indiscriminate attacks are prohibited, as is the use of weapons which by their nature are indiscriminate, i.e. which cannot distinguish between civilians and objects on the one hand and military objectives on the other,” the statement read.

This story, filed from Moscow, was posted on the RIA Novosti website at 8:59 p.m. Moscow time on their Thursday evening---and it's another contribution from Roy Stephens.

Ukraine border guards begin checks on Russian aid trucks

Ukrainian border guards began on Thursday to inspect a Russian truck convoy carrying aid earmarked for humanitarian relief in eastern Ukraine that has been stranded at the frontier between the two former Soviet republics for nearly a week.

Kiev believes the convoy of some 260 trucks, carrying water, food and medicines, could prove a Trojan horse for Russia to get weapons to pro-Russian separatists battling Ukrainian forces in the region - a notion that Moscow has dismissed as absurd.

"I can confirm that at 2:15 p.m. (1115 GMT/7.15 a.m. EDT) the Ukrainian side began border-customs formalities relating to the Russian humanitarian cargo," border guard spokesman Andriy Demchenko told Reuters.

Asked on whose territory the cargo was, he replied: "On the territory of the Russian border point."

This Reuters story is datelined 4:42 p.m. EDT yesterday afternoon---so it's obviously been edited, as Roy Stephens sent it to me at 12:55 a.m. EDT.

Moscow Urges to Prevent Disruptions of Aid Delivery, Warns of Provocations

The Russian Foreign Ministry on Thursday called on all parties concerned to prevent any disruptions in the delivery of Russian humanitarian cargo to eastern Ukraine.

“The most important task for now is to ensure that the convoy reaches its destination point without any disruptions,” the ministry said in a statement. “The Russian side reiterates its firm security guarantees. Similar guarantees have also been provided by the Ukrainian authorities and the militia.”

The ministry also warned of “possible provocations aimed at disrupting the delivery of aid.”

Ukraine’s National Security Council spokesman Andriy Lysenko said earlier today that Kiev had no information on when the Russian humanitarian aid convoy can enter the country.

This article appeared on the RIA Novosti website at 8:39 p.m. Moscow time on their Thursday evening---and it's another contribution from Roy Stephens.

Meeting Between Russian, Ukrainian Presidents Step Toward De-Escalation – Lawmaker

A meeting between the Russian and Ukrainian presidents slated for August 26 in the Belarusian capital of Minsk is a step forward in de-escalating the conflict in Ukraine, Russia’s lower house speaker Sergei Naryshkin said Thursday.

“The Minsk meeting is one of the stages to de-escalating this conflict," State Duma Speaker Naryshkin said.

Naryshkin stressed that the de-escalation of the Ukrainian conflict requires establishing a dialogue involving “all the political powers and all the regions of the country.”

On Tuesday, deputy head of the Ukrainian presidential administration Valeriy Chaliy said the coming two weeks would be decisive for a peaceful settlement in Ukraine, and that Kiev wants to resolve the conflict through diplomacy.

This is another article from the RIA Novosti website.  This one showed up at 1:18 p.m. Moscow time yesterday---and I thank reader M.A. for sending it along.

No Brie for Moscow as Cheese Stacks Up in France on Ban

At Alexander Krupetskov’s one-window cheese store in central Moscow, sales of products from France have tripled in the past two weeks.

Shoppers are stocking up on foods set to become scarce after Russia banned a range of products from the European Union and the U.S. in retaliation for sanctions over Ukraine. The nation of 143 million has been one of the fastest-growing export markets for French cheesemakers as Moscovites acquire a taste for creamy brie, pungent Camembert and spicy Roquefort.

“The very foundation of the shop has been cast into major doubt,” said Krupetskov, who has four weeks of inventory left.

This Bloomberg article, co-filed from Paris and Moscow, appeared on their website at 4:52 a.m. Denver time yesterday morning---and I thank Roy Stephens for sending it our way.

‘Zero effect’, if E.U. asks to stop trade with Russia – Brazil

Brazil has not received a request from the E.U. to halt increasing exports to Russia, but if it does, Brasilia wouldn’t care, Ambassador Antonio Jose Vallim Guerreiro told a news conference in Moscow Thursday.

"No E.U. official has approached the leadership of Brazil with such an initiative of the sort yet," as ITAR-TASS quotes the ambassador.

Guerreiro is certain that even if there were a request from the E.U., its effects would be "equal to zero."

He said he was aware of reports saying the E.U. leadership might ask Brazil to refrain from taking its share of the Russian market. Brazil’s leaders have no leverage to influence businesses or put pressures on them, he added.

This Russia Today story was posted on their website at 11:52 a.m. Thursday morning Moscow time---and it's the second-last contribution of the day from Roy Stephens.  RIA Novosti had their story on this issue as well.  It's headlined "Brazil Hopes to Increase Trade With Russia – Ambassador"---and this represents the final offering of the day from Roy.

Russian Rocket Engines Delivered to U.S. Despite Escalating Tensions

Two Russian-built rocket engines have arrived in the U.S. aboard a giant Antonov cargo plane despite fears that tensions between the U.S. and Russia could disrupt the supply of engines needed to launch U.S. satellites into space.

"Today, United Launch Alliance received two RD-180 engines at our factory in Decatur, Alabama, that will support critical near-term U.S. missions," Jessica Rye, spokeswoman for the joint venture of Boeing and Lockheed Martin Corp, said Wednesday. ULA uses the Russian engines to help launch a range of NASA and other government satellites into space.

Rye said the deliveries occurred as scheduled, bringing the company's current inventory of RD-180 engines to 15. Three additional rockets are due to arrive this fall, she said.

For now, Washington remains dependent on the Russian engines since it could take years and billions of dollars to design and build a U.S.-built alternate engine, according to U.S. government officials and industry executives.

Can you spell hypocrisy?  So much for the all that talk from the U.S. government.  This Reuters article was picked up by themoscowtimes.com Internet site at 8:55 a.m. Moscow time on their Thursday morning.

Council on Foreign Relations: The Ukraine Crisis is the West’s – Not Putin’s – Fault

We’ve previously reported that it’s the West’s encirclement of Russia – breaking a key promise which led to the break-up of the Soviet Union – which is behind the Ukraine crisis.

We’ve also noted that the U.S. State Department spent more than $5 billion dollars in pushing Ukraine towards the West.  The U.S. ambassador to Ukraine (Geoffrey Pyatt) and assistant Secretary of State (Victoria Nuland) were also recorded plotting the downfall of the former Ukraine government in a leaked recorder conversation.  Top-level U.S. officials literally handed out cookies to the protesters who overthrew the Ukrainian government.

And the U.S. has been doing everything it can to trumpet pro-Ukrainian and anti-Russian propaganda. So – without doubt – the U.S. government is heavily involved with fighting a propaganda war regarding Ukraine.

Now the news is starting to go mainstream---specifically, the Council on Foreign Relations (CFR) is a very mainstream, hawkish group.  CFR’s flagship publication – Foreign Affairs – has just published a piece blaming the Ukraine crisis on the West.  The piece by John Mearsheimer – in it’s September/October 2014 issue.

This commentary appeared on the Zero Hedge website at 12:56 p.m. EDT yesterday---and it's a must read---especially for all serious students of the New Great Game.  I thank reader M.A. for bringing this article to our attention.

Robert Fisk: Middle East crisis---We know all too much about the cruelty of Isis – but all too little about who they are

For centuries, governments told their soldiers and their people to “Know Your Enemy”. The problem with the Isis “Caliphate” – and it is a big problem for President Obama after journalist James Foley’s murder – is that we don’t know who it is. We are told of its butchery, cruelty, its kidnapping of women, its burying alive, its viciousness towards Christians and Yazidis and its public beheadings, but that is all. Even the Isis leader, Abu Bakr al-Baghdadi, comes across as a mad combination of the Mahdi who murdered Gordon of Khartoum, the assassinated Osama bin Laden and Oliver Cromwell, who did to the civilians of Drogheda what the Muslim Lord Protector al-Baghdadi has done to his enemies.

Foley’s ritual slaughter is enough to dissuade even the most foolhardy of journalists from seeking an interview with al-Baghdadi. Never before in the Middle East has so much land been out of bounds to the Western media. So ignorant are we of this Islamic State in Iraq and the Levant – a dark land in which the reports we see of it are their own phone videos – that the Obamas, Camerons and Hammonds can only gnash their teeth at this unspeakable enemy. Easy reaction – but not much to go on. Yet Isis knows how to do one thing: confront Obama with his very own hostage problem, the same conundrum Tony Blair faced when Ken Bigley appeared before the video lens. Do you ignore the warnings, thus proving that you don’t care about your individual citizens when undertaking military operations – which is the truth – or do you turn into Jimmy Carter, curtsy to every whim of your enemies, go down on one knee and tell the Pentagon to “Hold it right there”?

Now Obama has seen the next American reporter threatened with beheading. Will he blink? He can’t, can he?

This opinion piece showed up on the independent.co.uk Internet site on Wednesday---and it's a disturbing read.  I thank South African reader B.V. for this contribution to today's column.

Three King World News Blogs

1. Egon von Greyerz [#1]: "Swiss Gold Repatriation to Send Shock Waves in Gold Market"  2. Gerald Celente: "E-mail Exposes Scary Economic Collapse in the U.S."  2. Egon von Greyerz [#2]: "We Are Just Beginning to Experience a Global Hyperinflation"

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

Infographic: The world's largest diggers

There's some really gigantic mining equipment out there---and there are four of them presented in this article that showed up on the mining.com Internet site yesterday---and I thank reader M.A. for his final contribution to today's column.

Transnistria to Introduce Plastic Circulation Coins

The Transnistrian Republican Bank have announced that they will issue new currency units that will be made of composite materials. The currency items are primarily being issued to commemorate the twentieth anniversary of the national currency. The composite material or Plastic coins will have a different geometric shape and color depending on denomination.

The four coins, from one ruble to ten rubles are to replace the banknotes of the same denomination. The Press office of the Bank have indicated that the new money will combine the best qualities of both coins and banknotes with high wear resistance and a wide range of security features. The Press office have also indicated that the coins for use in Transnistria were developed in Russia.

I thought plastic 'paper money' was scraping the bottom of the barrel, but now this!  This article appeared on the coinupdate.com website yesterday---and it's an interesting, but depressing, read.  I thank West Virginia reader Elliot Simon for finding it for us.

U.S. Mint platinum coins bypassed in rush for gold

Five months after the U.S. Mint began producing coins made with platinum, sales have all but collapsed as investors continue to favor gold and silver.

“It’s not considered a currency,” said Jason Carstensen, a medical-sales representative in Ventura, California, who spends about $2,000 a month on coins. Gold and silver have value as hedges against a devaluation of the dollar, while platinum is viewed as an industrial commodity, he said.

The Mint, which resumed production of platinum coins in March after a six-year halt, has sold 13,600 ounces this year, including zero in July. By comparison, the Mint sold 313,500 ounces of gold coins and 27.71 million ounces of silver, fueled by concern that the Federal Reserve is inflating the economy with paper money to stimulate growth.

Yep, the new 2014 platinum eagle has been a bust.  At this mintage rate, they may cancel the program entirely before the years is out---and then it might be a collector's item some day.  This Bloomberg article found a home over at the mineweb.com Internet site on Thursday sometime---and it's the second offering in a row from Elliot Simon.

What if China, Russia Succeed in Going off the Dollar? -- Alasdair Macleod

Alasdair Macleod writes the blog financeandeconomics.org. His research aims to explain the relationship between the dollar and gold, and to warn investors about the biggest threats to their wealth from macro-economic events. 

Besides what the Fed is doing by printing money, there is another big threat to the dollar, said Alasdair. Countries in Asia are banding together in order to rid themselves of using the dollar in international trade.

He also warned that credible allegation of misconduct at the London bullion exchange could accelerate the trend of Shanghai becoming the world’s trading hub for gold.

This short, but very interesting read/interview was posted under the Sprott's Thoughts banner over on the sprottglobal.com Internet site yesterday---and it's worth your while.

¤ The Funnies

The first three photos are obviously of Canada geese.  The first two are baby pictures [along with proud, but very protective parents] that I took on May 18.  The third one, which I took on August 17, is of the graduating class of 2014---fledged, and all ready to head south.  It's virtually impossible to detect the difference between the adult birds and the juveniles.

¤ The Wrap

The stage is set for something the world has never experienced previously - an asset bubble accompanied by an industrial shortage. The two greatest upward price forces known to man, an asset bubble and a genuine commodity shortage, appear set to combine in silver. Either one alone would have a profound impact on the price, but the combination seems both inevitable---and almost impossible to contemplate in terms of how high the price of silver could be driven. It’s hard to see how intense investment buying wouldn’t trip off industrial user attempted inventory stockpiling, or vice versa---and it doesn’t matter which comes first. - Silver analyst Ted Butler: 20 August 2014

"Da Boyz" took another big slice out of the gold salami yesterday, plus they set a new low in silver for this move down as well.  Volume was decent, but not overly heavy in gold---and pretty light in silver.  But there should be no doubt in your mind dear reader of what happened on Thursday---and who was the cause of it.  First the HFT traders in the Commercial category used their algorithms to set prices lower---and then the technical funds sold as sell stops and moving averages were hit.  This, with no exceptions, is the way these engineered price declines always work.

Without doubt a large chunk of yesterday's volume in both metals was the technical funds in the 'Managed Money' category puking up longs---and probably going short as well, now that the 200-day moving average in gold was smashed to the downside---and that silver hit a new low.  It was their actions that caused prices to fall.  Of course JPMorgan et al were buying whatever longs the technical funds were selling---and happily taking the long side of any short position that these same funds wanted to place.

Here are the 6-month charts for both gold and silver with yesterday's price action included.

Are we done the downside?  Probably not.  And although I'm not happy to say that, there's still a ways to go yet in both metals.  The bottom will be in when JPMorgan et al can't entice any more technical funds to sell longs, or put on further short positions---and whatever price that is when that event occurs, will be the bottom.

Unfortunately, as Ted Butler rightly says, we won't know exactly when that happens until after the fact.

As I write this paragraph, the London open is less than 20 minutes away.  At the moment, all four precious metals are slightly above their Thursday closing prices in New York---having traded quietly all day long on Friday in the Far East.  Gold's net volume is a bit over 11,000 contracts, which isn't a lot---and silver's net volume is a microscopic 2,400 contracts.  Nothing to see here.  The dollar index has been creeping lower since mid-morning trading Hong Kong time---and is currently down 8 basis points.

Today we get the Commitment of Traders Report for positions held at the close of Comex trading on Tuesday and, unfortunately, it won't include any data from Thursday or Wednesday, which were both big down days in gold, but we'll see decent improvement in the Commercial net short position in both metals nonetheless.  I'll have all that for you tomorrow.

Including today, there are five trading days left in August---and by the close of Comex trading next Thursday everyone has to have rolled or sold their September futures contracts, except those standing for delivery.  It's also a pretty safe bet that these five trading days should be a sight to see from a price perspective.

We may hit the lows for this move down in both silver and gold before the end of the month, although I wouldn't bet the ranch on that.

So we wait to see what 'da boyz' do between now and then.

And as I sent this off to Stowe, Vermont at 4:55 a.m. EDT, nothing much has changed since I reported on things over two hours ago.  Prices are still about the same---and volumes are only slightly higher and still very much on the lighter side.  The dollar index is still down a bit.

I await the New York open with great interest.  I hope you have a good weekend, or what remains of it if you live west of the International Date Line---and I'll see you here tomorrow.

]]>
Fri, 22 Aug 2014 06:19:00 +0000
<![CDATA[Russia Adds Another 300,000 Troy Ounces of Gold to Their Reserves in July]]> http://www.caseyresearch.com/gsd/edition/russia-adds-another-300000-troy-ounces-of-gold-to-their-reserves-in-july/ http://www.caseyresearch.com/gsd/edition/russia-adds-another-300000-troy-ounces-of-gold-to-their-reserves-in-july/#When:06:31:00Z "The liquidation process in gold continues unabated"

¤ Yesterday In Gold & Silver

The gold price flopped and chopped in a tight five dollar price range through all of Far East and London trading on Wednesday.  But thirty minutes after the Comex close---and at precisely 2 p.m. EDT, the price got smacked for five bucks as the HFT boyz spun their algorithms.  However, the gold price gained half that back by the 5:15 p.m. EDT electronic close.

The high and low ticks, such as they were, were reported by the CME Group as $1,299.30 and $1,288.70 in the December contract.

Gold closed in New York on Wednesday at $1,291.40 spot, down another $3.80 from Tuesday.  Net volume was very light once again at around 76,000 contracts.

Here's the New York Spot Gold [Bid] chart, so you can see the precise timing of the 2 p.m. EDT sell-off by 'da boyz'.  This precision extended into the New York Spot Silver [Bid] chart as well.

It was slightly different for silver.  After the obligatory down spike at the 6 p.m. open on Tuesday evening, silver also traded flat in a very tight range yesterday, but a discernible rally began at 1 p.m. BST, which was twenty minutes before the Comex open.  That rally met its match at, or just before, the London p.m. gold fix---and the price got sold down a dime or so by 10:30 a.m. EDT.  After that it traded pretty flat, although the price got hit for about ten cents at precisely 2 p.m. EDT as well.

The high and low price ticks were reported as $19.585 and $19.395 in the September contract.

Silver closed yesterday at $19.45 spot, up 4.5 cents from Tuesday.  Volume was pretty heavy because of roll-overs out of the September contract, but it all netted out to only 22,500 contracts.

Platinum traded flat until the Zurich open---and then it got sold off gently to its 3:30 p.m. [or thereabouts] low.  After that it gained a few dollars into the close.  Platinum got closed down another 12 bucks.

It was the same for palladium, although the sell-off at the Zurich open was a bit more intense.  The decline ended just before lunch in New York---and after that it traded flat, but lost another 14 dollars---and is now down twenty-five bucks off its Monday high.

The dollar index closed late on Tuesday afternoon in New York at 81.87.  Once it opened for trading again it traded flat until about 9:30 a.m. Hong Kong time.  After that it rallied quietly up until 2 p.m. EDT yesterday, then it jumped not quite 20 basis points in just a few minutes---and after that it didn't do much into the close.  The index finished the Wednesday session at 82.25---up a chunky 38 basis points.

The action at 2 p.m. appeared to be another 'ramp the dollar index/sell the precious metals' moment---just like what happened at the Comex open on Tuesday.

The gold stocks opened in slightly negative territory---and finally broke into positive territory just before lunch in New York.  At that point, the rally picked up a bit more steam, but that all ended the moment 'da boyz' hit the 'buy the dollar/sell gold and silver' button.  After trading in the red for an hour or so, the stocks managed to finish the day unchanged, as the HUI close up 0.02%.

The silver equities chart looked the same---and the precision of the 2 p.m. EDT sell-off is to be marveled at.  Nick Laird's Intraday Silver Sentiment Index closed basically unchanged as well, down only 0.07%.

The CME Daily Delivery Report showed that 268 gold and 1 lonely silver contract were posted for delivery within the Comex-approved depositories on Friday.  The only short/issuer of note was Barclays out of its in-house [proprietary] trading account.  The three largest long stoppers were JPMorgan with 151 contracts for its client account, 85 contracts for Canada's Scotiabank---and 29 contracts for Barclays in its client account as well.  I continue to be amazed by the number of gold contracts that are being delivered into JPMorgan's client account lately.  What do they know that we don't?  The link to yesterday's Issuers and Stoppers Report is here.

Much to my surprise, there was more gold added to GLD yesterday, as an authorized participant deposited 28,860 troy ounces of the stuff.  And I was even more amazed to discover that another 1,439,175 troy ounces of silver had been deposited into SLV.  Obviously JPMorgan is in some hurry to pay down its short position in that ETF.

Since August 4, there has been 8.44 million troy ounces of metal added to SLV---and it certainly wasn't deposited because the price of silver has been rising and silver investors having been buy SLV shares like mad.  Au contraire, the silver price has fallen just under 75 cents since that date.

The U.S. Mint had another sales report again yesterday.  They sold 1,000 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and another 100,000 silver eagles.

There was no in/out movement in gold at the Comex-approved depositories on Tuesday, but silver more than made up for it, as 1,239,186 troy ounces were deposited---and a smallish 66,671 troy ounces were shipped out.  The link to that activity is here.

Since yesterday was the 20th of the month, the good folks over at The Central Bank of the Russian Federation updated their website with their July data.  It showed that they added 300,000 troy ounces of gold to their 'official' reserves.  Their reserves now stand at 35.5 million troy ounces---and Nick Laird's most excellent chart below reflects that change.

Try as I may, I just can't get the number of stories down to a manageable size, so I always have to wimp out and get you to edit it for me.  Today's list is no exception.

¤ Critical Reads

Mob boss calls a stock bubble

Former mob boss Michael Franzese thinks investors should avoid the U.S. stock market, but should you take his investment advice?

"There's a bubble there that's going to burst at some point and when it does it's not going to be good," Franzese, a former mob boss for the Colombo crime family in New York who has become an author and motivational speaker, told CNBC.

It's not just the valuations. He's got another reason for advising investors to keep their money off Wall Street.

"I did a lot of things at times with people on Wall Street," said Franzese, who believes there is still a contract out on his life. "A lot of guys are shady and they did shady things with me and I don't trust them. And I don't like other people that I don't know really well taking care of my money. I think that I can do it better."

What's the difference between Wall Street and this guy?  At least he's a reformed crook, something that won't happen to Wall Street.  I'll take his word on things any day compared to the usual shills that they have on that network.  This very interesting 7:15 minute video clip [plus transcript] appeared on the CNBC website just after midnight on Wednesday morning---and I thank West Virginia reader Elliot Simon for today's first 'story'.

Jim Rickards: "I'm expecting the next crisis sooner rather than later"

Listening to James Rickards ain’t healthy for your stomach.

The American lawyer, economist, and investment banker predicts that the global economy is heading for a disaster which will be even worse than the financial crisis of 2008. At the center of this horrifying scenario is the end of the Dollar as the leading world reserve currency, says the author of "The Death of Money".

He’s putting the blame on the massive money printing of the Federal Reserve and on over-reliance on flawed models to manage risk. Rickards is no stranger to financial crises himself: In the fall of 1998, he was the principal negotiator of the rescue of the hedge fund Long-Term Capital Management (LTCM).

An interview is only as good as the questions asked---and the person asking them.  This is a great one, as are Jim's answers.  It was posted on the Swiss website fuw.ch on Tuesday afternoon---and I thank reader Harold Jacobsen for digging it up for us.

BofA reaches $17 billion settlement with U.S.

Bank of America has reached a record settlement of nearly $17 billion to resolve an investigation into its role in the sale of mortgage-backed securities before the 2008 financial crisis, officials directly familiar with the matter said Wednesday.

One of the officials, who spoke with The Associated Press on condition of anonymity because the announcement isn't scheduled until Thursday at the earliest, said the bank will pay $9.65 billion in cash and provide consumer relief valued at $7 billion.

The deal is the largest settlement arising from the economic meltdown in which millions of Americans lost their homes to foreclosure. It follows agreements in the last year with Citigroup for $7 billion and with JPMorgan Chase & Co. for $13 billion.

This AP story was picked up by the finance.yahoo.com Internet site early Wednesday evening EDT---and it's another contribution from Elliot Simon.  There's another AP story on this subject.  It's headlined "Why Bank of America deal might not cost it $17B"---and it's courtesy of Elliot Simon as well.

Financial Times: Wall Street Plays Dangerous Derivatives Games — Again

The same kinds of complex, confusing derivatives that almost brought down the global financial system in 2008 are back in spades, according to the Financial Times. As one trader put it: "We've reformed nothing."

The U.K. newspaper suggested investors may be fooled by a false sense of security, and are therefore “chasing levered returns via certain types of US credit derivatives that Wall Street is willingly providing in the current climate of low interest rates and moribund volatility.”

The developments suggest that the financial industry learned little from the 2008 meltdown and that reforms put in place since then are ineffective.

“While standardized derivatives such as interest rate swaps are now transacted in exchange-type venues and centrally cleared, the flourishing area of opaque products are not, and moreover there are few records of activity that regulators can monitor,” the Times said.

This Financial Times article appeared on the moneynews.com Internet site at 7:51 p.m. EDT on Tuesday evening---and it's worth reading.  I thank Brad Robertson for sharing it with us.  There was also a very interesting 6:29 minute video about this derivatives story [featuring Janet Tavakoli] posted on the cbc.ca Internet site on Tuesday as well---and if you read the above story, this video is worth watching as well.  I thank Vancouver, B.C. reader 'Ashley D' for bringing it to our attention.  The link is here.

Credit Swaps Polished in $19 Trillion Derivative Overhaul

The biggest overhaul to the $19 trillion credit derivatives market in more than a decade will seek to solve flaws that have stopped some contracts paying out as buyers anticipated.

The changes come too late for investors in the junior debt of Banco Espirito Santo SA, whose credit-default swaps were devalued this month when the Portuguese lender was rescued and restructured by the government. Since the contracts are tied to the majority of a company’s debt, if the borrower is reorganized the swaps don’t necessarily stay tied to the securities they’re meant to protect.

Investors will start signing up to convert outstanding trades into new contracts as early as this week after the International Swaps & Derivatives Association rewrote the documentation to address the weaknesses. The biggest impact of the shakeup may be in the cost of swaps tied to subordinated bank bonds like those of Banco Espirito Santo, which will be about 50 percent more than existing contracts, according to Citigroup Inc.

This article, filed from London, showed up on the businessweek.com Internet site on Tuesday sometime---and it's another offering from Elliot Simon.

Fed debates merits of earlier rate hike given U.S. jobs gains

The U.S. Federal Reserve hinted on Wednesday that a surprisingly strong jobs market recovery could lead it to raise interest rates earlier than it had been anticipating.

At the same time, most Fed officials wanted further evidence before changing their view on when rates should rise, according to the minutes from the central bank's July 29-30 meeting.

"Labor market conditions had moved noticeably closer to those viewed as normal in the longer run," the minutes said, adding that policymakers "generally agreed" the job market was healing faster than they had expected.

Since there's nothing the Fed can do, as its hands are tied, it has resorted to talking the markets into doing what it wants.  We'll see how well that works out going forward, as a rate increase at this point would devastate the bond market.  This Reuters article, filed from Washington, appeared on their website at 4:26 p.m. EDT on Wednesday---and I thank Orlando, Florida reader Dennis Mong for sending it our way.

Argentina bonds, peso reel on country's debt swap plan

Argentina's new plan to skirt U.S. courts and resume payment on defaulted bonds aims to protect creditors who participated in two debt restructurings, the economy minister said on Wednesday as the local peso currency weakened to a new historic low.

Defying a U.S. federal court order, Axel Kicillof also said it would be "madness" to pay holdout creditors the 100 cents on the dollar that they were awarded in 2012.

The government has sent a bill to Congress that would replace its New York intermediary bank with state-run Banco Nacion, the latest move in a years-old legal chess game between Argentina and its "holdout" creditors who refused to participate in the restructuring.

Argentina's black market peso reeled on the news, falling 2.0 percent to an all-time low 13.5 to the U.S. dollar. The country's benchmark dollar-denominated bonds due in 2033 slumped more than 2.0 percent in price.

This Reuters story, filed from Buenos Aires, appeared on their website at 2:56 p.m. EDT yesterday---and I thank Dennis Mong for his second contribution in a row.  I had several other readers send me stories about this yesterday, but this is the first one where the deal was explained in such a way that I could grasp it.  Helping things out is this 3:22 minute CNBC video clip from Tuesday.  Jim Rickards explains it all---and the link to that is here.  This CNBC video is also courtesy of reader Harold Jacobsen.

World Business Leaders Call for Speedy Ukrainian Crisis Resolution

The conflict in Ukraine should come to an end, and 16 Russian, Ukrainian and international business leaders are willing to help, said a statement published Wednesday on Virgin Group founder Richard Branson’s website.

“As concerned business leaders from Russia, Ukraine and the West we encourage our governments to compromise and find a peaceful solution to the current conflict. If we can help in the process we’re happy to do so,” the statement said.

“As the world has become more and more interconnected, we have an opportunity to advance peaceful solutions that will bring about a better future for all. As responsible leaders, we must ensure that differences are resolved peacefully, through dialogue and diplomacy, and with respect for both national sovereignty and the right of all human beings to live in peace,” the statement read.

The businessmen urged the governments to cooperate to avoid slipping back into the Cold War era past. The statement also appealed to other business leaders around the world to help create ways to resolve the issues peacefully.

Voices of reason at last.  This RIA Novosti article appeared on their Internet site at 7 p.m. Moscow time on their Wednesday evening, which was 11 a.m. EDT yesterday morning---and it's the first offering of the day from Roy Stephens.

Ukraine Crisis Continues: Paul Craig Roberts

Having served Washington's propaganda purposes, the downed Malaysian airliner and the alleged Russian armored column that entered Ukraine and was allegedly destroyed have dropped out of the news even though both stories remain completely and totally unresolved.

Washington's stooge government in Ukraine has not released the communications records between Ukrainian air traffic control and Malaysian flight 17, and Washington has not released the photos it claims were taken by one of its satellites, which was directly overhead at the time of the airliner's demise.

We can safely and conclusively infer from this purposeful withholding of evidence that the evidence does not support the story Washington and Kiev want us to believe.

We can also safely and conclusively infer that the Western media's sudden disinterest in the unresolved story and failure to demand the evidence kept secret by Washington and Kiev is in keeping with the Western media's role as a Ministry of Propaganda.

This absolute must read commentary from Paul was picked up by the RIA Novosti website late Wednesday morning Moscow time---and it's courtesy of reader M.A.

Slovakia plants seed in Ukrainian gas sector

Slovakia and Ukraine have laid the preliminary groundwork for a long future in the natural gas sector, the Slovakian minister of economy said from Kiev.

The Ukrainian government this week said testing began to send 70 million cubic feet per day from Slovakia to Ukraine through the joint work of transit companies Uktransgaz and Eustream.

Ukrainian Energy Minister Yuri Prodan hosted Slovakian Minister of Economy Pavol Pavlis in Kiev to discuss the prospects of a new relationship in the natural gas sector.

"Small reverse flow will become a basis for further collaboration between Slovakia and Ukraine," Pavlis said in a statement.

The question that begs to be asked is "Where is the Ukraine going to get the money to pay for this gas when it does finally arrive?"  This UPI story, filed from Kiev, was posted on their website at 8:49 a.m. EDT yesterday morning---and it's the second offering in a row from Roy Stephens.

First 16 Russian Aid Trucks Move to Ukrainian Border Crossing for Customs Clearance

The first 16 trucks with Russian humanitarian aid to the population of violence-torn eastern Ukraine have started movement toward customs office at the Donetsk border crossing point, a RIA Novosti correspondent reported Wednesday.

"The trucks will pass through a special customs scanner at the crossing, which is 100 meters away from their current location," the correspondent reported from the site.

The rest of the 280-truck convoy remains near the Russian town of Kamensk-Shakhtinsky some 20 miles away.

This RIA Novosti article, filed from Donetsk, showed up on their website at at 8:48 p.m. Moscow time on their Wednesday evening---and it's another contribution to today's column from Roy Stephens.

Russia Adds Live Fish to List of Embargoed Goods

The Russian government published an amended list of embargoed goods Wednesday, which now includes live fish.

The decree also removes lactose-free dairy products from the list of goods banned for import from countries that sanctioned Russia.

Norway is Russia's largest provider of fish, according to the Federal Customs Service. Russia imports up to 60 percent of the fish consumed in the country, especially in large cities.

This is another story from the RIA Novosti website.  It was posted there at 5:14 p.m. Moscow time on their Wednesday---and I thank Roy Stephens for sending it our way.

China, India to Replace Canada, Australia, U.S. as Meat Suppliers to Russia

Chinese and Indian meat is to replace banned pork and beef exports from the West, which will not succeed in reclaiming its position on the Russian market if the embargo is lifted, Russia’s relevant authority said Wednesday.

“For example, Russia’s Far East used to be heavily reliant on meat supplies from the United States and Canada. Now that [we are] actively cooperating with China’s veterinary authorities on … pork supplies from certain highly-integrated Chinese enterprises, the U.S. and Canadian suppliers will not be able to come back,” Sergei Dankvert, the head of Russia’s Federal Service for Veterinary and Phytosanitary Surveillance, said in a statement released on the agency’s website.

According to data from Russia’s Federal Customs Service, Moscow imported 619,200 tons of pork for $2.13 billion in 2013. Brazil, Denmark, Germany and Canada were the principal suppliers of the meat. Canada exported 79,300 tons of pork to Russia in 2013 for $246.3 million, while U.S. pork exports had reached $19 million per year.

This is another article from the RIA Novosti website.  It appeared at 7:43 p.m. Moscow time on Wednesday---and my thanks go out to Roy Stephens once again.

Poland demands WTO challenge over Russia food ban

Poland has made a formal request that the EU take Russia before the World Trade Organisation (WTO) to overturn its ban on EU food and vegetables.

Reuters reported on Tuesday (19 August) that Poland’s economy ministry had sent a written request for a legal challenge to EU trade commissioner Karel De Gucht.

The move is expected to be confirmed by agriculture minister Marek Sawicki and economy minister Janusz Piechociński at a press conference on Wednesday (20 August).

This article appeared on the euobserver.com Internet site at 7:45 a.m. Europe time on Wednesday morning---and it's courtesy of Roy Stephens as well.

Four Moscow McDonalds shut by Russian consumer watchdog

Russia’s consumer watchdog has shut down four McDonald's restaurants in central Moscow – including the first-ever outlet in the country – over “administrative violations.” More of the company 430 Russian franchises are under investigation.

“Multiple violations of sanitary norms were detected in the sourcing of food and waste disposal in McDonald’s restaurants during inspections carried out between the 18th and 20th of August,” said an official statement from the watchdog, Rospotrebnadzor.

The company has said that it will study the allegations against its franchises, and “will do everything to ensure that the restaurants open as soon as possible.”

“McDonald’s main priority is offering its customers quality and safe produce,” said a statement on the McDonald’s website.

One wouldn't think that there's much wrong with these restaurants, but like everything in Russia involving the West these days, they're caught in the crossfire.  This Russia Today story was posted on their Internet site at 3:26 p.m. Moscow time yesterday afternoon---and it's the second-last offering of the day from Roy Stephens.

Construction on Russian gas line to China slated for September

Construction on a natural gas pipeline meant to feed the Chinese market is set for the beginning of September, a Russia official said Tuesday.

A pipeline contract between Gazprom and China National Petroleum Corp. is for 30 years and calls for 1.3 trillion cubic feet of natural gas per year. Russian energy company Gazprom said it started working on the infrastructure necessary for the pipeline almost immediately after signing a contract for gas to China in May.

A Russian source told state news agency RIA Novosti construction on the pipeline should begin next month.

"Sept. 1 is a tentative date, and it will all depend on the schedules of the country's leaders," the source said Tuesday.

This UPI story, filed from Moscow was posted on their Internet site at 9:31 a.m. EDT on Tuesday---and it's the final offering of the day from Roy Stephens.

Iraqi army clashes with militants in Tikrit after retaking key dam

Skirmishes broke out Tuesday between Iraqi security forces and militants on the outskirts of Tikrit a day after the Iraqi and Kurdish troops - backed by U.S. airstrikes - dislodged Islamic militants from a strategic dam in the country’s north.

The United Nations refugee agency, meanwhile, said it is launching one of its largest aid pushes aimed at helping close to a half million people who have been forced to flee their homes by the violence in Iraq.

The clashes in Tikrit, some 130 kilometers (80 miles) north of Baghdad, began on the militant-held city’s southwestern outskirts when a military convoy was travelling along the main highway that links Baghdad with the northern provinces, they said. The Iraqi military shelled militant positions inside and outside the city.

There were no immediate reports of casualties. The local official and resident both spoke on condition of anonymity, fearing for their safety.

This news item was posted on the france24.com Internet site yesterday sometime---and I found it all by myself.

China troops enter disputed India territory: sources

Chinese troops have advanced in recent days into disputed territory claimed by India, echoing a similar incursion last year that raised tensions between the two rival giants, official sources said on Tuesday (Aug 19).

Chinese troops twice crossed over the border into a remote area of the western Himalayas, with some unfurling a banner that read "this is Chinese territory, go back", an official said on condition of anonymity.

Indian border police noticed the troops on Sunday in an unpopulated area of Ladakh during a patrol of the informal border that separates India and China. "It was a temporary peaceful face-off with PLA well inside Indian territory," the official told AFP referring to China's People's Liberation Army.

This news item showed up on the channelnewsasia.com Internet site at 5:37 p.m. local time in Singapore---and I thank Brad Robertson for his second contribution of the day.

China Levies Record Antitrust Fine on Japanese Firms

China found a dozen Japanese auto-parts makers guilty of price fixing and doled out the biggest antitrust fines in the country since relevant rules came into effect six years ago.

Total fines amounted to 1.24 billion yuan ($200 million), the National Development and Reform Commission, China’s main economic planner, said on its website. Sumitomo Electric Industries Ltd. drew the heaviest fine at 290.4 million yuan -- the biggest-ever antitrust penalty for a single company -- followed by Yazaki Corp.

While China follows the U.S., Europe and Japan in punishing parts makers, the fines come as foreign businesses increasingly voice concerns that an era of heightened regulatory scrutiny is dawning on the world’s second-largest economy. Global Car manufacturers, technology companies and food companies have faced antitrust probes in the country since last year.

“This sends a warning to companies engaging in global price-fixing that they should beware of China,” said Chen Danzhou, a lecturer specializing in anti-monopoly law at the University of International Business and Economics in Beijing. “The government is getting more aggressive as it tries to make a structural adjustment to the market.”

This Bloomberg story, co-filed from Shanghai, Tokyo---and Osaka, was posted on their Internet site at 10:39 p.m. Denver time on Tuesday evening---and it's the final offering of the day from Elliot Simon.

Three King World Blogs

1. John Embry: "Coming Crash to Create a Human Tragedy of Epic Proportions"  2. Grant Williams: "Why the Next Mania in Gold Will Be Parabolic"  3. Doug Kass: "The Final Page in an Age of Innocence"

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

China paper denounces 'rampant rascality' of Australia tycoon

A Chinese state-run newspaper on Wednesday called on Beijing to "teach Canberra a lesson" after Australian tycoon and politician Clive Palmer labelled the Communist government "mongrels" who "shoot their own people" in a televised tirade.

The flamboyant mining baron, who is locked in a long-running dispute over royalties and port operations with a state-controlled Chinese company, also called the Chinese "bastards" who "want to take over this country".

In an editorial, the Global Times, a newspaper owned by the Communist Party's mouthpiece the People's Daily, urged Beijing to take "solid actions to punish him".

It labelled the billionaire's comments as "rampant rascality" showing "Australian society has an unfriendly attitude toward China".

Open mouth---insert foot.  Lots of bucks doesn't necessarily translate into lots of brains, regardless of the nationality.

This AFP article appeared on the france24.com Internet site at 9:05 a.m. Europe time on Wednesday morning---and I thank South African reader B.V. for bringing it to our attention.

Gold and silver prices may not really shine until 2015-6 warns Ross Norman

Arguably London’s most accurate gold forecaster for the past 15 years, Sharps Pixley CEO Ross Norman is warning of single digit gains only for the yellow metal this year, though he has not lost his sights on ‘very much higher prices’ in 2015-16.

His gold forecast last year suggested that 2014 would be a ‘Goldilocks’ year – not too hot and not too cold – with rally fade to both the upside and downside as the market reverted to the mean – so far that view appears to have held true.

Speaking from his office in Berkeley Street he told ArabianMoney that gold and silver prices will only really shine again when there is again a perceived serious inflation threat and he just can’t see one on the immediate horizon.

It's hard to know if he's being serious or not---as there's not a word about the fact that a small group of Commercial traders have captured the price-setting mechanism for all four precious metals, plus copper, on the Comex.  It's also hard to know which of John Embry's three categories Mr. Norman falls.  Is he ignorant, naïve---or complicit?  Considering his background---and current occupation, I would have to cast my vote in favour of 'complicit'.  And if that's the case, he's not exactly telling us the truth in this opinion piece---which I found on the Sharps Pixley website yesterday.

Tentative signs of stronger Indian gold demand in 2nd half of 2014

Gokulasthami, one of the major festivals celebrated across Maharashtra and some parts of South India, has now got a touch of gold, underscoring what some expect will be stronger second half for gold demand in India as the festival season ramps up.

If anything attracts Indians, it is gold, and gift prizes of gold pots, and gold coins, and even gold plated decorations rouse the masses.

The tradition of Dahi Handi festival on Gokulashtami, celebrated across India on August 18 and 19 this year, relates to a human pyramid breaking an earthen pot filled with buttermilk suspended high above the ground, sometimes well over 50 feet above the ground.

This very interesting gold-related story, filed from Mumbai, was posted on the mineweb.com Internet site yesterday sometime---and the real 'juice' is in the last half-dozen paragraphs.

¤ The Funnies

The next two photos are of scaups...probably Lesser Scaups.  The first photo is of the parents I took back on June 7.  The second photo is of Mom and the offspring, now fully fledged, which was taken less than three metres away from the first photo, but on August 17.  The log in photo one, is just out of frame on the left hand side in photo two.  Both pictures were cropped for maximum visual impact.  By the way, the third photo is of a baby Tasmanian Devil.







¤ The Wrap

I’m scratching my head at Monday’s 3 million oz deposit into the big silver ETF, SLV, following a 4 million oz deposit in the previous week. Trading volume in SLV has been light and price action rotten, not the ingredients for the 7 million oz deposits being due to plain vanilla investment buying. The only plausible alternative explanation is that then deposits are intended to reduce the short position in SLV, last reported at 17.37 million as of July 30, although only the first 4 million oz deposit occurred before the next report on August 26. At least the combined 7 million oz deposit is within the confines of reducing a 17 million oz total short position. If the deposits are not intended to reduce the short position, then I am at a loss to explain why they occurred. - Silver analyst Ted Butler: 20 August 2014

JPMorgan et al took another small slice off the golden salami yesterday---and although silver set a new low for this move down, it was only by a penny or so, so there wasn't much in the way of technical fund long liquidation in the 'Manged Money' category.  Once again, volumes were low in both metals.

Here are the 6-month charts for gold and silver once again.

The liquidation process in gold continues unabated, as it has much further to go than silver.  Silver took a bit of a breather yesterday, but I don't expect that happy situation to exist for long, as JPMorgan and the HFT boyz could slice another dollar off silver in a New York minute if that's what they decided to do.

And as I write this paragraph, the London open is twenty-five minutes away.  I see that the HFT boyz working for JPMorgan et al are busy slicing the salami in gold and silver to the downside once again, as they took a couple of five dollar slices out of the gold price during Far East trading, the last one starting at 2 p.m. Hong Kong time.  The price chart for silver looks similar---and silver was down over a percent at one point.  Platinum and palladium are basically unchanged.

I was quite taken aback by the gold volume figure, as it has exploded to 34,000 contracts net, as sell stops were hit as the 200-day moving average got penetrated to the downside about 15 minutes ago.  Net silver volume is much, much quieter at only 5,400 contracts, as any moving average of significance for silver was broken a long time ago.  The dollar index, which had been up as much as 10 basis points earlier, is now about unchanged.

Once again I feel I must comment on how well the precious metal equities are holding up in the face of these engineered price declines.  As a 'for instance', silver is down about $2.15 since it topped out back on July 10---which is a ten percent decline. According to Nick Laird, the silver equities are only down 2.2% over the same period.  I would guess that deep pockets are buying all the equities that John Q. Public is selling at the moment.

I was doing some reading over at the goldcore.com website just now---and Mark O'Byrne, the proprietor over there, had a few interesting things to say about 'peak gold'.

The decline in gold production in Australia has been blamed on royalties and gold’s falling price in recent years. Yet, there is a real possibility that Australia, like many other gold producing countries, may have reached “peak gold.”

Recently, the decline in South African gold production was attributed to national electrical issues, power outages and industrial unrest. However, the scale of the decline at a time when gold prices has risen since 2001 and there has not been a corresponding decline in base metals mined in South Africa suggests that geological constraints may be leading to lower gold production.

Peak oil is a phenomenon familiar in the popular consciousness – peak gold is a phenomenon yet to be understood.

Peak gold is the date at which the maximum rate of global gold extraction is reached, after which the rate of production enters terminal decline. The term derives from the Hubbert peak of a resource.

Peak gold has yet to be considered and analysed by the international financial community but there is a risk that it has happened or will happen soon. It should lead to much higher gold prices in time and gold’s inflation adjusted high of $2,500 per ounce remains a realistic long term price target.

The fact that peak gold may take place at a time when the world is engaged in a peak fiat paper and electronic money creation experiment, bodes very well for gold’s long term outlook.

You can read the rest of what Mark had to say over at the goldcore.com Internet site---and the link to his Wednesday commentary is here.

And as I hit the send button on today's missive at 5:05 a.m. EDT, I note that gold's current low of the day was set at the London open---and silver a few minutes after that---but both have recovered slightly.  Platinum and palladium have hit new lows as well---and palladium is actually up a few bucks from its New York close yesterday.

Net gold volume is now up to 47,000 contracts---and silver's net volume a bit under 8,000 contracts.  Obviously JPMorgan et al are continuing to harvest the technical funds for fun, profit---and price management purposes.  The dollar index is now down a hair.

It's a difficult situation to read at the moment, as there's still lots of room left to the downside in both gold and silver, but I'm also intrigued by the amount of metal being deposited in both GLD and SLV even as prices of the underlying metals continue to deteriorate.  I'm also watching the amount of gold contracts that are being delivered into JPMorgan's client account as well, as the amounts are not insignificant.  Then there's the matter of how well the precious metal shares are holding up---along with the current melt-up in the dollar index.

Is something afoot?  Beats me.  I've felt this way before---and it's always come to nothing.  But some day we'll wake up and things will be different---and as I am wont to say, only the timing is unknown.

For that reason I'll be watching the rest of August's price action with more than the usual amount of interest---starting with the New York open this morning.

That's all I have for today and, as usual, it's more than enough.

See you tomorrow.

]]>
Thu, 21 Aug 2014 06:31:00 +0000
<![CDATA[China Allows 3 More Banks, Including Standard Chartered, to Import Gold]]> http://www.caseyresearch.com/gsd/edition/china-allows-3-more-banks-including-standard-chartered-to-import-gold/ http://www.caseyresearch.com/gsd/edition/china-allows-3-more-banks-including-standard-chartered-to-import-gold/#When:06:17:00Z "JPMorgan et al managed to take another slice out of the gold and silver salamis"

¤ Yesterday In Gold & Silver

The gold price didn't do much in Far East or early London trading, but managed to make it back above the $1,300 spot price mark about thirty minutes before the Comex open.  That was its high tick of the day---and once gold began trading in New York, the HFT boyz showed up with their algorithms---and the low of the day was in by around 11:30 a.m. EDT.  After that, the price didn't do much.

The high and low ticks were reported as $1,303.70 and $1,94.70 in the December contract.

Gold closed back below the $1,300 mark at $1,295.20 spot, down an even two bucks on the day.  Net volume was very light at 72,000 contracts.

Silver didn't do a thing except chop sideways in a very tight range up until a few minutes before the Comex open.  The 'rally' that developed at that point got dispatched in the usual manner---and the HFT boyz took another decent slice off the silver salami, with the low tick coming the same time as gold's---at 11:45 a.m. EDT.  The price recovered a bit off its low, but didn't do much after that.

The high and low tick as recorded by the CME Group were $19.70 and $19.365 in the September contract.

Silver finished the Tuesday session at $19.405 spot, down 18 cents on the day.  Net volume was only 25,000 contracts.

The platinum price traded a handful of dollars in positive territory up until about 9 a.m. in New York---and then it suffered the same fate as gold and silver, with the low tick of the day coming around 11:45 a.m. EDT.  And after a quick recovery, it traded flat, closing down four bucks on the day.

Palladium traded pretty flat all through Far Eat and Zurich trading, but that all ended minutes after 10 a.m. EDT when a not-for-profit seller showed up.  The low, like platinum, came minutes before noon in New York---and it only recovered a small handful of dollars from there.  Palladium got closed down ten dollars.

The dollar index closed late on Monday afternoon at 81.57---and proceeded to tack on 10 basis points between the Tuesday open and the Comex open in New York at 8:20 a.m. EDT yesterday morning.  At precisely that moment, the index jumped another 15 basis points in a flash, as it appeared the someone hit the 'buy dollars/sell precious metals' button.  Most of the gains that mattered were in by noon in New York---and after that it traded flat, closing at 81.87---up 30 basis points on the day.

The gold stocks rallied into positive territory very shortly after the markets opened in New York yesterday morning---and it was pretty much all down hill between 10:45 and 11:30 a.m. EDT---which is where gold printed its low tick of the day.  The subsequent rally started to fade at the 1:30 p.m. Comex close---and the HUI finished down an even 1.00%.

The silver equities put in an almost identical show, as Nick Laird's Intraday Silver Sentiment Index closed down 1.20%---giving back almost all of Monday's gain.

The CME Daily Delivery Report showed that 110 gold and 7 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  For a change, there was hardly a bullion bank in sight as an issuer or stopper.  The link to yesterday's Issuers and Stoppers Report is here.

The CME's Preliminary Report for Tuesday showed that 509 gold contracts remain open in August---and from that you can subtract the 110 contracts mentioned in the paragraph above, so we're down to 400 contracts left, with lots of time left in the delivery month.

Much to my surprise, an authorized participant added another pile of gold to GLD yesterday.  This time it was 48,100 troy ounces.  And as of 9:48 p.m. EDT yesterday evening, there were no reported changes in SLV.

Moments after I hit the 'send' button on today's column, I received the weekly update from the good folks over at Switzerland's Zürcher Kantonalbank.  They reported the changes in their gold and silver ETFs as of the close of trading on Friday, August 15---and here's what they had to say.  Their gold ETF added a tiny 6,940 troy ounces---and that, I believe, is only the second or third time this year that there's been a deposit made in it, as it's been down hill all year long except for that.  But the string of withdrawals from their silver ETF remains intact, as another 197,598 troy ounces were reported taken out.

The U.S. Mint had another sales report yesterday.  They sold 1,000 troy ounces of gold eagles---100,000 silver eagles---and 300 platinum eagles.

There wasn't a lot of activity at the Comex-approved depositories on Monday.  In gold, only 1,399 troy ounces were reported received---and nothing was shipped out.  In silver, nothing was reported received, but 326,203 troy ounces were shipped out---all from Canada's Scotiabank vault.  The link to the silver activity is here.

I have another decent amount of stories again today, but not quite as many as I had in yesterday's column.

¤ Critical Reads

Study Finds 25% of U.S. Troops Use Food Banks

A new study suggests that 25 percent of troops in active duty, Guard and the Reserve use food banks to provide groceries and meals for themselves or their families.

The study sponsored by Feeding America, the nation's largest food bank network, is conducted once every four years and was based on data collected in 2012. It found that four percent of surveyed households who used a food bank contained a currently serving military member.

Based on those results, Feeding America officials estimated that 620,000 of their 46.5 million customers, or about 25 percent of the military population in 2012, used food banks.

This article appeared on the military.com Internet site on Monday---and today's first story is courtesy of West Virginia reader Elliot Simon.

Average Price of Ground Beef Hits All-Time High

The average price for all types of ground beef per pound hit its all-time high -- $3.884 per pound -- in the United States in July, according to data released today by the Bureau of Labor Statistics (BLS).

That was up from $3.880 per pound in June. A year ago, in July 2013, the average price for a pound of ground beef was $3.459 per pound. Since then, the average price for a pound of ground beef has gone up 42.1 cents--or about 12 percent.

Five years ago, in July 2009, the average price for a pound of ground beef was $2.147, according to the BLS. In those five years, the average price has climbed by $1.737 per pound--or almost 81 percent.

This article appeared on the cnsnews.com Internet site at 11:10 a.m. EDT yesterday---and I thank reader M.A. for sharing it with us.

Map: How much $100 is really worth in every state

Not all Benjamins are created equal.

For the first time ever, the federal government this year introduced a data series that compares price differences among states and metropolitan areas. Those estimates — regional price parities and real personal income — offer something simple and immensely useful for anyone considering making a move: They allow you to compare how far your money goes in each state.

You’d squeeze the most out of $100 in Mississippi, where you could use it to buy $115.74 worth of goods and services, relative to the national average. Arkansas comes next, followed by Missouri, Alabama and South Dakota. The state where $100 falls flattest is Hawaii, where that same $100 gets you only $85.32. (D.C., though not a state, is even worse: It would buy you just $84.60 in goods.)

This short, but excellent story, contains a not-to-be-missed chart.  It appeared on the washingtonpost.com Internet site on Monday sometime.  Reader Harry Grant sent it to me in time to make yesterday's column, but I was already 'full up'---so it had to wait until today.

36% Of Americans Haven’t Saved Anything For Retirement

Over a third of all Americans (36%) have not saved any money for retirement, according to a new Bankrate.com report. Sixty-nine percent of 18-29 year-olds haven’t saved anything, along with 33% of 30-49 year-olds, 26% of 50-64 year-olds and 14% of people 65 and older.

I would like to take this opportunity to thank my dear mother for insisting that I start putting away money as soon as I got my first job out of college. It certainly has added up over 25+ years and indeed mother knows best.

The good news is that Americans who are saving are starting earlier. Twice as many 30-49 year-olds started saving in their 20s as opposed to their 30s. But 50-64 year-olds were only slightly more likely to have started saving in their 20s than their 30s, and Americans 65 and older were almost evenly split between starting in their 20s, 30s and 40s.

This commentary appeared on the philadelphia.cbslocal.com Internet site at 10:03 a.m. EDT on Monday---and is another story that didn't make the cut for my Tuesday column, so here it is now---and I thank Howard Wiener for sharing it with us.

Dr. Dave Janda interviews your humble scribe

The good doctor and I spent 25 minutes together on all-talk radio WAAM1600 out of Ann Arbor Michigan on Sunday---and if you have the time and think you might learn something, have at it.

Citibank could lose Argentina banking license

If the banking giant obeys a U.S. judge’s order, it risks losing its banking license in Argentina — and the $2 billion it has in local deposits.

But if it follows Argentine law, it risks violating a U.S. federal court order.

Citi finds itself in this precarious position after Manhattan federal court judge Thomas Griesa — who is overseeing the bitter battle between hedge-fund mogul Paul Singer and Argentina over an estimated $3 billion due on bonds defaulted upon in 2001 — ordered the bank not to pay out on some of the country’s locally issued bonds.

Griesa initially exempted Citi’s Argentine law bonds from his sweeping order — stopping payouts to exchange bondholders unless Argentina also paid Singer and other holdout bondholders who demanded full payment.  But Griesa changed his mind last month after learning that some of the bonds for which Citi is custodian were also exchange bonds.

This very interesting "Catch-22" situation appeared on The New York Post website at 10:50 a.m. EDT on Monday morning---and it's courtesy of South African reader B.V.

Another Eyjafjallajokull? Airlines on alert as Iceland's largest volcano threatens to erupt and create chaos for air travellers

Airlines are on high alert after geologists warned that an Icelandic volcano may be close to erupting.

Officials issued a ‘code orange’ to travel firms after intense seismic activity at the Bardarbunga volcano in the island’s centre.

It is the second highest level of risk, signalling ‘heightened or escalating unrest with increased potential of eruption’, according to the International Civil Aviation Organisation.

The alert will raise fears of a repeat of the chaos seen when Iceland’s Eyjafjallajokull volcano erupted in 2010.

A dust cloud shut down much of Europe’s airspace for six days, affecting more than ten million people and costing £1.1billion. Passengers were stranded as 100,000 flights were cancelled during the Easter holidays.

This article appeared on the dailymail.co.uk Internet site at 11:26 a.m. BST yesterday---and was updated twice since midnight BST on their Wednesday morning.  It's definitely worth reading---and although you may be shocked by this, I found this story all by myself!

U.K. ambassador ‘lobbied’ U.S. senators to obscure Britain’s complicity in CIA rendition program

Records published under Britain’s Freedom of Information (FOI) Act have compounded concerns that the U.K. government lobbied U.S. officials to keep Britain’s role in CIA torture and rendition out of a soon-to-be published Senate report.

Newly-released data reveals Britain’s ambassador to the U.S., Peter Westmacott, engaged in at least 21 separate meetings with members of the US Senate’s Select Committee on Intelligence (SSCI) prior to its publication of this report, heightening existing allegations that the British government may be seeking to sanitize the document.

Westmacott met with key Democrats and Republicans on the SSCI throughout the body’s investigation of the CIA program, records obtained by the UK legal charity Reprieve reveal.

Of particular note are two separate meetings with Senator Feinstein in the immediate aftermath of the U.S. government’s decision to publish what is expected to be a damning report on CIA torture, interrogation and rendition.

This very interesting, but not surprising story appeared on the Russia Today Internet site at 12:55 p.m. Moscow time on their Tuesday afternoon, which was 4:55 a.m. EDT---and it's the first offering of the day from Roy Stephens.  It's worth reading if you have the time.

First Briton pleads guilty to Libor rigging

Paul Robson, a former trader at Rabobank, has become the first Briton to plead guilty to being part of the worldwide conspiracy to rig the Libor interest benchmark.

The executive, who worked at the Dutch bank’s London office, admitted before a New York court to one count of bank fraud and wire fraud, as part of a conspiracy that also involved the taxpayer-backed Lloyds Banking Group.

The scheme, which was designed to boost profits at the companies involved, which affected mortgage rates and pension payments around the world, estimated to have cost the public trillions of pounds.

According to the Department of Justice, Mr Robson worked with two other named Rabobank traders, as well as unnamed traders at other organisations including Lloyds, to manipulate Yen Libor between 2006 and 2011.

This news item showed up on the telegraph.co.uk Internet site at 11:49 p.m. BST on Monday evening---and I found it in a GATA release yesterday.

Greek stock recovery fading away as ASE falls 21 pct on valuations

The curtain is coming down on Greece’s star turn with international equity investors.

Among the best-performing Europe gauges in 2013 after the government carried out the world’s biggest-ever debt restructuring, Greece’s ASE Index has become one of the worst, slumping 21 percent as lenders from Piraeus Bank SA to Eurobank Ergasias SA tumbled. Drops are trimming returns that approached 200 percent starting in June 2012 amid investments from hedge funds such as Paulson & Co. and Third Point LLC.

Equities with valuations triple the rest of Europe have come too far to be justified by an economy that is poised to emerge from a six-year recession, says Peter Garnry, head of equity strategy at Saxo Bank A/S. Investors are looking elsewhere in emerging markets for bargains as sanctions hitting Russia, Greece’s biggest trading partner, disrupt businesses.

“Greece was the trade last year, but I don’t think it’ll be the trade next year,” Garnry said in a phone interview from Hellerup, Denmark. “Investors looking for good returns should look elsewhere.”

This news story appeared on the Greek website ekathimerini.com at 10:55 a.m. local time on Tuesday morning---and it's courtesy of Harry Grant.

E.U. compensates fruit and veg growers hit by Russian ban

The European Commission has announced emergency E.U. funding of €125m (£100m; $170m) for fruit and vegetable growers hit by Russia's ban on most imported Western food.

The funding is compensation for fresh produce which will not be sold. Instead it will be distributed free to schools, hospitals and other institutions.

Tomatoes, peppers, cucumbers, grapes and pears are included in the scheme.

Germany's Chancellor Angela Merkel insisted on Monday that the E.U. sanctions must stay in place "in order to show how serious we are" on the Ukraine crisis.

That much money is a drop in the bucket---literally.  I posted a story about this in my Tuesday column, but this BBC article is far more comprehensive---and I thank reader B.V. for his second contribution to today's column.

Merkel sets limits to NATO solidarity with Baltic states

German chancellor Angela Merkel has said NATO will defend Baltic states if need be, but will not build permanent military bases in the region.

She spoke on Monday (18 August) on a visit to Riga in which she also laid a wreath at the Freedom Monument, a memorial to the Latvian War of Independence against Russia in 1918.

"I want to stress that ... Article V of the NATO contract - the duty to provide mutual support - is not something which just exists on paper, but is also something which must be filled with life”, she told press after meeting Latvian prime minister Laimdota Straujuma.

She noted that German jets will start NATO air policing operations in Latvia on 20 August and that NATO is to build up a rapid reaction force to be used if Russia tries to destabilise its Baltic neighbours on the Ukraine model.

This news item appeared on the euobserver.com Internet site at 9:21 a.m. Europe time on Tuesday morning---and it's the second offering of the day from Roy Stephens.

Donetsk Republic Guarantees Safety of Humanitarian Convoy

The government of the self-proclaimed Donetsk People’s Republic (DPR) has guaranteed safe passage for Russia’s humanitarian convoy and the International Committee of the Red Cross (ICRC) employees accompanying it, the republic’s deputy prime minister said Tuesday.

“Our government thinks that the situation in DPR can be described as a humanitarian disaster. Naturally, we want the convoy to visit not only Luhansk, but Donetsk Region cities as well. To that end, we guarantee safety for the drivers of the convoy and ICRC employees,” DPR Deputy Prime Minister Andrei Purgin said.

The prime minister noted that the DPR had already ensured the security of the OSCE mission and international aviation experts on its territory when they arrived in Donetsk to work at the crash site of Malaysia Airlines flight MH17.

"Despite all Kiev’s provocations, despite the fact that Kiev started fighting in the area of the crash, we were able to ensure the security of the experts," Purgin said.

This article appeared on the RIA Novosti website at 1:51 p.m. Moscow time on their Tuesday afternoon---and I thank reader M.A. for sending it.

Kiev must publish record of MH17 communications with traffic control – Russia

Kiev should make public the records of communications between the Ukrainian air traffic control and the Malaysian Airlines flight 17 in the hours before it was shot down over Ukraine’s turbulent east, Russia’s UN envoy said.

The issue was among several Russia raised at a U.N. Security Council meeting, which was called by Russia to discuss the progress of the investigation into the tragic incident, which killed 298 people in July, Vitaly Churkin said. Moscow sees the shortage of proper evidence known to the public so far as wrong.

“As far as we know, [UN’s civil aviation watchdog] ICAO is being kept on the sidelines of the investigation, which has been conducted for some time,” Churkin said.

This news item showed up on the Russia Today website at 11:50 a.m. Moscow time yesterday morning---and it's the second contribution in a row from reader M.A.

Next Weeks ‘Decisive’ for Ukrainian Conflict – Kiev Official

The coming two weeks will be decisive for the peaceful settlement in Ukraine, the Kiev government wants to resolve the conflict through means of diplomacy, the deputy head of the Ukrainian president’s administration said Tuesday.

“I think that the coming two weeks will be decisive for transforming war into peace. The telephone diplomacy is giving way to direct contacts” Valeriy Chaliy told reporters, commenting on the forthcoming talks due in Minsk and Brussels on August 26 and August 30, respectively.

Earlier the same day, Ukrainian President Petro Poroshenko's press service said officials from Ukraine, the European Union and the so-called 'Eurasian Trio' (Russia, Belarus, Kazakhstan) will meet in Minsk on August 26 to discuss a number of urgent political and economic issues, including Ukraine's European integration, energy security and the stabilization of the situation in Donbas.

The press service also said Poroshenko had accepted the invitation of President of the European Council Herman Van Rompuy and European Commission President Jose Manuel Barroso to visit Brussels on August 30. In addition to the invitation to Brussels, Barroso and Poroshenko discussed by telephone the issues of granting Ukraine the third wave of EU macro-financial assistance.

This is another article from the RIA Novosti website---and this one appeared their at 8:20 p.m. Moscow time on their Tuesday evening, which was 12:20 p.m. in New York.  This article is courtesy of Roy Stephens.

Battle for Ukraine: An Inside View of the Surreal Donetsk War Zone

It is a thin veneer that separates guests of the Donetsk Park Hotel from the surreal world outside. Inside, we watch BBC in English and ZDF broadcasting news in German. The hotel has electricity and Internet while air conditioning keeps out the summer heat.

OSCE observers sit at the bar drinking Lvivske, a dark Ukrainian beer, for €2.50 ($3.3) a pint, a price that is outrageous for Donetsk. Their shiny white Toyota SUVs are lined up outside, waiting to drive them through the war zone during those moments when it's not too dangerous.

This Thursday is not one of those moments. Shortly before 1 p.m., a salvo of grenades rains down. One's ear quickly gets used to the sounds of war, rapidly learning to halfway reliably tell them apart. This time, though, the detonations are unbelievably loud and very close. Only three minutes after leaving the hotel, I arrive in the midst of misery in this embattled city of Donetsk.

This very interesting boots-on-the-ground commentary was posted on the German website spiegel.de very early yesterday evening Europe time.  It's worth reading---and I thank Roy Stephens for finding it.

No Weapons Seen Crossing Russian-Ukrainian Border - OSCE

The Organization for Security and Cooperation in Europe's Special Monitoring Mission working on the Russian-Ukrainian border has not seen any weapons crossing between the countries, an OSCE spokesman working on the Russian side of the border said Tuesday.

“We have not seen any weapons. There was a question of whether we saw military vehicles crossing the border. Yesterday at two [border crossing] points, we didn’t see any military vehicles crossing the border,” Paul Picard said at a briefing.

On August 15, Ukrainian President Petro Poroshenko claimed Ukrainian artillery destroyed Russian military hardware that had allegedly crossed into Ukraine at night.

The announcement came soon after a number of foreign news agencies reported that a convoy of military vehicles with Russian license plates had crossed into Ukraine via the Izvarino border checkpoint.

I said this story was bulls hit when I posted it last week---and now the OSCE spokesman confirms it.  The lies in the Western press are beyond outrageous.  This RIA Novosti article appeared on their Internet site at 1:38 p.m. Moscow time yesterday afternoon---and it's another Roy Stephens offering.

Ukrainian Refugees Camp in Russia's Rostov Region - 8 Photos

Over 53 thousand Ukrainians fleeing the war zone in southeastern Ukraine, 16,000 of them children, found refuge in Russia's Rostov region by August 14.

According to Russian authorities, over 730,000 Ukrainians were forced to flee their homeland because of war and sought shelter in Russia.

About 58 thousand of them currently reside in temporary accommodation centers.

This brief 8-photo presentation was posted on the RIA Novosti website on Monday---and the photos are worth the trip.  It's another story that Roy dug up for us.

Getting The Ukraine Narrative Straight: Washington Started This Fight, Not Putin

When even smart people like economist Paul Krugman buy into the false narrative about the Ukraine crisis, it’s hard to decide whether to despair over the impossibility of America ever understanding the world’s problems or to marvel at the power of the U.S. political/media propaganda machine to manufacture its own reality.

On Monday, Krugman’s New York Times column accepts the storyline that Russia’s President Vladimir Putin instigated the Ukraine crisis and extrapolates from that “fact” the conclusion that perhaps the nefarious Putin did so to engineer a cheap land grab or to distract Russians from their economic problems.

Or you could look at the actual facts of how the Ukraine crisis began and realize that it was the West, not Russia, that instigated this crisis. Putin’s response has been reactive to what he perceives as threats posed by the violent overthrow of elected President Viktor Yanukovych and the imposition of a new Western-oriented regime hostile to Moscow and Ukraine’s ethnic Russians.

Robert Parry tells it like it is on this essay posted on the David Stockman website yesterday---and it's the second last offering of the day from Roy Stephens.

'They want their war---and they want it now' - Adrian Salbuchi

If you are playing a game of chess, and the next moves you are considering all inexorably lead to your king falling into checkmate, then you have only two options: you either topple your king and graciously accept defeat, or…

You can kick over the chessboard, refuse to accept defeat, and let all hell break loose...!

Is that what the “four horsemen of the Apocalypse,” namely the elites running the U.S., U.K., E.U. and Israel against their own peoples’ interests, are thinking of doing?

All parents know that if you allow a young brat to do as he pleases by giving in to his yelling and kicking and sobbing every time he does not get his way it will become increasingly hard to get the little monster to mature and behave in an adult and responsible manner.

This could very well be a metaphor for the way the Western powers have been behaving and acting in recent years, especially since 9/11, which for a while gave them a blank check to run amok throughout the Middle East and beyond.

Including the article posted above this one, if I had to pick one other must read article for you today---this would be it for sure.  This is truly what the Ukraine/Russia imbroglio is all about, with all the political niceties stripped away---one of the last puzzle pieces in the New Great Game---and we've just seen 'the flop' with Ukraine---and what the 'turn' and 'river' cards bring, is unknown as of yet.  It's the last contribution of the day from Roy Stephens---and it was posted on the Russia Today website at 1:12 p.m. Moscow time on their Tuesday afternoon.

Three King World News Blogs

1. Dr. Stephen Leeb: "Russia Continues to Strengthen Ties With Germany and China"  2. Grant Williams: "Why Gold is Headed Into the Stratosphere"  3. Richard Russell: "New, Terrifying Confiscation to Worry About"

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

Jim Rickards: Warren Buffett and the Chinese Are Loading Up on Hard Assets

This 2:52 minute video clip with Jim was posted on the dailyreckoning.com Internet site last Friday---and it's worth your time, even though you've probably heard him say all this before.

I thank Harold Jacobsen for sending it our way.

China allows 3 more banks, including Standard Chartered, to import gold

China has allowed three more banks, including a foreign lender, to import gold, sources with direct knowledge of the matter said, as the world's top gold buyer gears up for its strongest effort yet to gain pricing power of the metal.

The move, which brings the number of firms allowed to import gold into China to 15, comes ahead of the launch in September of a new international bullion exchange in Shanghai with which China hopes to become a price-discovery centre.

China and other Asian gold trading centres such as Singapore are calling for more localised pricing of the precious metal as they seek alternatives to the so-called London fix, the global benchmark for spot gold prices, which is being investigated by regulators on suspicion that it may have been manipulated.

This Reuters story, co-filed from Singapore and Shanghai, showed up on their website at 9:08 a.m. BST on Tuesday---and it's something I found on the Sharps Pixley website in the wee hours of yesterday morning.  However, because I was already loaded with stories for my Tuesday column, it had to wait until today.

Koos Jansen: East Asia geared up for renminbi gold trading

Gold researcher and GATA consultant Koos Jansen reports that off-take from the Shanghai Gold Exchange has been flat for four weeks.

Meanwhile, Jansen writes, "China is developing its market infrastructure not only for physical gold trade but also to expand paper trading to steal pricing power from the dominant forces in the West and to promote the internationalization of the renminbi."

His commentary is headlined "East Asia Geared up for RMB Gold Trading" and it was posted at the bullionstar.com Internet site minutes before midnight local time on Monday.  I found this, along with the above paragraphs of introduction, on the gata.org Internet site yesterday.

India gold smuggling explodes YoY

According to figures released by the government, between April and June it intercepted $44 million worth of smuggled gold at the country’s airports. That compares with $82 million in the year ended March 31.

Last year, between April and July, the Mumbai airport customs had seized 61.46 kilograms gold, while this year until July, it had seized 403.52 kilograms. The customs officials at the Chennai airport in the South, have also reported seizing much more gold than last year.

Plainly put, thanks to the high import duty imposed last year on the yellow metal by the Indian Government to bring down the nation’s fiscal deficit, gold smuggling is thriving across the country. Last year, the government had hiked the duty to 10 per cent.

Cases of gold smuggling at the two city airports in Mumbai alone have gone up over six times this year, with the customs department recording as many as 497 cases in four months from April, as compared to 79 cases in the corresponding period last year.

This gold-related news item appeared on the mineweb.com Internet site on Monday---and it's worth reading.

Britain's fat cat pay gap hits new heights as average blue-chip chief executive earns 143 times more than his workers

The High Pay Centre’s research found the widest pay gap at miner Randgold Resources, where boss Mark Bristow earned almost 1,500 times his employees, many of whom are miners based at its sites in Africa.

Bristow received £4.4 million, while his average worker got just £2,968. Second on the list was Sir Martin Sorrell of media giant WPP, who took home a package worth £29.8million – almost 800 times more than his average worker’s salary of £38,265.

If you remember, yesterday's column was headlined "Randgold CEO Just Shrugs as Gold Mining Industry Produces More Metal at a Loss."  If you want to know one of the reasons that the executives of precious metal miners don't care about the price of the product they mine, or their shareholders---and why they won't pursue the price management scheme, you need to look no further than this.  I thank reader 'h c' for digging this story out of the Sunday edition of London's Daily Mail. The first part of the story is worth reading.

Pierre Lassonde, Franco-Nevada: “Very Few People ‘Get’ This… But It’s Worth So Much Money”

This edition of Sprott's Thoughts is an interview of Pierre Lassonde by Henry Bonner over at sprottglobal.com on Tuesday.

Lassonde is another executive who is more than familiar with the precious metal price management scheme---and who is pretty much bought and paid for as well.

Lawrence Williams: Is the LBMA Silver Price more transparent than the Fix? No!

So now we have had three days of the new LBMA Silver Price – the new name for the London Silver Fixing given that the term ‘Fix’ is somewhat discredited in modern-day parlance.  The banks involved in the old system, which had fallen to two, wanted to withdraw from it, in part because they felt the process, even if it was a totally honest system, which it probably was, could lay them open to having to defend expensive, and probably spurious, lawsuits and the London Bullion Market Association took upon itself to go out and set up some kind of new silver benchmarking process at very short notice. 

And is this new process any more transparent than the old one – one of the main charges laid against the old Silver fixing process.  The answer so far is probably not!  

Although one assumes it could become more open as the markets get to understand how it operates its new rather obscure process dealing in lakhs of silver rather than ounces, and in converting it back to a per ounce price.  (A lakh is a South Asian term for 100,000 units – in this case ounces.)  Why on earth such a measure was chosen defeats us – it just seems to be another way to obfuscate what should be a relatively straightforward process.

Amen to that---and everyone is in total agreement.  This commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and it's worth the read.

¤ The Funnies

Here are a couple of more photos from Sunday.  This is a juvenile red-necked grebe from two different angles---and it's almost the size of its parents already.  It's hard to believe that less than a month ago it was still in its egg.  I was amazed how late in the year these birds nested, as I'd been watching them sitting on their eggs for what seemed like forever, but maybe it's a second brood.  I never thought that the eggs would hatch in time for the babies to fledge by the time the snow flew around here.  How wrong I was.









¤ The Wrap

A number of readers have asked recently about my opinion on the new Silver Fix, which has attracted much publicity. I thought I had addressed the issue at the time Deutsche Bank quit the Fix, effectively bringing an end to a 117 year old tradition. Then and now, it seemed like a non-event to me because the price of silver (as well as gold and copper) is continuously fixed 24 hours a day on the COMEX. That being the case, I have trouble seeing what difference it could possibly make about what form the replacement fix takes on. I suppose there was a time when the London Silver Fix actually meant something, but that time has long passed. I don’t mean to give short shrift to a topic apparently of great interest to many, but I’m not going to pretend something is important if I don’t think it is. If it turns out that I am wrong and the new Silver Fix is more meaningful than I believe it would be, I’ll acknowledge that in the future. In the meantime, I consider it a non-event. - Silver analyst Ted Butler:  16 August 2014

As is usually the case, nothing much happened from a price perspective until trading began in New York at 8:20 a.m. EDT.  The pop in the dollar, along with the swan dives in gold and silver prices, certainly looked a managed event---but you should make up your own mind on this.  However, there was nothing free market about the fact that all four precious metals were sold down yesterday, as there was no news to account for it whatsoever.

But JPMorgan et al managed to take another slice out of the gold and silver salamis yesterday---and here's what the 6-month charts look like in both gold and silver now that they've been updated with Tuesday's trading data.

Although the silver is inches away from getting into oversold territory, that's certainly not the case in gold.  With such light volume on Tuesday, there wasn't a huge amount of long liquidation by the technical funds in silver in the 'Managed Money' category---and there wouldn't have been much in gold either, I would think.  So I'm still very fearful of the potential to take both these metals down by substantial amounts as 'da boyz' have a lot of work to do to the downside to get these same technical funds out of their current long positions---and probably back on the short side as well.

Of course that means lower prices, but how low is still unknown.

And as I write this paragraph, the London open is less than ten minutes away.  Nothing is happening, or has happened, price-wise in any of the four precious metals during the Wednesday trading day so far.  Net volume in gold is around 8,500 contracts---and silver's net volume is exactly 3,000 contracts.  Nothing to see here.  The dollar continues to crawl slowly higher---and is up about 11 basis points as of this writing.

Yesterday, at the close of Comex trading, was the cut-off for Friday's Commitment of Traders Report---and I would suspect that all of yesterday's trades will be reported in a timely manner considering the low volume.

I happened to glance at the 6-month dollar index chart---and was amazed at how much it was overbought.  It's been like this for a month---and one has to wonder how soon this condition will correct itself---and how violent it might be.  This, of course, will have some effect on precious metals, but only to the extent that it's allowed to have an effect.  So we wait.  Here's the chart.

Another event that's coming up starting tomorrow is the Fed's Jackson Hole Monetary Symposium.  It runs for a couple of days---and it will be interesting to see how the precious metals react, or are allowed to react during that time.

And as I hit the send button on today's effort at 5:05 a.m. EDT, I note that all four precious metals are down from their respective closes in New York---particularly palladium, which is down eleven bucks already.  Net volumes in both gold and silver are higher now, of course, but still very much on the lighter side for this time of day, so it's hard to read too much into the current price action.  Of course I said that at this time yesterday---and look what happened when the Comex opened.  The dollar index is now up 15 basis points.

That's all I have for today and, once again, it's more than enough.

I hope your day goes well---and I'll see you here tomorrow.

]]>
Wed, 20 Aug 2014 06:17:00 +0000
<![CDATA[Randgold CEO Just Shrugs as Gold Mining Industry Produces More Metal at a Loss]]> http://www.caseyresearch.com/gsd/edition/randgold-ceo-just-shrugs-as-gold-mining-industry-produces-more-metal-at-a-l/ http://www.caseyresearch.com/gsd/edition/randgold-ceo-just-shrugs-as-gold-mining-industry-produces-more-metal-at-a-l/#When:06:36:00Z "The miners are either, ignorant naïve, or complicit"

¤ Yesterday In Gold & Silver

The gold price got sold down to just below the $1,300 spot price mark by shortly after 9 a.m. in Tokyo.  It gained back five bucks or so by 11 a.m. in London, but lost all that by the London p.m. gold fix.  After that it  tried to make it back to the $1,300 spot price mark, but didn't quite do it.

The low and high ticks aren't worth the effort to look up.

Gold finished the Monday session in New York at $1,297.20 spot, down $7.30 from Friday's close.  Volume, net of August and September, was only 79,000 contracts, so nothing of importance should be read into the price action yesterday---except to note the fact that it was closed below the $1,300 spot price mark.

The price action in silver on Monday wasn't all that exciting, either---although a bit of a rally with some legs developed shortly after the noon London silver fix.  That rally, such as it was, ended/got capped minutes before noon n New York.  Most of these gains vanished in electronic trading, as some kind soul showed up about an hour before the close and made it so.

The low and high ticks were recorded by the CME Group as $19.47 and $19.65 in the September contract.

Silver finished the Monday trading session at $19.585 spot, up 3.5 cents from Friday.  Net volume was very quiet at only 20,500 contracts.

Platinum traded flat until the Zurich open---and at that point the price headed lower.  The decline ended at 2 p.m. EDT in New York---and traded sideways from there.  Platinum closed down 14 bucks.

Palladium traded flat until 10 a.m. in Zurich---and then rallied up to $900 by 2 p.m. Europe time.  But that was it, as selling showed up---and palladium finished unchanged on the day.

The dollar index closed on Friday afternoon at 81.43---and then hit its 81.39 low about 11:30 a.m. Hong Kong time on their Monday morning.  The rally that began at that point ended about 10:15 a.m. EDT---and it chopped sideways in a very tight range for the remainder of the day.  The index closed at 81.57---up 14 basis points.

The gold stocks gapped down about a percent at the open, hitting their low tick just minutes after 10 a.m. EDT.  From there they rallied unsteadily, before firming up a bit more starting around 2 p.m. EDT---and the shares edged into the black about an hour before the close.  The HUI finished up 0.17%.

The silver equities opened a hair lower, but by shortly before lunch EDT, they were back in positive territory---and continued to quietly add to their gains as the trading day progressed.  Nick Laird's Intraday Silver Sentiment Index finished up a very respectable 1.30%.

The CME's Daily Delivery Report showed that 108 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  It was Barclays stepping up to the plate as the largest short/issuer with 107 contracts out of its in-house [proprietary] trading account.  The two largest long/stoppers were JPMorgan in its client account once again, with 61 contracts---and Canada's Scotiabank with 37 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for Monday showed that gold open interest for August is down to 616 contracts, of which you can subtract the 108 contracts posted for delivery above.  So we have 500 potential contracts left to be delivered into before next Friday.

There was a decent delivery into GLD yesterday, as an authorized participant added 67,432 troy ounces---and as of 7:45 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I checked the i Shares.com Internet site about 3:30 a.m. EDT this morning, I was amazed to see that an authorized participant [read JPMorgan] had deposited a monstrous 3,070,420 troy ounces!  Without doubt it was all deposited to cover an existing short position and, unfortunately, because it was deposited after August 15, it won't be in next week's short position report from the good folks over at shortsqueeze.com.

The U.S. Mint reported selling 259,000 silver eagles---and that was all.

Over at the Comex-approved depositories on Friday, they reported receiving 23,278 troy ounces of gold---almost all of it into Brink's, Inc.  Nothing was shipped out.  The link to that activity is here.

There was more activity in silver, of course, as 581,092 troy ounces were received---and 287,477 ounces were shipped out the door.  The 'in' action was at Canada's Scotia Mocatta---and the 'out' action was at Brink's, Inc.  The link is here.

Since this is my Tuesday column, I have a lot of stories---and the final edit is yours.

¤ Critical Reads

More Money Down Adds to U.S. First-Time Buyer Blues

The challenges facing prospective buyers of the least expensive homes in the U.S. are getting harder to overcome.

Already beset by stagnant wages, growing student debt and competition from investors who are snapping up listings, those looking to purchase moderately priced houses must also provide more cash up front. The median down payment for the cheapest 25 percent of properties sold in 2013 was $9,480 compared with $6,037 in 2007, the last year of the previous economic expansion, according to data from 25 of the largest metro areas compiled by brokerage firm Redfin Corp.

The higher bar is a symptom of still-tight credit that is crowding out first-time buyers even as interest rates remain near historical lows. Younger adults, who would normally be making initial forays into real estate, are among those most affected, weakening the foundations of the housing market and limiting its contribution to economic growth.

This Bloomberg news item from last Thursday was picked up by the finance.yahoo.com Internet site on Monday---and today's first news item is courtesy of Orlando, Florida reader Dennis Mong.

PwC Fined $25 Million for Altering Bank Money-Laundering Report

PricewaterhouseCoopers LLP was fined $25 million after sanitizing a report to regulators on sanctions and money-laundering controls for Bank of Tokyo-Mitsubishi UFJ Ltd., New York’s top bank regulator said Monday.

The bank persuaded PwC Regulatory Advisory Services to change a compliance report related to financial transactions with sanctioned countries including Iran and Sudan between June 2006 and June 2008, according to a settlement with Benjamin Lawsky, superintendent of New York’s Department of Financial Services.

“When bank executives pressure a consultant to whitewash a supposedly ’objective’ report to regulators, and the consultant goes along with it, that can strike at the very heart of our system of prudential oversight,” Lawsky said in a statement announcing the settlement.

PwC was also banned for two years from consulting work with companies regulated by Lawsky and must implement changes to address conflicts of interest in consulting. It’s his second suspension of a financial-advisory firm. The Department of Financial Services hit Deloitte LLP’s Financial Advisory Services with a one-year ban in 2013 for work performed on behalf of Standard Chartered Bank Plc.

This article appeared on the moneynews.com Internet site at 11:51 a.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for sending it.

Unlike Russia, the U.S. Government Won't Take Your Pension Outright

Earlier this month, the Russian government seized its citizens’ pension contributions. Normally, 6 percent of Russians’ salaries is invested in financial markets, earmarked for their retirement. This year that $8 billion in contributions will finance Russian spending instead. Russia is not the first country to confiscate pension assets to pay its bills, and it probably won’t be the last. Argentina, Hungary, Poland, Portugal, and Bulgaria have all done the same in the last six years.

This is not only a setback for Russians’ retirement accounts; it also harms Russia’s financial markets, which count on a steady flow of pension assets each year. The move is expected to further weaken the already fragile Russian economy. Former Finance Minister Alexei Kudrin spoke out against the move, saying “today we are getting a government policy that lowers economic growth, plus a ‘shrinking’ of the economy’s possibilities and increasing uncertainty.”

In most countries, it’s extremely unlikely that the government will outright seize pensions. In America, it’s nearly impossible to change Social Security or Medicare benefits, and the idea of the U.S. government confiscating everyone’s 401(k) is unimaginable to all but the most ardent conspiracy theorists. However, it’s not unrealistic to think that the American government could take a bigger bite out of individuals’ 401(k) assets with higher tax rates: Income taxes are at historic lows, and if the American government needs to raise revenue in the future, taxes on 401(k) withdrawals may be higher (along with taxes on everything else). But at least the account’s assets will still belong to you.

This short article appeared on the businessweek.com Internet site on Monday sometime---and it's the second offering of the day from Dennis Mong.

The Great Economic Shoe Waiting To Fall: Loss Of Faith In The Cult Of Central Banking

Much of the supposedly godlike power of central banks is participants’ faith in their powers to control not just finance but the real world that can be leveraged by finance.

The Grand Narrative of the global economy since the 2008 financial meltdown has been: whatever the problem, zero interest rates and more credit will fix it. Too much debt? Zero-interest rates and more credit will fix that. Government spending far exceeds tax revenues? Zero-interest rates and more credit will fix that. Economy sluggish? Zero-interest rates and more credit will fix that. Few jobs being created? Zero-interest rates and more credit will fix that.

Had a bad hair day? Zero-interest rates and more credit will fix it.

Implicit in this narrative is the notion that there are no hard limits on credit or central bank money creation. If creating $1 trillion in new credit-money and pushing it into the hands of financiers doesn’t do the trick, then push $2 trillion more.

This commentary by Charles Hugh Smith appeared on David Stockman's website on Monday---and is worth reading if you have the time.  It's the first of many contributions from Roy Stephens.

Lawmakers Want to End Transfers of Military Equipment to Police

U.S. lawmakers alarmed by the aggressive police response to protests in Ferguson, Missouri, are pushing for Congress to limit the Pentagon's ability to provide civilian police departments with military equipment such as armored vehicles designed for the battlefield.

Georgia Democrat Hank Johnson wrote colleagues in the House of Representatives this week seeking support for legislation to curtail a program that passes surplus equipment from wars in Iraq and Afghanistan to municipal U.S. police forces, free of charge.

Because of the program "our local police are quickly beginning to resemble paramilitary forces," Johnson said.

Three other Democrats on the House Judiciary Committee wrote to Chairman Bob Goodlatte, a Republican, to ask for a committee hearing on "recent incidents of local law enforcement using excessive force." They pointed to events in Ferguson, where demonstrators have protested the shooting death of an unarmed black teenager by police, and elsewhere.

This article put in an appearance on the newsmax.com Internet site late Friday---and it's the second contribution of the day from reader Elliot Simon.

WSJ/NBC Poll: The Death of American Optimism

Should we hold a funeral for American optimism?

In its most pessimistic reading ever, a new Wall Street Journal/NBC News poll indicates that most Americans, 76 percent to be exact, are not sure their children's generation will be better than their own. Less than a quarter (21 percent) believe their children's generation will lead better lives than their own.

What's more, 71 percent think the country is on the wrong track, 60 percent believe the United States is in a state of decline, and 54 percent say the widening income gap is undermining opportunity.

The pollsters say the survey reveals "a strong undercurrent of pessimism about the economy, the political system and the U.S. role in world affairs."

This should surprise no one, as G. Edward Griffin's "Creature From Jekyll Island" is now stalking the world.  This article showed up on the moneynews.com Internet site at 7:57 a.m. EDT yesterday morning---and it's another story courtesy of Elliot Simon.

U.K. Property Prices Suffer 'Largest Decrease Ever' As London Real Estate Goes Into Full-Scale Collapse

More sellers than buyers, basically.

Property prices in the U.K. can't go on rising forever — and now they're not.

A survey of 90% of the market by Rightmove, a real estate price tracking company, shows that real estate prices fell 2.9% in August, the second consecutive down month this summer.

Prices fell nearly 6% in the overheated London market.

That news dovetails ominously with the rumors of "panic selling" in London as owners try to cash in on their overpriced houses at the very top of the market.

Having spent 27 years of my adult life selling residential real estate, I have first hand knowledge of what happens when a rabid bull bull market in real estate begins to head south.  The buyer vanishes---and the market implodes both in price and volume terms.  No doubt the drop is exacerbated by the disappearance of the Russian buyer in London---and it couldn't come at a worse time.  This Business Insider story appeared on their website around 4 a.m. EDT on Monday morning---and it was picked up by the finance.yahoo.com Internet site.  It's definitely worth reading---and it's the third contribution of the day from Dennis Mong.

France scraps deficit target, as eurozone recovery halts

France has all but abandoned a target to shrink its deficit, as the eurozone endured a turbulent day that raised the prospect of a triple-dip recession.

Figures published by Eurostat on Thursday (14 August) indicated that the eurozone economy flatlined between April and June, while the EU-28 saw 0.2 percent growth.

Latvia was the currency bloc’s strongest performer with 1 percent growth, and there was positive data from former crisis countries Spain and Portugal, which both expanded by 0.6 percent.

This story appeared on the euobserver.com Internet site at 7:17 p.m. Europe time last Friday---and Roy Stephens sent it our way on Sunday.

Draghi cash offer seen losing luster as euro area risks increase

Mario Draghi’s promise of cheap cash for banks betting on the euro-area revival is losing its allure.

Economists in the Bloomberg Monthly Survey cut their estimate of the take-up of funds under a program designed to boost bank lending. The reduction signals concern that the outlook for the currency bloc may be too weak to drive demand for loans, undermining a policy the European Central Bank president says is key to restoring the region’s health.

An escalating standoff with Russia threatens to worsen the prospects for the 18-nation euro area, where growth has already ground to a halt and inflation is running at the weakest pace in almost five years. That’s increasing pressure on the ECB to step up stimulus with radical tools such as quantitative easing to avert the risk of deflation and renewed recession.

“The next step is to see how big the demand is for liquidity,” said Peter Dixon, an analyst at Commerzbank AG in London. “If it falls well short of expectations then that’s the point at which the ECB may need to think again and start to bring the QE debate back to the table.”

This Bloomberg story was picked up by the Greek internet site ekathimerini.com---and it was posted there at 10:55 a.m. local time on their Monday morning.  I thank reader Harry Grant for sharing it with us.

Germany tapped John Kerry’s phone, spied on Turkey for years - report

Germany’s foreign intelligence agency eavesdropped at least one telephone conversation of U.S. Secretary of State John Kerry and spied on NATO ally Turkey since 2009, Der Spiegel newspaper revealed on Saturday.

Germany’s Federal Intelligence Service (BND) picked up the phone call "by accident" in 2013, the weekly newspaper reported in a pre-publication citing unnamed sources. Kerry was discussing the Middle East tensions between Israelis, Palestinians and Arab states in a satellite link, according to Der Spiegel.

The new revelation comes after German media - Daily newspaper Sueddeutsche Zeitung (SZ) and regional public broadcasters NDR and WDR – reported on Friday that BND intercepted at least one phone call made by former Secretary of State Hillary Clinton. The date of the call was not given and the media said that it was also picked up “by accident”.

The German media retrieved the information of the hacking from documents that were passed to the CIA by one of its moles inside the BND.

This Russia Today article appeared on their Internet site at 10:25 p.m. Moscow time on their Saturday evening---and it's courtesy of Roy Stephens.

Bulgaria halts South Stream gas pipeline project for second time

All operations on Russia’s Gazprom-led project South Stream have been suspended, as they do not meet the requirements of the European Commission, Bulgaria’s Ministry of Economy and Energy said on its website.

“Minister of Economy and Energy Vasil Shtonov has ordered Bulgaria’s Energy Holding to halt any actions in regards of the project,” the ministry said. This specifically means entering into new contracts.

There has been mounting pressure from the E.U. to put the project on hold, and now the European Commission will be consulted each step of the way to make sure it complies with E.U. law.

This very interesting story appeared on the Russia Today Internet site at 9:22 p.m. Moscow time on their Monday evening, which is 1:22 p.m. in New York.  Roy Stephens sent it our way---and it's definitely worth reading.

Europe risks deeper economic crisis as Russia buckles and defaults mount in Ukraine

German bond yields plummeted to record lows and stock markets sold off across the world after Ukraine and Russia came to the brink of war, threatening to set off a financial shock and push Europe into deep recession.

Flight to safety sent yields on German 10-year Bunds tumbling to 0.97pc after Ukraine said its artillery had destroyed a “significant” part of a Russian armoured column that crossed the border into the Donbass. Yields on two-year notes turned sharply negative, implying that large investors are willing to pay the German state to look after their money.

NATO chief Anders Fogh Rasmussen said the crisis had reached danger point, but stopped short of calling it an invasion. “I can confirm that last night we saw a Russian incursion, crossing of the Ukrainian border,” he said.

European foreign ministers warned that they would tighten the sanctions noose yet further unless Russia draws back. “Any unilateral military actions on the part of the Russian Federation in Ukraine under any pretext, including humanitarian, will be considered by the European Union as a blatant violation of international law,” it said.

This Ambrose Evans-Pritchard offering appeared on the telegraph.co.uk Internet site at 8:23 p.m. BST on Friday evening---and before you take it as gospel, I urge you to read the Paul Craig Roberts piece---and RIA Novosti piece linked here---and posted further down in the Critical Reads section.  I thank Roy Stephens for sending it.

MH17 Inquiry Results to Be Published Early September

The preliminary results of an inquiry into the crash of Malaysia Airlines Flight MH17 will be published during the first week of September, Agence France Presse reported Thursday.

The passenger jet is believed to have been shot down over war-torn eastern Ukraine on July 17, claiming the lives of all 298 passengers and crew members on board.

Ongoing fighting between pro-Russian rebels and Ukrainian government forces prevented investigators from reaching the crash site, but Dutch, Australian and Malaysian forensic experts managed to make it to the area to look for human remains and personal belongings.

The investigators have left Ukraine and will resume their probe in the Netherlands, Wim van der Weegen, spokesman for the Dutch Safety Board, or OVV, told AFP, noting: "We have sufficient information to compile a preliminary report."

I found this article posted on themoscowtimes.com Internet site on the weekend.  It showed up there at 4:06 p.m. Moscow time last Friday afternoon.  There was also a story posted on the RIA Novosti website on Monday about this as well.  It's headlined "Russia to Demand U.N. Report on Malaysian Boeing Crash Investigation"---and it's courtesy of Roy Stephens.

Dozens killed in attack on convoy, Ukraine says; rebels deny firing rocket

Dozens of people, including women and children, were killed as they fled fighting in eastern Ukraine on Monday when their convoy of buses was hit by rocket fire, military spokesmen said.

Ukraine accused pro-Russian rebels of targeting the convoy, which it said was bearing white flags when it was hit near the eastern city of Luhansk. The separatists denied responsibility for the attack and one rebel leader suggested the incident might never have taken place.

"The rebels were expecting the convoy and destroyed it entirely," military spokesman Andriy Lysenko told journalists. "We haven't been able to count the number of victims ... dozens (were killed)."

The convoy had been in an area of fierce fighting between government forces and the separatists when it came under fire from rebel Grad and mortar launchers, the spokesmen said.

This Reuters article, filed from Kiev, is datelined at 7:03 p.m. EDT on Monday evening---which is a little hard to believe, since I received it from reader Dennis Mong a 1:08 p.m. EDT yesterday afternoon---so it's obviously been edited in the interim.

State Department condemns Ukraine convoy shelling

The U.S. State Department condemned the deadly shelling of a convoy in eastern Ukraine on Monday that killed dozens of people, but said it could not confirm who was responsible for the attack.

"We strongly condemn the shelling and rocketing of a convoy that was bearing internally displaced persons in Luhansk and express our condolences to the families of the victims," State Department spokeswoman Marie Harf told a news briefing. "Sadly, they were trying to get away from the fighting and instead became victims of it."

The Ukrainian government accused pro-Russian rebels of targeting the convoy, which it said was bearing white flags. The separatists denied responsibility.

That's all there is to this brief Reuters new item, filed from Washington, that appeared on their Internet site at 2:43 p.m. EDT on Monday afternoon---and it's the second offering in a row from Dennis Mong.

Ceasefire Must be Unconditional – Lavrov on Situation in Ukraine

This 1:28 minute video clip showed up on the RIA Novosti website---probably yesterday.  In it, Russian Foreign Minister Sergei Lavrov commented on the four-party meeting with his counterparts from Germany, France and Ukraine in Berlin.  I thank reader M.A. for sending it our way.

Putin, Merkel Discuss Ways to De-escalate Situation in Ukraine - Kremlin

Russian President Vladimir Putin expressed his concern about the humanitarian situation in Ukraine during a telephone conversation with German Chancellor Angela Merkel, as the two leaders sought ways to de-escalate tensions, the Kremlin’s press service said Saturday.

“Ways for international community to help de-escalate the situation in Ukraine are under discussion,” the press service’s statement said.

Putin also informed Merkel of the ongoing cooperation between Russia and the International Committee of the Red Cross (ICRC) on their efforts to provide humanitarian aid to the civilian population of eastern Ukraine.

This RIA Novosti website appeared on their Internet site at 3:16 a.m. Moscow time on their Saturday morning---and it's courtesy of Roy Stephens once again.

Russia's humanitarian aid to cross into Ukraine in batches

Russian humanitarian aid trucks will cross the Ukrainian border in small batches of several dozen vehicles and only after a thorough examination by border guards, Kiev says, following an official acknowledgment of 280 trucks carrying crisis-relief cargo.

“The cargo, in agreement with the mission of the Red Cross, will be delivered to the international crossing point of Izvarino-Donetsk in batches of up to 30 vehicles,” the head of the Ukrainian State Fiscal Service Anatoliy Makarenko was quoted as saying by LB.ua.

After clearing customs, the aid trucks will be transferred “only to official representatives of the Red Cross,” Makarenko added.

The Red Cross is expected to arrive at the border crossing on Monday to perform the necessary procedures.

This article was posted on the Russia Today website at 11:42 p.m. Moscow time Moscow time on Sunday evening---and it's courtesy of Roy Stephens once again.

Russia Has Right to Security Measures as War Rages Near Its Borders - Lavrov

Moscow has the right to make decisions on security measures on its territory because hostilities continue a few kilometers away from its border with Ukraine, Russian Foreign Minister Sergei Lavrov said Monday.

"There is war on the other side of the border, with artillery, aviation, multiple-launch rocket systems and, according to some reports, missiles being used to attack Luhansk. It all takes place literally a few kilometers away from our border," he said.

The foreign minister added that many cases of cross-border fire were registered.

"We do not think that this was a deliberate act. Most likely, [the shelling] was a result of either accident or poor training. But this happens. There have been casualties and damage was done to civilian objects on the Russian side [of the border]," he said.

This RIA Novosti news item was posted on their website at 1:18 p.m. Moscow time on their Monday afternoon---and it's another contribution from reader M.A.

NATO Seeking Long-Term Military Presence in Eastern Europe

NATO's leadership implore the leaders of its member-states to approve the long-term deployment of troops to Eastern Europe during its September summit in Wales, NATO's leaders wrote in an article published by The Wall Street Journal.

"We need the presence of NATO forces in Eastern Europe for as long as necessary; upgraded intelligence gathering and sharing; updated defense plans; and an expanded training schedule with more exercises, of more types, in more places, more often," NATO Secretary General Anders Fogh Rasmussen and Supreme Allied Commander Europe Philip Breedlove said in the article.

NATO members are scheduled to meet in Wales to discuss the alliance's response to Russia, which it accuses of interfering in Ukrainian affairs.

NATO has strengthened its air-policing missions, deployed more ships to the Black Sea and Baltic Sea, and conducted more exercises in Eastern Europe, citing the need to protect nearby countries from Russia after Crimea rejoined the country following a referendum in March.

This article appeared on the RIA Novosti website at 5:49 p.m. Moscow time on their Monday afternoon---and I thank Roy Stephens for bringing it to our attention.

Five Russian Import/Export Stories

1. E.U. sets aside €125mn to stabilise food prices: E.U. Observer  2. Argentina seeks to export more food to Russia: Buenos Aires Herald  3. Mexico Ready to Increase Food Deliveries to Russia - Ambassador: RIA Novosti  4. China Ready to Expand Agricultural Trade With Russia: RIA Novosti  5. Russia may ban import of cars if West applies new sanctions: Yahoo.com

[The above stories are courtesy of reader M.A., 'David in California'---and Roy Stephens]

Putin's Ukraine gamble hastens exodus of Russian money and talent

The Kremlin's worst clash with the West since the 1991 collapse of the Soviet Union has accelerated the outflow of two of Russia's most prized assets: money and brains.

Vladimir Putin's annexation of Crimea and support for rebels accused of shooting down a passenger plane over Ukraine then hindering the recovery of the 298 bodies have shredded Western hopes of a lasting alliance with Moscow.

Sanctioned by the United States and European Union, Putin's courtiers are under fire, Russia's $2 trillion economy is threatened with isolation and millions of Russians across the world are wondering what next.

Russia is still earning much-needed revenues from pipelines carrying oil and gas to the West, but, less happily for the Kremlin, capital and talent are flowing in the same direction.

This Reuters story, filed from London, appeared on their Internet site at 1:51 a.m. EDT last Thursday morning---and it's the final offering of the day from Dennis Mong, for which I thank him.

Russia launches China UnionPay credit card

Forget Visa and MasterCard. After the two American credit system payment companies froze accounts without notice in March, Russia has been looking for an alternative in China UnionPay.

China UnionPay plans to have 2 million cards in Russia in the next three years.

Instead of seeing the small Visa and MasterCard logo on credits cards, ATMs, and retail outlets, Russians will start to see the three words “China. Union. Pay.”

China UnionPay first emerged in 2002 on the domestic Chinese market as an alternative to Visa and MasterCard, but quickly expanded internationally, and now is already number one in terms of quantity of cards in the world.

This really interesting news item showed up on the Russia Today Internet site at 9:29 p.m. on Friday evening Moscow time---and I thank reader 'David in California' for passing it around on Saturday.

Western Media Reports Shockingly Dishonest on Russia’s Part in Ukraine Events – Journalist

As everyone’s attention is drawn to the fate of the Russian humanitarian aid convoy at the Ukrainian border, some analysts are noting a shift in the tone of Western coverage of the conflict in the region, namely sociologist Mahdi Darius Nazemroaya, who shared his opinion speaking to Radio VR. Others, including Dennis Small, member of the editorial board of Executive Intelligence Review magazine, say the shift is miniscule, stating what the Western media reports are still a bunch of lies.

The role of media on both sides of the Atlantic has universally been a part of war propaganda, Mr. Small points out, adding it is all about “justifying what is in actual fact an intended war that both the British and U.S. under Obama want to trigger in the region with the purpose of seeking a conflict with Russia.”

Mr. Nazemroaya notes the media campaign against Russia and its leadership still exists, but the language and tone are now softer. “The emphasis has also changed, as EuroMaidan is more like a liability, it is forgotten.” By changing the narrative, Western media is obfuscating the actual political scene in Ukraine. They are shifting the focus from Ukrainian internal politics to broader geopolitics, to the Middle East and the resumed Iraqi conflict in particular.

This very interesting commentary showed up on the RIA Novosti website at 11:27 a.m. Moscow time on their Sunday morning---and it's the final offering of the day from Roy Stephen, for which I thank him on your behalf.  It's worth reading if you have the time.

In The West, Respect for Truth No Longer Exists: Paul Craig Roberts

The Western media have proved for all to see that the Western media comprises either a collection of ignorant and incompetent fools or a whorehouse that sells war for money.

The Western media fell in step with Washington and blamed the downed Malaysian airliner on Russia. No evidence was provided. In its place the media used constant repetition. Washington withheld the evidence that proved that Kiev was responsible. The media’s purpose was not to tell the truth, but to demonize Russia.

Now we have the media story of the armored Russian column that allegedly crossed into Ukraine and was destroyed by Ukraine’s rag-tag forces that ISIS would eliminate in a few minutes. British reporters fabricated this story or were handed it by a CIA operative working to build a war narrative. The disreputable BBC hyped the story without investigating. The German media, including Die Welt, blared the story throughout Germany without concern at the absence of any evidence. Reuters news agency, also with no investigation, spread the story. Readers tell me that CNN has been broadcasting the fake story 24/7. Although I cannot stand to watch it, I suspect Fox “news” has also been riding this lame horse hard. Readers tell me that my former newspaper, The Wall Street Journal, which has fallen so low as to be unreadable, also spread the false story. I hope they are wrong. One hates to see the complete despoliation of one’s former habitat.

The media story is preposterous for a number of reasons that should be obvious to a normal person.

Here's another absolute must read on the same subject, but this one's courtesy of Dr. Paul Craig Roberts, as he tells it like it really is---and I thank reader M.A for sending it along.

NATO Member Turkey Threatens Western-Owned Banks, Shifts East, Cozies up to Russia

Since the U.S. and E.U. began imposing and then widening and tightening sanctions against Russia, some U.S. allies have been getting second thoughts. The latest nation to begin severing ties with the U.S.-dominated Western alliance is arguably the most important yet.

That nation is Turkey, the largest and one of the fastest-growing economies in the Middle East – and most importantly, a long-standing NATO ally. For years Turkey has been slowly drifting away from the West, as its economy and geopolitical influence have grown. It hasn’t helped that its accession to the European Union has been repeatedly blocked by countries such as France and Austria, and is now directly opposed by Angela Merkel.

With recent events in Ukraine and the Middle East sending geopolitical shock waves around the world, Turkey’s Eastward shift appears to be accelerating. In a harbinger of things to come, Prime Minister Recep Tayyip Erdogan’s chief economic adviser, Yigit Bulut, announced that Turkey needs to “strengthen control of its banks and limit foreign ownership.

This article, posted on the wolfstreet.com Internet site on Friday, is courtesy of South African reader B.V.---and it's certainly worth reading if you have any time left.

Kurds battle to retake Iraq's largest dam: general

Kurdish troops backed by US warplanes launched a bid Saturday to recapture Mosul dam, Iraq's largest, from jihadists, a senior Kurdish military official said.

"Kurdish peshmerga, with US air support, have seized control of the eastern side of the dam" complex, Major General Abdelrahman Korini told AFP.

"We killed several members of Daash. We are still advancing and in the coming hours should announce welcome news," he said, using the old Arabic acronym for the Islamic State jihadist group.

Witnesses said the air strikes started early in the morning and reported that fighting was ongoing in the afternoon.

There are reports that the dam is back in Kurdish hands, but ISIS is denying it.  As Churchill said, the first casualty of war is the truth.   This AFP article was posted on the france24.com Internet site at 6:05 p.m. Europe time on Saturday---and is the second offering in a row from reader B.V.

Eight King World News Blogs/Audio Interviews

1. Ronald-Peter Stoferle: "This Will Trigger Major Dislocations in World Financial Markets"  2. William Kaye: "Trip Down the Rabbit Hole of U.S. Lies and Disinformation Agents"  3. James Turk: "The Greatest Fear For Central Planners in Gold and Silver"  4. Grant Williams: "Shocking Truth About the Missing U.S. and German Gold Hoards"  5. Michael Pento: "This is the Worst Nightmare For the United States and the West"  6. Robert Fitzwilson: "Panic Out of Fiat Currencies Accelerating Around the World"  7. The first audio interview is with Bill Fleckenstein---and the second audio interview is with Gerald Celente

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

Workers rappel from Colorado State Legislature Capitol Dome to complete gold restoration

The Colorado State Capitol dome restoration is nearly complete and the final touches to the gold are being applied this week by workers who rappel from the lantern section high atop the building as they wrap up a $17 million project. The observation area, which has been closed for nearly eight years, will reopen to the public on October 2 with a grand celebration.

This very interesting 1:53 minute video clip showed up on The Denver Post website last Wednesday---and I thank "Robert in Denver" for sharing it with us.

Koos Jansen: Global gold trade declines in the first half of 2014

Western gold exports to China were down in the first half of this year but the long-term upward trend continues, gold researcher and GATA consultant Koos Jansen reported yesterday.

His commentary is headlined "Global Gold Trade Declines in H1 2014" and it's posted at the bullionstar.com Internet site.  I found this embedded in a GATA release yesterday.

In Vietnam, gold sales are down but premiums are up

Gold purchases by retail customers in Vietnam, the world's seventh-largest gold consumer, fell 42 percent year-on-year to 19.3 tons in the April-June quarter, according to the latest World Gold Council report.

Gold bar sales dropped to 16.5 tons, down 45 percent from the second quarter of 2013 while jewelry purchases hit 2.8 tons, down 17 percent.

Vietnamese investors have tended to store gold as a hedge against inflation. However, with an improving economy and slowing inflation, many are seeking to invest in stocks and property or simply to collect deposit interest, Vietnam News Agency quoted Nguyen Thanh Long, Chairman of the Vietnam Gold Traders Association, as saying.

This gold-related article, filed from Ho Chi Minh City, appeared on the Thanh Nien News website at 2:37 p.m. local time on their Monday afternoon---and I found this story in a GATA release.

AngloGold to discontinue London listing to cut costs

AngloGold Ashanti, Africa's gold miner, said it intends to cancel the listing of its shares on the London Stock Exchange to cut costs.

Gold miners have been squeezing costs to cope with a decline in the price of the yellow metal, which has dropped 32 percent since touching $1,900 in September 2011.

AngloGold says the bulk of the trading of its shares is on the Johannesburg Stock Exchange and the New York Stock Exchange. The company added that it "wishes to streamline its administrative procedures and reduce costs arising from listings on multiple stock exchanges."

The miner's shares will stop trading in London on September 22.

The above four paragraphs are all there is to this brief article that appeared in the Financial Times yesterday.  It's posted in the clear in this GATA release.

Randgold CEO just shrugs as gold mining industry produces more metal at a loss

In the report appended here Randgold Resources CEO Mark Bristow complains to Bloomberg News yesterday that the gold-mining industry is boosting supply to the market even while mining the metal at an increasing loss. Overlooking the gold mining industry's silence and the silence of its supposed trade association, the World Gold Council, in the face of the longstanding Western central bank policy of gold price suppression, Bristow seems not to understand even half the problem.

Randgold shareholders might ask Bristow if he's aware of any of the documentation archived by GATA---and if he plans to do anything about it. If he's not and he doesn't, he'll have one more reason to be shaking his head at his brain-dead industry.

As John Embry said more than a decade ago---"The miners are either, ignorant naïve, or complicit."  Bristow would definitely fall into the 'complicit' category.  This Bloomberg article, along with the above introductory paragraphs, was something I found over at the gata.org Internet site yesterday evening.

This is what gold price suppression does to the environment in Peru and elsewhere

Even at the lunch café where we stopped after arriving in Peru's southeastern Amazon region, the family at the next table over looked deeply worried when we asked for directions. "Very dangerous," they said. "A lot of bad people there."

Madre de Dios is the center of illegal gold mining in the western Amazon. The miners' dredging equipment and the mercury they use to tease gold out of alluvial sediments has led to some of the most appalling environmental destruction anywhere in South America, turning lush forests into lunar wastelands.

Photographer Dominic Bracco and I wanted to see it up close. But the jungle camps where the miners work are notoriously lawless and miles from any help. Foreigners -- especially foreigners with cameras -- are not welcome.

This very interesting essay appeared on The Washington Post website at 8:30 p.m. EDT on Monday evening---and it's something else that came our way via a GATA release.

Grant Williams: Thinker, trader, holder. Why?

In the new edition of his "Things That Make You Go Hmmm..." letter, Singapore fund manager Grant Williams suggests that Asian central bank demand will be decisive for the gold price eventually, and he extensively praises gold researcher and GATA consultant Koos Jansen for calculating Chinese gold demand better than anyone else.

Williams writes: "If you really want to understand what the reality might very well be, then from time to time you need to take a little leap of imagination when considering the activities of the Chinese central bank and open your mind to possibilities that the mainstream just refuses to entertain.

"Nobody -- and I mean nobody -- does that better than my friend Koos Jansen.

This longish commentary by Grant Williams was posted on the mauldineconomics.com Internet site yesterday---and it's another item I found courtesy of the gata.org Internet site.

¤ The Funnies

I was out with the camera gear again on Sunday afternoon for an hour or so---and I have some photos to share.  I wasn't sure what I was taking a picture of in the first photo, as I didn't know if it was dead, or asleep on this concrete pier.  It turned out to be the latter, as I was able to get very close without being spotted.  It's a double-crested cormorant---and here are four of more than a dozen photos I took.  The first shot he/she is sound asleep, next comes the big yawn on waking up, the third preening---and the fourth, standing on one leg and contemplating how dangerous I was, because it was aware of my presence by that time.

¤ The Wrap

What moves metal prices is not developments in the Ukraine, Iraq or anywhere else; all that matters is what the moving averages are and the collusive COMEX commercials rigging prices above and below those moving averages in order to induce technical fund buying or selling. I know it seems like world events may be responsible for price changes, but that’s only because most people perceive that to be the case. But collective perception is not necessarily the same as the real cause and effect of price movement. The fact is that the technical funds (led by the nose by the collusive COMEX commercials) decide to buy and sell massive quantities of COMEX metals contracts, not by studying the news or reacting to world events, but by whether prices are higher or lower than the moving averages.

Since the commercials can put prices above or below the moving averages at will, that means the commercials control the technical funds’ behavior. Gold prices didn’t fall by more than $20 in a few minutes around 8:00 a.m. on Friday because of world events; they fell because the commercials rigged prices sharply lower below the 50-day moving average and after prices were rigged lower, the technical funds sold. Then, after prices rose back above the moving averages, the technical funds bought. What’s most amazing is that even after being explained to the point of redundancy, many still refuse to see the scam that this manipulation has become. - Silver analyst Ted Butler: 16 August 2014

Monday was another one of those trading days where the price action, such as it was, didn't matter, as volumes were so low it was easy to move prices any which way---so nothing should be read into the Monday trading session.  It was just another trading day in summer---and another day off the calendar as Ted is wont to say from time to time.

Here are the 6-month charts for both gold and silver.  Nothing to see here once again---like watching grass grow, or paint dry, although gold got closed back below its 50-day moving average again.  But unless a black swan appears, JPMorgan et al will resolve this situation to the downside, as they can do whatever they please, whenever they please---and there's not a soul to stop them, or a mining company executive with gonads big enough to raise a finger in protest.

But, having said that, I'm still rather impressed by the share price action, with yesterday's gains being another case in point.  But I'm always on the lookout for "in your ear."

And as I write this paragraph, the London open is just under 15 minutes away.  With the exception of silver, all the precious metals are up a hair from Monday's close in New York.  Gold volume is a bit under 10,000 contracts---and silver's net volume is shockingly low, a handful of contracts under 2,000---a number that I've never seen this low at this time of day, ever.  The dollar index, which had been trading ruler flat during most of the Far East trading day, popped about five basis points shortly after 2 p.m. Hong Kong time.

Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report---and it will be interesting to see if we have any interesting price action during the New York session, which is still five hours away as I write this.

And as I fire this off into cyberspace at 5:15 a.m. EDT, London has been open a bit more than two hours.  I see that gold has poked its nose back above the $1,300 spot mark---and silver is even up a few cents. 

However, both platinum and palladium are back at unchanged. Gold volume isn't even 15,000 contracts, which is fumes and vapours for this time of day---and silver's volume is only around 3,500 contracts, which is pretty amazing.  Based on this, nothing should be read into today's price activity up to this point.  The dollar index is up about 9 basis points.

It appears that it will be another quiet day in the precious metals---and if anything does erupt, it probably won't be until after the noon London silver fix, which is 7 a.m. EDT.

That's all that I have for today, which is more than enough---and I'll see you here tomorrow.

]]>
Tue, 19 Aug 2014 06:36:00 +0000
<![CDATA[GoldCore: New LBMA Silver Fix Still Not Transparent]]> http://www.caseyresearch.com/gsd/edition/goldcore-new-lbma-silver-fix-still-not-transparent/ http://www.caseyresearch.com/gsd/edition/goldcore-new-lbma-silver-fix-still-not-transparent/#When:09:43:00Z "Well, the new silver fix certainly isn't a hit"

¤ Yesterday In Gold & Silver

There was little price activity or volume in gold up until around the noon silver fix in London on their Friday.  Once the 'fix' was done for the day, then everything changed---and within the space of a couple of hours, the gold price was down twenty bucks, and back below its 50-day moving average.  It remained down until about 10:30 a.m. EDT---and then rallied quite a bit, and back above it's 50-day moving average.  The rally got capped at 12 noon---and then sold off a few dollars by 1 p.m. EDT.  After that it didn't do a thing into the close.

The high and lows ticks were recorded by the CME as $1,316.50 and $1,293.00 in the December contract.

Gold closed on Friday in New York at $1,304.50 spot, down $8.40 on the day.  Volume, net of August and September, was way up there at 202,000 contracts.

Silver had it's usual down opening in New York on Thursday evening---and after that the silver price pattern, with some minor variations, was very similar to gold, with everything changing at the noon BST silver fix.  The really big difference was that the sell-off after the noon price capping in New York was much harsher.

The high and low ticks for silver were reported as $19.955 and $19.505 in the September delivery month.

Silver finished the Friday session at $19.55 spot, down 31 cents from Thursday's close.  Net volume was pretty chunky at 47,500 contracts.

The platinum chart looks suspiciously like the gold chart as well well, as that precious metals was closed down 8 bucks on the day.

The palladium price was in the plus column all through Far East and early Zurich trading on Friday---and the HFT boys showed up in palladium about the same time as they did in the other three precious metals.  Palladium's low came at 9 a.m. in New York---and the rally from that point blasted through Thursday's close with ease before it, too, got capped at noon in New York at $892 spot---and after that it traded sideways into the close.  Palladium close up an even ten bucks.

I shan't dwell on the issue, but just about all the price action yesterday was wall-to-wall HFT traders spinning their algorithms---and running the technical funds through their sell/buy stops, as there was nothing about supply/demand fundamentals that would cause all four precious metals to react in such a fashion if there were a free market in any of them.

The dollar index closed late on Thursday afternoon at 81.61---and then traded flat until around 2:30 p.m. Hong Kong time on their Friday.  From that point the index chopped lower for the remainder of the day, as it closed at 81.43, which was down 18 basis points from Thursday.

The gold stocks gapped down about 2 percent at the open, but came roaring back once the 10:30 a.m. EDT rally started.  In actual fact, the gold stocks followed the gold price around like its proverbial shadow while the New York equity markets were open on Friday.  The HUI finished down 0.91 percent---and considering the severity of the price action, it could have been worse.

The silver equities started of in a similar fashion to the gold equities, with their low tick coming about ten minutes after the equity markets opened in New York.  After that they blasted back into positive territory---and stayed higher until noon in New York, which is when 'da boyz' rolled over the prices of all four precious metals.  But the silver stocks didn't roll over very far, before crawling higher as the trading day drew to a close.  Nick Laird's Intraday Silver Sentiment Index closed down only 0.31%, which I consider to be a big win.

I'm wondering about Friday's counterintuitive price action in the silver shares, just like I'm wondering about the counterintuitive price action in the silver shares on Thursday---and wondering if they're related in any way.  I'm not about to draw any conclusions, but just thinking out loud, dear reader.

The CME Daily Delivery Report showed that 216 gold and 10 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The big short/issuer in gold once again was Jefferies---and the biggest long stoppers were JPMorgan in its client account with 122---and Canada's Scotiabank with 72.  JPMorgan has been taking delivery of a lot of gold contracts in its client account lately---and I'm not sure if anything should be read into that.  The link to yesterday's Issuers and Stoppers Report is here.

Checking Friday's Preliminary Report from the CME, I note that 330 contracts got shaved off of August's open interest in gold, of which 300 was the Comex delivery on Monday.  There are still 825 gold contracts left open in the August contract---and from that number you can subtract the 216 contracts mentioned above that are posted for delivery on Tuesday.

There were no reported changes in GLD yesterday---and as of 8:54 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The good folks over at Switzerland's Zürcher Kantonalbank reported the changes in their gold and silver ETFs for the week ending on August 8---and this is what they had to say.  Their gold ETF had another withdrawal, this time it was 9,552 troy ounces.  Their silver ETF also declined, this time by 269,070 troy ounces.

The U.S. Mint had a very tiny sales report.  They sold 1,500 troy ounces of gold eagles---and that was it.

Month-to-date the mint has sold 15,500 troy ounces of gold eagles---4,500 one-ounce 24K gold buffaloes---and 1,180,000 silver eagles.  Based on these sales numbers, the silver/gold sales ratio for August so far is 59 to 1.

It was another fairly active day in both gold and silver at the Comex-approved depositories on Thursday.  In gold, there was 30,086 troy ounces of gold reported received---and all of it at Brink's, Inc.  The link to that activity is here.

In silver, there were 601,977 troy ounces shipped in---all into Brink's, Inc. as well.  There was 130,078 troy ounces shipped out, with most of that coming out the vaults of Canada's Scotiabank.  The link to that action is here.

Here's the 5-minute tick chart for gold on Friday.  The times on the bottom are MDT, so you have to add two hours for EDT.  Once you do that, you'll note that 95% of the volume occurred between 8 a.m. EDT [1 p.m. BST in London] and noon in New York.  I thank Brad Robertson for sending it our way.

Well, I was half right about the Commitment of Traders Report---and that is a failing grade as far as I'm concerned.  Even the part I was right about, was far bigger than I was expecting.

On the engineered priced drop in the silver price during the reporting week, the Commercial net short position declined by 4,477 contracts, or 22.4 million troy ounces.  The Commercial net short position is now down to 219 million troy ounces.  The brain dead/black box technical funds in the Managed Money category went in the opposite direction of course.  They increased their short position by 6,524 contracts as the Commercial HFT boyz with their trading algorithms engineered prices lower---and they were waiting with open arms to buy the long side of every trade.

But despite the fact that the Commercial traders were going long and covering short positions, Ted Butler says that JPMorgan increased their short side corner in the Comex silver market by about 1,000 contracts---and they now are short 19,000 Comex silver contracts.

In gold, it was exactly the opposite as it was in silver.  The Commercial net short position for the reporting week blew out by an astounding 29,045 contracts, or 2.90 million troy ounce of paper gold.  The Commercial net short increased to 16.07 million ounces.  On the other side of this were the brain dead/black box technical funds in the 'Managed Money' category, as they went long 14,538 contracts and covered 11,210 short contracts, for a total of 25,748 contracts.

Ted says that JPMorgan took the opportunity to sell 5,000 contracts of their 20,000 contract long-side corner in the Comex gold market.  They are now down to 15,000 Comex contracts.

As Ted has been saying for years now, it's the Commercial traders and their HFT antics that are running the technical funds in the Manged Money category through the sell and buy stops for fun, profit---and/or price management.  That was certainly evident this week, as gold was allowed to rally---and the silver price got engineered lower.

This is what drives prices in all four precious metals, plus copper---and has zero to do with supply and demand.  The CME Group, aided and abetted by the CFTC, are allowing a tiny group of Commercial traders to dictate world prices of these key commodities and, by extension, the prices of all commodities.

It's my opinion that this is deliberate---and is U.S. government policy---and is part of what is called the Wolfowitz Doctrine.  One can only imagine the number of countries in the world that would be prosperous beyond the dreams of Avarice if there was a free market in commodities.  This would put a quick end to the financial, economic and monetary dominance of the West in general---and the U.S. in particular.

The beauty of it is that both Russia and China know all about this---and if they wanted to, they could stick a pin in it if it suited them.  They just might if push really becomes shove.  [Note to Putin:  Feel free to do it at any time. Ed]

Another day---and another big pile of stories.  With this many to choose from, I'll happily leave the final edit up to you once again.

¤ Critical Reads

U.S. Investment Outflow Hits Record as China Cuts Holdings

The U.S. posted a record cross-border investment outflow in June as China and Japan reduced their holdings of Treasuries and private investors abroad sold bonds and notes.

The total net outflow of long-term U.S. securities and short-term funds such as bank transfers was $153.5 billion, after an inflow of $33.1 billion the previous month, the Treasury Department said in a report today. The June figure, and $40.8 billion in net selling of Treasury bonds and notes by private investors in June, were the largest on record, the Treasury said.

“Right at the beginning of June, you had a very strong sell-off of Treasuries and that’s what frightened a lot of private investors,” Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York, said by phone. “As yields stayed lower in subsequent months, some of the investors probably resumed their buying.”

China’s holdings of U.S. Treasuries declined by $2.5 billion to $1.27 trillion, while Japanese holdings dropped $600 million to $1.22 trillion, according to a Treasury report today.

This Bloomberg article, filed from Washington, was posted on their website at 9:04 a.m. Denver time on Friday morning---and I thank Ken Hurt for today's first story.

Does George Soros know something we don’t about the S&P 500?

Among the highlights, Soros Fund Management increased a bear-call bet on the S&P 500 in a huge way. The fund lifted a put position — a bet the market will go lower — on the S&P 500 ETF to its biggest size yet, in terms of value and portfolio percentage, making a 605% leap over the previous quarter.

Bullion Baron, who has long kept a beady eye on Soros’s SPY moves, has summed up the latest dealings. He speculated that this could be  a hedge — or Soros is really worried about something. One possible something is China, which the hedge-fund titan referred to as a global uncertainty earlier in the year, notes the Baron.

Soros also lifted positions in Apple and Facebook and a portfolio loaded up with stocks, so he can’t possibly be all that gloomy. As for that China unease, WSJ’s MoneyBeat reports that China bears are entrenched and see stocks headed for a big fall. One strategist says it’s not good to see that stocks there have been rallying on both good and bad economic news.

This article showed up on the blogs.marketwatch.com Internet site at 6:35 a.m. EDT on Friday morning---and it's courtesy of reader M.A.

Wal-Mart Cuts Profit Forecast Amid Slow Sales, Health Costs

Wal-Mart Stores Inc., the world’s largest retailer, reported stagnant same-store sales and cut its earnings forecast for the year, hurt by higher health-care costs and slow traffic at its supercenters.

Earnings for the year will now be $4.90 to $5.15 a share, down from a previous range of as much as $5.45, the Bentonville, Arkansas-based company said today in a statement. Sales at U.S. Wal-Mart and Sam’s Club stores open at least 12 months were little changed last quarter, which ended Aug. 1.

Chief Executive Officer Doug McMillon, who took the post in February, is trying to revive U.S. growth in the face of a slow economic recovery. The retailer hasn’t posted a same-store sales gain for six quarters, and customers are making fewer trips to big-box retailers. Cuts in government assistance also are leaving low-income shoppers with less money to spend.

This article appeared on the businessweek.com Internet site on Thursday sometime---and I found it in yesterday's edition of the King Report.

Inflation bites into food retailers' results

Food retailers like Red Robin Gourmet Burgers and Noodles & Company are sounding the alarm on inflationary pressures, raising the question: Is this the start to higher food prices for consumers?

Official data show inflation only gradually rising for the economy as a whole with the personal consumption index gaining 1.6 percent in June; however, a dozen food companies in the past few weeks have warned steeper price hikes hurt results last quarter.

Prices are rising for several restaurant staples like beef, seafood and cheese. But costs aren't up everywhere: Grain and vegetable prices, for example, have been declining.

This morning Red Robin said lower margins, which fell 1.3 percent from the same period a year ago, were mainly due to higher food and beverage costs.

This news item appeared on the cnbc.com Internet site at 3:35 p.m. EDT on Thursday---and it's courtesy of West Virginia reader Elliot Simon.

Marc Faber/Mike Crofton: How geopolitical issues could derail the markets

Philadelphia Trust Company CEO Mike Crofton and The Gloom, Boom & Doom Report editor Marc Faber give insight into geopolitical events and the markets.

This 5:56 minute video clip showed up on the cnbc.com Internet site on Wednesday sometime---and it's the second offering of the day from reader Ken Hurt.

Proof of a Structural Change in the U.S. Workforce

Yesterday Federal Reserve Vice Chairman Stanley Fischer gave a speech entitled The Great Recession: Moving Ahead. A key topic is the question of long-term structural changes to the economy -- whether we're experiencing economic weakness with deeper roots than the cyclical effect of the last recession.

Despite Mr. Fischer's ambivalence toward, as he put it, "the relative importance of cyclical (short-term) versus structural (long-term) factors", I believe there is profound evidence that the U.S. workforce has undergone structural changes more fundamental than the cyclical impact of a recession -- even that of the Great Recession.

This very serious commentary, with some really sensational charts, showed up on the adviorperspectives.com Internet site on Tuesday---and I thank Victoria, B.C. reader 'John D' for sending it our way.

White House loosens restrictions on lobbyists

President Barack Obama is loosening restrictions on lobbyists who want to serve on federal advisory boards, a White House official said on Tuesday, a setback to the president's efforts to tamp down special interest influence in Washington.

Obama came to office pledging to curtail the sway of lobbyists and banned lobbyists from serving on such panels, which guide government policy on a range of topics ranging from cancer to towing safety.

The president said he was doing so because the voices of paid representatives of interest groups were drowning out the views of ordinary citizens.

But many lobbyists felt they were being unfairly tarred by Obama's campaign to keep them out of public service. A lawsuit challenging the ban was initially dismissed, but a District of Columbia Circuit Court in January reinstated it.

This Reuters story, filed from Washington, showed up on their Internet site early Tuesday evening EDT---and I thank Phil Barlett for sharing it with us.

THE ROOM: Special Edition---Our Highest-Rated Speech of All Time

Never in my life have I seen a round of applause like this one… and at an event normally composed of conservative, introspective investors to boot. But most surprising of all - and I must admit in my bias here  they were applauding a lawyer. A defense lawyer at that.

The usual fare at our conferences has much more to do with how to keep your money safe (and invest it to grow, of course). But we always prefer to mix in a few speakers to give us a real, on the ground reality check of what’s happening to our freedoms. Thus, when we invited constitutional law and criminal defense attorney Marc J. Victor to speak, we expected he'd share his insights into a slowly eroding respect for individual rights. He did not. Instead, he showed us just how bad things are getting and at a breakneck pace just beyond the public eye.

His talk was downright chilling. And now, for the first time, I'm excited to share his Casey Summit presentation in its entirety with all of you. He's the highest-reviewed outside speaker we've ever gotten feedback on. This is a must watch.

The 35:10 minute video presentation is headlined "Is America a Police State"---and as Casey Research CEO Olivier Garret says "This is a must watch"---and I concur.

France rebels against austerity as Europe's recovery collapses

Michel Sapin, France’s finance minister, sent tremors through European capitals with a defiant warning that his country would no longer try to meet its deficit targets and would not inflict further damage on its economy by tightening into the downturn. “I refuse to raise taxes to close any budget gaps,” he said.

What is absolutely necessary is to adjust the pace of deficit reduction to the exceptional situation we are in today. Growth is too weak in Europe and inflation is too low. We must therefore stop reinforcing the causes of this depression,” he told RTL television.

“We must face the figures in front of us with realism. The truth is that, contrary to the forecasts of the International Monetary Fund and the [European] Commission, growth has broken down, both in France and in Europe.”

Eurozone strategy is in tatters after economic recovery ground to a halt across the region and France demanded a radical shift in policy, warning that austerity overkill is driving Europe into a depression.

This Ambrose Evans-Pritchard offering appeared on the telegraph.co.uk Internet site at 9:26 p.m. BST on Thursday evening---and it's another little something I found in yesterday's edition of the King Report.  It's worth your while.

Germany is itself a victim of EMU’s austerity fanatics

So now we learn. Germany had a double-dip recession last year without telling us. This could soon turn into triple-dip after contraction of 0.2pc in the second quarter.

The bond markets are flashing deflation warnings, but they are also indicting the European authorities for gross incompetence. Professor Paul De Grauwe from the London School of Economics says policy elites have misdiagnosed the fundamental cause of Europe’s chronic slump and its failure to recover. They are treating a demand crisis as if it were a supply crisis, imposing “reforms” – an Orwellian touch – that can only exacerbate EMU-wide distress in the short-run.

“They are doing everything they can to stop recovery taking off, so they should not be surprised if there is in fact no take-off,” he said.

“It is balanced-budget fundamentalism, and it has become religious. We know from the 1930s that if everybody is trying to pay off debt and the government then deleverages at the same time, the result is a downward spiral,” he said.

This Ambrose Evans-Pritchard blog from The Telegraph on Thursday is something that Roy Stephens sent our way yesterday---and it's worth reading as well.

E.U. Shot Itself in Foot With Russia Sanctions – Hungarian Prime Minister

The European Union shot itself in the foot by introducing economic sanctions against Russia, Reuters reported quoting Hungarian Prime Minister Viktor Orban’s Friday radio interview.

"The sanctions policy pursued by the West, that is, ourselves, a necessary consequence of which has been what the Russians are doing, causes more harm to us than to Russia. In politics, this is called shooting oneself in the foot," Orban said.

"The E.U. should not only compensate producers somehow, be they Polish, Slovak, Hungarian or Greek, who now have to suffer losses, but the entire sanctions policy should be reconsidered," Orban added. The prime minister also stressed his willingness to try to alter Brussels’ policy of imposing anti-Russian sanctions and urged other leaders to join him.

This story was posted on the RIA Novosti website at 1:50 p.m. Moscow time on their Friday afternoon---and I thank reader M.A. for sending it our way.

Jim Rickards Interviewed on Russia Today's "BoomBust"

The first 12 minutes of this 27:32 minute video clip features Jim---and it's well worth watching.  Reader Harold Jacobsen slid this into my in-box at 6:10 a.m. EDT this morning---and I managed to stick it in today's column.

EC, Russia, Ukraine Agree to Hold Talks on Association Pact, Gas Supplies

The presidents of the European Commission, Russia and Ukraine have agreed to hold talks on gas supplies, EU-Ukraine trade pact as well as on the current situation in Ukraine, the European Commission said on Thursday.

"President Barroso and President Putin spoke today on the phone. It was agreed to hold consultations between the Presidents of Russia, Ukraine and the European Commission on the issues related with the implementation of the Association Agreement as well as on the supply of gas, in parallel with the efforts to stabilise the political and security situation," the statement said.

"The concrete arrangements for these talks will be further discussed through the appropriate diplomatic channels," the document said.

This is another article from the RIA Novosti website.  This one showed up there at 1:04 p.m. Moscow time on their Friday afternoon, but the story is actually from Thursday.  It's the second contribution in a row from reader M.A.

Russia raises hopes in Crimea

Like many taxi drivers, Anatoly likes to talk. He explains the situation as he guns his car round the twisting, pine-scented roads of Yalta. Like his rusting car, Crimea may have seen better days. 

'There are a million fewer tourists this year' he tells us, 'and food prices are soaring.' This will hit Yalta hard.

It is ultimately a tourist town. 

This year the Ukrainians aren't coming because they feel it's been stolen from them. And despite encouragement by the Russian government, there aren't yet enough rich Muscovites here to make up the numbers. 

Anatoly is trying to look on the bright side, though. He's a pensioner making some extra cash, and since Crimea returned to Mother Russia's bosom early this year, his pension has doubled.

This very interesting boots-on-the-ground article appeared on the aljazeera.com Internet site at 6:12 p.m. on Thursday, but doesn't say what time zone. It's another article from Roy Stephens---and it's worth skimming.

Three Ukraine-related stories

1. 'Buy firewood & coal': MP warns Ukrainians after U.S., E.U. get access to national gas pipes: Russia Today  2. 'White rain’: Donetsk residents record alleged phosphorus shelling: Russia Today  3. Donetsk After Deadly Overnight Shelling: RIA Novosti

[The above three stories are all courtesy of Roy Stephens]

Russian Defense Ministry denies reports military column crossed into Ukraine

Russia’s Defense Ministry has denied Kiev’s report that it “destroyed the Russian military column” which allegedly crossed into Ukraine, saying that no such column ever existed.

No Russian military column that allegedly crossed the Russian-Ukrainian border at night or during the day ever existed,” said Major General Igor Konashenkov, a spokesman for the Russian Defense Ministry.

The best scenario would be, the official said, if it was a “phantom” that the Ukrainian military destroyed “rather than refugees or their own servicemen.”

“Such statements – based on fantasies, or journalists’ assumptions, to be precise – should not be subject for a serious discussion by top officials of any country,” Konashenkov said.

This news item appeared on the Russia Today website at 1:56 p.m. Moscow time on their Friday afternoon---and it's the second offering of the day from Roy Stephens.

Ukraine Tensions Flare as Poroshenko Touts Strike on APCs

Tensions flared in Ukraine yesterday as the government said its army destroyed part of a column of military vehicles that crossed the border from Russia, even as Vladimir Putin denies any military presence in the country.

President Petro Poroshenko said Ukrainian forces destroyed part of a column that had arrived from Russia. The Foreign Ministry in Moscow rejected the statement and warned about a potential attack on another convoy that carries aid. Ukraine’s top diplomat, Pavlo Klimkin, said he will meet with his Russian, German and French counterparts tomorrow in Berlin.

The incident adds to the tension building over Russia’s plan to send about 275 trucks with what it says is humanitarian aid to rebel-held areas in eastern Ukraine. Even with Ukraine saying it doesn’t see the armed vehicles as the sign of potential invasion, their arrival raised the stakes, said Volodymyr Fesenko, of the Penta research institute in Kiev.

This is such bulls hit.  Do you think for one minute, dear reader, that the Russians would be stupid enough to send in APCs along with their relief convoy when the entire world is watching what they're doing?  If you do, then you shouldn't be reading this column at all.  Try CNN instead.  This Bloomberg piece, co-filed from Kiev and Moscow, appeared on their website at 3:00 p.m. MDT yesterday, which was very early Saturday morning in Moscow.  The original headline read "Ukraine Says It Destroyed Part of Armed Convoy From Russia".  It's also courtesy of Roy Stephens.

Pepe Escobar: Vanishing Point...

First, passenger airliner MH370 vanished from Planet Earth. Then MH370 vanished from the news cycle. First, MH17 was shot down by "Putin's missile" - as Planet Earth was told. Then MH17 vanished from the news cycle.

Where's Baudrillard when we need him? Had he been alive, the dervish of simulacra would have already deconstructed these two Malaysian planes as mirror images; from absolute vanishing to maximum exposure, then vanished again. They might as well have been abducted - and shot - by aliens. Now you seem them, now you don't.

Black boxes, data recorders - everything MH17 is now floating in a black void. The British are taking forever to analyze the data - and if they have already done so, they are not talking. It's as if they were singing, I see a black box / and I want it painted black … void.

The Pentagon, with 20-20 vision over Ukraine, knows what happened. Russian intelligence not only knows what happened but offered a tantalizing glimpse of it in an official presentation, dismissed by the "West". The best technical analyses point not to "Putin's missile" - a BUK - but to a combination of R-60 air-to-air missile and the auto-cannon of an Su-25.

This short commentary by Pepe is his opinion of the mysterious flight MH17---and the missing black boxes and air traffic control data.  It was posted on the Asia Times website yesterday.  It's the second-last contribution of the day from Roy Stephens---and it's definitely worth reading.

Role reversal as African technology expands in Europe

Africans have long used technology developed abroad, but now a Kenyan cash transfer network which bypasses banks is being adopted in Europe.

The M-Pesa mobile money transfer system which allows clients to send cash with their telephones has transformed how business is done in east Africa, and is now spreading to Romania.

"From east Africa to eastern Europe, that's quite phenomenal when you think about it," Michael Joseph, who heads Vodafone's Mobile Money business, told AFP in the Kenyan capital Nairobi.

"I think that this is something the rest of the world can look at, to say that there are ideas that can emanate out of the developing world, and take it to the developed world."

This very interesting AFP article appeared on the france24.com Internet site on Wednesday and, surprisingly enough, it's worth skimming.  I thank South African reader B.V. for bringing it to my attention---and now to yours.

Japan’s Keynesian Demise: A Cautionary Tale For Our Times

During early 1981 as the Reagan White House prepared its radical fiscal plan—-what Senate Majority Leader Howard Baker famously called a “riverboat gamble”—-we were visited by a high ranking delegation from the Japanese finance ministry (MOF). It is no overstatement to say that they were absolutely shocked by the administration’s plan to enact a sweeping 30% income tax cut and double the defense budget—while expecting that it would all balance out as a result of surging economic growth immediately and large domestic spending cuts down the road.

The MOF men feared the worst—politely noting the possibility that there would be insufficient economic growth and spending cuts to pay for the Administration’s monumental tax reductions and defense build-up. Then the U.S. would experience an outbreak of massive fiscal deficits—an unprecedented peacetime development that could roil the entire global financial system. In that apprehension the MOF men turned out to be dead right, and not because they were especially clairvoyant.

Back in those benighted times, fiscal rectitude was a widely shared commitment among government financial officials including Congressional Republicans and their conservative counterparts abroad and especially in Japan. Economic policy officials did not have to be hectored about deficits and the fact that there is no such thing as a fiscal free lunch. Indeed, notwithstanding a government led 30-year drive to rebuild their economy from the complete devastation of WWII, Japan’s public debt was only 50% of GDP as of 1980.

That was then. Today Japan’s public debt is 5X greater relative to the size of its economy and tips the scales at 250% of GDP. That is off-the-charts relative to all other large developed economies and has no parallel in previous history. In the interim, of course, Japan succumbed to the Keynesian stimulus disease, betting that after its thundering financial meltdown during the early 1990s it could borrow and print its way back to the prosperity it had known during the period of its post-war economic miracle.

This longish commentary by David Stockman showed up on his website on Friday---and it's the final offering of the day from Roy Stephens, for which I thank him.  If you have the time, it's worth the read.

This Amazing Time-Lapse Video Shows Life Inside Pyongyang, North Korea

To much of the outside world, North Korea is a mystery. Little information about North Koreans’ daily lives makes it out of the country, partially because of its citizens disconnectedness and stringent restrictions on foreign visitors to the country. Westerners are accustomed to a gloomy narrative about the country, and famine, electricity shortages, North Korea’s draconian legal system and scarcity of modern luxuries loom large in outsiders’ imaginations.

But video producers JT Singh and Rob Whitworth show North Korea’s capital, Pyongyang in a cheerier light. In a state-sponsored visit, the pair created extensive footage of the city to create a time-lapse video of its people and sights. The two were escorted everywhere they went and were “not allowed to shoot any construction sites, undeveloped locations or military personnel.”

Their footage is detailed and intimate, but the obvious restrictions the pair had in creating the video make for a revealing and strange look at the enigmatic capital.

This 3:14 minute video clip showed up on the time.com Internet site last Sunday.  U.K. reader L.W. sent it our way on Wednesday---and for content reasons, it had to wait for today's column.  It definitely falls into the must watch category---and be prepared to be amazed, as I certainly was.

Three King World Blogs

1. Art Cashin: "Short Squeeze of Epic Proportions to Shock Market Participants"  2. Bill Fleckenstein: "U.S. Stocks to Crash as no Liquidity Fuels Panic"  3. Gerald Celente: "This Global Collapse is Just Getting Started"

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

Billionaire Paulson Maintains Stake in Biggest Gold ETP

Billionaire hedge fund manager John Paulson stuck with his holding in the biggest exchange-traded product backed by gold as prices rose on demand for a haven.

Paulson & Co., the largest investor in the SPDR Gold Trust (GLD), kept its stake at 10.23 million shares in the three months ended June 30, a government filing showed yesterday. The holdings were unchanged for the fourth straight quarter.

Gold rallied 9.3 percent in 2014, defying bearish forecasts from Goldman Sachs Group Inc. and outperforming equities and bonds amid escalating conflicts in Eastern Europe and the Middle East. The haven appeal may be waning amid concern that the Federal Reserve will raise interest rates as the U.S. economy accelerates, according to Lance Roberts, the chief strategist for STA Wealth in Houston.

This article appeared on the Bloomberg website at 1:10 a.m. MDT on Friday morning---and I thank Ken Hurt for bringing it to our attention.

McEwen Mining Chief: Gold Headed to $5,000 Within 4 Years

While gold has stagnated recently, fluctuating in a range of $1,250 to $1,350 an ounce since mid-March, Robert McEwen, chief owner of McEwen Mining, hasn't given up on the precious metal.

"I'm a long-term believer in gold, and I see it ultimately getting to $5,000," he tells CNBC. "Anything short of that, I wouldn't be hedging."

He thinks gold will reach that level within the next four years.

A bit over ten years ago I phoned Rob when he was the CEO of Goldcorp when it was only trading for two or three bucks a share before it became a major producer.  I was just on board with GATA at the time---and trying to raise a few bucks for the cause.  Rob heard me out, and then sent us a cheque/check for $1,000.  He knows what's going on, but like the rest of the mining CEOs, he won't say a word in public about it.  This article appeared on the moneynews.com Internet site at 7:32 a.m. EDT on Friday morning---and it thank Elliot Simon for digging it up on our behalf.

Russia seeks safe haven in gold, away from dollar and euro

Russia is taking steps to ensure that it protects itself from any future dollar or euro sanctions. Moscow boasts the world’s 5th biggest foreign exchange reserves and the 6th largest gold reserves. In total, the assets amount to over $1.5 trillion.

While the West is continuing to try and punish Russia via economic sanctions, the response of the Russian Central Bank has been to diversify away from the euro and dollar – and to buy up more gold.

As the geopolitical situation in Ukraine deteriorates, Russia is moving to protect itself from currency risks associated with the euro and the greenback.

“Due to the worsening geopolitical situation, the Central Bank actively redistributed foreign exchange reserves, replacing US Treasury bonds with gold,” Alfa Bank’s chief economist, Natalya Orlova, told Kommersant.

There's nothing really new here, but it's nice to see these facts show up in the print media other than the stories that appear on the Internet---including mine.  But, having said all that, it's still worth the read.  This Russia Today news item was posted on their website at 5:15 p.m. Moscow time on their Friday afternoon---and it's the final offering of the day from Elliot Simon.

GoldCore: New LBMA silver price still not transparent

GoldCore's daily commentary complains that the new silver pricing mechanism in London is not transparent and seems rushed and incomplete---and further comments that:

"The entire process has been a bit of a shambles. The Gold Anti Trust Action Committee (GATA) and those concerned about price manipulation will allege that the LBMA and the western bullion banks are engaged in a rebranding and repackaging exercise in order to maintain a cosy gold and silver cartel of bullion banks and ultimately control over precious metal prices."

"If the CME/Reuters aren’t willing to share with the public the presentation that they made at a closed door seminar, especially since they won the competition and are now running the process, what hope is there for transparency in this new process?"

Mark O'Byrne basically rips these guys a new one---and rightly so.  And as I've said before, it's not the silver fix that's important, it's the entire CME/Comex/CFTC-endorsed price management scheme that really matters.  The fixes, both gold and silver, although part of the problem, are not the real problem---and both Ted Butler and I wish that more people would acknowledge that.

¤ The Funnies

¤ The Wrap

Please, don’t worry so much. Because in the end, none of us have very long on this Earth. Life is fleeting. And if you’re ever distressed, cast your eyes to the summer sky when the stars are strung across the velvety night. And when a shooting star streaks through the blackness, turning night into day, make a wish, and think of me. Make your life spectacular. - Robin Williams, from the movie "Jack"

Today's pop 'blast from the past' is one I posted within the last year, but unknown to me at the time was the fact that it was the short version of the piece---and here is the full version as released on iTunes in 2013.   So here it is again, but cut totally differently---and complete.

It's Ann and Nancy Wilson of Heart, along with Jason Bonham, playing Stairway to Heaven as a tribute to Led Zeppelin [who are in attendance] on Dec. 2, 2012 at Kennedy Center.  It's an absolute stunning performance---and it's impossible not to get carried away in the spirit of the moment.  Turn up your speakers, put it on full screen---and enjoy!  The link is here.

Today's classical 'blast from the past' is somewhat older.  It's Franz Schubert's Piano Quintet in A major---more commonly know by its popular name the Trout Quintet.  Schubert was 22 years young---and only had nine more years to live---when he composed this work in 1819---and it is a classic piece of chamber music from that era.  I just love the base line in the first movement.  This recording was done at the 15th Esbjerg International Chamber Music Festival in 2013 in Denmark.  The link is here.

Well, the high frequency traders had a lot of fun whipsawing the technical funds/Managed Money traders back below the 50-day moving average in gold---and then closing the gold price above it once again at day's end.  One wonders how much money they skinned them for with that little maneuver?

Of course, all four precious metals got pretty much the same treatment, except for palladium, which went on its merry way to the upside after it got sold down initially.  And as I said in yesterday's edition of The Wrap---"This was particularly true in gold and silver, along with palladium, another metal that would take off to the moon and stars if allowed to do so."

Here are the 6-month charts for both gold and silver.  The price of gold is going in one direction---and the price of silver in the other.  There's nothing free market about this---and at some point this dichotomy will resolve itself---and if forced to bet ten bucks, I'd guess it will be resolved to the downside.

The silver price, at least according to the Relative Strength Indicator [RSI], is approaching oversold territory, but that is of little comfort at the moment, because the Commercial net short position is still miles away in Comex contract terms from its old low---and it remains to be seen how low JPMorgan et al will have to engineer the silver price to get all the Managed Money technical funds to puke up the rest of their long positions, plus go short again.

Of course the Commercial net short position in gold is getting up there real good---and if 'da boyz' turn the HFT traders and their algorithms loose on gold, they'll use the engineered price decline in that metal to accelerate the down-side price action in silver.  Ted Butler pointed out that on many occasions in the past, the Commercial traders have used a declining gold price to beat down silver.  We'll see if that happens this time around---and all we can do is wait it out.

One thing I am somewhat happy about is the share price action.  Considering how badly both gold and silver got manhandled yesterday, they could/should have done worse.  That outcome may lay ahead, but for the moment they're hangin' in there pretty good.

Well, the new silver fix certainly isn't a hit---and as Goldcore's Mark O'Byrne [and others] made abundantly clear in this story posted further up, it's hardly transparent at all.  But as I mentioned in my discussion on Friday's Commitment of Traders Report at the top of this column, it's not only the fixes that are an issue---"It's the Commercial traders and their HFT antics that are running the technical funds in the Manged Money category through the sell and buy stops for fun, profit---and/or price management."

This has been going on for ages now, especially in gold, silver---and copper.  All aided and abetted by the CME Group and the CFTC.

If you're looking for some sort of guidance going forward, I don't have any---nor does anyone else.  There's always that black swan out there somewhere, along with the chances that JPMorgan et al are going to get over run, but I wouldn't bet the ranch on that outcome.

That's all I have for today---and the week.  I'll see you here on Tuesday.

]]>
Sat, 16 Aug 2014 09:43:00 +0000
<![CDATA[Lawrence Williams: Russia May Become World No. 2 Gold Miner This Year]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-russia-may-become-world-no.-2-gold-miner-this-year/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-russia-may-become-world-no.-2-gold-miner-this-year/#When:06:05:00Z "I expect we'll see a blow-out in the Commercial net short position in gold"

¤ Yesterday In Gold & Silver

It was another day where not much happened in gold expect for the price capping at the London open, followed on by the even bigger event  ten minutes after the Comex open---and once the spike in gold was capped in New York, the price didn't do much for the remainder of the day.

The low and high ticks were reported by the CME Group as $1,310.00 and $1,321.80 in the December contract.

Gold closed on Thursday at $1,312.90 spot, up 70 cents on the day.  Volume, net of August and September, was 109,000 contracts---and about the same as Wednesday's volume.

After the obligatory down opening on Wednesday evening in New York, the silver price traded in a very tight range on Thursday everywhere on Planet Earth---and and all rally attempts, no matter how tiny, met the same fate.  The high of the day, such was it was, came at the London p.m. gold fix.  After that it sold off about a dime into the close.

The low and high ticks are barely worth the effort to look up, but here they are.  The low was $19.785---and the high was $19.985 in the September contract.

Silver finished the Thursday trading session at $19.855 spot, up 4.5 cents from Wednesday.  Net volume was very light at only 25,500 contracts.

Platinum didn't do a lot, or wasn't allowed to do a lot, depending on your interpretation of the chart below---and the metal closed down three bucks on the day.

Palladium didn't do much for most of the Thursday session, but the rally that began off the 1:45 p.m. Zurich low ran into some selling pressure at the London p.m. gold fix---and wasn't allowed to trade above the $884 spot mark for the remainder of the day. Palladium closed up three bucks.

The dollar index closed late on Wednesday afternoon in New York at 81.61.  It's 'high' tick, such as it was, occurred at precisely 2 p.m. Hong Kong time---and it was all down hill to its 81.42 low which came just before, or at, the London p.m gold fix.  From there it rallied back to 81.62 by 2 p.m. EDT, before shedding a few basis points going into the close.  The index finished unchanged at 81.61.

Despite the fact that the spike high in gold occurred an hour prior, the gold stocks rallied until shortly after 10 a.m. EDT---and from there they chopped lower, with the low tick coming about twenty minutes before the equity markets closed in New York---and the HUI finished just off its low, down 0.32%.

Despite the rather neutral performance in the price of silver---and the positive close, the shares were sold off relentless for almost the entire Thursday trading session, only moderating a bit at the end of the day, just like the gold shares.  Nick Laird's Intraday Silver Sentiment Index closed down an eye-watering 3.38%.

The CME Daily Delivery Report showed that 300 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The only short/issuer was Jefferies---and the two largest long/stoppers were JPMorgan with 164 contracts for its client account---and 99 contracts for Canada's Scotiabank.  The link to yesterday's Issuers and Stoppers Report is here.

The CME's Preliminary Report for the Thursday trading session showed that there are still 1,155 gold contracts open in August, from which you can subtract the 300 contracts posted for delivery on Monday, so there's still a bunch to go.

There were no reported changes in GLD yesterday---and as of 9:31 p.m. EDT yesterday evening, there were no reported changes in SLV, either.  But when I was editing today's column at 3:45 a.m. EDT this morning, I noted that the folks over at the iShares.com had updated their website---and it showed that an authorized participant, which you should assume to be JPMorgan, had deposited 1,007,508 troy ounces.

Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with the goings-on within SLV for the week ending on Wednesday---and this is what he had to report:  "Analysis of the 13 August 2014 bar list---and comparison to the previous week's list: 2,926,844.7 troy ounces were added, and no bars had a serial number change.

The bars added were from: Solar Applied Materials (1.1M oz), Korea Zinc (0.4M oz), Britannia Refined Metals (0.3M oz), KGHM (0.2M oz), and 14 others.

As of the time that the bar list was produced, it was overallocated 71.1 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

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

There was decent movement in gold over at the Comex-approved depositories on Wednesday, as 64,003 troy ounces were reported received---and 546 troy ounces were shipped.  Virtually all of the activity, both in and out, occurred at Canada's Scotiabank.  The link to that is here.

There was decent movement in silver as well.  585,950 troy ounces were shipped in---and 4,152 troy ounces were shipped out.  The receipt was at the CNT Depository---and the link to that action is here.

I was reading some of Mark O'Byrne's comments over at goldcore.com yesterday---and thought they were worth sharing, so here they are:

"[It's] important to remember that while gold and silver prices have been in lock down---and only eked out small gains so far in 2014 despite increasing risk, especially geopolitical, gold has seen very strong gains in many non-major currencies."

"This is especially the case in Ukraine where the currency has lost more than half of its value versus gold. Gold in Ukraine Hrvynia up 70% since the start of 2014. People who own gold in Ukraine would laugh at you, if you said that gold is not a safe haven."

Amen to that!

Nick Laird sent around the chart below to all and sundry the other day, including Mark, as it was posted in his column yesterday, so I see no reason why I shouldn't do the same.

As is usually the case, I have too many stories again today---and I'm always happiest when you do the final edit.

¤ Critical Reads

Berkshire's Share Price Tops $200,000, Extending Buffett's Record

The price of Berkshire Hathaway Inc. shares topped $200,000 each for the first time Thursday, further validating Chairman Warren Buffett’s decades-long bet on the U.S. economy.

The Class A shares climbed 1.6 percent to $202,850 at 4:15 p.m. in New York. That’s more than 60 times Seaboard Corp., the agribusiness and transportation company that has the second-highest price among stocks listed on U.S. exchanges.

“It’s a huge milestone,” said Buffett biographer Andrew Kilpatrick. “It proves how far things have come, and you start to wonder, and imagine in your wildest dreams, ‘Where is this thing going?’”

This longish article was posted on the moneynews.com Internet site at 11:06 a.m. ED Thursday morning---and today's first story is courtesy of West Virginia reader Elliot Simon.

Initial Jobless Claims Jump 21,000 To Biggest Miss In 3 Months

With expectations set at multi-year cycle lows of 295k, the 311k print is a major disappointment (the biggest miss since early May) as initial jobless claims jumped 21k to the highest since June. It has now been 3 weeks without a new cycle low in claims - perhaps too early to call a trend change - but notably 31k off the lows in late July. Continuing claims also rose markedly, missing expectations for the 6th of the last 7 weeks.

That's all there is to this brief Zero Hedge piece, but there are a couple of excellent charts as well.  It was posted on their website at 8:38 a.m. EDT yesterday morning---and it's courtesy of reader M.A.

U.S. fund says no deal to end Argentina default

Negotiations have apparently ended without success on a private-sector deal to end the legal battle that forced Argentina into default last month for the second time in 13 years.

Aurelius Capital Management LP said it had been in talks with private parties to sell its Argentine bonds at the heart of the dispute, but the offered payments were not even "remotely acceptable," to the U.S.-based investment fund.

"That engagement has convinced us that there is no realistic prospect of a private solution," Aurelius said in a statement issued late Wednesday that did not disclose the details of the proposals, nor the participants.

Argentina was forced into a default July 30 by its decade-long legal battle with Aurelius and other U.S. investors who refused to accept lower payments for bonds that the South American country defaulted on in 2001.

This AP story appeared on their website at 11:44 a.m. EDT yesterday---and it's the second offering of the day from Elliot Simon.

Broken Europe: economic growth grinds to a standstill

Growth has "broken down" in the eurozone, France's finance minister said on Thursday, as official data showed the single currency bloc stagnated in the second quarter.

Eurozone growth ground to a standstill between April and June, Eurostat said, following an expansion of 0.2pc in the first quarter.

France and Germany, which together account for around 50pc of eurozone growth, surprised analysts with weaker-than-expected data. Italy and Cyprus also contracted in the second quarter, while the Netherlands and Portugal bounced back after shrinking in the first three months of the year.

Europe's second largest economy flatlined in the second quarter, following zero growth in the first three months of the year.

This news item showed up on The Telegraph's website at 10:09 a.m. BST yesterday morning---and it's the first offering of the day from Roy Stephens.  It's worth reading.  There was a similar story on the euobserver.com Internet site yesterday morning Europe time as well.  It's headlined "European industrial output slumps"---and it's courtesy of Roy Stephens as well.

German bond rate falls below 1.0% for first time

Collapsing growth in the main eurozone economies pushed funds into the safety of German debt bonds on Thursday, causing the German borrowing rate to fall below 1.0 percent for the first time ever.

Shortly after bad second-quarter figures for the German and French economies were published, the interest rate indicated by German 10-year bonds fell to 0.998 percent.

The French 10-year bond was also showing a record low rate or yield of 1.390 percent.

That is a higher rate than for Germany to reflect the higher risk attached to the French economy which, despite this sign of confidence, faces deep economic challenges.

This AFP article put in an appearance on the france24.com Internet site at 11:45 a.m. Europe time on their Thursday morning---and I thank South African reader B.V. for sending it.

Italy's Renzi must bring back the lira to end depression

Italy has been in depression for almost six years. The slump has been punctuated by false dawns, overwhelmed each time by the monetary amateurs in charge of EMU policy.

The latest recovery fizzled after a single quarter. The economy is in technical recession again. Output has collapsed by 9.1pc from the peak, back to levels last seen 14 years ago. Industrial production is down to 1980 levels.

It takes spectacular policy errors to bring about such an outcome in a modern economy. Italy did not suffer anything like this during the Great Depression, clocking up growth of 16pc between 1929 and 1939. But not even Mussolini was maniacal enough to pursue his Gold Standard delusions until the bitter end.

The Italian authorities discern flickers of recovery, like fortress guards in Dino Buzzati's Desert of the Tartars, deceived by optical illusions on the lifeless horizon. Bank loans to business are still falling at a rate of 4.5pc. Moody's says the economy will contract by 0.1pc this year. Societe Generale is pencilling in -0.2pc.

This article by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site yesterday---and it's another story courtesy of Roy Stephens.

Kiev Passes Law Allowing Sanctions Against Russia, Including Transit of Energy

The Ukrainian parliament on Thursday passed a law that allows Kiev to impose 29 different types of sanctions against Russia, one of which covers the transit of Russian energy resources through its territory.

“With the purpose of protecting national interests, national security, the sovereignty and territorial integrity of Ukraine and its economic independence special economic and other restrictive measures may be utilized. Sanctions may be used by Ukraine against a foreign state, a foreign legal entity, or a [foreign] individual,” the law reads.

Ukraine’s Cabinet of Ministers on Friday approved the bill, but it does not mean that there will be an automatic implementation of economic or restrictive measures.

The new law allows for the blocking of stocks, limiting sales operations, as well as partially or fully halting flights and the transit of Russian goods through Ukrainian territory. It also gives the government the right to annul or freeze licenses on certain types of activity, including mining and energy extraction operations.

This RIA Novosti article showed up on their Internet site at 3:14 p.m. Moscow time Thursday afternoon---and I thank reader M.A. for finding it for us.

EU Has No Plans to Discuss New Anti-Russian Sanctions Friday – Representative

E.U. member states’ foreign ministers have no plans to discuss new economic sanctions against Russia, a high-ranking EU representative told the press Thursday.

“With regard to a new round of economic sanctions, I think it is a little bit too early at this stage,” the representative said.

The official said the ministers will study the consequences that the previous economic sanctions had on both E.U. members and non-E.U. states.

“This is the first step we have to take. Then we’ll look ahead and decide what we will have to do as a next step,” said the official in answer to a question on whether the ministers were going to discuss new anti-Russian sanctions.

This article was posted on the RIA Novosti website at 5:03 p.m. Moscow time on their Thursday afternoon---and its also courtesy of Roy Stephens.

Finland will impose no new sanctions on Russia – Finnish PM

Finland will impose no additional sanctions on Russia in response to Moscow’s ban of food imports from some E.U. countries, said Finnish Prime Minister before the presidents of the two countries are set to meet on Friday in the Black Sea resort of Sochi.

The Russian President will meet his Finnish counterpart Sauli Niinist in Sochi, on Russia's Black Sea coast, where Putin has a residence on Friday, the president’s press service said. Niinist is the first president of a European country to visit Russia in an official capacity since the escalation of the crisis in Ukraine.

The heads of state are to discuss the "peaceful settlement of the internal political crisis in Ukraine and measures to prevent a humanitarian catastrophe", the Kremlin said. Among other issues the presidents will talks about the current state and prospects of bilateral cooperation between Russia and Finland, the Kremlin added.

This article put in an appearance on the Russia Today website at 5:34 p.m. Moscow time yesterday afternoon---and I thank Roy Stephens once again for sending it.

Many in Europe Want to End Economic Sanctions – Putin

Russian President Vladimir Putin said that many in Europe want to put an end to the situation over economic sanctions that are detrimental to cooperation between Russia and the European Union.

“Many people in Europe, including politicians, my colleagues – and I recently spoke to the President of France, I know his feelings – they all want to put a swift end to this situation that is detrimental to our cooperation,” Vladimir Putin said at the meeting with Philippe de Villiers, leader of the Mouvement pour la France party.

The discussion focused on international policy issues. In particular, Putin noted that Russia was forced to introduce reciprocal economic sanctions.

This is another commentary from the RIA Novosti website.   This one appeared there at 11:39 p.m. Moscow time yesterday evening, which was 3:39 p.m. EDT.  I thank reader B.V. for sending this one.

E.U. - Russia ‘trade war’ to finish within 3 months – Danish biggest lender

Reciprocal trade sanctions by Russia and the E.U. should not last longer than 3 months, as both economies will feel they can’t afford that, according to experts from Denmark’s largest bank, Danske Bank.

We believe an escalating trade war would be unbearable for both Russia and the EU, and that the EU will revoke the sanctions within one to three months, with Russia abolishing its own sanctions,” said the bank’s report called 'The Ukrainian Crisis: the Nordic angle'.

The report focuses on Nordic markets and said that should energy become involved in the dispute, the losses for both Russia and the EU would be sky-high.

This Russia Today story, courtesy of Roy Stephens of course, was posted on their website at 2:18 p.m. Moscow time on their Thursday afternoon.

Ukraine crisis sends NATO 'back to basics'

More than two decades after the collapse of the Soviet Union brought an end to the Cold War, Ukraine's crisis is driving the U.S.-led defense alliance back to its original purpose: To protect its members against a perceived Russian threat.

President Vladimir Putin's annexation of Crimea and support for Russian-speaking separatists in eastern Ukraine has raised dramatically a sense of vulnerability among NATO's new eastern members from the Baltic to the Black Sea.

It has also highlighted unresolved questions about security in countries such as Georgia and Moldova as well as Ukraine in the post-Soviet space sandwiched between NATO and Russia.

Roy Stephens send me this Reuters story from yesterday---and he had this to say about it---"According to plan: Create crisis, act on it."  That pretty much sums it up.   And still no word on what's on the flight data recorders from flight MH17, or the tapes from air traffic control.  No one seems to care anymore---not even the Russians.  If I were them, I'd be screaming about it.  

Putin says Russia should aim to sell oil and gas for roubles globally

President Vladimir Putin said on Thursday Russia should aim to sell its oil and gas for roubles globally because the dollar monopoly in energy trade was damaging Russia's economy.

"We should act carefully. At the moment we are trying to agree with some countries to trade in national currencies," Putin said during a visit to the Crimea region, which Moscow annexed from Ukraine earlier this year.

This brief article showed up on the Zero Hedge website at 11:15 a.m. EDT on Thursday---and I thank reader 'David in California' for sending it our way.

Putin: Russians need to engage, but have no confrontation with wider world

Russians must consolidate and develop their country, neither sliding into isolationism nor sacrificing their dignity for the sake of pleasing anyone, President Vladimir Putin declared.

“We have to develop our country with calm, dignity and efficiency, without barricading ourselves from the outer world or breaking ties with partners, but also without allowing anyone to treat us with disrespect,” he told Russian MPs in Yalta, Crimea.

He called on a consolidation of the people, “not for the sake of any wars or conflict,” but “for an industrious labor force for Russia and in Russia's name.”

This Russia Today article was posted on their Internet site at 10:20 a.m. Moscow time yesterday morning---and it's also courtesy of Roy Stephens.

Washington Has Placed the World on the Road to War — Paul Craig Roberts

The drums for war are being loudly beaten in Washington, European capitals, and the presstitute Western media. A headline in the Asia Times is “NATO Is Desperate For War.” This time the target is Russia, a major nuclear power.

The deadly consequences of such a war would extend beyond Russia, Europe, and the U.S. to the entire world. The Western use of lies to demonize Russia endangers life on earth and reveals the West to be both reckless and irresponsible. Yet, few voices are raised against this recklessness and irresponsibility.

Ron Unz brings to our attention the important voice of a distinguished Dutch journalist, Karel Van Wolferen. Wolferen and Unz himself are important offsets to what Unz regards, correctly in my opinion, as “the utter corruption and unreliability of the mainstream American media.”

Wolferen’s article is long but very important. Readers will see analysis akin to my own.

Wolferen shows how the Washington hegemon has captured Europe within an Atlanticist ideology that forecloses any independent thinking or foreign policy on the part of Europeans who are reduced to a state of vassalage. Wolferen concludes that as Washington drives Europe toward war, “Europeans cannot bring themselves to believe in the dysfunction and utter irresponsibility of the American state.”

This commentary by Paul will certainly raise the hackles of some, but he's not far off the mark.  It's certainly a must read---and I thank reader B.V. for being the first person through the door with this article.

[By the way, I'm still waiting for the information from flight MH17's data flight recorders, plus the air traffic control/radar tapes.  Not even the Russians are asking for them---and I'm wondering why this data hasn't been rushed into the public domain.]

Pentagon 'defies Congress to buy Russian helicopters for Afghanistan'

Despite the anti-Russian sanctions drive, the U.S. DoD opposes American lawmakers in wanting to buy Russian-made helicopters for the Afghan forces, said Russian arms exporter Rosoboronexport.

“Despite the protests from the congressmen, suggestions of American-made alternative options, the Pentagon-level US officials are insisting on buying the Russian helicopters,” Rosoboronexport deputy head Igor Sevastyanov told journalists on Thursday.

He added that some people in the U.S. military told the Russians that they would prefer some of the Russian arms, including helicopters, to be used by the U.S. troops if it were possible, but it's not due to political reasons.

The U.S. and Russia signed three separate contracts for supplying a total of 70 Mil Mi-17V5 helicopters to Afghanistan. Afghan pilots favor them for reliability and a record of deployment in the country dating back to the Soviet military campaign in the 1980s. Russia has delivered 45 aircraft, and a possible extra order is on the table.

This article was posted on the Russia Today website at 9:15 a.m. Moscow time on their Thursday morning---and it's the final offering of the day from Roy Stephens.

Three King World News Blogs

1. KWN Commentary: "Chart of the Week, Vladimir Putin---and Chaos Around the World"  2. Egon von Greyerz: "A Horrifying and Destructive Future For the Entire World"  3. Dr. Stephen Leeb: "U.S. Desperate to Halt German-Chinese-Russian Alliance"

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

California Drought Launches New Gold Rush

Bruce Meyer took a smoke break on the gravel bank of the scenic Bear River, deep in central California's Gold Country. He was wearing a wetsuit and bandana, and water dripped from his thick, graying beard.

Meyer had spent much of the morning on that first Sunday in August hunting for gold in the middle of the stream, in the foothills of the Sierra Nevada near Colfax. He showed off several shiny flakes in his pan, each about half the size of a grain of rice. He rinsed them with water and then sucked them into a small plastic bottle.

"Everyone has something they do; mine's gold," said Meyer.

Meyer hails from Carson City, Nevada, but he has spent much of the summer staying in his truck northeast of Sacramento to be near California's rich mineral deposits. And perhaps paradoxically, thanks to the worst drought in the state's recorded history, his work has gotten a little easier.

I posted a story about this about a year ago.  This version of events showed up on the National Geographic's website yesterday---and I thank Washington state reader M.A. for sharing it with us.

70 Years Later - Warren Buffett's Dad Is Proved Right (About Everything)

Warren Buffett has famously supported the Obama administration and other Democrats, even lending his name to the so-called “Buffett Rule,” which calls for raising income taxes on high earners. As such, it may surprise you to learn that a key person in Warren Buffett’s life was an ardent proponent of political views diametrically opposed to those of the “Oracle of Omaha.”

111 years ago today, Warren’s father Howard Homan Buffett was born in Omaha, Nebraska. Buffett, like his son Warren, worked in the investment business, but also served four terms in the U.S. House of Representatives from 1943-1949 and then again from 1951-1953, as an anti-New Dealer, anti-Fair Dealer and overall anti-interventionist of the Republican “Old Right.” Politically, it could be said that Buffett was the Ron Paul of his day.

Unlike his son, who has lauded the Federal Reserve and in particular its former chairman Ben Bernanke, along with others who intervened during and after the financial crisis of 2008, Howard Buffett was an outspoken proponent of laissez-faire economics and sound money.

This Zero Hedge piece from yesterday is a repost of an article that appeared on The Blaze website---and I thank reader Joe Nordgaard for pointing it out.

Gold demand in China slumps 52% as buying frenzy subsides, WGC says

Gold demand in China shrank in the second quarter as consumers in the biggest user bought fewer bars, coins, and jewelry amid a clampdown on corruption and as the buying spurred by last year's price slump wasn't sustained.

Purchases in Asia's largest economy plunged 52 percent to 192.5 metric tons in the three months to June from a year earlier, contributing to a drop in global consumption, the London-based World Gold Council said in a report today.

Every Asian economy tracked by the producer-funded group bought less bullion in the period, apart from Taiwan, as demand across the biggest consuming region shrank 46 percent to 470.9 tons.

I'm not a huge fan of any statistic that comes out of the World Gold Council---but you're entitled to form your own opinion on this.  This Bloomberg story, co-filed from Singapore and Beijing, was posted on their Internet site at 2:44 a.m. Denver time yesterday morning---and I found it embedded in a GATA release.

China's fourth gold ETF raises about $50 million

Bosera Funds has raised $50 million for China's fourth gold-backed exchange-traded fund that it aims to launch soon, at a time when investment demand for the precious metal has been sluggish in the world's biggest bullion consumer.

The fund, called Bo Gold ETF, raised 292.2 million yuan ($47.5 million), in line with internal expectations, according to an e-mailed statement sent by Bosera to Reuters.

An exact launch date is yet to be finalised but the ETF could start trading as soon as next month.

This Reuters story, filed from Singapore, put in an appearance on their website at 6:38 a.m. EDT on Thursday morning---and it's another article that I found on the gata.org Internet site.

Lawrence Williams: Russia may become World No. 2 gold miner this year

Not content with its Central Bank being this year’s world’s largest gold purchaser, Russia looks like it might be moving into second place in the World gold mine production table and overtaking Australia which currently holds this position.  Last year Russia mined just under 8 million ounces of gold – around 248.5 tonnes – as opposed to Australia’s 8.53 million ounces – 265.3 tonnes.  But Russian gold output is reported as rising 26.6% in the first half of the year and if this level increase continues in H2 Russian full year output could total 10.1 million ounces – or 314.6 tonnes, although with normally far higher output in the second half of the year this kind of annual percentage increase may not be achievable. 

Thus industry sources in Russia estimate full year production at a rather more conservative 8.84 million ounces - 275 tonnes – a rise of only just over 10% but one suspects they may be erring on the side of caution, particularly as previous 2014 Russian production estimates had suggested mined gold output could fall back 5% this year.

This commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and it certainly falls into the must read category.

¤ The Funnies

These two photos, also from this past Sunday, are of juvenile seagulls---and it's impossible to tell at this stage of their development whether they're Ring-billed gulls, or California gulls---the other species that dominates the gull population in this area of North America.  This fellow was only 5 or 6 metres away---and at this distance, depth of field is an issue for big telephoto lenses, so the back half of him is not in sharp focus.  The second photo is a juvenile coming in for a landing---and at this age, their feather patterns are quite striking---and I was able to stop the action at 1/2,500 of a second.  Unfortunately I didn't get the entire bird in the frame, but it was close enough for me.

¤ The Wrap

Twenty five years ago, the thought that any market could be manipulated as I suggested was the case in silver was heresy, pure and simple. The idea was rejected out of hand. In searching for why this was so, the best I’ve been able to come up with was that the mere thought that a silver manipulation might exist was actually offensive to those in the business, which were who I approached with my premise. Maybe this was a defensive reaction, as in how could Ted see it and not me; but I sense it was actually offensive to most that a manipulation could exist in what everyone assumed was a true free market environment. Times were different then, there was an implied assumption that markets were on the up and up. Any suggestion to the contrary was summarily dismissed.

That’s not the case today.  So many serious manipulations and market misdeeds have been recorded that the silver manipulation deniers have almost been reduced to declaring that silver (and gold) are the only markets not manipulated. Where I once was isolated and alone, I am now in an apparent majority. I am shocked (and heartened) at this turn of event. The important thing is not, of course, how I feel, but the significance of the turnabout. Having been there at the outset, I am simply astounded by the current level of belief that silver is manipulated in price. - Silver analyst Ted Butler: 13 August 2014

It was another day where the rally attempts around the Comex open were met with "da boyz" and their HFT algorithms.  This was particularly true in gold and silver, along with palladium, another metal that would take off to the moon and stars if allowed to do so.  But, as has been the case all week, volumes weren't particularly heavy, so as I keep saying, it's not hard for those with an agenda to keep precious metal price in check---and they're doing so with ease, but it's oh-so obvious to all, except for the willfully blind, of course.

Here are the 6-month gold and silver charts once again---and we continue to mark time in gold, and edge lower in silver.  It's still an unknown as to how this will all turn out in the end.  But from a Commitment of Traders Report standpoint, it still doesn't look good at all, especially for silver.

As I write this paragraph, London has been open a bit more than ten minutes.---and the precious metals aren't doing much.  Silver is down a bit, as usual---and only palladium is showing any signs of life.  Volumes in both gold and silver border on nonexistent, so nothing should be read into the current price action, or lack thereof, as it's a Friday in summer in the Northern Hemisphere.

Today we get the latest and greatest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday.  As I said the other day, I expect we'll see a blow-out in the Commercial net short position in gold---and an up-tick in the Commercial net short position in silver as well.  We'll find out soon enough how good my guesses are---and I'll have it all for you in Saturday's column.

The other thing that we get today is the first London silver fix under the new 'price fixing' system and, without doubt, there will be plenty of people watching it like a hawk.  I'll be sound asleep when it all transpires, so I'll find out how it went when I power up the beast later this morning.

And as I sent this off to Stowe, Vermont at 5:08 a.m. EDT, there still isn't much happening in any of the precious metals, although I note that palladium is still running into the $884 spot price ceiling it had during Comex trading yesterday.  Volumes in both gold and silver are barely fogging the mirror.  The dollar index, which began to head south around 2:30 p.m. Hong Kong time, is now down 13 basis points.

That's all I have for today.  I hope you're weekend goes well---and I'll see you here tomorrow.

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