<![CDATA[Ed Steer's Gold & Silver Daily]]> http://www.caseyresearch.com/feeds/main Stay abreast of the news that's moving the gold and silver markets in The Gold & Silver Daily. en <![CDATA[Gold at $64,000—Bloomberg’s ‘China Gold Price’]]> http://www.caseyresearch.com/gsd/edition/gold-at-64000-bloombergs-china-gold-price/ http://www.caseyresearch.com/gsd/edition/gold-at-64000-bloombergs-china-gold-price/#When:08:39:00Z "JPMorgan et al, which certainly includes the BIS, have an iron grip on prices"

¤ Yesterday In Gold & Silver

The gold price traded flat until it developed a slight negative bias starting at 2 p.m. Hong Kong time on their Friday afternoon---and by the time the COMEX opened, the price was down about three bucks.  "Da boyz" showed up at 8:30 a.m. as expected, as they ran the precious metals down---and the dollar index up.  The low tick came at precisely 9:30 a.m. EDT.  Gold chopped quietly higher for the remainder of the New York trading session, closing almost back at the COMEX opening price.

The high and low ticks were recorded by the CME Group as $1,178.00 and $1,162.10 in the August contract.

The gold price closed at $1,172.30 spot, down $4.10 from Thursday's close.  Net volume was very decent at 138,000 contracts.

Here's the 5-minute gold chart courtesy of Brad Robertson once again.  The big volume spike at 8:30 a.m. EDT was pretty impressive at close to 20,000 contracts---and after that, the volume fell off in a hurry.  The dark gray line is midnight Thursday---and add two hours for EDT.  Don't forget the 'click to enlarge' feature.

The silver price followed a similar, but surprisingly muted price path compared to gold.  The low in that metal came at, or shortly after, the London p.m. gold fix.  At that point it promptly rallied back above unchanged before getting sold down in the 1:30 p.m. EDT COMEX close.  From there it quietly rallied back into positive territory---and closed on its high tick of the day.

The low and high were recorded as $16.925 and $16.16 in the July contract.

Silver finished the Friday session in New York at $16.125 spot, up a nickel from Thursday's close.  Net volume was almost the same as Thursday's at 46,500 contracts.

Platinum traded very flat until 2 p.m. Zurich time on their Friday afternoon, which was twenty minutes before the COMEX open.  Then down it went as well, with the low coming more or less at the London p.m. gold fix  and, like silver and gold, rallied mostly higher as the Friday session drew to a close.  Platinum finished the session at $1,095 spot, down 3 bucks on the day.

Palladium, as usual, was a mini version of the platinum price pattern---and it closed on Friday at $750 spot, also down 3 dollars on the day as well.

The dollar index closed late on Thursday afternoon in New York at 95.58---and began to slide quietly lower from there, hitting its 95.36 low tick shortly before 9 a.m. BST in London.  It began creeping higher from there---and then blasted higher when the HFT boyz spun their algorithms at 8:30 a.m. EDT.  The 96.91 high tick came moments before the equity markets opened in New York.  The index fell down to around 96.30 an hour later---and after that it didn't do a lot, closing at 96.31---up 73 basis points on the day.

And here's the 6-month chart to put yesterday's dollar index action in a longer-term perspective.

The gold stocks gapped down about 2 percent at the open, hitting their lows when gold bullion hit its low, which was at the London p.m. gold fix.  Like gold, the shares rallied off their lows for the next forty minutes before falling back a bit---and then trading flat for the remainder of the day, despite the fact that gold rallied for the remainder of the Friday session.  The HUI finished down another 1.87 percent.

The silver equities followed a similar path, but the rally off their 9:40 a.m. lows was far more substantial---and blasted the stocks back into positive territory.  Then, like gold, they sold off a bit from there before trading very flat for the remainder of the Friday session.  And, like the gold shares, they did not respond to the subsequent rally in the metal itself, or to the fact that it finished in the black.  Nick Laird's Intraday Silver Sentiment Index closed up 0.17 percent.

The CME Daily Delivery Report showed that only 1 gold and 6 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Nothing to see here for the second day in a row.

The CME Preliminary Report for the Friday trading session showed that June open interest in gold continues to fall.  Yesterday o.i. dropped by another 166 contracts, leaving 1,097 still open.  June o.i. in silver increased by 1 to 41 contracts.

Another day---and another withdrawal from GLD.  This time an authorized participant took out 38,357 troy ounces.  And as of 9:49 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was another sales report from the U.S. Mint.  They sold 6,500 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and 50,000 silver eagles.

Month-to-date the mint has sold 12,000 troy ounces of gold eagles---3,000 one-ounce 24K gold buffaloes---and 975,000 silver eagles.  Based on these numbers, the silver/gold sales ratio works out to 65 to 1.

There wasn't a lot of action in gold at the COMEX-approved depositories on Thursday.  But for the second day in a row there was a transfer from Canada's Scotiabank's depository to HSBC USA.  This time it was 10,023 troy ounces.

However, it was a big 'out' day in silver as only 35,915 troy ounces were received---and a chunky 1,204,482 troy ounces were shipped out the door.  The two big 'out' movements were at Canada's Scotiabank and the CNT depository---with one truckload apiece.   The link to the silver action is here.

Over at the COMEX-approved kilobar depositories in Hong Kong on their Thursday, they reported receiving 3,288 kilobars---and shipped out 4,622 kilobars.  The link to that activity, in troy ounces, is here.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday showed a pretty decent improvement in the Commercial net short position in silver---and almost no change in gold.

In silver, the Commercial net short position declined by 3,933 contracts, or 19.67 million troy ounces.  This reduced the total Commercial net short position down to 287.8 million troy ounces.  To be anywhere close to 'normal' at a bottom, the Commercial net short position should be a hair over 200 million troy ounces lower than it currently is.  That's how grotesque this situation is---and Keith Neumeyer had ever right to bitch and scream at the CFTC about it.  More companies should be doing the same thing---and for the same reason.  Another company did---and I have that info posted in the The Wrap.

Ted said that the short position of the Big 4 remained unchanged---and with the new numbers from the latest Bank Participation Report in hand, he pegs JPMorgan's short position at 20,000 contracts, up only a thousand from his guesstimate last week.  The '5 through 8' traders added 2,600 short contracts to their 6-year record high short position---and the raptors, the commercial traders other than the Big 8, bought 6,300 new longs.

Under the hood in the Disaggregated COT Report, the Managed Money traders, like the Pavlovian dogs they are, sold 4,324 long contracts---and purchased 1,324 short contracts.

As I said earlier, there wasn't much change in the Commercial net short position in gold, as it only decreased by a tiny 1,570 contracts, leaving the new Commercial net short position at 10.82 million troy ounces, which is almost unchanged on the week.

The Big 4 traders only covered 500 short contracts, but the '5 through 8' actually added 2,400 new short contracts to their positions---and the raptors added 3,400 long contracts.  Not much to see here.

But, of course, the engineered price decline began anew the day after the cut-off for yesterday's report which, as I pointed on in yesterday's column is a trick of theirs when they want to keep things hidden from public view as long as possible.

Without doubt, there's been very large improvements in the short positions in both gold and silver since Wednesday, but there is still more down-side work to do in both metals---and from a contract perspective, it's ugliest in silver.

Here's Nick Laird's most excellent and rightfully famous "Days of World Production to Cover COMEX Short Positions" for all physically-traded commodities on the COMEX.  The short position of the Big 8 in silver is the most grotesque it has ever been.  As Ted said above, the short position of the '5 through 8' traders [The Big 4 minus the Big 8] is at a 6-year high.  And not to be forgotten in all of this is that JPMorgan and Scotiabank are short about 90 days of world silver production between them---about 80 percent of the red bar.

Riddle me this, dear reader.  What would the silver price be if these two banks were forced to cover these short positions?  Whatever the price paid to accomplish that task, it would bankrupt both firms---just like it did Bear Stearns back in 2008.

Along with yesterday's Commitment of Traders Report came the companion Bank Participation Report [BPR] for June, for positions held in May.  And as I've said in the past---"This is data extracted directly from the above COT Report, which shows the COMEX futures contracts, both long and short, that are held by the U.S. and non-U.S. banks as of Tuesday's cut-off."

In gold, '3 or less' U.S. banks are net short 36,844 COMEX gold contracts. In the May BPR, these same banks were net short 22,885 gold contracts, so the COMEX short position in gold by the U.S. banks has increased by 61 percent in one month.  It would be a relatively safe bet to assume that if there are three U.S. banks involved, they are JPMorgan, HSBC USA and Citigroup.

Also in gold, '18 or more' non-U.S. banks were net short 48,106 COMEX gold contracts, an increase of 42 percent since the May BPR.  A goodly chunk of this amount, something under 50 percent, is most likely owned by Canada's Scotiabank, so the remainder of the 48,106 contracts split up between '17 or more' non-U.S. banks are more or less immaterial---unless they're all trading as a group, but I don't think that that's the case at all.

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

In silver, '3 or less' U.S. banks are net short 18,459 COMEX silver contracts.  That's an increase of about 34 percent since the May BPR.  Since Ted pegs JPMorgan's short position at 20,000 COMEX contracts, that means that the remaining two U.S. banks [or maybe just one] has to be net long the COMEX silver market by around 1,500 contracts to make these numbers work out properly.  It also proves that JPMorgan is the only U.S. bank that's short the COMEX silver market.  If there are two other banks involved, they would be HSBC USA and Citigroup---and if only one, it would be HSBC USA.

Also in silver, '14 or more' non-U.S. banks are net short 29,703 COMEX contracts.  That's an increase of 49 percent from the May BPR.  As in gold, the biggest non-U.S. bank short in silver is Canada's Scotiabank.  I would estimate that between 75 and 80 percent of those 29,703 contracts are owned by Canada's Scotiabank, which makes the short positions of the remaining '13 or more' non-U.S. banks pretty much immaterial.

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

I estimate that between JPMorgan and Scotiabank, they are currently net short about 43,000 COMEX silver contracts between the two of them.

In platinum, '3 or less' U.S. banks are net short 7,699 COMEX contracts, an increase of only 7 percent from the May Bank Participation Report, which isn't a big change.  I'd guess that JPM is short well over half this amount by itself---and maybe only HSBC USA is short the rest.  Citi would be a small player, if they are at all.

Also in platinum, '17 or more' non-U.S. banks are net short 9,464 COMEX contracts, which is a small decrease [-2.2%] from the May BPR.  If there is a large player in platinum amongst the non-U.S. banks, I wouldn't know which one it is, but 17 divided into 9,464 contracts isn't a lot anyway, unless they're all operating in collusion---which I doubt.  But from the numbers it's easy to see that the platinum price management is an American show as well.

Here's the BPR chart for platinum---and please note that the banks were never a factor in platinum until mid 2009.  Now look at them!  If you want to know why the platinum price isn't going anywhere, despite the supply/demand fundamentals, look at the total long positions the banks have vs. their collective short positions.  Palladium too!  That tells you all you need to know.  The banks are net short about 22 percent of the entire COMEX futures market in platinum.

In palladium, '3 or less' U.S. banks are net short 6,285 COMEX contracts, which is a decrease of 20 percent from the May BPR.

Also in palladium, '11 or more' non-U.S. banks are net short 2,646 COMEX contracts which is a 16 percent improvement from the May BPR.

Here's the BPR chart for palladium updated with the June BPR data.  Like platinum above, just look at the long positions vs. the short positions held by the U.S. banks in Chart #5.  You couldn't make this stuff up!  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007---and they became the predominant and controlling factor by the end of Q1 of 2013, where they remain today.  I would bet, that like platinum, JPMorgan holds the vast majority of the U.S. banks' short position in palladium---and maybe all of it.  And just as matter of interest, the banks, in total, are net short about 30 percent of the entire COMEX futures market in palladium, but it's the '3 or less' U.S. banks that are calling the shots in this metal---and in the other three precious metals as well.

As I say every month at this time, along with the odd Wall Street investment house such as Morgan Stanley and maybe Goldman Sachs, these are "da boyz'---the sellers of last resort---and you can call them what you like.  Until they decide, or are instructed to stand back, the prices of all four precious metals are going nowhere---supply and demand fundamentals be damned!

As Jim Rickards so correctly put it, the price management scheme is now so obvious they should be embarrassed about it.

But they obviously aren't.

Before heading into the stories, here's Nick's chart showing the withdrawals from the Shanghai Gold Exchange for the week ending May 29.  During that week, they reported a withdrawal of 37.082 tonnes.

Here are two more charts courtesy of Nick Laird over at sharelynx.com.  The first shows India's gold imports in March---and the second, their silver imports in March.  These are big numbers.

I have a lot of stories today, along with quite a few I've been saving for length or content reasons---and I hope you can find time in what's left of your weekend to read the ones that interest you the most.  But as is always the case, the final edit is up to you.

¤ Critical Reads

Where The May Jobs Were: Teachers, Waiters, Retail, and Temp Help

One of the defining features of jobs "recovery" and the main reason why wage growth has been so far below the Fed's expectations for years it has prevented wage inflation from appearing despite years of QE, is that the quality of jobs added month after month has disappointing. May was no difference.

Yes, the headline print of 280K job additions was great, but a quick look at how the BLS got there shows that nothing has changed because four of the five main job additions were, as usual for the lowest paid jobs.

Here is the breakdown:

  • Education and Health (i.e., teachers): +74,000
  • Leisure and Hospitality (i.e., waiters): +57,000
  • Retail Trade (i.e., minimum wage store clerks): +31,400
  • Temp Help: +20,100

In fact, these lowest quality jobs accounted for two-thirds of all jobs gains in May.

This brief Zero Hedge piece, with an excellent chart, appeared on their Internet site at 10:27 a.m. EDT yesterday morning---and its' courtesy of Dan Lazicki---and it's definitely worth a minute of your time.

The Do-It-Yourself Economy Just Hired 1 Million American Entrepreneurs

Animal spirits are returning to the American workforce.

The number of self-employed workers surged by 370,000 in May, according to the U.S. Labor Department's survey of households released Friday. And nearly 1 million workers have gone to work for themselves since just February.

The report is the latest sign that entrepreneurial activity is on the rise. The number of business start-ups rose in 32 of the 50 U.S. states last year, the Kansas City, Missouri-based Kauffman Foundation reported Thursday. The Kauffman Index of Start-up Activity, which is an indicator of new business creation, had the biggest increase in the past two decades.

"It is evidence of a growing do-it-yourself economy," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ. "The market for self-employed workers is booming and this is a sign of a pickup in entrepreneurial activity."

Well, dear reader, a sentence further down in this story states---"There is reason for some caution in interpreting the data."---and that would be excellent advice if you read this.  This Bloomberg article was posted on their website at 10:07 a.m. Denver time yesterday morning---and it's the second offering in a row from Dan Lazicki.

In 'year of Apple Pay', many top retailers remain skeptical

In a January earnings call with investors, Apple Inc Chief Executive Tim Cook made a confident prediction: "2015 will be the year of Apple Pay," he said.

Since then, the company has aggressively courted retailers - and claimed significant success. "We've spoken to all of the top 100 merchants in the U.S., and about half will accept Apple Pay this year, with many more the following year," a company spokesperson recently told Reuters.

But interviews with analysts, merchants and others suggest that Apple's forecast may be too optimistic and that many retailers remain skeptical about the payment system.

This longish, but very interesting story appeared on the Reuters website at 7:34 a.m. EDT on Friday morning---and I thank Orlando, Florida reader Dennis Mong for finding it for us.

Economic Crisis 2015 - Peter Schiff & Mike Maloney

Recently Peter Schiff visited Mike Maloney in California. During his stay they filmed nearly 3 hours of discussions about gold, silver, freedom, and the economy in general.

Dan Rubock over at GoldSilver.com sent me this 41:39 minute video interview on Tuesday, but for length reasons it had to wait for my Saturday column.  It's definitely worth your time if you have it.

Delusionary Thinking in Washington: The Desperate Plight of a Declining Superpower

Take a look around the world and it’s hard not to conclude that the United States is a superpower in decline. Whether in Europe, Asia, or the Middle East, aspiring powers are flexing their muscles, ignoring Washington’s dictates, or actively combating them. Russia refuses to curtail its support for armed separatists in Ukraine; China refuses to abandon its base-building endeavors in the South China Sea; Saudi Arabia refuses to endorse the U.S.-brokered nuclear deal with Iran; the Islamic State movement (ISIS) refuses to capitulate in the face of U.S. air power. What is a declining superpower supposed to do in the face of such defiance?

This is no small matter. For decades, being a superpower has been the defining characteristic of American identity. The embrace of global supremacy began after World War II when the United States assumed responsibility for resisting Soviet expansionism around the world; it persisted through the Cold War era and only grew after the implosion of the Soviet Union, when the U.S. assumed sole responsibility for combating a whole new array of international threats. As General Colin Powell famously exclaimed in the final days of the Soviet era, “We have to put a shingle outside our door saying, ‘Superpower Lives Here,’ no matter what the Soviets do, even if they evacuate from Eastern Europe.”

Strategically, in the Cold War years, Washington’s power brokers assumed that there would always be two superpowers perpetually battling for world dominance.  In the wake of the utterly unexpected Soviet collapse, American strategists began to envision a world of just one, of a “sole superpower” (aka Rome on the Potomac). In line with this new outlook, the administration of George H.W. Bush soon adopted a long-range plan intended to preserve that status indefinitely. Known as the Defense Planning Guidance for Fiscal Years 1994-99, it declared: “Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union.”

This longish essay certainly falls into the absolute must read category for any serious student of the New Great Game---and it appeared on the tomdispatch.com Internet site a week ago Friday.  I thank reader M.A. for sending it our way on Monday---and for obvious reasons it had to wait for today's column.

Edward Snowden: The World Says No to Surveillance

Two years ago today, three journalists and I worked nervously in a Hong Kong hotel room, waiting to see how the world would react to the revelation that the National Security Agency had been making records of nearly every phone call in the United States. In the days that followed, those journalists and others published documents revealing that democratic governments had been monitoring the private activities of ordinary citizens who had done nothing wrong.

Within days, the United States government responded by bringing charges against me under World War I-era espionage laws. The journalists were advised by lawyers that they risked arrest or subpoena if they returned to the United States. Politicians raced to condemn our efforts as un-American, even treasonous.

Privately, there were moments when I worried that we might have put our privileged lives at risk for nothing — that the public would react with indifference, or practiced cynicism, to the revelations.

Never have I been so grateful to have been so wrong.

This rather brief opinion piece by Edward, filed from Moscow, showed up on the 'hallowed' pages of The New York Times on Thursday---and it's the first offering of the day from Roy Stephens.  It's certainly worth reading.

Canada warns Russia it won't rejoin G7 with Putin in power

Canadian PM Stephen Harper has pledged to “strongly oppose” Russia rejoining the Group of Seven nations as long as Vladimir Putin is president. The G7 suspended Moscow last year over the conflict in Ukraine, but hasn't ruled out allowing it back.

"I don't think Russia under Vladimir Putin belongs in the G7. Period," Harper said in an exclusive interview with AP ahead of his trip to Ukraine and the G7 meeting in Bavaria this week. "Canada would very, very strongly oppose Putin ever sitting around that table again. It would require consensus to bring Russia back and that consensus will just not happen."

According to Harper, who faces re-election in October, Moscow is hard to get on with.

It's always embarrassing to have to keep apologizing in public that the leader of your country is a flaming ***hole, but that's certainly the case once again here.  I know that the Canadian people will do what's necessary to ensure that this man is put out to pasture for good in October---and that's spoken by a dyed-in-the wool small 'c' conservative, me!  I thank reader Jule Mounteer for bringing this story to my attention---and now to yours.

G7 Experiencing a 'Crisis of Legitimacy' as Leaders Accused of Hypocrisy

The G7 summit has been accused of suffering from a "crisis of legitimacy" ahead of the opening of Sunday's event in Germany, with leaders criticized for their perceived lack of action when it comes to pledges on improving global inequality, reducing climate change and implementing trade deals.

As the leaders of the U.S., U.K., Germany, France, Italy, Canada and Japan prepare to discuss a range of issues such as global food security and climate change in Bavaria's Elmau Castle, critics have slammed the G7 concept, accusing it of representing the height of hypocrisy.

"The very concept that seven of the richest nations have a mandate to enact policies and programs that impact the rest of the world is in itself a gross and unjust anachronism," Nick Dearden, director of U.K.-based activist group Global Justice Now said.

While much of the criticism of this year's G7 event has centered on Russia's non-attendance at the Bavarian summit, Dearden says the leaders of the countries involved talks are not matching their words with their actions.

This sputniknews.com article was posted on their website at 6:55 p.m. Moscow time on their Friday evening---and it's the second contribution of the day from Roy Stephens.

Greece cannot accept lenders' latest proposal: economy minister

Greece cannot accept the latest proposals for a cash-for-reforms deal put on the table by its international lenders but was prepared to negotiate a compromise, Greek Economy Minister George Stathakis said on Friday.

Greece delayed a key debt payment to the International Monetary Fund due on Friday as Prime Minister Alexis Tsipras demanded changes to tough terms from international creditors for aid to stave off default.

Stathakis said Greece had the money to pay, but had accepted an offer from the IMF to bundle four payments due in June into a single €1.6 billion lump sum due at the end of the month.

"We are looking forward to getting a deal as soon as possible," he told BBC Radio, but said that while Greece was ready to discuss compromises, it would not accept proposed fiscal adjustments for 2015 and 2016.

This Reuters article, filed from London, appeared on their website at 6:06 a.m. yesterday morning EDT---and it's the second contribution of the day from Dennis Mong.

Greece's creditors need a dose of reality – this is no time for European disunion -- Joseph Stiglitz

E.U. leaders continue to play a game of brinkmanship with the Greek government. Athens has met its creditors’ demands more than halfway. Yet Germany and Greece’s other creditors continue to demand that the country sign on to a programme proven to be a failure, and that few economists ever thought could, would, or should be implemented.

The swing in Greece’s fiscal position from a large primary deficit to a surplus was almost unprecedented, but the demand that the country achieve a primary surplus of 4.5% of GDP was unconscionable. Unfortunately, at the time that the “troika” – the European commission, the European Central Bank and the International Monetary Fund – first included this irresponsible demand in the international financial programme for Greece, the country’s authorities had no choice but to accede to it.

The folly of continuing to pursue this programme is particularly acute, given the 25% decline in GDP that Greece has endured since the beginning of the crisis. The troika badly misjudged the macroeconomic effects of the programme they imposed. According to their published forecasts, they believed that, by cutting wages and accepting other austerity measures, Greek exports would increase and the economy would quickly return to growth. They also believed that the first debt restructuring would lead to debt sustainability.

This op-ed piece by Stiglitz was posted on theguardian.com Internet site at 1:40 p.m. BST London time---and I thank South African reader B.V. for sharing it with us.  It's worth reading.

IMF has betrayed its mission in Greece, captive to EMU creditors

The International Monetary Fund is in very serious trouble. Events have reached a point in Greece where the Fund's own credibility and long-term survival are at stake.

The Greeks are not withholding a €300m payment to the IMF because they have run out of money, though they soon will do.

Five key players in the radical-Left Syriza movement – meeting in the Maximus Mansion in Athens yesterday – took an ice-cold, calculated, and carefully-considered decision not to pay.

They knew exactly what they were doing. The IMF’s Christine Lagarde was caught badly off guard. Staff officials in Washington were stunned.

On one level, the “bundling” of €1.6bn of payments due to the IMF in June is just a technical shuffle, albeit invoking a procedure last used by Zambia for different reasons in the 1980s. In reality it is a warning shot, and a dangerous escalation for all parties.

This longish, but must read commentary by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 3:25 p.m. BST yesterday afternoon, which was 10:25 a.m. EDT in Washington.  It's the third offering of the day from Roy Stephens.

Greek Banks on Verge of Total Collapse: Bank Run Surges "Massively" as Depositors Yank €700 Million Today Alone

While the Greek government believes it may have won the battle, if not the war with Europe, the reality is that every additional day in which Athens does not have a funding backstop, be it the ECB (or the BRIC bank), is a day which brings the local banking system to total collapse.

As a reminder, Greek banks already depends on the ECB for some €80.7 billion in Emergency Liquidity Assistance which was about 60% of total deposits in the Greek financial system as of April 30. In other words, they are woefully insolvent and only the day to day generosity of the ECB prevents a roughly 40% forced "bail in" deposit haircut a la Cyprus.

The problem is that a Greek deposit number as of a month and a half ago is hopefully inaccurate. It is also the biggest problem for Greece, which has been desperate to prevent an all out panic among those who still have money in the banking system.

This Zero Hedge commentary showed up on their website at 2:49 p.m. EDT on Friday afternoon---and I thank reader 'David in California' for passing it around.

Putin holds phone call with Tsipras, agrees to meet in 2 weeks in Russia

Russian President Vladimir Putin has held a telephone talk with Greek Prime Minister Alexis Tsipras on Friday. They have discussed Russian gas supplies via Turkish Stream and agreed to meet at the St. Petersburg International Economic Forum in mid-June.

"Practical steps were discussed to implement agreements reached during the recent working visit of Alexis Tsipras to Russia, particularly the planned construction of the gas transport infrastructure across the territory of Turkey and Greece," the press service said.

The talks with the Russian president came hours before the Greek prime minister is due to address the country's parliament about the EU proposal.

The Russian and Greek leaders have recently stepped up contacts, especially regarding the Turkish Stream gas pipeline. It is planned for the pipeline to transport 47 billion cubic meters of Russian natural gas to the Turkish-Greek border.

This news item appeared on the Russia Today website at 10:32 a.m. Moscow time on their Friday morning, which was 3:32 a.m. EDT in Washington.  It's another contribution from Roy Stephens.

Soros Flaring Flames of Ukraine War to Force Regime Change in Russia

A leaked document attributed to investor George Soros outlines the billionaire's plan for Ukraine, which essentially boils down to an ambitious idea to use Kiev to topple Russian President Vladimir Putin, investigative historian Eric Zuesse said.

The confidential document, allegedly part of communications between Soros and Ukrainian authorities, was published by hacktivists from CyberBerkut, known for releasing embarrassing revelations with regard to the U.S. meddling in Ukraine.

"While it would be more desirable to have Russia as a partner than an enemy, that is impossible as long as Putin persists in his current policies," Zuesse quoted Soros as saying. In other words, Moscow should be a partner but Russian leader has to go, the historian said referring to Soros' stance.

This is not 'new' news, as I've posted something about this before---and the story from other sources has been floating around for about a month.  This iteration appeared on the sputniknews.com Internet site at 2:56 p.m. Moscow time yesterday afternoon---and I thank U.K. reader Tariq Khan for sending it our way.

Poroshenko Hands Over Roshen Share to Rothschild Under Trust Deal

Ukrainian President Petro Poroshenko confirmed on Friday his decision to sell his businesses and transfer his stake in the Roshen confectionary corporation under a trust agreement to Rothschild Investment Company.

“I signed a deal with the world-famous and the world’s best Rothschild Company, which is now looking for buyers. Three such potential buyers have already stepped forward and are analyzing the company’s legal status and financial performance,” Poroshenko said during a news briefing devoted to his annual address to parliament.

“The transfer will be done so that my name is not mentioned among Roshen’s owners,” Poroshenko added.

One of the world’s main confectionery producers, Roshen Corporation annually turns out around 450,000 tons of chocolate and jelly sweets, caramel, chocolate, biscuits, waffles, and cakes.

This is another story from the sputniknews.com website---and it's also courtesy of Tariq Khan.  It was posted on their Internet site at 5:07 p.m. Moscow time on their Friday afternoon, which was 10:07 a.m. in New York.

John Batchelor interviews Stephen F. Cohen

From FIFA to George Soros the Ukraine is turning into a melting pot of personalities and  hot spots of intrigue. John Batchelor and Stephen F. Cohen once more discuss the most serious news of this new Cold War.

On the Russia Washington front Senator John McCain and the usual suspects rev up the rhetoric against the corruption in FIFA and targets for vandalism the World Cup games for Moscow in 2018. Cohen notes that once more International games institutions are being politicised by Washington as a campaign to take this event from Russia, and it sets a precedent for a new and most inappropriate front for politics.

Then there is the very strange story of Mikhail Saakashvili, former president of Georgia becoming governor of the province of Odessa in Ukraine. He is now under indictment for various crimes in Georgia while in office there, and most importantly he was responsible for the 2008 Georgia War against Russia – as Washington’s man behind the hostilities. Cohen describes his history at length and refers to his appointment as “weird” and a “detonator” for problems ahead in the Ukrainian Civil War. He is a long term Russian hater who is to be governor of a province that is culturally like the Donbass- in a word Russian. And in Russia many Russians see Odessa as more part of Russia than Ukraine – similar to Crimea. Cohen thus considers Saakashvili a “time bomb” and a “provocation”.

There is much more in this broadcast as Cohen gives great context to comparing the ending of the Soviet Union under Gorbekev and the political realities of the new Russia under Putin. As usual the insights gained about Russia are not available anywhere else, and all of these broadcasts are important for those who follow the New Great Game.

Reader Ken Hurt was the first person through the door with this on Wednesday, but the entire preamble above is courtesy of Larry Galearis.  This 39:48 minute audio interview was posted on the johnbatchelorshow.com Internet site on Tuesday.

Sergey Lavrov interview on Bloomberg TV

This 24:20 minute video interview with Sergey showed up on thesaker.is Internet site back on June 3---and I'm not sure of the exact date of the Bloomberg interview, but it's most likely less than a week old.

I haven't watched it yet, but it's on my 'to do' list this weekend.  Roy Stephens sent it to me on Wednesday---and it's another one of those news items that had to wait for the weekend.

Russia’s largest bank issues first credit guarantees in yuan

Sberbank has issued its first yuan-denominated letters of credit that involve funding from the Export-Import Bank of China to Russia’s largest pharmaceutical company.

Pharmasyntez, Russia’s leading drug manufacturer, appealed to Sberbank with a request for funding credit guarantees in Chinese national currency as part of contracts for the supply of imported pharmaceutical products worth over 29 million yuan ($4.6 million), Sberbank said in a statement Friday.

Sberbank has become the first Russian bank to issue letters of credit in yuan; the decision was announced in November 2014.

“The development of cooperation with The Export-Import Bank of China expands Sberbank’s possibilities to finance clients’ foreign trade with Chinese counterparties.”

This story appeared on the Russia Today website at 5:02 p.m. Moscow time on their Friday afternoon---and I thank Roy S. for sharing it with us.

Media failure on Russia's official gold reserves -- Koos Jansen

Gold researcher and GATA consultant Koos Jansen corrects a news agency report this week that grossly exaggerated Russia's gold reserves.

His commentary is headlined "Media Failure on Russia's Official Gold Reserves" and it was posted on the Singapore-based website bullionstar.com yesterday.  I thank Chris Powell for providing the above two paragraphs of introduction---and it's definitely worth reading.

China’s five year plan---and the end of an era: Alasdair Macleod

China is in the late stages of constructing its thirteenth five-year plan, a process that commenced over a year ago and will result in a first draft in October. While the bulk of the plan will concern regional and domestic development, it is the international aspects that will concern the rest of the world. The plan, which will produce specific goals for 2016-20, is already having an effect on China's foreign and trade policy.

At its centre will be a shift of emphasis away from trade with the advanced nations, whose prospects are bound to subside towards their level of economic growth. Instead, to maintain the long-term objective of 7% growth in GDP China will turn her attention to improving Asia's infrastructure, a policy for which the building-blocks are now in place. The Silk Road Project is advancing from the drawing board, and the Chinese-led Asian Infrastructure Investment Bank (AIIB), which will arrange finance for projects totalling as much as $20 trillion over the next thirty years, was formally established this year.

Working in partnership with China through the Shanghai Cooperation Organisation (SCO) will be Russia, whose resources are central to Asia's modernisation. The SCO will eventually cover a territory from the Bering Strait to the Persian Gulf. To obtain extra resources, China has already established a dominant presence on the ground in Sub-Saharan Africa, secured the undivided attention of the Middle East by being its largest customer, and through its own diaspora can count on the cooperation of the South-East Asian nations currently in the West's sphere of influence. At the end of the thirteenth plan a substantial majority of the world's population will have become involved one way another.

The implications for the West are becoming apparent. We have already seen how Europe and Japan have clamoured to join the AIIB, despite their alliances with America. Unfortunately, America has been a Goliath to China's David: her mistake has been not to recognise the passing of her own era and embrace a future based on Asia.

This short, but must read article by Alasdair showed up on the goldmoney.com Internet site yesterday---and I thank Dan Lazicki for his final contribution to today's column.

Gold for the long haul – Now is the time! -- Lawrence Williams

Over the long haul, gold is the least risky and potentially most rewarding of all investment asset classes.”  So says New York-based specialist gold analyst, Jeff Nichols, in his latest Nicholsongold newsletter.  Admittedly Nichols falls into the gold bull camp, but is at the realistic end of gold analysis, seeing both potential upsides and downsides ahead.  His latest article is headed Gold: Now is the time, and in it he lays out the various factors which he sees as having the potential to drive the gold price in the medium to long term – and as noted in the first sentence of this article he sees a reasonable investment in physical gold (not gold derivatives) – perhaps 5% – 10% of an investment portfolio – as key to protecting one’s assets over time.

So what factors does he point to as being the likely positive points for investment in gold?  In truth he is primarily stating the obvious here, but it’s an ‘obvious’ which is often ignored by mainstream investors who seek more rapid returns than gold tends to offer.  But rapid returns are themselves risky – it’s all very well chasing the stock markets upwards but as investors have found to their cost, bull markets tend to be followed by a crash and investors are notoriously bad at recognising when a crash begins and by the time they try to take their profits it is usually too late.

But some of the factors which could very easily come into play could have both an adverse impact on the general stock markets and a positive impact on gold.

Lawrie comments on a Jeff Nichols piece that was posted on the Internet early this week.  But Nichols conveniently forgets to mention the fact that black swans don't matter in a rigged market.  All that matters is what's happening in the COMEX futures market---and as I keep saying, until JPMorgan et al get the word, precious metal prices aren't going anywhere.

Gold At $64,000 – Bloomberg’s ‘China Gold Price’

Bloomberg Intelligence suggest gold-backed yuan see gold at $64,000 per ounce
- “Chinese gold standard would need a rate 50 times bullion’s price”
- As China-U.S. relations deteriorate, gold-backed yuan possible
- Dollar and financial and monetary dominance of U.S. at risk
- U.S. and China war of words continues to escalate
- China rejects U.S. hegemony in Southeast Asia
- Currency war to escalate

If China were to partially back its yuan with gold it would require a gold price of $64,000 per ounce, 50 times gold bullion’s price today, according to a recent article from respected Bloomberg Intelligence.

It seems like an outlandish forecast. However, as tensions between the U.S. and China continue to escalate such a scenario is not actually as implausible as it may first appear.

This isn't the first time that I've seen such an outlandish gold price mentioned.  The first time was from blogger Adam Hamilton over a decade ago.  His number at the time was $51,000 the ounce.  This commentary by Mark O'Byrne was posted on the goldcore.com Internet site on Friday BST sometime---and it's certainly worth reading.  I would have found this story on my own, but Roy Stephens saved me the trouble---and I thank him for his last offering in today's column.

Silver manipulation? First Majestic questions CFTC -- Lawrence Williams

There is a continuous debate taking place as to whether the principal precious metals prices are being manipulated by the big money for whatever reasons, or indeed in the case of gold at the instigation of some big Central Banks of which the US Fed is reckoned to be the main culprit. The idea is completely dismissed as complete rubbish by most mainstream gold analysts – indeed most will never mention the possibility. But activist groups like the Gold Anti Trust Action Committee (GATA) have researched, and put forward, some compelling evidence, dating back many years, which does indeed suggest that the monetary establishment has certainly been predisposed towards controlling the gold price as a runaway yellow metal price is seen as a destabilising influence on the global fiat currency system in terms of suggesting a global lack of confidence in paper money.

The jury remains out here – those who believe in gold price manipulation and repression will not be moved from their viewpoints, while the mainstream still looks upon these proponents as representing the lunatic fringe – ‘gold cultists’ was the term used at the recent Bloomberg Precious Metals Forum in London. Be this as it may there is an indication that the ‘cultists’ may be gaining a little ground in that some hitherto reluctant very respectable mainstream media have at least recognised in print that there is a raft of opinion which holds this view, having totally ignored this in the past.

But that is gold – with all the political implications that exist. The depths of government economic policies may be devious and remain well hidden with the ultimate intent of maintaining confidence in the status quo. We continually see this in the form of economic indicator goalposts being moved to present data in a more favourable light, so why not organise surreptitious gold price controls to do the same? Who knows outside the economic establishment itself – and it’s not saying apart from denials of such a policy. But who believes such denials these days at any level of the political process?

This longish but absolute must read commentary by Lawrie put in an appearance on the mineweb.com Internet site at 4:59 p.m. London time on their Friday afternoon, which was 11:59 a.m. in New York.   I found it all by myself in the wee hours of this morning---and must admit that I was both surprised and gratified to see it.

¤ The Funnies

These four photos are from a couple of weeks ago.  These two ring-billed gulls had been standing on the shore and looking at me [and each other] for over half an hour without moving.  I generally ignored them.  Then things began to get more interesting---and until the final moments, I had no idea what was about to happen.  Fortunately, I had the camera at the ready---and the last shot is totally uncropped and right of the camera.  Twenty-five feet/eight meters distance is point blank range for a 400mm telephoto lens---and I couldn't even get them both totally in frame.

There are several more photos in this sequence, but modesty and decency prevents me from posting them here, as it's all "XXX rated seagull porn" without much foreplay involved.  If you send me US$29.95---plus three coupons from specially market boxes of Fruit Loops---I'll send you the photos.

¤ The Wrap

Since  [last] Saturday, there have been several articles published highlighting the large number of June gold contracts still open and, while not stating explicitly that there would be a delivery default, described how such a default was possible; particularly since the amount of “registered” gold in the COMEX warehouse inventories was so low (around 370,000 oz) compared to the 550,000 equivalent ounces still open in the June contract.

A failure to deliver physical metal, in COMEX gold or silver or in any other commodity or on any other exchange, to a holder of a long position qualified to take delivery would not only be a delivery default, it would also most likely result in the closing of trading in that commodity and perhaps the closing of the exchange involved. It is the most serious issue possible from a contract and an exchange perspective and should not be referred to as just another thing. And there is no such thing as a minor or major default – any delivery default would be catastrophic for the exchange involved.

While I did note that conditions in the June COMEX gold delivery did look tighter than usual, due to tightening spread premiums and the level of remaining open interest, I generally avoid focusing on the registered vs. eligible categories of COMEX warehouse inventories, preferring to stick to the combined total warehouse inventories. The reason I do so is because the difference between registered and eligible gold and silver in the COMEX warehouses is strictly a matter of paper work. That appeared to be the case in delivery and warehouse developments this [past] week. -- Silver analyst Ted Butler: 03 June 2015

Today's pop 'blast from the past' was an easy choice today.  I've posted this before, but it's been a year or two---and it's one of my favourite pop/rock songs of all time.  It's Richard Harris 'singing' MacArthur Park---and the link is here.  There's a 3:14 minute tribute to this work---and it's linked here.  If you love the song, this youtube.com video is worth your while as well.

Today's classical 'blast from the past' was pretty easy too.  This year is the 150th anniversary of the birth of Jean Sibelius---and not a week goes by without hearing something on CBC FM by this Finnish composer.  Here's his violin concerto in D minor Op. 47---and South Korean violin prodigy Soyoung Yoon does the honours.  Her playing and interpretation is as good as it gets, as is the audio track---but the video quality is not quite what one would expect from a modern recording, but it's OK for the close ups.  The link is here.

I must admit that I was expecting JPMorgan et al to hit gold and silver harder than they did on the jobs numbers yesterday.  What the Friday session turned out looking like was just another slice off all four precious metal salamis.  Just eyeballing the charts below, I'd guess that we've got another $25 or so in gold left to the downside---and maybe 75 cents in silver, if these engineered price declines unfold as they have in the past.  But, as Ted keeps saying---and I mentioned in yesterday's column, it's the number of contracts and not the price that's important.

Here are the 6-month charts for all four precious metals, so you can see how "da boyz" are progressing, as we await the final washouts to the downside.

And before I forget, I'd like to mention that another company has sent off a letter to the CFTC about the goings-on the COMEX futures market in silver---and that came courtesy of CEO Jason Reid over at Gold Resource Corporation.  The amazing thing about his letter is that it's posted on the SEC's website---and the link to that is here.

Let's hope that there are lots more of these letters to come.

As for precious metal prices going forward, I certainly don't want to put a stake in the ground at this juncture.  For the moment JPMorgan et al, which certainly includes the BIS, have an iron grip on prices---and as I always say, until that changes, nothing changes.

Sure, there are lots of economic, financial and political black swans out there, but that matters not at the moment.

Some of the stories about gold coming from the China and Russia lately have all the appearance of rattling the cages of the Western financial system---and it remains to be seen if anything comes of it.  But as I've said on many occasions, if push really becomes shove, nothing would surprise me on this front.

The world is certainly going to hell in the proverbial hand basket---and it's now obvious in all quarters that the current financial and monetary system is floating off the rails.  That's been going on for years now, but the process appears to be accelerating on all fronts---and one has to wonder how long things can last before everything either blows up or melts down.

Will precious metals save us?  One hopes so, as I've pretty much bet the ranch on that outcome.  But, as I and others have said before, we should be careful what we wish for, as the world that emerges from the other side of whatever Armageddon awaits us ain't going to be pretty.

That's all I have for the day---and the week.

Ed Steer

Sat, 6 Jun 2015 08:39:00 +0000
<![CDATA[Ted Butler: Stepping Up to the Plate]]> http://www.caseyresearch.com/gsd/edition/ted-butler-stepping-up-to-the-plate/ http://www.caseyresearch.com/gsd/edition/ted-butler-stepping-up-to-the-plate/#When:04:21:00Z "Without doubt, all eyes will be on the job numbers this morning"

¤ Yesterday In Gold & Silver

The gold price chopped around, mostly lower, during the Far East trading session on their Thursday---and both the rally attempt in the Far East---and the one in early London trading, met with a resolute seller the moment that the price attempted to break above unchanged.  JPMorgan et al, HFT algorithms in hand, did the dirty starting the moment that COMEX trading began---and by around 11:20 a.m. EDT, their work was done for the day, with another low for this move down.  The gold price rallied quietly after that, before chopping sideways starting around 2:40 p.m. in electronic trading.

The high and low tick were recorded as $1,186.60 and $1,172.40 in the August contract.

The gold price closed in New York yesterday at $1,176.40 spot, down another $8.60 from Wednesday's close.  Net volume was very decent at 148,000 contracts.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  As you can tell by the volume spikes, "da boyz" stuck it to the Managed Money traders real good once again during the COMEX trading session.  Midnight Wednesday is the vertical gray line---and you have to add two hours for EDT---and the 'click to enlarge' feature is a must.

The silver chart was similar to gold's, right up until 3:30 p.m. in the New York Access market.  At that point a willing seller stepped in and ensured that silver closed on its absolute low tick of the day.

The high and low ticks were reported by the CME Group as $16.50 and $16.065 in the July contract.

Silver finished the Thursday session at $16.075 spot, down 40 cents on the day.  Gross volume was very decent, as was net volume---46,000 contracts.

Platinum prices were a mini version of the gold price chart---and palladium was a mini version of the platinum chart.  Platinum closed on Thursday at $1,098 spot, down three bucks, finally cracking the $1,100 spot price to the downside.  Palladium also closed 3 dollars lower at $753 spot.  Here are the charts.

The dollar index finished the Wednesday trading session in New York at 95.37---and traded virtually ruler flat until about 1:30 p.m. Hong Kong time.  At that juncture it rallied 20 basis points, hitting 95.56 at 8:30 a.m. BST in London trading.  It fell of a cliff at 9 a.m. right on the button, hitting its 94.72 low about thirty five minutes later.  Then at noon BST it appeared that 'gentle hands' showed up---and the dollar rallied to a handful of basis points above unchanged minutes before trading began in the equity markets in New York.  It rallied higher from there in a rather choppy manner---and closed yesterday at 95.58---up 21 basis points from Wednesday.

It's obvious to me that the dollar would crash if given the opportunity to do so---and it's equally as obvious that the powers-that-be are at hand to prevent that from happening.

Here's the 6-month U.S. Dollar chart as a reference.

The gold stocks opened down---and chopped more or less sideways for the remainder of the day, as the HUI closed down another 1.35 percent.

It was more or less the same thing in the silver equities, although the trading day had more shape to it.  The big drop because someone sold a boat load of shares in Peñoles right at the close, at least that's what Nick said yesterday when I asked him.  Because of that, Nick's Silver Sentiment Index got hit for 2.26 percent.  Without that share dump, the loss would have been about 0.5 percent.

The CME Daily Delivery Report for Day 5 of the June delivery month showed that zero gold and 9 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  Nothing to see here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest for June dropped another 282 contracts, leaving 1,262 still open.  June o.i. in silver was up 7 contracts to 40.

There was no reported change in GLD, but another deposit was made in SLV.  This time it was 1,433,379 troy ounces.  So far this week, there has been a bit over 2.5 million ounces deposited in SLV.  Since the price action indicates that silver should be flowing out of that ETF, the deposits must have been used to cover an existing short position.  We'll have to wait until about June 23 when the next short position report comes out of the folks over at shortsqueeze.com in order to get a hint of what might be going on.

Since yesterday was Thursday, Joshua Gibbons, the Guru of the SLV Bar List, updated his website with the goings-on over at the iShares.com Internet site at the close of trading on Wednesday---and this is what he had to report.

"Analysis of the 03 June 2015 bar list, and comparison to the previous week's list:  1,138,121.2 troy were added (all to Brinks London), 893,539.6 oz were removed (all from Brinks London), and 113 bars had serial number changes."

"The bars removed were from: Solar Applied Materials (0.3M oz, Krasnoyarsk (0.2M oz), and 10 others.  The bars added were from: Krasnoyarsk (0.2M oz), Prioksky (0.1M oz), and 13 others.

"As of the time that the bar list was produced, it was overallocated 384.9 oz.  All daily changes are reflected on the bar list."

Over at Switzerland's Zürcher Kantonalbank for the week ending May 29---they reported tiny declines in both their gold and silver ETFs.  Their gold ETF shed 1,804 troy ounces---and their silver ETF dropped only 7,123 troy ounces.

After four straight day of sales, it should come as no surprise that there was no report from the U.S. Mint yesterday.

Over at the COMEX-approved depositories on Wednesday, there was 50,092 troy ounces of gold transferred from Canada's Scotiabank to HSBC USA.  Other than that, there was no activity worth mentioning, but the link to what there was, is here.

It was another huge in/out day in silver, as 411,788 troy ounces were received---all at JPMorgan's vault---and 1,012,058 troy ounces were shipped out.  All of the 'out' movement was from Canada's Scotiabank, including the 411,788 troy ounces that JPMorgan received.  The link to that action is here---and it's worth a quick look.

There wasn't a lot of activity at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, as only 775 kilobars were reported received---and another 475 were shipped out.  All of the action was at Brink's, Inc. as usual.  The link to that activity is here.

I have a fair number of stories for you today---and I'll happily leave the final edit up to you.

¤ Critical Reads

IMF Panics - Slashes U.S. Growth Forecasts, Demands Fed Stay on Hold For Another Year

Anxiety over financial stability and shadow banking risks appear to have force Christine Lagarde and her fellow extrapolators to hit the panic button:


Adding that they viewed the Dollar as "moderately overvalued" and any more appreciation would be "harmful," it seems global disinflationary pressures have left the IMF no choice but to say publicly what everyone has uttered under their breath.

This is the Zero Hedge spin on a Bloomberg story yesterday.  It was posted on the ZH website at 9:41 a.m. EDT---and it's courtesy of Dan Lazicki.  It's worth reading.  There was a Reuters story on this as well.  It was filed from Washington and headlined " IMF warns Fed should delay rate hike until 2016"---and I found it embedded in a GATA release.

Marc Faber: Forget a Fed rate hike; QE4 coming

While some U.S. economic data suggest the economy is ready for normalizing monetary policy, Marc Faber said Thursday the Fed will have to unleash another round of quantitative easing.

"When I look at the whole financial sector … I feel like [I'm] on the Titanic. We're fighting about deck chairs, [meaning] which assets are performing best and we're fighting over the best tables in the ballroom, but I think it's best to find your safety boat and ladder because I think the financial sector will implode one day," the editor and publisher of the Gloom, Boom & Doom Report said on CNBC's "Squawk Box."

Faber made his remarks a day after the Federal Reserve's Beige Book said economic activity has expanded at a "modest" to "moderate" pace over the past few months.

"All the central banks are so deep in the mud that, in my view, they will continue to essentially buy assets," Faber said.

This 3-video clip interview totals about 8 minutes and change---and was posted on the CNBC website very early MDT yesterday morning---and I thank Ken Hurt for sending them along.

Bond Rout Wipes Out 2015 Gains as Traders Stay Glued to Screens

The global bond market sell-off has erased all of this year’s gains as historic market moves from Germany to the U.S. and Japan whipsaw traders.

After being up as much as 2.3 percent as of mid-April, the Bank of America Merrill Lynch Global Broad Market Index of bonds with a total face value of $41 trillion is now down 0.4 percent for the year.

Bond traders have been caught off guard by signs the worldwide economy is likely to avoid mass deflation and by improvement in the euro zone’s economy, leaving little incentive to own debt securities with yields that in some cases are below zero. Fixed income continued its slide on Thursday, a day after European Central Bank President Mario Draghi said investors should get used to the heightened volatility they’ve seen in recent weeks.

“This is sheer panic in the market from the standpoint of what’s been happening in Europe,” said Thomas di Galoma, head of fixed-income rates and credit at ED&F Man Capital Markets in New York. “Most of Wall Street is guarded here as far as taking on new positions.”

This Bloomberg article appeared on their Internet site at 4:45 p.m. on Wednesday afternoon Denver time, but was updated late yesterday morning.  There's also a 3:02 minute video clip embedded as well.  I thank West Virginia reader Elliot Simon for sharing it with us.

Rick Santelli: Here's something important

CNBC's Rick Santelli discusses bond prices and yields in this 1:04 minute video clip that was posted on their website about 2 p.m. EDT Thursday afternoon---and it's the second offering of the day from reader Dan Lazicki.

Economy’s biggest issue: People don’t have money to spend

Anyone with even a quarter of a brain now understands that the US economy got off to a bad start this year.

There was an economic contraction in the first three months — when the nation’s gross domestic product fell at an annualized rate of 0.7 percent — that some quarter-brainers are still blaming on the cold weather, strikes at ports, the strong dollar, solar flares, Martian landings and (insert your own poor excuse here).

The truth: Most of these excuses are part of the problem, although I didn’t personally see or not see the Martians.

But the biggest part is that people don’t have enough money to spend. Interest from savings is down to zero, people don’t liquidate stock gains to make purchases, and job and income growth has been sketchy.

This right-on-the-money commentary by John Crudele was posted on The New York Post website at 10:26 p.m. on Wednesday evening---and I thank reader "G. Roberts" for bringing it to our attention.

Hunting for Hackers, N.S.A. Secretly Expands Internet Spying at U.S. Border

Without public notice or debate, the Obama administration has expanded the National Security Agency’s warrantless surveillance of Americans’ international Internet traffic to search for evidence of malicious computer hacking, according to classified N.S.A. documents.

In mid-2012, Justice Department lawyers wrote two secret memos permitting the spy agency to begin hunting on Internet cables, without a warrant and on American soil, for data linked to computer intrusions originating abroad — including traffic that flows to suspicious Internet addresses or contains malware, the documents show.

The Justice Department allowed the agency to monitor only addresses and “cybersignatures” — patterns associated with computer intrusions — that it could tie to foreign governments. But the documents also note that the N.S.A. sought permission to target hackers even when it could not establish any links to foreign powers.

The disclosures, based on documents provided by Edward J. Snowden, the former N.S.A. contractor, and shared with The New York Times and ProPublica, come at a time of unprecedented cyberattacks on American financial institutions, businesses and government agencies, but also of greater scrutiny of secret legal justifications for broader government surveillance.

This essay, filed from Washington, showed up on The New York Times website yesterday sometime and, if it interests you, it will take just under ten minutes to read.  It's the first offering of the day from Roy Stephens.

Interest Rates in Brazil Rise to 13.75 Percent

Brazilian Central Bank’s Comitê de Política Monetária – Copom (Monetary Policy Committee) decided unanimously on Wednesday (June 3rd) to increase the country’s benchmark interest rate (Selic) by 0.5 percentage points from 13.25 percent to 13.75 percent per year. This is the sixth consecutive time the Selic has increased.

“Assessing the macroeconomic scenario and the perspectives for inflation, the Copom decided, unanimously, to increase the Selic rate by 0.50 percentage points to 13.75 percent per year, without bias,” said the Copom statement after the meeting.

The latest increase of the Selic shows the country going in the opposite direction of its international counterparts with growth well below average and interest rates much higher than most other countries, says Fecomercio-RJ (Rio de Janeiro Commerce Association), “We are on the tailgate in terms of growth and leading when it comes to interest rates,” said the association in a press release Wednesday night.

For the association what is needed is a structural reform. “It is time to increase the efficiency of public spending, reduce tax burdens, encourage investments and expand corporate productivity, which will in turn help contain inflation,” adds the note.

The only reason that interest rates are this high is to prevent capital flight, so hyperinflation and maybe capital controls are probably just around the corner.  Great shades of Venezuela!  This news item was filed from São Paulo yesterday---and posted on the riotimesonline.com Internet site.  I thank reader M.A. for sending it our way.

Argentina's President Cristina Fernandez went to Russia to chat with Edward Snowden

Argentina's President Cristina Fernandez held talks with U.S. whistleblower Edward Snowden during a visit to Russia in April, Anthony Romero, director of the American Civil Liberties Union and one of Snowden's lawyers said on Thursday.

The two hour-long meeting took place after an Argentine TV channel, citing intelligence documents provided by Snowden, revealed Britain spied on Argentine military and political leaders from 2006 to 2011 to safeguard the security of the disputed Falkland Islands.

"She met with him toward the end of April," Romero told reporters in the Argentine capital Buenos Aires.

This Reuters article, filed from Buenos Aires, was picked up by the businessinsider.com Internet site at 9:05 p.m. EDT yesterday evening---and I thank Roy Stephens for sending it our way.

Canada suffers indirect economic blow back from sanctions against Russia: Oliver

Canada is experiencing indirect economic fallout from the sanctions it and other countries have imposed against Russia, federal Finance Minister Joe Oliver acknowledged Tuesday.

Western European countries that do business with Canada are feeling the negative impact of economic sanctions, which have also been imposed by the U.S. and Europe, Oliver said.

That, in turn, reaches across the Atlantic because when growth in Europe slows, it also affects Canadian trade, he added.

"I think most European countries would acknowledge there has been some economic impact on Europe from these sanctions," Oliver said after a committee hearing.

Canada has been a branch plant of the U.S. Empire for decades---and it's hard to believe that I could possibly long for the return of the likes of Pierre Elliot Trudeau as Prime Minister, although it does cross my mind at times.  He could never be bought by the Americans.  Harper---and Mulroney before him---are bought and paid for.  This article appeared on the ca.finance.yahoo.com Internet site on early Wednesday morning EDT---and I thank reader Doug Milne for finding it for us.

Washington Politicizes Football — Paul Craig Roberts

Washington’s attack on world soccer is following the script of Washington’s attack on the Russian-hosted Sochi Olympics. The difference is that Washington couldn’t stop
the Olympics from being held in Sochi, and was limited to scaring off westerners with lies and propaganda. In the current scandal orchestrated by Washington, Washington intends to use its takeover of FIFA to renege on FIFA’s decision that Russia host the next World Cup.

This is part of Washington’s agenda of isolating Russia from the World.

This Washington-orchestrated scandal stinks to high heaven. It seems obvious that the FIFA officials have been arrested for political reasons and that the recently overwhelmingly-reelected FIFA president, Sepp Blatter, was forced to resign by Washington’s threats to indict him as well. This can happen because Washington no longer is subject to the rule of law. In Washington’s hands, law is a weapon that is used against everyone, every organization, and every country that takes a position independent of Washington.

This clears the deck for Washington and its British lapdog to take over FIFA, which henceforth will be used to reward countries that comply with Washington’s foreign policy and to punish those who pursue an independent foreign policy.

This very interesting commentary by Paul put in an appearance on his website on Wednesday---and it's another offering from reader M.A.

Soccer Scandal: How Interpol got into bed with FIFA

As the investigation into corruption in world soccer grows more intense, one organization that has a €20 million deal with FIFA now finds itself in an embarrassing corner: Interpol.

Whereas corporate sponsors like Samsung and Visa pour money into FIFA’s coffers, in Interpol’s case it is the other way around: the largesse comes from FIFA. Millions of euros of soccer money flow into the law enforcement organization’s bank account each year, raising serious questions about conflicts of interest and Interpol’s impartiality.

On Monday — after insisting for several days that its collaboration with FIFA would continue as normal — Interpol quietly revealed to POLITICO that it had decided to “review” the arrangement. To many, this will seem like too little too late.

Interpol’s deal with FIFA is just the tip of a fiscal iceberg. Since 2011, Interpol has signed deals with a large number of private “partners,” including tobacco giants, pharmaceutical firms and tech companies — such as Philip Morris International, Sanofi, and Kaspersky Lab — the proceeds of which have swollen its operational budget by almost a third.

The sleeze just keeps getting worse and, without doubt, we've only seen the beginning of it.  This news item showed up on the politico.eu website at 4:58 p.m. Central Europe Time [CET] on their Wednesday afternoon, but was updated on Thursday afternoon.  I thank South African reader B.V. for his first contribution to today's column.

Greece delays IMF payment, P.M. to brief angry parliament

Greece delayed a key debt payment to the International Monetary Fund due on Friday as Prime Minister Alexis Tsipras, facing fury among his leftist supporters, demanded changes to tough terms from international creditors for aid to stave off default.

The IMF said Athens planned to bundle four payments due in June into a single 1.6 billion euro lump sum which is now due on June 30.

It was the first time in five years of crisis that Greece has postponed a repayment on its 240 billion euro bailouts from euro zone governments and the IMF, even though Tsipras said earlier this week that Athens had the money and would make the payment.

The delay came as German Chancellor Angela Merkel said talks on a cash-for-reforms deal were still far from reaching an agreement.

This Reuters news story, co-filed from Athens and Brussels was posted on their website at 6:25 p.m. EDT Thursday evening---and I thank Orlando, Florida reader for digging it up for us.  The Bloomberg take on this bears the headline " Greece Defers IMF Payment as Merkel Says Resolution Far Away"---and it's courtesy of Roy Stephens.

Greece misses IMF payment in warning shot as showdown with Europe escalates -- Ambrose Evans-Pritchard

Greece is to take the drastic step of skipping a €300m payment to the International Monetary Fund on Friday, invoking an obscure mechanism in abeyance since the 1970s to bundle all debts due in June and pay them at the end of the month.

It is the first time that a developed country has ever missed a payment to the IMF since the creation of the Bretton Woods institutions at the end of the Second World War.

The news broke after the Athens stock exchange had closed but a bloodbath is feared when the bourse opens on Friday. Yields on two-year Greek bonds spiked 63 basis points to 21.8pc amid mounting fears of a deposit run on Greek banks and the imposition of capital controls as soon as this weekend.

Although one of the "fair-haired" favourites of the New World Order crowd, I'm always interested in his take on events.  This commentary appeared on the telegraph.co.uk Internet site at 8:45 p.m. BST yesterday evening, which was 3:45 p.m. in Washington.  Roy Stephens sent it our way in the wee hours of this morning Denver time.

Ukraine's Poroshenko warns of Russian invasion threat after fighting surge

Ukraine's president told his military on Thursday to prepare for a possible "full-scale invasion" by Russia all along their joint border, a day after the worst fighting with Russian-backed separatists in months.

His address in parliament was one of the first times Petro Poroshenko has used the word "invasion" to refer to Russia's behavior since the start of a separatist rebellion in the east in which the United Nations says more than 6,400 people have been killed.

Referring to a 12-hour firefight involving artillery on both sides on Wednesday when Ukraine says the rebels tried to take the town of Maryinka, Poroshenko said: "There is a colossal threat of a renewal of large-scale military operations from the side of the Russian-terrorist groups."

"The military must be ready as much for a renewal of an offensive by the enemy in the Donbass as they are for a full-scale invasion along the whole length of the border with Russia. We must be truly ready for this."

This Reuters article, filed from Kiev, appeared on their Internet site at 3:59 p.m. EDT yesterday afternoon---and as Roy Stephens said in his covering e-mail---"Unbelievable bulls hit!"  That it is, dear reader.

Kremlin: Timing of Kiev-provoked Donbass tensions linked with looming E.U. summit

The timing of the new tensions in Donbass, provoked by the Kiev forces, is connected with the upcoming EU summit, Kremlin spokesman Dmitry Peskov said. He added that Kiev has breached the Minsk deal and Moscow is waiting for the OSCE’s reaction.

"The violations are obvious and [Foreign] Minister [Sergey] Lavrov has already said that the representatives of the OSCE are to draw corresponding conclusions and to clearly identify who is responsible for these violations [in eastern Ukraine],” Kremlin spokesman Dmitry Peskov told journalists Thursday.

According to Peskov, the Kiev authorities are responsible for the recent escalation of the crisis in the troubled region.

“Donbass is being shelled. Self-defence forces can’t shell their own territory,” he said.

This story showed up on the Russia Today website at 9:49 a.m. Moscow time on their Thursday morning, which was 2:49 a.m. EDT in Washington.  I thank reader M.A. for sending it our way.

U.S. ignores OSCE data, blames ‘majority’ of Ukraine truce violations on rebels

US State Department spokesperson Marie Harf refused to directly acknowledge Kiev’s role in violating the Minsk peace agreements in eastern Ukraine, turning a blind eye on daily OSCE reports that equally implicate the government and the rebel forces.

The video below shows RT’s Gayane Chichakyan grilling Harf – and failing to get a straight answer on the issue despite multiple attempts.

Chichakyan reminds Harf about the daily reports compiled by the Organization for Security and Co-operation in Europe (OSCE) listing violations, noting that the breaches are more or less equally split between both sides of the conflict.

Harf continues to insist that the “majority of violations” to the Minsk agreements have been committed by rebel forces and not Ukrainian troops.

This news item is also courtesy of the Russia Today website---and it was posted on their Internet site in the wee hours of Thursday morning Moscow time.  It's the second offering in a row from reader M.A.

Commodity prices weigh heavily on top 40 mining giants

The tough fight faced by the global mining industry in 2014 would escalate into a brawl this year as mining companies worldwide struggled to emerge from depressed markets, PwC’s Africa Mining Centre of Excellence head Michal Kotze said on Thursday.

Widespread government intervention, significant conflicts surrounding strategy debates and other internal industry conflicts, “huge” competition, weakening commodity prices with increasing short-term volatility and rising shareholder activism had left industry on the ropes.

A reduction in capital spend, somewhat higher production and “unexpected help” from currency devaluations and lower input costs had assisted the mining industry to “manage expectations” during 2014 despite continued headwinds from weak commodity prices, the latest PwC ‘Mine’ report showed.

By April 2015, iron-ore prices had dropped to below 50% of the value recorded in January 2014, while coal and copper prices dropped to below 75% and 80% of their respective price structures during the same period.

This interesting article, filed from Johannesburg, appeared on the miningweekly.com Internet site yesterday---and I thank South African reader B.V. for his second contribution to today's column.

Gold mining’s enormous positive impact on global economy – WGC

A new report released today from the World Gold Council, produced in association with Maxwell Stamp, a leading international economics consultancy, reveals that the gold mining industry directly contributed around US$83.1 billion to the global economy in 2013. Once the indirect economic impact is taken into account, this figure increases to US$171.6 billion. The social and economic impacts of gold mining report builds on previous research, including studies by the World Gold Council, to provide an understanding of the socioeconomic impacts of the commercial gold mining industry at both a global, national and host community level.

The report’s analysis of the impacts of large-scale commercial gold mining in 47 gold producing countries (accounting for over 90% of the world’s gold production) shows that gold mining companies in total contributed over US$171 billion to the global economy in 2013 when the value created by support services and indirect employment is taken into consideration.

Globally, gold mining companies directly employed over one million people in 2013, with over three million more people employed as a result of the industry’s suppliers and support services.

This commentary by Lawrence Williams showed up on his website on Wednesday---and it's worth reading.

End of an era as largest gold ETF drops out of top 10

In May more than $900m left the world's largest physical gold-backed ETF, dropping the fund to number 11 in rankings it briefly led four years ago.

Once the largest fund of its kind in the world, top physical gold-backed exchange traded fund – SPDR Gold Shares  – has dropped out of the top ten.

According to ETF.com GLD suffered outflows of $902 million or 3% of its total assets under management during May.

GLD still dwarfs other physically-backed exchange traded gold products holding 44.5% of the global total at 709.9 tonnes or 22.8m ounces worth $26.8 billion.

Well, it's not going to be out of the Top 10 for long, because when the gold price is finally allowed to rise, it won't take much time to rocket back into top spot.  This must read article showed up on the mining.com Internet site yesterday---and I thank Jim Ackers for pointing it out.

Southwest England was scene of prehistoric gold rush, new research says

New archaeological research is revealing that south-west Britain was the scene of a prehistoric gold rush.

A detailed analysis of some of Western Europe’s most beautiful gold artifacts suggests that Cornwall was a miniature Klondike in the Early Bronze Age.

Geological estimates now indicate that up to 200 kilos of gold, worth in modern terms almost £5 million, was extracted in the Early Bronze Age from Cornwall and West Devon’s rivers – mainly between the 22nd and 17th centuries BC.

New archaeological and metallurgical research suggests that substantial amounts were exported to Ireland, with smaller quantities probably also going to France. It also suggests that the elites of Stonehenge almost certainly likewise obtained their gold from the south-west peninsula, as may the rulers of north-west Wales, who took to wearing capes made of solid gold.

This longish, but very interesting gold-related news item appeared on the independent.co.uk website yesterday BST sometime---and I found it on the gata.org Internet site.

Russia to Increase Its Gold Reserves – Central Bank Head

The head of Russia’s Central Bank is determined to increase the country’s gold reserves to its previous levels in 2012-2013, from $360.5 billion up to $500 billion.

Russia will increase its gold reserves by up to $500 billion, said Elvira Nabiullina, the head of Russia's Central Bank, Rossiyskaya Gazeta reported.

Russia will aim at $500 billion, despite the fact that a sufficient level of gold reserves for the country is $188 billion, Nabiullina said.

Currently, Russia owns $360.5 billion worth of gold reserves. The amount covers more than three months of imports, short-term foreign debt and 20 percent of Russia's entire money supply.

This story was posted on the sputniknews.com Internet site at 4:31 p.m. Moscow time on their Thursday afternoon, which was 9:31 a.m. EDT in New York.  It's a must read as well---and it's the final offering of the day from reader M.A.

40% drop in wedding days in 2015 may dent gold demand

A nearly 40% drop in the number of wedding days in the second half of 2015 according to the Hindu calendar may hit gold jewellery off-take this year. Retailers and gold traders say that the demand for jewellery sales may drop between 15 and 25% depending on the price of the yellow metal in the coming months.

Talking to ET, Ketan Shroff, spokesperson of India Bullion and Jewellers Association said, "The number of auspicious days for wedding is less this year, which will definitely dent the dent the demand of gold jewellery during the second half of this year. If prices correct at Rs 25,000 per 10 gm-level then the impact will be little less as people will still buy despite wedding dates being less. In that case, jewellery demand will drop by 10 to 15%. But if price remains at Rs 27,000 per 10 gm-level then jewellery sales will come down by 25% in the second half."

This gold-related story, filed from Kolkata, was posted on the The Economic Times of India website at 10:17 a.m. IST yesterday morning---and I found it over at the Sharps Pixley website.

Who's Next? China Finally Starts Snapping Up Gold Miners

One (perhaps the only) bright spot in the past few year’s gold market has been Chinese and Indian demand for the metal. Here’s a chart, courtesy of Ed Steer’s Gold & Silver Daily, showing that the two countries have imported a cumulative 15,000 tonnes since 2008, which is not far from the total production of the world’s gold mines in that period.

But physical bullion is only part of the story, and may not be the biggest one going forward. Speculation has been circulating for years that China’s miners, flush with cash from selling their low-cost output to the government, would soon start buying up the world’s in-ground gold reserves.

This article by John Rubino over at the DollarCollapse.com Internet site, was picked up the folks at Zero Hedge at 7:30 p.m. on Thursday evening---and it's the final offering of the day from South African reader B.V.  It's worth reading if you have the time.

Gold Sales Slump at Mints From Perth to U.S. as Bullion Shunned

Gold sales from Australia’s Perth Mint, which refines all the bullion output from the world’s second-biggest producer, tumbled to the lowest level in three years, adding to signs of weakening demand as prices drop.

Sales of gold coins and minted bars totaled 21,671 ounces in May, the Perth Mint said on its website on Friday. That’s down from 26,545 ounces in April and the lowest since April 2012, according to data compiled by Bloomberg. Silver sales were 337,511 ounces from 472,273 ounces a month earlier.

Gold retreated to a one-month low this week as investors cut holdings in bullion-backed exchange-traded products to the lowest since 2009. Surging stock markets in the U.S. and China, as well as prospects for rising U.S. interest rates and a stronger dollar, hurt demand for the precious metal. In the U.S., sales of American Eagle gold coins dropped 27 percent in May after posting a 37 percent slump in April, according to U.S. Mint data compiled by Bloomberg.

This tiny Bloomberg story showed up on their website at 1:21 a.m. Denver time this morning---and I snatched it off the Sharps Pixley website just before I hit the send button on today's column.

Ted Butler: Stepping Up to the Plate

Silver market analyst and whistleblower Ted Butler congratulates First Majestic Silver CEO Keith Neumeyer for appealing to the U.S. Commodity Futures Trading Commission for an explanation of manipulation of the silver futures market. (See http://www.gata.org/node/15422.)

Butler also thanks GATA Board of Directors member Ed Steer for encouraging him to draft a letter to the CFTC that executives of monetary metals mining companies could use for this purpose.

Butler's commentary is headlined "Stepping Up to the Plate" and it's posted at GoldSeek's companion site, SilverSeek.com.  This short commentary by Ted falls into the absolute must read category.  I thank Chris Powell for the two introductory paragraphs above.

¤ The Funnies

¤ The Wrap

Since we penetrated for the first time to the downside the key 50-day moving average in silver on Wednesday, I suppose the official price take-down cycle is now in effect. Gold, you’ll remember, had penetrated its 50-day moving average a week or so ago, so the market structure there is more advanced than it is in silver. Therefore, in silver, it’s more a question of how many contracts the commercials can induce the managed money traders to sell than it is how low prices must fall. It’s more about contracts sold than prices, although successive lower prices (salami slicing) are necessary to effect the full contract count outcome. In other words, it’s not necessary that we drop dramatically in price, just enough---and in the manner necessary to accomplish whatever complete managed money selling results this go around.

Of course, please dismiss any suggestion that I (or anyone else) know for sure the direction of prices in the short term. This is about probabilities based upon the same thing that those probabilities have always been based on – past and prospective COT patterns. And even though those probabilities suggest lower silver prices ahead, any such decline should prove minor compared to the eventual much higher prices that the actual fundamentals and facts point to. While I hope my COT analysis is beneficial, please understand it is not my intent to handicap silver prices in the short term, although many others do seem so engaged.

Instead, my intent is to use my analysis of the COT market structure to show just how screwed up is the price discovery process on the COMEX and, after 30 years, it is encouraging to see that at least one silver miner may feel the same. In the unfortunate circumstance that the probabilities once again prove correct and we do witness further declines in the price of silver, perhaps that might aid in convincing other silver producers to step up to the plate and write to the CFTC. Trying to come up with rational explanations for why silver and gold prices behave as they do, while leaving out the COT market structure on the COMEX, is guaranteed to reduce one to the babbling idiot level. --  Silver analyst Ted Butler: 05 June 2015

Another day---and more salami slicing in the all four precious metals, particularly gold and silver.  There was decent volume associated with both metals, so it's an absolute certainty that the Managed Money was puking longs and piling on the short side, while JPMorgan et al gobbled up everything on the opposite side of those trades for fun, profit and price management purposes.  And it was a very profitable day for "da boyz" yesterday.

Here are the 6-month charts for all four precious metals---and new lows were engineered in three of the four precious metals.

We're beginning to approach oversold territory and, as you probably already know, how soon we get to those lows will depend on how quickly the powers-that-be take the remaining slices.  A re-read of Ted's quote above would be useful at this point.

And as I type this paragraph, the London open is just under ten minutes away.  Gold, platinum and palladium prices are unchanged---and silver is up a nickel.  Gold's net volume is very light at just under 11,500 contracts---virtually all of it of the HFT variety---and silver's net volume is around 4,200 contracts, with decent roll-overs out of July already.  And after rallying about 20 basis points in the early going in Hong Kong trading on their Friday morning, the dollar index is back to unchanged.  Without doubt, all eyes will be on the job numbers this morning in New York---and what trading 'action' will accompany their release.

Of course the job numbers should make no difference to the gold price at all, but a long history shows that JPMorgan et al use that as an excuse on many occasions to drive the precious metal prices into the dirt---and I'll be amazed if that doesn't happen this morning.

Today we get the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and I doubt if we'll see much, if any, improvement in the Commercial net short positions in either gold or silver, as the reporting week was pretty flat from a price perspective.  All the price action that mattered most didn't start until the day after the cut-off---and it's a very safe bet that it was no accident that it happened this way, as "da boyz" have used this trick for at least a decade when they want to hide their tracks for as long as possible.

We also get the companion Bank Participation Report as well.  This is data that's extracted directly from the COT Report---and shows what the world's banks have been up to during the month that was and, as I always say at this juncture, they're usually up to quite a bit.  I'll have all that data in my Saturday column.

And as I send the Friday edition of today's column out the door at 5:25 a.m. EDT, I see that gold began to develop a slight negative bias starting at 2 p.m. Hong Kong time on their Friday afternoon. Ditto for silver.  Gold is down a couple of bucks, but silver is still up a nickel.  Platinum and palladium are trading flat.

Gold's net volume is now a bit over 22,000 contracts---and silver's net volume is pretty decent as well at 6,500 contracts, but there's been no increase in roll-over activity from over two hours ago.

The dollar index was slowly heading south, but has recovered a bit in the last half hour---and is currently down only 3 basis points.

As I said above, all eyes will be on the 8:30 a.m. EDT jobs report---and if you're feeling a bit like that poor chap in the last cartoon posted above, I'll certainly understand---as I feel that way myself at the moment.

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

Ed Steer

Fri, 5 Jun 2015 04:21:00 +0000
<![CDATA[Gold Declines For Second Day As Investors Await U.S. Jobs Data]]> http://www.caseyresearch.com/gsd/edition/gold-declines-for-second-day-as-investors-await-us-jobs-data/ http://www.caseyresearch.com/gsd/edition/gold-declines-for-second-day-as-investors-await-us-jobs-data/#When:06:21:00Z "In silver, the price closed below its critical 50-day moving average"

¤ Yesterday In Gold & Silver

The gold price didn't do much until about 1:30 p.m. Hong Kong time on their Wednesday afternoon.  From there the price declined into the London a.m. gold fix.  It rallied a hair from there until "da boyz" showed up minutes before 12:30 p.m. EDT---and in short order they'd peeled another ten spot off the price.  The price rallied a bit until 2 p.m. EDT---and then didn't do a lot after that.

Gold finished the Wednesday session in New York at $1,185.00 spot, down $7.70 from Tuesday's close.  Net volume, which was almost all of the HFT variety, was around 118,000 contracts.

The high and low ticks were reported by the CME Group as $1,195.60 and $1,179.10 in the August contract.

Here's the 5-minute tick gold chart from yesterday, courtesy of reader Brad Robertson---and you can see the big volume spike associated with the engineered price decline during the New York lunch hour yesterday.  Midnight EDT is the dark gray vertical line---and you have to add two hours for EDT, as this chart is scaled for MDT.  The 'click to enlarge' feature really helps as well.

The silver price was pretty comatose up until around 1:30 p.m. Hong Kong time on their Wednesday afternoon as well.  At that point it developed a negative bias---and that culminated in a down/up move courtesy of the HFT boyz during the New York lunch hour, the same as gold.  From its low at 12:45 p.m. EDT, the silver price rallied quietly until around 3:30 p.m., before getting sold down a hair into the close of electronic trading.

The high and low ticks were recorded as $16.795 and $16.375 in the July contract.

Silver finished the Wednesday session at $16.475 spot, down 27 cents on the day.  Net volume was pretty decent at around 38,000 contracts---and there was big roll-over action out of July, as gross volume was way up there at 74,838 contracts.

In most respects the platinum chart was just a variation of the gold and silver charts, with the low tick coming shortly before 1 p.m. in New York.  Platinum was closed at $1,101 spot---down 9 bucks from Wednesday, the same closing price as on Monday.  You should note that the $1,100 spot level has been tested for three days in a row---and it's still holding---for now, that is.

Ditto for palladium---and at its 12:45 p.m. EDT low tick, it was down $16 on the day.  It recovered a bit and closed at $756 spot, down an even 10 dollars from Tuesday.

The dollar index closed late on Tuesday afternoon in New York at 95.95---and poked its nose ever-so-briefly above the 96.00 level in early Far East trading before heading lower.  'Gentle hands' showed up around 2:35 p.m. Hong Kong time on their Wednesday afternoon---and by the time the rally was done by around 8:55 a.m. in New York, the index was back around the 96.34 mark.  It got sold off at that point, with Wednesday's absolute low tick of  95.28 coming at noon on the button in new York.  It rallied a hair during the remainder of the trading session and closed down 42 basis points at 95.37.

Here's the 1-year U.S. Dollar chart so you can keep an eye on the bigger picture.

The gold stocks got close to breaking into the black shortly after the London p.m. gold fix---and then headed lower until 12:45 p.m. at gold's engineered price low.  From there they chopped a hair higher into the close, as the HUI finished the Wednesday session down an even 2.00 percent.

The silver equities actually did make it into positive territory for around an hour, but after that, the price pattern was identical to the HUI's---however their post-low recovery was a hair more robust than their golden brethren.  Nick Laird's Intraday Silver Sentiment Index closed down 'only' 1.19 percent.

The CME Daily Delivery Report for Day 4 of the June delivery month showed that 10 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday.   The only short/issuer was JPMorgan out of its client account.

The CME Preliminary Report for the Wednesday trading session showed that 518 gold contracts disappeared into thin air yesterday, as the new o.i. number is now down to 1,544 contracts.  And for the third day in a row, June open interest remained unchanged at 33 contracts.

There were no reported changes in GLD---and as of 9:10 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

There was another sales report from the U.S. Mint, the fourth in a row.  They sold 3,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and another 150,000 silver eagles.

In the last four business days the mint has sold 1,302,000 silver eagles, but only 16,000 troy ounces of gold eagles and one ounce gold buffaloes combined.  Ted's big buyer, JPMorgan, appears to be still there---and he mentioned that in his mid-week commentary to his paying subscribers yesterday.

It was another quiet in/out day in gold at the COMEX-approved depositories on Tuesday, as nothing was received---and only 2,339 troy ounces were shipped out.   But silver more than made up for it as 1,196,312 troy ounces were reported shipped in---and 618,352 troy ounces were sent out the door.  The link to the silver action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they received 5,119 kilobars---and shipped out 6,319.  As usual, all of the activity was at Brink's, Inc.  The link to that, in troy ounces, is here.

I have the usual number of stories for a mid-week column---and I hope you'll find a few that interest you.

¤ Critical Reads

‘Freedom Act will make no difference’ to NSA surveillance

The only practical effect of the U.S. Freedom Act will be that now the NSA has to file a request to the court to get data from the telephone companies, but the same volume of NSA spying will remain, says Ted Rall, a political cartoonist and author.

The U.S. Senate has passed the so-called U.S. Freedom Act, the first surveillance reform in a decade in America. It comes just over a day after the infamous Patriot Act that provided legal grounds for the National Security Agency's snooping expired.

RT: The Freedom Act has been passed, is it a step in the right direction? There have been claims by some US lawmakers that it does not go far enough, what's your take?

This worthwhile story showed up on the Russia Today website at 1:29 p.m. Moscow time on their Wednesday afternoon, which was  6:29 a.m. EDT in Washington on their Wednesday morning.  Today's first article is courtesy of Roy Stephens.

Companies' Borrowing Spree Darkens Stock Market Future

A dark shadow is lurking behind the happy façade of rising stock prices.

U.S. companies are borrowing money faster than they’re earning it -- and they’re doing it at the quickest pace since the aftermath of the financial crisis.

Instead of deploying the debt to build factories, hire new workers or expand product lines, companies are funneling more of their money to shareholders or using it to fund deals. Stock buybacks reached an all-time high last year and the volume of global mergers and acquisitions announced so far this year would make it the second-busiest ever, according to data compiled by Bloomberg.

The debt undermines future growth and could dent company income when borrowing costs rise. Higher interest rates will make already indebted companies less desirable to lend to. The consequence: profitability, buoyed by cheap money since rates went to near-zero in 2008, will sink.

There's nothing really new here, but I though it worth posting nonetheless.  This item appeared on the Bloomberg website at 10:00 p.m. Denver time on Tuesday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

Electronic trading brings great benefits: CFTC's Massad

Timothy Massad, CFTC Chairman, discusses oil market volatility, and electronic trading.

This brief 1:54 minute CNBC video clip appeared on their website around 2 p.m. EDT yesterday afternoon.  I passed it by Ted---and he said that "---great benefits to who? Perhaps HFT manipulators but certainly not silver or gold investors, or commodity producers in general---very telling."  I thank Dan Lazicki for sending it along---and it's worth two minutes of your time to watch it.

New-car loans keep getting longer

New-car sales are running at near-peak levels, partly because many consumers are financing their purchases for longer terms.

The average new car loan has reached a record 67 months, reports Experian, the Ireland-based information-services company. The percentage of loans with terms of 73 to 84 months also reached a new high of 29.5% in the first quarter of 2015, up from 24.9% a year earlier.

Long-term used-vehicle loans also broke records with loan terms of 73 to 84 months reaching 16% in the first quarter 2015, up from 12.94% — also the highest on record.

"While longer-term loans are growing, they do not necessarily represent an ominous sign for the market," said Melinda Zabritski, Experian's senior director of automotive finance. "Most longer-term loans help consumers keep monthly payments manageable while allowing them to purchase the vehicles they need without having to break the bank.

This news item appeared in the Detroit Free Press very early Monday evening EDT---and was picked up by the usatoday.com Internet site since then.  I found it in yesterday's edition of the King Report.

The College Commencement Speech Every Graduate Needs to Hear

Earlier this week, we brought you "A Cynical Look At Tim Cook's Commencement Speech," which outlined an L.A. Times piece that took aim at what one columnist suggested was a disingenuous (if standard) effort on the part of Apple's CEO when he spoke to students at George Washington. 

Today, we bring you a commencement speech for the real world.

"In effect, you are graduating with a mortgage but no house. And what did you get? A subprime education."

"To those who majored in gender studies, film deconstruction, or any other of today's academic fads, to you I have this advice: when this commencement speech is over, do not bother looking for a job. Instead go straight to the unemployment office."

"Graduates, you have been saddled with debt and bad ideas. Good luck, you're going to need it."

This Zero Hedge article from 2:20 p.m. EDT on Wednesday has a 5:54 minute video clip embedded featuring George Will who really tells it like it is---and it's the second offering of the day from Dan Lazicki.

WTI Crude Pumps-and-Dumps as Increased Production Trumps Surprise Inventory Draw

Following last night's inventory build report from API, expectations adjusted to a 818k build for the DOE data this morning. However, for the 5th week in a row, DOE reported a draw (this time of 1.95 million barrels).  WTI Crude had rallied into the data but was still in the red from yesterday's close and spiked on the inventory news.

However, once the machines had a chance to see that production rose once again - to a new cycle record - prices began to slide....

This brief 3-chart Zero Hedge story is worth a quick look.  It showed up on their Internet site at 10:37 a.m. EDT yesterday morning.  It's another contribution from Dan L.

WikiLeaks announces $100K bounty for trade deal text

WikiLeaks announced an effort Tuesday to crowd-source a $100,000 reward for the remaining chapters of the Trans-Pacific Partnership trade deal, after the organization published three draft chapters of the deal in recent years.

“The transparency clock has run out on the TPP. No more secrecy. No more excuses. Let’s open the TPP once and for all,” WikiLeaks founder Julian Assange said in a statement.

Critics say that the deal being negotiated by the United States and other Pacific Rim countries would hurt American workers and the economy, while proponents argue that it would help the United States establish a stronger economic foothold in the region with regard to China.

The three chapters that WikiLeaks has already published include sections on intellectual property rights, published in November 2013, the environment, published in January 2014, and investment, published this March.

The $100,000 reward marks the beginning of a new program for the organization, in which users can pledge funding to get the chapters they want the most.

The above five paragraphs are all there is to this interesting news item that put in an appearance on the politico.com Internet site very early Tuesday morning---and it's the second offering of the day from Roy Stephens.

In a World of Tax Hells, a New Haven Emerges

It’s not some half-baked attempt to create a new country. It’s the real deal.

Best of all, it’s a country founded on staunch libertarian and free-market principles.

But I don’t blame you if you’re skeptical. I was too. That is, until I spoke with Vit Jedlicka.

Vit is the founder and president of Liberland. It’s a slice of land on the edge of Serbia, Croatia, and the Danube River. Neither country has ever claimed it due to a border quirk. Under international law, that opened up the opportunity for Liberland.

I posted a story about this tiny geographical aberration earlier this year---and now International Man's senior editor Nick Giambruno has stumbled across it.

Bunds Crater Most This Century

It appears Draghi's comments are not what the market wanted to hear.  Bunds have crashed over 30 bps in the last 2 days...the biggest 2-day spike since Oct 1998...

It's carnage...

This tiny Zero Hedge story with two embedded chart is worth a quick peek.  It was posted on their Internet site at 9:44 a.m. EDT yesterday morning.

Greek crisis fuels Juncker power grab

For European Commission President Jean-Claude Juncker, the roller-coaster negotiations with Athens haven’t just been about keeping Greece in the euro.

Behind the scenes, he has used the crisis to try to establish the European Commission as the union’s indispensable power broker, putting him at loggerheads with national governments.

At stake is the balance of power in the European Union. There has always been a natural tension between the Commission, as the E.U.’s executive arm, and the European Council, the forum of member states. Now, Juncker is trying to tip the scales in the Commission’s favor, arguing that as the Commission’s first popularly elected president, he has a mandate to do so.

Juncker’s strategy was on full display this week. On Monday, he traveled to Berlin, where he pushed Angela Merkel and Christine Lagarde to take a softer line on Greece. “Grexit is not an option,” he told a German newspaper ahead of the meeting, contradicting recent statements by some of the creditors. Juncker was scheduled to host Greek Prime Minister Alexis Tsipras Wednesday evening in Brussels for consultations on Athens’ latest reform proposals.

This article showed up on the politico.eu website at 5:15 p.m. CET [Central Europe Time] yesterday---and it's the third story of the day from Roy Stephens.

Europe has no choice - it has to save Greece

Greece has been through the trauma of default and currency collapse before. It went horribly wrong.

The sequence of events in the inter-war years have a haunting relevance today. In 1932, Greece turned to the League of Nations and British bankers in a last-ditch effort to defend the drachma under the Gold Standard as reserves drained away.

The creditors dithered for three months but ultimately said “no”. Greece devalued and imposed a 70pc haircut on loans. Debt service costs fell by two-thirds at a stroke.

It seemed like a liberation at first. The economy was growing briskly again - at more than 5pc - within a year. Then the sugar-rush faded. The credit system remained broken. Greek industry was too backward to exploit a cheaper exchange rate, unlike Japanese industry under Takahashi Korekiyo at the same time. .

The government never regained its credibility. There were four attempted coups d’etat, ending in the military dictatorship of Ioannis Metaxas. Political parties were abolished. Trade union leaders were killed or imprisoned. Greece fell to Balkan fascism.

This longish commentary by Ambrose Evans-Pritchard showed up on The Telegraph's website at 9:14 p.m. BST yesterday evening---and it's worth reading.  Roy Stephens sent it our way in the wee hours of this morning.

Ukrainian President Poroshenko Struggles to Fight Oligarchs

Since his election, Ukrainian President Petro Poroshenko has struggled to free his country from the influence of the oligarchs. But a new generation of reformers is determined to make it happen.

When Ukrainian President Petro Poroshenko congratulates him with a handshake, Artem Sytnyk presses his lips together and blinks. The reporters' flashes bother him. Still. Until recently, the 35 year old didn't even have a Wikipedia page, and now he's one of the most important men in Ukraine. A jury selected him from a pool of 176 candidates to make him the head of the country's new anti-corruption office.

The reformers first learned about Artem Sytnyk because in 2011, under the previous administration, he had left his job as a state prosecutor to protest the ways politics had become entangled in the country's justice system. At the time, the gesture was unprecedented. Now it has qualified him to become the new government's top corruption fighter.

This 10-minute read/essay appeared on the German website spiegel.de yesterday evening Europe time---and it's no surprise that it's courtesy of Roy Stephens.  It also sports a new headline, as it now reads "Angels and Demons: Ukraine, One Year After Poroshenko".

Missile maker says Russia did not shoot down Malaysian plane over Ukraine

The Russian company that makes the BUK air defense system that was used to shoot down a Malaysian airliner in east Ukraine said on Tuesday the plane was hit by a missile deployed by Ukraine and not widely used by Russia's military.

State-run Almaz-Antey said its own analysis of the wreckage of the Malaysia Airlines plane brought down on July 17 last year, killing 298 people, indicated it was hit by a BUK 9M38M1 surface-to-air missile armed with a 9H314M warhead.

Shrapnel holes in the plane were consistent with that kind of missile and warhead, it said.

Such missiles have not been produced in Russia since 1999 and the last ones were delivered to foreign customers, it said, adding that the Russian armed forces now mainly use a 9M317M warhead with the BUK system.

This Reuters article, filed from Moscow, appeared on their website late on Tuesday morning EDT---and I thank  Elliot Simon for bringing it to our attention.

Russian Ruble Tumbles to 2-Month Lows, Stocks Drop Following "Large-Scale" Rebel Offensive in Ukraine

The Ruble just hit 54/USD - its weakest since early April - as IFX reports a "large-scale" rebel offensive in eastern Ukraine involving 10 tanks and around 1,000 troops. Ukraine's military has redeployed troops to halt this rebel offensive and has informed its international partners on the re-deployment which leaves The Minsk Accord hanging by a thread. Ironically Ukraine bonds had earlier jumped to 3-month highs on optimism surrounding restructuring that haircuts would not be as severe, but the re-ignition of tensions in the country have taken the shine of that exuberance.


This brief news item, with a couple of excellent charts, was posted on the Zero Hedge website at 9:21 a.m. EDT yesterday morning---and I thank reader M.A. for sharing it with us.

Now the truth emerges: how the U.S. fuelled the rise of Isis in Syria and Iraq

The war on terror, that campaign without end launched 14 years ago by George Bush, is tying itself up in ever more grotesque contortions. On Monday the trial in London of a Swedish man, Bherlin Gildo, accused of terrorism in Syria, collapsed after it became clear British intelligence had been arming the same rebel groups the defendant was charged with supporting.

The prosecution abandoned the case, apparently to avoid embarrassing the intelligence services. The defence argued that going ahead with the trial would have been an “affront to justice” when there was plenty of evidence the British state was itself providing “extensive support” to the armed Syrian opposition.

That didn’t only include the “non-lethal assistance” boasted of by the government (including body armour and military vehicles), but training, logistical support and the secret supply of “arms on a massive scale”. Reports were cited that MI6 had cooperated with the CIA on a “rat line” of arms transfers from Libyan stockpiles to the Syrian rebels in 2012 after the fall of the Gaddafi regime.

Clearly, the absurdity of sending someone to prison for doing what ministers and their security officials were up to themselves became too much. But it’s only the latest of a string of such cases. Less fortunate was a London cab driver Anis Sardar, who was given a life sentence a fortnight earlier for taking part in 2007 in resistance to the occupation of Iraq by U.S. and British forces. Armed opposition to illegal invasion and occupation clearly doesn’t constitute terrorism or murder on most definitions, including the Geneva convention.

This incredible, but short essay, which certainly falls into the must read category for any serious student of the New Great Game, appeared on theguardian.com Internet site at 8:56 p.m. BST yesterday evening, which was 3:56 p.m. EDT in New York.  I thank South African reader B.V. for finding it for us.

What's OPEC Going to Do With Iran's Million Barrels a Day?

Just when it looked like OPEC was winning the war with U.S. shale-oil drillers, a new front is opening up within its own ranks.

The Organization of Petroleum Exporting Countries’ summit on June 5 to determine the group’s output will come three weeks before a deadline for a deal on Iran’s nuclear program. The government in Tehran says it can add almost 1 million barrels to daily production within six months of sanctions being lifted.

That’s a million barrels that OPEC hasn’t had to worry about since it adopted a new strategy in November of favoring market share over propping up prices. The group is already pumping the most oil in more than two years to quash higher-cost producers, and while Iran’s return would add to the pressure on OPEC’s rivals, it will also heighten competition within the group for buyers.

There’s a lot of jockeying for position going on in OPEC right now,” Ole Hansen, head of commodity strategy at Copenhagen-based Saxo Bank A/S, said by phone. “The Saudis are increasing production and anyone else in OPEC who can is also doing the same. If OPEC’s not willing to cut output to make room for Iran, they have to look for reductions from producers outside the group.

This Bloomberg article put in an appearance on their website late Tuesday afternoon Denver time---and it's the third and final offering of the day from Elliot Simon, for which I thank him.

One of the World's Largest Silver Miners Slams the CFTC About Silver Market Manipulation

It has long been known to silver market watchers that when it comes to the price of paper silver, there has long been a chronic and extremely concentrated shorting presence at the Comex, one which the CFTC has persistently refused to address even though it consistently surpasses the proposed limits on derivative positions. Now, at long last, a Canadian silver miner, First Majestic Silver Corp., has decided to take the CFTC to task.

In a letter penned by Ted Butler to CFTC Chairman Tim Massad (who recently replaced former Goldmanite and future US Treasury Secretary, Gary Gensler), Keith Neumeyer, CEO of First Majestic, became the first primary silver producer to vocally highlight some of the questionable activity reported weekly in the CFTC's Commitment of Traders report, specifically the "record position change of more than 28,200 net contracts of COMEX silver futures" the equivalent of 141 million ounces of silver and 61 days of world mine production. Incidentally, this was first observed here one week ago.

Neumeyer observes accurately that the "big changes in positions on the COMEX are by speculators and commercials acting as speculators and not by those engaged in bona fide hedging" and comments that "such massive speculation in COMEX silver futures may not be in keeping with the spirit and intent of commodity law and may suggest something is wrong with the price discovery process, since real producers and consumers of silver don't appear to be represented."

While we salute First Majestic with this first public appeal by a corporation to the CFTC to stop the rigging in the silver market, we have absolute certainty that this too complaint will promptly end up in Mr. Massad trash never to be heard from again.

This Zero Hedge spin on Keith Neumeyer's letter to the CFTC was posted on their website at 3 p.m. yesterday afternoon.

Gold Declines for Second Day as Investors Await U.S. Jobs Data

Gold dropped for a second day to trade near a three-week low before the release of monthly data on U.S. employment that will provide clues on the outlook for borrowing costs in the world’s largest economy. Silver declined.

Bullion for immediate delivery was 0.1 percent lower at $1,183.66 an ounce at 12:05 p.m. in Singapore, according to Bloomberg generic pricing. The metal declined as much as 1.1 percent to $1,179.65 on Wednesday, the lowest level since May 11. Prices in Shanghai fell to a one-month low.

Gold is little changed this year as investors pored over U.S. data for clues on when the Federal Reserve will raise interest rates for the first time since 2006. The report on Friday is expected to show a pickup in the jobs market after data on Wednesday showed companies added more workers in May from a month earlier. An expanding economy gives policy makers more room to raise rates, which curb gold’s appeal as it generally offers returns only through price gains.

Gold was “put under pressure after the release of improving U.S. economic data,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note.

This Bloomberg story from early yesterday evening MDT is the usual main stream bulls hit, as the gold price has nothing to do with "all of the above," as prices are set in the COMEX futures market between the bullion banks and their buddies on one side---and the Managed Money traders on the other.  I found it on the Sharps Pixley website in the wee hours of this morning EDT.

¤ The Funnies

Another ring-billed gull watching me warily from the shoreline.  Note the high-water marks on the rocks.  Like California, we could use some serious rain here as well.

Here's a rare bird in these parts.  I took this photo minutes after the one shown above.  It's a KLM flight on final approach into Edmonton International [YEG] and about 15 miles from the runway.  The flaps and slats are down, with the landing gear about to follow.  It was at least two kilometers away and about a kilometer high.  All the intervening air really softens the photo---and the colours.

¤ The Wrap

Adding to the insult of blatant commercial manipulation in capping the price of silver was the fact that there was no legitimate hedging by miners in the selling; this was all financial selling by banks and other financial institutions with no economic legitimacy. If it wasn’t perfectly clear then I would never be able to get away with calling JPMorgan and the CME as crooked.

The single biggest key to the silver manipulation has always been if the concentrated short position increases on any price rally and that is exactly what occurred on the latest (snuffed out) rally. The concentrated short position of the 8 largest traders in COMEX silver is now 75,529 contracts, or 377,645,000 million oz, the most in six years. Eight traders, not one of them a miner or representing miners is short almost 50% of what the CPM Group claims is world annual silver mine production (790 million oz). No other commodity has such a concentrated short position and this is why silver miners everywhere should be complaining and screaming with the loudest voices possible.

I haven’t done so in a while, but let me point out something I used to bring up in the past that is more relevant today. As crazy as it is that COMEX silver has the largest concentrated short position of any commodity traded in terms of actual world production, it’s even crazier than that. Not only is the concentrated short position in COMEX silver so large as to be impossible to justify economically, the concentrated short position is almost double the size of the concentrated long position, a situation not witnessed in any other metal and few other commodities in general. -- Silver analyst Ted Butler: 03 June 2015

JPMorgan et al took another tiny slice out of the gold and platinum salamis yesterday, but a much bigger chunk in silver and palladium.  In silver, the price closed below its critical 50-day moving average for the first time during this engineered price decline---and although volume was elevated, I wouldn't call it over the moon by any stretch of the imagination.  Unfortunately, none of this data will be in tomorrow's Commitment of Traders Report, as it's one day past the cut-off.

Just eye-balling the charts below, I'd guess that "da boyz"---along with their HFT buddies and their algorithms---could peel close to 50 bucks off the gold price and a buck and change off silver before this all done to the downside.  Of course it has to do with the number of contracts, not the price---and the way things are proceeding at the moment, these guys could use a month or more to get the job done, as they're in no hurry.  It's the "summer doldrums" don't you know?

Here are the 6-month charts for all four precious metals as of the close of COMEX trading yesterday.

And as I type this paragraph, the London open is less than ten minutes away.  Gold has been trading a bit lower in a very tight range all through Far East trading on their Thursday.  Pretty much the same can be said about the other three precious metals as well.  Net gold volume is north of 17,000 contracts already---and 99 percent of it is in the current front month, so it is---as usual---all of the HFT variety.  The same can be said of silver, as net volume is around 4,300 contracts.

Ted is quite right in his statement that only a small fraction of one percent of all trading volume in the precious metals is driven by legitimate supply/demand considerations.  The rest is HFT liquidity/noise---and is solely there for price management/profit purposes of JPMorgan et al.  The dollar index has traded virtually ruler flat all night long.

Tomorrow morning at 8:30 a.m. EDT we get the new job numbers---and it's a semi-sure thing that the powers-that-be will use that opportunity to hit the precious metals in general---and silver in particular.

We also get the latest COT Report tomorrow, along with the companion Bank Participation Report.  And as I said in Wednesday's column, I'm not about to hazard a guess as to what the latest COT Report will show---and Ted never mentioned it his mid-week commentary yesterday.

And as I hit the 'send' button on today's column at 5:30 a.m. EDT, I note that all four precious metals are still trading in a very tight range both below and above unchanged from Wednesday's close in New York.

Gold volume is now north of 34,500 contracts, which is huge ----and silver's net volume is around 7,800 contracts, not exactly tiny, either.  There are virtually no roll-overs in either metal, so the HFT boyz and their algorithms are hard at work keeping prices in line now that London has been open a bit more than two hours.

Now that I check the dollar index, which began to head south with a vengeance at precisely 9 a.m. in London, I can see why volume has blown out as much as it has, as the index crashed about 70 basis points in less than forty minutes until 'gentle hands' showed up.  Right now it's only down 49 basis points.

It's obvious that the powers-that-be don't want the precious metal prices to reflect what's happening in the currency markets---and that's why the HFT boyz are spinning their algorithms with such fury at the moment.

This reminds me of the shenanigans that were going on when the SNB dumped the Euro peg earlier this year, as they killed the gold price at that time, when it should have exploded to the upside.  It's obvious that JPMorgan et al---along with the BIS---are at battle stations.

I have no idea what the rest of the Thursday session will bring, but based on what's going on right now, nothing will surprise me when I check the charts later this morning---nor should it you.

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

Ed Steer

Thu, 4 Jun 2015 06:21:00 +0000
<![CDATA[First Majestic Silver Puts the CFTC on Notice Regarding the Silver Price Management Scheme]]> http://www.caseyresearch.com/gsd/edition/first-majestic-silver-puts-the-cftc-on-notice-regarding-the-silver-price-ma/ http://www.caseyresearch.com/gsd/edition/first-majestic-silver-puts-the-cftc-on-notice-regarding-the-silver-price-ma/#When:04:03:00Z "The lack of a rally can't be blamed on all the usual suspects"

¤ Yesterday In Gold & Silver

The gold price didn't do much in Far East or early London trading on their Tuesday.  The low came at, or close to, the 10:30 a.m. BST London a.m. gold fix---and it rallied quietly and unsteadily until the 1:30 p.m. COMEX close.  From that point, it sold off a hair into the close of electronic trading at 5:15 p.m. EDT.

The low and high ticks are barely worth looking up, but the CME Group recorded them as $1,185.80 and $1,196.40 in the August contract.

Gold finished the trading day in New York yesterday at $1,192.70 spot, up only $3.90, which was a disappointment, because the dollar got taken out to the woodshed and had the hell beat out of it.  I'll have more on that later. Net gold volume wasn't overly heavy at 106,000 contracts.

The silver price action was pretty much the same as gold's, with the only real difference being that silver's low came either around 11 a.m. in London, or shortly before 9 a.m. in New York.  You can decide for yourself from the Kitco chart below, but in the grand scheme of things, it doesn't really matter.

Silver traded in a 20 cent range all day Tuesday---and the highs and lows definitely aren't worth my effort to look up.

Silver closed yesterday at $16.745 spot, up 4 cents from Monday---and Monday's gain was only 0.5 cents after "da boyz" were through with it.  In the face of a crashing dollar index, I'm underwhelmed. Net silver volume was 33,000 contracts.

The platinum price traded flat until shortly after 1 p.m. Hong Kong time---and then began to chop unsteadily higher from there.  Like gold and silver, the rally---such as it was---came to an end at the 1:30 p.m. EDT COMEX close.  Platinum finished the Tuesday session at $1,110 spot, up 9 bucks on the day---gaining back everything it 'lost' on Monday.

After trading down about four bucks by the noon Hong Kong time, the palladium price also began to chop unsteadily higher.  It's high tick came shortly after 1 p.m. in Zurich---and the New York traders stepped in shortly before 11 a.m. EDT---and took the price down to its $764 low.  It rallied a few dollars higher before trading flat into the close.  The metal closed at $766 spot, down 8 dollars from Monday's close.

The dollar index closed late on Monday afternoon at 97.43---and began to slide almost immediately when Far East trading began on their Tuesday morning.  It bounced off the 97.00 low just once---and the next time it rolled over a couple of hours after that, the 'gentle hands' I spoke of yesterday were nowhere to be seen.  The 95.68 low tick came moments after 1 p.m. in New York---and it rallied a bit into the close, finishing the day at 95.95---down an eye-watering  147 basis points.

And not a thing out of the precious metals.  After the out-of-left-field-for-no-reason rallies on Monday, the precious metals had a bona fide reason to rally yesterday, but did nothing.

Here's the 6-month U.S. dollar index chart so you can see how yesterday's trading action fits into the grand scheme of things---and as you can tell, it took out its 50-day moving average to the downside with some authority.  I'm careful not to read too much into this for moment, as I'm always cognizant of Chris Powell's infamous quote---"There are no market anymore, only interventions."  So we'll see how this shakes out in the days ahead, but I'd guess there are still 'gentle hands' out there that will show up at some point if things really start to get out of hand---and they may have put in a brief appearance minutes after 1 p.m. EDT yesterday.

The gold stocks opened up a bit---and rallied fairly strongly until shortly before 10:30 a.m. EDT.  They didn't do much of anything after that, as the HUI closed up 1.57 percent.

The silver equities had a similar shape to their rallies on Tuesday as the gold shares---and Nick Laird's Intraday Silver Sentiment Index closed up 1.61 percent.

The CME Daily Delivery Report for the Tuesday session showed that 74 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  The only stand-out number, which is barely worth mentioning, was that HSBC USA stopped 49 contracts in its client account. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that June's open interest in gold declined a very chunky 3,026 contracts, but most of that was the 2,500-odd that are being delivery today that were posted yesterday.  There are 2,062 gold contracts still open.  Silver's June o.i. was unchanged at 33 contracts.

Another day---and another withdrawal from GLD.  This time it was 134,254 troy ounces, which is a pretty decent amount considering the fact that the gold price hasn't been allowed to go anywhere from a price perspective for the last five trading days in a row.  Then to add to that mystery, there was a deposit into SLV yesterday, as as authorized participant added 1,104,807 troy ounces.  Go figure!

There was another sales report from the U.S. Mint yesterday.  They sold 2,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and another 375,000 silver eagles.  In the last three business days the mint has sold 1,152,000 silver eagles---and only a small portion of that was buying by the retail public.  Could Ted Butler's big buyer---JPMorgan---still be around?  He has his mid-week column today---and I'm expecting he'll have something to say about it.

It was a decent in/out day for gold over at the COMEX-approved depositories on Monday, as 32,001 troy ounces were reported received---and 16,075 troy ounces were shipped out the door.  The link to that activity is here.

It was pretty quiet in silver, as only 22,054 troy ounces were received---and 145,748 troy ounces shipped out.  The link to that action is here.

There was a decent amount of activity at the gold kilobar COMEX-approved depositories in Hong Kong on their Monday, as 3,132 kilobars were received---and 5,262 kilobars were sent out the door.  The link to that activity, in troy ounces, is here.

I don't have all that many stories today, so I hope you can find a couple you like from the limited selection below.

¤ Critical Reads

Factory Orders Scream Recession, Drop 6% From Year Ago in Sixth Consecutive Drop

Following this morning's disappointing tumble in ISM New York (with 5 of the 6 components plunging), Factory Orders tumbled 0.4% MoM in April (against expectations of a modest 0.1% decline).

This comes after March's exuberance-inspiring upwardly revised 2.2% MoM surge (which ended a 7 month streak of MoM drops). Down 6.4% against 2014, this is the 6th month in a row of YoY declines in Factory Orders - something not seen previously outside of a recession. Stocks love this terrible news (for now).

This chart-filled Zero Hedge article was posted on their website at 10:03 a.m. EDT yesterday morning---and it's certainly worth a minute or so of your time.  I thank Dan Lazicki for today's first story.

Roubini: 'Combination of Macro Liquidity, Market Illiquidity a Time Bomb'

While massive central bank easing has created huge pools of liquidity in the financial systems of developed economies in recent years, liquidity in their financial markets has shrunk, notes economist Nouriel Roubini of New York University.

And that paradox carries ominous implications, he writes in an article for Project Syndicate.

"Policy interest rates are near zero in most advanced economies, and the monetary base has soared. This has . . . lifted many asset prices," Roubini points out. The Federal Reserve's balance sheet now totals a whopping $4.5 trillion.

"And yet investors have reason to be concerned," he explains. Roubini cites the May 2010 "flash crash" for stocks and the October 2014 flash crash for Treasurys as examples.

"This combination of macro liquidity and market illiquidity is a time bomb," he warns.

This piece appeared on the newsmax.com website at 6:00 a.m. EDT yesterday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

New York Sun: Jeb Bush on the dollar and currency manipulation

We were just sitting down at the typewriter to tap out an editorial on the failure of any of the Republican contenders to address the crisis in respect of the dollar when an e-mail hit our screen from the editor of the Future of Capitalism about the remarks over the weekend by Jeb Bush. The former governor of Florida was making an appearance at WMUR television at New Hampshire when he was asked whether, as FoC characterized the question, “foreign currency manipulation had put American manufacturers at a disadvantage.

Mr. Bush responded that there might be some manipulation by foreigners. But, he added, “you can make a case that in the last few years, given our monetary policy, that we’ve been manipulating our currency. We’ve never had a time where our central bank is just printing money like nobody’s business. And that depreciates our currency. It lowers our interest rates and depreciates our currency.” Mr. Bush acknowledged that there exist some protections against foreign currency manipulation already and noted that an eventual trade pact may yet add more.

One swallow mightn’t make a spring, but it’s terrific to hear a potential presidential candidate — Mr. Bush seems to be moving in that direction, though he’s yet formally to declare — open up this issue. By our lights, monetary policy will be the most important economic question before the voters in 2016. We haven’t had a real donnybrook on the question since 1896, when William Jennings Bryan ran on a campaign of the free coinage of silver — meaning inflation — against William McKinley, who ran on the gold standard and won.

This interesting story showed up on The New York Sun website yesterday---and I found it in a GATA release.

Dollar Flash-Crashes on Sudden EUR Spike Amid Carnage in Bunds

Driven by no immediate fundamental or news catalyst, EUR/USD is spiking (running stops to almost 1.1200) sending the USD index into yet another flash-crash this morning... as the carnage in bunds continues (+11bps to 65bps)...

USD Index is tumbling suddenly...driven by a spike above 1.1100 in EUR/USD... (highs at 1.1196! - 200 pips off lows).

This is another short, chart-filled Zero Hedge column from yesterday morning EDT---and it's worth a quick look as well.  It's the second offering of the day from Dan Lazicki.

HSBC Preparing Job Cuts That May Target 20,000 Workers, Sky Says

HSBC Holdings Plc, Europe’s largest bank, will announce a plan next week to cut thousands of jobs, Sky News reported, citing unidentified people close to the matter.

Chief Executive Officer Stuart Gulliver will disclose a target when he updates shareholders on the bank’s strategy on June 9, laying out a reduction that will probably affect 10,000 to 20,000 people, according to Sky. The number is still being worked out, it cited one person as saying.

Heidi Ashley, a spokeswoman for HSBC in London, declined to comment on the report. The company employed almost 258,000 people at the end of last year.

Gulliver, 56, is striving to reduce costs and sell businesses to bolster earnings, while spending billions of dollars to boost internal compliance. The job-cutting target will exclude the potential impact of selling businesses in Brazil and Turkey, as well as the possible separation of HSBC’s U.K. arm to meet a requirement to separate the consumer and investment banking businesses, Sky said.

This news item appeared on the Bloomberg website early Monday afternoon MDT---and it's something I 'borrowed' from yesterday's edition of the King Report.

E.U. regulators tell 11 countries to adopt bank bail-in rules

The European Commission on Thursday gave France, Italy and nine other EU countries two months to adopt new E.U. rules on propping up failed banks or face legal action.

The rules, known as the bank recovery and resolution directive (BRRD), seek to shield taxpayers from having to bail out troubled lenders, forcing creditors and shareholders to contribute to the rescue in a process known as "bail-in".

The Commission drafted the rules in response to the financial crisis which started in 2008, giving the 28 countries in the European Union until the end of last year to apply them.

It said Bulgaria, the Czech Republic, France, Italy, Lithuania, Luxembourg, the Netherlands, Malta, Poland, Romania and Sweden had yet to fall in line.

"If they don't comply within two months, the Commission may decide to refer them to the E.U. Court of Justice," the E.U. executive said in a statement, referring to Europe's highest court based in Luxembourg.

The above five paragraphs are all there is to this brief Reuters article that was filed from Brussels early last Thursday morning EDT.  The article is definitely worth reading---and I thank reader 'David in California' for his first of two contributions to today's column.

Germany dominance over as demographic crunch worsens

Germany’s birth rate has collapsed to the lowest level in the world and its workforce will start plunging at a faster rate than Japan's by the early 2020s, seriously threatening the long-term viability of Europe’s leading economy.

A study by the World Economy Institute in Hamburg (HWWI) found that the average number of births per 1,000 population dropped to 8.2 over the five years from 2008 to 2013, further compounding a demographic crisis already in the pipeline. Even Japan did slightly better at 8.4.

“No other industrial country is deteriorating at this speed despite the strong influx of young migrant workers. Germany cannot continue to be a dynamic business hub in the long-run without a strong jobs market,” warned the institute.

The crunch is aggravated by the double effect of a powerful post-war baby boom followed by a countervailing baby bust – the so-called “Pillenknick”. The picture in Portugal (nine) and Italy (9.2) is almost as bad.

This very interesting, but not shocking Ambrose Evans-Pritchard commentary from Monday evening BST is definitely worth reading if you have the interest---and I thank Roy Stephens for sending it our way.

Greece urges international creditors to be realistic

Greece has said it had sent a comprehensive reform proposal to its international creditors, urging them to be realistic and accept the plan to clinch a long delayed deal to release frozen aid before Athens runs out of cash.

The announcement by Prime Minister Alexis Tsipras came hours after leaders of Germany, France and the lending institutions held emergency talks on the Greek debt crisis in Berlin in a sign of top-level concern about the impasse.

It appeared to be an attempt to preempt a take-it-or-leave-it offer by the creditors and to show Greek voters that Athens, too, is putting forward proposals.

This Greece-related news item appeared on the Irish Times website at 2:01 p.m. BST on their Tuesday afternoon, which was 9:01 a.m. EDT---and it's the second offering in a row from Roy Stephens.

Greek default draws closer as opposing sides swap ultimatums

Greece and its European creditors have both issued “last ditch” demands in their bail-out talks that appear incompatible, raising the stakes in an increasingly dangerous showdown.

The eurozone’s negotiators and the International Monetary Fund have been putting the finishing touches on what amounts to a package of take-it-or-leave-it conditions that offer scant leeway on Greece’s austerity or debt relief.

It is understood that the proposals offer no real concessions on Greece’s “red lines” on pensions and labour rights. The creditors have promised a degree of flexibility but continue to insist that the far-Left Syriza government comply with the chief sticking points of the old EU-IMF Troika”Memorandum”.

Alexis Tsipras, Greece’s prime minister, pre-empted the move by rushing through his own set of proposals, more or less conceding in advance that his plans will not be accepted by the technocrats.

This commentary by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 7:51 p.m. BST yesterday evening---and it's courtesy of Roy Stephens as well.

Greece to invest $2 billion in Turkish Stream, will sign memorandum asap - Energy Minister

Greece plans to sign a document on political support for Gazprom’s Turkish Stream project at the St. Petersburg International Economic Forum in June, its Energy Minister announced on Monday. The country plans to invest $2 billion in its construction.

A memorandum on political support for the gas pipeline project will be prepared by June 18-20, when the International Economic Forum (SPIEF-2015) will be held in Russia’s St. Petersburg, Greek Energy Minister Panagiotis Lafazanis announced on Monday.

Right there we will try to sign an agreement, a so-called ‘memorandum’ on the political support of the said gas pipeline between Greece and Russia,” the minister said, as quoted by TASS. Greece “will be proactively drafting a document,” the official added.

Greece’s part of the pipeline, which will be delivering Russia’s gas on from the Turkish border, will cost some $2 billion, Lafazanis said in an interview with the Rossiya24 channel. The minister said that a Greek state company will be involved in the project, adding that there has been “big interest” from many companies wishing to take part in the construction and future operation of the pipeline.

This news item put in an appearance on the Russia Today website at 7:42 p.m. Moscow time on their Monday evening, which was 12:42 p.m. EDT in Washington.  I thank reader 'David in California' for passing it around yesterday.

The South China Sea word war -- Pepe Escobar

As Cold War 2.0 between the U.S. and Russia remains far from being defused, the last thing the world needs is a reincarnation of Bushist hawk Donald “known unknowns” Rumsfeld.

Instead, the — predictable — “known known” we get is Pentagon supremo Ash Carter.

Neocon Ash threw quite a show at the Shangri-La Dialogue this past weekend in Singapore.

Beijing is engaged in reclamation work in nine artificial islands in the South China Sea; seven in the atolls of the Spratlys, and two others in the Paracel archipelago. Ash virtually ordered Beijing to put an “immediate and lasting halt” to the expansion; accused it of behaving “out of step” with international norms; and capped the show by flying over the Strait of Malacca out of Singapore in a V-22 Osprey.

Washington never ceases to remind the world that “freedom of navigation” in the Strait of Malacca – through which China imports a sea of energy – is guaranteed by the U.S. Navy.

This short essay by Pepe showed up on the Asia Times website yesterday---and certainly falls into the must read category for any serious student of the New Great Game.  It is, of course, courtesy of Roy Stephens.

Anthem Vault, Inc. Raises $3.2 Million Ahead of HayekGold Launch: Liquid, Spendable, Digital Gold

Anthem Vault, Inc., a provider of retail gold and silver bullion and vaulting services, today announced that it has raised a combined $3.2 million — both a Founders' Seed Round of $1.6 million and matching Series A Financing of $1.6 million of its equity securities under Regulation D, Rule 506(c) from accredited investors in the pharmaceutical, healthcare, financial services, retail, datacenter, telecommunications, government and entertainment sectors - for the launch of HayekGold, a global open digital gold payment platform powered by the Bitcoin block chain.

Introduced on Memorial Day, HayekGold is a gold-backed digital currency with unparalleled stability and intrinsic value; each is backed by one gram of vaulted and insured gold bullion.

"Bitcoin was a trailblazer in the arena of global digital currency and HayekGold builds on that foundation," said Founder & CEO Anthem Hayek Blanchard. "Gold combined with a stable cryptocurrency forms a perfect union — a free, instant, secure and reliable payment system for goods and services anywhere in the world simply, swiftly and safely."

This gold-related news story appeared on the marketwatch.com Internet site at late Monday afternoon EDT---and I thank reader Dave Malek for sending it our way.

U.S. Government Lost 7 Fort Knox Gold Audit Reports

Every year the gold in Fort Knox is ‘audited’ by checking the official joint seals that were placed on all vault compartments during the continuing audits of U.S.-owned gold from 1974 until 1986, when allegedly 97 % of the gold was inspected. However, a Freedom Of Information Act request I’ve submitted in order to obtain all audit reports could not be honored. Seven reports are missing.

From at least 1944 the world reserve currency is the US dollar, which was backed by gold until 1971 and supported by gold ever since. There can be no world reserve currency without appropriate gold reserves supporting it, providing essential confidence and credibility. The US official gold reserves are the world’s greatest by far at 8,134 metric tonnes. The fact that 7 audit reports that should grant the existence of these reserves appear to be missing is problematic.

At the congressional hearing of the Gold Transparency Act (H.R. 1495, not enacted) in 2011 the Inspector General (IG) of the Treasury presented a case ‘all is fine’, but all is not fine. And the problem goes far beyond missing audit reports. In a series of posts we’ll continue to examine all there is to find regarding the audits of US official gold reserves.

This very long commentary by Koos is the third in a series of reports on U.S. gold reserves.  It was posted on the bullionstar.com Internet site yesterday---and I must admit that I haven't had the time to read it yet.

Here’s What the Next Gold Bull Market Will Look Like -- Jeff Clark, Casey Research

We measured every bull cycle of gold stocks and found there have been eight distinct upcycles since 1975.

We also discovered something exciting: Only one was less than a double. (A second was 99.9%.)

Even more enticing is that the biggest one—a 601.5% advance in the early 2000s—occurred just after a prolonged bear market---and our current bear market is longer than that one.

To get a sense for the potential upside, we applied the percentage gain from each of those upcycles to our recommended BIG GOLD picks.

Of course this bull market will only occur when JPMorgan et al allow it, or are over run.  But either way, it's coming---and only the timing is unknown.  This commentary by Jeff appeared on the Casey Research website yesterday.

Swiss slammed for closing DRC 'dirty gold' case

Activists on Tuesday accused Swiss authorities of encouraging impunity, after prosecutors shut a case against a company suspected of laundering gold pillaged by armed groups in Democratic Republic of Congo.

The Swiss attorney general's office decided in March to close a case against Argor-Heraeus, which faced allegations of "complicity in war crimes and pillage" after it, refined three tonnes of gold ore pillaged from the conflict-torn country in 2004-2005.

In its ruling, which was quietly made public a month later, the prosecutor's office said there was not enough evidence that the Swiss firm, one of the world's largest processors of precious metals, was aware of the illegal origin of the gold.

The gold, believed to have been illegally mined by a group called the National Integrationist Front (FNI), was sold through a Uganda-based company and on to British Hussar Limited before reaching Argor.

This interesting news item, filed from Geneva, showed up on the South African Internet site news24.com yesterday at 12:32 p.m. SAST---South Africa Standard Time.  And it's fitting that South African reader B.V. sent it our way.

Turkey gold imports slip to 10-month low

Turkey’s highest gold price in more than three years is cutting appetite for the metal in the fourth- biggest buyer.

The country imported 1.65 metric tons of bullion in May, 21 percent less than a month earlier and the least since July, the Istanbul Gold Exchange’s website showed on Tuesday. Turkish first-quarter consumer demand for bullion slid 42 percent from a year earlier, according to World Gold Council data.

Local prices rallied 21 percent in the past year as the lira weakened against the dollar. The currency’s slump is the second-biggest in emerging markets this year on concern government gridlock will prevent legislation needed to bolster the economy. Turkey will hold national elections on June 7 and polls suggest a coalition government will be elected.

“A decline in the Turkish lira has made it more expensive for people to buy gold,” Cagdas Kucukemiroglu, a consultant for researcher Metals Focus Ltd., said by phone from Istanbul on Tuesday. “This is the continuation of a trend, we have seen weak demand in the first quarter and we expected it to carry through to the second quarter.”

This Bloomberg article from yesterday found a home on the mineweb.com Internet site.

Gold for No Money: Mandela, Zuma Heirs Await Fraud Ruling

Fifteen years after their relatives helped free South Africa from apartheid, scions of two of the nation’s most famous families met in a hotel overlooking the Indian Ocean to start a business together.

Zondwa Mandela and Khulubuse Zuma, accompanied by an entourage of friends and advisers, decided at the five-star Beverly Hills Hotel in Durban in March 2009 to set up a company that would take advantage of laws favoring black investors in mining. They didn’t put up any money.

Six years later, Nelson Mandela’s grandson and President Jacob Zuma’s nephew are fighting claims alleging fraud amounting to almost 2 billion rand ($164 million) in a civil case after gaining access to two mines near Johannesburg without paying for them. About 5,000 workers have lost their jobs, operations ceased five years ago, equipment has been sold for scrap -- and almost $10 million of gold is missing, court documents show.

Mandela and Zuma “are still enjoying luxurious lifestyles despite workers suffering with no food, water or electricity,” said Joseph Montisetse, a regional secretary for the National Union of Mineworkers. “They have tarnished the image of our political leaders.”

This long, but very interesting [and somewhat convoluted] story was posted on the Bloomberg Internet site late Monday afternoon Denver time---and I thank Elliot Simon for his second contribution to today's column.

Traders may get cash-settled gold and silver futures on Indian commodity exchange

Domestic punters and hedgers in gold and silver futures might soon be able to play similar contracts that are traded on CME Group, the world's largest derivatives marketplace, but denominated in rupees on the Multi-Commodity Exchange (MCX), the country's largest commodity bourse, subject to regulatory approval.

Unlike existing gold and silver contracts that are compulsorily settled at the average of three days' spot price in Ahmedabad, the new contracts will be cash settled at the CME relevant rate multiplied by the rupee exchange rate, said two persons aware of the development. "This will be helpful to those who don't want delivery but just to hedge or speculate. Approval of Forward Markets Commission, or FMC, is awaited," they added.

On MCX the kilo gold contract is settled once in two months. The contract enters the delivery period on the first of the expiry month while delivery takes place on the fifth. However, once the contract enters delivery period, the margin to trade jumps to 25 per cent of open position, which is substantial, leading to many hedgers and punters simply rolling over their positions or squaring off pre-delivery. In the new contract, this might not be the case since it is cash-settled.

As interesting as this story may be, it's also irrelevant when it comes to India's physical demand, as futures trading such as this will have zero impact on the physical market, so they can trade away to their heart's content.  This news story appeared on The Times of India website at 2:31 a.m. IST on their Wednesday morning--and I found it on that gata.org Internet site.

First Majestic Silver Puts the CFTC on Notice Regarding the Silver Price Management Scheme

In a letter crafted by silver analyst Ted Butler, First Majestic Silver Corp. President & CEO Keith Neumeyer became the first primary silver producer to put their marker down on the CME-condoned silver price management scheme by JPMorgan et al.

They may not dignify his request for action with the courtesy of a reply, but the fact that a miner has gone on the public record on this issue speaks volumes about Keith & Co. over at First Majestic.  I've been a shareholder for many years---and I'm delighted [as is Ted] that he had the courage to step up to the plate on this issue.

I know that Ted will have something to say about it in his mid-week column to his paying subscribers this afternoon.

The letter, in full, is a must read---and I urge you to send your personal thanks to Keith via their Investor Relations guru, Mr. Todd Anthony at  info@firstmajestic.com.

Is gold demand/supply balance crunch already here? -- Lawrence Williams

The chart also shows the inexorable rise of China’s gold consumption to overtake India in 2013 as the world’s leading gold consumer – India had held this position for many years beforehand.  It can be seen how Indian imports fell away so sharply during 2013 when the then Indian government imposed significant gold import duties and introduced other measures to try and control the very substantial gold flows into the nation to counter the significant effects Indian gold imports had been having on its Current Account Deficit.  It may be seen though that since last year Indian gold imports have been beginning to pick up again despite the 10% import duty imposed.

Given that China and India are not the only net gold consuming nations – the World Gold Council suggests around 545 tonnes was consumed by other nations last year – and that some central banks, notably Russia and Kazakhstan, have been taking gold into their reserves month in, month out amounting to 477 tonnes last year and one may well ask where all this gold is coming from.  Scrap will account for most of this.  Overall, scrap supply last year was largely balanced out by the central bank purchases plus other nations’ demand.   But scrap supplies have been falling along with the gold price and if China and India keep on absorbing gold at the current rate. Then demand will be exceeding apparently available supply so where will this come from?  ETFs could be a source, but at the moment sales out of and purchases into these seem pretty much in balance.

Ed Steer in his Gold and Silver Daily newsletter says that any balance of global demand over supply must be coming out of Central Bank vaults as the only other available unaccounted-for source.  It is hard to disagree with this suggestion, but this would presumably be in leased gold which enables the banks to keep it in their books, although in reality the chance of this ever being repaid as bullion look increasingly slim, given the physical gold flows into firm eastern hands.

This commentary, plus embedded chart, certainly falls into the must read category---and it showed up on Lawrie's website yesterday.  Dan "The Man" Lazicki found it before I got to it---and I thank him for his final offering in today's column.

¤ The Funnies

The first photo is of your standard utility grade magpie.  It's difficult to photograph these things, as they fly away long before you get within decent range.  But, like every other bird, if you just sit quietly for long enough...

This Canada goose has a very interesting colour variation from the normal---and that's the only reason I took the shot.

¤ The Wrap

The single biggest key to the silver manipulation has always been if the concentrated short position increases on any price rally and that is exactly what occurred on the latest (snuffed out) rally. The concentrated short position of the 8 largest traders in COMEX silver is now 75,529 contracts, or 377,645,000 million oz, the most in six years. Eight traders, not one of them a miner or representing miners is short almost 50% of what the CPM Group claims is world annual silver mine production (790 million oz). No other commodity has such a concentrated short position and this is why silver miners everywhere should be complaining and screaming with the loudest voices possible.

I haven’t done so in a while, but let me point out something I used to bring up in the past that is more relevant today. As crazy as it is that COMEX silver has the largest concentrated short position of any commodity traded in terms of actual world production, it’s even crazier than that. Not only is the concentrated short position in COMEX silver so large as to be impossible to justify economically, the concentrated short position is almost double the size of the concentrated long position, a situation not witnessed in any other metal and few other commodities in general. -- Silver analyst Ted Butler: 30 May 2015

As I mentioned further up, I was very surprised that the precious metals prices didn't do better in the face of the U.S. dollar index face plant yesterday.  The precious metals blasted off [and got squashed] for no good reason on Monday, but the moment there was a reason to blast skyward, they didn't.  Volumes in gold and silver weren't particularly heavy yesterday, so the lack of a rally can't be blamed on "all the usual suspects" this time.  Ted was surprised as well.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday---and it certainly appears that gold and silver are being held in a trading range.  However, for Commitment of Trader reasons, I'm afraid that they're going to follow the current price trends of both platinum and palladium at some point.

And as I write this paragraph, the London open is less than five minutes away.  Gold has been trading, or forced to trade, in a very narrow range through all of Far East trading on their Wednesday---and has a negative bias at the moment, and is currently down two bucks from Tuesday's close in New York.  Ditto for silver, which is down a nickel.  Nothing to see here, at least for the moment.  Platinum and palladium have been chopping around unchanged as well.

Gold volume is around 12,200 contracts, with 99.9 percent of that amount trading in the August contract, so it's certainly of the HFT variety---and has zero to do with supply and demand.  Silver's net volume is only 2,500 contracts, with only a handful of contracts due to roll-over activity out of June.

The dollar index, which peaked at 96.06 at 8:30 a.m. Hong Kong time, has been heading lower since then---and is currently down 21 basis points.

As I mentioned in yesterday's column, the cut-off for Friday's COT Report was at the end of COMEX trading yesterday---and based on the price action, it's a reasonably safe bet that this week's report should contain all the pertinent data.  As to what that report might show, both gold and silver have been forced to trade in a very tight price range during the reporting period---and as Ted Butler pointed out, the shenanigans on Monday will most likely determine the overall content of the report.

But all eyes should be on silver, as the short position of the Big 8 traders sits at 6-months of world silver production according to Nick Laird's chart---and Ted's comments in today's quote.

And as I send today's effort off to Stowe at 5:25 a.m. EDT, I see that both silver and gold are continuing their downwards price decent.  Gold is now down 5 bucks---and silver is down 15 cents.  Platinum is unchanged---and palladium is trading 6 dollars lower.

Gold's net volume is a hair under 20,000 contracts---and all of the HFT variety in the current front month.  Exactly the same can be said about silver, whose net volume is now up to 4,700 contracts.  The dollar index is back in rally mode---and is now up 32 basis points vs. down 21 basis points about two and a half hours ago.

As for today's expected price action, I haven't a clue.  But the COT structure, especially in silver, is still as ugly as sin---so there's still lots of pain left to go the downside.  It's just a matter of 'when' before JPMorgan et al pull the trigger on it.

See you tomorrow.

Ed Steer

Wed, 3 Jun 2015 04:03:00 +0000
<![CDATA[China Gold Demand Holding Up Well: New Record Ahead?—Lawrence Williams]]> http://www.caseyresearch.com/gsd/edition/china-gold-demand-holding-up-well-new-record-ahead-lawrence-williams/ http://www.caseyresearch.com/gsd/edition/china-gold-demand-holding-up-well-new-record-ahead-lawrence-williams/#When:04:13:00Z "The most blatant example of price management that one could hope to see"

¤ Yesterday In Gold & Silver

The gold price popped for about five bucks at the New York open on Sunday evening, but "da boyz" were there within fifteen minutes to put the kibosh on that.  From there it traded pretty flat until the London open---and then the selling pressure began anew.  By the COMEX open, the price was down five dollars.

Then ten minutes after the open, the gold price began to rally in earnest, breaking through its 50-day moving average in the process---and JPMorgan et al were there at the London p.m. gold fix to put an end to it all.  By the 1:30 p.m. EDT COMEX close, the price was engineered to slightly below its Friday close---and it traded flat from there.

The low and high ticks were reported by the CME Group as $1,184.00 and $1,204.70 in the August contract.

Gold was closed in New York yesterday at $1,188.80 spot, down $1.20 from Friday.  Net volume was huge at 165,000 contract, with virtually all of it in the current front month, which is August.

Here`s a partial 5-minute gold chart courtesy of Brad Robertson---and as you can tell, the volume to the upside on the rally was much higher than the volume required to engineer the gold price back to unchanged---and Ted Butler has a comment on that in The Wrap section.

It was more or less the same price pattern in silver, so I'm sure you can fill in the blanks on this metal on your own.

The low and high tick in that precious metal was recorded as $16.59 and $17.17 in the July contract.

Silver finished the Monday session at $16.705 spot---up a whole half a cent. Aren't these HFT guys and their algorithms just too cute for words?  Net volume was pretty high at 52,000 contracts, with about 8 percent of that amount being roll-overs out of the July contract. 

Ditto for platinum which, by the London p.m. gold fix, was up 11 dollars, but by the COMEX close, JPMorgan et al had the price at a 9 dollar loss, closing it at $1,101 spot.

The palladium chart was a mini version of the other three precious metals, but it was only closed down three dollars at $772 spot.

The dollar index closed late on Friday afternoon in New York at 96.85---and then had a pretty wild time of it starting on Sunday evening in New York. It made it back above the 97.00 level by mid-morning trading in the Far East on their Monday.  The two attempts it penetrate the 97 mark to the downside after that were met with the usual 'gentle hands'---except these same hands hit the 'sell precious metals' button at the London p.m. gold fix at the same moment they ramped the dollar.  The dollar index finished the Monday session at 97.43---up 57 basis points.

Here`s the 6-month U.S. Dollar Index chart so you can see the progress of the current `rally`.

The gold stock opened up, but began to head lower immediately, even though the gold price was till heading for the moon and the stars.  They stopped falling around the COMEX close and did little for the remainder of the day.  The HUI closed down 0.76 percent.  I thank Nick Laird for this chart.

The silver equities rallied against strong selling until their high ticks, which came at 11:00 a.m. EDT.  The low came about fifteen minutes before the COMEX close and, like their golden brethren, didn't do much after that.  Nick Laird's Intraday Silver Sentiment Index closed virtually unchanged, down only 0.08 percent.

Based on the price action in the precious metal shares, there can be little doubt that there was an active seller lurking in the background to ensure that their respective rallies didn't go anywhere.

The CME Daily Delivery Report for Day 3 of the June delivery month showed that 2,468 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. The only short/issuer was JPMorgan out of its in-house [proprietary] trading account.  The three largest stoppers were HSBC USA in its in-house account with 1,570 contracts, JPMorgan in its client account with 422---and Canada's Scotiabank with 387 contracts. The link to yesterday's Issuers and Stoppers Report is here---and it's worth a look.

The CME Preliminary Report for the Monday trading session showed that gold open interest in June fell by 444 contracts, leaving 5,091 still open---minus the 2,468 shown above, of course.  In silver, June o.i. increased by 1---to 33 contracts outstanding.

There was a withdrawal from GLD yesterday.  This time an authorized participant removed 57,539 troy ounces.  And as of 8:55 p.m. EDT, there were no reported changes in SLV.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with that changes in their gold and silver ETFs as of Friday, May 22---and both had withdrawals for the reporting week.  Their gold ETF declined by 21,118 troy ounces---and their silver ETF dropped by a chunky 285,063 troy ounces.

The U.S. Mint had a sales report to start the new month.  They sold 500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 400,000 silver eagles.  Those silver eagle sales go along with the 375,000 they reported selling on Friday.

There was no in/out activity in gold worth mentioning at the COMEX-approved depositories on Friday.  There was more activity in silver, as 629,943 troy ounces were received---but only 3,056 troy ounces were shipped out.  Most of the 'in' activity was at the CNT Depository---and because I'm on the road, I don't have the link to that activity.

It was fairly quiet at COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  Only 3,208 kilobars were received---and 397 shipped out.  All the action was, as usual, at Brink's, Inc.

Here's a new chart that Nick Laird sent our way yesterday.  The top of the chart shows the China [in red] and India [in green] monthly gold demand going back to the start of 2008.  Please note the bottom chart, which shows monthly demand from these two countries vs. total monthly mining production.  Add in Russia---and you're about 100 percent.  Minus scrap, the rest of the world's gold demand is coming out of central bank vaults.

Because I'm still on the road, I've cut the stories back to the minimum which, in this case, is still quite a few.

¤ Critical Reads

Consumer Spending Stalled in April as Americans Saved More

Consumer purchases unexpectedly stalled in April as Americans used income gains to shore up savings, raising the risk the biggest part of the economy may take time to gain momentum after a slow start to the year.

The unchanged reading in purchases followed a 0.5 percent gain the prior month that was larger than previously estimated, Commerce Department figures showed Monday in Washington. The median forecast in a Bloomberg survey of 79 economists called for a 0.2 percent rise. Earnings increased 0.4 percent, more than projected, and the saving rate climbed.

Consumers, who’ve been using the money freed up by low gasoline costs to pay down debt or rebuild their balance sheets, would be more inclined to shop as wages accelerate. Sustained improvement in household spending, which accounts for almost 70 percent of the economy, is needed to ensure growth rebounds as Federal Reserve officials project.

This Bloomberg article was posted on their Internet site at 6:30 a.m. Denver time on Monday.  There's a 1:34 minute video clip as well.  I thank Dan Lazicki for today's first story.

Margin Debt Breaks Out: Hits New Record 50% Higher Than Last Bubble Peak

For a few months in mid/late 2014 there was some concern among those who still don't get that in this New Paranormal market the only real buyers are central banks, that while the stock market kept on rising, and rising, NYSE margin debt was flat, and in fact the total amount of purchases on margin at the end of 2014 was nearly the same to those in January. Meanwhile the S&P 500 had soared to recorder highs.

A few things here: first, as we explained one year ago, in a world in which levered purchases take place via such shadow banking conduits as repo and primary broker arrangements, margin debt has become an anachronism from a bygone generation in which there wasn't $2.5 trillion in Fed reserves supporting the market, and is now almost entirely meaningless.

But for those who still cling on to margin debt as indicative of anything, the latest NYSE report should provide some comfort: finally the long-awaited breakout in participation has arrived, and after stagnating for over a year, investors - mostly retail - are once again scrambling to buy stocks on margin, i.e., using debt, and as of April 30, the amount of margin debt just hit a new all time high of $507 billion, $30 billion more than the month before, and nearly 50% higher than the last bubble peak reached in October 2007.

This Zero Hedge story showed up on their website early on Friday afternoon EDT last week---and it`s something I found in yesterday`s edition of the King Report.  It`s worth skimming.

Is Our Economy's Cinderella Carriage About to Turn Into a Pumpkin?

The past six years of expansion have been as illusory as Cinderella's magic carriage.

The clock is about to strike midnight, and our Cinderella economy's magic carriage will revert to a pumpkin. The magic of the Federal Reserve's flood-the-fields policies of zero interest rates (ZIRP) and liquidity (via quantitative easing (QE) and other programs) had an expiration date of December 2014, judging by the negative gross domestic product (GDP) in the first quarter and the deep slump in corporate profits:

U.S. GDP falls 0.7%

U.S. corporate profits sink 5.9%, biggest drop since 2008

There are many other indications that the Fed's magic has worn off: new orders are slumping, for example.

This Charles Hugh-Smith commentary appeared on the Zero Hedge website yesterday morning---and it's the second offering of the day from Dan Lazicki.

"By Almost Every Measure Stocks Are Overvalued" Warns Goldman After Slamming Corporate Buybacks

Over the weekend, we first reported that none other than Nobel prize winner Robert Shiller said that in his opinion, unlike 1929, this time everything - stocks, bonds and housing - was overvalued.

Curiously, none other than Goldman's chief equity strategist, David Kostin echoed this sentiment when in his latest weekly note to clients he said that "by almost any measure, US equity valuations look expensive. The typical stock in the S&P 500 trades at 18.1x forward earnings, ranking at the 98th percentile of historical valuation since 1976.

For the overall index, the aggregate forward P/E multiple equals 17.2x, a rise of 63% since September 2011, compared with the median expansion of 48% during 9 previous P/E expansion cycles. Financial metrics such as EV/EBITDA, EV/Sales, and P/B also suggest that US stocks have stretched valuations. With tightening on the horizon, the P/E expansion phase of the current bull market is behind us."

This commentary showed up on the Zero Hedge website at noon EDT on Monday---and it's courtesy of Orlando, Florida reader Dennis Mong.

When Paper Wealth Vanishes: John P. Hussman

"The Federal Reserve hasn’t created a perpetual money machine. No, no, no, no, no. What the Fed has done is to encourage investors to chase yields and to speculate, to the point where stocks are now so overvalued that they can be expected to enjoy no further return at all over the coming decade. That’s how security pricing works. The higher the price an investor pays for a given stream of future expected cash flows, the lower the subsequent return an investor can expect to enjoy. The gains have already been had, at least on paper, though the holders who successfully realize these paper gains will do so through a needle’s eye.

The past few quarters appear to be part of that distribution process. Volume picks up as holders attempt to sell and those shares are absorbed by dip-buyers, followed by low-volume short squeezes as sellers back off, and then return after those rallies with additional rounds of distribution.  As long as only a few investors attempt to do so, any individual can cash out, but only by successfully selling their shares to some other investor at current levels.  In aggregate, investors can’t exit, because somebody has to hold the stuff.  For most investors, the majority of the paper gains that have emerged during the advancing half-cycle since 2009 will simply vanish over the completion of the cycle.

This longish commentary has a couple of excellent charts embedded.  It was posted on the hussmanfunds.com Internet site yesterday---and I thank reader U.D. for passing it around.

Why to Pay Attention to Today's Buyback Boom

There has been a lot of debate recently about whether today’s buyback boom — a record $133 billion in buybacks for S&P companies were announced in April — is good or bad for the economy and for markets.

While some defend the buyback practice as a method of returning cash to shareholders, others, including my colleague Larry Fink, have argued that some companies today are focusing on maximizing short-term shareholder value at the expense of investing in the future.

In my opinion, today’s boom is just one economic distortion created by the Federal Reserve (Fed)’s excessively accommodative monetary policy.

The boom is, in essence, a response to today’s extraordinarily low interest rates, which have translated into abundant liquidity for corporations seeking to borrow cheaply in the capital markets.

This commentary is by Rick Rieder, who is the Managing Director of BlackRock’s Fundamental Fixed Income Fund---and is Co-head of Americas Fixed Income.  It's pretty short---and worth reading.  It appeared on the blackrockblog.com Internet site early yesterday---and it's the second contribution in a row from reader U.D.

"The Fed Has Been Horribly Wrong" Deutsche Bank Admits, Dares to Ask if Yellen is Planning a Housing Market Crash

The reason why Zero Hedge has been steadfast over the past 6 years in its accusation that the Fed is making a mockery of, and destroying not only the very fabric of capital markets (something which Citigroup now openly admits almost every week) but the US economy itself (as Goldman most recently hinted last week when it lowered its long-term "potential GDP" growth of the US by 0.5% to 1.75%), is simple: all along we knew we have been right, and all the career economists, Wall Street weathermen-cum-strategists, and "straight to CNBC" book-talking pundits were wrong. Not to mention the Fed.

Indeed, the onus was not on us to prove how the Fed is wrong, but on the Fed - those smartest career academics in the room - to show it can grow the economy even as it has pushed global capital markets into a state of epic, bubble frenzy, with new all time highs a daily event across the globe, while the living standard of an ever increasing part of the world's middle-class deteriorates with every passing year. We merely point out the truth that the propaganda media was too compromised, too ashamed or to clueless to comprehend.

And now, 7 years after the start of the Fed's grand - and doomed - experiment, the flood of other "serious people", not finally admitting the "tinfoil, fringe blogs" were right all along, and the Fed was wrong, has finally been unleashed.

Here is Deutsche Bank admitting that not only the Fed is lying to the American people:

This long commentary, with a quite a few charts, was posted on the Zero Hedge website at 10:06 a.m. EDT yesterday morning---and I thank reader M.A. for sharing it with us.

The End of the Safe Deposit Box for Wealth Storage

On 1 April 2015, Chase bank in the US advised clients who rent safe deposit boxes from them that there would be some changes in their policies. Of particular interest is the following condition:

Contents of box: You agree not to store any cash or coins other than those found to have a collectible value.”

Interesting. After all, cash and precious metals are traditional primary stores of wealth. Why single them out as no longer being acceptable?

As readers of this publication will know, the banking world, increasingly, is pushing people to put their wealth into cash, and their cash into banks in the form of deposits. In this effort, they’re being assisted by many of the world’s governments, which are rapidly increasing the level of legislation that controls what individuals are allowed to do with their own wealth.

This excellent commentary by Jeff Thomas appeared on the International Man website yesterday---and certainly falls into the must read category.

Rule By The Corporations — Paul Craig Roberts

The Transatlantic and Transpacific Trade and Investment Partnerships have nothing to do with free trade. “Free trade” is used as a disguise to hide the power these agreements give to corporations to use law suits to overturn sovereign laws of nations that regulate pollution, food safety, GMOs, and minimum wages.

The first thing to understand is that these so-called “partnerships” are not laws written by Congress. The US Constitution gives Congress the authority to legislate, but these laws are being written without the participation of Congress. The laws are being written by corporations solely in the interest of their power and profit. The office of US Trade Representative was created in order to permit corporations to write law that serves only their interests. This fraud on the Constitution and the people is covered up by calling trade laws “treaties.”

Indeed, Congress is not even permitted to know what is in the laws and is limited to the ability to accept or refuse what is handed to Congress for a vote. Normally, Congress accepts, because “so much work has been done” and “free trade will benefit us all.”

This commentary by Paul put in an appearance on his website on Monday---and it's definitely worth reading.  The first person through the door with this story was South African reader B.V.

Alexis Tsipras lambasts 'absurd proposals' for Greece debt-deal failure

Greece’s beleaguered prime minister, Alexis Tsipras, has blamed the “absurd proposals” of creditors keeping the debt-stricken country afloat for the failure to reach a deal that could release emergency aid to avert default.

In a hard-hitting article for the French daily Le Monde, the leader lambasted the uncompromising approach of the EU, European Central Bank and International Monetary Fund for five months of fruitless negotiations.

“The lack of an agreement so far is not due to the supposed intransigent, uncompromising and incomprehensible Greek stance,” he wrote. “It is due to the insistence of certain institutional actors on submitting absurd proposals and displaying a total indifference to the recent democratic choice of the Greek people.”

The Greek leader held a telephone call on Sunday night with the German chancellor, Angela Merkel, and France’s François Hollande to discuss the situation. All three leaders reiterated the need for a quick agreement, according to one official in Athens.

This news item showed up on The Guardian's website at 7:42 p.m. BST in London on their Sunday evening---and it's the first offering of the day from Roy Stephens.  Ambrose Evans-Pritchard has something to say about this as well in a Telegraph story from Sunday evening headlined "Defiant Tsipras threatens to detonate European crisis rather than yield to creditor "monstrosity""---and that one is courtesy of Martin Fluck.

European Leaders Deciding on Greece's Fate Agree That Talks Must Intensify

European leaders and the head of the International Monetary Fund agreed to step up the intensity of talks over Greece’s fate after an extraordinary meeting in Berlin about ways to avert a default.

The top-level huddle lasted past midnight Tuesday morning at Germany’s government headquarters with Chancellor Angela Merkel, IMF chief Christine Lagarde, European Central Bank President Mario Draghi, French President Francois Hollande and European Commission President Jean-Claude Juncker in attendance. The goal was to hammer out an offer that Greece could consider in coming days, according to two people familiar with the plan.

After Merkel left, her office put out a statement saying the five leaders “agreed that work must now be continued with greater intensity” and that “they have been in closest contact in recent days and want to remain so in the coming days, both among themselves and naturally also with the Greek government.”

Efforts to end an impasse over funding have become urgent as the Mediterranean nation faces a debt repayment to the IMF on Friday. While Greece says it can make the payment, it’s the smallest of four totaling almost 1.6 billion euros ($1.78 billion) this month. The timing coincides with the expiration of a euro-region bailout by the end of June.

This news item appeared on the Bloomberg website very late Monday morning MDT---and was updated late Monday afternoon MDT.  It's the second offering of the day from Roy Stephens.  The original headline read "Greece's Creditor's said to meet in Berlin to discuss next steps".

Greece must stop hoping for a miracle - it needs to leave the euro

It’s time for Greece to put itself out of its misery. It must stop hoping for a miracle, default on its debts and exit the euro. In the short term, this would probably precipitate another cataclysmic relapse into recession for Greece’s long-suffering people. But it is the only way out of the current logjam and has become a necessary, albeit not sufficient, condition for the country to make an eventual recovery.

Ideally, the Greek government would choose to press the Grexit button itself. But if it decides instead to cling on indefinitely, the rest of the eurozone should find a way of forcing it out of the single currency as soon as possible. That would go against the EU’s imperialistic mindset, for sure, and would violate the infamous acquis communautaire rule: the view that E.U. integration should never be allowed to be reversed in any area and in any country. But it’s the only way to end the current nonsense, and the only hope for a country that has been suffering horrendously for years.

The most powerful arguments in favour of both default and Grexit relate to political economy and electoral psychology. Greece’s debt burden is too big: it can never be repaid. The sooner everybody accepts this, the better. Just as importantly, however, most Greek voters seem to agree with the current government’s ideology: they want, by and large, to remain in the euro but don’t want to have to abide by its broadly orthodox rules on tax, spending and markets. This is fatally inconsistent: the only way for the euro to work, in the absence of massive, permanent handouts from Germany and other rich countries, is for member states to embrace free markets and radical labour market flexibility.

This right-on-the-money commentary was posted on the telegraph.co.uk Internet site at 9:18 p.m. Monday evening London time, which was 4:18 p.m. EDT in Washington.  I thank Roy Stephens for sliding this into my into my in-box just after midnight MDT this morning.

Slovak PM calls for cancelation of anti-Russian sanctions

Slovak Prime Minister Robert Fico has called for cancelation of the European Union’s anti-Russian sanctions.

"The sanctions have not produced the expected effect. They have harmed both Europe and Russia. I don’t know who may be happy with that reciprocal damage," Fico said on the eve of his official visit to Russia, due Tuesday, in an exclusive interview with TASS First Deputy Director General Mikhail Gusman.

He said sanctions cannot be the content of politics. "They may only be the tool or one of the tools in the resolution of emerging complex situations," the premier underscored.

Second, he said, historical experience testifies to inefficiency of that mechanism of pressure.

This short article, filed from Bratislava, appeared on the tass.ru Internet site at 7:44 p.m. Moscow time on their Monday evening, which was 12:44 p.m. EDT in Washington.  I thank Roy Stephens for sending it along.

‘Self-appointed advocate of new Ukraine’: Soros emails leaked by anti-Kiev hackers

George Soros advocates E.U. financial aid and military assistance to Ukraine to restore Kiev’s fighting capacity without violating the Minsk peace deal, claim anti-Kiev hackers citing leaked emails between the billionaire and Ukraine’s president.

The hacking group CyberBerkut claims it has penetrated Ukraine’s presidential administration website and obtained correspondence between Soros and Ukraine’s President Petro Poroshenko.

The hacktivists have published three files online, which include a draft of “A short and medium term comprehensive strategy for the new Ukraine” by Soros (dated March 12, 2015); an undated paper on military assistance to Kiev; and the billionaire’s letter to Poroshenko and Ukraine’s Prime Minister Arseny Yatsenyuk, dated December 23, 2014.

According to the leaked documents, Soros supports Barack Obama’s stance on Ukraine, but believes that the US should do even more.

I`ve known for a long time that Soros has been involved in stuff like this, not only in the Ukraine, but elsewhere as well.  Even though it`s worth reading, you should read it with an open mind and await further developments.  This story was posted on the Russia Today website at 8:58 p.m. Moscow time on their Monday evening---and I thank reader `h c` for sending it our way very late yesterday evening Denver time.

Europe Shocked When Russia Does to It What Europe Did to Russia

The E.U. issued a press release this morning which could perhaps be summed up in two words - "not fair." Following the denial-of-entry by Russia of several EU politicians, Russia has released a list of 89 names who will face travel bans - of exactly the same type as E.U. and U.S. enforced upon numerous Russian elites. Europe is displeased that Russia would dare do unto them as they have done unto others... "we deem this measure as totally arbitrary and unjustified," they exclaimed, adding, "we don’t have any further information on the legal basis or the criteria or the process of these decisions."

The travel bans by Russia appear to be a response to the E.U.’s imposing several rounds of sanctions on Russia for its role in destabilizing Ukraine, including asset freezes and travel bans on 150 officials.

What goes around, comes around sweetheart!  Personally, it would have been better for Russia to let everyone in, as such tit-for-tat action is childish.  This is an area where the Russian's should take the moral high ground---and I'm disappointed that they didn't.  This Zero Hedge piece showed up on their website at 3:00 p.m. EDT yesterday afternoon---and I thank Dan Lazicki for sending it our way.

World Bank improves Russia forecast on higher oil

The World Bank has issued a more optimistic economic forecast for Russia for 2015-2016, which assumes GDP will fall less than predicted in 2015 and start growing from 2016. The change of heart is linked to growing oil prices in the last two months.

The real GDP is now expected to decline by 2.7 percent in 2015, increase by 0.7 percent and 2.5 percent in 2016 and 2017 respectively. This is a change to the Bank's viewpoint in April when GDP was anticipated to shrink by 3.8 percent in 2015 and by 0.3 percent in 2016.

"The revised forecast is largely driven by the adjustment in oil prices over the previous two months that is supporting the ruble exchange rate and a slightly faster retreat of inflation. That would allow the Central Bank of Russia to pursue monetary easing at a more rapid pace for the rest of 2015, as a result bringing down borrowing costs and increasing lending to firms and households. Both investment and consumption growth would contract slightly less than previously expected," said Birgit Hansl, the World Bank’s top economist for the Russian Federation, on Monday.

This story showed up on the Russia Today website at 3:31 p.m. Moscow time on their Monday afternoon, which was 8:31 a.m. EDT in New York.  It's another contribution from Roy Stephens. 

U.S. calls for ‘immediate halt’ to China island-building

The United States on Saturday vowed to keep sending military aircraft and ships to disputed parts of the South China Sea and called for an immediate halt to reclamation works by Beijing in the tense region.

U.S. Defense Secretary Ashton Carter told a high-level security conference in Singapore that Beijing's intensifying reclamation activity was "out of step" with international norms.

"First, we want a peaceful resolution of all disputes. To that end, there should be an immediate and lasting halt to land reclamation by all claimants," Carter said at the annual Shangri-La Dialogue on security with a high-level Chinese military delegation attending.

"We also oppose any further militarisation of disputed features," he said.

This AFP story put in an appearance on the france24.com Internet site on Saturday---and I thank Roy Stephens for sharing it with us.  There was also a BBC article about this from Saturday headlined `U.S. calls for land reclamation 'halt' in South China Sea`---and it`s courtesy of reader M.A.

Why is Obama Goading China? -- Mike Whitney

U.S. Secretary of Defense Ashton Carter is willing to risk a war with China in order to defend  “freedom of navigation” in the South China Sea. Speaking in Honolulu, Hawaii on Wednesday, Carter issued his “most forceful” warning yet, demanding “an immediate and lasting halt to land reclamation” by China in the disputed Spratly Islands.

Carter said: “There should be no mistake: The United States will fly, sail, and operate wherever international law allows, as we do all around the world.” He also added that the United States intended to remain “the principal security power in the Asia-Pacific for decades to come.”

In order to show Chinese leaders “who’s the boss”, Carter has threatened to deploy U.S. warships and surveillance aircraft to within twelve miles of the islands that China claims are within their territorial waters. Not surprisingly, the U.S. is challenging China under the provisions of the U.N. Convention on the Law of the Sea,  a document the US has stubbornly refused to ratify.  But that’s neither here nor there for the bellicose Carter whose insatiable appetite for confrontation makes him the most reckless Secretary of Defense since Donald Rumsfeld.

So what’s this really all about?  Why does Washington care so much about a couple hundred yards of sand piled up on reefs in the South China Sea? What danger does that pose to U.S. national security? And, haven’t Vietnam, Taiwan and the Philippines all engaged in similar “land reclamation” activities without raising hackles in D.C.?

Carter is a screaming psychopath---and absolutely nothing is off the table with this nut job running things.  If you're a serious student of the New Great Game, dear reader, this falls into the absolute must read category.  It was posted on the counterpunch.org Internet site on the weekend---and I thank South African reader B.V. for bringing it to our attention.

China Says It Could Set Up Air Defense Zone in South China Sea

A Chinese admiral said Sunday that Beijing could set up an air defense zone above disputed areas of the South China Sea if it thought it was facing a large enough threat, according to Chinese news media.

Adm. Sun Jianguo, deputy chief of staff of the People’s Liberation Army, speaking at a regional security forum in Singapore, said that China had not definitely said it would create a so-called air defense identification zone, but that any decision would be based on an aerial threat assessment and the maritime security situation. He also said other nations should not overemphasize the issue.

The creation of an air defense zone would be viewed by the United States and Southeast Asian nations as a huge provocation. In recent years, foreign officials have speculated whether one of Beijing’s next moves in the South China Sea would be to set up such a zone, which would further solidify China’s military presence in the waters.

I`m always leery of any article like this that shows up in The New York Times---and you should be as well, as it, along with several other New York papers, are basically mouthpieces for the U.S. government.  This article put in an appearance on their website on Sunday sometime---and it`s the final offering of the day from Roy Stephens---and I thank him on your behalf. 

The Dollar Will Die with a Whimper, Not a Bang -- Jim Rickards

The same force that made the dollar the world’s reserve currency is working to dethrone it.

July 22, 1944, marked the official conclusion of the Bretton Woods Conference in New Hampshire. There, 730 delegates from 44 nations met at the Mount Washington Hotel in the final days of the Second World War to devise a new international monetary system.

The delegates there were acutely aware that the failures of the international monetary system after the First World War had contributed to the outbreak of the Second World War.

They were determined to create a more stable system that would avoid beggar-thy-neighbor currency wars, trade wars and other dysfunctions that could lead to shooting wars.

This U.S. dollar-gold commentary by Jim showed up on the dailyreckoning.com Internet site last Thursday---and I get the impression that this is a repeat, as I think I`ve posted this commentary, or one very much like it, before.  I thank Harold Jacobsen for sending it our way.

Texas also aims to repatriate its gold ... from HSBC in New York

State Rep. Giovanni Capriglione asked the Legislature to create a Texas Bullion Depository, where Texas could store its gold, which is now in New York, and where others could keep their precious metals.

The Southlake Republican must have the golden touch, because the House and the Senate have signed off on his plan and his bill appears headed to Gov. Greg Abbott for consideration.

“We are not talking Fort Knox,” Capriglione said. “But when I first announced this, I got so many e-mails and phone calls from people literally all over the world who said they want to store their gold … in a Texas depository.

“People have this image of Texas as big and powerful … so for a lot of people, this is exactly where they would want to go with their gold.”

This gold-related news item put in an appearance on the star-telegram.com Internet site on Saturday---and I found it embedded in a GATA release.  The above headline is a Chris Powell invention.  The actual headline reads `A Gold Rush in Texas`.  The Zero Hedge spin on this from just before midnight EDT last night is headlined `Kyle Bass Was Right: Texas to Create Own Bullion Depository, Repatriate $1 Billion of Gold`---and it`s courtesy of reader M.A.

How BitGold intends to become a new standard

When Josh Crumb and his colleague started out, they just wanted to figure out a way to allow people to pay for a cup of coffee with gold.

Yes, you read that correctly. With gold.

In the more than four decades since president Richard Nixon abolished the gold standard -- the pledge that a dollar was worth 1/35th of an ounce of gold -- there has been no formal link between the value of the precious metal and that of the dollar or any other of the worlds other chief currencies. That has driven a group of economists and policymakers crazy; they argue that the demise of the gold standard lies behind all of Americas economic woes since Nixons 1971 edict. Rand Paul, one of the current crop of Republican candidates for president, is among those arguing that its time to at least study the idea of linking the dollar to gold.

This article appeared on theguardian.com Internet site of all places.  It showed up there early Sunday afternoon BST---and it`s another gold-related story I found on the gata.org Internet site.

Productivity, modernisation key in gold wage talks

South Africa’s gold mining industry needed to undergo a structural shift and significant modernisation to curb the socioeconomic pressures it was facing and to create a sustainable, uninterrupted operating environment, South Africa’s gold miners have stated.

In the latest update from their ‘This is Gold’ website, they noted that, by 2025, the country’s gold output would fall to 69 t, or one-half of current levels. This could potentially result in employment decreasing by 43% to 68 000 employees over the next decade.

While employee numbers had continued to decline in recent years, wages paid – in total and on average – had risen significantly.

In fact, average labour remuneration had risen by 11% a year over the past decade. On average, guaranteed pay for gold mine employees had risen to R13 435 a month in 2012 versus R10 972 a month in 2010.

Well, dear reader, I`m getting rather tired of hearing the plight of gold and silver miners, regardless of country of origin.  Every mining company out there knows precisely why their in their current predicaments, but won`t say or do anything about it.  What happened to their fiduciary responsibilities to their company, their employees---and their stockholders.  They don`t have a gonad to share between them, so I guess we shouldn`t expect much else than constant whining.  I wonder what their respective mothers would think if they knew how badly they had raised their sons.  This news item, filed from Johannesburg, showed up on the miningweekly.com Internet site on Friday SAST---South African Standard Time---and it`s the final offering of the day from South African reader B.V. 

China gold demand holding up well: New record ahead? -- Lawrence Williams

We keep seeing reports in the mainstream media suggesting that Chinese gold demand is slipping away, but continuing strong gold withdrawal figures from the Shanghai Gold Exchange (SGE) seem to contradict these reports. While, as we have reported before, there are many doubts expressed as to whether SGE withdrawals are actually equivalent to Chinese consumer demand, there is no doubt that they do represent the underlying consumption situation.

Hong Kong-based Philip Klapwijk, the former executive chairman of GFMS prior to its acquisition by Thomson Reuters, did explain some of the discrepancies between the mainstream analysts’ Chinese consumption figures and SGE withdrawals (which differed last year by around 1,000 tonnes) as unrecorded cross border gold movement from mainland China into Hong Kong (technically illegal) in a presentation to the Bloomberg Precious Metals Forum a week ago, but he also noted that due to a clampdown by authorities this amount had ‘fallen off a cliff’ so far this year, which raises the question as to where all this gold being withdrawn from the SGE is going if it is not being technically ‘consumed’ in the mainland, or being ‘exported’ to Hong Kong.

The latest figure for SGE withdrawals, announced Friday, is for 42 tonnes for the week ended May 22, bringing the total so far this year to 945 tonnes in only 20 weeks. The levels are actually high for the time of year, which is usually a low period for SGE gold movements. Thus average weekly withdrawals so far this year have amounted to over 47 tonnes. While this includes the relatively high demand levels up to the Chinese New Year, it should also be recognised that the final four months of the calendar year also tend to see very high SGE withdrawal numbers.

This excellent and right-on-the-money must read commentary by Lawrie put in an appearance on the mineweb.com Internet site at 10:18 a.m. BST yesterday morning, which was 5:18 a.m. EDT.  I found this story all by myself!

¤ The Funnies

Here`s a photo that Charleston, South Carolina reader Tony Beck sent my yesterday---and I thought it worth sharing.  It`s an underside shot of a swallow-tail kite that he took the other day.

Here`s a photo of the whole bird that I `borrowed` from the Internet.

¤ The Wrap

In the case of a cooling off of the weekly COMEX silver turnover, since I trace JPMorgan’s accumulation of hundreds of millions of ounces of silver as having started precisely when the unprecedented turnover began in April 2011, I can’t help but think that a cessation of the unusual weekly turnover may indicate the bank has completed or is close to completing its historic silver acquisition. This is highly speculative on my part, but there are other indications this may be the case. Of course, these are matters that must involve speculation for the simple reason that there is no reason to expect JPMorgan to disclose anything. 

As expected, JPMorgan did take (stop) 808 silver contracts in the just completed delivery period for the May COMEX futures contract in the bank’s own proprietary or house trading account. This is in addition to the 1500 maximum allowed amount taken in the March delivery contract. In ounces, that’s 4 million oz in May and 7.5 million oz in March. This is only a tiny part of the 350 million+ oz I claim JPM has acquired, but it is highly visible and (also) might be suggestive of conforming to my speculation that the bank is finishing up its silver accumulation. - Silver analyst Ted Butler: 30 May 2015 

Yesterday`s price action in all four precious metals was about the most blatant example of price management that one could hope to see.  Not that it matters, as no one will raise a finger in protest.

In an e-mail from reader David Caron yesterday, he pointed out the obvious---`Arguing that you don't care about manipulation of the markets, is like saying you don't care about your wealth or your net worth!`.  Since the mining executives can get their respective boards of directors to reprice their stock options at any time, they really don`t care.  But what about us shareholders on the outside looking in.

In my chat with Ted yesterday, he feels that because the `up` volume was so much larger than the `down` volume on yesterday`s price spikes, there was most likely more deterioration in the Commercial net short positions in both silver and gold---as the technical funds in the Managed Money category poured in on the long side once the critical 50-day moving averages were violated.

Here are the 6-month charts for all four precious metals as of the close on Monday, so you can see what ``da boyz`` did to us again.

And as I type this paragraph, the London open is a bit under twenty minutes away---and with the exception of platinum, which is up two bucks, the other three precious metals are down a hair from Monday`s close in New York.   Gold`s net volume is just a bit under 17,000 contracts, which is very high considering the lack of price action---and virtually all of it is in the August contract, which is the current front month, so it`s all of the HFT variety.  Silver`s net volume is 3,800 contracts, which is nothing special.  The dollar index has been chopping quietly lower all through Far East trading on their Tuesday---and is down 14 basis points at the moment.

Since today is Tuesday, the cut-off for this Friday`s Commitment of Traders Report is at the close of COMEX trading.  Hopefully all of Monday`s price action will be in it---and unless we have another volatile price day courtesy of JPMorgan et al, all today`s data should be in it as well.

And as I sent today`s column off to Stowe, Vermont at 4:40 a.m. EDT I note that only platinum is up on the day.  Gold`s net volume is approaching 25,000 contracts, which is very high---and silver`s net volume is pretty chunky as well, a bit under 6,000 contracts.  The dollar index made another attempt to take out the 97.00 level to the downside, but `gentle hands` were at the ready once again---and the index is now down only 25 basis points, but was down over 40 at one point.  I would guess that all this HFT volume is associated with keeping precious metal prices under control as the dollar index falls.

I have no idea what the Tuesday trading session in New York, but based on what I see at the moment, I`m not overly optimistic.

That`s all I have for today.  I have a plane to catch early this morning, so I`m off to bed.

See you tomorrow.

Ed Steer

Tue, 2 Jun 2015 04:13:00 +0000
<![CDATA[U.S. Mint Ends Rationing of Silver Eagles]]> http://www.caseyresearch.com/gsd/edition/us-mint-ends-rationing-of-silver-eagles/ http://www.caseyresearch.com/gsd/edition/us-mint-ends-rationing-of-silver-eagles/#When:07:03:00Z "I'm not overly optimistic about the silver price going forward"

¤ Yesterday In Gold & Silver

The gold price chopped around in a five dollar price range all through Far East and the first half of London trading on their Friday, but at 8:30 a.m. EDT the price began to rally, but ran into the usual not-for-profit sellers right away.  The high tick came at, or shortly before the London p.m. gold fix, before getting sold back to almost unchanged.  It rallied a bit starting around noon in New York, but didn't do much after that.

The low and high tick were recorded by the CME Group as $1,186.00 and $1,194.40 in the August, which is the new front month.

Gold finished the Friday session at $1,190.00 spot, up $2.20 on the day. Net volume was only 108,000 contracts, which wasn't a lot.

As always, it was almost an identical price pattern in silver, which is obvious from looking at the charts, so I shall spare you the play-by-play.

The low and high ticks in the metal were reported as $16.64 and $16.85 in the July contract.

Silver closed on Friday in New York at $16.70 spot, up 4 cents from Thursday's close.  Net volume was only 25,500 contracts.

Platinum chopped sideways until shortly before 11 a.m. in New York---and then it got sold down into the COMEX close.  Platinum finished the Friday session at $1,109 spot, down 5 bucks from Thursday.

Palladium chopped around a couple of bucks either side of unchanged until 2 p.m. Zurich time---and then got sold down 7 dollars by the COMEX open, which was twenty minutes later.  By around 10:30 a.m., EDT, the price was back in the green.  But within two hours it had been sold down 11 bucks---and didn't do a lot after that.  The metal was closed down 8 dollars on the day to $775 spot.

The dollar index closed at 96.88 late on Thursday afternoon in New York---and it chopped around that number in a wide range throughout the entire Friday session, closing at 96.85---down 3 basis points from Thursday's close.

The gold stocks opened unchanged, but blasted to their highs of the day, along with the gold price, shortly before 10 a.m. in New York.  From there they slid into negative territory, hitting their low tick around 11:30 a.m.  They rallied back into positive territory in the next hour or so, but couldn't hold it, as the HUI closed down 0.17 percent.  I thank Nick Laird for the chart.

The silver stocks followed almost the same pattern as their golden cousins, but they managed to close in the green, as Nick Laird's Intraday Silver Sentiment Index closed higher to the tune of 0.42 percent---but well off their highs.

Nick advised us that for the week just past the HUI and the Intraday Silver Sentiment Index both closed down another 2.6 percent apiece.

The CME Daily Delivery Report for Day 2 of the June delivery month showed that only 3 gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Nothing to see here which, I must admit, is a bit of a surprise.

The CME Preliminary Report for the Friday trading session showed that gold open interest in June fell by 2,830 contracts, down to 5,550 contracts.  That's a pretty decent amount of gold for a delivery month---and that's why I'm surprised that the first two delivery days have been as quiet as they were.  Obviously that will change---and in rather short order I would think.

June open interest in silver fell by 195 contract, leaving only 32 left for delivery, minus the 2 posted in the previous paragraph.  Unless some surprise deliveries show up as the month progresses, silver deliveries are going to be a real yawner.  But that should come as no surprise, as June is not a traditional delivery month for silver anyway.

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

I wasn't expecting a sales report from the U.S. Mint yesterday, but we got one.  They sold 6,500 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---and 375,000 silver eagles.

Month-to-date the mint has sold 21,500 troy ounces of gold eagles---9,500 silver eagles---and 2,023,500 silver eagles.  Based on these figures, the silver/gold sales ratio works out to 65 to 1.

And as Ted has been mentioning for most of the month, the big buyer of silver eagles appears to have stepped away from the table---and in obvious response to that, the U.S. Mint has ended rationing of silver eagles.  I have a story about this in the Critical Reads section below.

It was another 'nothing' day for gold deliveries at the COMEX-approved depositories on Thursday.  Nothing was received---and only 1,286 troy ounces were shipped out.

There was a decent receipt in silver, as 601,024 troy ounces were reported received---all at Brink's Inc.---but only 30,186 troy ounces were shipped out the door.  That silver came out of the depositories over at HSBC USA.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 5,843 kilobars---and shipped out 5,024.  I'm on the road at the moment---and don't have the links to any of the above movements, as they're on my home computer. 

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday was a crushing disappointment in silver---and pretty decent in gold.

In silver, the Commercial net short position only declined by 983 contracts, which is nothing.  The Commercial net short position is still way up in the stratosphere at 61,502 contracts, which translates into 307.5 million troy ounces, a hair under 134 days of world production.

The Big 4 were unchanged---and Ted thinks that JPMorgan's short position is basically unchanged at 20,000 contracts, with a possible revision with next week's Bank Participation Report.  The big '5 thru 8' upped their short position by 300 contracts to a new six year record of 75,529.  The raptors, the Commercial traders other than the Big 8, added 1,200 new longs and sit at 14,000 contracts net long. The traders in the Managed Money category in the Disaggregated COT Report did next to nothing.

In gold, the Commercial net short position declined by 22,614 contracts, or 2.26 million ounces, which was in line with Ted's expectations.  The Commercial net short position is now down to 10.97 million troy ounces.

The Big 4 bought back 7,600 short contracts, the big '5 thru 8' bought back a little over 4,000 shorts---and the raptors added 10,500 new longs. On the sell side, Managed Money only accounted for 12,373 contracts.  They did this by reducing their long position by 7,237 contracts and going short an additional 5,136 contracts.

I'm less than amused with the silver situation in this past week's COT Report---and I'd like to blame it on tardy reporting standards, but if that was the case, then it should have equally applied to gold as well, which it obviously didn't according to Ted.  I'll have more on this in The Wrap.

Here's Nick's "Days of World Production to Cover Short Positions" for all physically traded commodities on the COMEX---and you can see why I said that the short position in silver was still in the stratosphere.  Not that I wish to bore you with this minor detail, but it's my opinion based on the Bank Participation Report figures that JPMorgan and Canada's Scotiabank combined, are short about 90 days of world silver production between them.  The Big 8 are short 179 days of world production in total, but these two banks alone are short exactly half of that amount.  How's that for a concentrated short position?

Another week---and another decent withdrawal from the Shanghai Gold Exchange.  They reported taking out 42.493 tonnes on Friday, May 22.  Here's Nick's most excellent chart.

I've tried to cut the number of stories down to a bare minimum---and was only partly successful.  I also have a few that I've been saving for today's column.

¤ Critical Reads

Chicago PMI Bounce Is Dead, Crashes Back Near 6 Year Lows

Following Milwaukee ISM's plunge to 15-month lows this morning with a plunge in new orders (missing for 4 of last 5 months), Chicago PMI printed a disappointing 46.2 (against expectations of a slight rise to 53.0 from 52.3 last month) - lower than the lowest economist estimate.

After last month's modest (dead-cat) bounce back from winter's collapse to 6 year lows, this re-collapse is hardly the kind of Q2--recovery-reinforcing data the mainstream wants. With the level now back at the same when Lehman hit, New Orders, Production, and Employment all contracted in May.

This short Zero Hedge piece showed up on their Internet site at 9:48 a.m. EDT on Friday morning---and the three embedded charts are worth the trip.  Today's first story is courtesy of Dan Lazicki.

"Welcome to the Contraction": Q1 GDP Drops By 0.7%, Corporate Profits Crash

And you thought the preliminary 0.2% Q1 GDP print from last month was bad. Moments ago, just as we warned, the BEA released its latest, first, revision of Q1 GDP (pre second-seasonal adjustments of course), and we just got confirmation that for the third time in the past four years, the US economy suffered a quarterly contraction, with the Q1 GDP revised drastically from a 0.2% growth to a drop of -0.7%: the worst print since snow struck, so very unexpectedly, last winter.

Incidentally, there has not been a US "expansion" with three negative quarters in it in the past 60 years.

Worse, the breakdown shows that far from being a non-core slowdown, consumption rose just 1.8%, below the 2.0% expected, and contributed just 1.23% of the bottom line GDP number. This was the worst Personal Spending contribution since Q1 of last year, when revised GDP dropped by -2.11%.

This very interesting chart-filled news item showed up on the Zero Hedge website at 7:27 p.m. EDT yesterday evening---and it's the second offering in a row from Dan Lazicki.

Santelli: Slice GDP any way you want...

CNBC's Rick Santelli discusses bond prices and yields, after first quarter GDP was revised lower.

This brief 55 second video clip appeared on the CNBC website around 2 p.m. EDT yesterday afternoon---and it's the third contribution in a row from Dan L.

What Will Happen to a Generation of Wall Street Traders Who Have Never Seen a Rate Hike?

Magdy El Mihdawy remembers exactly where he was when the stock market tanked in 2009.

He was on Spring Break in Florida -- as a 22-year-old undergrad.

Today, El Mihdawy is part of a Wall Street demographic whose own trial by fire awaits: traders who’ve never known anything but a post-crisis world of rock-bottom interest rates and ever-rising markets.

This youth brigade -- call it Wall Street’s class of 2009 - - is about to learn what higher rates from the Federal Reserve look like firsthand. Their inexperience has left older, more experienced colleagues wondering how these relative youngsters will fare.

This Bloomberg story, which includes a 5:51 minute video clip, showed up on their Internet site at 5 p.m. Denver time on Thursday afternoon---and I thank West Virginia reader Elliot Simon for sharing it with us.

Doug Noland: Out of Thin Air

Meanwhile, intermediate- and long-term risks are rapidly escalating. Regrettably, China has prolonged its “Terminal Phase” of excess, with dire consequences. Extending the life of the global Bubble comes with similar risks. At the same time, the building of a non-U.S. alliance and competing global financial infrastructure unfolds in earnest. Clearly, the Chinese military is preparing for a world that is changing in profound ways. The U.S. military has begun to adjust as well.

Global markets remain unsettled. The Chinese stock market Bubble has all appearances of an accident in the making. A Greek accident could be only days away. European periphery debt markets appear more fragile. EM seems more vulnerable. Currency markets are highly unstable. The dollar, bunds and Treasuries caught decent safe haven bids this week.

The age old problem with creating “money” is that once commenced in earnest it’s extremely difficult to curb. There comes a point where the soundness of the underlying Credit structure begins to be questioned. Such questioning is well overdue. Do central bankers have any idea of their role in fomenting geopolitical turmoil? Just print “money” Out of Thin Air.

Doug's weekly Credit Bubble Bulletin is a weekly must read for me---and his Friday evening missive is no exception.  I thank reader U.D. for passing it around.

Where the River Runs Dry: The Colorado and America’s water crisis

Our pilot, David Kunkel, asked me to retrieve his oxygen bottle from under my seat, and when I handed it to him he gripped the plastic breathing tube with his teeth and opened the valve. We had taken off from Boulder that morning, and were flying over Rocky Mountain National Park, about thirty miles to the northwest. We were in a Maule M-7, a single-engine “backcountry” plane, and Kunkel was navigating with the help of an iPad Mini, which was resting on his legs. “People don’t usually think altitude is affecting them,” he said. “But if you ask them to count backward from a hundred by sevens they have trouble.” What struck me at that moment was not how high we were but how low: a little earlier, we had flown within what seemed like hailing distance of the sheer east face of Longs Peak, and now, as Kunkel banked steeply to the right to give a better view of a stream at the bottom of a narrow valley, his wingtip appeared to pass just feet from the jagged declivity beneath. Snow had fallen in the mountains during the night, and I half expected it to swirl up in the plane’s wake.

The other passenger, sitting in the co-pilot’s seat and leaning out the window with a camera, was Jennifer Pitt, a senior researcher for the Environmental Defense Fund. Pitt, who is in her forties, is the director of the E.D.F.’s Colorado River Program. She has long brown hair, which she had pulled back into a ponytail, and she was wearing a purple fleece. Most of her work in recent years has involved the river’s other end, in Mexico, but she had agreed to show me its source. We were bound for the Colorado’s headwaters, just over the Continental Divide, roughly fifty miles south of the Wyoming state line. “The best way to see a river system is from the air,” she had told me.

This long essay, which is your big read of the day, appeared on The New Yorker's website on Monday---and for length and content reasons had to wait for today's column. It's the second offering in a row from reader U.D.

Cameron presses E.U. for renegotiation of British membership

British Prime Minister David Cameron began a two-day, four-country tour of Europe with a goal of renegotiating his country's role in the European Union.

He visited Netherlands Prime Minister Mark Rutte and French President Francois Hollande on Thursday. Talks with Polish Prime Minister Ewa Kopacz and German Chancellor Angela Merkel are scheduled for Friday, bringing the message that Britain is seriously considering leaving the EU.

Cameron's Conservative Party, campaigning on "a better deal for Britain," won a solid re-election last month, and in 2017 a referendum will be offered British voters on whether to remain in the E.U.

To prevent a British exit, or "Brexit," Cameron seeks restrictions on social welfare benefits to legal E.U. immigrants; assurance that countries that do not use the euro as currency, such as Britain, cannot be hurt by free trade protections in goods and financial services; an exclusion from an obligation to seek an "ever closer union;" and the return of some powers to national parliaments.

This UPI story, filed from Paris, appeared on their website at 8:35 a.m. EDT yesterday morning---and I thank Roy Stephens for his first offering of the day.

Cameron playing ‘dangerous’ game on EU referendum, says France

France has warned Prime Minister David Cameron that a referendum on Britain’s European Union membership is "risky" and “dangerous,” while German Chancellor Angela Merkel has indicated reforms are possible.

French Foreign Minister Laurent Fabius issued the frank warning on Thursday, adding that Paris would reject Britain’s demands for a special status in the EU.

Cameron visited France on Thursday as part of a four-nation European tour in which the PM seeks to gain support for his proposed EU reforms.

Speaking alongside German Chancellor Angela Merkel in Berlin on Friday afternoon, Cameron said it was “right” for Britain to stay in a “reformed European Union,” adding that if the UK fails to win concessions he will “rule nothing out.”

This news item put in an appearance on the Russia Today website at 12:37 p.m. Moscow time on their Friday afternoon, which was 5:37 a.m. EDT in Washington.  It's also courtesy of Roy Stephens.

ECB fears 'abrupt reversal' for global assets on Fed tightening

The global asset boom is an accident waiting to happen as the US prepares tighten monetary policy and the Greek crisis escalates, the European Central Bank has warned.

The ECB’s financial stability report described a “fragile equilibrium” in world markets, with a host of underlying risks and the looming threat of an “abrupt reversal” if anything goes wrong.

Europe's shadow banking nexus has grown by leaps and bounds since the Lehman crisis and has begun to generate a whole new set of dangers, many of them beyond the oversight of regulators.

While tougher rules have forced the banks to retrench, shadow banking has picked up the baton. Hedge funds have ballooned by 150pc since early 2008.

This Ambrose Evans-Pritchard offering appeared on the telegraph.co.uk Internet site at 8:26 p.m. BST on Thursday evening---and it's worth reading.  It's the third contribution in a row from Roy Stephens.

Mistral dead end: Sources say French offer ‘totally impracticable,’ no progress in Moscow talks

Negotiations on the Mistral ships in the Russian capital have wrapped up with no effect - and even without starting properly, sources told media, as the French delegation put forward an “absolutely impracticable” suggestion.

“A delegation of French experts involved in the Mistral talks visited Moscow yesterday, but the negotiations came to nothing,” a source in Russia’s military cooperation circles told RIA Novosti, adding the delegation returned to Paris the same day.

“In fact, the negotiations did not even start as the conditions put forward by the French side were absolutely impracticable,” the source said, without going much into detail and only mentioning the conditions involved “termination of banking accounts.”

As a result the French didn’t even check into a hotel and left for Paris, the source said.

This news item was posted on the Russia Today website at 4:23 p.m. Moscow time on their Friday afternoon, which was 9:23 a.m. EDT in Washington.  I thank Roy Stephens for this story as well.

Art World Hunt: The Quest for Hitler's Lost Treasures

Moss has money and a fake Picasso, but no first name -- he simply goes by "Moss." He's in his early sixties and lives near Dallas, Texas. According to a major American law firm, Moss has $250 million (€228 million) at his disposal at all times, but no one knows how he made his fortune.

The American collects objects with an unusual history -- and, if necessary, he is prepared to pay any price for them.

In January, Moss fell in love with two bronze horses created by one of Adolf Hitler's favorite artists, the sculptor Josef Thorak. They had disappeared for a long time, but now Moss had learned that an art dealer was selling the pair for $8 million. Not a problem for Moss.

Well, it wouldn't be a problem for Moss if he actually existed. But there is no Moss. He's the invention of Dutch art detective Arthur Brand, who created the persona as a way to respond to objects the art dealer was offering for sale, including Thorak's horses and other objects revered by the Nazis.

With Moss' help, the authorities finally carried out a sensational bust: During a nationwide raid on Wednesday, officers with the Berlin State Office of Criminal Investigation searched the apartments and houses of seven suspects and found an important cache of lost Nazi art treasures.

This longish, but very interesting essay, showed up on the German website spiegel.de on Tuesday afternoon Europe time---and for obvious reasons had to wait for my Saturday column.  I thank reader M.A. for finding it for us.

The Ukraine Imbroglio: John Batchelor Interviews Stephen F. Cohen

A lot has happened since Sec. State, Kerry made his dramatic turnaround visit with Putin in Sochi, and our favourite pundits note that not a lot of it sees a good outcome for Minsk2 and the Ukraine Civil War. In brief the hostilities have not ceased there, nor has the New Cold War warmed any. For example, on May 17, Assistant Sec. State Nuland (f**k the E.U.) was in Moscow to see if Washington could be involved in Minsk2 discussions and stated in leaving that Minsk2 would not be realized until Russia stopped attacking in the Donbass – thereby torpedoing the diplomacy herself. The Ukrainian Rada withdrew its transit permission for Russian troops to supply the breakaway province of Transnistria from Moldova. And ignoring the Western troops already in Ukraine, NATO hypocritically demands the withdrawal of all Russian troops from the Donbass. And lastly, Kiev is calling out frantically for financial aid from the West.

Once again Stephen F. Cohen and John Batchelor discuss all these points in all their horrendous greater details, and especially the infighting of the various war parties in NATO, the EU, and Washington. All is revealing that Putin is likely still on his game plan of allowing the economic collapse of Ukraine to resolve itself in regime change. It is very clear from this discussion that Cohen understands that there is a real trust issue that is going to hinder any détente possible with Washington, and that Ukraine still remains the hot bed of instability for war between Russian and the West.

This 39:51 minute audio interview was posted on the johnbatchelorshow.com Internet site on Tuesday---and I thank readers Larry Galearis and Ken Hurt, both of whom contributed to this story. 

Russia offers to discuss BRICS prototype of SWIFT global system

The Central Bank of Russia (CBR) has proposed a discussion about establishing an analogue to the SWIFT global network for transmission of financial information that processes $6 trillion worth of communiqués daily.

The CBR hopes to cut the risks of possible disruptions.

"Seriously speaking, there is no analogue to SWIFT at the moment in the world, it is unique. The only topic that may be of interest to all of us within BRICS is to consider and talk over the possibility of setting up a system that would apply to the BRICS countries, used as a backup," said Deputy Governor of the Central Bank of the Russian Federation Olga Skorobogatova on Friday.

Russia got seat on the SWIFT board in March, despite numerous threats from the U.S. and its allies to disconnect Russia from the system.

This news story appeared on the Russia Today website at 12:03 p.m. Moscow time on their Friday afternoon---and I thank Roy Stephens for digging it up for us.

G7 agree ‘in principle’ to add Chinese currency to IMF basket – German Finance Minister

The finance ministers of G7 have supported the inclusion of the yuan in the IMF currency basket. The decision means the yuan has gained international recognition after Beijing was accused of artificially curbing the exchange rate for more than ten years.

However, the issue has to be discussed thoroughly first, said German Finance Minister Wolfgang Schaeuble on Friday concluding the meeting of G7 finance ministers and central bank governors in Dresden.

"We were completely agreed that it is desirable in principle, that the technical conditions must be examined, but there are no politically divergent views on this," Schaeuble said adding that there still are technical and other issues to be clarified. "We are in full agreement on the goal, but it would not be good to rush it," he said.

Yuan’s inclusion into the IMF basket would also raise China's influence at the Fund.

This is another news item from the Russia Today website---and another contribution from Roy Stephens.  It appeared on their Internet site very late on Friday evening Moscow time.

Abenomics Heads Toward Debt Meltdown, Reflation Enemies Warn

Two years after unleashing record monetary stimulus, Bank of Japan Governor Haruhiko Kuroda and his allies are confronting increasingly vocal opposition from the opponents of reflation who once dominated the policy debate.

Hundreds of economists filed in to a Saturday symposium on BOJ policy at a Japan Society of Monetary Economics semiannual gathering in Tokyo May 16. Backers of Kuroda’s 2 percent inflation target squared off against advocates of monetary restraint, who say the BOJ’s bond purchases are delaying a crucial overhaul of public finances to deal with record debt.

“The discussion was heated,” Masahiko Takahashi, a professor at Yokohama National University who used to work at the central bank, said of the closed-door, two-hour session. “It’s been two years since the BOJ started QQE and there’s growing interest in the BOJ’s monetary policy and its effects,” he said, using the initials for Kuroda’s stimulus program.

This Bloomberg article was posted on their Internet site at 9:00 a.m. MDT on Thursday morning---and I thank Tres Knippa for passing it around yesterday.

Japan spending slump casts doubt on central bank optimism

Spending by Japanese households slumped unexpectedly in April and consumer inflation came in roughly flat, casting doubt on the central bank's view that a steady economic recovery will help move inflation toward its ambitious 2 percent target.

Households spent less on leisure and dining out even as the jobless rate fell to a 18-year low, underscoring the challenge of eradicating the sticky "deflationary mindset" that has beset Japan for nearly two decades.

While analysts expect consumption to pick up in coming months, lingering weakness will keep policymakers under pressure to underpin a fragile economic recovery.

"It's a pretty gloomy number ... Consumption may take longer than expected to pick up," said Taro Saito, director of economic research at NLI Research Institute.

This Reuters article, filed from Tokyo, appeared on their website at 11:19 a.m. India Standard Time [IST] on their Friday morning---and I thank Elliot Simon for finding this story for us.

Julian Assange on the TPP: "Deal Isn't About Trade, It's About Corporate Control"

It’s mostly not about trade. Only 5 of the 29 chapters are about traditional trade. – Julian Assange in a recent interview with Democracy Now

The content of this unbelievably dangerous gift to multi-national corporations is being kept secret from the public, and for very good reason.

What little we know about the TPP has come from whistleblower site, Wikileaks. This is what Julian Assange thinks of this “trade” treaty in his own words.

This 6-minute video clip is embedded in a Zero Hedge story from Wednesday---and it had to wait for today's column.  I thank Joe Nordgaard for bringing it to our attention.  It's worth your time.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on ongoing European financial woes, a second seasonal revision to U.S. GDP numbers, the release of a frustrating COT report last week, and the movement in gold.

This 10:22 minute audio interview, with host Geoff Rutherford, was posted on the sprottmoney.com Internet site yesterday---and it's worth a listen.

U.S. Mint ends rationing of silver eagles -- but for how long?

Coin News reports that the U.S. Mint has ended its rationing of U.S. silver eagle coins.

It's not clear whether the end of rationing is intended to be permanent or if rationing might be reinstated along with reductions and even suspension of production if demand increases enough.

With retail sales in the gutter, there's only one reason that rationing would happen again---and that's if the 'big buyer' [read JPMorgan] steps up to the plate once again---and if they do, it will be because they've kicked the living snot out of the silver price in the interim, just like they did last year about this time.  So we wait.  I found this story in a GATA release yesterday.  It's worth reading.

¤ The Funnies

The photo below is one I took on the 6-frames-a-second setting---and managed to get the 3-point splash-down just right for once.

¤ The Wrap

Cautious, careful people, always casting about to preserve their reputation and social standing, never can bring about a reform. Those who are really in earnest must be willing to be anything or nothing in the world's estimation---and publicly and privately, in season and out, avow their sympathy with despised and persecuted ideas and their advocates, and bear the consequences. - Susan B. Anthony

Today's pop 'blast from the past' is actually a ballad by Marty Robbins from way back in 1960.  This B&W video was taped at the Grand Ole Opry---and it's a classic.  The link is here.

Today's classical 'blast from the past' is one I heard on CBC FM as I was driving to work earlier this week---and couldn't get out of my head, so I thought posting it in today's column would help.  I've posted it before, but it's been a while.  It's Mozart's third violin concerto, his most popular of the five he composed when he was 19 years young.  Here's the delightful Hilary Hahn doing the honours along with the Stuttgart Radio Symphony Orchestra.  Gustavo Dudamel conducts---and the link is here.  By the way, the pope at the time was in attendance.

It was another trading session where gold, silver and platinum wanted to rally during the COMEX trading session, but it was equally obvious that "da boyz" weren't about to allow it to happen.  Volumes were pretty light, so it didn't take much to keep prices under wraps.

Here are the 6-month charts for all four precious metals as of the close of trading on Friday.

As I mentioned in my comments on Friday's Commitment of Traders Report, I was not amused by what the silver numbers showed.  During the reporting week, silver smashed through its 200-day moving average---and kissed the 50-day moving average---and the COT Report showed basically unchanged.  Assuming all the data from Tuesday's engineered price decline was reported in a timely manner---and that's a big assumption---I'm not overly optimistic about the silver price going forward.  Of course the critical 50-day moving average hasn't been broken, but that's almost beside the point at this juncture.  The fire power to the downside that JPMorgan et al currently have is awesome---and it's only a matter of time before the unleash it.

On that happy note, I'm signing off, as it's almost 4 a.m.---and I've had enough, as I'm in Vancouver at the moment.

I'll see you on Tuesday.

Ed Steer

Sat, 30 May 2015 07:03:00 +0000
<![CDATA[Ted Butler: Curiouser and Curiouser]]> http://www.caseyresearch.com/gsd/edition/ted-butler-curiouser-and-curiouser/ http://www.caseyresearch.com/gsd/edition/ted-butler-curiouser-and-curiouser/#When:04:16:00Z "More tiny slices off the salamis"

¤ Yesterday In Gold & Silver

After trading flat through the first half of the day in Far East trading, the gold price began to inch higher in afternoon trading in Hong Kong on their Thursday.  But shortly after 9 a.m. BST it was obvious that a willing seller appeared.  The low tick came in a down/up move centered around the London p.m. gold fix---and after that the price didn't do a lot.

The high and low ticks were recorded by the CME Group as $1,192.00 and $1,179.60 in the June contract.

Gold finished the Thursday session at $1,187.80 cents, down a whole 20 cents on the day.  Gross volume was pretty wild at 209,000 contracts---and even the net volume was chunky at 156,000 contracts, but most of that was roll-overs out of the June contract and into future months---and mostly August, which is the new front month.

With some variations, the silver chart was similar to gold's right down to the love tap shortly after 9 a.m. in London trading.  The tiny rally at the COMEX open was dealt with in the usual manner---followed by the down/up spike at the London p.m. gold fix, etc.

The high and low in this precious metal was reported as $16.75 and $16.555 in the July contract.

Silver finished the Thursday trading session at $16.66 spot, up a whole penny.  Net volume was only 25,000 contracts, with another huge amount of volume rolled into September and December.  As I mentioned in yesterday's column, I asked Ted about this---and he figures that it's just early rolls out of the July contract and nothing else.  I wasn't looking for black bears in dark rooms that weren't there, just an explanation---and the fact that there was nothing nefarious about it was fine by me.

Platinum was the same as gold and silver, complete with capping at 9:15 a.m. BST---and the down/up dip at the p.m. gold fix in London.  Nothing free market about this.  Platinum closed on Thursday at $1,115 spot, down two bucks from Wednesday.

The chart pattern in palladium sort of looked the same, but the metal rallied strongly after its p.m. gold fix low---and was the only precious metal to close up on the day, finishing Thursday at $783---up 3 dollars.

The dollar index closed late Wednesday afternoon in New York at 97.30---and chopped lower to the 97.00 level around 2:40 p.m. Hong Kong time on their Thursday afternoon.  After bouncing off that price three time over the next few hours, it rallied anew, taking it up to its 97.59 high tick around 9:35 a.m. in New York.  From there it began to head for the nether reaches of the earth---slicing through the 97.00 mark in the process.  The index closed at 96.88---which was down 42 basis points on the day.

You should carefully note that from its high tick to its low tick in New York trading, the index fell about 72 basis points, but gold, silver and platinum prices weren't allowed to reflect that.

After opening down, the gold stocks rallied into positive territory to stay shortly after 11 a.m. EDT.  Then after trading flat for about two hours, they rallied anew---and, wonder of wonders, the HUI closed on its absolute high tick, up 1.65 percent.

The price path of the silver equities was very similar---and Nick Laird's Intraday Silver Sentiment Index closed up 1.79 percent.

The CME Daily Delivery Report showed what I wanted to see---and that was the fate of the last 20 silver contracts in the May delivery month that I'd been talking about in yesterday's report.  HSBC USA turned out to be the issuer on all 20---and the CME Group was the stopper.  The 20 contracts issued and stopped is a one hundred 1,000 troy ounces silver bars, which the CME immediately turned around and delivered to Jefferies as 100 contracts to fill the 1,000 ounce silver futures contracts outstanding for May delivery.  Mystery solved.

Of the 2,840 silver contracts delivered during May, JPMorgan stopped 808 of them [4.04 million troy ounces] for its own account.

First Day Notice numbers for the June delivery month showed that 43 gold and 197 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, the only short/issuer of note was JPMorgan out of its client account with 32 contracts---and HSBC USA stopped 24 contracts.  In silver, ABN Amro was the only short/issuer and Canada's Scotiabank was the biggest long/stopper with 193 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday---and as of 10:18 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 yesterday with the happenings over at the iShares.com Internet site as of the close of business on Wednesday---and here's what he had to say. 

"Analysis of the 27 May 2015 bar list, and comparison to the previous week's list.  No bars were removed, added, or had serial number changes.  As of the time that the bar list was produced, it was overallocated 420.8 oz."

"A 1,003,543.8 oz withdrawal on Tuesday---and 143,354.0 oz deposit Wednesday---are not yet reflected, and should be on next week's list."

The folks over at shortsqueeze.com updated their website with the short positions in both SLV and GLD yesterday---and they must have done it after 5:00 a.m. EDT yesterday morning, because I checked their website a half dozen times while I was writing yesterday's column just so I wouldn't miss it.

Anyway, there were huge improvements in the short positions in both ETFs.  Those monster improvements certainly didn't come through depositing physical gold or silver, as there have been huge outflows out of both ETFs during the reporting period---May 1 to 15.  Someone had to lay down big bucks to cover them.

Anyway---and regardless of how it happened---the short position in SLV dropped an eye-watering 37.58 percent from 20.56 million troy ounces/shares, down to 12.83 million troy ounces/shares.

The change in short position in GLD was just about as impressive, as it declined by 27.28 percent---from 1.40 million troy ounces, down to 1.02 million troy ounces.

These changes were a huge surprise for both Ted and myself, as we were expecting the opposite---and I'll leave him to explain it in his Saturday missive---and I'll steal what I can for my Tuesday column.  But he did mention his suspicions about JPMorgan and their control over the DTCC---the Depository Trust Clearing Corporation---the dubious organization that controls this sort of data.  Darth Vader's name came up in the same breath.

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

For the month of May, unless the mint adds some sales today, they sold 15,000 troy ounces of gold eagles---7,000 one-ounce gold buffaloes---and only 1,648,500 silver eagles.  The big buyer in silver eagles obviously stepped away from the table earlier this month---and hasn't been back since, as this is the lowest month for silver eagle sales so far in 2015.  Of course that may change with today's report from the mint.

If the big buyer/JPMorgan doesn't reappear soon, we'll see what the real retail sales numbers are for silver eagles during June.  If we do, they will be ugly---because both Ted and I have been saying all year that retail bullion sales are in the toilet, and they are.  I ought to know, as I work part time in that business in my day job.

There was a decent deposit in gold over at the COMEX-approved depositories on Wednesday, as 31,919 troy ounces were received---all at HSBC USA---and only 327 troy ounces were shipped out the door.  The link to that activity is here.  In silver, nothing was received---and only 27,783 troy ounces were shipped out---all from Brink's, Inc.

Over at the gold kilobar COMEX-approved depositories in Hong Kong on their Wednesday, they received 4,322 kilobars---and 6,208 kilobars were shipped out.  The link to that action is here.

I have a decent number of stories for you today---and I'm happy to leave the final edit up to you once again.

¤ Critical Reads

Bull Market Dealt A Significant Blow?

In January, we wrote a post titled “Are Bears Missing The Forest For The Trees?”. The gist of it was that while there were certainly concerning bits of evidence piling up regarding the longer-term fate of U.S. stocks, the most important factors in the immediate-term – such as the continued confirmation of new highs by the NYSE Advance-Decline Line – continued to support the bull market. That may be starting to change.

Regarding the NYSE A-D Line, we noted last week that for the first time in awhile, it failed to match the new highs set earlier this month by the S&P 500 and other large cap indices. As a refresher, the A-D Line is a cumulative total of daily advancing issues minus declining issues on the NYSE. In our view, it is an important gauge of the health of the stock market as it measures the level of strength among all stocks. The more stocks there are advancing, the more robust and resilient a rally is likely to be. Therefore, when the A-D Line failed to confirm the new high in the indices, it was an indication that fewer stocks were still participating in the rally.

Yesterday, we saw more confirmation of that. The UP trend-line of the NYSE Advance-Decline Line since the beginning of the cyclical bull market in 2009 was broken to the downside with yesterday’s poor breadth.

This interesting article put in an appearance on the Zero Hedge website at 8:07 a.m. EDT yesterday morning---and it's about a 5-minute read.  And if you don't read it, you should at least spend a minute looking at the charts.  I thank Dan Lazicki for today's first story.

Rick Santelli: Is it the top?

CNBC's Rick Santelli discusses the latest action in the bond market, and the U.S. dollar.

This brief 1:36 minute video clip found a home over at the CNBC website about 6 a.m. EDT yesterday morning---and it's the second offering in a row from Dan Lazicki.

JPMorgan CEO faults company and shareholders for disagreements

JPMorgan Chase officials have not done enough to show how well the company is run, Chairman and CEO Jamie Dimon said on Wednesday, after one-third of shareholders disapproved last week of his pay and the practice of one person holding his two jobs.

"The board talks all of the time about what they want the agenda to be," Dimon said, adding that the entire panel approved his compensation.

Dimon also faulted investors for not thinking for themselves and instead following the recommendations of shareholder advisory services Institutional Shareholder Services and Glass Lewis & Co. Both firms had argued against Dimon's pay and for an independent chairman of the board.

"God knows how any of you can place your vote based on ISS or Glass Lewis," Dimon said. "If you do that you are just irresponsible, I am sorry. And, you probably aren't a very good investor, either. I know some of you here do it because you are lazy."

Spoken like the true sociopath that he is.  This 3:12 minute CNBC video clip, complete with transcript, was posted on their website about 6:30 a.m. EDT on Thursday morning---and that makes it three in a row from Dan L.

Forex's 'last look' practice gets curbed

Two of the world's biggest currency-trading platforms plan to restrict a controversial industry practice in which banks can pull out of trades at the last moment if the market moves against them.

Thomson Reuters Corp. and BATS Global Markets Inc. will limit the practice, known as "last look," on their platforms in coming weeks in a move aimed at increasing transparency in the foreign-exchange market.

The change comes amid a broader shake-up of the trading industry prompted by concerns about traders' efforts to manipulate a range of financial markets. Markets for precious metals, interest rates, stocks, and currencies have all come under scrutiny from regulators in recent years because of allegations of inappropriate behavior.

The above three paragraphs are all of this Wall Street Journal story that's posted in the clear---and you need a subscription to read the rest.  It showed up on their Internet site on Wednesday evening EDT.  I found it embedded in a GATA release.

TTIP wins key panel vote

The Parliament’s trade committee passed a resolution backing the E.U.-U.S. free trade agreement on Thursday, including a deal on the controversial investor state dispute settlement, after the two main political groups forged a compromise.

The panel took up dozens of amendments,  but all eyes were on one vote: a compromise on the investor court struck late Wednesday between the European People’s Party and the Socialists & Democrats.

The panel voted, 29-10, for the amendment, which settles to use the ISDS reform proposal recently pitched by Trade Commissioner Cecilia Malmström as a basis for “a permanent solution for resolving disputes between investors and states … where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism,” ensuring “a consistency of judicial decisions [and respecting] the jurisdiction of courts of the E.U. and of the Member States.”

The measure is only advice to the European Commission — the Parliament itself only observes the negotiations — but Thursday’s vote could boost TTIP over the longer term. The trade agreement will need, once it is finally negotiated, to pass the Parliament. The Commission therefore needs the Parliament on its side.

This news item appeared on the politico.eu website yesterday afternoon Central European Time [CET]---and it's the first contribution of the day from Roy Stephens.

Putting the 'Great' in Great Depression, Stephen Roach Warns on TPP's Currency Rules

As the U.S. Congress grapples with the ever-contentious Trans-Pacific Partnership – President Barack Obama’s signature trade legislation – a major stumbling block looms. On May 22, the Senate avoided it, by narrowly defeating – 51 to 48 – a proposed “currency manipulation” amendment to a bill that gives Obama so-called “fast-track” authority to negotiate the TPP.  But the issue could be resurrected as the debate shifts to the House of Representatives, where support is strong for “enforceable currency rules.”

For at least a decade, Congress has been focusing on currency manipulation – a charge leveled at countries that purportedly intervene in foreign-exchange markets in order to suppress their currencies’ value, thereby subsidizing exports. In 2005, Senators Charles Schumer, a liberal Democrat from New York, and Lindsey Graham, a conservative Republican from South Carolina, formed an unlikely alliance to defend beleaguered middle-class US workers from supposedly unfair competitive practices. Stop the currency manipulation, went the argument, and America’s gaping trade deficit would narrow – providing lasting and meaningful benefits to hard-pressed workers.

A decade ago, the original Schumer-Graham proposal was a thinly veiled anti-China initiative. The ire that motivated that proposal remains today, with China accounting for 47% of America’s still outsize merchandise trade deficit in 2014. Never mind that the Chinese renminbi has risen some 33% against the US dollar since mid-1995 to a level that the International Monetary Fund no longer considers undervalued, or that China’s current-account surplus has shrunk from 10% of GDP in 2007 to an estimated 2% in 2014. China remains in the crosshairs of US politicians who believe that American workers are the victims of its unfair trading practices.

While this argument has great emotional and political appeal, it is deeply flawed, because the United States has an insidious saving problem. America’s net national saving rate – the sum total of household, business, and government saving (adjusted for the depreciation of aging capacity) – currently stands at 2.5% of national income. While that is better than the negative saving rates of 2008-2011, it remains well short of the 6.3% average of the final three decades of the twentieth century.

This commentary appeared on the Zero Hedge website at 6:30 p.m. EDT yesterday evening---and it's another offering from Dan Lazicki.

Germans turn their backs on renting with new property boom

Are we calling peak German property? Or are we witnessing a new German housing market in gestation, driven by imbalances between supply and demand, fired by an urge to buy not rent?

Germany has one of the lowest rates of home ownership in Europe. Just 15% of Berliners own property. That figure is rising. "Germany is counter-cyclical to Britain," says Hilton. "In Britain, property ownership is in decline. In Germany it is the other way round."

Meanwhile, supply is constrained and will remain so. "Although new-build property is coming on, there isn't anything like enough of it. Last year, 4,000 properties were built in Berlin. The demand is for 20,000."

This brief article was posted on the europe.newsweek.com Internet site on Wednesday morning EDT---and I thank reader A.V. for sending it our way.

Poland's Duda rises over Brussels

The surprise victory of Andrzej Duda in Poland’s presidential runoff was greeted with shock in Brussels, and raised pressing questions about the future of Warsaw’s policies toward as well as influence in the EU.

The European capital had long factored in a second term for incumbent Bronisław Komorowski. Dismissed as an unknown and long-shot, Duda triumphed in Sunday’s elections by three percentage points, heralding the resurgence of a more socially conservative and Euroskeptical strand of Polish politics.

The 43-year-old lawyer comes from the Law and Justice (PiS) bloc of Jarosław Kaczyński, a former prime minister who will lead the party — now brimming with momentum and confidence — into parliamentary elections in the autumn. Komorowski’s loss reflected voter fatigue with his centrist Civic Platform (PO), which has ruled Poland since 2007 and comes into the election campaign on a weaker foot. This unexpected political shift is also forcing a rethink of Poland by its main EU partners, which view Warsaw as the leading EU power east of Germany.

This is the second story of the day from the politico.eu website.  This one appeared there at 5:30 a.m. Central Europe Time [CET] yesterday morning---and I thank Roy Stephens for sending it our way.

Greece Has Not Asked Switzerland to Name Suspected Tax Evaders

Greece is not one of the countries that have asked Swiss authorities to release on the web the names of suspected tax evaders who have bank accounts in Switzerland. Switzerland has started uploading on the internet the names of Swiss bank depositors who are probed for tax evasion in their countries. This was after several countries have asked Switzerland to release the names in order to tackle tax evasion.

According to a report in Swiss Sunday newspaper Sonntagszeitung, Switzerland has received numerous formal judicial requests from tax authorities of many countries who suspect tax evaders who have funds in Swiss banks. The Swiss government decided to release the names of companies and the names, date of birth and nationality of individuals in its federal gazette, where official texts are published.

Germany, Spain, India, the Netherlands, Great Britain, U.S.A. and South Korea are among the countries that have made the request. Greece, however, is not among the countries requested the publication since there is not a single Greek name or company on the published list.

This news item was posted on the greekreporter.com Internet site on Tuesday---and it's the first of two stories from Harry Grant, our man in Greece.

"The Greek Endgame is Here": Probability of IMF Default Now 70%, Says Deutsche Bank

As the farcical negotiations between Greece and its creditors unfold ahead of a June 5 IMF payment and as Alexis Tsipras is forced to spread false hope just to avoid a terminal bank run, a picture of the Greek endgame has emerged. 

We’ve discussed the political implications of both an agreement or a Grexit and we’ve also taken an in-depth look at what a missed IMF payment means for the country’s EU creditors. On the political front, the troika is intent on sending a strong message to leftist political parties (such as Spain’s Podemos and Portugal’s “ascendant" socialists) that using the threat of a euro exit as a way to extract austerity concessions is not a viable negotiating strategy. What this amounts to is an attempt on the part of the “institutions” to subjugate the political process to economics. In terms of skipping a payment to the IMF — who, as a reminder, effectively paid itself earlier this month by allowing Greece to tap its SDR reserves to pay the bills — there are a number of cross acceleration concerns which you can review by referring to the following graphic.

Now, amid accelerating deposit outflows and an hourly flow of conflicting headlines, Deutsche Bank is out with a fresh take on the Greek endgame including an analysis of both the political wrangling that would need to take place in order for parliamentary approval of concessions to creditors and the mechanics of a default to the IMF.

This longish commentary put in an appearance on the Zero Hedge website at 11:51 a.m. EDT yesterday---and it's courtesy of Dan L. as well.  There was another story about this posted over at The Telegraph yesterday.  It's headlined " IMF warns of Grexit risk as judgment day approaches"---and I thank Roy Stephens for sending it our way in the wee hours of this morning.

G-7 Weighs In on Greece as Government Told to Be Serious

Germany and France told Greece to get serious about striking a deal on rescue aid, as ministers from the world’s biggest economies urged a resolution of the crisis to stop it from spilling beyond Europe’s borders.

Delegates at a meeting of Group of Seven finance chiefs in Dresden, Germany, diverged from the main program to push back against Greek claims that an agreement is near and called for stronger efforts to resolve the standoff. The gathering in a former palace brings together Greece’s three creditor institutions as well as Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro-area colleagues.

“At some point, the discussion has to be transformed into something on paper,” French Finance Minister Michel Sapin said in an interview en route to Dresden. “You need a draft.”

While Greece isn’t on the G-7’s official agenda and the group has no mandate to make a decision, the topic has so far dominated policy makers’ public comments. Time is running out for the Mediterranean nation to receive funding ahead of almost 1.6 billion euros ($1.74 billion) in International Monetary Fund payments scheduled for next month, with the first transfer due June 5.

This Bloomberg story, complete with an embedded 2:30 minute video clip, showed up on their Internet site late Wednesday afternoon Denver time---and I thank West Virginia reader Elliot Simon for bringing it to our attention.

‘Greek Island Kos Not a Party Paradise But a Refugee Shelter’

“Almost 1,200 migrants – some crammed onto overcrowded inflatable dinghies – have been picked up by Greek authorities in the eastern Aegean Sea in the past two days,” correspondents for the British newspaper Daily Mail Jenny Stanton and Mario Ledwith mentioned in their article published on Tuesday.

Although the article is intended to highlight the plight of refugees arriving in Dodecanese islands from neighboring Turkey, it mainly focuses on the island of Kos, a popular tourist destination for U.K. teens.

According to the British newspaper, “after Italy, financially crippled Greece is the main destination for refugees, mostly from war-ravaged Syria plus economic migrants seeking a better life in the E.U.” with the total new arrivals exceeding 30,000 this year.

Kos is situated approximately two miles from the southwestern Turkish region of Bodrum and the journey from the Turkish port to the Greek holiday island takes around 20 minutes. In order for the desperate migrants to cross the Aegean Sea in search for a better life, up to €800 should be paid to smugglers for a place on a boat.

This story showed up on the greekreporter.com Internet site yesterday sometime---and once again I thank our man in Greece, Harry Grant, for sharing it with us.

Bucharest's corruption crackdown may be doing the country more harm than good

On paper, the east Romanian port town of Constanta looks like an economic success story. With investments pouring into renewable energy, shipping, real estate and agriculture, GDP per capita is 16% higher than the country average, in line with the most prosperous cities in Europe.

But such development has been made possible under the maverick reign of the city's mayor, Radu Mazare, who was arrested in April under accusations that he had taken €9m in bribes – and the scars of his rule are visible everywhere. The historic centre looks like a city abandoned. Crumbling Ottoman-era buildings stand derelict on streets that run to dirt halfway. Roads stop abruptly where brand new mansions have been erected, jostling to get a view of the sea. Stray dogs roam the roofs of unfinished tower blocks. Queues wind out the front doors of hospitals.

"Mazare is a king in Constanta," says Sebastian Bodu, a member of the European Parliament and former president of the National Agency for Fiscal Administration. "The city is his empire. He has established a system where any economic initiative has to go through him. Now he's been arrested, nothing happens – no one knows what to do."

Mazare's reputation rests as much on his ability to play the clown as it does on his open embrace of foreign investment. He has dressed as a Nazi general and a Roman emperor for the press; posed on a silver throne surrounded by naked models for the cover of Playboy magazine, and regularly arrives for political debates dressed in full Che Guevara garb, cigar included. The proud owner of a fleet of vintage sports cars, multiple houses and an estate on Madagascar – despite earning an official salary of just €495 a month – Mazare has somehow managed to keep the public's trust. At the last poll, he was re-elected with 62% of the votes.

You couldn't make this stuff up!  This very interesting article put in an appearance on the europe.newsweek.com Internet site on Wednesday---and it's another offering from reader A.V.

Putin: FIFA-linked arrests are U.S. attempt to thwart Blatter re-election

The FIFA-linked arrests on the eve of the re-election of the organization’s chief are an obvious attempt to thwart Sepp Blatter’s re-appointment, Vladimir Putin said, answering journalists’ questions. He added it’s another example of US meddling abroad.

Russian President Vladimir Putin has said the US could be selfishly motivated for its own gain, as was the case with Edward Snowden and Julian Assange.

“Unfortunately our American partners are using these methods in order to achieve their own selfish gains and it is illegal to persecute people. I would not rule out that in regards to FIFA, the same thing could be happening, though I do not know how it will end,” he said.

“However, the fact that this is happening right on the eve of the FIFA presidential elections, gives one this exact impression.”

This very interesting news item appeared on the Russia Today Internet site at 9:13 a.m. Moscow time on their Friday morning, which was 2:13 a.m. EDT in Washington.  It is, of course, courtesy of Roy Stephens.

UBS puts 'buy' recommendation on gold stocks, but Newcrest is a 'sell'

Gold stocks are set to boom thanks to the commodity's price and merger activity, with UBS slapping a buy on its entire gold coverage list with the exception of Newcrest and Independence Group.

UBS put out the note as the sector enjoys a boost from a wave of mergers and acquisitions this year, with 26 deals worth in total $1.7 billion.

Gold has recovered from its March lows of $US1150 an ounce and is now trading near $US1,188 (AUS$1,533).

"With the exception of Newcrest and Independence Group, we have buy ratings on our entire gold coverage list," said UBS.

This gold-related news item showed up on The Sydney Morning Herald website on their Wednesday---and one would assume that if Aussie gold stocks are a 'buy'---most of the rest of the world's gold miners would fall into that category as well.  I thank Casey Research's own Jeff Clark for sending it our way yesterday.

The Message from Last Week’s Headlines: Don’t Dare Sell Your Gold!

Have you noticed the trend in mainstream headlines over the past week?

The gold price may be stagnant, but forces behind the scenes signal that something big is gelling.

What conclusion would you draw from this rundown of recent headlines?

It’s one reason I bet Harry Dent that gold won’t fall to his predicted $700 level. I’m so confident I put up my own gold. He did, too.

This commentary by BIG GOLD's Jeff Clark showed up on the Casey Research website yesterday---and it's worth a few minutes of your time.

Austrian central bank to repatriate some gold from London

Austria's central bank plans to repatriate some of its gold reserves from Britain after facing criticism for storing too much of the precious metal abroad, the bank said today.

The Austrian National Bank, which administers Austria's 280 tonnes of gold reserves, said by 2020 50 percent of the reserves would be kept in Austria, 30 percent in London, and 20 percent in Switzerland.

The bank currently keeps 80 percent of its gold reserves, which have been unchanged since 2007, in Britain, 17 percent in Austria and 3 percent in Switzerland.

In February the bank rejected criticism of its gold storage policy from the country's Court of Audit. At the time it insisted that keeping the bulk of the reserves in London was in the country's best interests but also said a policy review was under way.

The above four paragraphs are all there is to this brief Reuters story that was filed from Vienna yesterday.  I found it on the gata.org Internet site.  There was another tiny Reuters story on this issue---and this one bears the Chris Powell headline " Austrian central banker acknowledges general trend toward gold repatriation"---and it was another story I found in a GATA release.

The Guardian: Austrian repatriation arises from fear of new Auric Goldfinger and Pussy Galore

Until now the Austrian National Bank has relied on the Bank of England to watch over most of its L6.7 billion gold reserves. The BoE looks after much of the world's gold as most central banks send some of the stocks to London for safekeeping.

Now the BoE's stock of the precious metal will be reduced to 30%, while Austria will hold 50% and Switzerland 20%.

The Austrian authorities appeared to be conscious of the perils of bulk-storing gold in the manner of Fort Knox in the US, made famous by Auric Goldfinger's attempted heist in the third James Bond film.

The fictional villain seeks to corner the gold market in his position as treasurer of Smersh, the arch enemy of MI6. However, the decision was taken earlier this year, before the Hatton Garden robbery, which saw millions of pounds of precious metals and jewels stolen and resulted in mass arrests this month.

How does this stuff get past the editors, I wonder?  The above is Chris Powell's headline---and the actual headlined from The Guardian yesterday reads "Austria's Central Bank to Repatriate £3.5 Billion of Gold Reserves from U.K."  This is another Austrian gold-related story from the gata.org Internet site.

Swiss gold exports to Asia fell considerably in April

Gold is trading at around $1,190 per troy ounce this morning, having recovered only slightly from the two-week low it recorded yesterday. In other words, the correction of the EUR/USD exchange rate has not been reflected in the gold price. In fact, it has even meant that gold in euro terms has fallen to just shy of €1,090 per troy ounce. 

According to figures published this morning by the Swiss Federal Customs Administration, Switzerland exported 143.9 tonnes of gold in April, 36% less than in March. More than three quarters of this total was shipped to Asia, gold exports to India declining by 28% month-on-month to 51.8 tonnes and those to China even plummeting 67% to 15.1 tonnes. By contrast, exports to Hong Kong surged by 36% to a good 43.4 tonnes, notes Commerzbank. 

The Census and Statistics Department of the Hong Kong government will be publishing figures for gold trading with the Chinese mainland today. It will then become clear whether the weak Chinese gold demand in the first quarter was merely temporary or has spilled over into the second quarter. According to data from the International Monetary Fund, only Kazakhstan bought any sizeable quantity of gold in April (2.4 tonnes) apart from Russia. The figures show that the central banks acquired only around 11 tonnes of gold in total to diversify their currency reserves last month. Sales on a net basis are unlikely, however. According to the World Gold Council, central banks were net gold purchasers in the first quarter for already the seventeenth quarter in a row.

The above three paragraphs are all there is to this short article that appeared on the fxwire.pro website at 9:22 a.m. BST yesterday, which was 4:22 a.m. EDT in New York.  I found it on the Sharps Pixley website.

China’s Hong Kong gold imports fall a third month

China’s net gold imports from Hong Kong fell a third month as buyers deferred purchases in anticipation of further price drops and amid increasing government scrutiny of bullion trading.

Net inbound shipments dropped to 46.6 metric tonnes last month from 61.8 tons in March and 65.4 tonnes a year earlier, according to data compiled by Bloomberg from the Hong Kong Census and Statistics Department released Thursday. Mainland buyers purchased 55.2 tonnes, including scrap, compared with 72.1 tonnes a month earlier. Exports to Hong Kong from China fell to 8.5 tonnes. Mainland China doesn’t publish such data.

Purchases by the biggest buyer declined to the lowest in eight months amid speculation that the U.S. Federal Reserve will raise interest rates. China’s tax authorities will audit all domestic gold traders, people familiar with the matter said this month, as the government clamps down on the practice of using fake precious-metals trade to mask capital flows.

As has been said by many commentators, including this writer, you can no longer use China's imports through Hong Kong as a proxy for China's gold demand, but the mainstream media never stops trying to spin it that way.  This Bloomberg article is from yesterday---and it found a home on the mineweb.com Internet site.

Ted Butler: Curiouser and Curiouser

The defective price discovery process has little to do with the price change during the reporting week, which was largely unremarkable. Instead, it has everything to do with the massive quantities of equivalent metal changing hands by two different groups of speculators in an orgy of private bucket shop trading that is dictating silver prices to the rest of the world.

Look, if these two groups of speculators, managed money traders on one side and speculators we call commercials on the other side wanted to wager massive bets and kept their betting to themselves, then no problem – they can have at it. But by dictating silver prices to everyone else in the world involved in silver investing or mining, their private betting becomes a very big problem.

I have only one absolute must read in today's column---and this is it.  I urge you to pick out a small handful of silver companies you own shares in---and e-mail them Ted's commentary, asking at the same time what they plan to do for themselves and their shareholders, as enough is enough.  That's what I'm going to be doing this weekend.  This excellent commentary was posted on the silverseek.com Internet site yesterday.

¤ The Funnies

The first photo is of a pair of northern shoveller ducks.  I took this photo in the middle of the red-winged blackbird sequence that I posted in this space yesterday.  These ducks were about 100 meters away---and I'm very pleased with the quality of the picture from that distance, because I had to crop it pretty hard as well.

The next two photos are 'nothing' shots of a drake mallard in breeding plumage---and a Canada goose with only one gosling.  The same day I took this photo, I saw a pair of geese with twenty little ones.  That's quite a few, as the normal is under ten---and considerably less than that make it all the way to adulthood.

¤ The Wrap

All that is necessary for the triumph of evil, is that good men do nothing. -- Edmund Burke

It was another 'nothing' sort of day, as the last of the June contract went off the board.  The only price movement allowed was the down/up new low ticks that were set in three of the four precious metals yesterday.  More tiny slices off the salamis.

Here are the 6-month charts for all four precious metals so you can see these shiny new low ticks for yourself.

In the face of very little price action, I was encouraged by the activity in the silver and gold equities.  However, I'm not about to get my hopes up at the moment.

And as I write this paragraph, the London open is about twenty minutes away.  All four precious metals were up a bit during early Far East trading on their Friday, but were all turned lower in early afternoon trading in Hong.  All four are back to unchanged from Thursday's close in New York.  Net gold volume is a bit over 15,000 contracts, which is nothing special---and silver's net volume is a hair under 3,000 contracts.  The dollar index, after chopping sideways for most of Far East trading, is now up 16 basis points---and barely back above the 97.00 mark.

Today we get the new Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  I'd like to think that we'll see some rather impressive improvements in the Commercial net short positions of both gold and silver---and no doubt we will.  But no matter how good these numbers may turn out to be, we still have some ways to go before JPMorgan et al get the Managed Money back to rock bottom again, if that's their intent.

For the moment, all we can do is wait it out---and hope that they don't step in front of the next rally as well.

And as I send this out the door at 5:20 a.m. EDT I see that gold, silver and platinum still aren't doing much---and palladium is now down four bucks.  Net gold volume is around 23,000 contracts---and silver's net volume is around 4,400 contracts.  Not a lot to see here, but I get the impression from the choppiness of the price action that the tiny rally attempts since noon in Hong Kong have been quietly guided lower.

After rallying a bit, the dollar index has now slid back below the 97.00 mark---but is currently up 10 basis points.

I have no idea how the precious metals will trade today, expect there won't be anything free market about it, whatever happens.  But since today is Friday---and the last day of the month---I must admit that I'm not overly optimistic but, as usual, I'd love to be spectacularly wrong.

That's all I have for today.  I'm off to Vancouver today---and both my Saturday column---and my Tuesday column are going to be as short as I can make them, as I have other things to do while I'm there.

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

Ed Steer

Fri, 29 May 2015 04:16:00 +0000
<![CDATA[Could South Africa’s Gold Mining Industry Be Gone By 2020?]]> http://www.caseyresearch.com/gsd/edition/could-south-africas-gold-mining-industry-be-gone-by-2020/ http://www.caseyresearch.com/gsd/edition/could-south-africas-gold-mining-industry-be-gone-by-2020/#When:04:17:00Z "Three of the four precious metals set new lows for this move down"

¤ Yesterday In Gold & Silver

Well, the HFT boyz, along with their algorithms and spoofing, were nowhere to be seen on Wednesday as the gold price traded in about a seven dollar price range.  However, a new low price tick was set for this move down minutes after the COMEX open.  The highs and lows from yesterday aren't worth the effort of looking up.

Gold closed in New York yesterday at $1,188.00 spot, up the magnificent sum of 20 cents the ounce.  Gross volume, as expected, was over the moon at 363,000 contracts, but it all netted out at only 37,000 contracts as the large traders had to be out at the close of COMEX trading.

Silver traded basically unchanged until shortly after the morning gold fix in London yesterday---and its new low tick for this move down also came minutes after the COMEX open---no coincidence, I'm sure.  The silver price rallied a bit until 10:20 a.m. EDT, before getting sold down until 11:15 a.m. EDT.  From there it traded flat into the close of electronic trading.

The high and low ticks in silver were recorded by the CME Group as $16.81 and $16.58 in the July contract.

Silver finished the Tuesday session at $16.65 spot, down 7 cents from Tuesday's close.  Gross volume was 38,500 contracts, but netted out to only 25,500 contract.  The surprise in these numbers was the heavy roll-overs out of July, with 2,156 contracts into September---and 3,918 contracts into December.  I don't know if it means anything---and I'll try to remember to ask Ted today.

The platinum price traded a small handful of dollars higher through all of Far East trading---and into early trading in London.  Then, like silver, the price got rolled over just after 10:30 a.m. BST/11:30 a.m. in Zurich---and its new low price for this move down came shortly before and after the close of COMEX trading at 1:30 p.m. EDT.  Platinum finished the Wednesday session at $1,117 spot, down 6 bucks from Tuesday.

Palladium followed platinum pretty closely up until the price got turned over at 11:30 a.m. Zurich time as well.  Its low of the day came during early trading in New York---and it rallied back to unchanged---$778 spot---by the close.

The dollar index closed late on Tuesday afternoon in New York at 97.22.  It rallied about 15 basis points in early Far East trading on their Wednesday morning before heading lower.  It dipped to its 96.90 low of the day around 2:45 p.m. Hong Kong time, but at that point 'gentle hands' appeared and brought it back above the 97.00 mark.  After trading flat for a couple of hours, a 'rally' began that took it to its 97.78 high minutes after 9 a.m. in New York---and from there it chopped lower in the close.  It finished the Wednesday session at 97.30---up 8 basis points from Tuesday's close.

The gold stocks gapped down about 2 percent at the open---and managed to rally into positive territory shortly after 10:30 a.m. EDT on gold's tiny rally after its new low tick---and then they faded from there, with the HUI closing down 0.32 percent.

The silver equities got sold down at the open as well, but they never got a sniff of positive territory---and Nick Laird's Intraday Silver Sentiment Index closed down 1.38 percent.

The CME Daily Delivery Report showed that 10 gold and 51 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The largest short/issuer was Canada's Scotiabank with 39 contracts---and the largest long/stopper was JPMorgan with 42 for its in-house [proprietary] trading account.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in May fell by 26 contracts---and is now down to 10 contracts remaining.  Those contracts are being delivered tomorrow as per the above paragraph.  Silver's open interest fell an amazing 147 contracts, leaving 71 still open, but only 51 were posted for delivery on Friday.  What's with the other 20 contracts left over undelivered?  Beats the hell out of me---and I await the First Notice Day report this evening for some sort of resolution to this.

There were no reported changes in GLD yesterday---an an authorized participant added a smallish 143,355 troy ounces to SLV.

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

It was another quiet day in gold at the COMEX-approved depositories on Tuesday, as only 2,500 troy ounces were received, all at HSBC USA---and nothing was shipped out.  And it was pretty quiet in silver as well.  Only 94,733 troy ounces were received---and 130,239 troy ounces were shipped out.   The 'in' activity was at HSBC USA---and most of the 'out' activity was at the CNT Depository.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they received 4,092 kilobars---and shipped out 3,416 of them.  The link to that activity, in troy ounces, is here.

I have a decent number of stories for you today, but I'm a little short of precious metal-related stories, as not much has been happening this week.  I hope you'll find a few that you feel are worth reading.

¤ Critical Reads

Humiliated McDonalds to Stop Reporting Monthly Sales

What do you do when month after month you have nothing but bad data to report, such as in this case McDonalds with its weekly comparable store sales shown on the ugly charts below?

Simple: you have two choice - you either seasonally adjust the data (or in the case of U.S. GDP, double-seasonally adjust it), or if that is not possible since unlike U.S. GDP, your numbers are at least somewhat indicative of underlying reality, you stop reporting them altogether.

That's what McDonalds just did.


This commentary appeared on the Zero Hedge website at 9:41 a.m. EDT on Wednesday morning---and today's first story is courtesy of reader M.A.

Investor Bill Gross: Bet against Bunds 'well timed, not well executed'

Bill Gross, the widely followed investor, admitted in his June Investment Outlook on Wednesday that his bet against the German Bund market was well timed but not profitable.

"My famous (infamous?) 'Short of a lifetime' trade on the German Bund market was well timed but not necessarily well executed," Gross, who runs the Janus Global Unconstrained Fund, wrote in his latest report to clients titled "Mr. Bleu."

Gross's Janus Global Unconstrained portfolio is down 0.40 percent so far this year, underperforming its peers by 1.88 percentage points and lagging 93 percent of its non-traditional bond category, according to Morningstar data on Tuesday.

This Reuters article from around 8 a.m. EDT yesterday, was picked up by the CNBC website---and the second story of the day is courtesy of Dan Lazicki.

Billionaire Hedge Fund Manager Paul Singer Reveals the "Bigger Short"

First it was Gross, then Gundlach. Now billionaire hedge fund manager Paul Singer of Elliott Management has unveiled what he believes is the trade of this generation: being short "long-term claims on paper money, i.e., bonds." He calls it the "bigger short." First hinted at during the Grant's Spring 2015 conference, he now goes into excruciating detail.

Select excerpts from Paul Singer's latest letter.

The Big Short, of course, refers to short positions in credit in the period 2005-2007, more specifically structured credit. To be even more precise, it refers to subprime residential mortgage securitizations. It is also the name of a best-selling book by Michael Lewis about the housing and credit bubble. It was called the Big Short because many forms of credit were so overpriced that the risk/reward of taking on short positions before the financial crisis was extraordinarily favorable.

Today, six and a half years after the collapse of Lehman, there is a Bigger Short cooking. That Bigger Short is long-term claims on paper money, i.e., bonds.

This longish commentary was posted on the Zero Hedge Internet site at 6:07 p.m. EDT yesterday evening---and it's the second offering in a row from Dan Lazicki.

Dr. Lacy Hunt on U.S. Endgame and Greatest Risk to Financial Markets

Wondering why economic growth can’t seem to take off or why inflation continues to fall? According to Dr. Lacy Hunt, Executive Vice President of Hoisington Investment Management, it all comes down to debt, which helps to explain most of the world’s economic problems today. Lacy describes the six characteristics of over-indebted economies, the most toxic type of debt to economic growth and financial stability, his view of the endgame, and why he still sees "significant value" in long-dated US Treasury bonds.

This partial transcript, along with a 6:25 minute audio clip was posted on the financialsense.com Internet site yesterday sometime---and it's another contribution from Dan Lazicki.

Fed's Lacker: Letting Banks Fail Will Restore Market Discipline

Policymakers must ensure that financial industry creditors do not expect government bailouts and must be willing to let firms fail in order to restore market discipline, a top Federal Reserve official said.

The remarks by Jeffrey Lacker, president of the Richmond Federal Reserve Bank, repeated much of what he has previously said about what regulators need to do to make the financial system safer. Lacker, a voting member this year on the Fed's policy-setting committee, did not discuss monetary policy.

The long-term solution to ending too-big-to-fail banks is restoring market discipline "so that financial firms and their creditors have an incentive to avoid fragile funding arrangements," Lacker said in remarks prepared for delivery at the Louisiana State University Graduate School of Banking.

His remarks come amid heightened concern among Fed officials about financial stability as the U.S. central bank prepares to raise interest rates. But Lacker says less regulation, not more, is needed to make the system safer.

It's incredible what passes for 'news' these days---and there's no way on God's green earth that the U.S. government will ever allow any U.S. bank, like JPMorgan for instance, to fail.  I don't know what's in the Kool-Aid this guy is drinking.  This 'story' put in an appearance on the newsmax.com Internet site at 7:43 a.m. EDT yesterday morning---and I thank Brad Robertson for sending it.

The Farce is Complete: FIFA, Qatar Donated to the Clinton Foundation

Earlier today, when commenting on the latest global criminal scandal, that of "rampant corruption" at FIFA, we - jokingly - said: "And now we just sit back and wait to see how many of the defendants sent "donations" to the Clinton Foundation and how many speeches Hillary and/or Bill gave at the Baur au Lac in the past two decades."

Then we decided to make sure the joke wouldn't be on us and that FIFA hadn't indeed donated to the Clinton foundation.

The joke was on us... because not only did FIFA donate to the Clinton Foundation...

This very interesting new story showed up on the Zero Hedge website at 2:14 p.m. EDT yesterday---and I thank Dan L. for finding it for us.

LIBOR riggers included Bank of England's 'Hammer' in their e-mail plotting

A senior Bank of England official received emails that were part of an alleged campaign to rig benchmark interest rates, according to evidence presented in a London trial Wednesday.

Martin Mallett, who at the time was the chief currencies dealer at the Bank of England, was among a couple dozen recipients of emails sent in 2007 by brokers allegedly working at the behest of former bank trader Tom Hayes. The recipients were blind carbon-copied on the messages.

In the emails, the brokers sent out daily suggestions for where a variety of banks should set the London interbank offered rate, or Libor. Mukul Chawla, the prosecutor trying Mr. Hayes, said those emails were used in an attempt to skew interest rates for the benefit of Mr. Hayes, at the time a trader in Tokyo at UBS AG .

Mr. Mallett, nicknamed “The Hammer,” was sent the emails at his hammer@bankofengland.co.uk address.

This story was posted on The Wall Street Journal website yesterday morning sometime---and I found it embedded in a GATA release.  The actual headline reads "Bank of England Official Received E-mails Relating to Libor Manipulation, Prosecutor Says".  The Zero Hedge spin on this is headlined " Need to Manipulate Markets? Just E-mail the Bank of England at hammer@bankofengland.co.uk"---and I thank Dan Lazicki for that as well.

G7 finance ministers, central bankers to meet in Dresden

Finance ministers and central bank governors of the Group of Seven wealthiest nations meet in Dresden this week to discuss the health of the global economy and financial regulation, with Greece also on the agenda.

German Finance Minister Wolfgang Schaeuble has invited his counterparts and their central bank chiefs from Britain, Canada, France, Italy, Japan and the United States, for a meeting starting Wednesday and "an in-depth exchange of views" in the eastern German city.

But there will also be other experts seated around the table, Schaeuble said in an interview with German public radio Deutschlandfunk at the weekend.

For the first time, "we've also specifically invited a number of the world's leading economists and monetary policy experts so that we can think about and find better solutions" to today's pressing economic policy issues, he said, such as striking a balance between budget consolidation and investment, and the rules of the international financial architecture.

I don't care how many so-called experts they invite, nothing will change.  This AFP story, filed from Berlin yesterday morning, was picked up by the news.yahoo.com Internet site---and it's the first offering of the day from Roy Stephens.

With Greece "Nowhere Close" to Deal, Depositors Pull €300 Million From Banks In Single Day

On Tuesday, Greece postponed a scheduled Eurogroup meeting in Brussels without offering a reason as officials conducted “preparatory” discussions and held an evening teleconference with creditors. Face-to-face meetings will take place today with just 9 days to go until June 5 when Athens will miss a payment to the IMF, triggering an unprecedented default the repercussions of which no one can accurately predict. 

Also on Tuesday, Greek FinMin Yanis Varoufakis allegedly told Greek reporters that one measure under consideration to help stem the outflow of deposits from Greek banks was a levy on ATM withdrawals designed to encourage the use of credit cards over cash, a rather ironic suggestion coming from a government crippled by debt. The Finance Ministry was quick to deny that such a levy was being considered because after all, one way to ensure that ATM lines will get quite a bit longer is to suggest that depositors will soon be subject to a levy on withdrawals. Unfortunately, it appears as though the move to dispel the ATM tax “rumor” came too late because according to Kathimerini, deposit flight accelerated meaningfully on Tuesday.

This Greece-related story showed up on the Zero Hedge website at 7:48 a.m. EDT on Wednesday morning---and I thank reader M.A. for passing it around.

Creditors dash Greek optimism as U.S. warns country faces an 'abyss' of a euro exit

European creditors dashed hopes that Greece was finally nearing the end-stage of its bail-out negotiations, insisting both sides remained far apart on securing the embattled country’s future in the eurozone.

Greek stock markets jumped after comments from prime minister Alexis Tsipras that the country was "close" to a deal, following reports the two sides had begun the process of drafting an agreement.

"We have made many steps. We are on the final stretch towards a positive deal," said Mr Tsipras.

"This agreement will be positive for the Greek economy, this agreement will redistribute the [financial] burdens and I believe that, very soon, we will be in a position to present more information," said the Leftist premier.

Athens' benchmark closed nearly 4pc up on the day.

This news item appeared on The Telegraph's website early yesterday morning, but has been edited in the interim---and it has also undergone a headline change, as it used to read "Greek markets jump as Alexis Tsipras says Greece is on the 'final stretch' towards bail-out deal".  It's the second contribution of the day from Roy Stephens.

The G-7's Problem: Can the World Deal With a Greek Default?

The world’s top finance ministers and central-bank chiefs meeting in Dresden this week are already struggling to stick to an agenda set by their German hosts that doesn’t mention Greece.

In a sign of deepening global concern over the country’s stumbling bailout talks, U.S. Treasury Secretary Jacob L. Lew spoke with Greek Prime Minister Alexis Tsipras on Wednesday for the second time in less than a week and told a London audience that “everyone has to double down” on reaching an accord. European Commission Vice President Valdis Dombrovskis denied a Greek government statement that a deal is close.

The Group of Seven meeting starting on Wednesday will officially focus on big-picture themes of economic growth, tax evasion and strengthening the global financial architecture. Yet the most pressing matter for many of the policy makers attending is whether Greece can stay in the euro, and whether the world can handle the consequences if it can’t.

This Bloomberg story from 5 p.m. Denver time on Tuesday afternoon has a lot of similarities to the AFP story further up headlined "G7 finance ministers, central bankers to meet in Dresden".  But there are enough differences that I though it worth posting on its own.  I thank West Virginia reader Elliot Simon for bringing it to our attention.

Fossil industry faces a perfect political and technological storm

The political noose is tightening on the global fossil fuel industry. It is a fair bet that world leaders will agree this year to impose a draconian “tax” on carbon emissions that entirely changes the financial calculus for coal, oil, and gas, and may ultimately devalue much of their asset base to zero.

The International Monetary Fund has let off the first thunder-clap. An astonishing report - blandly titled "How Large Are Global Energy Subsidies" - alleges that the fossil nexus enjoys hidden support worth 6.5pc of world GDP.

This will amount to $5.7 trillion in 2015, mostly due to environmental costs and damage to health, and mostly stemming from coal. The World Health Organisation - also on cue - has sharply revised up its estimates of early deaths from fine particulates and sulphur dioxide from coal plants.

The killer point is that this architecture of subsidy is a "drag on economic growth" as well as being a transfer from poor to rich. It pushes up tax rates and crowds out more productive investment. The world would be richer - and more dynamic - if the burning of fossils was priced properly.

Well, dear reader, I'll believe it when I see it.  This Ambrose Evans-Pritchard offering showed up on the telegraph.co.uk Internet site at 5:23 p.m. BST yesterday afternoon---and it's certainly worth reading.  It's the first of three in a row from Roy Stephens.

Russia, Venezuela Agree on $14 Billion Investment in Oil, Gas Sphere

The investment is aimed at doubling oil production in the coming years, Maduro said on Wednesday, after a meeting with CEO of Russian oil giant Rosneft Igor Sechin in Venezuela's capital, Caracas.

The agreement concerns the development of the so-called Orinoco Belt — one of the richest oil reserves in the world — and projects in the gas sector, according to Maduro.

Since last summer, global oil prices have drastically dropped due to oversupply in the market. In November, the Organization of the Petroleum Exporting Countries (OPEC) decided to maintain its oil production levels, contributing to a further drop in prices and severe crises in many oil exporting nations, particularly Venezuela.

This brief article appeared on the sputniknews.com Internet site at 3:14 a.m. Moscow time this morning which was 8:14 p.m. EDT in Washington Wednesday evening.  I thank Roy Stephens for finding it for us.

Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Tony Blair’s time as Middle East envoy representing the US, Russia, the U.N. and the E.U. has finally come to an end. Eight years after he took up the role, Blair tendered his resignation and left one question: how come a war criminal ever became a “peace envoy” in the first place?

The people of the Middle East – and much of the world – have been asking this question ever since Blair was appointed the Quartet’s man in Jerusalem, solemnly and hopelessly tasked to bring “peace” between Israelis and Palestinians. Was his new mission supposed to wash the blood from his hands after the catastrophe of the Bush-Blair invasion of Iraq and the hundreds of thousands of innocents who died as a result?

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – Blair’s appointment was an insult. The man who never said he was sorry for his political disaster simply turned up in Jerusalem four years later and, with a team which spent millions in accommodation and air fares, managed to accomplish absolutely nothing in the near-decade that followed.

This short must read commentary by Robert Fisk was posted on the independent.co.uk Internet site early this morning in London---and my thanks go out to Roy Stephens for sliding it into my in-box very late last night Denver time.

Washington Blows Itself Up With Its Own Bomb -- F. William Engdahl

These are sad days in Washington and Wall Street. The once unchallenged sole Superpower at the collapse of the Soviet Union some quarter century ago is losing its global influence so rapidly that most would not have predicted anything comparable six months ago. The key actor who has catalyzed a global defiance of Washington as Sole Superpower is Vladimir Putin, Russia’s President. This is the real background to the surprise visit of US Secretary of State John Kerry to Sochi to meet with Russian Foreign Minister Sergei Lavrov and then a four hour talk with “Satan” himself, Putin.

Far from a “reset” try, Washington’s hapless geopolitical strategists are desperately trying to find a better way to bring the Russian Bear to her knees.

Kerry was clearly sent to Sochi to sniff out possible soft points for a renewed assault in the future. He told the rogue U.S.-backed lunatics in Kiev to cool it and respect the Minsk cease-fire accords. The demand came as a shock in Kiev. U.S.-installed Prime Minister Arseniy Yatsenyuk told French TV, “Sochi is definitely not the best resort and not the best place to have a chat with Russian president and Russian foreign minister.

At this juncture the only thing clear is that Washington has finally realized the stupidity of its provocations against Russia in Ukraine and globally. What their next scheme will entail is not yet clear. Clear is that a dramatic policy shift has been ordered on the Obama administration from the highest levels of US institutions. Nothing else could explain the dramatic shift. If sanity replaces the neo-con insanity remains to be seen. Clear is that Russia and China are resolute about never again leaving themselves at the mercy of an incalculable sole superpower. Kerry’s pathetic attempt at a second Russia “reset” in Sochi will bring Washington little at this point. The US Oligarchy, as Shakespeare’s Hamlet put it, is being “hoist with their own petard,” as the bomb maker blows himself up with his own bomb.

This commentary by Engdahl put in an appearance on the journal-neo.org Internet site on Monday---and is an absolute must read for any serious student of the New Great Game.  I thank South African reader B.V. for bringing it to our attention.

Global trade just saw its sharpest drop since the financial crisis

The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released its latest Merchandise World Trade Monitor, which covers global import volumes as well as global export volumes. The index dropped 0.1% in March to 136.5, after having already dropped 0.7% in February, and 1.7% in January. The index, which was set at 100 in 2005, is now down 2.5% from the peak of 140.0 in December. That 3.5-point decline was the sharpest since the Financial Crisis.

This chart, going back to January 2012, doesn’t exactly inspire confidence in the current state of the global economy.

This commentary from the wolfstreet.com Internet site was picked up by the businessinsider.com website on Tuesday---and it's something I found in yesterday's edition of the King Report.

Patrolling the hood from (China) sea to shining sea -- Pepe Escobar

If only Mad Men in real life were like Don Draper – channeling his true inner self, after many a rocky season, to finally click on “I’m OK, you’re OK.”

Instead, we have a bunch of (Pentagon) madmen provoking every major geostrategic competitor all at once.

The Masters of War at the self-described “Don’t Do Stupid Stuff” Obama administration are now announcing they’re ready to dispatch military aircraft and ships within 18 kilometers of seven artificial islands China has built up in the Spratly Islands.

Beijing’s response, via the Global Times, couldn’t be other than There Will be War; “If the United States’ bottom line is that China has to halt its activities, then a U.S.-China war is inevitable in the South China Sea … The intensity of the conflict will be higher than what people usually think of as ‘friction’.

This must read commentary by Pepe appeared on the Asia Times website yesterday---and it's the final contribution of the day from Roy Stephens and, once again, I thank him on your behalf.

Chinese mining group buys $710 million in gold and copper assets

Zijin Mining Group will buy US$710 million worth of gold and copper mining assets from two Canadian companies in the Democratic Republic of Congo and Papua New Guinea with funds raised through a private placement in the Shanghai stock market.

Zijin told the Shanghai and Hong Kong stock exchanges on Tuesday it would buy a 49.5 per cent stake in the Kamoa copper project in the Democratic Republic of Congo from Ivanhoe Mines for US$412 million.

Zijin already owns 9.9 per cent of Ivanhoe, which recorded a net loss of US$52.9 million last year following a net loss of US$80.6 million in 2013.

Fujian-based Zijin will also pay Barrick Gold Corp US$298 million for a 49.5 per cent interest in the Porgera gold mine in Papua New Guinea.

This news item showed up on the South China Morning Post on their Wednesday---and I found it embedded in a GATA release.

Direxion Asset Management closing 3X leveraged gold ETF

The Direxion Shares ETF Trust II has decided to liquidate and close the Direxion Daily Gold Bull 3X Shares (BAR) exchange-traded fund based on the recommendation of Direxion Asset Management LLC, the fund's sponsor.

Due to the fund's inability to attract sufficient investment assets, Direxion believes the fund cannot continue to conduct its business and operations in an economically efficient manner. As a result, Direxion concluded that liquidating and closing the fund would be in the best interests of the fund and its shareholders.

Shares of the Fund will stop trading on the NYSE Arca Inc. and will no longer be open to purchase by investors after the close of regular trading on June 19, 2015. Shareholders may sell their holdings in the fund prior to June 19 and those transactions may be subject to customary brokerage charges. Between June 22 and June 26 shareholders may be able to sell their shares only to certain broker-dealers and there is no assurance that there will be a market for the fund during that time.

This gold-related story appeared on the prnewswire.com Internet site on Tuesday---and it's another article I found on the gata.org Internet site yesterday.

Could South Africa’s gold mining industry be gone by 2020?

The South African mining industry is in trouble. That is not in question. The only debatable point is exactly how much trouble it is in.

The industry on which this country’s modern economy was built has been stuttering since the global financial crisis. What investors and anyone else with an interest in mining’s role in the economy wants to know, is where this is headed.

Are we nearing a point where we will start to see a turnaround? Or is there a chance that things will simply continue to deteriorate?

Speaking at the JSE’s Power Hour in Cape Town, Peter Major, mining specialist at Cadiz Corporate Solutions, warned that one must be wary of thinking that things will always revert to an historically established mean. The mining environment in South Africa has changed so much over the last few decades that “the old rules no longer apply”.

Well, dear reader, as long as these so-called experts and current crop of mining executives don't get on stick pretty soon, ALL of the world's precious metal miners are going to be heading in the same direction.  I know for a fact that there isn't a mining executive out there that doesn't know that the metals they mine isn't being managed by JPMorgan et al.  They just won't do anything about it.

This article was posted on the mineweb.com Internet site yesterday afternoon London time---and it's worth reading.

¤ The Funnies

Here are three red-winged blackbird photos, one female---and two different males, that I took from the car as I was driving down a country road just outside the city limits about ten days ago.  There's no way that they would allow you to get close enough for a good photo if you were just on foot.

¤ The Wrap

If, for instance, copper futures experienced 53 or 61 days of world copper production (50,000 tons per day) being bought and sold by speculators on the COMEX during one week, as just occurred in silver futures, that would mean between 210,000 to 240,000 COMEX copper contracts would be repositioned, an impossibility for a market with a total open interest of less than180,000 contracts. Further, the concentrated short position of the eight largest traders in COMEX copper comes to 15 days world production, less than a tenth of the 163 days of world production in COMEX silver.

If NYMEX crude oil experienced 53 days of world oil production (93 million barrels a day) being sold in one week, as just occurred in COMEX silver, that would be the equivalent of 5 billion barrels of oil or 5 million NYMEX futures contracts. NYMEX crude oil is the largest oil futures contract in the world and has a current total open interest of around 1.6 million contracts and it would be impossible for any group of speculators to sell or buy 53 days of world production in a year or longer, no less in a week as just occurred in COMEX silver. In terms of the concentrated short position of the 8 largest traders in NYMEX crude oil, it comes to less than 4 days of world oil production, compared to the 163 days of production held short in COMEX silver.

It is only when you compare what just occurred in COMEX silver to other commodities does the extent of the manipulation come through. I’d use the words preposterous and absurd to describe the situation, but the COT report is factual and as real as rain. Instead, what is preposterous and absurd is for anyone to pretend that what is going on in silver is somehow normal. This is particularly true for silver investors and mining companies and their shareholders which are being held hostage to the most defective price discovery process in history. -- Silver analyst Ted Butler: 27 May 2015

It was a very quiet trading day from a price perspective, but three of the four precious metals set new lows for this move down yesterday, although they did not close at them---so the slicing continues.

Volume in gold, of course, was enormous as the big traders had to be out yesterday at the COMEX close---and all the rest have to be out by the end of today's close.  Volume will be lighter, but still very decent.

Here are the 6-month charts for all four precious metals updated with Thursday's price/volume data.

If you read Ted's quote above, I urge you to read it one more time---and if you didn't, it's not too late to make amends.  Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" graph in all physically traded commodities on the COMEX.  This chart was in my Saturday column, but I thought I'd post it here for reference purposes.  Ted mentions that the Big 8 traders are short 163 days of world silver production, but Nick's chart indicates the number is actually 178 days.

And as I type this paragraph, the London open is about fifteen minutes away.  Gold, silver and platinum are up a hair---and palladium is flat.  Nothing to see here.  Net gold volume is around 10,500 contracts at the moment, with virtually all of it in the new front month, which is August.  Net silver volume is a bit over 3,600 contracts.  Nothing to see in the volume data, either.

The dollar index made it up to 97.39 around 11 a.m. Hong Kong time on their Thursday morning---and it's been heading south at a goodly pace since.  It kissed the 97.00 mark around 2:30 p.m Hong Kong time, but 'gentle hands' were at the ready.  However, it's still hovering very close to that mark with the London open less than five minutes away at this point---and is currently down 28 basis points.

Today is the last trading day in the June contract---and First Day Notice numbers will be posted on the CME's website this evening---and I'll have them for you in tomorrow's column.

And as I send today's effort off into cyberspace at 5:35 a.m. EDT, I see that all four precious metals have crept a bit higher, but it's obvious that a willing seller was present shortly after 9 a.m. BST in London, as gold, silver and platinum all got sold down a bit.  With three wildly different supply/demand fundamentals, this sort of co-ordinated 'action' would never happen in a free market.

As expected, gold's gross volume is getting up there, but the net volume is only 21,000 contracts.  Silver's net volume is sitting right at 6,000 contracts---and the dollar index, which has bounced off the 97.00 mark three times in the last couple of hours, is down 22 basis points.  I get the impression that it would like to move a lot lower, but those 'gentle hands' are obviously still around.

I have no idea what will happen during the Thursday trading session, but we certainly aren't out of the woods yet from a down-side perspective.  Of course there's always a chance that JPMorgan et al could get over run with some black swan event coming out of left field.  But if it does happen, it will be---as Ted Butler has been saying for at least a decade now---the first time.

So we wait.

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

Ed Steer

Thu, 28 May 2015 04:17:00 +0000
<![CDATA[Gold Smuggling in India Rises 900% to Record]]> http://www.caseyresearch.com/gsd/edition/gold-smuggling-in-india-rises-900-to-record/ http://www.caseyresearch.com/gsd/edition/gold-smuggling-in-india-rises-900-to-record/#When:04:15:00Z "This does not bode well for precious metal prices going forward"

¤ Yesterday In Gold & Silver

The gold price chopped quietly lower in Far East trading on their Tuesday---and the HFT boyz and their algorithms/spoofing showed up around 2:15 p.m. Hong Kong time.  Once they were done, the price drifted quietly lower until the London morning gold fix was done at 10:30 a.m. BST.  It rallied a hair into the COMEX open, but JPMorgan et al were laying in wait once again---and within thirty-five minutes had gold down another ten bucks to its low tick of the day.  The gold price didn't do much after that.

The high and low ticks were reported by the CME Group as $1,108.20 and $1,184.80 in the June contract.

Gold closed on Tuesday in New York at $1,187.80 spot, down $18.10 from Monday's close.  Not surprisingly, gross volume was sky-high at 345,000 contracts, but it only netted out to about 142,000 contracts.  And once you take out the 21,000 net contracts from Monday, net volume yesterday wasn't overly heavy at 121,000 contracts.  On a $20 engineered price decline, that's not a lot.  I'll have more on this in The Wrap.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  Note the lack of volume on the engineered price decline in Hong Kong vs. the volume on the engineered price decline at the COMEX open.  The grey line is midnight EDT---and you need to add two hours to this chart for EDT, as it's scaled for Denver time.  The 'click to enlarge' feature is a must.

"Da boyz" laid the same lumber on silver---and the only real difference was that the metal rallied sharply off its 9 a.m. EDT low---and that was summarily dealt with.  From around 12:30 onward it traded pretty flat.

The high and low tick in that precious metal was recorded as $17.18 and $16.645 in the July contract.

Silver finished the Tuesday session at $16.72 spot, down 35.5 cents from Monday's close.  Net volume was pretty decent at 45,000 contracts.

Platinum got hammered as well---and in the same way---closing at $1,123 spot, down 25 bucks on the day.

Palladium was also affected, but mostly as an afterthought, as it closed down 8 dollars at $778 spot.

The dollar index closed late on Monday afternoon in New York at 96.37---and began to rally almost the moment that trading began in the Far East on the their Tuesday morning.  It was above by the 97.00 mark by the London open---and dipped to 96.82 at exactly 8:00 a.m. EDT.  From there it rallied up to about 97.35 just after 3 p.m. before sliding a bit into the close.  The dollar index closed on Tuesday at 97.22---which was up 85 basis points on the day.  Here's the 2-day chart so you can see the complete move over the last twenty-four hours.

Here's the 6-month dollar chart so you can see the progress of this counter-trend rally.

The gold stocks gapped down over 2 percent at the open---and never looked back.  The low tick came around 1:45 p.m. in New York---and they barely crawled off the floor after that, as the HUI closed down 3.71 percent.

The silver equities turned in a very similar performance---right down to the timing of the low tick.  Nick Laird's Intraday Silver Sentiment Index closed down 3.80 percent.

The CME Daily Delivery Report showed that only 1 gold and 66 silver contracts were posted for delivery on Thursday.  The big short/issuer in silver was the Japanese bank Mizuho.  HSBC USA stopped 23 contracts---and JPMorgan stopped 38 contracts---15 for clients, and 23 for its own account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in May dropped another 6 contracts, leaving 76 open---minus 1 whole contract mentioned in the previous paragraph.  Silver May o.i. fell by 35 contracts down to 254---minus the 66 above.

As I mentioned in yesterday's column, I was expecting all the remaining May open interest to be posted for delivery in the above Preliminary Report, but they weren't.  That leaves the rest to be delivered on Friday---First Notice Day---and one way or another May's remaining open interest in gold and silver has to be zero in tomorrow's report.  They have to be delivered into---or sold.  There are no other options.  So we wait.

There was movement in both GLD and SLV yesterday.  In GLD, an authorized participant deposited a tiny 19,181 troy ounces.  In SLV an authorized participant withdrew 1,003,544 troy ounces.

There was no sales report from the U.S. Mint yesterday---and that was a bit of a surprise.  It appears that Ted was right.  JPMorgan, the big buyer, has stepped away from the table this month, probably for the same reason they did last year---and that was because they knew they were about to hammer the silver price into the dirt, so why buy expensive when you can buy cheaper later at a price they set themselves.  What a racket!

Of course the other reason Ted gave was that they may have stopped buying silver eagles altogether, but that fact won't be knowable for months, either.  So we wait.

There was little in/out activity in gold at the COMEX-approved depositories on Monday---3,500 troy ounces in---and 101 troy ounces out.  There was little activity in silver either, as only 19,496 ounce were received---and 5,192 shipped out the door.

Over at the COMEX-approved gold kilo depositories in Hong Kong on their Monday, they received 1,866 kilobars and shipped out 3,977 kilobars.  All of the activity was at the Brink's, Inc. warehouse---and the link to that action, in troy ounces, is here.

I don't have all that many stories again today---and I'll leave the final edit up to you.

¤ Critical Reads

The world is drowning in debt, warns Goldman Sachs

The world is sinking under too much debt and an ageing global population means countries' debt piles are in danger of growing out of control, the European chief executive of Goldman Sachs Asset Management has warned.

Andrew Wilson, head of Europe, Middle East and Africa (EMEA), said growing debt piles around the world posed one of the biggest threats to the global economy.

"There is too much debt and this represents a risk to economies. Consequently, there is a clear need to generate growth to work that debt off but, as demographics change, new ways of thinking at a policy level are required to do this," he said.

"The demographics in most major economies – including the US, in Europe and Japan - are a major issue – and present us with the question of how we are going to pay down the huge debt burden. With life expectancy increasing rapidly, we no longer have the young, working populations required to sustain a debt-driven economic model in the same way as we've managed to do in the past."

This story from The Telegraph is datelined at 6:25 p.m. BST yesterday evening, which is a pretty neat trick considering that our man in Greece, Harry Grant, sent it to me at 5:37 a.m. EDT yesterday morning, so it's obviously been edited in the interim.

El-Erian: Correction in stocks could happen if…

There could be a "big air pocket" in stocks if fundamentals, at some point, don't validate valuations, Mohamed El-Erian said Tuesday.

The market has been supported by "ultra-loose" monetary policy around the world and cash from corporate balance sheets being put to work in the form of dividends, buybacks and mergers and acquisitions, Allianz' chief economic adviser said on CNBC's "Squawk Box."

While the Federal Reserve will probably hike interest rates this year for the first time in nearly a decade, El-Erian advised investors against obsessing over it.

This 4:11 minute CNBC video clip, along with a transcript, appeared on their website at 8:40 a.m. EDT yesterday morning---and I thank Dan Lazicki for his first story of the day.

JPMorgan Chase Writes Arrogant Letter to Its Swindled Forex Customers

As the U.S. Department of Labor deliberates giving JPMorgan Chase a waiver to continue business as usual after it pleaded guilty to a felony charge for engaging in a multi-bank conspiracy to rig foreign currency trading, a letter the bank sent to its foreign currency customers should become Exhibit A in the deliberations. The letter effectively tells JPMorgan’s customers, here’s how we’re going to continue to rip your face off.

Two sections of the letter stand out in particular. One section reads:

“As a market maker that manages a portfolio of positions for multiple counterparties’ competing interests, as well as JPMorgan’s own interests, JPMorgan acts as principal and may trade prior to or alongside a counterparty’s transaction to execute transactions for JPMorgan…” (Italic emphasis added.)

I posted the JPMorgan "I'm so sorry" letter in Tuesday's column, or on Saturday---and here's what the good folks over at the wallstreetonparade.com Internet site had to say about it yesterday.  I thank Richard O'Mara for sending it along.

JPMorgan’s Guilty Plea Puts Wealth Unit in Spot With Regulators

JPMorgan Chase & Co. put allegations of currency-fixing largely behind it with a guilty plea, but it’s not out of the woods yet.

With its new felony record, America’s biggest bank needs to seek the Department of Labor’s permission to keep managing money in the $8 trillion private pension market. At the same time, there’s a cloud over the JPMorgan unit where pensions are managed: The Securities and Exchange Commission is well along in an investigation into conflicts of interest in the bank’s wealth-management unit, whose products include individual retirement accounts.

That puts the bank in a sticky position -- arguing that a criminal conviction shouldn’t keep it from managing Americans’ retirement savings, while the SEC is investigating possible wrongdoing in the same division.

“When a bank has enforcement action after enforcement action, it becomes hard to argue that it won’t happen again,” says Urska Velikonja, an assistant law professor at Emory University whose research focuses on securities law.

Of course there will be no end to it, but the precious metal price management scheme is still the 1,000 pound gorilla in the living room.  This Bloomberg article showed up on their website at 3:00 a.m. Denver time on Tuesday morning---and it's the first offering of the day from West Virginia reader Elliot Simon.

After a Political Reversal in Alberta, ‘Anything Seems Possible’

This is the Canadian province known for oil, cowboys and rodeos, and as the adopted home of Prime Minister Stephen Harper, whose Conservative Party has long dominated politics.

So it seemed especially jarring when a boisterous crowd in this bastion of conservative voting known as Canada’s Texas celebrated its new premier this weekend: a woman regarded by much of the country as a leftist who vows to take on big oil and champion the poor.

The 51 newly elected New Democratic Party members who sat behind the premier, Rachel Notley, their leader, in the swearing-in ceremony on Sunday did not resemble typical revolutionaries. Largely political novices, they dressed like junior bank managers. They include nurses, a phone technician and a yoga instructor.

The ceremony on the steps of the Alberta provincial legislature, cheered by members of a large and enthusiastic crowd who could have easily passed for hockey fans celebrating a rare Edmonton Oilers victory, signified an exceptional moment in politics in both Alberta and Canada.

Yep---and if I were Prime Minister Stephen Harper, I'd be shaking in my boots right now, as the Canadian people are just itching to give this guy, along with the rest of the Federal conservatives, the old 'heave ho'---and they'll have their chance this fall.  This is another article from The New York Times.  This one was posted on their website on Monday---and I thank Roy Stephens for sending it along.

Vancouver: Real estate ‘pandemonium’

Mortgage broker David Ford thinks he has found the right way to describe the Lower Mainland’s market for single-family homes.

“Detached housing is BANANAS.

“It’s real estate pandemonium,” he writes in his latest Shop Talk newsletter for clients, realtors and financial advisers.

It’s not just single-family homes that are hot. Vancouver Mayor Gregor Robertson and former wife Amy received five offers recently for their 1,666-square-foot Stephens St. half-duplex in Kits with ocean views, purchased in 2013 for $1.57 million. Listed for $1.798 million. Sold for $1.982 million.

This story showed up on The Vancouver Sun website yesterday---and it's the second offering in a row from Roy Stephens.

Germany sees progress on Greece, E.U. officials to confer on Thursday

A senior German official said on Tuesday there was no reason to believe Greece would be in default after a 300 million euro payment to the IMF falls due on June 5.

Separately, euro zone officials said deputy finance ministers would hold a teleconference on Thursday to follow up on days of negotiations between representatives of Greece and creditors the International Monetary Fund (IMF), the European Central Bank and the European Commission.

Greece must repay four loans totaling 1.6 billion euros ($1.76 billion) to the IMF next month, starting with a 300 million euro payment on June 5.

If no deal is reached within EU/IMF for new loans to be disbursed to Athens, Greece is likely to default on the IMF loan repayment. This would start a process that could lead Greece out of the euro zone.

Will they?---Won't they?  What a soap opera.  This Reuters article co-filed from Berlin and Brussels, put in an appearance on their Internet site at 11:00 a.m. EDT yesterday morning---and it's the second offering of the day from Elliot Simon.

With Money Drying Up, Greece Is All but Bankrupt

Bulldozers lie abandoned on city streets. Exhausted surgeons operate through the night. And the wealthy bail out broke police departments.

A nearly bankrupt Greece is taking desperate measures to preserve cash. Absent a last-minute deal with its creditors, the nation will run out of money early next month.

Two weeks ago, Greece nearly defaulted on a debt payment of 750 million euros, or about $825 million, to the International Monetary Fund.

For the rest of this month, Greece should be able to cover daily cash deficits of around 100 million euros, government ministers say. Starting June 5, however, these shortfalls will rise sharply, to around 400 million euros as another I.M.F. obligation comes due. They will then double in size on June 8 and 9.

This article, filed from Athens, appeared on The New York Times website on Monday sometime---and it's another contribution from Elliot Simon.  David Stockman gave it the headline "At the Street Level, Greece is Grinding to a Halt".

Russia Officially Gives Up on Mistral Deal

Moscow has finally given up on the Mistral deal. Now Russia and France will discuss only the sum that Paris should pay Russia for the failed contract.

During the negotiations on the Mistral deal Russia and France have discussed only one question — the sum of the compensation.

"We switch the conversation to business — give us our money back… We're now discussing just one thing — the exact sum of money France owes Russia," Oleg Bochkaryov, a deputy chairman of the Russian Military Industrial Complex said.

Russia and France signed a $1.3-billion deal for two Mistral-class helicopter carriers in 2011. The handover of the first ship to Russia was scheduled for November 2014, but never happened. French President Francois Hollande put the delivery on hold due to Moscow's alleged interference in the Ukrainian crisis.

This news item appeared on the sputniknews.com Internet site at 5:02 p.m. Moscow time on their Tuesday afternoon, which was 10:02 a.m. EDT in Washington.  It's courtesy of Dan Lazicki.  The Zero Hedge spin on this is headlined "Russia Tells France It Gives Up on Mistral Ship Deal"---and it's also courtesy of Dan L.

Muslim world reacts to Obama's latest speech

This 2:20 minute youtube.com video clip appeared on Egyptian television last week---and it falls into the absolute must watch category.  I could hardly believe what I was hearing---and I thank reader U.D. for passing it around yesterday.

ISIS rise provoked by outside interference into Middle East, North Africa – Putin

There was previously no terrorism in countries where Islamic State militants “now prosper” until outside forces “not sanctioned by the UNSC” interfered, Russian President Vladimir Putin said, stressing the “serious consequences” that followed.

“We know what is happening, for example, in the Middle East, in North Africa; we know the problems associated with a terrorist organization, which has appropriated the right to be called the ‘Islamic State” (IS, formerly ISIS/ISIL),” Putin said during a meeting with security officials from the BRICS block in Moscow.

“But there was no terrorism in the countries where it [IS] flourishes today before an unacceptable interference from the outside happened, not sanctioned by the Security Council of the United Nations,” he stressed.

Russia’s president describe the consequences of such interference as “serious,” with the Islamic State currently controlling territory in Syria, Iraq, Libya, Lebanon, Afghanistan and Nigeria.

This news item showed up on the Russia Today website at 9:37 p.m. Moscow time on their Tuesday evening---and I thank Roy Stephens for sending it along.

Saudi Arabia, partners turn down Chinese requests for extra oil

Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world's biggest crude importer hits new records.

While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market.

Saudi Arabia "used to provide as and if we asked for extra cargoes on top of contract during the first four months of the year, but not for May and June," said a trader with one of China's biggest oil importers on condition of anonymity as he had no permission to talk to media.

Another source with a Chinese refinery that takes Saudi oil said Saudi heavy crude was "a bit tight" in May and June.

This Reuters article, co-filed from Beijing and Singapore, was posted on their website a week ago today---and I thank Orlando, Florida reader Dennis Mong for sharing it with us.

Iraq About to Flood Oil Market in New Front of OPEC Price War

Iraq is taking OPEC's strategy to defend its share of the global oil market to a new level.

The nation plans to boost crude exports by about 26 percent to a record 3.75 million barrels a day next month, according to shipping programs, signaling an escalation of OPEC strategy to undercut U.S. shale drillers in the current market rout. The additional Iraqi oil is equal to about 800,000 barrels a day, or more than comes from OPEC member Qatar. The rest of the Organization of Petroleum Exporting Countries is expected to rubber stamp its policy to maintain output levels at a meeting on June 5.

While shipping schedules aren't a promise of future production, they are indicative of what may come.

This Bloomberg article showed up on their Internet site at 8:37 a.m. EDT yesterday morning---and I thank International Man senior editor Nick Giambruno for passing it around yesterday.

China's currency 'no longer undervalued,' IMF says, clearing entry to SDRs

The International Monetary Fund has declared that China's currency is "no longer undervalued," marking a significant shift after more than a decade of criticism of Beijing's tight management of the renminbi.

The move amounts to a major vote of confidence in Beijing and the renminbi at a critical time. It also puts the IMF at odds with its biggest shareholder, the United States, which insists that China continues to draw an unfair trade advantage from a renminbi that it considers "significantly undervalued."

The renminbi has gained 25 per cent against the US dollar since it was allowed to adjust upward within a narrow band a decade ago, and has held its value even as the dollar has strengthened against other major currencies over the past year.

Eswar Prasad, the former head of the IMF's China unit, said the shift by the fund was important as it marked the first time since the Asian financial crisis of the late 1990s that the fund had not deemed the renminbi to be undervalued. It also presaged the likely adoption later this year of the renminbi as one of the small number of major currencies in a basket used to determine the value of the IMF's de-facto currency, the Special Drawing Rights.

This is only part of the story that appeared on the Financial Times website yesterday.  There's a bit more in the GATA release, but you'll have to go to the FT site for the rest---and a subscription is required.  The part that's posted in the clear is worth reading.

Texas Senate Passes Bill to Establish Bullion Depository, Help Facilitate Transactions in Gold and Silver

A bill taking a step towards gold and silver as commonly-used legal tender in Texas passed in the state Senate today by an overwhelming 29-2 vote.

Introduced by State Rep. Giovanni Capriglione (R- Southlake) and four co-sponsors on Feb. 12, House Bill 483 would create a state bullion depository.

What the bill essentially does is create a means for transactions to occur in precious metals. It allows people  to open an account and deposit their precious metals in the state depository. They could then use the electronic system to make payments to any other business or person who also holds an account.

This opening of the market is considered by many insiders to be the most important first step towards bringing sound money to mainstream acceptance.

This news item, filed from Austin yesterday, appeared on the tenthamendmentcenter.com Internet site---and it's something I found over at Sharps Pixley in the wee hours of this morning.

MIT developing platinum replacement

Fears of a looming crunch in platinum supply, driven mainly by a four-month-long ongoing strike at the world’s top producers of the metal in South Africa, may be about to fade.

MIT graduate student Sean Hunt, postdoc Tarit Nimmandwudipong, and Yuriy Román, an assistant professor of chemical engineering, are working on a new process to replace platinum-group metals (PGMs) with more widely available elements in renewable energy technologies.

In a paper published last week in the journal Angewandte Chemie, the team explains their proposed new method for synthesizing alternative catalysts.

This is another one of those cases of "I'll believe it when I see it!"  This short article was posted on the mining.com Internet site  back on May 18---and I thank Patrick Leavens for sending it our way.

Platinum price: The cheese and biscuits analogies -- Lawrence Williams

Platinum has been in a large deficit for the last two to three years – and a substantial one at that, last year in particular with the five-month long platinum miners’ strike in South Africa taking perhaps a further 1 million ounces away from the production picture. But, over this same period, the price has not risen, but has fallen, thus seemingly being counter to the normal supply/demand process.

An interesting panel discussion at last week’s Bloomberg Precious Metals Forum in London did not see an immediate end to this price malaise, although looking further ahead did feel there would be a stage when fundamentals would start to impact price positively. Panel members were David Jollie of Mitsui Global Precious Metals, Jonathan Butler of Mitsubishi and James Steel of HSBC, ably led by Rupen Raithatha of Johnson Matthey who had previously given the audience insights on the very significant demand for platinum in the Chinese jewellery sector.

The weak price has been all to do with the levels of above-ground stocks which some had put at over 4 million ounces, which meant there has been adequate supply out there to service demand. This without impacting positively on the price which, if anything, has allied itself to the fortunes of the gold price however illogical this might be. Indeed it was felt that we may still not yet have seen the platinum price lows if gold hits a spot of further weakness as some analysts have been predicting. Although platinum is very much an industrial metal, it is also classified by the markets as a precious metal and all the precious metals complex tends to move, to an extent at least, with the upwards and downwards movements in the gold price.  This in turn seems to move due to the huge speculative element played out for the moment primarily on the COMEX futures market.

This commentary by Lawrie appeared on the mineweb.com Internet site mid-afternoon BST in London---and if you're a PGM fan, this is worth reading.

Don’t Believe Everything You Read On The Internet -- Koos Jansen

Recently a website called Want China Times published a story titled, “China Could Crash U.S. Dollar With 30,000 Tons Of Gold: Commentary”. I would like to share my opinion on this story about the Chinese gold market that has directly or indirectly reached many readers.

Alasdair Macleod has written an article in 2014 stating “the Chinese state has probably accumulated between 20,000 and 30,000 tonnes since 1983”. In my humble opinion this estimate is based on no evidence, but you can read the article and make up your own mind. Now, was the 30,000 tonnes number conceived by MacLeod or Jin? The only source I could find on the 30,000 tonnes number is MacLeod’s estimate. In a new Chinese jacket (Duowei, Jin) the story was transformed and made additional rounds. (if someone else has an additional source I would love to read it, please comment below.)

Starting from BWChinese via Duowei and Want China Times the 30,000 tonnes story was re-ignited and has spread over the internet. Shortly after Russian website pravda.ru published, “China Saves Up 30,000 Tons Of Gold To Topple US Dollar From Global Reign”. Pravda did not include any links, but they mention Duowei as the source (so again, this was MacLeod’s estimate). Sputnik published "Dragon Rising: China's Gold Will Break World's Dependence on the U.S. Dollar".

This very interesting commentary appeared on the bullionstar.com Internet site yesterday---and it's worth reading.  I thank Koos for sending it our way.

Russia acquires gold as defense against 'political risks,' central banker explains

Russia is increasing its gold holdings because gold is a reserve asset free from legal and political risks, a senior central banker said on Tuesday.

The comments by Dmitry Tulin, who manages monetary policy at the central bank, reflect Russian fears that the country's overseas assets could be frozen as part of a possible toughening of Western sanctions over the Ukraine crisis.

"As you know we are increasing our gold holdings, although this comes with market risks," Tulin told lawmakers in the lower house of parliament. "The price of it swings, but it is a 100-percent guarantee from legal and political risks."

This Reuters article from late Tuesday morning EDT was something I found in a GATA release.

Gold smuggling in India rises 900% to record

For the first time in the history of gold smuggling in India, the seizure in illicit trade has crossed the rupees 1,000 crore mark in one financial year with customs, police, and revenue agencies seizing more than 3,500 kilograms of gold in 2014-15.

In 2012-13 the same figure stood at merely Rs 100 crore with just about 350 kilograms of gold seized. In two years, since the government increased duty on gold to 10 percent to rein in a yawning current account deficit, gold smuggling has grown by 900 percent.

Since as an accepted principle seizures could be less than 10 percent of actual smuggling, the figures look even more ominous.

Sources say gold has also begun to be smuggled in unique ways and from rather unexpected corners.

This article showed up on the Times of India website at 4:31 a.m. IST on their Wednesday morning---and I found this one the gata.org Internet site yesterday.  It's worth reading.

Turn out the lights: Australia calls commodity spending boom end

Gold miners are spearheading a wave of merger and acquisition activity in Australia, riding a rebound in local gold prices to pounce on projects promising quick growth.

In the first signs of life since the country’s mining boom went bust three years ago, companies are buying assets from international rivals tightening their belts, and partnering with fellow Australian miners.

“Everyone is looking for assets that enable them to grow. We’ve seen more M&A in Australia in 2015 than in the past five years,” Ian Murray, chairman of Perth-based Gold Road Resources Ltd told Reuters, referring broadly to the level of interest in the sector.

Progressive central bank interest rate cuts aimed at knocking down the Australian dollar and falling labour and mining costs are adding fuel to the frenzy.

This Reuters article appeared on the mineweb.com Internet site yesterday morning BST---and I found it all by myself.

¤ The Funnies

This little fellow---and he is little---is a pied-billed grebe, and is about a foot long, tops.  Both sexes are similar in appearance, so I'm not sure whether this is a male or female---not that it matters, I suppose.  It showed up right in the middle of my photo shoot with the yellow-headed blackbird that appeared in yesterday's column.  It's only because I was in my car that he got as close as he did, so I made the most of the opportunity.

¤ The Wrap

It occurred to me that it has come down to JPMorgan and other big banks being found guilty of manipulation in most of the markets they deal in, except for a very few; even though their behavior was the same in all markets. It took me a while to figure out why the banks could be found guilty in most markets, but not in others. The difference is that in the markets where the banks were found guilty were all markets where the chance of pile-on civil litigation was virtually non-existent.

OK, the banks conspired and colluded in LIBOR and foreign exchange, for instance, but who was damaged was very hard to prove and this virtually eliminated waves of follow on civil litigation. Plus, there were no strong public allegations of manipulation beforehand that I am aware of – just a sudden finding that the banks did something wrong and they agreed to settle. It was almost like the authorities and banks agreed that something was done wrong to throw everyone off the real trail.

In contrast, in the markets where the banks’ manipulation is clear, like silver, gold, copper and elsewhere, neither the Justice Department nor the CFTC would dare bring charges for fear of the avalanche of civil lawsuits that would follow. Let’s face it, it would be pretty easy for many thousands of market participants and investors to prove they were damaged by the silver manipulation were the regulators to level charges against the banks along the lines of what I write about weekly. In addition to subjecting JPMorgan and the CME to endless and unlimited litigation, it would necessarily end the manipulation in an instant and send silver prices to the heavens. - Silver analyst Ted Butler: 23 May 2015

There should be no doubt in your mind as to what's going on---and who is behind it.  JPMorgan et al took a decent chunk out of all four precious metals yesterday, but the thing that didn't impress me was the lack of net volume, something I mentioned at the top of today's column.  With the 50-day moving average taken out to the down-side in gold, I was expecting much more than we got.  Silver didn't take out any of its moving averages, but I was still expecting higher net volume there as well.  This does not bode well for precious metal prices going forward.

Here are the 6-month charts for all four precious metals so you can see the slices that "da boyz" took off the prices yesterday.

As to how bad it could get---it is, as Ted Butler keeps pounding into me, the number of contracts---not the price.  And based on yesterday's volume, there are still a boatload of long contracts left in the Managed Money category that have to puked up---and that doesn't include how far the powers-that-be can get these same traders to go on the short side.

As to how long this might take, as I said yesterday, it will either be death by a thousand cuts, or a couple of massive slices.  Their usual procedure is to slice thinly over a long period time, but make no mistake, the process started yesterday.  Just look at the 6-month gold and silver charts above and take a look at the length of time between the tops and the bottoms.

Of course the critical 50-day moving averages are much closer, and we're already through gold's, but with the Commitment of Traders numbers what they are at the moment, JPMorgan et al could engineer prices much, much lower.  Just eye-balling the above charts, I'm guessing that it could be as bad as $40 in gold---and $1.25 in silver.  Maybe more.  Ted was surprised that they didn't go after the precious metals even harder than they did yesterday, but I guess 'thinner slices' are back in vogue.

So we wait.

And as I type this paragraph the London open is just under ten minutes away, the gold price is crawling higher, silver is about unchanged, platinum is up a few bucks---and palladium is up six.  Net gold volume is very light at the moment, a bit under 10,000 contracts---and silver's net volume is around 3,300 contracts.  All is quiet at the moment, but this state of affairs won't last.

The dollar index topped out in mid-morning trading Hong Kong time---and is currently down 26 basis points.

As I said in Saturday's column---and Tuesday's as well---with all futures traders [except those standing for delivery] having to be out of the June contract by the close of COMEX trading tomorrow, roll-over volumes will be huge---and they have been.  But its the net volumes I'm not happy with.

Yesterday was the cut-off for this Friday's COT Report---and because of the high volume, most of which occurred during the New York trading session, it's doubtful that all of Tuesday's data will be reported in a timely manner.

And as I send today's column out the door at 5:20 a.m. EDT, I note that gold and silver are trading very flat---and basically unchanged. Platinum and palladium are up a bit.  The dollar index is down 20 basis points.

Not surprisingly, gold's gross volume is very high, as all the large traders have to be out by the end of the COMEX trading session today. But net volume is just under 14,000 contracts, which is very light. Silver's net volume is just under 5,000 contracts.  Nothing to see here.

It's obvious that the HFT boyz and their algorithms are not around at the moment---and it's entirely possible that they may not put in an appearance again until next week, when the June contract is off the board.  However, I wouldn't bet the ranch on that.

Whichever way it turns out, we're not out of the woods yet by any stretch of the imagination.

And on that cheery note, I'm off to bed---and I'll see you here tomorrow.

Ed Steer

Wed, 27 May 2015 04:15:00 +0000
<![CDATA[60 Countries Invest in Chinese Fund to Facilitate Central Bank Gold Purchases]]> http://www.caseyresearch.com/gsd/edition/60-countries-invest-in-chinese-fund-to-facilitate-central-bank-gold-purchas/ http://www.caseyresearch.com/gsd/edition/60-countries-invest-in-chinese-fund-to-facilitate-central-bank-gold-purchas/#When:04:10:00Z "Just waiting for the hammer to fall"

¤ Yesterday In Gold & Silver

The gold price got sold down five bucks the moment that trading began at 6 p.m. EDT in New York on Sunday evening.  It chopped around that new price all through Far East and the London trading session, although London was also closed for some sort of bank holiday.  Then at 8:30 a.m. EDT a rally began which got capped minutes after 9:30 a.m. EDT.  The second smallish rally after that also met the same fate about 12:20 p.m.---and then it got sold down a bit into the 1:00 p.m. early close.  All this trading occurred on the Globex system outside the U.S., as the U.S. [and London perhaps] were closed for Memorial Day.  But there was obviously trading going on from somewhere.

With the CME closed, there were no low and high ticks available.

Gold closed on Monday at $1,207.00 spot, up $1.10 from Friday.  Net volume was a tiny 20,800 contracts.

Silver also got sold down on the Sunday evening open in New York---and it's price pattern was identical to gold's, which it almost always is.

There are no low and high ticks, either, but it traded in a two bit range for the entire Monday session---such as it was.

Silver finished the day at $17.105 spot, up a whole 3 cents.  Net volume was a microscopic 6,000 contracts.

The platinum price eked out a tiny two dollar gain and closed on Monday at $1,148 spot.

Like gold and silver, palladium's price pattern had some structure to it.  It began to rally at 2 p.m. in Zurich---and by the time the markets closed at 1 p.m. EDT, the metal had tacked on another 7 bucks, finishing the day at $786 spot.

The folks over at ino.com stated that the dollar index closed at 96.01 on Friday afternoon in New York, but that's not what the closing numbers stated yesterday.  They showed that dollar closed on Monday at 96.37---up 5 basis points from Friday's close.  I don't know what to make of that, but I thought I'd point it out.  Here's the 3-day chart so you can see it for yourself.

With everything shut tight in New York yesterday, there's nothing from either GLD or SLV, the U.S. Mint, or the COMEX-approved depositories.  There's no CME Daily Delivery Report or Preliminary Report, either.

All the large traders in the COMEX futures market that aren't standing for delivery in the June gold contract have to be out of their positions by the COMEX close tomorrow---and the rest have to be out by the COMEX close on Thursday, so it's going to be a pretty wild from a volume perspective for the rest of the month.

And as I stated in Saturday's column, whatever outstanding May contracts that haven't been posted for delivery yet, have to be in this evening's report from the CME---and it will be interesting to see who the hold-out short/issuers were in both silver and gold.  More to the point is how many of the remaining silver contracts were picked up by JPMorgan for its own account.

Here's a nifty chart that reader U.D. passed around yesterday.  It's the Euro Interbank Offered Rate.  It is, as reader U.D. so succinctly put it---"mass insanity".

I have don't have all that many stories for you today---and I hope there are a few in here that you'll find of interest.

¤ Critical Reads

Did Someone Forget to Tell the Machines the U.S. is Shut Today?

"Unrigged"... European weakness - on the heels of increasing event risk and slowing ECB purchases - provided downward impetus to global risk assets this morning... but the machines rigging running U.S. equity futures appears to have forgotten that the U.S. markets are shut and sparked the ubiquitous rampathon back to unchanged for S&P futures (on less than 10% of daily average pro-rata volume).

The same can be said of the trading in gold and silver yesterday as well.  This tiny Zero Hedge article has a must see chart embedded, so it's worth 30 seconds of your time.

Don Coxe: Bull Market in Bonds Now Ending - Risks Ahead

Don Coxe, Chairman of Coxe Advisors, called the dawn of the bull market in bonds in 1981. Now, 34 years later, he sees it ending as bonds enter their final mania phase marked by negative interest rates. Don discusses this historic period we are now in and both the risks and opportunities he sees ahead.

This excellent transcript, plus an embedded 6:27 minute video clip, appeared on the financialsense.com Internet site on Friday---and it's definitely worth your while.  I thank Casey Research's own John Grandits for passing it around on Sunday afternoon.

Dr. Dave Janda interviews your humble scribe

The good doctor and I spent 25 minutes talking about the banks in general---and JPMorgan in particular---on Sunday afternoon.  Of course we also spent some time talking about the precious metals as well.  It was posted on the davejanda.com Internet site yesterday.

Ferguson Protesters Now Protesting Over Not Getting Paid

At least some of the protesters who looted, rioted, burned buildings and overturned police cars in Ferguson, Missouri, last year were promised payment of up to $5,000 per month to join the protests.

However, when the Missourians Organizing for Reform and Empowerment (MORE), the successor group to the now-bankrupt St. Louis branch of ACORN (Association of Community Organizations for Reform Now), stiffed the protesters, they launched a sit-in protest at the headquarters of MORE and created a Twitter page to demand their money, The Washington Times reports.

Presidential candidate and former Rep. Allen B. West, [R-Fl.], noted on his website, "Instead of being thankful for getting off the unemployment line for a few weeks and having a little fun protesting, the paid rioters who tore up Ferguson, MO, are protesting again."

"First of all, can you even imagine getting paid $5,000.00 a month for running around holding a sign and burning down an occasional building? That's around $1,250.00 per week. Try making that at McDonalds or Starbucks."

MORE is funded by liberal billionaire George Soros, the Times notes, through his Open Society Foundations (OSF).

Only in America.  This amazing story appeared on the newsmax.com Internet site at 3:07 p.m. EDT on Memorial Day---and it's another contribution from reader U.D.  It's definitely worth reading.

Businesses quietly turn to the dollar in fiercely anti-American Venezuela as currency crashes

It's still possible to buy a gleaming Ford truck in Venezuela, rent a chic apartment in Caracas, and snag an American Airlines flight to Miami. Just not in the country's official currency.

As the South American nation spirals into economic chaos, an increasing number of products are not only figuratively out of the reach of average consumers, but literally cannot be purchased in Venezuelan bolivars, which fell into a tailspin on the black market last week.

Businesses and individuals are turning to dollars even as the anti-American rhetoric of the socialist administration grows more strident. It's a shift that's allowing parts of the economy to limp along despite a cash crunch and the world's highest inflation. But it could put some goods further out of reach of the working class, whose well-being has been the focal point of the country's 16-year-old socialist revolution.

This AP story was picked up by the startribune.com Internet site at 1:45 p.m. EDT yesterday---and I found it on the gata.org Internet site.

Banks brace for more foreign exchange rigging pain as civil lawsuits come forth

Banks are bracing for hundreds of millions of pounds in new claims for foreign exchange manipulation from class-action lawsuits triggered by last week’s vast market rigging fines.

Barclays, Royal Bank of Scotland and four other banks were ordered on Wednesday to pay $6bn (£3.84bn) by U.K. and U.S. authorities.

The Barclays penalty represents the biggest bank fine in British history.

The regulators, detailing how traders gathered in chat rooms using monikers such as “The Cartel” and “Coiled cobra” to rig the $5.3 trillion-a-day currency market, also forced the banks to plead guilty to criminal charges.

Lawyers say that the fines, as well as an investigation from the European Commission, could be a springboard to damaging civil litigation in the U.K. and Europe.

This article put in an appearance on the telegraph.co.uk Internet site at 7:46 p.m. London time on their Saturday evening---and I found it embedded in a GATA release.

E.U. parliament cracks down on shell firms

People trying to hide their money in shell companies will face greater scrutiny following a new law adopted Wednesday (20 May) by the European Parliament.

Initially proposed at the start of 2013, the bill - also known as the fourth anti-money laundering directive - proposed to crack down on money laundering, terrorist financing, and to improve ways of tracing illicit transfers.

A political agreement with member states was reached last December.

MEPs expanded on it, making it more difficult for fraudsters and other criminals to hide behind shell companies to avoid paying taxes or to launder income from criminal activities. Member states have two years to transpose the rules into their national laws.

This story, filed from Brussels, showed up on the euobserver.com Internet site last Wednesday---and the reader that sent it to me wishes to remain anonymous.

Spain's ruling party punished in local elections

Voters in Spain’s two biggest cities have put the leaders of new and untried citizens’ platforms in pole position to become their mayors as the results of Spain’s local and regional ballots on Sunday reveal a highly fragmented political scene ahead of a general election due at the end of the year.

Barcelona en Comú, whose city council candidates were supported by anti-austerity movement Podemos and the Left-wing Catalan Green party, won 11 councillors with 25 per cent of the vote, narrowly ahead of the CiU Catalan nationalist grouping of current city mayor Xavier Trias, which picked up 10 seats out of 41 available.

Barcelona en Comú leader Ada Colau, formerly known as an anti-eviction campaigner, has promised a drastic reduction in perks for councillors and an emergency anti-poverty plan for the city’s poor and marginalised. “It’s a David versus Goliath victory,” a tearful Mrs Colau said as the result came in.

“We said it could be done, and we’ve proven it,” said Mrs Colau. “We are an unstoppable democratic revolution.”

This story appeared on The Telegraph's website just before midnight BST on Sunday evening---and I thank Roy Stephens for sharing it with us.

Greece to miss IMF payments amid fears of 'catastrophic' eurozone rupture

Greece will be unable to find the €1.6bn (£1.1bn) sum it is due to hand the International Monetary Fund (IMF) next month, one of the country’s ministers has admitted.

Nikos Voutsis, the Greek minister of the interior, said that “this money will not be given and is not there to be given”, speaking on Mega TV. The Greek state is due to hand over the money in four installments in June, as part of its obligations for its 2011 bail-out.

Mr Voutsis’ comments came as Yanis Varoufakis, the Greek finance minister, told The Andrew Marr Show that if progress was not made, it would be the beginning of the end for the euro project.

This is another story from the telegraph.co.uk Internet site.  It showed up there at 10:50 a.m. BST on Sunday morning---and it's the second story in the row from Roy Stephens.  Our man in Greece, Harry Grant, sent us the Zero Hedge spin on all this headlined "Greece Is on the Ragged Edge: Bloodied Ideologues vs. Bloodthirsty Technocrats".  And here's another story on Greece from The Telegraph.  This one's from Monday morning BST---and it's headlined " Greece begs for leniency as investors warn 'time for complacency' on collapse is over"---and it's courtesy of Roy Stephens as well.

No to Brussels, Yes to Kiev: New president sets course for more independent Poland

Youthful energy and rhetoric for change have seen Andrzej Duda transformed from a virtual unknown to the rising star of Eastern European politics – but his presidency could set Poland against Russia and the E.U.

On Sunday, 51.6 percent of the electorate cast their votes for Duda to replace the centrist incumbent Bronislaw Komorowski, with a turnout of 55.4 percent, according to the official results. Exit polls showed that over 60 percent of rural voters supported Duda, but only about 40 percent of those live in cities.

Like the last president from the Law and Justice party and Duda’s idol, the late Lech Kaczynski, who held the office from 2005 to 2010, the new Polish leader won by appealing to voters from the traditional heartlands – Catholics, social conservatives, farmers, and those left behind by Poland’s superficially stellar economic performance in the last decade.

This story was posted on the Russia Today website at 9:52 p.m. Moscow time on their Monday evening, which was 2:52 p.m. EDT in Washington.  It's also courtesy of Roy Stephens.

Ukraine crisis: Rebel commander Alexei Mozgovoi 'killed'

One of the top rebel commanders in eastern Ukraine, Alexei Mozgovoi, has been killed in an attack on his car, Russian and Ukrainian media report.

Mr Mozgovoi led the "Prizrak" (Ghost) battalion which was based in the Alchevsk area of Luhansk.

Reports said a bomb struck his car, which was then targeted by gunfire that killed Mozgovoi and six others.

Mr Mozgovoi was a critic of the Russian-backed separatist leadership and the Minsk accord signed with Kiev.

This story put in an appearance on the bbc.com website on Saturday sometime---and I thank Jim Skinner for sending it along.

Putin signs bill on ‘undesirable foreign groups’ into law

The Russian president has signed a bill banning the activities of foreign groups that pose a threat to national security or defense capability, and to punish those who continue to cooperate with such groups.

The bill, initially drafted by two opposition MPs, was passed by both chambers of the Russian parliament last week. It tasks the Prosecutor General’s Office and the Foreign Ministry with creating a proscribed list of “undesirable foreign organizations” and to outlaw their activities in the country. The main criterion for putting a foreign or international NGO on the list is a “threat to the constitutional order and defense capability, or the security of the Russian state.”

Once the group is recognized as undesirable, all its assets in Russia must be frozen, its offices closed and distribution of any of its information materials must be banned.

No surprises here, as foreign-sponsored NGO's, mostly U.S., have been working in many countries to overthrow their current governments.  This news story was posted on the Russia Today website at 9:52 a.m. Moscow time on their Monday morning, which was 2:52 a.m. EDT in Washington.  There was also a Fox News item on this headlined "Putin signs Russian law to shut down 'undesirable' organizations"---and it's courtesy of Brad Robertson.

City in the sky: world's biggest hotel to open in Mecca

The holy city is fast becoming a Las Vegas for pilgrims.

Four helipads will cluster around one of the largest domes in the world, like side-plates awaiting the unveiling of a momentous main course, which will be jacked up 45 storeys into the sky above the deserts of Mecca. It is the crowning feature of the holy city’s crowning glory, the superlative summit of what will be the world’s largest hotel when it opens in 2017.

With 10,000 bedrooms and 70 restaurants, plus five floors for the sole use of the Saudi royal family, the £2.3bn Abraj Kudai is an entire city of five-star luxury, catering to the increasingly high expectations of well-heeled pilgrims from the Gulf.

Modelled on a “traditional desert fortress”, seemingly filtered through the eyes of a Disneyland imagineer with classical pretensions, the steroidal scheme comprises 12 towers teetering on top of a 10-storey podium, which houses a bus station, shopping mall, food courts, conference centre and a lavishly appointed ballroom.

“The city is turning into Mecca-hattan,” says Irfan Al-Alawi, director of the UK-based Islamic Heritage Research Foundation, which campaigns to try to save what little heritage is left in Saudi Arabia’s holy cities. “Everything has been swept away to make way for the incessant march of luxury hotels, which are destroying the sanctity of the place and pricing normal pilgrims out.”

This very interesting article showed up on The Guardian website on Friday afternoon BST---and it's the second contribution in a row from reader Brad Robertson.

‘Titanic’ Global Economy May “Collapse” Warn HSBC – Gold Is Lifeboat

The chief economist of the world’s third largest bank, HSBC’s Stephen King, has compared the global economy to the Titanic.

In a note to clients on Wednesday he wrote We may not know what will cause the next downswing but, at this stage, we can categorically state that, in the event we hit an iceberg, there aren’t enough lifeboats to go round.

“The world economy is like an ocean liner without lifeboats.” As we have been warning in recent months, when another recession arrives, governments do not have the ability or the reserves to prop up the economy like they did in 2008.

Global debt has soared by 40 percent since the Great Recession. We now have a staggering $200 trillion of debt globally, or almost three times the size of the global economy. It would be a “truly titanic struggle” for policymakers to right the economy, King said.

This commentary by Mark O'Byrne over at the goldcore.com Internet site on Friday was something I meant to stick in Saturday's column, but completely forgot about---so here it is now.  If you haven't already, it's worth reading.  Here's The Telegraph's spin on this, courtesy of Ambrose Evans-Pritchard.  It's headlined "HSBC fears world recession with no lifeboats left"---and I thank Roy Stephens for finding it for us.

60 countries invest in Chinese fund to facilitate central bank gold purchases

A gold-sector fund involving countries along the ancient Silk Road has been set up in northwest China's Xi'an City during an ongoing forum on investment and trade this weekend.

The fund, led by the Shanghai Gold Exchange, is expected to raise an estimated 100 billion yuan (U.S. $16.1 billion) in three phases.

China is the world's largest gold producer and a major importer and consumer of gold. Among the 65 countries along the routes of the Silk Road Economic Belt and the 21st-Century Maritime Silk Road, there are numerous Asian countries identified as important reserve bases and consumers of gold.

About 60 countries have invested in the fund, which will in turn facilitate gold purchases for the central banks of member states to increase their holdings of the precious metal, according to the SGE.

This gold-related item, filed from Xi'An in China, appeared on the xinhuanet.com Internet site at 6:18 p.m. Beijing time on their Saturday evening.  I found it in a GATA release.  Koos Jansen also has something on this---and it's headlined "Xinhua: China Sets Up Gold Fund For Central Banks".  His comments are a must read.  The Zero Hedge spin on this is entitled "China Establishes World's Largest Physical Gold Fund"---and it's courtesy of reader M.A.

Australian gold production falls in first quarter of 2015

Australian gold production fell by 7 per cent in the first quarter of this year.

Less than 70 tonnes of the precious metal was pulled from the ground in the first three months of 2015, according to mining consultancy firm Surbiton Associates.

Director Dr. Sandra Close said the low figure was in part due to a number of shutdowns, wet weather and fewer production days from January to March.

"March is usually the lowest quarter of the year anyhow, but overall both the grade and tonnage of ore treated was lower this quarter than for December and there are quite a few reasons for that happening, in fact," she said.

This gold news item was posted on the Australia Broadcasting Corporation website on Sunday "down under"---and I thank South African reader B.V. for digging it up for us.

1,000 platinum-powered Hyundais in UK this year – Amplats

Fuel cell electric vehicles will allow platinum mining to build its future in a truly sustainable way on the back of zero exhaust emissions and the use of the world’s endless supply of hydrogen as a fuel source, Anglo American Platinum (Amplats) CEO Chris Griffith has told Platinum Week 2015 in London.

Griffith said this against the background of Korean automotive manufacturer Hyundai targeting the production of 1,000 ix35 fuel cell vehicles in the U.K. by the end of this year.

Highlighting the need for continuous industry collaboration with customers and nontraditional partners to develop uses for platinum-group metals (PGMs), Griffith outlined that if fuel cell cars succeeded in dominating the electric vehicle segment in Europe, platinum demand within Europe would rise to 6.6-million ounces in 2050.

Conversely, if battery cars dominated, demand for platinum within Europe would decline to 2.5-million ounces in the same period.

This article, filed from Johannesburg, appeared on the miningweekly.com Internet site yesterday---and it's the second offering in a row from reader B.V.

Above-ground platinum stocks unlikely to reach zero

Above-ground inventories of platinum are unlikely ever to reach zero, World Platinum Investment Council CEO Paul Wilson predicted.

Sizeable above-ground stocks are often cited as the primary reason for platinum’s failure to react to the current fundamental deficit.

“[But] they certainly don’t need to reach zero for sentiment to change and there could be a change to the price level in the marketplace,” he told delegates at the Bloomberg and CME Precious Metals Forum here on Friday.

Prices are now down 50 percent at $1,150 since the all-time peaks hit in 2008 at $2,300. The metal recently struck its lowest since the post-peak crash during 2008/2009 at $1,080 per ounce.

It's hard to believe that the guy running the World Platinum Investment Council is as ignorant as his brethren in the gold and silver mining industry, but this story proves that he is.  Until the Big 8 traders, led by JPMorgan et al, who are currently short 115 days of world platinum production get out of Dodge, the price of that precious metal is going nowhere as well.  This story, which was posted on the fastmarkets.com website, found a home over at the mineweb.com Internet site yesterday.

As LME looks east, CME throws down challenge in west: Andy Home

The London Metal Exchange (LME) Asia festivities have just wrapped up in Hong Kong.

It is the third such annual event since the LME was bought by Hong Kong Exchanges and Clearing (HKEx) in 2012 and each year, it seems, the Asian gathering of the metals industry gets larger.

The grand old London lady of metals trading is all part of Charles Li's vision of positioning Hong Kong as the renminbi gateway between mainland China and international markets. The HKEx chief is confident the LME will help open up a commodities channel to complement the newly-opened Stock-Connect highway.

It's very much still an aspiration but LME Week Asia is where the foundation stones are being laid.

This opinion piece, filed from Singapore, appeared on the Reuters website last Friday---and I found it on the Sharps Pixley website just now.

¤ The Funnies

This is a male yellow-headed blackbird.  They are widespread in the western half of North America, but not nearly as common as their red-winged cousins, at least not in these parts.  The last photo shows him standing on the road, where he was looking for road-kill insects.  He was so close that I had to back the car up [which I was using as a blind] so I could get him in focus.

¤ The Wrap

Unlike the situation in gold where there was a record weekly change but nowhere near a record level of total commercial shorts; in silver not only was there a record change for the week, the resultant level of total commercial net shorts was the highest since September of 2010. The total commercial net short position in gold is still way below where it was a few months ago, yet the total commercial net short position [in silver] is higher than it has been in more than four and a half years. My point? This is clear evidence that silver is much more manipulated in price than is gold, or any other commodity.

Eight non-silver producing speculators, euphemistically classified as commercials by the CME and CFTC, hold more than 376 million oz of equivalent silver net short in COMEX futures according to the current COT report, the most in six years. That’s the equivalent of more than 47% of total world mine production according to the CPM Group (790 million oz) and  more than 42% of the 877 million oz reported by GFMS (why there are such disparities in world silver production is beyond me – I don’t trust either organization).

The one key feature which I have long identified as at the core of the silver manipulation - the concentrated short position on the COMEX - has just rocketed to a multi-year record extreme on an anemic silver rally to just over $17 an ounce, a level at which most primary silver miners can’t turn a profit. What kind of madness is this? - Silver analyst Ted Butler: 23 May 2015

It was a nothing sort of day in the precious metals yesterday.  But, having said that, one has to wonder who the traders were in gold and silver that showed up to play at 9 a.m. EDT when New York was supposedly shut.  And as I also mentioned, there appeared to be an entity riding shotgun over them, as the tiny rallies in both metals weren't allowed to get far.

And as the Zero Hedge story in the Critical Reads section headlined "Did Someone Forget to Tell the Machines the U.S. is Shut Today?" pointed out, you have to wonder what machines are really running the show in the S&P futures market as well.  Based on that, it's not much of a stretch to think that JPMorgan et al are on top of the precious metal markets 24/7--- U.S and U.K. holidays notwithstanding.

So here we sit, looking at the ugliest Commitment of Traders Report in a very long time---and just waiting for the hammer to fall.  When that will happen is unknown, but unless JPMorgan et al get overrun, fall it will.

And as I write this paragraph, the London open is about ten minutes away---and I see that the 'salami slicing' has begun in all four precious metals, starting shortly after 2 p.m. Hong Kong time.  Gold came within a dollar of taking out its 50-day moving average to the downside---and silver is now about 30 cents away from its.  JPMorgan et al took out platinum's 50-day moving average with ease.

Gross volume in gold is at 55,000 contracts, with 17,000 of that being roll-overs out of the June contract, with most of that activity now in the new front month, which is August.  Silver's net volume is also enormous at just a hair over 11,500 contracts.  Not surprisingly, this is all being hidden behind what has all the hallmarks of a short-covering rally in the U.S. dollar index, which is currently up 53 basis points.  Like the engineered price declines in the precious metals going on at the moment, it's pretty much a given that this short-covering rally in the U.S. dollar index had some help getting started---and "da boyz" are cleaning up there as well.  The dollar rally began almost the moment that trading began in the Far East on their Tuesday morning.

Of course the technical funds in the Managed Money category are now in the process of selling their newly-acquired long positions---and probably going short as well.  The commercials are taking the other side of the trade and ringing the cash register in the process.  What a scam JPMorgan et al have going for themselves.  I wonder what percentage of the profits are ending in the pockets of persons at the CME Group and the CFTC as their 'cut'.

As I mentioned in the first section of today's column, it's going to be a busy three days in the COMEX futures market in gold in particular, as all the traders, both big and small not standing for June delivery, have to be sell or roll by the close of COMEX trading on Thursday---no "ifs, ands or buts" about it.

And as I fire today's missive out the door at 5:25 a.m. EDT, I note that gold, silver and platinum have all hit new lows for this move down once again now that London has been open for a couple of hours.  Gold's 50-day moving average has now been taken out by a bit---and the silver price is lower still.  "Da Boyz" are putting the lumber to the platinum price as well.  Here's the silver chart as of 5:37 a.m. EDT.

Net gold volume is now 51,000 contracts---and silver's net volume is just north of 15,500 contracts.  The dollar index is now back above the 97.00 mark---and up 69 basis points from Monday's close.

One thing I should point out is that the net volumes shown above includes Monday's net volumes, so you have to subtract out 20,800 contracts in gold---and 6,000 net contracts in silver to get a true picture of Tuesday's trading volume so far.  Once you do that, the volume for Tuesday isn't overly heavy.  I expect that will change once trading begins on the COMEX at 8:20 a.m. EDT.

Well, the final three days before First Notice Day are turning out to be pretty wild right out of the gate.  Today, at the close of COMEX trading in New York, is also the cut-off for this Friday's COT Report---and it will be interesting to see how much of Tuesday's [and Monday's] volume data actually makes it into that report.

I must admit that the slices out of the precious metal salamis so far today are much bigger than I was expecting, so maybe the powers-that-be are in somewhat of a rush for reasons that we don't know about.  Time will tell.

With all the insanity out there as far as the eye can see, I was reminded of how bad things really are by the quote below that has graced this column before.  I found it embedded in an e-mail that I received from reader Jim Akers yesterday.

"When you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you…you may know that your society is doomed." - Ayn Rand

That pretty much sums up where we are in the world today.

Based on the current price 'action'---absolutely nothing will shock me when I check the charts later this morning.

See you tomorrow.

Ed Steer

Tue, 26 May 2015 04:10:00 +0000