<![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[Lawrence Williams: Have Gold and Silver Really Bottomed This Time?]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-have-gold-and-silver-really-bottomed-this-time/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-have-gold-and-silver-really-bottomed-this-time/#When:06:07:00Z "My main concern is still the Commercial net short positions"

¤ Yesterday In Gold & Silver

Every attempt by gold to break above the $1,200 spot price mark during the Wednesday trading session was quickly sold off---and even the sharp rally after the FOMC meeting wasn't allowed to infringe on that price point.  After that attempt, the price got sold down to its low of the day, which came a minute or so after 3:00 p.m. EST in electronic trading.  The price rallied a bit after that, but still closed down on the day.

The high and low ticks were reported by the CME Group as $1,203.10 and $1,182.00 in the February contract.

Gold closed in New York on Wednesday at $1,188.90 spot, down $6.10 from Tuesday's close.  Volume, net of December and January, was 180,000 contracts.

It was more or less the same type of price activity in silver as well, but its attempt to break above the $16 spot price mark on the FOMC news wasn't allowed to get anywhere, either---and silver got sold down to just above Tuesday's closing price.

The high and low ticks were recorded as $16.06 and $15.615 in the March contract.

Silver was closed at $15.75 spot, up 3 whole cents from Tuesday.  Volume, net of December and January, was an even 50,000 contracts.

Platinum hugged the $1,200 spot price mark for most of the Wednesday trading session, before succumbing to the same post-FOMC meeting selling pressure that gold and silver went through.  Platinum closed at $1,186 spot, down 6 bucks from Tuesday.

Palladium rallied to its high of the day around 10 a.m. Zurich time---and then it gold sold down to its low just before lunch in New York.  It recovered a few dollars from there---and the FOMC news barely affected this metal.  Palladium was closed down 4 dollars on the day at $776 spot.

The dollar index closed late on Tuesday afternoon at 87.97---and never looked back in what was one of its most volatile trading sessions in my memory.  After initially selling off at 2 p.m. EST on the FOMC news, there was obviously someone there to run the dollar index up, as it closed at 89.075---up an eye-watering 107 basis points.

And while I'm at it, here's the 6-month intraday.

The gold stocks gapped up a bit at the open---and then proceeded to chop higher in a very wide range.  The HUI came to close to finishing on its high tick---up 5.27% on the day.

The silver equities opened down slightly, but finally broke into positive territory to stay shortly before 11 a.m. EST.  But they didn't do that with much conviction---and they chopped sideways until a late-day rally began shortly after 3 p.m. that took the shares up to their highs of the day---and that's where they closed, as Nick Laird's Intraday Silver Sentiment Index finished up 3.70%.

The CME Daily Delivery Report was a bust, as no gold or silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The only metal posted for delivery was 35 copper contracts.

The CME Preliminary Report for the Wednesday trading session showed that December gold open interest declined by 6 contracts, leaving the December o.i. balance at 765 contracts.  Glancing at the silver numbers, December open interest declined by 79 contracts, most of which was the 72 deliveries posted for today that were reported in yesterday's column.  The December o.i. in silver is now down to 101 contracts.

There were no reported changes in GLD yesterday---but there was a big withdrawal from SLV, as an authorized participant took out 2,011,401 troy ounces.

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

Over at the COMEX-approved depositories on Tuesday, there was 20,736 troy ounces of gold reported received, but only 908 troy ounces shipped out.  The link to that activity is here.  In silver, only 963 troy ounces were received---and only 151,592 ounces were shipped out the door.  The link to that activity is here.

I have a decent number of stories again today, so I hope you find some in the list below that you like.  A lot of these news items have to do with Russia, oil, the U.S. dollar, etc---and with Putin's press conference at noon Moscow time today [4 a.m. EST this morning]---some, or all, what's in these stories may no longer hold true.

¤ Critical Reads

Meet your newest legislator -- Citigroup

Citigroup is the Wall Street mega-bank that forced the repeal of the Glass-Steagall Act in 1999; blew itself up as a result of the repeal in 2008; was propped back up with the largest taxpayer bailout in the history of the world even though it was insolvent and didn't qualify for a bailout; has now written its own legislation to deregulate itself; got the president of the United States to lobby for its passage; and received an up vote from both houses of Congress in less than a week.

And there is one more thing you should know at the outset about Citigroup: It didn't just have a hand in bringing the country to its knees in 2008; it was a key participant in the 1929 collapse under the moniker National City Bank. Both the U.S. Senate's investigation of the collapse of the financial system in 1929 and the Financial Crisis Inquiry Commission that investigated the 2008 collapse cited this bank as a key culprit.

The FCIC wrote:  “…we do not accept the view that regulators lacked the power to protect the financial system. They had ample power in many arenas and they chose not to use it. To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup’s excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not…Too often, they lacked the political will – in a political and ideological environment that constrained it – as well as the fortitude to critically challenge the institutions and the entire system they were entrusted to oversee.

This longish, but very interesting commentary appeared on the wallstreetonparade.com Internet site on Tuesday---and I found it in a GATA release yesterday.

Jim Rickards: Fed Will Implement QE4 in Early 2016

On today’s “The Roundup,” James Rickards, author of “Currency Wars,” Bloomberg's Trish Regan, Lisa Abramowicz and Douglas Lavanture break down some of the day’s top market stories on “Street Smart.”  The most interesting part is in the first 5:20 minutes---and you can skip the rest if you wish to.  I thank Harold Jacobsen for sending this.

WTI Crude Spikes Over $59, Up 9% From Lows: Biggest Intraday Swing Since April 2009

Lifting WTI over $59 and Brent over $63. In fact, the $9 surge from the lows is the biggest move in crude since April 2009!

As Bloomberg reports, Russia Government Supported Ruble Ahead of Putin Conference.

"They want to reduce volatility and strengthen the ruble, and they are preparing the ground for Putin’s speech tomorrow,” Per Hammarlund, the chief emerging- markets strategist at Skandinaviska Enskilda Banken AB, says by e-mail today.

“It’s the ruble’s ‘P-Day.’”

President Vladimir Putin will hold an annual media conference tomorrow.

The media conference begins at noon Moscow time on Thursday, which is 4 a.m. EST this morning in New York, so it will be over by the time that North America wakes up today.  This Zero Hedge story, with some excellent charts, appeared on their website at 12:02 p.m. EST on Wednesday---and I thank Dan Lazicki for sharing it with us.

British PM Cameron: Russia not fit to be part of international financial system

The combined effect produced by Western sanctions and low oil prices proves that there’s no place for Russia in the international financial system, believes British prime minister David Cameron, urging for more pressure on Moscow.

“We should stand up very firmly against the Russian aggression that’s taking place,” Cameron said before the Parliament on Wednesday.

The PM reminded that it’s the U.K., which “led the way in Europe in making sure there were sanctions” imposed against Russia over its 'annexation' of Crimea in March and Moscow’s alleged involvement in the Ukrainian crisis.

“And what the combination of the lower oil price and the sanctions are showing that I think it isn’t possible for Russia to be part of the international financial system, but try and opt out of the rules-based international legal system,” Cameron said.

Can you believe this guy?  How does a leader of a country get away with saying crap like this?  This article was posted on the Russia Today website at ten minutes to midnight on Wednesday evening Moscow time, which was 3:50 p.m. in New York.  I thank Roy Stephens for his first contribution to today's column.

Russians training on Mistral warship ‘to leave France’

Some 400 Russian sailors training on a Mistral-class warship France controversially built for their navy will be returning home for an unspecified amount of time, the ship’s French builder has said.

"I can confirm that the Russian sailors will return (to Russia) before the end of year," a spokesman for shipbuilder DCNS told AFP news agency on Wednesday.

The spokesman did not give a date for the sailors' departure and could not say whether they would return to the port city of Saint-Nazaire, where the ship was built.

The sailors have been training since June on board the “Vladivostok”, one of two Mistral-class helicopter carriers destined for the Russian navy according to the terms of a €1.2 billion ($1.58 billion) deal signed in 2011.

This news item showed up on the france24.com Internet site yesterday sometime---and I thank South African reader B.V. for sending it our way.

Russia Tries Emergency Steps for Second Day to Stem Ruble Plunge

Russian authorities eased accounting rules to curb banks’ need for dollars, seeking to ease concern the ruble’s plunge will lead to a full-blown financial crisis.

The ruble and stocks rallied after the Bank of Russia announced the measures. They came a day after the central bank’s 1 a.m. interest-rate increase and a free-fall of as much as 19 percent in the currency, prompting speculation of a potential meltdown in emerging markets.

The package of measures allows banks to use the third-quarter exchange rate in valuing risk-weighted assets and imposes a moratorium on mark-to-market accounting. Russian companies face about $20.3 billion in non-ruble loan and debt repayments before the end of March, according to data compiled by Bloomberg. The ruble has dived 35 percent this quarter.

“The most important measure is this use of third-quarter valuation for risk-weighted assets,” Natalia Berezina, banking analyst at UralSib Capital, said by phone. “This is a big boost as some banks would fail to meet central bank regulatory capital ratios at their current levels.”

This Bloomberg article, filed from Moscow, put in an appearance on their website at 10:02 a.m. Denver time yesterday morning---and I thank reader Howard Wiener for finding it for us.

Jim Rickards: Ruble Crisis -- Is Russia's Economy in a Tailspin?

James Rickards, author of "Currency Wars," UBS Wealth Management's Jorge Mariscal and Bloomberg economist Carl Riccadonna discuss Russia's efforts to stem the ruble crisis. They speak with Bloomberg's Trish Regan on "Street Smart."

This 6:47 minute Bloomberg video clip from Tuesday falls into the absolute must watch category---and it's another offering from Harold Jacobsen.

We Are Headed For a Major Dis-location and It Revolves Around the Dollar

The United States declared economic war on Russia. It is hard to pinpoint the why of the matter but in this author’s opinion it always comes back to U.S. dollar dominance. Russia has made no secret of its disdain for the global pricing mechanism of oil. The chart below shows what matters in the pricing of oil and it has zero to do with shale miracles or over supply.

It is the dollar and only the dollar that matters in the pricing of oil with an exception being an act of nature.  The West has attacked the currency of a sovereign nation for UNECONOMIC reasons.

Russian debt to GDP is roughly 14%. Their debt to GDP is pristine. Japan’s is 227%, Greece 175%, Italy 132%, and the U.S. 105%. Now can someone kindly explain why a currency would implode like the Ruble when their financial condition relative to the West and Japan looks like a Ferrari among a bunch of Ford Pintos?

This guest post appeared under Koos Jansen's name over at the bullionstar.com Internet site yesterday---and I'm breaking my own rule of posting an unaccredited source, because the author, whoever he is, has it exactly right.  It's certainly worth reading.

Russia's sinking economy becoming a global threat

Russia's suddenly escalating financial crisis risks spilling beyond its borders and endangering parts of the global economy.

With economies in Europe, Japan, China and Latin America already ailing, fresh threats have emerged from Russia's shriveled currency, its move to dramatically boost interest rates, the damage from plummeting oil prices and Western sanctions over Russia's action in Ukraine.

"Our deepest fear has been - and still is - that putting Mr. Putin in a `nothing-to-lose' situation removes any constraint he might have had against reneging on his foreign debt obligations, which Russian borrowers probably cannot pay off or service now," writes Carl Weinberg, chief economist at High Frequency Economics. Foreign lenders would have to brace for $670 billion in losses.

This possibility has sparked an investor retreat from Russia. But that pullback has also caused investors to flee other emerging market currencies that are deemed risky. They include Turkey, Brazil, South Africa and Indonesia, noted John Higgins, chief markets economist at Capital Economics.

Doug Noland will have a field day with all this in his Friday evening Credit Bubble Bulletin.  This AP story, filed from Washington, showed up on their Internet site at 5:27 p.m. EST on Tuesday afternoon---and I found it in yesterday's edition of the King Report.

Russia makes knock-off European cheese as embargo bites

The Camembert made near Moscow might look -- or even smell -- like the famous French fromage, but it's part of a booming knock-off market in Russia as stocks of banned European cheeses disappear.

Mozzarella made in the Russian region of Bryansk and Roquefort from Altai in Siberia are also part of the flourishing trade that has popped up since Russia decreed a food embargo in response to Western sanctions in the summer.

The names Roquefort and Mozzarella cannot be used in the European Union, and increasingly abroad, unless the products are made in a particular place or in a certain way.

However, since Soviet times, Russians have been swilling local Champagne and Cognac -- although both names are protected under E.U. rules -- without too much concern.

This interesting article showed up on the france24.com Internet site at 5:06 p.m. Europe time on their Wednesday afternoon---and it's another contribution from reader B.V.

Little cheer for Greece's government in first presidential ballot as Dimas draws 160 votes

The government garnered 160 votes in the first round of crucial presidential elections on Wednesday, performing slightly worse than anticipated and increasing speculation about snap polls.

In addition to the 155 coalition MPs, five independents backed the government’s candidate, former European commissioner Stavros Dimas. Another 135 voted “present” while five were absent. The result was far short of the 200 votes required in the first round, a target that the government is also certain to miss in next week’s second round. However, ahead of the critical third vote on December 29 when the threshold drops to 180, the government had hoped to gain between 161 and 165 in the first round in a bid to build momentum for the votes to come.

There were some surprises, including the decision by independent Panayiotis Melas to vote “present” rather than backing Dimas (Melas later suggested he might change his stance in the coming votes). Also two former MPs of neofascist Golden Dawn, Chrysovalantis Alexopoulos and Stathis Boukouras, who was released from prison earlier on Wednesday, did not turn up for the vote.

Meanwhile seven Golden Dawn lawmakers were granted day release from Korydallos Prison to attend the vote. They were subdued for the most part despite fears of upheaval.

You couldn't make this stuff up.  This news item appeared on the ekathimerini.com Internet site at 8:53 p.m. Europe time last night---and my thanks go out to Harry Grant for bringing it to our attention.

China Prepares to Bailout Russia?

Earlier this evening China's State Administration of Foreign Exchange's (SAFE) Wang Yungui noted "the impact of the Russian Ruble depreciation was unclear yet, and, as Bloomberg reported, "SAFE is closely watching Ruble's depreciation and encouraging companies to hedge ruble risks."

His comments also echoed the ongoing FX reform agenda aimed at increasing Yuan flexibility which The South China Morning Post then hinted in a story entitled "Russia may seek China help to deal with crisis," which which noted that Russia could fall back on its 150 billion yuan ($24 billion) currency swap agreement with China if the ruble continues to plunge, that was signed in October. Furthermore, two bankers close to the PBOC reportedly said the swap-line was meant to reduce the role of the U.S. dollar if China and Russia need to help each other overcome a liquidity squeeze.

This Zero Hedge article showed up on their website at 11:17 p.m. EST late last night---and I thank Casey Research's own Bud Conrad for passing it around.

Yuan Has Real Shot at IMF Blessing on Reserve Status

For the first time, China has a real shot at getting the International Monetary Fund to endorse the yuan as a global reserve currency alongside the dollar and euro.

In late 2015, the IMF will conduct its next twice-a-decade review of the basket of currencies its members can count toward their official reserves. Including the yuan in this so-called Special Drawing Rights system would allow the IMF to recognize the ascent of the world’s second-biggest economy while aiding China’s attempts to diminish the dollar’s dominance in global trade and finance.

China would need to satisfy the Washington-based lender’s economic benchmarks and get the support of most of the other 187 member countries. The Asian nation is likely to pass both tests, said Eswar Prasad, who until 2006 worked at the IMF, including spells as heads of its financial studies and China divisions.

This very interesting Bloomberg article showed up on their website a week ago---and it's worth reading.

Strange rock containing 30,000 diamonds baffles scientists

When Russian miners pulled a strange red and green stone out of the ground, they immediately knew it was different to the thousands of tons of ore they process every day.

In fact, what workers at Alrosa's Udachnaya diamond mine had unearthed was a 30mm rock that contained 30,000 diamonds - a concentration 1m times higher than normal.

However, despite the rare find the company donated the rock to the Russian Academy of Sciences, as the diamonds are so small that they cannot be used as gems.

After scanning the rock with X-rays, scientists found that the diamonds inside measure just 1mm and are octahedral in shape - similar to two pyramids stuck together at the base. The red and green colouring comes from larger crystals of garnet, olivine and pyroxene.

This interesting news item appeared on the telegraph.co.uk Internet site at 5:20 p.m. GMT yesterday afternoon---and it's the final offering of the day from South African reader B.V.

The Gold Chronicles: Dec 9, 2014 Interview with Jim Rickards

This 49:17 minute audio interview appeared on the physicalgoldfund.com Internet site on Tuesday sometime---and it's the final contribution of the day from Harold Jacobsen.  There's no transcript---and I must admit that I haven't had time to listen to it all, but what I have heard makes it worth your while, although some of what he says, you've certainly heard before.

Lawrence Williams: Have gold and silver really bottomed this time?

At the recent Mines & Money conference and exhibition In London there was a perhaps surprisingly upbeat feel given the poor performance of metals prices over the preceding two to three years.

While this optimistic mood seemed to apply to precious and base metals producers alike, as is the norm nowadays it was the gold companies which were looking for the biggest upside. Perhaps this was because those that can nowadays afford to participate in an event like this – it is expensive to exhibit and to attend – are those who are going to survive in the current price environment come what may. But perhaps even more prevalent was the perceived view that things were at last truly bumping along the bottom and that the only way forward was up.

There are a lot of factors supporting this latter viewpoint, but it’s probably just as well for the bulls out there not to get too carried away as many of these bullish factors have been around before and still prices have continued to be driven down. But this time perhaps the optimists do have a point.

On gold and silver demand, this appears to be riding high. Chinese Q4 demand as represented by Shanghai Gold Exchange withdrawals has been just as strong as it was in the 2013 record year. True demand had slipped pretty badly in Q2 and Q3 compared with a year earlier, but it has staged a huge pick up since the end of September. But perhaps even more significant has been India’s return to the gold buying spree with November gold imports officially put at 150 tonnes, although some assessments had even suggested it might have been as high as 200 tonnes.

This commentary by Lawrie, which was posted on the mineweb.com Internet site on Wednesday, is certainly worth reading--and I thank him for sliding it into my in-box early yesterday morning.

¤ The Funnies

¤ The Wrap

A standout feature to the gold and silver market on the COMEX has always been the concentrated short position of the 4 and 8 largest traders which are invariably in the commercial category. The concentrated short position is more pronounced and manipulative in silver, but both markets are characterized by the fact that the 8 largest shorts in each market usually comprise a larger net short position than the total commercial net short position. In other words, if the 8 largest shorts in COMEX silver and gold didn’t exist, there would be no total commercial net short position at all – there would be no headline number as we know it. Stated differently, without the 8 largest shorts in COMEX gold and silver, there would be a commercial net long position in each market.

What’s interesting in COMEX gold (as I remarked about last week) is that the 8 largest shorts have not added to their dominant short position either this week or over the past 4 weeks even as the total commercial net short position has grown by 27,220 contracts and 66,600 contracts respectively. In fact, despite the pronounced increase in the headline number, the concentrated short position of the eight largest traders is lower than it has been in 4 or 5 years or longer. I admit that this could be a temporary aberration and the big 8 in gold may resume shorting gold on higher prices, but usually all the commercial categories trade in unison and if the new pattern of commercial discord is more than temporary, it might signal change is afoot. - Silver analyst Ted Butler:  13 December 2014

The lack of price action around the FOMC news was a bit of a surprise, but it is what it is---and I was quite amazed to see that the powers-that-be managed to keep gold under the $1,200 spot price mark, all things considered in the world today.  And, with the exception of silver, the other precious metals were all closed below their Tuesday closing prices in new York as well.

Here are the 6-month charts for all four precious metals, along with crude oil.  Just eye-balling the charts, you can see from the RSI trace that WTIC is grossly oversold---and none of the four precious metals are anywhere near that condition.

I was happy to the precious metals equities do well yesterday---in spite of the lousy price action of the underlying metals.  But with the counterintuitive price action that we've seen so much of in these shares lately, I'm not prepared to read too much into yesterday's positive closes.

I guess my main concern is still the Commercial net short positions in both gold and silver.  Even though we've certainly had improvement after Monday and Tuesday's price action, I doubt very much from looking at the charts that we're done to the downside, although I'll reserve judgement on that until I see tomorrow's Commitment of Traders Report.

As I write this paragraph, the London open is about twenty-five minutes away.  All four precious metals rallied starting right at the 6 p.m. EST New York open yesterday evening but, once again, gold wasn't allowed to get far above $1,200 before getting swatted down---and silver has been hugging the $16 spot price for about the past five hours.  Platinum is up $19---and palladium is up $9 bucks.  Net gold volume is just under 20,000 contracts---and silver's net volume is around 6,700 contracts.  The dollar index, which had been down 5 basis points at one time, has really soared---and is now up 23 basis points in the last half hour or so.

And as I hit the 'send' button on today's column at 5:30 a.m. EST, I see that all four precious metals have rallied starting about twenty minutes ago, which may have been an early London a.m. gold fix. Gold has now blasted up to $1,213 spot---and silver is at $16.195. Gold volume is now over 34,000 contracts---and climbing rapidly---as is silver's volume, which is just north of 10,000 contracts. Platinum and palladium are on the rise again as well.  The dollar spike I reported on earlier, has now been whittled down to a 7 basis point loss.  Crude oil is up $1.22.

I have no idea as to what might happen for the remainder of the Thursday session, but considering the price action I can see at the moment, nothing will surprise me when I check the charts after I roll out of bed later this morning.

See you tomorrow.

Ed Steer

]]>
Thu, 18 Dec 2014 06:07:00 +0000
<![CDATA[U.S. Gold Output Down By 7 Percent Year-to-Date]]> http://www.caseyresearch.com/gsd/edition/u.s.-gold-output-down-by-7-percent-year-to-date/ http://www.caseyresearch.com/gsd/edition/u.s.-gold-output-down-by-7-percent-year-to-date/#When:06:21:00Z "All four precious metals wanted to do their versions of a NASA space launch"

¤ Yesterday In Gold & Silver

The gold price began to rally the moment that trading began in New York on their Monday evening, but barely got a sniff of the $1,200 spot before getting capped---and then chopped sideways within a five dollar price range until about 8:30 a.m. GMT in London.  Then things got a big friskier---and once the noon silver fix was in, gold blasted higher like a homesick angel.  The HFT boyz and their algorithms were there within minutes to cap the rally---and then they really went to town once the London p.m. gold fix was in---and by the time they were done forty minutes later, they not only had the price back below $1,200---but also below Monday's closing price in New York as well.  The price bounced back, but got capped around noon EST---and it chopped quietly sideways with very light volume into the 5:15 p.m. electronic close.

The high and low ticks were reported by the CME Group as $1,223.90 and $1,187.80 in the February contract.

Gold closed in New York yesterday afternoon at $1,195.00 spot, up $1.50 on the day.  Volume, net of December and January, was huge at 250,000 contracts.

Here's Brad Robertson's 5-minute gold tick chart showing just how busy a day it was---starting at 2 p.m. MST.  Don't forget to add two hours for EST---and the 'click to enlarge' feature is very useful here.

The price path in silver was similar, as were all the inflection points, so I shan't repeat myself.  The high and low price ticks were recorded as $16.665 and $15.54 in the March contract.

Silver finished the Monday trading session in New York at $15.715 spot, down another 47 cents from Monday's close.  Volume, net of the December and January was very close to 80,000 contracts.

Platinum also rallied at 6 p.m. on Monday evening and, like gold and silver, wasn't allowed to get very far.  A rally began at noon in Zurich, hit its high tick at the London silver fix---and that, as they say, was that---as platinum got sold down 32 bucks from its high.  A buyer at the $1,188 spot mark showed up at the COMEX close---and that's as low as 'da boyz' could get the price.  From there it rallied a few dollars into the close, finishing the day at $1,192 spot, down 7 bucks from Monday.

The palladium price chart is a mini version of the platinum chart---with the high and low coming at the same time.  Palladium was closed down 16 bucks on the day at $780 spot.

The dollar index closed late on Monday afternoon in New York at 88.43---and chopped quietly lower until London opened on their Tuesday morning.  By minutes before 8 a.m. EST five hours later, the index was down to its 87.67 low tick before begin rescued.  The last gasp of the counter-trend rally after that came around 2:35 p.m. EST---and the 88.13 level---and from there it chopped quietly lower into the close, finishing the day at 87.97---down 46 basis points from Monday.

The gold stocks gapped up a bit over 2 percent at the open---and chopped lower in a broad range for the remainder of the New York trading session.  They closed just off their low tick, as the HUI finished down 1.81%---its fifth losing session in a row.

The silver equities gapped down at the open, but rallied into positive territory by a bit almost immediately.  But that was the high for the day---and by 10:45 a.m. EST, they were down a bit over 4 percent.  They rallied strongly for the next hour, but once they rolled over the second time, there was no looking back---and Nick Laird's Intraday Silver Sentiment Index closed down 3.96%.

The CME Daily Delivery Report showed that 7 gold and 72 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  The short/issuer of note was Deutsche Bank with 68 contracts.  HSBC USA stopped 60 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that December open interest in gold declined by 30 contracts---and is now down to 771 contracts still open.  Silver's December o.i. declined by another 14 contracts---and currently sits at 180 contracts, from which you must subtract the 72 contracts mentioned in the preceding paragraph to get a true and current picture of December silver o.i. at the moment.

There was another withdrawal from GLD yesterday.  This time an authorized participant took out 57,643 troy ounces---and as of 10:44 p.m. EST yesterday evening, there were no reported changes in SLV.

I continue to be amazed that the U.S. Mint is still producing 2014 silver eagles---as they reported selling another 151,000 of them yesterday.  But what is equally amazing, as I've been alluding to for the last week or so, is the fact the mint hasn't sold a gold ounce of anything, either eagle or buffalo, in the last two weeks.  Not one.  As Ted Butler pointed out yesterday, normally sales are brisk this time of year because of Christmas.

And as Ted pointed out in his weekly review on Saturday, the mint hasn't sold any platinum eagles for more than two months now.

It was a very quiet day in both gold and silver at the COMEX-approved depositories on Monday.  Only 700 ounces of gold was reported received---and nothing shipped out.  And in silver, nothing was reported received---and only 29,825 troy ounces were shipped out the door.

Here's a chart that Nick passed around last evening---and it's an update on the 30-day Russian Rouble/Gold situation that was posted in this space yesterday.  As you can tell, it was a wild day for gold priced in roubles on Tuesday.

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

¤ Critical Reads

The MSM Misleads Again: Housing Starts Didn’t ‘Weaken’ A Tad In November, They Plunged

Don’t believe everything you read in the mainstream media. Especially don’t believe anything in the financial news media until you’ve looked at the data yourself.  It’s no wonder investors are so often caught flatfooted in the markets. Financial “journalists” feed their readers and viewers a constant stream of misinformation and bad data. Financial reporters are so atrocious at serving their audience I have to believe that they are, wittingly or unwittingly, part of a deliberate and elaborate campaign of disinformation… unless you believe in Coincidence Theory.

Housing starts collapsed in November. They weren’t good, they weren’t even so-so as media reports intimated. The seasonally adjusted annualized number which the paid flacks report is absolute nonsense. It’s fiction.

Actual, not seasonally adjusted single family starts were down by 10,400 units in November to 47,700 units. November is always a down month but this was the worst November performance since 2008, in the teeth of the housing crash.  On a year to year basis starts were down by 6.3%. It’s absurd that you can’t find that fact anywhere near the mainstream media headlines. In fact, Bloomberg outright lied about it.

This commentary by Lee Adler appeared on David Stockman's website yesterday sometime---and today's first story is courtesy of Roy Stephens.

Federal Reserve Reinflating Real Estate Bubble - Mike Maloney

This 5:51 minute video clip with Mike Maloney put in an appearance on the youtube.com Internet site yesterday sometime.  I thank Dan Rubock for sending it my way.

Oil plunge, Russia crisis challenge U.S. Federal Reserve

The relentless fall in oil prices and Russia's plunging currency pose big challenges as the US Federal Reserve opens a two-day meeting Tuesday.

The Fed's last meeting of 2014 was expected to confirm its path toward monetary policy normalization after holding its base interest rate at the zero level for six years to bring the country out of the Great Recession.

But stagnating economies in Europe and Japan and slowing growth in China, coupled with the threats to markets and the financial system from the oil price and Russian crises, could force the US central bank to weigh a pause.

While the world's most powerful central bank is unlikely to make any immediate changes to its interest rate and liquidity stance, it could signal via comments and economic forecasts a readiness to stick to that stance for longer than expected to help the global economy through a rough period.

This AFP article, filed from Washington, appeared on the france24.com Internet site at 5:16 p.m. EST on Tuesday---and it's the first offering of the day from South African reader B.V.

Obama will sign Russia sanctions bill despite reservations

The bill - which primarily sanctions Russia's defence industries - passed with overwhelming support in Congress.

Spokesman Josh Earnest said the bill sent "a confusing message to our allies" but Mr Obama will sign it because it "preserves flexibility".

Russia's rouble has lost half its value this year amid lower oil prices and Western sanctions.

The currency went into free-fall in trading on Tuesday.

The bill would also give Mr Obama the authority to provide lethal and non-lethal military assistance to Ukraine, but not require him to do so.

This short article appeared on the bbc.com Internet site at 4:39 p.m. EST yesterday afternoon---and it's the second offering of the day from Roy Stephens.

T. Boone Pickens on where oil prices will settle

This 6:08 minute video interview from Fox Business was posted on the finance.yahoo.com Internet site at 8:41 p.m. EST on Monday evening---and I thank reader William Gebhardt for sending it along.

$1 Trillion in Global CapEx at "Unambiguous" Risk as a Result of Crude Crash

Just like with the Mohammed Islam story, the religious belief by the cheerleading crew that the crashing price of oil is so "unambiguously, unquestionably, indisputably" good for the U.S. is so taken for granted, that nobody actually checked the facts.  So here is one such attempt by the Financial Times, which writes that "almost $1 trillion of spending on future oil projects is at risk as a result of the plunge in crude to $60."

The price plunge has shaken the energy industry, throwing some of the majors’ most ambitious plans into doubt and pummeling oil company shares. Projects in challenging frontier regions like the deep waters of the Gulf of Mexico are predicated on high oil prices and may not be economic with oil at $60 a barrel — the level Brent was trading at on Monday afternoon.

Goldman has examined 400 oil and gas fields around the world, many of which are still awaiting a final investment decision. Its analysis, based on a $70 oil price, shows that fields representing 2.3m b/d of output by 2020 and awaiting a green light have now become uneconomic. That figure rises to 7.5m b/d of production by 2025. The analysis excludes U.S. shale.

The bank shows that companies will need to cut costs by up to 30 per cent — for example by forcing suppliers to take steep price cuts — to make these projects profitable at $70 a barrel.

This Zero Hedge article appeared on their Internet site at 10:58 a.m. EST on Tuesday---and it's the first contribution of the day from Manitoba reader U.M.

Jim Rickards: Same Currency War, New Battle Phase

The current global currency war started in 2010. My book, Currency Wars, came out a little bit after that. One of the points that I made in the book is that the world is not always in a currency war. But when we are, they can last for a very long time. They can last for five, 10 or 15 years, sometimes longer.

And so it’s really not a surprise that here we are in 2014 talking about currency wars because it’s the same on that’s been going on. A lot of what you read or see on the TV is after some policy move by, let’s say, Japan to weaken the yen. And reporters will say: “Hey, there’s a currency war going on,” or “There’s a new currency war.”

I roll my eyes a little bit and go: “No, this is the same one, the same currency war; it’s just a new phase or new battle.”

So yes, it is going on. And it does have a lot of explanatory power. It’s one of the most important things going on in economics today. I think a year from now, I’ll be writing to you and we’ll still be talking about it.

This commentary by Jim appeared on the dailyreckoning.com Internet site on Monday sometime---and it's courtesy of Harold Jacobsen.

Venezuela—The Sequel

The government fixing of prices in grocery stores has caused unnaturally low prices on many staple goods. A predictable result has been that Venezuelans have been cleaning out the shelves at supermarkets and taking the goods to neighbouring Colombia for resale. (Colombia maintains free-market pricing, and as such, a profit can be made by Venezuelans.)

Typically, such staples as meat, grains, and toilet paper are bought immediately upon delivery to the supermarkets in Venezuela. Shortages are so significant that people frequently queue at supermarkets in shifts, as the waits are so long to receive goods.

This movie is, of course, ongoing. Historically, however, food shortages tend to occur in the latter stages of a decline, just prior to collapse of the system. (No fear is more gripping in the minds of a population than the fear of starvation, and already, in the last year, food prices have nearly doubled in Venezuela.)

This commentary by Jeff Thomas appeared on the internationalman.com Internet site on Monday---and I thank their senior editor Nick Giambruno for sending it along yesterday.

German Private Sector Activity Hits 18 Month Low: Report

The German private sector, considered the backbone of the country's economy, expanded at the slowest pace in 18 months in December, increasing the risk that growth will slow further at the beginning of 2015, said a report released by the Markit Economics research group Tuesday.

"Today's flash PMI [Purchasing Managers' Index for manufacturing and services] results showed that private sector output growth in Germany slowed further in December. The pace of expansion was in fact the weakest in one-and-a-half years and well below levels seen earlier in the year, when GDP grew 0.8%," the author of the study Oliver Kolodseike said in comments to the report.

Kolodseike suggested that the reduction of oil prices and energy costs gave German private companies a chance to lower prices, but do not help the firms attract new customers.

Overall German company performance has also been affected by the recent train operator and airline pilot strikes in Germany in late October and November of this year.

This short business news item showed up on the sputniknews.com Internet site at 6:58 p.m. Moscow time on their Tuesday afternoon, which was 8:58 a.m. in New York.  I thank South African reader B.V. for sharing it with us.

Chevron suspends Ukrainian shale efforts

U.S. energy company Chevron said it was still looking for opportunities in Ukraine, but opted to shelve a contract to tap the country's shale gas potential.

In October, members of a regional council in Ukraine approved a draft production agreement for shale natural gas with Chevron. The deal was formalized in November.

Ukraine is one of the Eastern European countries thought to be rich in shale natural gas and the government estimates there may be enough natural gas in shale plays to meet the country's needs without imports.

Peter Clark, country manager for Chevron, told the Kiev Post the company terminated the production agreement because of legislative hurdles in Ukraine.

This very interesting UPI story showed up on their website at 8:01 a.m. EST yesterday---and I thank Roy Stephens for sharing it with us.

The Real Reason Shell Halted Its Ukrainian Shale Operations

Royal Dutch Shell has blamed air strikes by the government in Kiev against its own citizens in southern Ukraine as the reason it decided to declare a halt to its shale oil projects in the troubled region.

In reality, the truth may be closer to the fact that company is disappointed with the economic viability of what it once thought was a large shale deposit and is looking for a way out.

After a series of dramatic statements and the signing of a $410-million letter of intent, a veil of uncertainty is being drawn around the myth of Ukrainian shale.

According to a recent statement by the former head of Royal Dutch Shell, Peter Voser, “the company is now analyzing its business in shale,” which, translated from the streamlined language of press releases, means: The project is not earning its keep and we need to do something (Read: write off expenses).

This very interesting article [datelined 19 June 2014] put in an appearance on the oilprice.com Internet site---and it's definitely worth reading in light of the UPI/Chevron article posted above it.  I thank Brad Robertson for digging this up on our behalf.

Putin Discusses Donbas Situation With Merkel, Hollande, Poroshenko: Kremlin

Russian President Vladimir Putin has held a telephone conversation with German Chancellor Angela Merkel, French President Francois Hollande and Ukrainian President Petro Poroshenko, discussing the situation in Donbas (Ukraine's southeastern regions), the Kremlin's press service announced Wednesday.

The Kremlin's statement stressed "the importance of a swift meeting of the Contact Group with the aim of implementing the Minsk agreements and facilitating dialogue between Kiev and [Ukraine's] southeast".

"The issues of the economic recovery of the affected regions [Donbas] and the provision of humanitarian and social support to the [local] population have [also] been discussed," the statement added.

This news item, filed from Moscow, showed up on the sputniknews.com website at 2:02 a.m. Moscow time on their Wednesday morning---and it's another contribution from Roy Stephens.

THE INTERVIEW: 'We will survive sanctions,’ says Russian foreign minister

“Russia will not only survive but will come out much stronger,” he said, brushing aside concerns about the country's crisis-hit economy. “We have been in much worse situations in our history and every time we have got out of our fix much stronger.”

Lavrov pulled no punches over his contempt for Western-imposed sanctions, levied against Russia for its alleged meddling in a pro-Moscow insurgency in eastern Ukraine following the ouster of the pro-Kremlin president in February. 

He saved his most scathing comments for the E.U.: “Of course sanctions hurt, but I don’t believe the sanctions will help the European Union. The United States ordered the E.U. to impose sanctions and frankly we have overestimated the independence of the European Union [from the U.S.].”

“Sanctions are a sign of irritation, they are not the instrument of serious policies,” he added.

This must watch video interview, especially for any serious student of the New Great Game, showed up on the france24.com Internet site yesterday afternoon.  It runs for a surprising 25:15 minutes.  There is a transcript, but it's tiny.  It's another offering from reader B.V.

The Russian Ruble is Hereby Halted Until Further Notice

Earlier, we reported that various currency brokers such as FXCM and FxPro, would - as a result of the soaring liquidity in the USD/RUB pair - suspend trading in the Russian Ruble (while other merely hiked margins to ridiculous levels). It appears things have escalated again, and as FXCM just reported, instead of just politely advising clients not to open new USD/RUB position tomorrow, it has advised anyone long, or short, the USD/RUB that their positions will be forcibly shut in moments.

So for those curious why there appears to be a collapse in Ruble volatility in the past few hours which in turn has sent both stocks and crude soaring, the answer is simple: nobody is trading it!

And this is what happened following the post: as soon as all those short the RUB (long USD/RUB) realized they have to take profits, the USD/RUB tumbled some 500 pips (!) in the process sending stocks surging.

This must read news item, along with some excellent charts, appeared on the Zero Hedge website at 2:20 p.m. EST yesterday---and I thank 'David in California' for sending it our way.

George Friedman: Viewing Russia From the Inside

Last week I flew into Moscow, arriving at 4:30 p.m. on Dec. 8. It gets dark in Moscow around that time, and the sun doesn't rise until about 10 a.m. at this time of the year — the so-called Black Days versus White Nights. For anyone used to life closer to the equator, this is unsettling. It is the first sign that you are not only in a foreign country, which I am used to, but also in a foreign environment. Yet as we drove toward downtown Moscow, well over an hour away, the traffic, the road work, were all commonplace. Moscow has three airports, and we flew into the farthest one from downtown, Domodedovo — the primary international airport. There is endless renovation going on in Moscow, and while it holds up traffic, it indicates that prosperity continues, at least in the capital.

Our host met us and we quickly went to work getting a sense of each other and talking about the events of the day. He had spent a great deal of time in the United States and was far more familiar with the nuances of American life than I was with Russian. In that he was the perfect host, translating his country to me, always with the spin of a Russian patriot, which he surely was. We talked as we drove into Moscow, managing to dive deep into the subject.

From him, and from conversations with Russian experts on most of the regions of the world — students at the Institute of International Relations — and with a handful of what I took to be ordinary citizens (not employed by government agencies engaged in managing Russia's foreign and economic affairs), I gained a sense of Russia's concerns. The concerns are what you might expect. The emphasis and order of those concerns were not.

This commentary by Stratfor Chairman George Friedman appeared on their Internet site at 9:02 a.m. GMT yesterday---and it's definitely worth reading, especially for all serious students of the New Great Game.  It will take you 15 minutes to run through this, but it's more than worth it if you have the interest.  The first reader through the door with this yesterday was Roy Stephens.

Oil Trades Near 5-Year Low as Russia Matches OPEC Output Policy

Oil in New York traded near a five-year low as Russia reiterated that it will keep crude production steady next year, echoing OPEC’s strategy to refrain from curbing supply to tackle a global surplus.

Futures fell as much as 2.4 percent after sliding below $54 a barrel yesterday for the first time since May 2009. Output from Russia, the world’s largest crude producer, will be similar to this year’s 10.6 million barrels a day, according to Energy Minister Alexander Novak. Iran is said to be offering shipments to Asia at the deepest discount in at least 14 years, taking a cue from Saudi Arabia in cutting price differentials.

Oil has slumped 44 percent this year as a surge in shale drilling lifted U.S. output to the fastest pace in three decades amid slowing world demand growth. Leading members of the Organization of Petroleum Exporting Countries such as Saudi Arabia have resisted calls from smaller producers including Venezuela and Ecuador to reduce quotas to stem the price rout.

“OPEC won’t make a move unless the U.S. cuts its production first, and for now it looks like the game of chicken will most likely continue through next year,” Kang Yoo Jin, a commodities analyst at Woori Investment & Securities Co. in Seoul, said by phone. “As oil prices are slumping, it seems to be a strategic decision for producing countries including OPEC and Russia to keep their output levels unchanged.”

This Bloomberg story, filed from Seoul, South Korea on Wednesday morning, appeared on their website at 10:45 p.m. MST on Tuesday evening.  Marin Katusa passed it around the Casey Research crowd late last night.

Russia's Alternative to SWIFT Would Cause Big Problems for the West

The international financial system is based on the U.S. dollar. The greenback is both the world’s “reserve currency” — the one everyone wants to hold when things go bad — and the principal means of exchange. The vast majority of transactions between companies, countries and people are denominated in dollars.

As my investment-oriented colleagues regularly discuss on this page, the dollar’s dominance isn’t unchallenged. The Chinese yuan, in particular, has pretensions to become a second global currency, one so widely used that transactions unrelated to China could be conducted in yuan.

But there’s another challenge on the horizon … a new international interbank system that could create important opportunities — or chaos — for the world economy, depending on how the proverbial ball bounces.

This very interesting commentary showed up on the russia-insider.com Internet site yesterday---via The Sovereign Investor.  It's also courtesy of Roy Stephens.

Erdogan speech indicates deep rift with E.U.

Turkish leader Recep Tayyip Erdogan has told the EU to “mind its own business” on free press, marking an ever-deeper rift in relations.

He made the comments at a speech in the Tupras oil refinery outside Istanbul on Monday (15 December) after European officials criticised his latest arrests of opposition-linked journalists.

“They cry press freedom, but they [the arrests] have nothing to do with this … We have no concern about what the EU might say, whether the EU accepts us as members or not, we have no such concern. Please keep your wisdom to yourself”, he said.

“The EU should not intervene in acts taken by the police and judiciary against entities that jeopardise our national security. It should mind its own business”.

This news item, filed from Brussels, appeared on the euobserver.com Internet site at 8:43 a.m. on their Tuesday morning---and it's the final offering of the day from Roy Stephens, and I thank him on your behalf.

China’s Treasury Holdings Fall to Lowest Since February 2013

China’s holdings of U.S. Treasuries fell to a 20-month low in October, as yuan appreciation indicated less of an impetus to buy the government securities.

China held $1.25 trillion in U.S. debt as of October, a $13.6 billion drop from September, the Treasury Department said in a monthly report today. The nation remains the largest foreign holder, ahead of Japan, whose stockpile increased $0.6 billion to $1.22 trillion, reducing the gap between the two countries to the narrowest since September 2012.

The yuan rose 0.4 percent against the dollar in October as the government moves toward a market-determined exchange rate, part of efforts to expand the currency’s use worldwide. The less China intervenes to weaken its currency, the less it needs to buy securities such as Treasuries.

“The lack of growth in their Treasury portfolio has been happening throughout this year, so I tend to think it’s more of a structural trend that’s developing,” said Stanley Sun, an interest-rates strategy analyst at Nomura Securities International Inc. in New York. He said he expects “a grind lower rather than any sharp decline” in holdings.

This Bloomberg article, filed from Washington, was posted on their website at 3:53 p.m. Denver time on Monday afternoon---and I thank reader M.A. for bringing it to our attention.

Traders betting Russia's next move will be to sell gold

Russia’s surprise interest-rate increase failed to stop the plummeting ruble. The next weapon available to repair economic havoc caused by sanctions and falling oil prices: selling gold.

Russia holds about 1,169.5 metric tons of the precious metal, the central bank said last month. That’s about 10 percent of its foreign reserves, according to the London-based World Gold Council. The country added 150 tons this year through Nov. 18, central bank Governor Elvira Nabiullina told lawmakers. 

Russia’s cash pile has dropped to a five-year low as its central bank spent more than $80 billion trying to slow the ruble’s retreat. The currency’s collapse combined with more than a 40 percent tumble in oil prices this year is robbing Russia of the hard currency it needs in the face of sanctions imposed after President Vladimir Putin’s annexation of Crimea. A fall in gold prices signals that traders are betting that the country will tap its reserves.

I'll be amazed if Russia taps its gold reserves---and I expect an update with their November Central Bank gold purchases on Friday.  This Bloomberg story showed up on their website sometime yesterday afternoon Denver time, but was updated just before midnight.  It also carries another propaganda line about Russia's annexation of the Crimea.  I found it in a GATA release yesterday.

Commodity Trading Giant Exits Physical Gold Due to "Lack of Physical With a Documented Origin"

Back in March, otherwise very under-the-radar Swiss commodities trading giant Gunvor and the fifth largest oil trader in the world, made headlines in the press when one of its then-Russian owners, billionaire Gennady Timchenko (estimated net worth of $8.5 billion), sold his entire 44% stake in the company to his partner in the firm, Torbjorn Tonqvist, just a day before the U.S. revealed its first round of sanctions against individuals affiliated with the Putin regime. Timchenko was among them. As a result of the sale, however, Gunvor avoided falling on the U.S. sanctions list and a Treasury official said that "Gunvor Group Ltd. isn’t subject to automatic blocking from dealing with U.S. persons under Russian sanctions because co-founder Gennady Timchenko owns less than 50 percent of the company."

Since then the Geneva-based company rarely appeared in the media which is how the nondescript company liked it. Until last week, that is, when Bloomberg reported that the company was giving up trading physical precious metals, read gold, less than a year after the commodity house started a business dedicated to buying and selling gold. Gunvor is, or rather was, one of the few large commodity firms that handles precious metals.

But the biggest surprise in this story was the reason why Gunvor chose to discontinues its gold trading. Per Bloomberg, "executives decided to abandon the precious metals trading business partly because of difficulties in finding steady supplies of gold where the origin could be well documented, one of the people said."

I'm not sure what to make of this Zero Hedge/Bloomberg piece that appeared on their Internet site at 10:35 p.m. EST last night.  It's worth reading---and I thank reader 'David in California' for sending it along.

Gold hedging creeps back

Mining companies are set to increase their outstanding net forward gold sales by between 42 and 52 tonnes in 2014, the largest expansion of the global gold hedge book of any year since 1999, an industry report said on Tuesday.

In their quarterly Global Hedge Book Analysis, Société Générale and GFMS analysts at Thomson Reuters said although the global hedge book shrank by 6 tonnes in the third quarter and will contract further in the fourth, they still expect net hedging in the full year.

Increased hedging would theoretically be negative for gold prices, as forward sales add to supply as gold is leased and sold forward. But despite the recent price drop, mining companies are wary of a wholesale return to hedging, after they lost billions of dollars unwinding hedged positions in the mid 2000s.

No gold mining company will sell their production forward at these prices---and even if they did, these small amounts are not even close to being material.  This Reuters story, filed from London yesterday, is much ado about nothing.  I thank reader U.M. for bringing it to my attention---and now to yours.

Gold Imports ‘Phenomenal’ In India - 571 Percent Surge To 150 Tonnes in November

India's gold imports were over a staggering 150 tonnes in November and have seen a "phenomenal" rise in India according to India’s Trade Secretary, Rajeev Kher.

A few weeks ago we said that the death of the Indian gold market was greatly exaggerated. The latest gold import data out of India confirms this.

The import restrictions on gold that were imposed on Indians in August of 2013 were lifted at the end of last month. Despite the fact that the restrictions were still in place gold importation in November surged an incredible 571% relative to the same month last year at over 151.58 tonnes.

This was an increase of 38 percent from 109.55 tonnes a month earlier, trade ministry data showed on Tuesday.

261 tonnes of gold imports in two months for India is a huge amount---and along with what China's taking off the market, one has to wonder where all this gold is coming from.  This commentary on Indian gold imports by Mark O'Byrne appeared on the goldcore.com Internet site yesterday---and is worth your while.

India to weigh gold policy impact after jump in November imports

India will weigh the impact of last month's easing of gold import rules after inbound shipments jumped 38 percent in November to push its trade deficit to an 18-month high, Trade Secretary Rajeev Kher said on Tuesday.

In a surprise move, the world's second-biggest gold consumer scrapped a rule for traders to export 20 percent of all gold imports, belying expectations for tighter curbs instead.

After the change, gold imports surged to 151.58 tonnes in November, an increase of 38 percent from 109.55 tonnes a month earlier, trade ministry data showed on Tuesday.

This gold-related Reuters story, filed from Mumbai, was posted on their Internet site at 10:25 p.m IST on their Tuesday evening---and contains a lot of the same information that was in Mark's column posted above, but there is other information, so it's worth your while if you have the time.  I thank Manitoba reader U.M. for her final contribution in today's column.

Lower Barrick ore grades, Midas sale cuts into U.S. gold output by 7 percent Y.T.D.

U.S. gold mine production declined 7% in the first nine months of this year, the U.S. Geological Survey has reported.

The decline was partly attributed to lower production from Barrick Gold Corp. and Newmont Mining.

Barrick’s Cortez Mine in northern Nevada produced 21,600 kg (684,451 troy ounces) in the first nine months of this year for a 36% decline in output, which was attributed to a lower ore grade.

Production for Newmont’s Nevada operations during the same period also dropped 10% to 34,600 kg (1,112,407 oz) because of the sale of the Midas Mine and a development phase that will increase waste stripping and decrease mill throughput at several mines, said the USGS.

The production decreases were partially offset by Rio Tinto’s Bingham Canyon Mine with 7,060 kg (226,982 oz) in the first nine months of the year, a 70% increase over the same period of last year when the operation was still recovering from a massive landslide.

There are a lot of facts and figures in this news item that appeared on the mineweb.com Internet site yesterday---and it's definitely worth your while if you're into numbers.

¤ The Funnies

¤ The Wrap

Another physical silver related issue that remains overlooked is the deposit/withdrawal pattern of metal in the big silver ETF, SLV, the world’s single largest holding of metal. Despite the two best price weeks recently and on higher than normal volume, over that same time a significant amount of silver has been redeemed from the trust; more than 9 million oz. There’s no way of me knowing if the metal was physically shipped out of the London warehouses, or stayed in place as a result of a conversion of shares to physical metal ownership, a simple process for those who may be involved. In either event, the reduction in reported metal holdings in SLV is serious food for thought.

For one thing, the redemptions in SLV are completely counterintuitive to what normally occurs when prices rise and trading is heavy. Usually, net investment demand increases on strong buying and higher prices, necessitating the deposit of metal to correspond with the increase in new shares created by the investment demand. The best current example is in GLD, the big gold ETF.

While the redemption pattern in GLD has been pronounced over the past two years as investors sold on declining gold prices, there have been three straight days of metal deposits into GLD on the recent price strength and higher trading volume. In other words, the deposit pattern in GLD this week was completely normal; whereas the redemptions in SLV on the same or greater price strength and trading volume was as cockeyed as it gets. - Silver analyst Ted Butler: 13 December 2014

Yet none of the so-called 'precious metal analysts' anywhere on Planet Earth---lunatic fringe or otherwise---will talk about this dichotomy, let alone try to explain it if they do.  You have to ask yourself why this is.

It was a wild day where all four precious metals wanted to do their versions of a NASA space launch at the London silver fix, but JPMorgan et al---and their HFT buddies---were having none of it.  The charts say it all---so I shan't beat this to death any further here.  Even the most brain dead could see that yesterday's price action had zero to do with supply and demand---and everything to do with price management in the face of all the uncertainty going on at the moment.  I would also guess, as I pointed out in The Wrap yesterday, that there's a certain amount of illiquidity in the gold and silver futures markets at the moment as well.

Posted below are the 6-month charts for all four precious metals, plus WTIC.  Crude oil traded at a new low yesterday, but didn't close there.

Although gold didn't close at a new low for this engineered price move down, that certainly wasn't the case for the other three precious metals, as they got smoked for the second day in a row.

Yesterday was the cut-off for this Friday's Commitment of Traders Report---and pretty much all of yesterday's volume should be in it.

As I type this paragraph, the London open is fifteen minutes away.  As occurred on Monday, gold rallied a bit at the New York open on Tuesday evening, but the moment it got within spitting distance of the $1,200 mark once again, that was it---and it traded just under that price point for the remainder of the Far East session on their Wednesday.  At the moment, it's up 4 bucks.  Silver was up over 20 cents at one point---and it, too, has been trading quietly in the Far East and is still up 15 cents or so.  Platinum and palladium's rallies also ran out of gas after small gains---and both are up about 5 bucks at the moment.

Gold volume is a bit over 15,000 contracts, but silver's volume is already pretty decent at 6,300 contracts.  The dollar index is up 14 basis points.

Today the kiddies at the Fed say their thing, as the FOMC meeting ends today---and we'll find out how badly the precious metals get hit at 2 p.m. EST.  And if they do take off on whatever news is released, then I don't expect the rallies to be allowed to last for long.  I'd love to be spectacularly wrong about this, of course.

So we wait some more.

And as I send this out the door at 4:45 a.m. EST, I note that gold poked its nose above the $1,200 spot mark just before London opened---and promptly got sold down below that mark the second that it did open.  Silver is trading sideways, but still in positive territory---platinum is up 10 bucks---and palladium rallied until 10 a.m. in Zurich before getting sold down a few bucks, and is currently up 7 dollars at the moment. Gold volume is around 22,500 contracts, which isn't a lot---and silver's volume is now a bit over 8,000 contracts, which is quite a bit.  The dollar index is up 26 basis points from its close in New York late yesterday afternoon---and up 59 basis points from its 8 a.m. low in New York yesterday morning.  Crude oil is currently down another 74 cents a barrel.

All eyes should be on what happens at 2 p.m. EST today, even before Yellen opens her yap.  I'm not expecting good things, but you just never know.

Whatever happens, I'll have it for you in tomorrow's column---and I'll see you then.

Ed Steer

]]>
Wed, 17 Dec 2014 06:21:00 +0000
<![CDATA[Indian Gold Imports in November Close to 150 Tonnes]]> http://www.caseyresearch.com/gsd/edition/indian-gold-imports-in-november-close-to-150-tonnes/ http://www.caseyresearch.com/gsd/edition/indian-gold-imports-in-november-close-to-150-tonnes/#When:06:21:00Z "Everything was set up for an engineered price decline"

¤ Yesterday In Gold & Silver

After opening with a positive bias in New York at 6 p.m. on Sunday evening, the HFT boyz and their algorithms showed up at 9 a.m. Hong Kong time.  From there it traded flat before rallying a hair going into the London open.  Then it was all down hill until 8:30 a.m. EST in New York.  The subsequent rally ended at noon---and then JPMorgan et al had their way with the gold price for the remainder of the COMEX and electronic trading session.

The high and low ticks were recorded by the CME Group as $1,225.00 and $1,191.30 in the February contract.

Gold finished the Monday session in New York at $1,193.50 spot---down $28.30 from Friday's close.  Considering the price action, the associated volume wasn't as big as I would have expected---156,000 contracts, net of December and January.

Here's the 5-minute gold chart courtesy of Brad Robertson.  The charts starts at 2:00 a.m. MST, to which you have to add 2 hours for EST.  The lack of really big volume on the engineered price declines is very evident here.

The silver price wasn't spared by the HFT traders in Hong Kong trading, either---and after that, the price didn't do much of anything until noon in New York---and 'da boyz' really put the lumber to the price starting at 12:40 p.m. EST.  The bloodshed ended at exactly 3:30 p.m. in electronic trading.  After that it traded flat in the 5:15 p.m. close.

The high and lows recorded as $17.08 and $16.135 in the March contract.

Silver finished the day at $16.185 spot, down 85 cents from Friday's close.  Net volume was only 44,500 contracts.

The platinum chart was a mini version of the gold chart, with the high of the day coming just before Zurich opened on Monday morning.  After that it chopped lower, closing on its low tick of the day---$1,199 spot, which was down 26 bucks from Friday.

Palladium's rally attempt at the 6 p.m. EST open on Sunday evening didn't get far---and after that it chopped around the $810 mark until about 1:30 p.m. in Zurich---and down it went from there---probably with a little help.  Palladium closed at $796 spot---down $16 on the day---and almost on its low tick.

The dollar index finished the week last Friday at 88.335---and didn't do much on Monday.  It dipped as low as 88.19 about 3:20 p.m. Hong Kong time---and its 88.61 high came at 11 a.m. EST, which was the close of the precious metal markets in London on their Monday afternoon.  At that point it had a two hour long 30 plus point down/up dip---and then didn't do much after that.  The index finished the Monday session at 88.43---up 10 basis points.

The gold stocks opened down a bit, but then chopped around either side of unchanged until 12:20 p.m.---which was when the HFT boyz and their algorithms showed up.  Then the stock cratered---and didn't stop until 3:30 p.m.---and traded sideways from there into the close.  The HUI chart was painful to look at, as it closed down a whopping 7.01%.

The silver equities appeared to be trading on some other planet, because at one point they were up 4 percent.  Then 'da boyz' appeared shortly after noon EST---and even then the silver equities stayed in positive territory until they rolled over with a vengeance starting at 2 p.m. EST, with their low tick also coming at 3:30 p.m.  Nick Laird's Intraday Silver Sentiment Index closed down 'only' 4.33%.

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

The CME Preliminary Report for the Monday trading session showed that gold open interest for December declined to 803 contracts, down 78 contracts from Friday's report.  In silver, the December open interest is now down to 195 contracts, which was a drop of 188 contracts from last Friday.

There was a withdrawal from GLD yesterday.  This time an authorized participant took out 76,859 troy ounces.  And as of 8:31 p.m. EST yesterday evening, there were no reported changes in SLV.

Much to my surprise, the U.S. Mint had another silver eagles sales report.  This time it was only 84,500 of them, but I was still amazed to see it nonetheless.  Maybe yesterday was the last day for 2014 sales.  Once again there was no gold of any type reported sold by the mint.

Over at the COMEX-approved depositories on Friday, there wasn't much action in gold, as only 16,075 troy ounces were reported received---and 2 kilobars were shipped out.  The link to that activity is here.  In silver, nothing was received---and 850,525 troy ounces were shipped out.  The link to that action is here.

Here's a chart that Nick Laird passed around yesterday.  It's the price of gold in Russian roubles for the last 30 days---and as you can tell, it protects against currency debasement very well.

I have a pretty decent number of stories for you today---and there should be some in the list below that you'll find worth reading.

¤ Critical Reads

Gross: U.S. structural growth rate to be about 2% or less

Bill Gross said in an exclusive interview with CNBC on Monday that economic growth will likely fall to 2 percent.

"Yes, we're starting from a 3 percent growth economy that will probably persist for another quarter or so," he said. "We get back to a relatively new structural growth rate, which is not 3 but probably 2 or even less."

He attributed the decline to falling oil prices, which in turn affects industries such as fracking. Oil's slide also "determines currency movements," setting off a chain reaction.  Gross said it would be "very difficult" for oil prices to stabilize.

Financial conditions are also problem, Gross said.

This short story appeared on the CNBC website Monday afternoon---and I thank reader Dan Lazicki for today's first item.

FOMC Decision on 'A Considerable Period'

The Federal Reserve will decide [this] week whether interest rates will remain low for “a considerable period” or perhaps some other time frame designated by central bank policy makers.

The policy-setting Federal Open Markets Committee meets for two days -- Tuesday and Wednesday -- with an announcement scheduled for 2 p.m. EST Wednesday and a press conference by Fed Chair Janet Yellen to follow.

The Fed is widely expected to address the timing of interest rate hikes, possibly by altering the language of its statement to eliminate the phrase “a considerable period,” which was added earlier this year to describe how long rates would stay low after the Fed ended its monthly bond-buying program.

The bond buying program ended in October and markets are on edge as to when the Fed will raise rates and how they will communicate that move. Most analysts have interpreted the “considerable period” phrase to mean about six months, which would match with the consensus belief that the Fed will start raising rates in mid-2015.

Jim Rickards says that the Fed won't raise rates again, ever.  We'll see.  This article appeared on the foxbusiness.com Internet site on Friday---and I thank Dr. David Richardson for sharing it with us.

Matt Taibbi: Dodd-Frank Budget Fight Proves Democrats Are a Bunch of Stuffed Suits

If the Democrats actually stood for anything other than sounding as progressive as possible without offending their financial backers, then they would do what Republicans always do in these situations: force a shutdown to save their legislation. How many times did Republicans hold the budget hostage to rescue the Bush tax cuts?

But the Democrats won't do that here, because they're not a real party. They're a marketing phenomenon, a big chunk of oligarchical Blob cleverly sold to voters as the more reasonable and less nakedly corrupt wing of a two-headed political establishment.

So they'll punt on this issue in the name of "maturity" or "bipartisanship," Wall Street will get a nice win, and Hillary Clinton or whoever else is being set up as the Blob candidate on the Democratic side will receive an avalanche of Financial Services donations to stave off Warren (who will begin appearing in the press as an unhinged combination of Lev Trotsky and Spartacus). A neat little piece of business all around. I don't know whether to applaud or throw up.  

This short [for Matt] blog showed up on the rollingstone.com Internet site on Saturday---and I thank Manitoba reader U.M. for finding it for us.

The Oil-Price-Shock Contagion-Transmission Pathway

As we noted previously, counterparty risk concerns (and thus financial system fragility) are starting to rear their ugly heads. In the mid 2000s, it was massive one-way levered bets on "house prices will never go down again."

When the cracks started to appear, the mark-to-market losses in derivatives led to forced liquidations and snowballed systemically. In the mid 2010s, it is massively levered one-way asymmetric bets on "commodity prices [oil] will never go down again."

Meet WTI-structured-notes... the transmission mechanism for oil-price-shocks blowing up the financial system.   Because nothing says exuberant ignorance like limited upside, unlimited downside OTC (illiquid) derivatives...

Here's BNP Paribas' 1-Yr WTI-linked notes that collapse if oil drops below $70...

This short, but very interesting Zero Hedge article appeared on their Internet site at 7:00 p.m. on Sunday evening---and it's worth a minute of your time.  My thanks go out to reader U.D. for passing it around.

Oil Rot Spreading in Credit

Credit investors are preparing for the worst.

They’re cleaning up their portfolios, selling riskier debt that’s harder to trade in bad times and hoarding longer-term government bonds that do best in souring markets. While investors have pruned energy-related holdings in particular as oil prices plunge, they’re also getting rid of other types of corporate bonds, causing yields to surge to the highest in more than a year.

“We believe the pervasive nature of the sell-off is more reflective of overall liquidity concerns in the cash market than of fundamental deterioration,” Barclays Plc analysts Jeffrey Meli and Bradley Rogoff wrote in a report today. “The weakness, while certainly most pronounced in the energy sector, has been broad based.”

Rather than waiting around for a trigger to escalate this month’s sell off, investors are pulling out of dollar-denominated corporate debt now, causing a 0.8 percent decline in the notes this month, according to a Bank of America Merrill Lynch index that includes investment-grade and junk-rated securities. This would be the first month of losses since September.

This short Bloomberg piece, filed from New York, appeared on their website at 10:14 a.m. Denver time on Friday morning---and it's the second offering of the day from Dan Lazicki.

U.S. isolated, BRICS to get greater voting power at IMF

Months after the formation of new financial institutions like the $100 billion BRICS Bank and the China-led Asia Infrastructure Investment Bank, Christine Lagarde, managing director of the International Monetary Fund (IMF), said Friday that the organization is ready to discuss IMF voting reforms without the United States to give BRICS and emerging countries greater voting power.

Lagarde said the IMF is disappointed with the US inaction to ratify the governance and quota reforms and will now move forward without Washington.

“The IMF’s membership has been calling on and was expecting the United States to approve the IMF’s 2010 Quota and Governance Reforms by year-end. Adoption of the reforms remains critical to strengthen the Fund’s credibility, legitimacy, and effectiveness, and to ensure it has sufficient permanent resources to meet its members’ needs,” Lagarde said in a statement.

“I have now been informed by the U.S. Administration that the reforms are not included in the budget legislation currently before the U.S. Congress. I have expressed my disappointment to the U.S authorities and hope that they continue to work toward speedy ratification,” she said.

It will be a frosty day in July [in the northern hemisphere] before the U.S. gives up it's veto power---and unless that happens, how the BRIC countries, plus others, divide up the percentage of the vote, it just doesn't matter.  This new items showed up on thebricpost.com Internet site early on Saturday morning---and I thank South African reader B.V. for bringing it to our attention.

On the Brink of War and Economic Collapse — Paul Craig Roberts

On occasion a reader will ask if I can give readers some good news. The answer is: not unless I lie to you like “your” government and the mainstream media do. If you want faked “good news,” you need to retreat into The Matrix. In exchange for less stress and worry, you will be led unknowingly into financial ruin and nuclear Armageddon.

If you want to be forewarned, and possibly prepared, for what “your” government is bringing you, and have some small chance of redirecting the course of events, read and support this site. It is your site. I already know these things. I write for you.

The neoconservatives, a small group of warmongers strongly allied with the military/industrial complex and Israel, gave us Granada and the Contras affair in Nicaragua. President Reagan fired them, and they were prosecuted, but subsequently pardoned by Reagan’s successor, George H.W. Bush.

Ensconced in think tanks and protected by Israeli and military/security complex money, the neoconservatives reemerged in the Clinton administration and engineered the breakup of Yugoslavia, the war against Serbia, and the expansion of NATO to Russia’s borders.

This is an absolute must read, especially if you're a serious student of the New Great Game.  It was posted on Paul's website last Friday---and even though several readers sent it in time for my Saturday column, I decided not to post it.  I've since changed my mind---and for good reason now that I've actually read it from start to finish.  I thank Malcolm Roberts for sending it.

The Bank of England has missed its opportunity for greater transparency

Thursday’s publication and adoption of the Warsh review into transparency will change little. The date of publication of the minutes will be brought forward to coincide with the announcement of the interest rate decision, but they will not be transcripts. They will be only be published eight years later, some three years behind the five-year rule employed by the US Federal Reserve, with the Bank citing the UK’s six-to-eight-year business cycle as the prime reason behind the chosen delay. The European Central Bank, that bastion of openness, doesn’t publish its transcripts for 30 years, the Bank’s spinner pointed out, as if that made everything alright.

Even when these transcripts are published, they will not be in full. Instead they will be partial versions – missing out day one of the meetings when all the main discussion is said to take place – with publication due to start in 2023, some nine years from now. The argument for holding back on some of the transcripts is because, Bank sources hint, MPC members want to be able to speak freely, without fear of being held to something they’d said in jest eight years later.

Of course, it means that members can continue to espouse their own opinions in public, without the public knowing that they might have contradicted what they expressed behind closed doors.

This commentary was posted on The Telegraph's website at 8:48 p.m. GMT last Thursday---and I found it in a GATA release.

Belgium paralysed by general strike

The entire Belgian airspace is closed on Monday (15 December), as well as high-speed trains from Brussels to London, Paris and Amsterdam and local buses, trams and metro lines, as part of a general strike over public sector cuts.

Schools, government offices and private firms are also likely to be closed on Monday. Garbage will not be picked up and newspapers will not be delivered.

Serious traffic jams are expected around Brussels and Antwerp, with transport trade unions calling on truck drivers to join in and "paralyse the country".

Trade unions already staged a huge march which ended in violent clashes with police a month ago, when the government first announced the plans to save €11 billion over the next five years. The measures include scrapping an automatic indexation of salaries next year and raising the retirement age from 65 to 67 from 2030.

This news item, filed from Brussels, put in an appearance on the euobserver.com Internet site at 9:09 a.m. Europe time on Monday morning---and it's the first offering of the day from Roy Stephens.

Red-Faced Germans Forced to Ask Russia a Favor

Ukraine is apparently close to financial collapse: According to a report by FT the Finance Minister Wolfgang Schaeuble is said to have called his Russian counterpart Anton Siluanow: Schäuble is said to have asked the Russians to not demand repayment of a loan, that Kremlin had granted Ukraine last year, but to reschedule. The credit is 3 billion and could possibly trigger insolvency. The Russians have hedged their loans in elaborate legal contracts.

The IMF has identified a $15 billion deep hole in the Ukrainian government finances. This must be "filled within weeks to prevent the financial collapse," citing the FT the IMF. 15 billion dollars are needed in addition to those $17 billion, which the IMF Ukraine granted in April as credit. 

The IMF is concerned about the situation because of the willingness of the IMF states is small, to provide Ukraine new money. Finally, there have been no reforms, corruption flourishes unchanged and Western financial institutions are not impressed by an American as the Ukrainian Finance Minister says the E.U. Observer.

This story, originally posted on the German Economic News website---and translated into English by Google Translate---was picked up by the russia-insider.com Internet site late on Monday morning Moscow time.  This item is courtesy of Roy Stephens as well.  It's worth reading.

E.U. Foreign Policy Chief Expects New Sanctions Against Crimea on Dec.18

E.U. foreign affairs chief Federica Mogherini said Monday that additional E.U. sanctions against Crimea could be announced as early as on December 18.

Speaking at a news conference following the first Association Council meeting between the European Union and Ukraine, Mogherini said that in addition to the expanded individual sanctions list the E.U. will most likely introduce this week restrictive economic measures against Crimea.

"Just today in the Foreign Affairs Council we restated unanimously the political commitment for swift implementation of the part of the sanctions that were already decided, so I would expect the work at the working group level to be finalized in these very same hours and then a written procedure could finalize their implementation in time for the European Council [meeting] on Thursday," Mogherini said.

According to a draft E.U. document on the expansion of sanctions against Crimea, leaked to the media, the new restrictive measures include the prohibition for E.U. firms to invest in the region, as well as the ban on trading E.U. oil and gas exploration technologies.

This story, filed from Brussels, appeared on the sputniknews.com website at 10:59 p.m. Moscow time on their Monday evening---and it's courtesy of Roy Stephens once again.

Ukraine needs national referendum on NATO membership - PM

The issue of Ukraine’s possible accession to NATO requires a nationwide referendum, Ukrainian Prime Minister Arseny Yatsenyuk said Monday after a meeting in the Belgian capital with the North Atlantic alliance’s secretary general, Jens Stoltenberg.

“In line with current Ukrainian legislation, we will have to hold a referendum on the proposed agenda of NATO membership,” Yatsenyuk said.

He said that in order to join NATO, Ukraine also has to conduct reforms in the sphere of security, politics, economics and justice in order to bring them in line with NATO standards.

“We will keep following that roadmap,” Yatsenyuk said.

He said that “if the Ukrainian people speaks in favor of joining NATO in the referendum, this will allow Kiev to not only request but demand NATO membership.”

The above four paragraphs are all there is to this brief news item, filed from Brussels, that showed up on the itar-tass.com Internet site shortly before midnight Moscow time last night.  It's the third contribution in a row from Roy Stephens.

U.N. concerned by Kiev’s economic blockade of eastern Ukraine

The United Nations in its report on Monday expressed concerns about Kiev’s decision to relocate all state institutions and organizations in the areas not under the government’s control in the country’s east.

The report released by the Office of the U.N. High Commissioner for Human Rights in Geneva said these steps could aggravate the situation which “is becoming increasingly dire for the population still living in the east,” and could violate people’s social and economic rights.

“With the onset of winter and no let-up in the hostilities, the situation of approximately 5.25 million people living in the conflict and post-conflict affected areas is further deteriorating due to significant damage of the infrastructure, the breakdown of economic activities, and the disruption of social and medical services and social welfare benefits,” the report reads.

This story, filed from Geneva, was posted on the itar-tass.com Internet site at 4:13 p.m. Moscow time yesterday afternoon, which was 8:13 a.m. in New York.  Once again my thanks go out to Roy Stephens.

Russia Warns May Send Troops to Ukraine After Congress Unanimously Votes to Give Lethal Aid to Kiev

While the market, and America's media, was focusing over the passage of the Cromnibus, and whether Wall Street would dump a few hundred trillion in derivatives on the laps of US taxpayers once again (it did), quietly and unanimously both houses passed The Ukraine Freedom Support Act of 2014, which authorizes "providing lethal assistance to Ukraine’s military" as well as sweeping sanctions on Russia’s energy sector.

The measure mandates sanctions against Rosoboronexport, the state agency that promotes Russia’s defense exports and arms trade. It also would require sanctions on OAO Gazprom (GAZP), the world’s largest extractor of natural gas, if the state-controlled company withholds supplies to other European nations (yes, the U.S. is now in the preemptive punishment business, and is enforcing sanctions on a "what if" basis).

But while one may debate if additional sanctions will do much to impact a Russian economy which is already impaired due to the plunging ruble, the clear escalation is that unlike previously, when the US limited itself - at least on paper - to non-lethal assistance to the Ukraine, now the US is finally preparing to send in weapons, and potentially "military advisors" as well. We say "on paper", because in late November hacked U.S. documents revealed the extent of secret U.S. "Lethal Aid" for the Ukraine army. And since America's under-the-table support for Ukraine's insolvent armed forces has been revealed, there is little point in pretending to keep a moral upper hand (especially in light of recent "other" revelations involving the U.S., most notably its intelligence services).

This Zero Hedge piece was posted on their website at 12:47 p.m. EST on Sunday afternoon---and it's courtesy of reader M.A.

Russia Increases Key Rate Most Since 1998 to Stem Ruble Rout

Russia’s central bank raised its benchmark interest rate the most since the nation’s 1998 default, making the announcement in the middle of the night in Moscow as policy makers seek to douse investor panic and stem a ruble rout.

The central bank increased the key rate to 17 percent from 10.5 percent effective today, it said in a statement on its website. Policy makers gathered for an unscheduled meeting after a one-point increase on Dec. 11.

“This decision is aimed at limiting substantially increased ruble depreciation risks and inflation risks,” the bank said in the statement.

Russia’s central bank raised interest rates for the sixth time in 2014 after more than $80 billion spent from its reserves failed to stop a 49 percent sell off of the ruble, the world’s worst-performing currency this year.

Besides the facts, this Bloomberg story has the usual b.s. Crimea propaganda.  It appeared on their website at 3:27 p.m. MST yesterday afternoon---and I thank Dan Lazicki for bringing it to my attention---and now to yours.  There was another somewhat similar Bloomberg story on this issue---also courtesy of Dan---and it's headlined "Ruble Tumbles Most Since 1998 as Traders Pressure Central Bank".  It's worth reading.

Revitalized Turkey drifts away from Europe and towards Eurasia

Along with Russia, Turkey lies at the confluence between Europe and Asia. A peripheral European power, like Russia, it is following Moscow's lead and also looking east.

In Turkey, I found a nation of deep contrasts, but a country incredibly sure of its statehood and fastened together by a strong overriding identity. Unlike its Black Sea neighbors, most of whom are searching for a stable course, Turkey is assured and united.

A country without the deep-seated corruption of nearby ‘European’ states and the religious radicalism of its Middle Eastern neighbors, Turkey is back in business. It also has the potential to become the dominant power in its hinterland, if it isn’t already.

Relations between Moscow and Ankara have been making headlines due to a new gas deal which will replace the ill-fated South Stream project. Nevertheless, from a Turkish perspective, warmer relations with Russia are part of a greater pivot to Eurasia. After flirting with Europe for decades and being constantly spurned, Turkey no longer seeks to be an attachment to a failing EU. Indeed, many Turks expressed the view that being rejected by Brussels has turned out to be a lucky escape.

This op-edge commentary showed up on the Russia Today Internet site at 1:19 a.m. Moscow time on their Sunday morning---and it's the second-last offering of the day from Roy Stephens.

OPEC willing to push oil price to $40 says Gulf oil minister

OPEC's most influential producers are willing to allow oil prices to fall to $40 per barrel before discussing whether the cartel should hold an emergency meeting to discuss cutting output.

According to Suhail al-Mazrouei, energy minister of the United Arab Emirates and a high profile delegate of the cartel: "We are not going to change our minds because the prices went to $60, or to $40."

The official's comments made to Bloomberg News at a conference in Dubai could add to further downward pressure on prices, which have already fallen more than 45pc since June. Brent crude - a global benchmark comprised of high-quality oil from 15 North Sea fields - closed last week at a new five-and-a-half-year low under $62 per barrel.

A slump in prices to levels around $40 per barrel would be a boost for parts of the UK economy and could see petrol prices drop close to £1 per litre providing relief to motorists. However, the slump will also threaten thousands of jobs in Britain's petroleum industry and according to Wood Mackenzie place around £55bn worth of oil projects in the North Sea and Europe at risk of cancellation

As this---and the following story shows---there is a big downside to cheap gas/petrol at the pump.   This article appeared on the telegraph.co.uk Internet site at 11:45 a.m. GMT on Sunday morning---and it's worth reading.  It's also the final offering of the day from Roy Stephens, for which I thank him.

Crashing crude may blow a $1.6 trillion hole in the global oil sector, annually

Talk about an oil spill. The spectacular unhinging of crude oil prices over the past six months is weighing mightily on the U.S. stock market.

And while it may be too early to abandon all hope that the market will stage a year-end Santa rally, it appears that if Father Christmas comes, there’s a good chance his sleigh will be driven by polar bears, instead of gift-laden reindeer.

Wall Street’s gift: a major stock correction.

Indeed, the Dow Jones Industrial Average DJIA, -0.58%  already endured a bludgeoning, registered its worst percentage decline since Nov. 25, 2011, down 677.96 points, or 3,78%. It was also the worst week for the S&P 500 SPX, -0.63% on a percentage basis since May 18, 2012. The S&P 500 was down 73. 04 points and 3.52% on the week.

But all that carnage is nothing compared to what may be in store for the oil sector as crude oil tumbles to new gut-wrenching lows on an almost daily basis. On the New York Mercantile exchange light, sweet crude oil for January delivery settled at $57.81 on Friday, its lowest settlement since May 15, 2009.

This brief commentary showed up on the marketwatch.com Internet site at 9:36 a.m. EST on Sunday morning---and it's the final offering of the day from Dan Lazicki.

Saudi Arabia is playing chicken with its oil

In August 1973, Egyptian President Anwar Sadat paid a secret visit to the Saudi capital, Riyadh, to meet with King Faisal. Sadat was preparing for war with Israel, and he needed Saudi Arabia to use its most powerful weapon: oil.

Until then, King Faisal had been reluctant for the Arab members of OPEC to use the “oil weapon.” But as the October 1973 Arab-Israeli war unfolded, the Arab oil producers raised prices, cut production and imposed an embargo on oil exports to punish the United States for its support of Israel. Without Saudi Arabia, the oil embargo would not have gotten very far.

Today, Saudi Arabia is once again using its “oil weapon,” but instead of driving up prices and cutting supply, it’s doing the reverse. In the face of a global slide in oil prices since June, the kingdom has refused to cut its production, which would help to drive prices back up. Instead, the Saudis led the charge to prevent OPEC from cutting production at the cartel’s last meeting on Nov 27.

The consequences of Saudi policy are impossible to ignore. After two years of stable prices at around $105 to $110 a barrel, Brent blend, the international benchmark, fell from $112 a barrel in June to around $65 on Friday. “What is the reason for the United States and some U.S. allies wanting to drive down the price of oil?” Venezuelan President Nicolas Maduro asked rhetorically in October. His answer? “To harm Russia.”

That is partially true, but Saudi Arabia’s gambit is more complex.

This commentary appeared on the Reuters website yesterday sometime---and it's definitely worth reading.

Survey: Chinese manufacturing contracted in December

A survey of Chinese factories says manufacturing activity contracted in December in another sign the slowdown in the world's No. 2 economy is quickening.

HSBC's preliminary purchasing managers' index released Tuesday fell to a seven month low of 49.5 from 50 in November.

The index uses a 100-point scale on which numbers above 50 indicate expansion.

It's the latest in a string of weak data on China's economy, which expanded at a five-year low of 7.3 percent last quarter. That rate was below the official full year target of 7.5 percent.

This short AP story was posted on their website at 9:24 p.m. EST yesterday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

Abe's coalition secures big Japan election win with record low turnout

Japanese Prime Minister Shinzo Abe's coalition cruised to a big election win on Sunday, ensuring he will stick to reflationary economic policies and a muscular security stance, but record low turnout pointed to broad dissatisfaction with his performance.

NHK public TV said Abe's Liberal Democratic Party and junior partner the Komeito party were assured more than the 317 seats in the 475-member lower house required to maintain a two-thirds "super-majority" that smooths parliamentary business.

But the LDP was set to fall slightly short of the 295 it held before the poll, NHK figures showed.

"I believe the public approved of two years of our 'Abenomics' policies," Abe said in a televised interview. "But that doesn't mean we can be complacent."

Many voters, doubtful of both the premier's "Abenomics" strategy to end deflation and generate growth and the opposition's ability to do any better, stayed at home.

This Reuters news item, filed from Tokyo, appeared on their website at 11:59 a.m. EST on Monday---and I thank Orlando, Florida reader Dennis Mong for digging it up on our behalf.

Gold extends drop with silver before fed monetary policy meeting

Gold futures posted the longest slump in five weeks on concern that the Federal Reserve is moving closer to raising U.S. interest rates, crimping demand for the precious metal as an alternative investment.

In the third quarter, gold fell 8.4 percent as the U.S. economy gained. The Fed begins a two-day meeting tomorrow and policy makers will debate the pace of raising borrowing costs after holding its benchmark rate close to zero percent since 2008.

Last month, gold dropped to a four-year low as equities surged to a record and oil prices entered a bear market. Jeffrey Currie, head of commodity research at Goldman Sachs Group Inc, said last week that the metal will drop as the U.S. economy improves. Economists and Fed officials surveyed by Bloomberg expect higher rates in 2015.

“This week will be all about the Fed,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Some investors are waiting on the sidelines until they get a clearer picture from the Fed.”

I picked this Bloomberg story off the Sharps Pixley website at 3:20 a.m. EST on Monday morning, but it's obviously been 'reworked' since then, because along with a 12:55 p.m. MST dateline, it also sports a new headline that reads "Gold Prices Cap Longest Slump in Five Weeks on Fed Rate Outlook".

2014 silver eagle sales break annual record at over 43 million

Silver Eagle sales in 2014 have already broken the 2013 annual record with a few weeks of sales still left to be counted. As of December 11, the U.S. Mint reported that 43.1 million silver eagles have been sold so far in 2014. This compares to the 42.7 million during all of 2013, which was the previous all-time record.

Investor demand for silver clearly remains strong and people are taking advantage of discount prices. Why not? It isn’t too often that you can purchase an end product for less than the cost to produce it.  Many miners are unprofitable at current silver prices as their all-in cost of production is closer to $20. I believe this is an excellent time to take advantage of the paper games that have pushed prices to such absurd lows. Silver at under $20 per ounce is not likely to last long.

Yes, dear reader, it's another record year for U.S. silver eagles sales which I mentioned in my column last week.  But ignored in this article is the blatant fact that the retail silver investor in silver is M.I,A. for all types of silver bullion---and silver eagles sales this year and last are only a fraction of what they were in 2011 and the first part of 2012.  A phone call to your friendly local bullion dealer will reveal that fact---something that this so-called 'silver analyst' obviously hasn't done.  I'm in a position to talk to some of the biggest bullion wholesalers in North America on a weekly basis---and the story is the same.  It's the one or two big buyers that Ted has been talking about for the last two years now that have vacuuming up all the silver eagles---and silver maple leafs.

As Mark Twain was quoted as saying---"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."  This is a case in point---along with most of what else you read from the rest of the lunatic fringe.

This silver-related 'story' appeared on the mining.com Internet site on Sunday---and it's courtesy of reader M.A.

Casey Research: Russian Bear—or Gold Bull?

Last week oil was down, emerging markets were down, Wall Street was down—even the US dollar was down… but gold was up. That’s just the latest fluctuation, so, as encouraging as it is for us, we’ll wait for our favorite metal to show some real strength before getting too excited.

Meanwhile, the warm feelings gold bugs were celebrating got doused by news of Russia selling off its gold reserves as a response to its economic difficulties. But is it true?

Fortunately, we have fluent Russian speakers on staff here, so we were able to go to the source, and we’ve got the straight facts for you.

Yet another reminder that there is no substitute for careful thought and due diligence in all business matters.

Late last week several readers sent me this news item about Russia selling some of its gold, but it never appeared in my column because I was informed right away that it was bogus.  This commentary by Casey Research's own Laurynas Vegys appeared in yesterday's edition of the Casey Daily Dispatch---and it's worth reading.

Johnson Matthey sells Gold and Silver Refining business for £118 million

Johnson Matthey announces that it has agreed to divest its Gold and Silver Refining business to Asahi Holdings, Inc., a collector, refiner and recycler of precious and rare metals from waste materials, for £118 million (US$186 million) in cash, subject to typical post-closing adjustments. The transaction is expected to be completed by the end of March 2015.

Johnson Matthey’s Gold and Silver Refining business is a refiner of primary and secondary gold and silver materials. It serves customers globally from refineries in Salt Lake City, USA and Brampton, Canada. The business also provides investment casting services from its St Catharines facility in Canada. In total, the business employs approximately 340 people.

In the financial year ended 31 March 2014 the Gold and Silver Refining business had sales excluding the value of precious metals (sales) of £44 million and for the six months ended 30 September 2014, its sales were £19 million. Its return on sales is typically around 25%.

This precious metal related story appeared on the matthey.com Internet site yesterday---and I found it on the Sharps Pixley website.

Koos Jansen: Why Austria is likely to repatriate its gold from London

Bullion Star market analyst and GATA consultant Koos Jansen writes that the Austrian central bank's gradual reduction of the unallocated portion of its gold reserves at the Bank of England in London indicates that Austria is serious about repatriating its foreign-vaulted gold.

Jansen's commentary is headlined "Why Austria Is Likely to Repatriate Its Gold from London" and it was posted on the Singapore-based bullionstar.com Internet site on Saturday---and I found it on the gata.org Internet site.

Swiss gold exports to India near Rs 1 trillion in 2014

Amid concerns of bullion trade being used for routing of black money, Switzerland's gold exports to India have risen further and is fast approaching Rs 1 trillion mark for the entire 2014.

The Swiss gold exports to India stood at over 2.8 billion Swiss francs (over Rs 18,000 crore) in October, up from about 2.2 billion Swiss francs in the previous month, shows the latest data from the Swiss Customs Administration.

This has taken the total Swiss gold exports to India since January this year to 14.2 billion Swiss francs (nearly Rs 93,000 crore), as per the data compiled by Switzerland's cross-border trade monitoring agency.

This surge in gold shipments has made India the largest destination for the yellow metal exports from Switzerland.

This longish article, co-filed from Berne and New Delhi, showed up on The Times of India website at 7:34 p.m. IST on their Sunday evening---and it's courtesy of Manitoba reader U.M.  It's worth reading.

Indian gold imports in November close to 150 tonnes

India’s imports of gold surged in November to 145-150 tonnes, according to the latest statistics from the Indian Ministry of Commerce and Industry.

The ministry valued gold imports last month at $5.6 billion, which at the average spot price of $1,177 per ounce equates to around 148 tonnes. Imports hit 150 tonnes in October after 120-130 tonnes in September, 71 tonnes in August and 48 tonnes in July, when importers stepped up their efforts to meet the typical increase in demand from the Hindu festival season.

Imports surged on news that the Reserve Bank of India was reviewing import curbs that were introduced last year to counteract the country’s ballooning current account deficit. Towards the end of November, however, the RBI surprised markets by abolishing the rule that made it mandatory to export 20 percent of all imported gold, known as the 80:20 rule.

This short article appeared on the bulliondesk.com website at 2:50 p.m. GMT yesterday---and it's another gold-related news item I found on the Sharps Pixley Internet site.  It's a must read.

3 Kerala companies have more gold than Sweden, Singapore, Australia

Three gold loan companies in Kerala have more precious metal in their vaults than the gold reserves of some of the richest nations. Muthoot Finance, Manappuram Finance and Muthoot Fincorp jointly hold nearly 200 tonnes of gold jewellery, which is higher than the gold reserves of Singapore, Sweden or Australia.

India accounts for approximately 30% of the global demand for gold, a true-and-tested source of insurance for millions of families that have little access to other forms of social security. What is true for India is even more so for Kerala, where 2 lakh people are employed in the gold industry. The metal's fungibility makes it an ideal collateral for over-the-counter loans.

Muthoot Finance holds 116 tonnes of gold as security for its loans, Manappuram Finance has 40 tonnes and Muthoot Fincorp, 39 tonnes. The trio's combined holdings are 195 tonnes. To put things in global perspective, Singapore's gold reserves are 127 tonnes, Sweden's 126 tonnes, South Africa's 125 tonnes and Mexico's 123 tonnes.

This gold-related article, filed from Kochi, was posted on The Times of India website at 2:06 a.m. India Standard Time [IST] on Sunday.  It's another contribution from reader U.M.

'Dama' investors suffer heavy blow as gold frenzy subsides

Jewelry shops in Shuibei in Shenzhen's Lohu district have seen a drastic reduction in custom, as the local gold market is experiencing a chill, similar to the cold front sweeping the region.

Local jewelry shops report that their sales have plunged 40%-50% this year, according to Chinese-language Shanghai Securities News.

The status of jewelry vendors in Shuibei mirrors the situation of China's gold and jewelry market as a whole, as the region is the largest jewelry trading center in the nation, boasting four large-scale jewelry wholesale marketplaces and 4,000 jewelry firms, on top of over 2,000 small businesses, employing over 130,000 people, forming a complete industrial chain which covers processing, production, management, wholesale and retail.

Shuibei racks up jewelry processing value of 80 billion yuan (US$12.9 billion) a year, for a nationwide market share of just over 70%, accounting for 80%-90% of the nation's total transaction volume in gold/platinum and jewels.

Zhao Bin, general manager of a local jewelry company, said that the company's sales of gold-related products have slumped 60% this year, notably investment-oriented products, such as gold coins and gold bars, according to Shanghai Securities News.

This story put in an appearance on the wantchinatimes.com Internet site at 9:04 a.m. Beijing time on their Monday morning---and it's the final offering of the day from reader U.M., for which I thank her.

Robert Ringer: Dollar Collapse Is Inevitable, So Buy Gold

Last month, Kitco News interviewed renowned New York Times Bestselling author Robert Ringer. They began by discussing the current political direction of America, but moved on to the collapse of the dollar. While Ringer will not put a timeline on the collapse of America’s currency, he is certain that it will fall apart.

What will that collapse look like? Again, Ringer wouldn’t say, but he does have just one piece of advice for everyone: buy gold. Buy physical gold. In fact, he is even more aggressive in his allocation than our Chairman Peter Schiff. Ringer believes 50% of your portfolio should be in gold!

I found this gold-related news item on The Telegraph's Finance webpage late last night when I was looking for something else.  The link led to the talkmarkets.com Internet site.  There's a 6:12 video clip, plus a transcript.

¤ The Funnies

¤ The Wrap

It was another well-above-average week in the physical turnover among the six licensed COMEX silver warehouses, as more than 6.6 million oz either came in or were removed. Total COMEX silver inventories fell 1.3 million oz to 176.4 million oz, remarkably close to where these inventories, the second largest in the world (behind the SLV), began the year. I know I beat this issue to death, but please consider that the weekly movement of 6.6 million oz annualized is more than 40% of the world mine production of silver.

I also know that this unprecedented physical turnover is one of the “unmentionable” topics of the precious metals market despite being so unusual and so easy to verify. At the very least, I know that no one would undertake the time, effort and expense to move such an unusually large amount of metal into and out from the six COMEX silver warehouses unless it was absolutely necessary to do so. To me, absolutely necessary is another term for insatiable demand. In addition to the remarkable consistency of the unusual movement over the past more than 3.5 years, the data suggest it is actually increasing. - Silver analyst Ted Butler: 13 December 2014

As I said in my Saturday column, everything was set up for an engineered price decline in both gold and silver because of the massive deterioration in the Commercial net short positions in both metals recently---and especially after those 'orphan' rallies last Tuesday.

Well, we certainly didn't have to wait long to get them, as the HFT boyz and their algos were there at 9 a.m. Hong Kong time on their Monday morning, two hours after trading began in New York on their Sunday evening---and after that it was only a matter of when they showed up during the COMEX trading session in New York.

And show up they did.

After its 'orphan' rally last Tuesday, gold touched its 50-day moving average yesterday, but did not close at, or below it.  Silver closed below its 50-day moving average---and after spending a day or so barely above its 50-day moving average, platinum is now below its by a considerable amount.  Palladium was never allowed to break convincingly above its 200-day moving average---and was closed well below it yesterday.

Here are the 6-month charts for all four precious metals, plus WTIC which, as you know, set a new low price for this move down.

So how far down the rabbit hold can 'da boyz' take us from here?  Beats the hell out of me.  Can the technical funds in the Managed Money category be coaxed back on the short side after making enormous profits on this trade just last month?  Are the raptors, the Commercial traders other than the Big 8, in a financial position to go back on the long side since they got their collective lights punched out during the last five weeks?  What can the Big 4 and Big 8 shorts expect to gain out of this mess?

I mentioned the small amount of volume for such big price moves yesterday---and that may be a sign that this engineered price decline may be different than the rest.  Ted Butler pointed out that with a lot of the raptors dead or dying after getting keelhauled for about $400 million, the market may actually be very illiquid.

Anyway, regardless of what happens, I will continue to watch with morbid fascination as JPMorgan et al continue to rape the precious metal industry, with barely a peep out of them---or the countries that live off them.  Of course that's why the World Gold Council and Silver Institute are there, to prevent the miners from doing anything, either individually or collectively.

And as I type this paragraph at 2:39 a.m. EST---the London open is twenty minutes away.  All four precious metals rallied a bit once New York opened at 6 p.m. on their Monday evening---however none of these rallies were allowed to get far.  Except for silver, the other precious metals remain up a bit from Monday's close.  Gold volume is considerable at the moment, at just a hair under 25,000 contracts.  Silver's volume is more than substantial at a bit more than 10,000 contracts.  The lion's share of all this volume in both metals was traded many hours before the London open. The dollar index is down 12 basis points.

The other event upon us is the FOMC meeting, which starts today---and lasts until tomorrow.  The smoke goes up the chimney at 2 p.m. EST on that day---and I can't remember a time when the powers-that-be didn't use the FOMC shindig to beat the crap out of the precious metals.  We obviously got a taste of that yesterday---and I await the almost predictable pounding it will get tomorrow at 2 p.m. on the dot.

Today is the cut-off for this Friday's Commitment of Traders Report, so all of Monday's nefarious price/volume action, along with whatever happens today, will be in it.

And as I send this off to Stowe, Vermont at 4:30 a.m. EST, I see that not much has changed.  Silver is still down a few pennies---and everything else is up a few bucks.  Gold volume is up to 32,000 contracts---and silver's volume is just north of 12,000 contracts.  The dollar index took a header starting right at the 8:00 a.m. London open---and as I type this, it's down almost 38 basis points at 88.05.  Will 'gentle hands' show up again today?  Oil is down another $1.62 a barrel.

Absolutely nothing will surprise me when I check the charts later this morning.

Before heading off to bed, I'd like to mention that my good friend Dennis Miller over at Miller's Money Forever has a new piece out titled "The Truth About Bonds".

The first question you should ask yourself is "Should I buy bonds in today's market?" Depending on which pundits you listen to, you may have heard that bonds are dangerous and should be avoided in today’s market. Other pundits still tout them as great investments—relatively safe and capable of generating the income we’re all so desperate for.  So, to whom should we listen? Click here to find out.  It costs nothing to read all about it.

See you tomorrow.

Ed Steer

]]>
Tue, 16 Dec 2014 06:21:00 +0000
<![CDATA[Austria Considers Repatriating Its Gold]]> http://www.caseyresearch.com/gsd/edition/austria-considers-repatriating-its-gold/ http://www.caseyresearch.com/gsd/edition/austria-considers-repatriating-its-gold/#When:10:03:00Z "No amount of money printing will do any good now"

¤ Yesterday In Gold & Silver

It was pretty much a nothing day in the gold market on Friday.  The tiny rally at the London open began to erode immediately---and the down/up price tick in the two hours surrounding the London p.m  gold fix was all the activity there was in new York.  The gold price continued to slowly sell off from there into the close of electronic trading.

The high and lows ticks are barely worth the effort to look up, but the CME Group recorded them as $1,228.90 and $1,214.80 in the February contract.

Gold finished the Friday session in New York at $1,221.80 spot, down $5.60 from Thursday's close.  Volume, net of December and January, was 130,000 contracts.

Silver traded a bit higher in Far East trading, but got sold down a dime around noon Hong Kong time---and the rally at the London open met the same fate as the gold price.  The silver price traded in a 20 cent range for the entire Friday session, so the high and low aren't worth looking up.

Silver finished the day at $17.035 spot, down 6 cents from Thursday.  Volume, net of December and January, was 32,000 contracts.

The platinum price didn't do much until the London open, but then rallied about six bucks to its high---and from there, it got sold down until the London p.m gold fix was done.  After that it chopped sideways in a $20 price range---finishing the day at $1,225 spot, down 12 bucks from Thursday.

Palladium closed the Friday session at $812 spot, down five bucks on the day.

The dollar index closed late on Thursday afternoon in New York at 88.55.  It's 88.62 high tick came at 3:00 p.m. Hong Kong time in their Friday afternoon, an hour before the London open.  From there it chopped down to its 88.12 low, which came minutes before 12 o'clock noon in New York.  It rallied back 10 basis points by 2 p.m.---and then traded flat into the close.  The index finished the Friday session at 88.335---down 21 basis points on the day.

The gold stocks opened down a bit, hitting their morning low minutes after the London p.m. gold fix, which came shortly after 10 a.m. in New York.  From there they rallied into positive territory, but that only lasted for fifteen minutes or so before they began to head quietly lower---and that trend continued right into the close, as the HUI finished down 1.71%.

Although gold closed up $30 on the week, the HUI closed down 0.4%.

The silver stock also opened down a hair, but turned on a dime after the gold fix was done---and by 11:30 a.m. they were up over 3 percent.  Sadly, that rally didn't last either---and by 2:45 p.m they were down about a percent.  From there they rallied back into positive territory by a hair, as Nick Laird's Intraday Silver Sentiment Index closed up 0.03%.

Although silver gained 75 cents during the prior week, the silver equities gained something less than 2 percent.

The CME Daily Delivery Report showed that 35 gold and 178 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, JPMorgan issued 35 contracts from its client account---and stopped 31 of of them in its in-house [proprietary] trading account.  The theft from their clients continues.

In silver, the three largest short/issuers were Scotiabank with 104 contracts, along with Jefferies and JPMorgan both out of their client accounts, with 38 and 25 contracts respectively.  The two biggest long/stoppers were HSBC USA and Jefferies with 139 and 29 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that December gold open interest dropped by 163 contracts, and is now down to 881 contracts still open---minus the 35 posted for delivery on Tuesday.  In silver, the December o.i. went down by only 14 contracts---and December open interest now sits at 383 contracts---minus the 178 mentioned two paragraphs ago.

There were no reported changes in GLD yesterday---and I was astonished to see another withdrawal from SLV.  This time an authorized participant took out 1,341,037 troy ounces.  Since December 1, there have been 9.2 million ounces of silver withdrawn from SLV---and nothing deposited.

The good folks over at Switzerland's Zürcher Kantonalbank finally got around to updating their gold and silver ETFs for the week ending Friday, December 5---and this is what they had to report.  Their gold ETF declined by another 22,117 troy ounces---and their silver ETF shed 174,272 troy ounces.

The U.S. Mint sold another 100,000 silver eagles again yesterday, but no gold eagles or buffaloes once again.

Month-to-date the mint has sold 16,500 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---and 1,722,500 silver eagles.  Based on these sales, which are really skewed towards silver, the silver/gold ratio so far this month works out to 90 to 1.  With the new 2015 production year coming up hard, I can't see 2014 silver eagle sales continuing much longer, because at the rate they've been pumping out the 2014 silver eagles in December, it appears that they haven't yet begun to ramp up production for the new calendar year as of yet.

There was only 1 kilobar of gold shipped out of the COMEX-approved depositories on Thursday---and in silver, nothing was reported received, but 491,721 troy ounces were shipped out for parts unknown.  The link to that activity is here.

Well, yesterday's Commitment of Traders Report was about as bad as it could possibly be.

In silver, the headline number in the legacy COT Report was ugly, as the Commercial net short position blew out by 8,771 contracts, one of the biggest numbers I can remember---and I can remember quite a bit.  The Commercial net short position now stands at 35,357 contracts, or 176.8 million troy ounces, which is really getting up there.

On the other side of those 8,771 contracts, the raptors [the Commercial traders other than the Big 8] sold 5,200 of their long contracts, while the '5 through 8' Commercial traders added about 400 contracts to their short position---and the 'Big 4' blew out their short position by around 3,200 contracts.  Ted says that JPMorgan's short position in silver appears to be back up around the 10,000 contract mark, or 50 million ounces.

Under the hood in the Disaggregated COT Report, the technical funds in the Managed Money covered 4,976 of their short contracts---and added 594 long contracts.  Ted says that these technical funds have about 10,000 short contracts still on their books, which isn't very much rocket fuel left to sustain any kind of big rally in silver going forward---and I know that he'll have lots more to say about this in his weekly review to paying subscribers later this afternoon.

In gold, the headline number in the legacy COT Report showed that the Commercial net short position jumped by an eye-watering 27,193 contracts, or 2.72 million troy ounces.  The Commercial net short position in gold now stands at 116,601 contracts, or 11.66 million troy ounces.

On the other side of the 27,193 contract deterioration, the raptors, the Commercial traders other than the Big 8, sold about 28,600 contracts of their long position, while the '5 through 8' largest traders added around 6,700 contracts to their short position.  But the 'Big 4' traders swam against the tide---and actually covered about 8,300 contracts of their short position.  I think I remember Ted telling me that JPMorgan's COMEX long position in gold was now 10,000 contracts, which is down from the 12 to 14,000 contracts they were long last week.  But I didn't write it down, so I reserve the right to be wrong about that.

As in silver, Ted will have more to say about the gold situation later today---and I'll steal any pertinent bits as a quote for one of my columns next week.

Still, there's no way to sugar coat this, as this week's COT Report was a disaster.  There's no sign whatsoever that JPMorgan et al are softening their iron grip on silver and gold prices---and to make matters worse, a huge chunk of Ted Butler's rocket fuel [the short positions of the technical funds in the Managed Money category] has already been used up---at great profits to them, but at the expense of the next rally.

I'm happy to report that I don't have all that many stories today, but I do have a decent number that I've been saving for today's column, so I hope you have enough time in what's left of your weekend to read the ones that interest you.

¤ Critical Reads

Wall Street’s Win on Swaps Rule Shows Washington Resurgence

Wall Street is re-emerging as a force in Washington as it closes in on one of its biggest wins against regulation since the financial crisis.

With must-pass spending legislation making its way through Congress this week, banks seized on an opportunity to attach a measure that would halt a planned restriction on derivatives trading they had long opposed. The industry’s lobbying extended to the highest levels of finance with JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon pressing lawmakers to support the change.

Wall Street’s success, after four years of struggling to persuade Congress to ease the Dodd-Frank Act, is a precursor to more fights next year against some of the law’s hallmarks: the consumer protection bureau and stiff oversight of big financial companies whose failure could threaten the financial system.

“The Wall Street interests -- the big banks -- they’re back,” said Richard Durbin of Illinois, the Senate’s second-ranking Democrat.

This Bloomberg news item appeared on their Internet site at 11:01 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for today's first story.

Some Accused of Insider Trading May Rethink Their Guilty Pleas

A ruling that tossed out the insider trading convictions of two hedge fund managers may have opened the door for others charged with wrongful trading to get their cases or pleas dismissed.

A federal judge in Manhattan, Andrew L. Carter Jr., on Thursday ordered the lawyers for the defendants in an unrelated insider trading case to come to court on Dec. 18 to discuss the implications of the ruling. The day before, a panel of the United States Court of Appeals for the Second Circuit overturned the convictions of the hedge fund managers Anthony Chiasson and Todd Newman.

Judge Carter said in his brief order that he wanted to discuss whether the appellate ruling affects a guilty plea by at least one of five defendants. In the case he is overseeing, five friends have been accused of receiving a secondhand tip about IBM’s plans to acquire SPSS for $1.2 billion in October 2009.

The move by the judge is a sign that the impact of the appellate court’s decision may have ramifications well beyond Mr. Chiasson and Mr. Newman. The ruling was notable because the appellate court significantly reined in prosecutors when pursuing cases of insider trading, especially against individuals who are far removed from the original source of an illegal stock tip.

This article appeared on The New York Times website at 9:11 p.m. EST on Thursday evening---and it's the first offering of the day from Roy Stephens.

Jim Rickards: Fairy tales from the Federal Reserve: 15 Reasons Fed Policies Belong in Fantasyland

Don’t ever think for a minute that the central bankers know what they’re doing. They don’t. And that’s my own view, but I’ve heard that recently from a couple central bankers. I recently had spent some time with one member of the FOMC, the Federal Open Market Committee, and another member of the Monetary Policy Committee of the Bank of England, which is the equivalent of their FOMC, both policymakers, both central bankers.

And they said the same thing, “We don’t know what we’re doing. This is a massive experiment. We’ve never done this before. We try something. If it works, maybe we do a little more; if it doesn’t work, we pull it away, and we’ll try something else.” And the evidence of this – again, I’ve heard this firsthand, and it’s my view – but the evidence for this is that their have been 15 separate fed policies in the last 5 years.

This 3:26 minute video clip, plus transcript, showed up on the dailyreckoning.com Internet site on Thursday---and I thank Dan Lazicki for sharing it with us.

John Pilger: War by media and the triumph of propaganda

Why has so much journalism succumbed to propaganda? Why are censorship and distortion standard practice? Why is the BBC so often a mouthpiece of rapacious power? Why do The New York Times and The Washington Post deceive their readers?

Why are young journalists not taught to understand media agendas and to challenge the high claims and low purpose of fake objectivity? And why are they not taught that the essence of so much of what's called the mainstream media is not information, but power?

These are urgent questions. The world is facing the prospect of major war, perhaps nuclear war - with the United States clearly determined to isolate and provoke Russia and eventually China. This truth is being turned upside down and inside out by journalists, including those who promoted the lies that led to the bloodbath in Iraq in 2003.

The times we live in are so dangerous and so distorted in public perception that propaganda is no longer, as Edward Bernays called it, an "invisible government". It is the government. It rules directly without fear of contradiction and its principal aim is the conquest of us: our sense of the world, our ability to separate truth from lies.

This essay was posted on the johnpilger.com Internet site on December 5---and it's certainly worth reading if you have the time.  I thank reader D'Anne Blume for sending it our way last Sunday.

U.K. stocks suffer worst weekly rout since 2011 on economy fears

The FTSE 100 suffered its worst week for more than three years, with more than £100bn wiped off the value of Britain’s biggest companies after investors took fright at signs of a Chinese slowdown, the oil rout and looming elections in Greece, plunging global stock markets into turmoil.

London’s benchmark index on Friday slumped 161.07 points to 6,300.63, a 2.5pc tumble that brought its drop since the open of trade on Monday to 6.6pc. The FTSE 100 fell every day this week.

The slide marked the heaviest weekly fall since August 2011 and knocked £112bn off the value of the index. Today alone saw the FTSE 100 lose almost £41bn, as bourses around the world all plunged. Germany’s DAX y lost 2.7pc, the CAC 40 in France dropped 2.8pc and the Italian FTSE MIB slid 3.1pc. On Wall Street, the Dow Jones Industrial Average had lost almost 200 points by the time trading in London had finished.

Globally, more than $1 trillion was wiped from equities this week, while the VIX index, a U.S. measure of volatility, rose 70pc.

This story appeared on The Telegraph's website at 6:15 p.m. GMT Friday evening---and I found it all by myself.

France drifts into deflation as ECB 'pea-shooter' falls short

France is sliding into a deflationary vortex as manufacturers slash prices to keep market share, intensifying pressure on the European Central Bank to take drastic action before it is too late.

The French statistics agency INSEE said core inflation fell to -0.2pc in November from a year earlier, the first time it has turned negative since modern data began.

The measure strips out energy costs and is designed to “observe deeper trends” in the economy. The price goes far beyond falling oil costs and is the clearest evidence to date that the eurozone’s second biggest economy is succumbing to powerful deflationary forces.

Headline inflation is still 0.3pc but is expected to plummet over the next three months. French broker Natixis said all key measures were likely to be negative by early next year.

This commentary by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 8:14 p.m. GMT on Thursday evening---and it's the second offering of the day from Roy Stephens.

Fitch Downgrades France to AA

Fitch Ratings has downgraded France's Long-term foreign and local currency Issuer Default Ratings (IDR) to 'AA' from 'AA+'. This resolves the Rating Watch Negative (RWN) placed on France's ratings on 14 October 2014. The Outlooks on France's Long-term ratings are now Stable. The issue ratings on France's unsecured foreign and local currency bonds have also been downgraded to 'AA' from 'AA+' and removed from RWN. At the same time, Fitch has affirmed the Short-term foreign currency IDR at 'F1+' and the Country Ceiling at 'AAA'.

In its debt sensitivity analysis, Fitch assumes a primary surplus averaging 0.5% of GDP over the next 10 years, trend real GDP growth averaging 1.5%, an average effective interest rate of 2.7% and GDP deflator of 1.5%. On the basis of these assumptions, the debt-to-GDP ratio would peak at 99.4% in 2017, before declining to 87.6% by 2023.

Fitch assumes the eurozone will avoid long-lasting deflation, such as that experienced by Japan from the 1990s. Fitch also assumes the gradual progress in deepening fiscal and financial integration at the eurozone level will continue; key macroeconomic imbalances within the currency union will be slowly unwound; and eurozone governments will tighten fiscal policy over the medium term.

What are these guys smoking?  How about junk status?  That's what France's bonds should really be rated at---along with just about every other country's bonds as well.  This Zero Hedge posting appeared on their Internet site at 4:13 p.m. EST yesterday afternoon---and I thank Elliot Simon for passing it around.

‘We want our jobs!’ Thousands march against Italian labor reforms

Some 40,000 protesters took to the streets of Rome on Friday, as Italy was gripped by protests against Prime Minister Matteo Renzi's reforms. Demonstrations turned violent in Milan and Turin as protesters clashed with police.

A general strike called by CGIL and UIL, two of Italy’s major trade unions, prompted huge rallies in over 50 cities nationwide. The unions have denounced government reforms, claiming they pose a threat to job security.

Strikers believe the burden of reform is being placed unfairly on workers.

Renzi has defended the reform program, saying that Italy, which is in the midst of a three-year recession – the longest since WWII – needs mobility of labor in order to jump-start the economy. Protestors, however, disagree. Thousands marched under the banner “Cosi non va!,” which roughly translates to “This is unacceptable!”

This news story showed up on the Russia Today website at 9:22 p.m. Moscow time on their Friday evening, which was 1:22 p.m. in New York.

Greek Stock Rout Means ASE Is 2014 Worst After Russia

Anxiety that voters will kick out leaders committed to Greece’s bailout wreaked havoc on markets, sending the nation’s shares for the biggest weekly slump since 1987 and making them this year’s worst performers behind Russia.

The ASE Index (ASE) has lost 20 percent this week, taking its decline for the year to 29 percent. Only Russia’s RTS Index did worse, with a 44 percent plunge. The rout spread to Greek bonds, with rates on three- and five-year notes jumping yesterday to the highest levels since the 2012 debt restructuring.

Greece’s government said this week it would start the process of electing a new president early. The risk is that Prime Minister Antonis Samaras will have to call a parliamentary election that anti-bailout party Syriza might win, reintroducing the turmoil that threatened the European currency union two years ago. Syriza wants a write-down on Greek debt held by euro-area member states and the European Central Bank.

This Bloomberg item, filed from London, appeared on their website at 7:36 a.m. Mountain Time yesterday morning---and I thank reader M.A. for sending it.

Russia targets Cyprus, Hungary, and Italy for sanctions veto

Moscow has begun lobbying what it sees as sympathetic EU capitals - Budapest, Nicosia, and Rome - to veto next year's renewal of Russia sanctions.

The first batch of E.U. measures - an asset freeze on Ukraine’s former president Viktor Yanukovych (now hiding in Russia) and 17 associates - expires in March. The next batch - visa bans and asset freezes on Russian officials linked to Russia's annexation of Crimea - ends in April.

The most painful sanctions - on Russian banks and energy firms, imposed after the Malaysian Airlines disaster - end in July.

Member states must agree by consensus to extend their validity---but if one or more of them break ranks, the sanctions will fall.

This article, filed from Brussels, appeared on the euobserver.com Internet site at 9:57 p.m. Europe time on Thursday evening---and it's another contribution from Roy Stephens.

John Batchelor Interviews Stephen F. Cohen about Russia, the Ukraine and Europe

Obama states that Russia is being isolated in the world but the reality seems to be that the rift between the E.U. and Washington is growing and Russia has simply changed course. Although Stephen Cohen does not discuss it, the bell may be tolling for Merkel's political future as that soon to be famous Letter of the 60 is a stern warning that better minds do not like Germany's course against Russia.  The point is that the E.U. is also being isolated from Russia - and Putin has continually stated that his actions with pipelines, trade and associations with China and other BRICKS nations makes this course inevitable. All too true.

Meanwhile there are glimmers of moderation now being heard in the United States. The Booker Institute authors have come out against Washington extremism which it considers dangerous and on a war footing. Cohen again hints about incompetency and dishonesty in the White House.

Cohen also postulates that Ukraine during these upheavals may actually disintegrate as it pushes for war and neglects its obligations to its own citizens in the West.

This very interesting audio interview was posted on the johnbatchelorshow.com Internet site on Tuesday---and I thank Larry Galearis for sending it along.

Ukraine cheers U.S. vote for military aid, Russia outraged

Ukraine welcomed a U.S. bill that would allow Washington to provide lethal military assistance to the embattled country, but Russia expressed outrage at the "openly confrontational" legislation.

The bill -- passed late on Thursday and due to get final approval in Congress on Friday before being sent to U.S. President Barack Obama -- opens the way for up to $350 million (280 million euros') worth of U.S. military hardware to be sent to Ukraine, which has been fighting an eight-month war against Kremlin-backed separatists in its east.

It also threatens fresh sanctions against Russia, whose economy is crumbling under previous rounds of Western sanctions and a collapse in oil prices.

U.S. Secretary of State John Kerry is set to meet Russian Foreign Minister Sergei Lavrov in Rome on Monday amid the toughening American response.

Russia's foreign ministry said the new U.S. legislation put a "powerful bomb" under U.S.-Russia bilateral ties.

IF the president signs this bill, it will really up the ante a lot.  This AFP news item, filed from Kiev, appeared on the yahoo.com Internet site  yesterday evening EST---and I thank Jim Skinner for digging it up for us.

World Oil Demand Outlook Cut Again; Sub-$60 Price Seen Holding

Any hope that global demand would provide a floor for oil’s free fall was dashed as the leading energy forecaster cut its outlook for the fourth time in five months and crude extended its tumble.

Oil dropped 3.6 percent in New York after the International Energy Agency forecast weaker consumption next year and said supply from countries outside of the Organization of Petroleum Exporting Countries will rise faster than previously estimated.

This year’s 41 percent drop in crude has hurt the economies of oil-producing countries from Russia to Nigeria, reducing fuel demand. Brent crude is too low for 10 of OPEC’s 12 members to balance their budgets, yet not low enough to force producers to scale back output. The U.S. is producing the most oil in three decades and OPEC members have pumped more than the group’s target level for each of the past six months.

This very interesting Bloomberg news item, filed from London, appeared on their Internet site at 2:47 p.m. Denver time on Friday afternoon---and it's the second contribution of the day from reader M.A.

The Oil Market Actually Works, And That Hurts

It’s not about where WTI and Brent are at any given moment. Even if WTI is down another 3.60% today so far at $57.79. Whatever WTI tells us, the real world out there trumps it by a mile and a half. The prices at which oil actually sells in the real world are way below WTO and Brent standards, a very big and scary development. There are tons of parties that will sell at any price they can get. There is no better way to drive prices down further, it’s a vicious circle down a drain.

The market is setting future prices as we go along, that’s the – inevitable – mechanism. It’s called price discovery. We knew ISIS was selling at $30 or so, but tar sands at $30 and both Canada and Venezuela heavy crude at $40, that’s way more than an outlier. At WTI standard prices, too many can’t move nearly enough product anymore, and with credit having been slashed, moving product is the sole way to survive. How much of this ongoing process would you think we have we seen to date?

Here’s one of the first oil-producing countries about which serious alarm bells are raised. It’s not Venezuela or Nigeria, it’s Canada.

This short must read commentary appeared on theautomaticearth.com Internet site yesterday---and my thanks go out to Dan Lazicki for finding it for us.

Russia sees promise in energy ties with India

Bilateral efforts to expand cooperation in the oil and gas sector between Russia and India hold "great promise," the Kremlin said Thursday.

"We are paving the way for long-term, true and mutually beneficial cooperation," Russian President Vladimir Putin said during a state visit to New Delhi.

Russia is examining its energy options as Western sanctions take their toll on its economy. In July, Russian Ambassador to India Alexander Kadakin told Indian business newspaper The Hindu the Kremlin was interested in spending as much as $40 billion to build a natural gas pipeline for India.

The pipeline would run along the southern border of Russian to India through the Himalayan region or mirror the route of the planned pipeline from Turkmenistan.

This short news item, filed from New Delhi, was posted on the UPI website, at 8:37 a.m. EST on Thursday evening---and it's another contribution from Roy Stephens.

20 deals in 24 hours: Russia-India relations given $100 billion-worth boost

The economic burden of Western sanctions has pushed Russia to the east in search of business opportunities. Judging by the outcome of President Putin’s visit to India - 20 high-profile deals struck – Moscow’s ‘pivot to Asia’ is getting a warm welcome.

Russian President Vladimir Putin achieved this during his visit to India spanning 23 hours and 15 minutes and at a summit meeting with Indian Prime Minister Narendra Modi that lasted barely a few hours.

By the time the two leaders finished their business in New Delhi’s Hyderabad House, 20 pacts were signed in the presence of Putin and Modi on 11 December and the two sides ended with US$100 billion commercial contracts.

Rich pickings by both sides included deals worth $40 billion in nuclear energy, $50 billion in crude oil and gas and $10 billion in a host of other sectors, including defense, fertilizers, space, and diamonds.

This op-edge piece showed up on the Russia Today Internet site at 12:07 p.m. Moscow time on Friday---and the stories from Roy just keep on coming.

Generations of Victims: Bhopal's Unending Catastrophe

Thirty years after the worst chemical accident in history, the disaster is hitting a new generation. The victims have received little help, professional clean-up has not happened and there are no signs the ongoing environmental catastrophe will end.

"The people can't see, smell or taste the poison," says Rachna Dhingra, "but it's there." It's in the water, in the flesh of fish and in the milk of the water buffalo, and it's in the dark mud that slum residents scrape from the shores of the lake to fill the cracks in their houses. Dhingra, 37, is standing on a small hill in her blue kurta, a long traditional Indian garment, angrily trying to talk sense into the fishermen. "This is suicide," she shouts.

Today's lake was once used as a solar evaporation pond, a dump for the unfiltered waste from the nearby chemical plant. More than 11,000 tons of material was dumped there, and now the soil and groundwater are contaminated with mercury, nickel and other heavy metals. Nevertheless, farmers water their animals at the lake every day, and women fetch water from it to wash their children and their laundry. The contaminated lake affects more than half a million people. For activist Dhingra, what is happening in Bhopal is an "endless catastrophe -- and the world simply looks away."

The murky lake is only about 500 meters (1,640 feet) from the grounds of the former Union Carbide plant. The rusty factory ruins form a backdrop to the corrugated metal roofs of the slum, almost a memorial. They are silent witnesses of the tragedy that began in Bhopal 30 years ago and continues today.

This 2-page essay appeared on the German website spiegel.de on Tuesday---and was another article because of content and length reasons that had to wait for my Saturday column.  I thank Roy Stephens once again for sending it.

The Curse Of Keynesian Dogma: Japan’s Lemmings March Toward The Cliff Chanting “Abenomics”

According to Takahiro Mitani, trashing your currency, destroying your bond market and gutting the real wages of domestic citizens is a sure fire ticket to economic success. Yes, that’s what the man says---“I have no doubt that the economy is in a recovery trend if you look at the long run….”

After two years of hoopla and running the BOJ’s printing presses red hot, however, there is not a shred of evidence that Abenomics will lead to any such thing. In fact, after the recent markdown of Q3 GDP even deeper into negative territory, Japan’s real GDP is no higher now than it was the day Abenomics was launched in early 2013; and, in fact, is no higher than it was on the eve of the global financial crisis way back in 2007.

This longish commentary by David Stockman is certainly worth reading---and I thank Roy Stephens once again for sharing it with us.

"More Scarecrows Than People": A Tragic Preview Of Japan's Terminal Collapse

A few weeks ago it was revealed that the mystery person behind the latest bout of monetary (if not so much fiscal) insanity in Japan is none other than Paul Krugman, a fact which has since assured the fate of Japan as a failed state: the demographically imploding country now has at best a few years (if not less) before it implodes into a hyper-inflationary supernova.

And for a very graphic, and tragic, preview of Japan's endgame - the direct result of following Keynesian and monetarist policies to a tee - we go to the Associated Press, which looks at the village of Nagoro, located "deep in the rugged mountains of southern Japan once was home to hundreds of families" and finds that now, only 35 people remain, outnumbered three-to-one by scarecrows that Tsukimi Ayano crafted to help fill the days and replace neighbors who died or moved away.

Wow!  An absolute must read if there ever was one!  I've known for more than a decade that this was Japan's future, but this AP story from Monday was like a two by four right between the eyes.  The story is courtesy of Manitoba reader U.M., who sent it to me earlier this week---and I stole the introductory paragraphs---and the headline---from the Zero Hedge piece about it.

Doug Noland: The Collapsing Periphery

This week saw things take a turn for the worse for the Faltering Periphery Bubble. On the back of crude oil’s $8.03 collapse (to five-year lows), Venezuela CDS surged another 1,402 bps to 4,151 bps. Ukrainian bond yields surged 517 bps this week to 28.63%. Russian ruble yields jumped another 95 bps to 12.82%. On the currency front, the Russian ruble was slammed for another 9.25% (down 43.6% y-t-d). The Colombian peso fell 3.7%, the South African rand 2.1%, Indonesia rupiah 1.4%, Chilean peso 1.1% and Indian rupee declined 0.8%. The Chinese renminbi declined a not insignificant 0.6% against the dollar this week.

Importantly, the Periphery’s core has fallen under major duress. The Mexican peso was hit for 2.7% (down 11.7%) this week, with the Brazilian real down 2.5% (down 11%) and the Turkish lira 1.7% (down 6.5%). Brazilian CDS surged 48 bps to a one-year high 212 bps. Mexican CDS jumped 22 bps to a one-year high 112 bps. Brazilian stocks sank 7.7%. Turkey CDS rose 36 bps to 185 (high since October). Indonesian rupiah yields jumped 34 bps to 8.11%.

With Emerging Market currencies faltering, local currency denominated debt has been under pressure. Yet, for the most part, dollar-denominated EM debt has performed well – that is, until this week. Importantly, the EM dollar-denominated bond dam gave way. Russia dollar bond yields surged 59 bps to 6.62%. Brazil yields jumped 47 bps to 4.56%. Turkey yields rose 45 bps to 4.45%; Mexico 18 bps to 3.53%; Peru 22 bps to 3.80%; and Colombia 28 bps to 3.94%. Venezuela dollar-denominated yields jumped 381 bps this week to 24.28%.

It is also fundamental to my current analysis that central bank reflationary measures have rapidly lost their capacity to hold the global Bubble together---and that the game would continue.  The game, however, has changed. Flagrant euro and yen devaluation propelled king dollar, in the process giving a powerful bear hug to already deflating Periphery Bubbles. King dollar placed further downside pressure on crude and commodities markets. Collapsing crude and commodities impaired financial and economic stability for scores of countries and companies – too many that had ballooned debt (much dollar-denominated) throughout the previous boom. Huge amounts of global debt have rather suddenly turned suspect, inciting a self-reinforcing flight out of currencies, debt markets and commodities. And the more flows reverse out of the Periphery and head to the bubbling Core, the more destabilizing the unfolding king dollar dynamic for the global financial “system” and economy.

With each passing week, Doug Noland's Credit Bubble Bulletin becomes all the more crucial to the understanding of the credit dynamic that now blankets Planet Earth.  As always, it's a must read from one end to the other---and I thank reader U.D. for passing it around last night before I got around to digging it up myself.

Chris Martenson interviews Mike Maloney about the Coming Wealth Transfer

Chris Martenson: Well it’s global this time, right? This is -- there’s nowhere to hide. (...)  What has happened when we’ve tried to print our way to prosperity before? What has happened? Why has it happened and what have been the consequences always been?

Mike Maloney: Whenever you try to print your way to prosperity it transfers well from the masses to the few. The few being the people running the game and then also the hucksters that are very nimble, the con artists and so on. You see these people get rich during the Weimar Hyperinflation. There were quite a few of these fancy salespeople that got rich; they didn’t stay rich once things stabilized again.

But it creates such a topsy turvy world that the normal person that does not know how to operate under these weird economic conditions cannot possibly keep up with things and wealth is transferred away from those people to the people that are very good at observing what’s going on that second and adjusting to it. But the one thing that I see as a constant throughout history is that gold and silver eventually do an accounting of all this -- the financial -- you know financial finessing that the governments are doing.

And when it does that it -- there is a transfer of wealth to the people that own gold and silver. And so -- it’s very rare moments in history. This does not happen often. But it’s a great opportunity and I’ve just -- you know if you look at gold right now the public’s opinion of gold is quite low because it’s been going down for three years.

This 43:35 minute audio interview [with transcript] showed up on Chris Martenson's peakprosperity.com Internet site last Saturday, but for obvious length reasons, it had to wait for today's column.  It's worth your time, if you have any left, that is---and I thank reader John Bastian for passing it around last Sunday.

Peter Boehringer explains the German gold repatriation campaign

In an interview with Rick Wiles of Tru News, Peter Boehringer of the German Precious Metals Society, a leader of the campaign to induce the Bundesbank to repatriate Germany's gold reserves, describes the campaign and the central bank's longstanding reluctance to provide information about the metal.

The interview, which was recorded on Thursday, begins at the 16-minute mark on the trunews.com Internet site.  Chris Powell filed this GATA release from Munich early Friday afternoon local time.

Austria Considers Repatriating Its Gold

And just like that, the list of countries who want to repatriate their gold just increased by one more, because after Venezuela, Germany, the Netherlands, sorry Switzerland, and rumors of Belgium, we now can add Austria to those nations for whom the "6,000 year old barbarous relic bubble" is more than just "tradition."

From Bloomberg: Austrian Central Bank Mulls Relocating London Gold: Standard

The Austrian state audit court says central bank should address concentration risk of storing 80% of its gold reserves with the Bank of England, Standard reports, citing draft audit report. Court advises central bank to diversify storage locations, contract partners.

Austrian central bank reviewing gold storage concept, doesn’t rule out relocating some of its gold from London to Austria: Standard cites unidentified central bank officials. Austria has 280 tons gold reserves, according to 2013 annual report. Austrian Audit Court Will Review Nation’s Gold Reserves.

This Zero Hedge gold-related story is one I found embedded in a GATA release that Chris Powell filed from Toronto just before midnight EST last night.

Koos Jansen: Shanghai Gold Exchange chief's data disputes WGC's China demand estimates

Data from the chairman of the Shanghai Gold Exchange shows that the World Gold Council's estimates of China's gold demand are very understated, Bullion Star market analyst and GATA consultant Koos Jansen reports.

This commentary by Koos showed up on the Singapore-based bullionstar.com Internet site yesterday sometime---and I found this story that Chris Powell filed on the gata.org Internet site just after midnight EST last night.

¤ The Funnies







¤ The Wrap

One must look away from the COMEX to understand how JPMorgan could be the world’s largest silver long (owner) since the data indicate that the bank still holds a short position on the exchange, albeit the smallest such short position in 7 years. The evidence suggests that JPMorgan used its control of silver prices by virtue of its dominant COMEX market share to depress prices, not only to accrue profits on its short position, but even more for the express purpose of accumulating physical silver on the cheap. What evidence?

The evidence lies in the intentionally poor price performance of silver over the past nearly 4 years and the fact that the world has produced as many as 300 million ounces of new silver that has been excess to total fabrication demand. This extra silver had to be bought by the world’s investors and those investors did not appear to be aggressive buyers. In other words, someone had to buy the silver and since the world’s investors did not appear to be ready buyers, the metal was most likely bought by a non-traditional buyer. JPMorgan most closely fits that description for two reasons. One, buying physical silver was the most practical and efficient manner of closing out JPM’s documented COMEX short position and two, the silver purchases would be kept confidential since no reporting requirements attach to physical ownership. By buying physical silver, JPMorgan could cover its massive COMEX short position absent prying eyes. - Silver analyst Ted Butler: 10 December 2014

Today's pop 'blast from the past' comes from an American rock band that formed in L.A. back in 1977.  This was their first big hit during the winter of 1978/79---reaching #5 on the U.S. Billboard Charts.  The link is here---enjoy!

Today's classical 'blast from the past' is an old Christmas chestnut that I drag out every year---and since there are only two weekends left before Christmas, I better stick it in here, as I have something else for next weekend already.  Despite the fact that this work was composed for a bass voice, here's now-Dame Emma Kirkby singing what I consider to be the definitive version of "But who may abide..." from Handel's Messiah, which he composed back in 1741 A.D.  It's 4:07 minutes of pure heaven on earth.  What a voice!  The link is here.

It was a pretty quiet day in the precious metal markets yesterday, but with the world's economy, particularly in the emerging market economies, in the initial stages of melt-down, it may not remain quiet much longer.  However, the 'orphan' rally that we had in the precious metals on Tuesday, along with yesterday's COT Report that covered it, was an indication that 'da boyz' are not going to let things get out of hand to the upside, at least for the moment.

Here are the 6-month charts for all four precious metals, plus WTIC, which hit a new low for this move down yesterday.

Although both gold and silver blasted through their respective 50-day moving averages like a hot knife through soft butter on Tuesday, they haven't been allowed to get anywhere since---and with the short positions of the technical funds whittled away to next to nothing, it's hard to see how the next rally will develop, unless these same funds start pouring onto the long side.  And if that's the case, JPMorgan et al will most likely meet them head on like they did on Tuesday.  And even though the Commercial net short positions in both gold and silver are now ripe for an engineered price decline, Ted Butler wonders whether these same technical funds that just covered most of their short positions at big profits, will stick their heads back in the lion's mouth by going back on the short side if 'da boyz' can make it happen.

So we wait.

Along with the U.S. provoking Russia at every turn---and oil prices at a level that is about to wreak financial and economic havoc in all oil-producing nations, other than a few in the Persian Gulf region---the stage is certainly set for some sort of crisis.  And if it doesn't unfold right away, the effects of both are certain to intensify dramatically in the not-too-distant future.

It's hard for me to believe that Russia/Ukraine situation is happening in isolation from what now has all the appearances of a credit market and financial implosion which, as Doug Noland pointed out earlier, is now firmly established in the emerging markets---and is now starting to infect the "Core Bubble Dynamics" as he so eloquently puts it.

Casting back to an Earnest Hemingway quote that has graced this column far too often, but which is worthwhile resurrecting at this particular juncture---"The first panacea for a mismanaged nation is inflation of the currency; the second is war.  Both bring a temporary prosperity; both bring a permanent ruin.  But both are the refuge of political and economic opportunists."

Here's a chart that Nick Laird sent me in the wee hours of this morning.  It's the "Major Markets Composite Index" going back to 1970---and it certainly doesn't require any explanation on my part, as the chart says it all.  The market swoon of the last few weeks---and this past week in particular---barely register on the far-right side of this graph, but the potential size of the down move from here is terrifying---and that's being kind.

No amount of money printing will do any good now---and I see nothing but very hard times ahead.

Somewhere in all of this, the precious metals should do well, but what event will trigger it, is hard to tell, as the powers-that-be in the COMEX futures market in gold and silver et al are still on the job.

And as I've said before recently, I'm comforted by the fact that Alan Greenspan has gone on record that at some point in the future, the price of gold will trade "materially" higher than it is now---and also by the fact that certain entities are buying massive amounts of physical silver in all forms, which will ensure that someday, silver will certainly become the new gold.

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

See you on Tuesday.

Ed Steer

]]>
Sat, 13 Dec 2014 10:03:00 +0000
<![CDATA[CME Implements Gold, Precious Metals Circuit Breakers Up to $400 Wide]]> http://www.caseyresearch.com/gsd/edition/cme-implements-gold-precious-metals-circuit-breakers-up-to-400-wide/ http://www.caseyresearch.com/gsd/edition/cme-implements-gold-precious-metals-circuit-breakers-up-to-400-wide/#When:06:17:00Z "I'm certainly intrigued by these 'circuit breakers' in gold and silver"

¤ Yesterday In Gold & Silver

The high tick for gold on Thursday came at 9 a.m. Hong Kong time---and the low was at the London p.m. gold fix---3 p.m. GMT/10 a.m. EST.  The subsequent rally ran into resistance at three different points, but was capped for good at 12:15 p.m. in New York.  From that high, the price sold off until 2 p.m. EST, before trading unsteadily sideways into the 5:15 p.m. close of electronic trading.

The high and low ticks were reported by the CME Group as $1,233.40 and $1,216.40 in the February contract.

Gold closed in New York yesterday at $1,227.40 spot, up $1.30 from Wednesday's close.  Volume, net of December and January, was 150,000 contracts---the same as Wednesday's volume.

Here's the New York Spot Gold [Bid] chart on its own, so you can see the COMEX price action in more detail.

The price chart for silver is very similar to gold's, but since silver traded within a two bit price range all day long on Thursday, the high and low ticks don't mean much.

Silver finished the Thursday session at $17.095 spot, up 4 cents from Wednesday.  Volume, net of December and January, was 36,000 contracts---compared to the 50,000 contracts on Wednesday.

Platinum was in rally mode right from the 6 p.m. open in New York on Wednesday evening, with the high tick coming around 12:30 p.m. Hong Kong time.  It was all down hill from there, with the low coming shortly after 9:30 a.m. in New York.  The subsequent rally got capped about 12:20 p.m. EST---and from there it got sold down a bit into the close.  Platinum finished the Thursday session at $1,237 spot, up a buck on the day.

Palladium continues to crawl higher, but is never allowed to close on its high tick and, like gold and platinum, its high tick came around 12:20 p.m. EST.  Palladium closed at $817 spot, up five bucks from Wednesday's close.

The dollar index closed late on Wednesday afternoon at 88.22---and promptly fell off the proverbial cliff shortly after trading began in New York on Wednesday evening.  As I said in The Wrap yesterday, it appeared that 'gentle hands' were at the ready---and from there the index chopped higher, printing its 88.77 high tick at 2 p.m. EST.  By 5 p.m. it had given up a bunch of its earlier gains---and then rallied a handful of basis points into the close.  The index finished the Thursday session at 88.55---up 33 basis points on the day.

The gold stocks opened down---and then slid a bit lower until the London p.m. gold fix was out of the way.  The high of the day came minutes after 11:30 a.m. EST---and then the shares headed lower until 2 p.m.  They rallied back into positive territory by 3:30 p.m., but then sold down into the close.  The HUI closed down 1.29%.

The silver equities followed a similar chart pattern---and Nick Laird's Intraday Silver Sentiment Index closed down 1.85%.

Although gold and silver prices haven't changed much in the last couple of trading days, almost all the gains in the silver and gold equities since the 'orphan' rallies on Tuesday have vanished over the same period of time.

The CME Daily Delivery Report was almost a bust, as it showed that one gold and zero 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 December open interest in gold slid 10 contracts yesterday---and the o.i. outstanding is now 1,044 contracts.  Silver's December o.i. declined by 120 contracts---and the report shows that there are still 397 contracts open.

I don't know if my heart will stand it or not, but an authorized participant added more gold to GLD for the third consecutive day.  It was only 30,502 troy ounces, but it's better than the alternative.  And as of 9:33 p.m. yesterday evening, there were no reported changes in SLV.

Since yesterday was Thursday, Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with what happened within the SLV ETF during the reporting week ending at the close of trading on Wednesday---and this is what he had to say.  "Analysis of the 10 December 2014 bar list, and comparison to the previous week's list:  4,789,802.2 troy ounces were removed (all from Brinks London), no bars were added or had serial number changes."

"The bars removed were from Russian State Refineries (1.7M oz), Britannia (0.7M oz), Australian Gold (0.4M oz) and 34 others.  As of the time that the bar list was produced, it was overallocated 312.3 oz."

"There was a withdrawal of 2,873,718.0 oz on Wednesday that is not yet reflected on the bar list.
Over 99% of the bars removed were old bars, that had been in SLV for many years.
"

In case you missed it, dear reader, what Joshua's report shows is that 7.8 million ounces of silver were withdrawn from SLV since December 1---and nothing was added during that period!  During the same time period, about 260,000 troy ounces of gold has added to GLD.

Why isn't anyone except Ted Butler screaming about this dichotomy from the rooftops, as this is real silver news---and has been going on for years!  Ted says that these are the one or two big buyers removing silver from the SLV before they exceed the 5 percent ownership that requires them to report their holdings to the SEC.  Ted is still open to any alternative suggestion as to what explains this dichotomy---and so am I.

It's also also a virtual certainty that the big buyers in SLV are the same as the big buyers of silver eagles and silver maple leafs, as the retail market in these bullion coins is virtually nonexistent at the moment.

Rarely have I seen the 'lunatic fringe' mention either of these highly unusual activities---and if they do, they have no explanation as to why these events are occurring.  But they sure are great at making up stuff that isn't true, or doesn't matter even if it is.  It's the 21st century equivalent of selling snake oil out of the back of a covered wagon.

Another bunch of silver eagles were reported sold by the U.S. Mint yesterday.  This time it was 118,500 of them.  There were no reported gold sales once again.

Over at the COMEX-approved depositories on Wednesday there was no in/out activity in gold whatsoever.  But, as is almost always the case, the in/out activity in silver continues to be manic.  This time 1,180,422 troy ounces were reported received---and 445,505 troy ounces were shipped out.  The link to that action is here.

Since it's Friday, the data is out for the weekly withdrawals from the Shanghai Gold Exchange.  This week it was 'only' 38.361 tonnes---and here's Nick Laird's most excellent chart.

I'm happy to report that I don't have all that many stories for you today, but there should be two or three that hopefully float your boat.

¤ Critical Reads

Debt Is Forever in 21st Century America

Nearly one in five Americans expect to be in debt the rest of their lives and never pay off what they owe, according to a new CreditCards.com survey.

Specifically, 18 percent of the 1,001 respondents don't believe they will ever get out of debt – double the percentage who said that less than two years ago, in May 2013.

While mortgage delinquencies have declined recently, credit card debt is going back up and student loan debt has been on the rise in recent years, CNBC reported.

Older respondents were more apt to believe their debt would never get paid off. Approximately 31 percent of those older than 65 expected to be lifelong debtors, versus 22 percent of those aged 50 to 64 and just 6 percent of millennials aged 18 to 29.

Today's first news item appeared on the newsmax.com Internet site at 7:40 a.m. EST on Thursday morning---and it's courtesy of West Virginia reader Elliot Simon.

Langone: 'Consumers More Cautious Now Than I've Ever Seen'

Many analysts are growing increasingly optimistic about the U.S. economy, in light of recent data such as the 321,000 surge in November non-farm payroll employment. 

But Home Depot co-founder Ken Langone is more circumspect, especially when it comes to the consumer sector. "The consumer is more cautious now than I've ever seen them," he told CNBC

Stagnant income remains a problem for many Americans, Langone notes. Average hourly wages rose only 2.1 percent in the 12 months through November, barely exceeding the 1.7 percent increase in consumer prices in the 12 months through October.

"We have to do something to get the lower-income people to the party. It isn't just jobs. It's pay," Langone said.

This story showed up on the moneynews.com Internet site at 8:00 a.m. EST yesterday---and it's the second contribution in a row from Elliot Simon.

Bill Bonner: The "Near-Bubble"

The Dow fell 51 points on Monday. Gold surged $37.10 – or 3.1% – to settle at $1,232 an ounce. The US stock market is “hideously expensive,” says value investor James Montier at Boston-based investment firm GMO.

He’s not wrong about that. But we have a feeling it’s going to be even more hideous before this story reaches its end. When it is so hideous that to look upon it sends us running to a public toilet and retching, that is when it will be most loved by everyone.

This is the story of human hubris (a classic in Greek drama), wherein man oversteps his boundaries and brings down upon himself the fury of wrathful gods.

Yellen, Draghi, Kuroda, Carney, Zhou – the protagonists think they are “wiser than God.”

This short commentary, with two excellent charts, was posted on the acting-man.com Internet site yesterday---and it's courtesy of Dan Lazicki.

Fed Bubble Bursts in $550 Billion of Energy Debt: Credit Markets

The danger of stimulus-induced bubbles is starting to play out in the market for energy-company debt.

Since early 2010, energy producers have raised $550 billion of new bonds and loans as the Federal Reserve held borrowing costs near zero, according to Deutsche Bank AG. With oil prices plunging, investors are questioning the ability of some issuers to meet their debt obligations. Research firm CreditSights Inc. predicts the default rate for energy junk bonds will double to eight percent next year.

“Anything that becomes a mania -- it ends badly,” said Tim Gramatovich, who helps manage more than $800 million as chief investment officer of Santa Barbara, California-based Peritus Asset Management. “And this is a mania.”

The Fed’s decision to keep benchmark interest rates at record lows for six years has encouraged investors to funnel cash into speculative-grade securities to generate returns, raising concern that risks were being overlooked. A report from Moody’s Investors Service this week found that investor protections in corporate debt are at an all-time low, while average yields on junk bonds were recently lower than what investment-grade companies were paying before the credit crisis.

This Bloomberg article, filed from New York, showed up on their Internet site at 8:59 a.m. Denver time yesterday morning---and it's the second offering in a row from Dan Lazicki.

Bank of Canada: Housing may be overvalued by as much as 30 per cent

The Bank of Canada is suggesting house prices may be overvalued by as much as 30 per cent, but governor Stephen Poloz maintains the country’s real-estate market is still likely headed for a soft landing.

Even with the risk of overvalued homes, the central bank governor reiterated his forecast Wednesday that the market will unwind gradually along with the improving economy.

“We believe the economy is gathering strength, it’s beginning to rebuild itself, it’s going to create new jobs and income is going to go up,” Poloz told a news conference after releasing the review.

Gathering strength?  Methinks not.  More like whistling past the graveyard.  This CP article, filed from Ottawa, appeared on the macleans.ca website on Wednesday---and I thank Brad Robertson for his second contribution in a row.

Governor Mark Carney Sweeps Aside Secrecy at Bank of England

Mark Carney, Bank of England governor, swept aside much of the secrecy that traditionally surrounds the central bank's deliberations on Thursday, promising to publish voting details and minutes of interest rate decisions at the same time they are announced.

The bank also wants to hold fewer monetary policy meetings each year and, after reviewing its practice of deleting recordings, has decided it will publish transcripts of monetary policy meetings after a delay of eight years.

The key word here is in the first sentence---and that is "much".  What is missing is the implied "but not all" portion, as I'm sure they're not about to discuss their gold secrets.

The above two paragraphs are all there is that's posted in the clear from this story that appeared in the Financial Times of London yesterday---and the rest is subscriber protected.  I found it in a GATA release that Chris Powell filed from Munich yesterday afternoon Europe time.

Norway Risks ‘Severe Downturn,’ Central Bank Governor Says

The governor of Norway’s central bank says western Europe’s biggest oil producer is facing a major economic slowdown as crude prices continue to plunge.

“Our job now is that we need to prevent a severe downturn in the economy,” Oeystein Olsen said today in an interview after a press conference in Oslo. “Overall, that is presently the major concern of the board. That explains why we have reduced the rate.”

Olsen cut Norway’s main interest rate today by 0.25 percentage point to 1.25 percent, a move that shocked markets and sent the krone down almost 2 percent against the euro. The decision came after almost three years of unchanged rates and marked a shift away from a policy that had sought to prevent excessive monetary easing from fueling house price growth.

The krone plunged as much as 1.8 percent against the euro and traded 1.1 percent lower at 9.0138 as of 10:56 a.m. in Oslo.

This Bloomberg article, filed from Oslo, showed up on their website at 6:50 a.m. MST yesterday morning---and it's another offering from Elliot Simon, for which I thank him.

Deutsche, Barclays FX Algos Busted For FX Rigging

First it was humans. Now it is vacuum tubes.

Having quickly learned that letting carbon-based traders engage in FX (or stock, or bond, or Libor, but not gold, never gold) rigging usually leads to said carbon-trader ultimately being fired with the bank suffering a violent slap on the wrist, banks are getting smart, and have - as we have been claiming for about 4 years - decided to let pre-programmed algos do all the market manipulation. Only this time it is not some tinfoil blog making this accusation, but New York regulators who according to Bloomberg, have found evidence that Barclays Deutsche Bank may have used algorithms on their trading platforms to manipulate foreign-exchange rates, a person with knowledge of the investigation said.

As Bloomberg reports, the practice suggests there may be a systemic problem involving automated tools that goes beyond individuals colluding to rig currency benchmarks and take advantage of less sophisticated clients.

Whatever tipped them off: was it looking at any given Yen cross for about a minute and seeing the now surreal stop hunts that take place on a constant basis as algos out rig each other in attempts to pick the pockets of any human fools who still think they have a chance in yet another rigged, manipulated market.

This must read Zero Hedge commentary, along with the linked Bloomberg article, appeared on their website at 8:01 a.m. EST yesterday---and it was embedded in another GATA release from yesterday.

Marin Katusa: Russia’s Unfazed by Falling Oil Prices

Oil is not quite as powerful a weapon against modern-day Russia as one might think.

By arguing that the slump in oil prices will finish off Russia just like it did the Soviet Union, Ambrose Evans-Pritchard, writing in the Daily Telegraph, is forgetting how far Russia has come since those dark days.

It is true that the USSR couldn’t cope with falling oil revenues and that Saudi Arabia is credited with helping to break up the former empire by dramatically increasing oil production from 2 million to 10 million barrels per day in 1985.

And sanctions could make it harder for Russian firms to access Western know-how, and ultimately affect Russia’s oil output.

This short commentary by Marin was posted on the Casey Research website yesterday.

Greek candidate willing to call European leaders’ bluff

Events have rudely exposed the illusion that Greece's people will submit quietly to a decade of colonial treatment and debt servitude.

As matters stand, it is more likely than not that a defiant Alexis Tsipras will be the elected prime minister of Greece by late January. His Syriza alliance has vowed publicly and persistently that it will overthrow the EU-IMF Troika regime, refusing to implement the key demands.

A view has taken hold in E.U. capitals and the City of London that Mr Tsipras has resiled from these positions and will ultimately stick to the Troika Memorandum, a text of economic vandalism that pushed Greece into seven years of depression, with a 25.9pc fall in GDP, longer and deeper than Europe's worst episodes in the 1930s.

Mr Tsipras is a polished performer on the E.U. circuit. He can no longer be caricatured as motorbike Maoist. But the fact remains that he told Greek voters as recently as last week that his government would cease to enforce the bail-out demands "from its first day in office".

Here's another must read story.  This Ambrose Evans-Pritchard offering put in an appearance on the telegraph.co.uk Internet site at 9:55 p.m. GMT on Wednesday evening---and I thank Roy Stephens for bringing it to our attention.

OPEC veteran says oil price a 'disaster' and cartel powerless

OPEC is now "powerless" on its own to prevent oil prices falling further because of a 2m barrels per day (bpd) surplus of supply in the market and the cartel should seek a deal with Russia, Norway and Mexico to arrest the decline, according to a senior Gulf official.

Speaking exclusively to the Telegraph, Abdullah bin Hamad al-Attiyah, a senior adviser to the Emir of Qatar and a former president of the Organisation of Petroleum Exporting countries (OPEC) said: "OPEC can't solve this problem alone like before, now it's a different story. Russia, Norway and Mexico all must sit down with OPEC to discuss making cuts."

However, Mr al-Attiyah - who was one of OPEC's longest serving oil ministers when he led the Qatari delegation - said that he doubts the group of 12 producers will agree to an emergency meeting unless producers outside the cartel agree to also rein in production. He added that the oil market currently was suffering from an oversupply in the region of 2m bpd, most of which is coming from production outside the group.

"It's a disaster," said Mr al-Attiyah. "OPEC should meet with non-OPEC countries to resolve this but America will never cut production."

This story appeared in The Telegraph at 2:56 p.m. GMT yesterday afternoon---and it's worth your while as well.  My thanks go out to Roy Stephens one more time.

Going Nuclear: Russia and India agree to build 12 nuclear power reactors by 2035

Russia and India are ramping up energy ties and will construct at least 12 new nuclear reactors by 2035. Two will be completed by 2016 at the Kudankulam Nuclear Power Plant, Russian state-owned power company Rosatom confirmed Thursday.

"This morning a general framework agreement was signed on the construction and equipment delivery for the third and fourth blocks of the Kudankulam Nuclear Power Plant at the present site. Cement foundations [for the new blocks] will be poured in the beginning of 2016," Rosatom head Sergei Kiriyenko said Thursday, as quoted by Sputnik news agency.

In April, Russia and India agreed to begin phase two of the Kudankulam plant, which includes adding Block 3 and Block 4. It is the only nuclear power plant which meets all the 'post-Fukushima' safety requirements.

This news item showed up on the Russia Today website at 9:58 a.m. Moscow time on their Thursday morning, which was 1:58 a.m. in New York.  It's the third offering in a row from Roy Stephens.

Greenpeace sorry for Nazca lines stunt in Peru

Greenpeace has apologised for any "moral offence" it has caused, after a publicity stunt on the ancient Nazca lines in Peru.

Activists from the organisation placed a banner next to a figure of a hummingbird, carved more than 1,500 years ago.

The Peruvian government said it would prosecute the activists who took part.

The ancient depictions of animals, including a monkey and a hummingbird that are etched into the arid plain of Southern Peru are a vital part of the county's heritage.

The Greenpeace nutballs really stuck their foot in it this time---and do they ever know it.  This very interesting article found a home on the bbc.com Internet site at 9:17 p.m. EST on Wednesday evening.  I thank Casey Research's own Jeff Clark for sharing it with us.

More insane pictures of Russian potash mining destruction

The recent catastrophic accident at Uralkali's Solikamsk-2 potash mine is not an isolated case.

Over the past thirty years, numerous similar accidents, caused by sudden surface subsidence, occurred at potash mines located in and around Berezniki and Solikamsk cities in the Perm Region of Russia.

Berezniki and Solikamsk, the second and third largest cities of the Perm Region, sit on abandoned and existing underground potash mines, some of those located as close as 200-300 meters from the surface.

First major sinkhole occurred at the Berezniki potash mine #3 in 1986. It was later flooded and now has a 210 X 110 meters size---and in 1993-2005, several hundred earthquakes with a magnitude varied from 2 to 5 of the Richter scale, were recorded in the Berezniki-Solikamsk region.

This is another very interesting story, with some fantastic photos embedded as well.  It was posted on the mining.com Internet site on Thursday sometime---and I appreciate reader Carl Lindfors bringing it to my attention---and now to yours.

What Do They Know? CME Implements Gold, Precious Metals Circuit Breakers Up to $400 Wide

With memorandum S-7258, titled "Implementation of New NYMEX/COMEX Rule Regarding Special Price Fluctuation Limits for Certain NYMEX and COMEX Metals Futures and Options Contracts" released moments ago by the CME Group, and set to become effective on December 21, 2014, and which seeks a 5-minute trading halt when "price movements in lead-month primary futures contracts result in triggering events"...  "as a measure that is consistent with promoting price discovery and cash-futures price convergence" in order to "deter sharp price movements that may, for example, be driven by illiquid central limit order books prevailing from time to time in otherwise liquid markets", one wonders why now, and what does the CME know about upcoming volatility, or lack of liquidity, in the precious metals space that nobody else does (and does any of this have to do with the "berserk" algo test from November 25?)?

This must read Zero Hedge piece from yesterday really lit up the Internet---and even if you don't understand all of it, as I don't, it's not the parts that we don't understand that are amazing.  It's been a bit more than 20 years since there have been any trading limits on the precious metals---and as is stated in the one-sentence paragraph above---"one wonders, why now".  I'll be very interesting in Ted Butler's take on this---and once I have his opinion, I'll post it.  The first person through the door with this story yesterday was Howard Brown.  A similar commentary appeared on the goldseek.com Internet site yesterday---and the headline there read "Comex Institutes Trading Collars For Precious Metals"

Jim Rickards: Global Financial Calamity! U.S. economic collapse imminent

That's the headline to this 34:05 minute video interview that Greg Hunter did with Jim over at the usawatchdog.com Internet site back on December 5.

Greg has enough hyperbole in the headline to last a lifetime but, in reality, it's probably not far off the mark.

But Greg puts the big GOLD QUESTION to Jim at the 6:45 minute mark---and Jim's answer lasts until the 19:00 minute mark.  For that reason alone this video is a must watch.  I thank reader Brad Robertson for finding it for us yesterday.

Industrial silver use will jump 27% by 2018 - CRU

More and more applications for silver are being invented, discovered, and, importantly, commercialized, said a new report from the Silver Institute and CRU Consulting, stoking the growth potential from several of the most important industrial silver applications.

Total industrial silver demand is forecast to reach nearly 680 million ounces annually by 2018, according to the “Glistening Particles of Industrial Silver” report scheduled for public release Wednesday morning.

Half of this growth will occur in the electrical and electronics sector, but additional demand will be due to growth in the use of silver in batteries, Ethylene Oxide (EO) in the chemical sector, anti-bacterial uses of silver, the automotive industry, silver coated bearings, and the brazing alloys/solders sector.

“Over the past decade, physical silver demand has seen strong growth, of which industrial demand for silver, has contributed the largest share,” said CRU. Loss from the photography sector have been offset by increasing demand from other sectors as well as new applications, such as silver-zinc batteries, clothing and hygiene.

This rather longish silver-related story appeared on the mineweb.com Internet site on Wednesday sometime---and I thank Bill Busser for sending it our way.  It's worth reading.

Silver to see 11 million ounce deficit in 2015 – HSBC

The demand and supply balance for silver is likely to swing from a three million ounce surplus in 2014 to an 11 million ounce deficit in 2015, said HSBC in a report focusing on the outlook of silver.

The deficit comes mainly from a reduction in mine production, lower scrap supplies as well as a a halt to government sales. Consequently, the small but persistent deficit should limit further price declines.

Despite the deficit forecast, the bank is keeping its average price for silver outlook at $17.65 for 2015 and expects the precious metals to trade in the price range between $15 to $21 per ounce.

This is all very nice, but in the second paragraph above, the author talks about "a halt to government sales".  As Ted Butler has pointed out, no government has owned any silver for many, many years, so I'm not sure about the accuracy of the data he's using.  Secondly, deficits mean nothing to the price.  Look at platinum and palladium, which have both been in supply/demand deficits for several years now.  It has meant nothing.  The same with silver, because until JPMorgan et al decide, or are the given the word, prices are going nowhere---and only the willfully blind, or those whose jobs depend on them not seeing it, won't admit it.  Einstein was right.  The only thing that exceeds the amount of hydrogen in the world, is human stupidity.  I thank Casey Research's Jeff Clark for sharing it with us.

¤ The Funnies

¤ The Wrap

Based upon deposit/withdrawal patterns in the world’s largest silver ETF, SLV, a pattern of physical silver accumulation emerges. In the big silver price take down beginning in May 2011, some 60 million ounces of silver were redeemed from the trust as investors reacted to sharply falling prices by selling shares. The silver sold at this time was, obviously, bought by someone else; as there must be a buyer for every ounce sold. Who better a buyer than the world’s largest short holder at that time, JPMorgan? And over the past three and a half years, JPMorgan, by continuing to hold, albeit at a declining rate, the largest short silver holder becomes the de facto logical buying candidate.

Additionally, over the past 4 years, an unusually large amount of Silver Eagles have been produced and sold by the U.S. Mint, some 160 million ounces, in a steadily declining price environment. Nearly as many Silver Eagles were sold by the U.S. Mint over the past 5 years as were sold in the previous 23 years of the program. For the past four years, the Mint struggled to keep up with demand for Silver Eagles and frequently resorted to rationing coins. However, consistent reports from the retail dealer community indicated a fall off in broad retail demand for Silver Eagles.

The only plausible answer to this conundrum of record Silver Eagle sales and tepid retail demand was that a large entity, or entities, were behind the buying demand. Based upon the above, JPMorgan appears to me to the big buyer, accounting for 60-75 million coins over the past four years. All told, based upon SLV transaction, Silver Eagles and other forms of silver that could have been purchased, it is my guesstimate that JPMorgan could have accumulated 300 million oz of physical silver over the past four years; or three times what the Hunt Brothers were said to have bought by 1980. And please remember – there was a heck of a lot more silver in the world in 1980 than exists today; approximately 3 billion oz back then versus close to a billion oz today. - Silver analyst Ted Butler: 10 December 2014

There wasn't much action in the gold price yesterday---and what action there was during the New York session wasn't allowed to develop into anything, as the New York Spot Gold [Bid] chart at the top of this column indicates.

Here are the 6-month charts for all four precious metals once again---along with West Texas Intermediate, which closed below $60 the barrel yesterday.

And as I write this paragraph, the London open is about twenty minutes away.  The gold price has been drifting quietly lower during Far East trading on their Friday---and is down 8 bucks or so a the moment.  Silver actually rallied a bit at the 6 p.m. open of trading in New York on Thursday evening, but is now trading down a nickel or so from yesterday's close.  Gold volume is just over 18,000 contracts---and silver's volume is around 3,200 contracts.  Both platinum and palladium are down a few dollars apiece.  The dollar index is chopping sideways---and is up 5 basis points at the moment.

I'm certainly intrigued by these 'circuit breakers' in gold and silver that the NYMEX/COMEX has put into place, but as I've said before, I'll wait for Ted's take on this, as any meaning I would put on them would be strictly "amateur hour" stuff.  Ted traded commodities for a couple of decades for two different Wall Street firms---and his opinion over any other is what I would consider credible.  I'll keep you posted.

Today at 3:30 p.m. EST we get the new Commitment of Traders Report for positions held at the close of trading on Tuesday, December 9---and hopefully all the volume/price action from Tuesday's 'orphan' rallies in both gold and silver will be in it.  Whatever the numbers tell us, will be in my Saturday column.

And as I fire today's column off into cyberspace at 5:30 a.m. EST, I note that gold is barely off its earlier low---and is still down a couple of bucks on the day, but silver has managed to rally a bit above unchanged.  Gold volume is just over 33,000 contracts---and silver's volume is now up to 6,100 contracts.

Platinum and palladium are both hovering around unchanged, where they've been for most of the Friday session up until now.  The dollar index, which had been up 5 basis points earlier, began to roll over at 3 p.m.

Hong Kong time---and it hit its current 88.31 low shortly after 9 a.m.
in London.  It's only down 12 basis points at the moment.

As to what might happen for the remainder of the Friday session, I haven't a clue.  But having listened to the Jim Rickards interview, I'm comforted by the thought that this whole price management scheme will end sooner rather than later.  That feeling is buoyed up by the internal goings-on in the silver market over the last three years or so that Ted Butler has been writing about in great detail---and another data point on that timeline are the new and about-to-be-implemented 'circuit breakers' in the precious metal markets that appeared out of the blue yesterday.

All this should lead to the conclusion that something is definitely up. 

But until that time, we must wait some more---and make our final preparations.

When that day does arrive, it will be as Ted Butler has always said, as we won't have to ask if this it is or not, as the precious metal price charts will tell us all we need to know.

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

Ed Steer

]]>
Fri, 12 Dec 2014 06:17:00 +0000
<![CDATA[Indian Households Said to Spend 8% of Daily Consumption on Gold]]> http://www.caseyresearch.com/gsd/edition/indian-households-said-to-spend-8-of-daily-consumption-on-gold/ http://www.caseyresearch.com/gsd/edition/indian-households-said-to-spend-8-of-daily-consumption-on-gold/#When:06:16:00Z "It appears that we're back to twiddling our collective thumbs"

¤ Yesterday In Gold & Silver

After getting sold down a few dollars to the $1,230 level in early Far East trading on their Wednesday, gold rallied quietly to its high of the day, which came shortly before 3 p.m. Hong Kong time.  But by the 10:30 a.m. GMT London a.m. gold fix, the price had returned to the $1,230 level.  There was a tiny rally that began at the noon London silver fix, which got sold down the moment that COMEX trading began at 8:20 a.m. EST---and from there it gently sold off, closing on its low tick of the day.

The high and lows were reported by the CME Group as $1,238.90 and $1,225.20 in the February contract.

Gold finished the trading day at $1,226.10 spot, down $6.30 from Tuesday's close.  Volume, net of December and January, was not exactly light at 151,000 contracts.

The silver price had a little more shape to it.  It traded flat in the Far East until about 1:30 p.m. Hong Kong time---and then, like gold, began to rally.  That all ended at the London open---and from there price got sold down into the London silver fix.  The subsequent rally met the same fate as the gold price at the COMEX open---and it's low tick came minutes after 9:00 a.m. EST.  It rallied back a bit from there, but at precisely 2:00 p.m. EST in electronic trading, a willing seller pealed 17 cents off the price going into the 5:15 p.m. electronic close.  That turned a potentially positive close, into a negative one.

The low and high ticks were recorded as $16.95 and $17.355 in the March contract.

Silver finished the Wednesday trading session at $17.055 spot, down a nickel from Tuesday's close.  Volume, net of December and January, wasn't exactly light either at 50,000 contracts.

The platinum price rallied in fits and starts until shortly before the Zurich open---and it was pretty much all down hill from there, with platinum closing on its low tick of the day at $1,236 spot, down 6 bucks.

The palladium price rallied a few dollars in the early going in Far East trading on their Wednesday morning---and then didn't do much after that until around 1:30 p.m. Zurich time.  From there it rallied until 1 p.m. EST, before getting sold off into the 5:15 p.m. close of electronic trading.  Palladium closed at $812 spot---up five bucks on the day, but well of its high tick.

The dollar index closed late on Tuesday afternoon in New York at 88.67.  The 88.80 high tick came shortly before 10 a.m. in Hong Kong.  From that 'high,' the index drifted back to unchanged by shortly after the noon silver fix in London.  At that point, the index began to head south with more urgency, closing virtually on its low tick of the day at 88.22---down 45 basis points from Tuesday's close.

In many respects, the dollar index carved out an identical price path on Tuesday as it did on Wednesday, but this time it wasn't accompanied by a corresponding rally in the precious metals.  So it's safe to call the correlation between the dollar index and the precious metal prices so much bulls hit.  However, it does make for a good cover for JPMorgan et al when it becomes necessary---and it's obvious that yesterday wasn't one of those days.

Here's the 3-day chart, so you can see that the dollar index moves on Tuesday and Wednesday were almost mirror images of each other---but the 'reaction' of the precious metals obviously wasn't the same.

The gold stocks opened down a hair, but immediately rallied into positive territory, with the high coming just before 10:30 a.m. EST.  Despite the fact that the gold price was trending lower, the stocks managed to stay in positive territory until shortly before 2 p.m.  At that point the general sell off in the Dow, which began at the 1:30 p.m. COMEX close, infected the gold stocks---and by 3 p.m. were down a hair over 3 percent---and that's where they closed an hour later, as the HUI finished the day down 3.02 percent, giving up 60 percent of its Tuesday gains.

The silver equities followed a very similar pattern, but they only closed down 2.11 percent.  Here's Nick Laird's Silver Sentiment Index showing that.

The CME Daily Delivery Report showed that zero gold and 115 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The only short/issuer was Jefferies out of its client account---and the two largest long/stoppers were HSBC USA with 85 contracts---and Jefferies with 17 contracts for its client account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that December open interest in gold declined by 23 contracts---and is now down to 1,054 contracts.  In silver, December o.i. stands at 518 contracts, down 57 contracts from Tuesday's report.

Let the bells ring out and the banners fly, because for the second day in a row there was a deposit in GLD.  This time it was 96,080 troy ounces.  It's been years since we've seen that!  Over at SLV, the opposite happened, as an authorized participant withdrew a monstrous 2,873,718 troy ounces.  I don't need Ted Butler standing over my left shoulder to figure out that this was a 'Mr. Big' withdrawing silver in order to circumvent SEC requirements of having to report more than a 5 percent share ownership in that ETF.

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

There wasn't big in/out movement in gold over at the COMEX-approved depositories on Tuesday.  Only 3,215 troy ounces were reported received---and 803 troy ounces were taken out.  But, of course, it was another big day in silver, as 551,073 troy ounces were reported received---and another 1,061,295 troy ounces were shipped out.  Canada's Scotiabank took in all the silver---and almost a million ounces was shipped out of Brink's, Inc.  The link to that activity is here.

I have a decent number of stories again today---and I hope you find something in the list below that you like.

¤ Critical Reads

David Stockman: Duck and Cover—The Lull is Breaking, the Storm is Nigh

September 15, 2008 is the day that Lehman died and the moment that the world’s central banks led by the Fed went all-in. As it has turned out, that was an epochal leap into the most dangerous monetary deformation that the world has ever known.

It needn’t have been. What was really happening at this pregnant moment was that the remnants of honest capital markets were begging for a purge and liquidation of the speculative rot that had built up during the Greenspan era. But the phony depression scholar running the Fed, Ben Bernanke, would have none of it. So he falsely whooped-up a warning that Great Depression 2.0 was at hand—-sending Washington, Wall Street and the rest of the world into an all-out panic.

The next day’s AIG crisis quickly became ground zero—the place where the entire fraudulent narrative of systemic “contagion” was confected. Yet that needn’t have been, either. In truth, AIG was not the bearer of a mysterious financial contagion that had purportedly arrived on a comet from deep space.

This longish but absolute must read commentary by David was posted on his website yesterday sometime---and I thank Roy Stephens for today's first story.

Central Banks Have Failed Because They Can't Push Wages Higher

You can print all the money you want, but it will never boost wages to keep up with prices.

Central banks have been pursuing two goals for the past six years: ignite inflation and an expansion of debt that will supposedly generate "growth." Despite squandering trillions of dollars, yen, yuan and euros, central banks have failed to ignite sustainable inflation or growth.

There's nothing mysterious about their failure: you can't get "good" inflation or growth if wages are stagnant or declining.

The central banks don't bother to distinguish between "good" and "bad" inflation: any and all inflation is considered not only wonderful but essential to propping up the Ponzi scheme of debt-dependent consumption, a dynamic I described in Central Banks Create Deflation, Not Inflation.

"Good" inflation is wages rising faster than prices. When wages rise faster than consumer prices, households have more money to spend on consumption, and it's progressively easier for them to pay down debt and support additional borrowing.

In Japan, where the central bank and government have struggled for years to generate price inflation as the means to "re-start growth," wages have fallen by 9% in real terms since 1997.

This commentary by Charles Hugh-Smith appeared on the Zero Hedge website at 10:14 a.m. EST Wednesday morning---and I thank Manitoba reader U.M. for being the first person through the door with it.

Congress reaches deal for $1.1 trillion U.S. spending bill

Congressional negotiators unveiled a $1.1 trillion U.S. spending bill that aims to avoid a government shutdown at midnight on Thursday and punts an immigration showdown between Republicans and President Barack Obama until February.

As the funding deadline loomed, Republicans successfully negotiated a number of policy provisions into the measure, including easing of regulations ranging from the environment to financial derivatives trading.

The measure was expected to be put to a House of Representatives vote on Thursday. But to enable Senate passage, a short-term extension of one or two days was being prepared, congressional aides said.

This Reuters article, filed from Washington, appeared on their Internet site at 2:57 p.m. EST on Wednesday---and I thank Orlando, Florida reader Dennis Mong for sending it our way.

Why is the U.S. Treasury Quietly Ordering "Survival Kits" for U.S. Bankers?

The Department of Treasury is spending $200,000 on survival kits for all of its employees who oversee the federal banking system, according to a new solicitation. As FreeBeacon reports, survival kits will be delivered to every major bank in the United States and includes a solar blanket, food bar, water-purification tablets, and dust mask (among other things). The question, obviously, is just what do they know that the rest of us don't?

"The emergency supplies would be for every employee at the Office of the Comptroller of the Currency (OCC), which conducts on-site reviews of banks throughout the country. The survival kit includes everything from water purification tablets to solar blankets.

"The government is willing to spend up to $200,000 on the kits, according to the solicitation released on Dec. 4.

The survival kits must come in a fanny-pack or backpack that can fit all of the items, including a 33-piece personal first aid kit with “decongestant tablets,” a variety of bandages, and medicines.

I guess that somewhere in the future they know that the citizens of the U.S. will be storming the banks---and their employees may come under siege.  This interesting Zero Hedge article appeared on their website at 3:32 p.m. EST yesterday---and I thank U.A.E. reader Laurent-Patrick Gally for sending it.

Bank of America sees $50 oil as OPEC dies

The OPEC oil cartel no longer exists in any meaningful sense and crude prices will slump to $50 a barrel over the coming months as market forces shake out the weakest producers, Bank of America has warned.

Revolutionary changes sweeping the world’s energy industry will drive down the price of liquefied natural gas (LNG), creating a “multi-year” glut and a much cheaper source of gas for Europe.

Francisco Blanch, the bank’s commodity chief, said OPEC is “effectively dissolved” after it failed to stabilize prices at its last meeting. “The consequences are profound and long-lasting,“ he said.

The free market will now set the global cost of oil, leading to a new era of wild price swings and disorderly trading that benefits only the Mid-East petro-states with deepest pockets such as Saudi Arabia. If so, the weaker peripheral members such as Venezuela and Nigeria are being thrown to the wolves.

"Our biggest worry is the end of the liquidity cycle. The Fed is done. The reach for yield that we have seen since 2009 is going into reverse”, said Bank of America.

This Ambrose Evans-Pritchard commentary appeared on the telegraph.co.uk Internet site at 8:01 p.m. GMT on Tuesday evening---and it's courtesy of reader 'G. Roberts'.  It's worth reading.

Mexico vows to sell dollars to halt peso's slide

Mexico is ready to intervene in currency markets to fight the peso's fall against the dollar amid concerns over dropping oil prices and a possible increase in U.S. interest rates.

Mexico's Exchange Commission said that as of Tuesday, the government will hold a daily auction of $200 million whenever the peso falls at least 1.5 percent from the previous day.

The idea is to provide liquidity to a currency market that has been volatile in recent weeks. Experts attribute the instability to fears that investment in Mexico could slide in coming years in the face of lower oil prices and the possible flight of dollars away from Mexican debt toward higher interest rates elsewhere.

This AP story, filed from Mexico City, was picked up by the abcnews.go.com Internet site late Monday afternoon---and it's an article I found on the gata.org Internet site.

HSBC fires head of forex trading in London

HSBC Holdings Plc has dismissed Stuart Scott, its London-based head of currencies trading, in connection with the global investigations that have led to the bank paying $620 million in fines on both sides of the Atlantic, according to a person familiar with the matter.

Mr Scott was fired on December 9 from a role that involved supervising the bank's foreign-exchange trading operations. He joined the bank in 2007, according to the UK financial regulator's register. Reached by phone, he declined to comment.

U.S., British, and Swiss regulators in November imposed a total of $4.3 billion in penalties against six banks, including HSBC, for failing to stop employees from improperly sharing confidential information with rival banks and for attempting to boost currencies-trading profits at their customers' expense. HSBC and the other five banks didn't dispute the regulators' findings. HSBC said at the time that it "does not tolerate improper conduct."

This news item showed up on theaustralian.com.au Internet site just after midnight on their Thursday morning---and I found it in a GATA release.

First direct China-Spain freight train arrives in Madrid

The first freight train to link China directly to Spain arrived in Madrid on Tuesday after covering over 13,000 kilometres (8,000 miles) in a test run of a planned regular service between the two nations.

The train departed Yiwu in eastern China, a major wholesale centre for small consumer goods, on November 18 and passed through Kazakhstan, Russia, Belarus, Poland, Germany, and France during its 21-day trip.

The newly operational route is the longest railway route in the world, longer still than Russia's famous Transsiberian railway linking Moscow to Vladivostok near Russia's border with China.

The journey time was over ten days shorter than if the goods transported by the train had been shipped by sea, Spain's public works ministry said.

This interesting AFP article was picked up by the terradaily.com Internet site on Tuesday---and the first person through the door with this particular story was Swiss reader A.V.

E.U. leaders to pledge more Ukraine money, threaten Russia sanctions

The E.U. is prepared to inject more money into Ukraine and to impose further sanctions on Russia if need be, draft summit conclusions say.

The provisional text - agreed by EU states ambassadors’ on Monday (8 December) and seen by EUobserver - “congratulates Ukraine on its new government and welcomes its determination to carry out political and economic reforms”.

It says that following a recent E.U. aid payment of €500 million “the Union and its member states stand ready to further facilitate and support Ukraine's reform process”.

It notes the “situation in eastern Ukraine remains a strong concern” and urges both sides to implement the 5 September ceasefire accord.

This story, filed from Brussels, was posted on the euobserver.com Internet site at 9:29 a.m. Europe time on Wednesday morning---and I thank Roy Stephens for bringing it to our attention.

Russia will go to international court if Ukraine doesn't settle gas debt – Medvedev

Russia’s Prime Minister Dmitry Medvedev says Moscow will take Ukraine to court if it fails to pay is gas debt. Even though the country is teetering on the brink of default he left the door open for possible negotiations.

An EU-mediated agreement in October says Ukraine owes Russia $3.1 billion for gas it has already bought, and it has to pay up by the end of the year.

“I think that we can reach an agreement, and there is always room for compromise,” the Russian Prime Minister said during an interview with domestic TV channels in Moscow.

“But if we can’t, there are already several lawsuits at the International Court of Arbitration in Stockholm, we’ll see them there.”

This Russia Today news item put in an appearance on their website at 5:08 p.m. Moscow time yesterday afternoon, which was 9:08 a.m. in New York.  It's the second contribution in a row from Roy Stephens.

Doug Casey on Russia and Russian Stocks

Nick: One market that has struck me as cheap—with a decent dividend yield—and that’s accessible is Russia. What are your thoughts on Russia?

Doug: I think that things might get better there. That they’re doing this big natural gas deal with China is a plus. The fact that the Russians have apparently been continuing to buy a lot of gold is a plus.

As far as Ukraine is concerned—with the proviso that I don’t believe in the sanctity of any nation-state, and so I don’t cheer for any of them—you’ve got to be on Putin’s side of that situation from an ethical and a practical point of view. So I’m not terribly afraid of Russia. I don’t think there’s going to be a war of any type with Russia, and because the market there is now so cheap, it could be very interesting.

In any event, the colors of the world map have been running since the first map was drawn. And Ukraine isn’t even a coherent country to start with—it’s an ethnic intertidal zone. It’s certainly no place where the U.S. government should stick its nose, which is only making things worse.

This short Q&A between International Man senior editor Nick Giambruno and Doug Casey is worth your while---and it was posted on the caseyresearch.com website yesterday.

Pepe Escobar: The new European 'arc of instability'

The European Council on Foreign Relations and Berlin think-tank Friedrich Ebert Stiftung have just reached more or less the same conclusion.

If the dangerous stand-off between the E.U. and Russia over Ukraine is not solved, the E.U. could face, up to 2030, a military build-up in eastern Europe; a new arms race with NATO as a protagonist; and a semi-permanent “zone of instability” from the Baltic to the Balkans and the Black Sea.

What these two think-tanks don’t – and won’t – ever acknowledge is that a new European “arc of instability” – from the Baltic to the Black Sea, as myself and other independent analysts have stressed – is exactly what the Empire of Chaos and its weaponized arm – NATO – are working on to prevent closer Eurasia integration.

This must read commentary by Pepe appeared on the Russia Today Internet site at 10:59 p.m. Moscow time on their Wednesday evening---and it is, of course, courtesy of Roy Stephens.

Oil Resumes Drop as Iran Sees $40 If There’s OPEC Discord

Brent crude fell near to a five-year low as OPEC said it expects demand for its crude next year to be the lowest since 2003. West Texas Intermediate also sank.

Futures slid as much as 2.2 percent in London. The Organization of Petroleum Exporting Countries lowered its estimate for demand for its crude in 2015 by about 300,000 barrels a day to 28.9 million. Crude could fall as low as $40 a barrel amid a price war or if divisions emerge in OPEC, said an official at Iran’s oil ministry. The U.S. Energy Information Administration reduced its price forecasts for next year while also downgrading its production outlook for a second month.

Brent collapsed 15 percent since OPEC agreed to leave its production ceiling unchanged on Nov. 27, resisting calls from members including Venezuela to cut output to stabilize prices. Saudi Arabia and Iraq this month deepened discounts on crude exports to their customers in Asia, bolstering speculation that group members are fighting for market share.

“I can see no news that would give any reason to buy oil at the moment,” Christopher Bellew, senior broker at Jefferies International Ltd., said by e-mail.

This Bloomberg article, filed from London, appeared on their website at 7:04 a.m. Denver time on Wednesday morning---and I thank Dan Lazicki for sharing it with us.

Oil price drop a conspiracy, Iran's president says

While describing the slump in oil prices as a plot against Middle East producers, Iran's president said Wednesday it's time to wean the budget from oil.

"The slide in crude oil prices is not merely an economic issue, and it stems from a conspiracy and political planning by certain countries," President Hassan Rouhani said.

Price variances among the 12 blends from the Organization of Petroleum Exporting Countries are seen by some as a sign of internal rivalries among producers that can withstand lower oil prices and those that can't.

Western economic sanctions on Iran's energy sector are already impacting the health of the Iranian economy. For fiscal year 2013-14, the World Bank estimates the Iranian economy has contracted at an annual rate of 1.7 percent.

This UPI article, filed from Tehran, showed up on their Internet site at 9:32 a.m. EST yesterday---and it's the final offering of the day from Roy Stephens.

Blue Belle of Asia shatters the world record for any sapphire sold at an auction fetching a staggering US$17.7 million

The “Blue Belle of Asia,” the world’s fourth-largest faceted blue sapphire, shattered the world record for any sapphire sold at an auction, at Christie’s Geneva Magnificent Jewels Sale held on November 11, 2014 by fetching a staggering US$17.7 million, which was also the highest selling lot at the auction. According to presale estimates,the 392.52-carat, cushion-cut Ceylon sapphire was the second most expensive lot at the sale with an estimate of US$6.9 – 9.9 million. However, the enormous blue sapphire with a historical provenance dating back to 1937, outperformed the projected highest selling lot, Lot 392 – A Pair of Colored Diamond and Diamond Ear Pendants, by Bulgari – with a pre-sale estimate of US$12 – 15 million. Incidentally, this was also the first time that a blue sapphire or a colored gemstone lot had topped the sale at a public auction outperforming diamond containing lots.

This very interesting article appeared on the News InternetStones.com website within the last month---and it's courtesy of reader M.A.

Gold forecasts for 2015 - Scotiabank mining panel

The most direct question to Scotiabank's gold panel came from the audience at the end of a wide-ranging discussion of the gold market at the bank's recently held mining conference: where would the price of gold go by the end of 2015?

Most of the panel cringed at the request, but nonetheless made their wagers (or almost so).

Andy Montano, ScotiaMocatta director, went first. "If I give you a forecast, I guarantee you one thing it will be wrong," he said.  Still, he added, "I would say right where we are now."

If clues were shoes, these guys would be barefoot.  This Q&A session ended up posted on the mineweb.com Internet site yesterday---and it's courtesy of reader U.M.

Guest Post: Guilty Gold

Nearly half of the gold looted by the Nazis from the Dutch central bank during the Second World War remains to this day in Switzerland, a reminder of the Alpine nation’s controversial role as a financial conduit for Hitler’s regime. About 61,000 kg of Dutch war gold, currently value at about €2bn, is believed to be still in Swiss possession.

During the Nazi occupation of the Netherlands, 145,650 kg of monetary gold and gold coins that Dutch citizens were forced to hand over to the central bank were transported to the Reichsbank in Berlin. After the war, the Tripartite Gold Commission (TGC), set up in 1946 by the US, France and the UK to return gold stolen by Germany, handed back about 71,820 kg of gold to the Netherlands – less than half of the total. In 1998, the TGC made its final share-out and was dissolved.

The story of the looting of Dutch gold and how it ended up in Switzerland is told in my ‘faction’ thriller Fout Goud (Guilty Gold). The book, which is currently only published in Dutch, combines historical facts with a fictional plot.

The Reichsbank sold about 80% of the gold it stole from occupied countries to Switzerland to obtain convertible Swiss francs to pay for imports needed by Germany’s war machine. Smaller amounts were sold to Sweden, Spain, Portugal and Turkey.

This extremely interesting guest commentary by writer Roel Janssen appeared on the bullionstar.com Internet site yesterday sometime---and it's definitely worth reading.  I thank South African reader B.V. for bringing it to my attention---and now to yours.

Indian households said to spend 8% of daily consumption on gold jewellery and coins

An Indian household spends 8% of its daily consumption on gold jewellery and coins, which is only marginally behind medical expenses and education, according to a joint report by industry body Ficci and the World Gold Council.

This startling revelation comes at a time when India's current account deficit has widened sharply to $10.1 billion, or 2.1% of GDP , in the second quarter of FY15 due to high gold imports.

India is the second largest consumer of gold, next to China, with an annual consumption of 850-900 tonne. The report says that a gold board should be set up to manage imports, encourage exports and facilitate development of infrastructure needed to ensure that the Indian gold market functions to its maximum strength. It recommends development of accredited refineries in line with international standards, including upscaling the current domestic refineries. Somasundaram said that Indian banks should be allowed to use gold as part of their liquidity reserves which would incentivise them to introduce gold-based savings products.

The rest of this gold-related news item can found on The Economic Times of India website.  The story appeared there at 3:29 p.m. IST on their Wednesday afternoon---and I found it embedded in a GATA release.

Further Easing in India’s Gold Curbs to Be Measured: Minister

India, the world’s biggest consumer of gold after China, will implement any further relaxation of import restrictions in a measured way as concern over the current-account deficit eases, the junior finance minister said.

The government will take one step at a time in order to allow the gold industry to function efficiently, Jayant Sinha, junior finance minister told reporters in New Delhi.

The Reserve Bank of India scrapped a requirement last month for importers to sell 20 percent of their purchases to local jewelry makers for re-export, a rule known as 80:20. The government still controls flows through a 10 percent import tax and by limiting direct shipments to selected banks and trading companies nominated by the central bank. India buys abroad almost all the bullion it consumes and represented 25 percent of global demand last year, World Gold Council data show.

“At this point, this was the right step to take. Let’s see how things evolve and then we will proceed in a measured way,” Sinha said. “Now that the current-account deficit is in a much more comfortable situation, our foreign exchange reserves are very comfortable and the rupee is quite stable, we can once again let the industry function as it should.”

This Bloomberg article, co-filed from Mumbai and New Delhi, appeared on their Internet site at 2:57 a.m. MDT yesterday---and I found it in another GATA release that Chris Powell filed from Munich yesterday.

Bron Suchecki: PBOC paper recommends leasing its reserves to manipulate gold price

The Perth Mint's Bron Suchecki today disputes Bullion Star market analyst and GATA consultant Koos Jansen's interpretation of a 2011 analysis of gold leasing written for the People's Bank of China. 

Suchecki writes that the PBOC analysis cited by Jansen is most notable for indicating the Chinese central bank's potential interest in using gold leasing to manipulate the currency markets, much as Western central banks do.

The disagreement may be important for Suchecki's implicit reminder that it would be an exceedingly rare central bank that wanted free markets enough that it was willing to extend them to its own currency. Indeed, while gold advocates are inclined to root for China and Russia in the international currency war or competition because the governments of those countries seem to recognize gold's monetary function, China and Russia don't want free and transparent markets and limited and accountable government any more than Western governments do.

If free markets for international trade are ever to be established, they probably will be established only begrudgingly as nations form themselves into blocs and those blocs balance the power of each other, possibly returning to gold as the neutral arbiter.

This commentary by Chris Powell, along with the links to Suchecki's and Jansen's blogs, is posted in this GATA release that Chris Powell filed from Munich last night---and I must admit that quite a bit of this is way above my pay grade.

Lawrence Williams: Chinese and Indian gold demand boost fundamentals further

Apologies for returning to Chinese and Indian gold demand again – but we do feel these two nations are so important for the future of the gold price given the huge amounts of gold they continue to absorb. This in total has to be close to, or even perhaps will exceed, annual new mined gold production.

It is often pointed out, particularly by those who consider gold irrelevant in today’s financial markets, that new mined production is of no consequence given the huge volumes of above ground gold stocks held by Central Banks globally, in the big gold ETFs and hoarded in private hands – much, perhaps most – held in the East. And they have a point if there was a propensity for the Central Banks and private gold holders to sell, but this is such a Western attitude to global gold holdings where profit is almost everything, that it completely ignores a totally different mind-set, which prevails elsewhere in the world.

As we have pointed out before, the value of gold is instilled into us even in the West from our mothers’ knees. Numerous fairy stories and legends revolve around gold and its perceived value as a store of wealth and the lengths people, seen as both good and evil, will go to to lay their hands on it. Gold’s inbuilt and ever ongoing PR has to be the envy of today’s spin doctors!

Now while some of this may have fallen away in the West with modern children’s books perhaps eschewing gold, an element still remains, while in many other parts of the world this inbuilt idea that gold is THE great wealth protector remains and never more so in countries like India where gold is often so tied up in religious mythology. But in reality far more of the world sees gold as the best store of wealth than does not. It is also instilled into much of European culture – and the further east one moves the more it seems to be wholly relevant, even in today’s world.

This commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and it's worth reading.  I thank Manitoba reader U.M. for today's last story.

¤ The Funnies

¤ The Wrap

The price of gold and silver surged on Tuesday---and held those gains through Wednesday’s trading. In silver, it was the first upside penetration of the important 50-day moving average in six months. I would imagine there was further technical fund buying, including both additional short covering and most likely new buying as well. The key question, of course, is who were the sellers---and more specifically, how much additional short selling occurred by the 4 and 8 largest commercial shorts in both silver and gold? Because yesterday was the cutoff for the reporting week, this Friday’s COT should go a long way to answering that question.

While I’m resigned to some disappointment in increased concentrated short selling by the big commercials, I am still more interested in what has occurred over the past five reporting weeks, namely, the unprecedented outcome of the technical funds cashing in massive profit chips on the short side of silver and a good number of commercial longs (raptors) tapping out. Nothing close to this has occurred previously and I’m still convinced that this shocking turnabout portends important changes ahead, including a potential loss of trading liquidity. A loss of liquidity generally translates into bigger price moves and yesterday’s large price moves in gold and silver would tend to support my conclusion. - Silver analyst Ted Butler: 10 December 2014

Yesterday was another day where the price got sold down after a big advance the prior day.  The four 'orphan' out-of-the-blue rallies that gold and silver have staged during the past five weeks have all ended the same way, with down days following each one---with significant portions of the gains in precious metal stocks vanishing as well.  As you already know, yesterday's action was no exception.

Here's the 3-month gold chart so you can see this for yourself.  The first rally of the current sequence came on Friday, November 7, with the big down day coming the following Monday on the 10th.  The other three 'orphan' rallies are equally as obvious.

Here are the 6-month charts for the four precious metals, plus natural gas and West Texas Intermediate.  As the world already knows, the price of crude oil set a new low for this move down yesterday---and as to where the bottom might be, nobody knows.  In natural gas, we're back to the lows we haven't seen since late October---and prior to that, a bit over a year ago.

My ISP was down for about ninety minutes in the wee hours of this morning---and London had been open for a while by the time Internet service had been restored.

The gold price rose about five bucks in the first hour or so after trading began in New York yesterday evening, but got sold down the same amount shortly after 1 p.m Hong Kong time---and at the moment [4:08 a.m. EST] the gold price is down a couple of bucks.  Silver's price path was similar---and it's price is down a couple of pennies.  Gold volume is a bit over 31,000 contracts at the moment---and silver's volume is just north of 6,300 contracts.  The dollar index fell off a cliff in early Far East trading, but the moment it broke through the 88.00 mark to the downside, it appeared that 'gentle hands' showed up.  Right now the index is up a hair.

After Tuesday's big 'orphan' run-up in precious metal prices, it appears that we're back to twiddling our collective thumbs until the next out-of-the-blue rally puts in an appearance.  And as Ted mentioned in his quote further up, we await the Commitment of Traders numbers on Friday to see what the big 4 and 8 short holder in gold and silver did during that rally.

I'd be happy if it was just the technical funds in the Managed Money covering the remainder of their short positions while the raptors [the Commercial traders other than the Big 8] sold what was left of their long positions at a big loss once again.  That's my Christmas wish, but JPMorgan et al would hardly pass as Santa and his elves---and Christmas is still a long way away.

And as I hit the send button on today's effort at 5:30 a.m. EST, I note that the gold and silver prices are continuing to slide.  Gold is down five bucks, with silver down a nickel.  Platinum, which had been up about 15 bucks on the day at 1 p.m. Hong Kong time, is now down two dollars on the day.  Palladium is up 3 bucks.

Gold volume is around 44,000 contracts---and silver's volume is a hair above the 8,300 contract mark.  These numbers are bigger than I'd like to see this time of day, but they haven't increased by much since I reported on them about 90 minutes ago.

The dollar index which, once again, came close to sliding back below the
88.00 mark minutes before the London open, is now rallying a bit.  At the moment it's up 12 basis points at 88.345.

As for what might happen during the remainder of the Thursday session, I haven't a clue, nor does anyone else.  I'd be happy with another 'orphan' rally---but I'm always on the lookout for "in your ear."

See you tomorrow.

Ed Steer

]]>
Thu, 11 Dec 2014 06:16:00 +0000
<![CDATA[GATA’s Chris Powell: Gold Market Manipulation: Why, How, and How Long?]]> http://www.caseyresearch.com/gsd/edition/gatas-chris-powell-gold-market-manipulation-why-how-and-how-long/ http://www.caseyresearch.com/gsd/edition/gatas-chris-powell-gold-market-manipulation-why-how-and-how-long/#When:06:16:00Z "In the last five weeks we've had four 'orphan' rallies"

¤ Yesterday In Gold & Silver

The gold price got sold down within a few bucks of the $1,200 spot price mark early in the Far East trading session on their Tuesday, but began to rally shortly before 2 p.m. Hong Kong time.  That tiny rally took the price back a few bucks above unchanged by 9 a.m. GMT in London.  The real action started the moment that the noon London silver fix was in---and the rally that began at that point got capped/ran out of gas shortly after 10:30 p.m. EST.  From its high tick it got sold down about ten bucks, before chopping sideways into the 5:15 p.m. close of electronic trading.

The low and high ticks were reported by the CME Group as $1,199.50 and $1,239.00 in the February contract.

Gold was closed in New York yesterday at $1,232.40 spot, up $28.20 on the day---and well of its high.  Volume, net of December and January, was an enormous 252,000 contracts.

Once again Brad Robertson sent us the 5-minute tick chart for gold---and you can see the big volume spikes that occurred while yesterday's rally was underway, with most of the big volume coming between 9:40 and 11:00 a.m. EST in the COMEX session.  Other that that, volume was pretty quiet.  Add two hours for EST---and use the 'click to enlarge' feature.

The price rally in silver was almost the same as the rally in gold, with the only real difference being the time of the high price tick.  In the case of silver, this occurred shortly after the London close, which came shortly after 11 a.m. in New York.

The low and high in silver were recorded as $16.29 and $17.23 in the March contract.

Silver finished the Tuesday trading session at $17.105 spot, up 73 cents from Monday's close.  Net volume was very heavy here as well.  Net of December and January, it was 69,500 contracts.

The rally in platinum was very similar to gold's rally.  It ended/got capped the same time as gold.  From its high, half its gains disappeared by noon in New York, as platinum finishing the Tuesday session at $1,242 spot, up 14 bucks from Monday's close.

Palladium's rally was a mini version of the other three precious metals---and every attempt to break above the $810 spot mark got turned back.  Palladium closed at $807---up 9 dollars on the day.

The dollar index closed late on Monday afternoon in New York at 89.12.  From there it 'rallied' to its 89.26 high tick of the day, which came shortly after 11:30 a.m. Hong Kong time on their Tuesday morning.  From that point it headed lower, with the decline really picking up steam once the London p.m. gold fix was in at 10 a.m. EST.  But a minute or so before 10:30 a.m. it appeared that 'gentle hands' showed up to save the dollar from a full-fledged crash, just as it knifed through the 88.20 level.  The index rallied back to around 88.75, before rolling over a bit into the close.  The index finished the Tuesday session at 88.67---down 45 basis points.

Of course you'll note that the rallies in gold, platinum and palladium all ended at the low tick in the dollar index.

The gold stocks gapped up at the open, hitting their high tick at, or shortly after, the high in gold.  Within half an hour of the high tick, the stocks gave up 2 percent of their gains before chopping sideways in a tight range into the close of trading.  The HUI finished up an even 5 percent.

The silver equities rallied until 2:15 p.m. EST, before getting sold down the same 2 percent into the close.  Nick Laird's Intraday Silver Sentiment Index closed up 5.25 percent.

The CME Daily Delivery Report showed that 1 gold and 72 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  The two largest issuers in silver were Canada's Scotiabank and ABN Amro with 51 and 20 contracts respectively.  HSBC USA and Jefferies were the long/stoppers on 55 and 11 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday session showed that gold open interest in the December contract dropped by 848 contracts---and now sits at 1,087 contracts left.  In silver, December o.i. declined by only 12 contracts---and the balance outstanding is 575 contracts.

After a withdrawal on Monday, an authorize participant added 86,473 troy ounces of gold to GLD yesterday.  And as of 9:28 p.m. yesterday evening, there were no reported changes in SLV.

Late last night the folks over at the shortsqueeze.com Internet site updated the short positions for both SLV and GLD for the two week period ending on November 28---and this is what they had to report.  The short position in SLV declined from 17.45 million shares/troy ounces, down to 15.41 million shares/troy ounces---which was a decline of 11.68 percent.

In GLD, the short position declined from 1.77 million troy ounces, down to 1.57 million troy ounces.  That was a decline of 11.29%.

These very similar declines for the period ending at the close of trading on November 28---were in sharp contrast to the very similar increases in short positions that were posted for the prior reporting period that ended on November 14.  The previous report showed that SLV's short position increased by 17.53%---and GLD's short position was up by 17.37%.

Much to my surprise, there was another 187,000 silver eagles sold by the U.S. Mint yesterday and, for the second day in a row, there was no gold sold.

There was almost no in/out activity in gold over at the COMEX-approved depositories on Monday.  Nothing was reported received---and only 3 kilobars were shipped out---96.450 troy ounces worth.

It was busier in silver, of course, as 391,778 troy ounces were received---and 846,875 troy ounces were shipped out the door to parts unknown.  The link to that activity is here.

The chart below is one that Nick Laird slid into my in-box just after midnight MST this morning---and its contents don't require any embellishment by me.

And here's a chart that I ripped out of Mark O'Byrne's column over at the goldcore.com Internet site yesterday.  It's headlined "Are Your Savings Safe From Bail-Ins?"  Use the 'click to enlarge' feature and look it over.  However, I wouldn't allow those assigned numbers to give you any comfort, as all the world's banks are toast on mark-to-market basis, even our beloved Canadian banks.  Mark's commentary about this is well worth reading---and is linked here.  It also posted in the Critical Reads section as well

I have a more reasonable number of stories for you today---and I hope you can find some in here that interest you.  There are two absolute must reads included.

¤ Critical Reads

Citi Pays $3.5 Billion to Keep Its Employees Out of Jail For Yet Another Quarter

Moments after Bank of America reported at today's Goldman financial conference that its Q4 trading revenues would be down both Q/Q and Y/Y, it was Citi's turn to warn that the current quarter will be the latest disaster in a long series of revenue disasters, with Q4 revenue said to drop 5% from a year ago, however, despite the drop, Citi would still see a "marginally profitable" quarter. Supposedly this means that a few hundred million shares of stock will have to be repurchased to give the optics that EPS is rising even as revenues continue to drop.

That was to be expected in a financially-engineered, centrally-planned world in which there is no institutional volume left, and all the rigged market levitation takes place on the back of negligible volumes by HFT algos, as well as stock buyback VWAP orders.

What, however, was a surprise, is that alongside the revenue warnings, Citi's CEO Corbat also announced yet another $2.7 billion in legal, related charges in 4Q, as well as another $800 million in repositioning expenses.

This brief Zero Hedge piece showed up on their website at 10:24 a.m. EST on Tuesday morning---and today's first story is courtesy of Manitoba reader U.M.  It's certainly worth skimming.

Fed Proposing Big U.S. Banks Boost Capital Buffers

Federal regulators are proposing that the eight biggest U.S. banks be required to further increase the amount of capital they set aside to cushion against unexpected losses.

The Federal Reserve's proposal is aimed at reducing the potential for future taxpayer bailouts of troubled banks. The proposed requirements also are designed to encourage the behemoths to shrink so they pose less risk to the financial system. The banks include JPMorgan Chase, Citigroup and Bank of America.

The Fed governors voted 5-0 at a meeting Tuesday to advance the so-called "capital surcharges," opening them to public comment through Feb. 28. The extra capital requirements would increase in proportion to how risky the regulators deem a bank to be. A key risk factor would be how much a bank relies on short-term funding markets to borrow from other banks. Those markets seized up during the financial crisis.

The requirements would give the banks an incentive to shed businesses and downsize to avoid having to set aside more capital.

West Virginia reader Elliot Simon sent this story our way yesterday, along with the comment that "This is why they are getting rid of some of their big corporate customers by charging negative interest rates on their deposits."  He would be right about that.  This AP story, filed from Washington, was picked by the abcnews.go.com Internet site at 5:59 p.m. EST yesterday.

High-Yield Credit Crash Accelerates

High-yield energy bond spreads are crashing-er. Up 15 bps to 880 bps today, these are record wides and massively impact the economics of these firms - no matter how much investors want to ignore it. This is contagiously spreading across the broad high yield and even investment grade credit markets as high yield bond prices crash below the mid-October Bullard lows...

Now we will see what BlackRock's liquidity fears really amount to.

[And I'm sure that Doug Noland will have something to say about this in his Friday Credit Bubble Bulletin. - Ed]

This tiny article, complete with an excellent chart, appeared on the Zero Hedge website at 9:47 a.m. EST yesterday---and I thank reader 'David in California' for sending it our way.

Did Blackstone Just Call the Top in Commercial Real Estate?

Blackstone's well-timed IPO in 2007 was almost the perfect top-tick indicator as 'the smart money' private-equity guys cashed out into the public markets at peak euphoria. Earlier this year we noted that, among others, Blackstone was drastically ratcheting down purchases (and in fact selling what it could) US residential real estate - and with it withdrew the only pillar holding up the housing market. And now, in the biggest deal in 7 years, Blackstone is dumping a $3.5 billion commercial real estate portfolio. Given the recent declines in CMBX pricing, perhaps, once again, Blackstone is calling the top in another bubble...

So is Blackstone calling the top with this deal?

Hudson Pacific, based in Los Angeles, agreed to pay $1.75 billion in cash for the properties and the rest in stock, giving Blackstone about a 48 percent stake in the real estate investment trust, the companies said in a statement today.

The acquisition of the properties, in the San Francisco area and Silicon Valley, “perfectly aligns with our strategy to acquire high-quality office properties in West Coast markets poised for continued growth through off-market transactions,” Victor Coleman, Hudson Pacific’s chairman and chief executive officer, said in the statement.

Blackstone has been selling assets from its 2007 acquisition of Equity Office Properties Trust as occupancies increase and rents recover from the real estate crash. The Hudson Pacific transaction marks the New York-based firm’s biggest sale of office buildings since just after the $39 billion Equity Office takeover, when it flipped many of the properties to reduce debt.

This Zero Hedge piece, with a Bloomberg story embedded, put in an appearance on their Internet site at 7 p.m. EST on Monday evening---and it's the second offering in a row from reader 'David in California'.

Senate Torture Report Condemns C.I.A. Interrogation Program

The Senate Intelligence Committee on Tuesday issued a sweeping indictment of the Central Intelligence Agency’s program to detain and interrogate terrorism suspects in the years after the Sept. 11 attacks, drawing on millions of internal C.I.A. documents to illuminate practices that it said were more brutal — and far less effective — than the agency acknowledged either to Bush administration officials or to the public.

The long-delayed report delivers a withering judgment on one of the most controversial tactics of a twilight war waged over a dozen years. The Senate committee’s investigation, born of what its chairwoman, Senator Dianne Feinstein of California, said was a need to reckon with the excesses of this war, found that C.I.A. officials routinely misled the White House and Congress about the information it obtained, and failed to provide basic oversight of the secret prisons it established around the world.

In exhaustive detail, the report gives a macabre accounting of some of the grisliest techniques that the C.I.A. used to torture and imprison terrorism suspects. Detainees were deprived of sleep for as long as a week, and were sometimes told that they would be killed while in American custody. With the approval of the C.I.A.’s medical staff, some prisoners were subjected to medically unnecessary “rectal feeding” or “rectal hydration” — a technique that the C.I.A.’s chief of interrogations described as a way to exert “total control over the detainee.” C.I.A. medical staff members described the waterboarding of Khalid Shaikh Mohammed, the chief planner of the Sept. 11 attacks, as a “series of near drownings.”

This news item appeared on The New York Times website yesterday---and the 'thought police' over there have softened up the headline, as it now reads "Senate Panel Faults C.I.A. Over Brutality and Deceit in Interrogations".  I thank Roy Stephens for his first offering in today's column.  There was a story about this in The Guardian yesterday as well.  It bears the headline "Senate report on CIA torture claims spy agency lied about 'ineffective' program"---but was originally headlined "CIA Torture Report Released".  This, too, is courtesy of Roy Stephens.

Dick Cheney: CIA Techniques Post 9/11 'Absolutely Totally Justified'

Waterboarding and other CIA interrogation techniques on terror suspects were justified and "totally authorized" – and an expected Senate report on the use of torture is "a bunch of hooey," former Vice President Dick Cheney says.

In an interview with The New York Times, Cheney said he hadn't yet read the Senate Intelligence Committee report, due Tuesday.

But he said he's heard nothing to persuade him Central Intelligence Agency techniques used after the 9/11 attacks were not "absolutely totally justified."

"What I keep hearing out there is they portray this as a rogue operation and the agency was way out of bounds and then they lied about it," he told The Times.   "I think that’s all a bunch of hooey. The program was authorized. The agency did not want to proceed without authorization, and it was also reviewed legally by the Justice Department before they undertook the program."

Mr. Cheney would print a pretty big number on the socio/psychopath scale if given the test.  This story was posted on the newsmax.com Internet site at 7:40 p.m. EST on Monday evening---and it's the second contribution of the day from Elliot Simon.

Mark O'Byrne: European Banks at Risk of Bail-Ins in 2015 - Moody's and S&P Warn

In March of this year, credit rating agency Standard and Poor's (S&P) warned that the move towards "bail-ins" and away from "bailouts" continues to evolve and pose risks to European banks and their credit ratings.

Bank of England plans to make bondholders and depositors bear the cost of bailing out failing banks, led Moody’s to downgrade its outlook on the UK banking sector this August. The rating agency said that it had changed its outlook for the UK financial system from “stable” to “negative”, citing the developing global “bail in regime” of creditor and depositor bail-in.

Moody’s have warned of bail-ins numerous times in recent months. In June of this year, Moody’s cut the outlook for Canadian bank debt to negative over the new ‘bail-in’ regime.

Depositors in some Cyprus banks saw 50% or more of their life savings confiscated overnight.

The truth is that banks in most western nations are vulnerable to bail-ins in 2015---and the recent G20 meeting in Brisbane was a further move towards the stealth bail-in regimes.

Mark's commentary was posted on the goldcore.com Internet site on Tuesday---and it's worth reading.

BIS Quarterly Review December 2014 - media briefing

Once again, the financial market scene was far from uneventful during recent months. Volatility spiked in mid-October. Stock prices fell sharply and credit spreads soared. U.S. Treasuries were exceptionally volatile, at least intraday - even more than at the height of the Lehman crisis. And yet, just a few days later, the previous apparent calm had returned. Volatility in most asset classes had sunk back down to the depths of the previous two years. And as benchmark sovereign yields sagged once more, the valuation of riskier assets recovered at least part of the lost ground. So, what is going on?

It is too early to say what exactly triggered these sharp, if brief, price swings. As we speak, researchers and market regulators in the United States and elsewhere are sifting through tons of data to understand every market heartbeat during those turbulent hours on October the 15th. That said, some preliminary reflections are in order. No doubt, one-sided market positioning played a role, as participants were wrong-footed. But is there more to it?

It is, of course, possible to draw comfort from recent events. Those who do so stress the speed of the rebound. At the same time, a more sobering interpretation is also possible. To my mind, these events underline the fragility - dare I say growing fragility? - hidden beneath the markets' buoyancy. Small pieces of news can generate outsize effects. This, in turn, can amplify mood swings. And it would be imprudent to ignore that markets did not fully stabilise by themselves. Once again, on the heels of the turbulence, major central banks made soothing statements, suggesting that they might delay normalisation in light of evolving macroeconomic conditions. Recent events, if anything, have highlighted once more the degree to which markets are relying on central banks: the markets' buoyancy hinges on central banks' every word and deed.

The highly abnormal is becoming uncomfortably normal. Central banks and markets have been pushing benchmark sovereign yields to extraordinary lows - unimaginable just a few years back. Three-year government bond yields are well below zero in Germany, around zero in Japan and below 1 per cent in the United States. Moreover, estimates of term premia are pointing south again, with some evolving firmly in negative territory. And as all this is happening, global growth - in inflation-adjusted terms - is close to historical averages. There is something vaguely troubling when the unthinkable becomes routine.

On-the-record remarks by Mr Claudio Borio, Head of the Monetary and Economic Department, and Mr Hyun Shin, Economic Adviser & Head of Research for the B.I.S., 5 December 2014.  I found this on the bis.org Internet site yesterday.  It's a longish read, but worth it if you have the time.

Danish central bank will devalue without limit to match euro, deputy governor says

As Mario Draghi tries to pump as much as 1 trillion euros ($1.23 trillion) of liquidity into the euro area, a little nation on Europe's northern rim is preparing its defense of a 30-year-old currency regime.

The unprecedented stimulus push by the European Central Bank president promises to test the euro peg in Denmark, where the benchmark interest rate is already below zero. Should ECB measures weaken the euro, Deputy Governor Per Callesen says, there is basically no limit on how far Denmark is willing to go to defend the krones peg to Europe's single currency.

Print, print, print!  This Bloomberg article, filed from Copenhagen, appeared on their website at 2:35 a.m. EST this morning---and I found it embedded in a GATA release that Chris Powell filed from Munich in the wee hours of this morning.

Belgium asks for solidarity to prevent electricity blackouts

After several of its nuclear reactors had to be taken offline, the country is facing the possibility of electricity shortages, particularly on cold days.

Across the country, posters ask people to try and reduce energy demand, by switching off lights when they are not needed, washing clothes at lower temperature and cooking using fewer pans.

Lower temperatures means more people spend their time inside, using electricity. Not only for electrical heaters, but also devices like televisions and computers.

The big problem is the period of peak demand, between 5pm and 8pm. Electricity supply and demand have to remain in balance, otherwise a blackout can occur.

This article, filed from Antwerp, appeared on the euobserver.com Internet site at 9:23 a.m. Europe time on their Tuesday morning---and it's another offering from Roy Stephens.

French politician to Merkel: 'Shut your trap'

French politician Jean-Luc Melenchon had harsh words for German Chancellor Angela Merkel after the German leader said France and Italy had not done enough to trim their budgets, and called for both countries to enact additional deficit-cutting measures.

"The [E.U.] Commission has made clear that what has been put on the table so far is insufficient. I would agree with this," Merkel told German newspaper Die Welt am Sonntag.

Shut your trap, Ms. Merkel! France is free." Melenchon tweeted in German, adding in French that Merkel should concern herself instead with the poor in her country and ruined infrastructure in Germany.

The 63-year-old leftist politician was a candidate for the French presidency in 2012, and has been a sharp critic of Merkel, calling her policies "narrow-minded and very dogmatic."

This news story showed up on the German website dw.de on Monday---and my thanks go out to South African reader B.V. for sharing it with us.

Greece gets two more months to exit bailout

Eurozone finance ministers on Monday (8 December) extended Greece's bailout programme by two months, while the Greek government is fighting for political survival and has brought forward presidential elections.

The decision comes after the troika of international lenders - the European Commission, European Central Bank and International Monetary Fund (IMF) - was in earlier talks in Athens unable to pin down what should be the last reforms needed to disburse the final tranche of money.

Greece is still due €1.8 billion out of a total of €240 billion under two consecutive bailouts since 2010.

Eurogroup chief Jeroen Dijsselbloem said in Monday's press conference in Brussels that a "short extension" was preferable to a "long-term extension" and expressed confidence that the government in Athens will be able to agree with the troika on the outstanding measures.

This news item, filed from Brussels, showed up on the euobserver.com Internet site at 7:24 a.m. yesterday morning Europe time---and once again I thank Roy Stephens for sending it our way.

Greece’s stock market just suffered its worst collapse ever

Greece’s Athex Composite tanked almost 13% Tuesday — the biggest drop for the index on record, according to FactSet. The renewed jitters came after the government, in a surprise move late Monday, said it would bring forward presidential elections to Dec. 17, potentially, setting the scene for snap elections in early 2015.

Here’s why that’s important: Far-left party Syriza currently is leading the early polls and it seems likely they would win a snap election. This is how to think about Syriza:

  • The party has been calling for an end to austerity in Greece
  • Has been campaigning for market-unfriendly measures
  • Is firmly against the international bailout program that helped the country avoid a default during the depths of its financial crisis.

This story appeared on the marketwatch.com Internet site at 11:50 a.m. EST on Tuesday---and I thank reader U.M. for her second contribution to today's column.

Ukraine: Truce observed, gas deliveries renewed

Government military forces in eastern Ukraine adhered to a one-day truce Tuesday, as Russia resumed shipments of gas and plans to resume peace talks are underway.

The government Defense and Security Council said the truce was holding, unlike the truce agreed to in Minsk, Belarus, that has been broken regularly. The army said Tuesday 192 Ukrainian military personnel have been killed since the Sept. 5 truce.

"We expect that the first and most important point of agreement is a permanent ceasefire. It's only after Tuesday's truce that it will be possible to withdraw heavy weaponry to 15 kilometers (nine miles) from the front line," said Andriy Lysenko, spokesman for Ukraine's National Security and Defense Council.

"We are pinning our hopes on the fact that a cease-fire was declared today," Russian Foreign Minister Sergei Lavrov said in Moscow. "The current stage was well-prepared. He added "Russian officers helped in this at (Ukrainian) President Poroshenko's request."

This UPI news story, filed from Kiev, appeared on their website at 8:20 a.m. EST yesterday---and it's courtesy of Roy Stephens once again.

Pepe Escobar: Russia, Turkey pivot across Eurasia

The latest, spectacular "Exit South Stream, Enter Turk Stream" Pipelinistan gambit will be sending big geopolitical shock waves all across Eurasia for quite some time. This is what the New Great Game in Eurasia is all about.

In a nutshell, a few years ago Russia devised North Stream - fully operational - and South Stream - still a project - to bypass unreliable Ukraine as a gas transit nation. Now Russia devises a new sweet deal with Turkey to bypass the "non-constructive" (Putin’s words) approach of the European Commission (E.C.) concerning the European "Third Energy Package", which prohibits one company from controlling the full cycle of extraction, transportation and sale of energy resources.

Background is essential to understand the current game. Already five years ago I was following in detail Pipelineistan’s ultimate opera - the war between rival pipelines South Stream and Nabucco. Nabucco eventually became road kill. South Stream may eventually be resurrected, but only if the E.C. comes to its senses (don’t bet on it.)

So what Putin’s judo/chess/go counter punch accomplished with a single move is to have stupid E.U. sanctions once again hurt the E.U. The German economy is already hurting badly because of lost Russia business.

The E.C. brilliant "strategy" revolves around the E.U.’s Third Energy Package, which requires that pipelines and the natural gas flowing inside them must be owned by separate companies. The target of this package has always been Gazprom - which owns pipelines in many Central and Eastern European nations. The target within the target has always been South Stream.

This essay by Pepe is the first of your two absolute must read commentaries in today's column---and it was posted on the Asia Times website on Monday---and reader M.A. beat Roy Stephens on this one.

China's stock mania decouples from economic reality

China’s stock market boom has reached outright mania, with equities galloping higher at a parabolic rate, despite threats of a crackdown by regulators and the continued slowdown of the national economy.

The Shanghai Composite Index has risen 32pc in the past six weeks, blowing through 3,000 to a three-and-a-half-year high even though corporate earnings are declining steeply.

The China Securities Regulatory Commission said late last week that it would “increase market supervision, resolutely crack down and earnestly safeguard normal market order”. It warned that stock manipulators had been “raising their head” and would be dealt with.

The cautionary words have been ignored by retail investors as they throng brokerage offices, lured by momentum trades. The government itself is partly responsible for letting the genie out by talking up “cheap stocks” in the official media two months ago, but now appears alarmed by what it has done.

This Ambrose Evans-Pritchard offering appeared on The Telegraph's website at 8:52 p.m. GMT on Monday evening---and it's definitely worth reading.  It's the second-last offering of the day from Roy Stephens.

China Crashes: Shanghai Composite Plunges 5.4% Amid Record Trading, Biggest Tumble Since 2009

Those who have been following the ridiculous moves in the Shanghai Composite in recent months, knew it was only a matter of time before yet another major stock market (one which recently surpassed the Nikkei for the second largest spot in the world) crashed violently, further eroding faith in the central-planned "price discovery" process. The only question was when.

Following our report last night about China's change in collateral rules, in which we noted that none other than the PBOC was now eager to pop the equity bubble following the PBOC simultaneously fixing the CNY significantly stronger (implicit tightening) and enforced considerably stricter collateral rules on short-term loans/repos - a move which according to estimates from Shenyin Wanguo Securities, would disqualify some 1.25 trillion yuan in corporate bonds as repo collateral, or 60% of all outstanding corporate bonds listed on China’s two stock exchanges - we were not surprised to see the tumble in the market-traded Yuan (which crashed the most in 6 years), and the surge in interest rate swaps, coupled by the plunge in corporate bonds. The only thing that puzzled us was why, after the correct knee-jerk reaction lower in the Shanghai composite, did stocks proceed to surge even higher.

This is another Zero Hedge offering.  This one was posted on their Internet site at 8:08 a.m. EST---and I thank reader M.A. for finding it for us.

China opens 32 high-speed rail routes in grand expansion

China is launching 32 high-speed train routes on December 10. The network extension includes a link between the biggest city Shanghai and the manufacturing hub of Guangzhou right next to Hong Kong.

The 1,106-mile route cuts the journey time down to 6 hours and 51 minutes, instead of the 16 hours it previously took. New bullet train lines are part of the government’s plan to double the size of the domestic rail network.

China has the world’s largest high-speed rail network, which keeps the growing population and economy connected. The country’s two largest train makers are in the process of merging to create a more competitive company, both internationally and domestically, reports in October said.

The world’s fastest passenger train is also in China - the Shanghai Maglev Train can reach speeds of over 430 kilometers (260 miles) per hour.

This very interesting Russia Today article appeared on their website at 1:46 p.m. Moscow time on their Tuesday afternoon, which was 5:46 a.m. in New York.  This story represents the final offering of the day from Roy Stephens, for which I thank him.

Mike Maloney: Silver & Gold At 5,000 Year Low

If you really analyze it gold and silver are really at a 5,000 year low.

They have been either our money or connected with our currency backing our currencies for 5,000 years and they’ve -- governments have slowly sort of weaned us off gold and silver and for the last 43 years is the first time in all of human history that gold and silver are not either our money or backing our currency. They have no connection with the global monetary system other than people like Ben Bernanke say it’s tradition to hold it for some reason central banks are buying it.

But at the same time after it went into a tiny little bubble in 1980, the world experienced a brutal bear market that lasted 20 years and by the year 2000 investors gave up on it; so here you don’t have any country on the planet wanting it or using it as their money. And no investor wanted it by the year 2000. And at the same time we were in the NASDAQ bubble on such there was no time in human history that paper assets were as over valued and loved as during the tech bubble and the dot com bubble.

This 4:37 video clip, along with a transcript, was posted on the hiddensecretsofmoney.com Internet site yesterday---and it's worth watching if you have the time.

India should subordinate itself to London fix, World Gold Council report says

India, the world's largest gold consumer after China, should start a bullion board to regulate trade and a spot exchange to offer uniform prices across the country, the World Gold Council said.

The board should manage imports, encourage exports, and boost infrastructure for the industry, while the spot bourse would create a national pricing structure derived from the London fixing, the council said today in a joint report with the Federation of Indian Chambers of Commerce and Industry, an industry group.

India’s bullion imports surged this financial year as tax increases and a rule linking shipments to re-exports failed to curb demand among jewelry buyers and investors. The solution to meeting Indians’ enduring appetite for the precious metal lies in making better use of the gold already in the country and not restricting shipments, according to P.R. Somasundaram, managing director for the council in India.

“Demand for gold in India is interwoven with culture, tradition, the desire for beauty and financial protection,” Somasundaram said in a statement. “It would be futile to control gold demand knowing how much the passion for gold drives savings itself.”

A long-term “India Gold Policy” should encourage gold-based investment products and support the country’s economic priorities and find ways of mobilizing and monetizing 22,000 metric tons of gold in Indian households, he said.

The forces of Mordor operating under the guise of the World Gold Council just won't quit.  This Bloomberg story, filed from Mumbai, appeared on their website at 2:00 a.m. Denver time yesterday morning.  The headline above is courtesy of Chris Powell---and I found it embedded in a GATA release.  The actual headline reads "Bullion Board Seen by Council as Way to Manage India Gold Demand"

India should allow banks to hold gold as reserves, World Gold Council report says

India should allow banks to use gold as part of their liquidity reserves, which would let them make more use of gold inside the country and reduce the need for imports, an industry body said today, seeing that as an alternative to import curbs.

The world's second-biggest consumer of the metal should also consider setting up an exchange for transparent gold pricing and to streamline trade, according to a report commissioned by the World Gold Council.

The WGC says allowing banks to hold gold as part of their liquidity reserves would motivate them to introduce gold deposit schemes, which would in turn circulate existing bullion within the country, removing some of the need to import fresh supply.

"The solution to meeting India's enduring appetite for gold lies not in restricting the import of gold, but in making better use of the gold that is already in the country, making it a productive, fungible asset class like any other financial savings," Somasundaram said in a separate statement.

This is the same siren song---and coming from the same people, but with a slightly different tune---and spun by Reuters instead.  It was co-filed from Mumbai and Singapore at 4:05 p.m. IST yesterday---and the photo is worth the trip.  It's another gold-related news item I found over at the gata.org Internet site.

India may change rules on gold imports for star trading houses

India will announce changes as early as this week to a rule mandating so-called star trading houses export 100 percent of their gold imports, a policy maker with direct knowledge of the upcoming action said on Tuesday.

India could also announce changes to rules last year mandating that all imports be paid fully with cash margins.

The actions would come in the form of a clarification to the country's surprise move last month to scrap a rule mandating traders export 20 percent of all gold imports, in what had been called the 80:20 import rule.

The changes to 80:20 had left unclear the fate of "star trading houses," or leading private trading firms, which had been mandated last year to export 100 percent of their gold imports.  The policy maker added in the clarification India would give these star trading houses "a free hand" without specifying any further.

This is the second Reuters story in a row---this one filed from Mumbai at 5:56 p.m. India Standard Time [IST] yesterday.  It's worth skimming---and I thank Manitoba reader U.M. for her final offering in today's column.

Koos Jansen calculates year-to-date Chinese gold imports at 1,212 tonnes

Bullion Star market analyst and GATA consultant Koos Jansen calculates net Chinese wholesale gold imports for the first 11 months of the year at 1,212 tonnes, with demand remaining strong.

Jansen also disputed recent gold demand data reported by Bloomberg.

I posted this GATA release in yesterday's column as well, but it bore an erroneous headline stating that China's gold demand was 1,212 tonnes y-t-d.  That error, which I didn't catch either, was kindly pointed out to me by Lawrence Williams over at the mineweb.com yesterday---and both Chris and I thank him for that.  Lawrie also pointed out, correctly, that actual Chinese gold demand year-to-date was "well over 1,800 tonnes---and heading for comfortably over 2,000 tonnes this year."

Koos Jansen: Gold leased in China is not double-counted as in the West

While gold leased in the Western central banking and general banking systems is typically double-counted (or more), Bullion Star market analyst and GATA consultant Koos Jansen reports today, gold leased in China's banking system is not.

Jansen's analysis is headlined "A Close Look at the Chinese Gold Lease Market" and it's posted at the Singapore-based Internet site bullionstar.com.

GATA's Chris Powell: Gold market manipulation: Why, how, and how long?

Thank you for coming here tonight even though I can speak only English. I'm afraid that when it comes to German I don't know scheisse.

Maybe I have an excuse. Mark Twain tried very hard to learn German and wrote afterward that German should be classified with the dead languages, because only the dead had the time to learn it.

Still, I'm really glad to be here, since at least many of you speak English as well as German and since I've just come from London, where hardly anyone speaks English.

For the first 48 hours I was in London the only person I heard speaking English was the hotel desk clerk, and she didn't seem too happy about it. The first time I heard English on the street it was from a guy who recognized me as an American rube and asked me for money.

All humour aside, the rest of Chris Powell's commentary is deadly serious.  It was a speech he gave to the German Precious Metal Society in Munich yesterday---and falls into the absolute must read category.  It is, without question, the most important 'story' in today's column.

¤ The Funnies







¤ The Wrap

Being that futures trading is a zero sum game, the $400 million that the technical funds booked in profits on COMEX silver shorts (so far) was largely lost by the raptors---the Commercial traders other than the 'Big 8'. Technical funds closed out 22,000 short contracts at a profit---and some, but not all, raptors sold nearly 19,000 long contracts at a loss of close to $400 million. While the large gain will undoubtedly increase the technical funds’ financial war chest, the loss to the 10 or so raptors which sold contracts, is devastating. Because the loss was not only large but concentrated among so few raptors, it's reasonable to assume the losses have knocked those traders out of the silver game for good. No speculator can lose an amount equal to years’ worth of cumulative gains in any one trade and remain solvent, or continue as if nothing extreme has occurred.

Therefore, the relatively few raptors who got caught and sold the 19,000 long contracts in the downdraft from over $17 as recently as Oct 28---to $14 and $15---can no longer be, effectively, in business. It is highly unlikely that these traders will trade silver futures anytime soon. And it’s possible that the large selling by the raptors in gold [last] week may be related to the massive losses of the silver raptors. After all, how hard is it to imagine that the raptors who got caught flat-footed in silver were also long gold futures?  While the losses to the raptors in silver overshadowed what might have been lost on gold longs, what real difference does it make? A trader put out of business by silver losses isn’t going to trade gold as if nothing mattered. - Silver analyst Ted Butler: 06 December 2014

Although it was nice to see the precious metals rally, once again there has been absolutely no follow-through in Far East trading, or early London trading this morning.  In the last five weeks we've had four 'orphan' rallies with no follow through.  All of them can be easily classified as "key reversal" days---and every one has failed.  One wonders what the T.A. gurus have to say for themselves at this juncture.

However, having said that, every one of these out-of-the-blue one-day-wonder rallies has resulted in internal structure changes within the Commitment of Traders Reports that, as Ted Butler said on Saturday---"were so extreme as to potentially be a game changers."

Here are the 6-month charts for all four precious metals, plus WTIC.  Crude oil hit a new intraday low yesterday, but did not close there.

As you can see, the 50-day moving averages in both gold and silver got obliterated to the upside---and platinum also broke through, but with somewhat less authority.  Palladium continues to 'struggle' just under its 200-day moving average.

As I type this paragraph, the London open is less than ten minutes away---and at the moment, the prices of all four precious metals are up relatively decent amounts from their respective closes in New York yesterday.  Gold volume is just north of 28,000 contracts---and silver's volume is around 4,600 contracts.  Neither volume is exactly light.  The dollar index, which touched its 88.80 Far East high just before 10 a.m. Hong Kong time, is down 14 basis points from its Tuesday close as of this writing.

Since yesterday [at the close of COMEX trading] was the cut-off for this Friday's Commitment of Traders Report, all of that price/volume activity from Tuesday will be in it.  All that matters---and it's what Ted and I will both be looking for, is whether or not the 'Big 8' traders on the short side in both silver and gold increased their short positions on this rally.  On the surface it's looked ugly, but the last four weeks of COT Reports have show huge and positive changes, despite the headline numbers.  Ted is hoping we'll see more of the same in this Friday's report.  So do I---and so should you!

And as I fire today's effort out the door at 5:25 a.m. EST, I see that the tiny rallies in both gold and silver that developed an hour or so before the London open have reversed themselves---and both precious metals are now down on the day by small amounts.  Gold volume is just over 40,000 contracts, which is quite a bit all things considered---and silver's volume is getting up there as well, at just over 8,200 contracts.

Both platinum and palladium are still up on the day, but also trending lower as of this writing.  The dollar index hasn't changed much in the last couple of hours---and is down 7 basis points at the moment.

I note that crude oil is down $1.20 a barrel---and a new low for this move down.

Like yesterday, I won't hazard a guess as to how the remainder of today's trading session will unfold and, as usual, nothing will surprise me when I check the charts after rolling out of bed later this morning.

See you tomorrow.

Ed Steer

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Wed, 10 Dec 2014 06:16:00 +0000
<![CDATA[Jim Rickards: Central Bank Gold Buying Shows Readiness for ‘Demise of the Dollar’]]> http://www.caseyresearch.com/gsd/edition/jim-rickards-central-bank-gold-buying-shows-readiness-for-demise-of-the-dol/ http://www.caseyresearch.com/gsd/edition/jim-rickards-central-bank-gold-buying-shows-readiness-for-demise-of-the-dol/#When:06:17:00Z "The table is set if 'da boyz' want to smash silver and gold again"

¤ Yesterday In Gold & Silver

It was a very quiet trading day in gold on Monday---and even the the price spike that came minutes after the close of COMEX trading yesterday, didn't have a lot of volume associated with it.  But it did improve moral a bit, as the gold price managed to close above $1,200 spot.

The low and high tick were reported by the CME Group as $1,187.30 and $1,209.30 in the February contract.

Gold finished the Monday session in New York at $1,204.20 spot, up $11.10 from Friday's close.  Net volume was 117,000 contracts.

Here's the 5-minute tick chart courtesy of Brad Robertson---and it shows the volume associated with the post-COMEX close price spike---and it was only around 9,000 contracts in total.

Silver didn't do much of anything yesterday either and, including the price spike, traded within about a two bit range for the entire session.  It was just another day where silver was kept on a very tight price leash.

The low and high ticks were recorded as $16.165 and $16.44 in the March contract.  Volume, net of December and January, was only 27,000 contracts.

Platinum rallied until around 10:30 a.m. in Zurich on their Monday morning---and then chopped sideways into the New York close.  Platinum finished the day at $1,228.00 spot, up ten bucks on from Friday's close.

Palladium spent most of the Monday session above the $800 spot price mark.  The high tick came shortly before 10 a.m. in Zurich---and once the London gold fix was in, the price was taken back below the $800 spot price mark.  It closed at $798 spot, down 3 bucks.

The dollar index closed late on Friday afternoon at 89.36---and didn't do much until 2 a.m. Hong Kong time.  At the point it rallied to its 89.54 high, before slowly rolling over.  The decline got more serious as the New York session progressed---and it appeared that 'gentle hands' were there to catch a falling knife as the index broke through the 89 level, hitting its 88.92 low tick shortly after 2 p.m. EST.  It rallied unsteadily from there---and the dollar index closed at 89.12---down 24 basis points from Friday.

It would have obviously closed much lower if allowed to continue trading freely, which it obviously wasn't after 2:10 p.m. EST.  Here's the 3-day chart.

The gold stocks opened in positive territory, but began to sell off almost immediately, hitting their low ticks [and down over 2 percent] just minutes before noon EST.  From that point they chopped sideways until the surprise rally in gold just minutes after the COMEX close.  They were up almost 2 percent at one point, but sold off in the last hour of trading.  The HUI closed up 0.85%.

The silver equities followed a very similar pattern, but since they were sold down much harder during the early going in New York, they had a much bigger hole to dig themselves out of.  Even though they managed to make it into positive territory, they finished basically unchanged, as Nick Laird's Intraday Silver Sentiment Index closed down a tiny 0.06%.

The CME Daily Delivery Report showed that 753 gold and 5 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, the two short/issuers of note were Scotiabank and JPMorgan out of its client account with 160 and 592 contracts respectively.  HSBC USA stopped 264 contracts---and JPMorgan out of its in-house [proprietary] trading account was the long/stopper on 486 contracts, sticking it to its clients for the benefit of the company once again.  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 December dropped by 28 contracts, down to 1,935 contract---also minus the 753 contracts posted for delivery in the previous paragraph.  Silver's December o.i. declined by 29 contracts down to 587 contracts still open---minus the 5 contracts mentioned above.

There was another withdrawal from GLD by an authorized participant yesterday.  This time 57,648 troy ounces were taken out.  And as of 9:22 p.m. EST yesterday evening, there were no reported changes in SLV.

There was another silver eagles sales report from the U.S. Mint on Monday.  They sold 495,500 of them.  No gold eagles or gold buffaloes were sold.  It's another record year for silver eagles sales, as 42,864,000 have been sold so far in 2014---compared to 42,675,000 reported sold in 2013.

BIG GOLD editor Jeff Clark sent me this silver eagle story posted on the silvercoinstoday.com Internet site on Sunday.  It's headlined "2015 American Eagle Silver Bullion Coins Available January 12"---and it's very much worth reading.  It's also posted in the Critical Reads section further down.

It was another whopper in/out day in both gold and silver over at the COMEX-approved depositories on Friday.  In gold---186,465 troy ounces were reported received, with the lion's share going into JPMorgan and Scotiabank.  There were 10,383 troy ounces shipped out the door.  The link to that activity is here.

In silver---600,325 troy ounces were reported received---and 1,064,019 troy ounces were shipped out the door.  The 600,325 troy ounces were received at the CNT Depository---and the withdrawals were spread around between four of the six depositories.  The link to that action is here.

Although the 'unofficial' China gold imports through Hong Kong figures for October were reported about ten days ago in stories from Reuters and Bloomberg, the 'official' numbers weren't released until yesterday.  They show that 77.626 tonnes imported.

As you may be aware, I had written off the chart below many months ago, as it was becoming obvious that it was no longer a proxy for gold being imported into China.  The last three months have shown that I may have been premature in my opinion, as it's obvious China is buying gold from all sources now, even to the point of resurrecting imports through Hong Kong.  Here's Nick Laird's most excellent chart---and it has returned to moving from lower left to upper right with a new vigor.

I have an embarrassingly large number of stories for you today---and since I refused to edit them further, I'll leave the final edit up to you.

¤ Critical Reads

Fortune's Sloan: Financial Markets Have Gone Cuckoo

For those who may wonder if U.S. financial assets are distorted and far out of alignment with reality, it's worth noting that Apple — and even Italy — can now borrow money more cheaply than Uncle Sam can.

The rate on 10-year Treasury securities has been trading at 2.28 percent, while two of the poorest nations of Europe were paying less than that to borrow. Italy was paying 1.98 percent and Spain was paying only 1.83 percent.

"Have financial markets lost their collective mind? In some ways, it's starting to look like that," Fortune Senior Editor at Large Allan Sloan wrote in a column for The Washington Post.

He noted the U.S. government can print dollars to redeem its debt, while European nations cannot — they must leave it up to the European Central Bank to authorize printing of euros.

Today's first news item appeared on the newsmax.com Internet site at 06:00 a.m. EST on Monday morning---and it's courtesy of West Virginia reader Elliot Simon.

Jim Grant Sums it All Up in 2 Stunning Paragraphs

Likely it will be even more baffled than we are. Imagine trying to explain the present-day arrangements to your 20-something grandchild a couple of decades hence - after the crash of, say, 2016, that wiped out the youngster's inheritance and provoked a central bank response so heavy-handed as to shatter the confidence even of Wall Street in the Federal reserve's methods...

I expect you'll wind up saying something like this:  "My generation gave former tenured economics professors discretionary authority to fabricate money and to fix interest rates.  We put the cart of asset prices before the horse of enterprise.  We entertained the fantasy that high asset prices made for prosperity, rather than the other way around.  We actually worked to foster inflation, which we called 'price stability' (this was on the eve of the hyperinflation of 2017)."

"We seem to have miscalculated."

This brief article was posted on the Zero Hedge website on Sunday at 11:30 a.m. EST---and my thanks go out to Phil Barlett for finding it for us.

McDonalds Implodes, Reports Worst U.S. Sales in Over a Decade

If one ignores all traditional, staple indicators of a growing economy, such as stable (not plummeting) crude demand, stable (not plummeting) holiday spending and stable (not plummeting) McDonalds comp store sales, then indeed the US economy has "decoupled" from the rest of the world, and those who wish to demonstrate the same intellectual capacity as Tim Geithner, will welcome you to the (latest non-)recovery.

And yet for those, who are leery of seasonally-adjusted government data (showing soaring low-wage jobs offset by crashing employment in the energy sector and M&A synergies which mysteriously are never captured), or sentiment surveys and confidence polls (of Wall Street executives and government workers), here is the latest data from McDonalds. Showing the worst US comp store sales in nearly 12 years at -4.6%, one does wonder if following America's inability to even pay for sub-$1 meals, mass starvation will follow?

This short Zero Hedge story from yesterday has two charts embedded---and it's worth your while.  I thank reader Brad Robertson for sharing it with us.

Job Market Growth Hovers Near 2-Year Lows, Fed's Labor Market Index Shows

Despite the utter exuberance at Friday's payrolls data -which 'everyone' saw as nothing but indicative of escape velocity and utopia in America's near future - the Fed's new multifactor model of the US jobs market shows growth sliding to just 2.9% MoM. This is the almost the slowest growth since Aug 2012.

This is another tiny Zero Hedge article.  It appeared on their Internet site at 10:22 a.m. EST yesterday morning---and I thank Manitoba reader U.M. for sending it.

Negative Interest Rate Policy Arrives in the U.S. -- TBTF Banks Tell Customers to Move Their Cash or be Charged Fees

Back in June, the world was speechless when Goldman's head of the ECB, Mario Draghi, stunned the world when he took Bernanke's ZIRP and raised him one better by announcing the ECB would send deposit rates into negative territory, in the process launching the Neutron bomb known as N(egative)IRP and pushing European monetary policy into the "twilight zone", forcing savers to pay (!) for the privilege of keeping the product of their labor in the form of fiat currency instead of invested in a global Ponzi scheme built on capital market so broken even the BIS can no longer contain its shocked amazement.

Well, the U.S. economy may be "decoupling" (just as it did right before Lehman) and one pundit after another are once again (incorrectly) predicting that the Fed may raise rates, but when it comes to the true "value" of money, U.S. banks have just shown that when it comes to spread between reality and the economic outlook, the schism has never been deeper.

As The Wall Street Journal reports, far from paying for the privilege of holding other people's cash (and why would they with nearly $3 trillion in positive carry excess reserves sloshing around) US banks - primarily of the TBTF variety - "are urging some of their largest customers in the U.S. to take their cash elsewhere or be slapped with fees, citing new regulations that make it onerous for them to hold certain deposits."

This longish Zero Hedge article from yesterday showed up on their website at 2:30 p.m. EST on Monday---and it's the second offering in a row from reader U.M.

Dollar surge endangers global debt edifice, warns BIS

Off-shore lending in US dollars has soared to $9 trillion and poses a growing risk to both emerging markets and the world's financial stability, the Bank for International Settlements has warned.

The Swiss-based global watchdog said dollar loans to Chinese banks and companies are rising at annual rate of 47pc. They have jumped to $1.1 trillion from almost nothing five years ago. Cross-border dollar credit has ballooned to $456bn in Brazil, and $381bn in Mexico. External debt has reached $715bn in Russia, mostly in dollars.

A chunk of China's borrowing is disguised as intra-firm financing. This replicates practices by German industrial companies in the 1920s, which hid their real level of exposure as the 1929 debt trauma was building up. "To the extent that these flows are driven by financial operations rather than real activities, they could give rise to financial stability concerns," said the BIS in its quarterly report.

"More than a quantum of fragility underlies the current elevated mood in financial markets," it warned. Officials are disturbed by the "risk-on, risk-off, flip-flopping" by investors. Some of the violent moves lately go beyond stress seen in earlier crises, a sign that markets may be dangerously stretched and that many fund managers do not really believe their own Goldilocks narrative.

This Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site at 1:16 p.m. GMT on their Sunday afternoon---and it's definitely worth reading.  I thank South African reader B.V. for bringing it to my attention---and now to yours.

Oil and Gas Bloodbath Spreads to Junk Bonds, Leveraged Loans. Defaults Next

The price of oil has plunged nearly 40% since June to $65.63, and junk bonds in the US energy sector are getting hammered, after a phenomenal boom that peaked this year. Energy companies sold $50 billion in junk bonds through October, 14% of all junk bonds issued! But junk-rated energy companies trying to raise new money to service old debt or to fund costly fracking or off-shore drilling operations are suddenly hitting resistance.

And the erstwhile booming leveraged loans, the ugly sisters of junk bonds, are causing the Fed to have conniptions. Even Fed Chair Yellen singled them out because they involve banks and represent risks to the financial system. Regulators are investigating them and are trying to curtail them through “macroprudential” means, such as cracking down on banks, rather than through monetary means, such as raising rates. And what the Fed has been worrying about is already happening in the energy sector: leveraged loans are getting mauled. And it’s just the beginning.

How bad is it? The number of leveraged loans in the oil and gas sector trading between 80 and 90 cents on the dollar (blue line in the chart below) has soared parabolically from 0% in September to 40% now. These loans are now between 10% and 20% in the hole!

Oil and gas stocks are bleeding: the Energy Select Sector ETF (XLE) is down 21% from June; S&P International Energy Sector ETF (IPW) down 29% from early July; and the Oil & Gas Equipment & Services ETF (XES) down 42% from early July.

This commentary appeared on the wolfstreet.com Internet site on Sunday---and I thank reader U.D. for passing it around yesterday.

U.S. intelligence fears violence, deaths abroad after CIA torture report release

The U.S. intelligence agencies predict that the publication of a Senate report on the use of torture on terror suspects by the CIA will cause “violence and deaths” abroad, with security beefed up at U.S. foreign installations.

The 480-page report on Central Intelligence Agency’s interrogation techniques after 9/11 is to be to be released next week. The document is a summary of a larger 6,000-page study, which still remains classified.

The U.S. intelligence agencies as well as foreign governments have said privately that the publication of the paper will be used by the extremists to promote deadly violence, Rep. Mike Rogers, a Michigan Republican, told CNN’s State of the Union program.

Rogers questioned the very need for the report to be released as the investigation of CIA torture by the Justice Department saw no criminal charges filed.

This news item put in an appearance on the Russia Today website at 9:17 p.m. Moscow time on their Sunday evening, which was 1:17 p.m. EST.  It's the first offering of the day from Roy Stephens.  It's worth reading---as is this next piece headlined "Bush blasts CIA torture report even before its release".  It's also a Russia Today offering from 5:25 p.m. on Monday afternoon Moscow time---and it's courtesy of Roy Stephens as well.

Ron Paul: Reckless Congress 'Declares War' on Russia

Today the U.S. House passed what I consider to be one of the worst pieces of legislation ever. H. Res. 758 was billed as a resolution “strongly condemning the actions of the Russian Federation, under President Vladimir Putin, which has carried out a policy of aggression against neighboring countries aimed at political and economic domination.”

In fact, the bill was 16 pages of war propaganda that should have made even neocons blush, if they were capable of such a thing.

These are the kinds of resolutions I have always watched closely in Congress, as what are billed as “harmless” statements of opinion often lead to sanctions and war. I remember in 1998 arguing strongly against the Iraq Liberation Act because, as I said at the time, I knew it would lead to war. I did not oppose the Act because I was an admirer of Saddam Hussein – just as now I am not an admirer of Putin or any foreign political leader – but rather because I knew then that another war against Iraq would not solve the problems and would probably make things worse. We all know what happened next.

That is why I can hardly believe they are getting away with it again, and this time with even higher stakes: provoking a war with Russia that could result in total destruction!

This must read commentary by Ron Paul appeared on his website on Thursday---and I thank reader Jim Skinner for bringing it to my attention on the weekend.

Basel Faults E.U. for Deviations From International Bank Standards

Global banking regulators rebuked the European Union for failing to properly implement capital rules intended to avert another financial crisis.

The Basel Committee on Banking Supervision said that European legislation to apply the international standards is “materially non-compliant,” the lowest grade given by the group so far in its review process of member nations.

Deficiencies in EU rules include “the treatment of exposures to SMEs, corporates and sovereigns,” as well as exemptions to part of Basel’s treatment of derivatives trades, the group said in a report on its website today. The committee also published a report on the U.S., judging it “largely compliant” with the standards known as Basel III.

The latest Basel standards more than triple the minimum amount of core capital that internationally active banks must have to at least 7 percent of their risk-weighted assets, while also toughening rules on how banks should measure the possibility of losses on their investments.

This Bloomberg article from last Friday was picked up by the swissinfo.ch website---and it's the second offering of the day from reader B.V.

U.S. Dollar remains Strong - Italy downgrade casts gloom over euro zone

U.S. and European stocks fell on Monday after weak Chinese and Japanese data stoked worries about slowing global economic growth, while oil prices sank to five-year lows on expectations of oversupply into 2015.

The euro sagged to 2-1/2-year lows against the dollar after European Central Bank policymaker Ewald Nowotny warned of a "massive weakening" of the euro zone economy and said the purchase of state bonds could provide a boost. His comments came just days after Standard and Poor's downgraded its credit rating on Italy, the bloc's third-largest economy, to a level just above junk status.

Nowotny's remarks raised bets in the bond market for a fresh round of ECB stimulus in the first quarter of 2015.

This Reuters piece, filed from New York, appeared on their Internet site at 4:50 p.m. EST yesterday---and I thank Orlando, Florida reader Dennis Mong for sending it.  Since Dennis sent it our way, the Reuters 'thought police' have changed the headline.  It now reads "U.S. stocks stumble, oil falls to five-year lows".  I liked the first headline better.

E.U.'s Juncker Folds to Gazprom on South Stream Pipeline

European Commission President Jean-Claude Juncker has insisted the $40 billion South Stream natural gas pipeline can still go ahead and accused Russia of holding E.U.-member Bulgaria to ransom when it said it had abandoned the project.

Speaking after talks with Bulgarian Prime Minister Boiko Borisov, whose country South Stream would traverse making it a major beneficiary, Juncker rebutted Russia’s statement that EU competition rules had killed it. He told reporters issues relating to the pipeline were not insurmountable and he was working with Bulgaria to address them.

Russia said on Monday it had abandoned the pipeline, which would have bypassed Ukraine, Gazprom’s traditional transit route for Russian gas, citing E.U. competition requirements for a pipeline’s ownership to be divorced from its cargo. It said it was working on an alternative route via Turkey.

Juncker accused Moscow of blackmailing Bulgaria, which retains strong political and economic ties with Moscow and is almost entirely dependent on Russia for its gas. “I am not accepting the simple easy idea that Bulgaria can be blackmailed as far as these energy relations are concerned,” Juncker said.

You couldn't make this stuff up.  This news item from the acting-man.com Internet site appeared on their Internet site on Monday sometime---and I thank Casey Research's own Bud Conrad for passing it around yesterday.  I borrowed the headline from the Zero Hedge spin on this piece.

Hollande discusses Ukraine crisis with Putin in Moscow

French President François Hollande made an unscheduled stop in Moscow on Saturday to discuss the Ukraine crisis with Vladimir Putin, telling the Russian leader that Moscow and the West must overcome their divisions and work together.

"I think we must get rid of the walls that separate us," Hollande said in Moscow. "We must find solutions together."

Putin struck a moderate tone in his remarks on Ukraine. “I very much hope that in the near future we will have a final cease-fire agreement” in east Ukraine, Putin said in televised remarks. Without a full truce, he said, “it is difficult to picture Ukraine as a territorially integral country”, adding that Russia “supports the territorial integrity of Ukraine”.

Hollande stopped in the Russian capital on his way back from a visit to Kazakhstan, a day after vowing to work towards a de-escalation in the Ukraine conflict.

This story showed up on the france24.com Internet site on Sunday sometime---and I thank Roy Stephens for sending it our way.

Merkel Digs Own Grave, Doubles Down With Harsh Anti-Russia Rhetoric

As we reported last week, Angela Merkel has come under fire by her three predecessors – Schroeder, Kohl and Schmidt – over her uncompromising stance towards Russia.

Those wondering how she will react to such criticism did not have to wait for long.

Die Welt am Sonntag has just printed an interview with her under the header: „Angela Merkel blames Moscow for the destabilization of Eastern Europe“.

Those still hoping that her words had somehow, sometimes been equivocated, or even mistranslated, will now have to face facts: Angela Merkel really is a staunch servant of the American empire.

Merkel's words leave no room for dialogue and compromise. She is right, her critics are wrong, and Putin is a evildoer who must pay the price for his actions.

This must read news item appeared on the russia-insider.com Internet site early Monday evening Moscow time---and it's another contribution from Roy Stephens.

60 Hi-Profile German Leaders Sign Petition Condemning Merkel's Russia Policy

Apologies for the funny translation, we just ran this German article from Die Zeit through GoogleTranslate, but you get the idea.  

This is not a minor thing, and a sign that Merkel is in big trouble.

The list is chock-a-block of heavy hitters and contains former top politicians, (mayors of Berlin and Hamburg, chancellor, president, head of top party, minister of defense, prime ministers of Germany's 16 Bundeslander (like states), ambassador to Russia), top religious leaders, famous actors, scientists, business leaders, and prominent journalists.

If Merkel is known for anything, it is that she doesn't stand for anything, believe in anything, and this flexibility and pragmatism has kept her at the top of the heap for ages now.

We bet she will roll with the new reality in Germany and soften her line on Russia.  Either that or she will get booted out.

This very interesting article was posted on the russia-insider.com Internet site early yesterday evening Moscow time---and it's the second offering in a row from Roy Stephens.  It's worth reading as well.

Athens on fire as rioters mark anniversary of police killing of teen

Greek police used tear gas and water cannons to disperse crowds during clashes in the capital. Athens was gripped with protests marking six years since police shot dead an unarmed teenager during an anti-austerity rally.

At least 8,000 demonstrators marched in Athens on Saturday commemorating the sixth anniversary since the police slaying of Alexandros Grigoropoulos. Grigoropoulos' murder on December 6, 2008 sparked violent clashes across Greece, with cars being burned, shops looted, and police attacked in a number of Greek cities.

The violence on Saturday began at 19:30 in the evening by a group of some 200 black-clad masked men, local media reported. They started setting on fire cars and bank ATMs and threw Molotov cocktails and other projectiles at police in the bohemian neighborhood of Exarchia, where Grigoropoulos was killed.

This Russia Today news item showed up on their website at 1:34 a.m. Moscow time on their Sunday morning---and I thank reader Harry Grant, who lives very close to where all these events occurred, for sending it along.

Kiev ignored E.U. request to close East Ukraine airspace days before MH17 crash – report

The European air traffic control regulator urged Kiev to close the southeast of Ukraine for civilian aircraft days before the MH17 flight was downed near Donetsk, but the plea was ignored by local authorities, a new report claims.

Eurocontrol experts spoke privately to their Ukrainian colleagues about the danger of the situation in the east of the country, unnamed sources in the organization told the Sunday Times newspaper.

They were reportedly concerned that by that time anti-Kiev militias had already downed about 20 Ukrainian military planes; that the communication frequencies were jammed in the Donetsk Region; and that the Russian and Ukrainian air-traffic controllers couldn’t exchange information.

However, Eurocontrol lacks power to affect national governments’ decisions, and Kiev continued to allow civil planes to use airspace over war-torn Donetsk and Lugansk regions, the report said.

This story put in an appearance on the Russia Today Internet site at 8:27 p.m. Moscow time on their Sunday evening, which was 12:27 p.m. in New York.  It's another offering from Roy Stephens.

Sanctioned Russian banks begin testing national payment system next week

Russia’s Rossiya and SMP banks, which fell under Western sanctions, are among the eight lenders that will start testing the country’s new national payment system on December 15.

"The pilot project involves SMP Bank and Rossiya Bank, those for which the story is very critical and important. These are quite large banks,” the head of the Russian National payment system (NPS) Vladimir Komlev said in an interview with Rossiya 24 TV.

The move comes as a part of Russia’s ambitious initiative to move away from the Western dominance of its financial markets. Last month the Russian Central Bank said it would have its own international inter-bank payment system, an alternative to the global SWIFT network up and running by May 2015.

Gazprombank, Rosbank, Alfa Bank and Ural Bank for Reconstruction and Development are among eight other banks to join the pilot project. They were selected based on the size of business, location and technology platform, Komlev said.

This Russia Today news article appeared on their Internet site at 1:18 p.m. Moscow time on their Monday afternoon---and it's the second-last offering of the day from Roy Stephens.

Analysis: What’s behind the U.K. ‘return’ to the Middle East?

Britain is to open a new £15 million naval base in Bahrain, the country’s Foreign Office announced Friday, which will be the first permanent UK military presence in the Middle East in more than 40 years.

Under a deal signed with the Bahraini government, improvements will be made to the Gulf state’s Mina Salman Port, which is already used on an ad-hoc basis by four UK mine-hunter ships, creating a permanent forward operating base.

The base will “enable Britain to send more and larger ships to reinforce stability in the Gulf” said UK Defence Secretary Michael Fallon. “We will now be based again in the Gulf for the long term,” he said.

The move represents a potentially significant shift in British defence strategy.

That much money in Bahrain doesn't get one far, but it is a foot in the door, I suppose.  This france24.com appeared on their Internet site on Sunday sometime---and it's the final contribution of the day from Roy Stephens, for which I thank him on your behalf.

China trade data well below expectations

Trade data from the world's second largest economy, China, came in well below expectations on Monday, heightening fears of a sharper slowdown.

China's exports rose 4.7% in November from a year ago, compared to market forecasts of a 8.2% jump.

Imports fell 6.7% in the same period against predictions of a 3.9% rise.

The surprise slump in imports led the trade surplus to hit a record $54.5bn (£35bn), the highest in 14 years.

While the trade surplus, which is up 61% compared to last year, will add to economic growth in the fourth quarter, it does suggest the government needs to step in to stimulate growth, said Dariusz Kowalczyk, economist at Credit Agricole.

This news item put in an appearance on the bbc.com Internet site at 11:28 p.m. EST on Sunday evening---and I thank Elliot Simon for sending it.  It's worth reading.

'Gold-obsessed' Chinese officer's graft case worth $5 billion: magazine

A former senior Chinese military officer was obsessed with gold and often ferried gold bars for bribes in a luxury car, a Hong Kong magazine reported on Monday, in connection with a graft case which investigators estimate is worth some $5 billion.

The government charged Lieutenant General Gu Junshan, who had been deputy director of the logistics department of the People's Liberation Army, with corruption in March, and he is suspected of selling hundreds of military positions.

Phoenix Weekly, a magazine run by Hong Kong broadcaster Phoenix Television which has close ties with the Chinese government, said that total ill-gotten gains amounted to some 30 billion yuan ($5 billion), including about 600 million yuan in bribes accepted by Gu.

Gu also loved gold, especially gold statues of Buddha, though he preferred receiving ground up gold rather than gold bars when he was taking bribes, the magazine added, in a story widely carried by mainland Chinese news websites.

This very interesting Reuters news item, filed from Beijing in the wee hours of Monday morning EST, is definitely worth reading.  It's another contribution from Manitoba reader U.M.

Japan's recession worse than thought, data shows

Japan’s economy contracted more than initially thought in the July-September quarter, revised official data revealed Monday, showing the world’s third largest economy sank deeper into recession.

The economy shrank 0.5% quarter-on-quarter, worse than the 0.4% estimated in initial data released three weeks ago, the Cabinet Office said.

The reading was much worse than the median forecast of a 0.1% quarterly shrinkage in a survey by the Nikkei economic daily.

The drop came after a 1.7% contraction in the April-June quarter, meeting a common definition of a recession as two consecutive quarters of negative growth.

This news story appeared on the japantoday.com Internet site at 3:20 p.m. JST on their Monday afternoon---and it's courtesy of reader M.A.

Justin Raimondo: Pearl Harbor and the Engineers of War -- How FDR lied us into WW2

What gets me are the lies. Iraq’s "weapons of mass destruction" – Iran’s (nonexistent) nuclear weapons program – the Vietnamese "attack" in the Gulf of Tonkin – Germans bayoneting Belgium babies – the sinking of the USS Maine: over the long and bloody history of US imperialism, these are just a few of the fabrications US policymakers have seized on to justify Washington’s aggression. It’s quite a record, isn’t it? Not only that, but there’s been little if any acknowledgment by the American political elites that they’ve ever lied about anything: it’s all been thrown down the Memory Hole, along with whatever sense of shame these people ever had.

Indeed, if there is an award for sheer shamelessness then surely it must go to the court historians who preserve the myth of Pearl Harbor, insisting that the Japanese launched a "sneak attack" on the US fleet. The official version of the narrative is that the Americans, dewy-eyed innocents all, were simply minding their own business, not bothering anybody and certainly not aggressing against the predatory Japanese, who were fighting harmless "agrarian reformers" led by Mao Tse-Tung in China. Suddenly, totally without provocation, and out of the clear blue the Japs – to use the term routinely employed by the Roosevelt administration and its media minions at the time – crossed thousands of miles of Pacific Ocean to commit murder and mayhem for no good reason other than their own inherent evil.

What’s amazing is that even though this nonsense has been thoroughly and repeatedly debunked over the years by historians concerned with discovering the truth – as opposed to getting tenure at some Ivy League university – the Big Lie is still not only believed by the hoi polloi but also stubbornly upheld by the "intellectuals." As to whether they actually believe it or not, that’s largely irrelevant as far as they’re concerned. As Arthur Schlesinger, Jr., the archetypal pointy-headed liberal intellectual – and idolator of FDR – put it: "If he [the President] was going to induce the people to move at all, he had no choice but to trick them."

This rather short essay by Justin, which is your absolute must read commentary of the day, appeared on the antiwar.com Internet site yesterday---and I thank Dan Lazicki for sending it our way.  It dovetails perfectly with the James Perloff piece in my Saturday column headlined "Pearl Harbor: Roosevelt's 9/11".

Commodity Benchmarks Are Open to Manipulation, Law Firm Says

Almost two-thirds of commodity market participants say that benchmarks used to set the price of everything from crude oil to ethanol to zinc are vulnerable to manipulation, according to a new study.

The report, to be published today by U.K. law firm Clyde & Co., shows that 64 percent of 170 respondents are concerned methods used by price reporting agencies to set commodity benchmarks could be manipulated. Reasons given in the survey include sample groups that are too small, a lack of independent oversight and the fact price creators are also traders who can benefit from influencing prices.

“It is an issue that there is a lack of confidence,” Clare Hatcher, a consultant with Clyde & Co.’s International Trade and Commodities Group, said in a phone interview.

Benchmark prices and the way they are determined have come under scrutiny after scandals in markets including foreign exchange, precious metals and the London interbank offered rate, or Libor, showed that some participants had conspired to manipulate benchmarks. The European Commission raided the offices of producers BP Plc, Royal Dutch Shell Plc, Statoil ASA and price reporting agency Platts last year as part of an investigation into fuel-price benchmarks.

This Bloomberg article, filed from Geneva, showed up on their website at 11:26 a.m. Denver time yesterday morning---and it's courtesy of reader M.A.

Citigroup Panicked Over Fraud at Chinese Ports: Mercuria

Citigroup Inc. was in a “state of panic” when alleged fraud was uncovered in two Chinese ports, Mercuria Energy Group Ltd.’s lawyer said as a London trial over disputed metal finance deals got under way.

“The discovery of the fraud was a massive problem for Citi as it was their metal and it was at their risk,” Mercuria lawyer Graham Dunning told a London judge. “There was a state of panic.”

The disputed copper and aluminum is under lock down in the ports of Qingdao and Penglai, where Chinese authorities are investigating an alleged fraud. Neither side can get access and they don’t know how much of the metal is there, Dunning said at a pretrial hearing in August.

Citigroup argues that it effectively delivered the metal to Mercuria under the terms of a sale-and-repurchase agreement by handing over warehouse receipts. The bank says it is owed about $270 million. Mercuria, a Cyprus-based firm with major trading operations in Geneva, argues the products were never properly delivered.

“It appears that substantial quantities may be missing from the warehouses or may be the subject of multiple pledges,” Dunning said today.

This very interesting Bloomberg article, filed from London, appeared on their website at 6:46 a.m. MST last Wednesday---and I thank reader U.D. for passing it around  yesterday afternoon.

Max Keiser: Two Gold Interviews with GATA's Chris Powell

GATA's secretary/treasurer was interviewed last week about gold price suppression by Max Keiser on the Russia Today network's "Keiser Report" program. The interview is about 13 minutes long and begins at the 15:35 mark of this youtube.com video that showed up on their Internet site on Friday sometime.

The second RT video interview with Chris, also posted on the youtube.com Internet site last Friday, begins at the 12:35 minute mark---and the link to that one is here.  I thank Patrick Leavens for bringing the second interview to our attention.

Both are worth watching, but the second one especially.

2015 American Eagle Silver Bullion Coins Available January 12

"Allocation" continues to be the keyword when it comes to bullion sales of American Eagle silver coins. On Friday, the United States Mint announced that the rationing process of Silver Eagles will be used for the remaining inventory of 2014-dated coins, and that it will also apply when next year’s coins debut.

In the same announcement, the Mint indicated its inventory of the 2014 American Silver Eagle would be depleted soon and that it was transitioning to production of 2015-dated coins. Based on current demand, the 2014 coins are expected to last through the week of December 15th. Next year’s coins, the Mint said, would launch on January 12, 2015.

It is almost certain that this year will become the new record holder for annual Silver Eagle sales. The most recent figures from the Mint list 42,368,500 sold through December 5. The current record happened last year at 42,675,000 coins. As such, just over 306,500 need to be purchased for a new annual record.

In related news, production of 2014 American Eagle and American Buffalo Gold Bullion Coins has ceased, but sales will continue until remaining inventories are sold. 2015-dated gold bullion coins will become available, without allocation, on January 5, 2015. However, if any inventories remain of this year’s coin, they will be sold on a fixed ratio basis along with the new ones.

This silver-related news item appeared on the silvercointoday.com Internet site on Sunday---and I thank Casey Research's own Jeff Clark for sending it to me yesterday.

Bank of England's former deputy governor misleads about gold and credit creation

In an interview today with Russia Today's Sophie Shevardnadze, Sir Howard Davis, former deputy governor of the Bank of England and former director of the London School of Economics, makes the most elementary mistake in his objection to restoration of a gold standard for currencies. That is, Davis says a gold standard "would radically reduce the amount of credit and would cause a worldwide depression that would make the 1920s look like a holiday."

But of course the amount of credit supported by a gold standard would depend entirely on the price established for currency convertibility into gold, a price that could be revised from time to time. While Britain's return to a gold standard for the pound in 1925 is now widely regarded as a deflationary mistake, it is because the pound's value in gold was set too high, at the parity in force prior to the First World War and the inflation caused by the war. If the gold price for convertibility was set high enough, a gold standard could support infinite money and infinite credit.

That was established by the famous trillion-dollar platinum coin idea in the United States a few years ago.

This very interesting commentary, filed from Munich at 2:02 p.m. Europe time on their Monday afternoon,  was posted on the gata.org Internet site---and it's definitely worth reading.

Jim Rickards: Central Bank Gold Buying Shows Readiness for 'Demise of the Dollar'

The central banks of Russia and China have been major buyers of gold this year, and that shows they realize the international monetary system is in a real pickle, says James Rickards, author of "The Death of Money: The Coming Collapse of the International Monetary System."

Russia has purchased about 150 metric tons of gold in 2014, according to its central bank Governor Elvira Nabiullina, driving its holdings to 1,149.8 metric tons, the highest since at least 1993.

"By purchasing gold, China and Russia have indicated that they understand how fragile things are and that they're getting ready for the demise of the dollar," Rickards told The New York Times.

"At the same time, other countries have been watching what they're doing and are saying to themselves, 'If things are really that bad, then we better get our gold back,' possession being nine­ tenths of the law."

This short article appeared on the moneynews.com Internet site yesterday---and it's courtesy of Elliot Simon.

Jim Rickards: Interview on Canada's Broadcast News Network

This 5:51 minute video interview appeared on the bnn.ca Internet site at 8:15 a.m. EST last Friday.  The headline on the page reads "Mark your calendars for April 23, 2015".

The interesting part of that was that there was no mention made of that date anywhere in the interview.  I fired off an e-mail to Jim and asked him what that was all about---and his reply to me was "I don't know. The producer put that in there.  It may have come up in a conversation, but I don't recall why.  If it comes to me, I'll let you know."

I marked it on my calendar anyway, so we'll see what happens, if anything.

Although the interview has similar subject material regarding his book, it's presented in a much different way---and he talks about about Canada's gold, or lack thereof, so it's definitely worth your while if you have any time left.  As usual, I thank reader Harold Jacobsen for sending it our way.

7 Questions Gold Bears Must Answer

A glance at any gold price chart reveals the severity of the bear mauling it has endured over the last three years.

More alarming, even for die-hard gold investors, is that some of the fundamental drivers that would normally push gold higher, like a weak U.S. dollar, have reversed.

Throw in a correction-defying Wall Street stock market and the never-ending rain of disdain for gold from the mainstream, and it may seem that there’s no reason to buy gold; the bear is here to stay.

If so, then I have a question. Actually, a whole bunch of questions.

This commentary by BIG GOLD's Jeff Clark appeared on the caseyresearch.com Internet site yesterday---and its' worth reading.

Indian Current-Account Gap Widens to Largest in a Year

India’s current-account deficit widened more than estimated to the largest since the quarter through June 2013 as exports slowed and gold imports surged.

The July-September shortfall in the broadest measure of trade widened to $10.1 billion from $7.8 billion the previous quarter, the Reserve Bank of India said in a statement yesterday. That compared with a $9.4 billion median estimate in a Bloomberg survey of 16 economists. The gap amounts to 2.1 percent of gross domestic product, lower than the level the central bank considers sustainable.

A recession in Japan and deteriorating outlook for the euro-area are keeping a lid on demand for Indian products as Prime Minister Narendra Modi seeks to revive manufacturing in Asia’s third-largest economy. Any further increase in gold shipments after authorities again eased import curbs last month will probably be partly offset by a drop in oil prices.

“Gold imports are likely to increase but they are not as attractive as they used to be in early 2013 as an asset class, so that should limit the pick-up in demand,” Anubhuti Sahay, an economist at Standard Chartered Plc in Mumbai, said by phone. “Oil is a much bigger proportion in the total imports and lower prices should benefit.”

This gold-related news item, file from Mumbai, put in an appearance on the Bloomberg website, at 10:10 p.m. Mountain Standard Time last night---and it's the final offering of the day from Manitoba reader U.M.---for which I thank her on your behalf.

Koos Jansen calculates year-to-date Chinese gold demand at 1,212 tonnes

Bullion Star market analyst and GATA consultant Koos Jansen calculates net Chinese wholesale gold demand for the first 11 months of the year at 1,212 tonnes, with demand remaining strong. Jansen also disputes recent gold demand data reported by Bloomberg.

Koos's commentary appeared on the Singapore Internet site bullionstar.com on Monday local time---and I found it in a GATA release.  It's on the longish side, so topping up your coffee first might be an idea.

¤ The Funnies











¤ The Wrap

Following a  recent pattern of uneven, but still heavy overall movement of metal coming into and moving out from the COMEX-approved silver warehouses, [last] week’s physical turnover of silver surged to 7.3 million oz, the highest weekly turnover since September. Total COMEX silver inventories rose by 700,000 oz to 177.7 million oz.  Stated differently, this week’s physical silver turnover in the COMEX warehouses was ten times greater than the net increase in total inventories.

Remarkably, this has been the pattern for the full year (and longer) in that there has been a frantic and consistent turnover or churn in COMEX silver inventories while the total level of inventories remains mostly flat. It’s a pattern that has never occurred previously in other COMEX metals and is strongly suggestive of overall supply/demand tightness; but the most peculiar aspect of the turnover is that it is hardly mentioned, even though the data are published daily and easily retrieved. Very recently, there has been a pickup in COMEX gold warehouse movements but more in the way of steady withdrawals than in the frantic turnover seen in the COMEX silver warehouses. - Silver analyst Ted Butler: 06 December 2014

Despite the rather dramatic spike in gold and silver prices just after the COMEX close yesterday, Monday really wasn't much to look at from a price perspective.  Yes, I was happy to see it, but in the overall scheme of things, it doesn't matter, as we're still sitting around the 50-day moving averages in both gold and silver---platinum as well.  A resolution up or down is yet to be seen, although I'm not overly happy about the prospects considering the deterioration in the Commercial net short positions in both metals over the last month.  But as I said on Saturday, it may not matter.  Only time will tell---and all we can do is watch and wait.

But the table is set if 'da boyz' want to smash silver and gold again.  But there's nothing to say that we couldn't blast higher from here as well.

Here are the charts for the four precious metals, plus crude oil, which hit an ugly new low yesterday.

As I type this paragraph, the London open is about twenty minutes away.  After selling off a few dollars to the $1,200 spot mark, the gold price has rallied back to unchanged.  Silver hit its Far East low shortly before 2 p.m. Hong Kong time---and rallied sharply back above unchanged, but got capped [at least for the moment] at exactly 3 p.m. Hong Kong time.  Platinum and palladium are a dollar or so above unchanged as well.

Gold volume is a bit over 22,000 contracts at the moment---and silver's volume is just above 3,600 contracts.  The dollar index, which peaked out around the 89.26 level around 11:30 a.m. in Hong Kong trading, dipped back below the 89.00 level, where it appeared that 'gentle hands' showed up for the second time in twelve hours.  At the moment, the index is down 10 basis points.

I continue to be amazed by the record silver eagle/silver maple leaf sales in the face of absolutely awful retail demand.  And as Ted Butler said in his quote above, the frantic churn in COMEX silver stocks for about the last two years continues unabated, to which you can add Friday's big in/out movements that I reported at the top of this column.  Even the recent in/out action in gold at the COMEX-approved depositories is raising eyebrows.

Also the continuing slow-but-steady increase in SLV physical inventories, especially in the face of continued---and at the moment, non-ending---declines in GLD.  This rise in SLV also flies in the face of the enormous amounts of silver being withdrawn at the same time.  Ted feels, and I agree, that one or more large entities are removing physical silver by converting shares so that they don't have to report a holding of more than 5 percent of that ETF to the SEC.

And not to be forgotten in all of this is the internal structure of the Commitment of Traders Report.  As Ted has said, the raptors [the Commercial traders other than the 'Big 8'] have had their heads handed to them for the first time in history in both silver and gold over the last month.  I'll steal part of a paragraph he wrote about this is in his Saturday column---"What matters more is that a certain significant, but unquantifiable, level of liquidity and market making may have just been removed from silver (and gold) with the financial demise of what were formerly important players. Not only does this suggest increased price volatility going forward, it also sharpens what was already the prime price determinant ahead – whether JPMorgan and the other big silver (and gold) shorts will add aggressively to short positions on the next rally to cap and control the price. The forced liquidation of 19,000 raptor long contracts increases, by at least that amount, to what the big silver shorts must sell short on the next rally."

Along with all these extreme conditions in the precious metals, similar conditions exist in copper and crude oil---along with an extreme long position in the U.S. dollar index.  Then there's the nose-bleed stock market valuations in both the U.S. and world wide, combined with a bond market priced to absolute perfection.

These extremes can't last forever---and I can't shake the feeling that all this will resolve itself sooner rather than later.

Of course I, along with others, have been saying more or less the same thing for the last few years---and so far, nothing---as conditions continue to get more extreme.  But Jim Rickards snowflake/avalanche scenario awaits at some point---and it's not a question of if or when either, as it's now only a matter of when.

So we wait some more.

And as I hit the 'send' button on today's efforts at 5:20 a.m. EST, I note that all four precious metals had tiny rallies going into the London/Zurich open, but all are below their opening highs as the rallies got sold down before they got very far.

Gold volume is just north of 34,000 contracts---and silver's volume is at 5,700 contracts.  The dollar index hit its current low just before the 9:00 a.m. GMT in London, but has rallied a hair since then---and is currently down 18 basis points at 88.94.

Today, at the close of COMEX trading, is the cut-off for this Friday's COT Report---and I have no clue as to how today's price action may unfold.  I vote for up---but with JPMorgan et al still very much in control of all four precious metals, plus a few other key commodities, it's a crap shoot as to how the Tuesday trading session will turn out.

That's all I have for today, which was way too much---and I'll see you here tomorrow.

Ed Steer

]]>
Tue, 9 Dec 2014 06:17:00 +0000
<![CDATA[Lawrence Williams: Is Indian Gold Turnaround a Game Changer For Prices?]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-is-indian-gold-turnaround-a-game-changer-for-prices/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-is-indian-gold-turnaround-a-game-changer-for-prices/#When:08:05:00Z "I'd forgotten completely about the jobs report coming out yesterday"

¤ Yesterday In Gold & Silver

Like on Thursday, gold got gently sold down in early Far East trading on their Friday, with the low of the day in the Far East coming shortly after 1 p.m. Hong Kong.  The price rallied a few dollars from there, until about an hour before the London open---and then it got sold down again into the noon London silver fix.  The rally off that low began about 12:45 p.m. GMT---and then the price got hammered at the 8:30 a.m. EST release of the job numbers in U.S.---an event that I'd completely forgotten about.

After a precipitous decline of just under twenty bucks, the price rallied back to the $1,200 spot price mark where it ran into a not-for-profit seller once again---and got quietly sold down until 1 p.m. EDT, before rallying a few bucks into the close.

The high and low ticks were reported by the CME Group as $1,208.50 and $1,186.40 in the February contract.

Gold closed in New York yesterday at $1,193.10 spot, down $13.40 from Thursday's close.  Net volume was 164,000 contracts.

Brad Robertson sent me the 5-minute tick chart for gold---and you can see the price action, plus the big blow-out in volume that started at 8:30 a.m. EST.  Other than that engineered sell-off, it was a very quiet trading day.  Don't forget to add 2 hours for EST---and the 'click to enlarge' feature really helps here.

With no exceptions, the silver price moved in tandem with the gold price---and the high and low were recorded as $16.56 and $16.22 in the March contract.

Silver finished the trading day yesterday at $16.285 spot, down 20 cents from Thursday's close.  Net volume was around 41,000 contracts.

Platinum followed a similar price path---and it was closed at $1,218.00 spot, down $17 on the day.  As usual, palladium followed its own drummer yesterday, finishing the Friday session at $801.00 spot, up 5 bucks on the day.  Here are the charts.

The dollar index closed in New York late on Thursday afternoon at 88.60---and then climbed as high as 88.90 by the noon London silver fix.  Then it blasted off on the release of the jobs numbers---and the 89.46 high tick came at the 10 a.m. EST London p.m. gold fix.  It got sold down a bit from there, before chopping sideways into the close.  The dollar index closed 89.36---up 76 basis points on the day.

Not surprisingly, the gold stocks gapped down at the open, but rallied to their highs shortly before 11 a.m. EST, before they got turned over in the usual manner in which we've become accustomed to lately.  The gold stocks never got a sniff of positive territory  The HUI finished  down 2.61%.

Although the silver equities gapped down as well, they rallied strongly---and into positive territory, before a seller showed up at noon Eastern time---and they were solidly back in negative territory forty minutes later.  From there they chopped sideways into the close.  Nick Laird's Intraday Silver Sentiment Index closed down 1.48%.

The CME Daily Delivery Report showed that 2 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Tuesday.  I was underwhelmed!

The CME Preliminary Report for the Friday trading session showed that December gold open interest only declined by 12 contracts, down to 1,963 contracts still open.  In silver, December o.i. actually rose by 43 contracts, putting the remaining December open interest up to 616 contracts.  And as I said in the previous paragraph, I'm underwhelmed by the slowdown in December deliveries.  It was just gold before, now it's both metals.

There was a small deposit in GLD yesterday, as an authorized participant added 28,825 troy ounces.  And as of 7:04 p.m. EST yesterday evening, there were no reported changes in SLV.

I forgot all about the weekly changes in SLV inventory in my column yesterday, so I shall make amends here.

Joshua Gibbons, the "Guru of the SLV Bar List" updates his website with what happened over at iShares.com Internet site for the reporting week ending Wednesday, December 3---and this is what he had to say.

"Analysis of the 03 December 2014 bar list, and comparison to the previous week's list: 2,059,257.9 troy oz were added (all to Brinks London), no bars were removed or had serial number changes. About 90% of the bars added were new bars, about 10% had been in SLV before."

"The bars added were from Solar Applied Materials (0.9M oz), Kazakhmys (0.8M oz), Korea Zinc (0.1M oz), and 6 others.  The overallocation cannot be calculated this week, due to the removal of bars for expenses."

"There was a withdrawal of 2,730,964.9oz on Tuesday, and a withdrawal of 2,203,395.4oz on Wednesday, that are not yet reflected on the bar list."

There was a sales report from the U.S. Mint yesterday.  They sold 1,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and another 159,000 silver eagles.

Month-to-date the mint has sold 16,500 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---and 821,500 silver eagles.  Based on these sales, the silver/gold ratio works out to 43 to 1---but it's based on only five days worth of sales, which is a pretty small sampling.

It was a monster day in both gold and silver over at the COMEX-approved depositories on Thursday.  In gold, there was 19,901 troy ounces reported received---and 153,400 troy ounces shipped out.  The link to that activity is here.

In silver, there was 1,243,579 troy ounces reported received---an 831,807 troy ounces shipped out the door for parts unknown.  The link to that action is here.

Yesterday's Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, December 2, wasn't quite what I was hoping to see---but the numbers are what they are.

In silver, the Commercial net short position increased by a very chunky 4,543 contracts, or 22.7 million troy ounces which, by the way, is equal to at least ten days of world silver production.  The Commercial net short position is now back up to 132.9 million troy ounces.

During the reporting week, the Raptors sold 3,000 of their long positions for huge loses---and the Big 8 went short 1,500 additional contracts; 600 more for JPMorgan, and 900 more contracts short for the '5 through 8' traders.

Under the hood in the Managed Money category of the Disaggregated COT Report, the technical funds covered another 7,245 of their short contracts for very large profits---and the 'non-blinking' non-technical fund longs in the same category sold 1,510 contracts of their huge long position.

Of course Ted isn't happy to see all this short covering in this category, as it was potential rocket fuel for the next silver rally.  But whether he's happy or not doesn't change the fact that these technical funds have rung the cash register to the tune of $400 million in the last month---and almost all of the 22,000 short contracts/$400 million worth that they've covered during that time has come out of the trading/banking accounts of the Raptors---the Commercial traders other than the Big 8.  Ted says that this trading behaviour is absolutely unprecedented---and I'm not disagreeing with him, as I've not seen it before either.

Ted also said that JPMorgan's short position is around 7,500 contracts, give or take 500 contracts---and he again pointed out that JPMorgan is no longer the big short in the COMEX silver market---and I pointed out that the 'King Short' in silver was Canada's Scotiabank---and they have been for quite some time now.  I'll have more to say about that in the Bank Participation Report posted below.

In gold, the Commercial net short position blew out by 20,923 contracts, or 2.09 million troy ounces---and that puts the new Commercial net short position up to 8.94 million troy ounces.  Ted puts JPMorgan's long position in the COMEX gold market somewhere between 12 and 14,000 contracts.

The 'Big 8' traders covered 11,500 short contracts during the reporting week---6,000 for the 'Big 4', and 5,500 for the '5 through 8'.  Ted says that these are very decent numbers, considering the price action.

Under the hood in the Managed Money category, the technical funds covered 10,379 contracts of their short position at big profits---and the 'unblinking' non-technical funds in the Managed Money category actually increased their long position to the tune of 3,805 contracts.

Almost all the selling to cover this came out of the hides/bank accounts of the Commercial traders other than the 'Big 8'---Ted Butler's raptors.

With this kind of deterioration since the lows of a month ago, it leaves the door wide open for JPMorgan et al to engineer a price decline to rectify this situation---if they can, want to, or even have to.  Since the raptors have had their heads handed to them lately, they may be in no financial position to do it themselves in either metal.

The December Bank Participation Report [BPR] also put in an appearance yesterday.  These are the COMEX long and short positions that are all held by the world's banks.  The report comes out once a month---and the data is extracted directly from the current COT Report discussed above.  For this one day a month we get to see what the banks are up to in all four precious metals and, as I say every month at this time, they're always up to quite a bit.

In gold, '3 or less' U.S. banks are net short 8,616 COMEX gold contracts, compared to the November BPR, where the net short position in gold for these same U.S. banks was 3,511 contracts.  Since Ted pegs JPMorgan's net long position at around 13,000 contracts, that means that the '2 or less' remaining U.S. banks must be net short the difference between them.  In this case it's around the 21,600 contract mark, in order to make the numbers work out.  The two other U.S. banks would be HSBC USA and Citigroup.

Also in gold, '18 or more' non U.S. banks are net short 51,991 Comex gold contracts, compared to the 54,811 COMEX gold contracts they were short in the November BPR.

Ever since the CFTC 'outed' a 'non-U.S.' bank back in October 2012, which I always suspected to be Canada's Scotiabank---along with it's 100 percent owned Scotia Mocatta subsidiary---it's been my opinion that around 40% of the non-U.S. bank short position is held by them.  Based on that, about 21,000 contracts of this non-U.S. bank short position is held by Scotiabank, leaving the other 30,000 contracts to be divided up between the '17 or more' non-U.S. banks that remain.  And no matter how you slice or dice that 30,000 contract number, their positions divided up equally between the remaining U.S. banks don't mean much.

Below is Nick Laird's BPR chart for gold going back to 2000.  Note the blow-out in the short position in gold in the U.S. banks [red bars on Charts 4 and 5] in August of 2008.  This is when JPMorgan took over the COMEX short positions of Bear Stearns.  Also note the blow-out in gold in the non-U.S. banks [the blue bars on Chart #4] when Scotiabank got 'outed' in October of 2012.  The net COMEX short position there blew out by almost double.  The net long position also increased.  The 'click to enlarge' feature really helps here.

[NOTE: Because I didn't advise Nick Laird in enough time, these Bank Participation Charts don't include the December report.  The updated charts will be posted later today sometime and, if you're interested, you can check back then. - Ed]

In silver, '3 or less' U.S. banks were net short the COMEX silver market to the tune of 10,240 contracts in the December BPR.  The November BPR showed these same '3 or less' U.S. banks net short only 6,159 contracts, so there's been a pretty chunky increase in the net short position over the reporting month.  Since Ted Butler puts JPMorgan's short position around the 7,500 contract mark, that means that the remaining '2 or less' U.S. banks have to be short an additional 2,700 contracts to make the numbers work.  These '2 or less' banks would be HSBC USA and/or Citigroup as well.

Also in silver, '13 or more' non-U.S. banks are net short 18,046 silver contracts---and since October 2012, I'm of the opinion that at least 90 percent of this short position is held by Canada's Scotiabank.  This means that their short position in the COMEX silver market is a bit north of 16,000 contracts---and the balance of the contracts, split up between the remaining '12 or more' non-U.S. banks, are immaterial.  A quick glance at the chart below will prove that to be the case, as before that date, the foreign banks [blue bars, Chart #4] were basically market neutral in silver.

In platinum, '3 or less' U.S. banks were net short 4,188 COMEX contracts, which is basically unchanged from the 4,202 COMEX contracts they were net short in the November BPR.  Nothing to see here.

Also in platinum, '16 or more' non-U.S. banks were net short 6,260 COMEX contracts, which is a huge deterioration from the November BPR when they were short 3,268 COMEX contracts.  Some of that big difference may come from the fact that there were 12 non-U.S. banks reporting a short position in platinum in the November BPR, vs. '16 or more' non-U.S. banks in the latest [December] BPR.

In palladium, '3 or less' U.S. banks were net short 8,376 COMEX contracts, which wasn't much change from the November BPR when these same banks were net short 8,231 COMEX contracts.  Nothing to see here, either.

Also in palladium, '13 or more' non-U.S. banks were net short 3,010 COMEX palladium contracts, compared to the 3,856 COMEX contracts that '12 or more' non-U.S. banks were short in the November BPR.

Although JPMorgan, HSBC USA and Citigroup are the key U.S. bullion banks that are active in the COMEX futures market in the precious metals, it's becoming more and more obvious that Scotiabank's monster short positions in both gold and silver---but particularly silver---may put the bank in jeopardy at some point.  That is, of course, unless they've got themselves covered in other markets like JPMorgan appears to have done in silver.

I have a lot of stories for your reading 'pleasure' today---and several that have been sitting in my in-box all week waiting for my Saturday column.  I hope you have enough time in what's left of your weekend to read the ones that interest you.

¤ Critical Reads

U.S. Factory Orders Tumble, Miss By Most Since January

But, but, but payrolls data was awesome!!

U.S. Factory Orders tumbled 0.7% in October (missing 0.0% expectations) for the 3rd month in a row (for the first time since June 2012). Rather notably, the only other time we had 3 straight months of factory orders declines was in the recession and the 2012 decline was saved by QE3.

The data was ugly across the board: Non-durable orders -1.5%, non-defense, ex-air tumbled 1.6%, and inventories-to-shipments levels are at the year's highs. More problematically for GDP enthusiasts, October inventories of manufactured non-durable goods decreased 0.5% to $249.0 billion driven by petroleum and coal products (but wait lower oil prices are unequivocally good right?)

This brief bit of sarcasm showed up on the Zero Hedge website at 10:18 a.m. EST yesterday morning---and today's first offering is courtesy of reader M.A.   The embedded chart is worth a quick look.

Full-Time Jobs Down 150K, Participation Rate Remains at 35 Year Lows, "No Job Market For Young Men"

While the seasonally-adjusted headline Establishment Survey payroll print reported by the BLS moments ago may be indicative of an economy which the Fed will soon have to temper in an attempt to cool down, a closer read of the November payrolls report shows several other things that were not quite as rosy. First, the Household Survey was nowhere close to confirming the Establishment Survey data, suggesting jobs rose only by 4K from 147,283K to 147,287K, and furthermore, the breakdown was skewed fully in favor of Part-Time jobs, which rose by 77K while Full-Time jobs declined by 150K.

And then for those keeping tabs on the composition of the labor force, the same adverse trends indicated over the past 4 years have continued, with the participation rate remaining flat at 62.8%, essentially the lowest print since 1978, driven by a 69K worker increase in people not in the labor force.

This excellent Zero Hedge article hit their Internet site at 9:10 a.m. EST yesterday morning---and it's definitely worth reading, as the charts are first rate.  I thank Manitoba reader U.M. for her first contribution to today's column.

Bloomberg’s House Bonehead Clarifies All—–Central Banks Should Literally Drop Money From Helicopters

The reason there is a terrible financial cataclysm ahead is that mainstream thinking has degenerated into outright quackery. Just read the drivel coming from financial journalists and pundits these days; and recall that the latter are little more than repeaters and amplifiers, passing along to their readers what politicians and policymakers are thinking and saying.

Take the case of Clive Crook, formerly the Financial Times’ man in Washington and now an editorial scribbler at Bloomberg View. After lamenting the Draghi has dawdled too long getting to an aggressive QE initiative, he called out the authority of no less than Milton Friedman to justify a new absurdity in Keynesian delusion. Namely, that in dispensing trillions of new euros made out of thin air, the ECB should not simply purchase the rotten debt of Italy and the rest of the latin league; instead, it should literally mail out checks to 275 million Eurozone households and send them frolicking into the continent’s shops, stores and retail websites:

"On the face of it, though, this approach would be legal. It would make Milton Friedman proud. Best of all, it’s a good idea. Fire up the helicopters!"

Would that Crook were writing a parody for The Onion. But, unfortunately, the man is dead serious.

David Stockman goes postal in this commentary that showed up on his website yesterday sometime---and it's the first offering of the day from Roy Stephens.

WSJ: Dollar's Surge Means Trouble for Europe and Asia

Numerous central banks are pushing down their currencies in an effort to spark exports, but the dollar's recent jump will cause problems for Europe and Asia, according to The Wall Street Journal.

The greenback has soared this week to a seven-year high against the yen and a two-year peak against the euro, as the U.S. economy steams along, while the economies of Japan and the eurozone suffer. China's economy also is experiencing a slowdown in growth.

The dollar's strength is helping to push commodity prices down, as many commodities are priced in dollars, including gold and oil. The Bloomberg Commodity Index has plunged 10.9 percent so far this year, to a five-year low.

That doesn't help the efforts of the European Central Bank and the Bank of Japan to boost inflation in their countries.

This news item put in an appearance on the moneynews.com Internet site at 7:20 a.m. EST on Friday morning---and my thanks go out to West Virginia reader Elliot Simon for sharing it with us.

Doug Noland: The Unavoidable Peril of Financial Sphere Bubbles

Increasingly, EM contagion is enveloping Latin America. The Mexican peso was hit for 1.6% Friday, boosting this EM darling’s loss for the week to a notable 3.0%. This week saw the Colombian peso hit for 4.3%, the Peruvian new sol 1.1%, the Brazilian real 0.9% and the Chilean peso 0.6%. Venezuela CDS (Credit default swaps) surged 425 bps to a record 2,717 bps. Venezuela CDS traded near 1,000 in August. On the yield front, 10-year rates jumped 30 bps this week in Brazil, 24 bps in Mexico and 24 bps in Colombia. Brazilian stocks were slammed for 5% this week and Mexican equities fell 2.2%.

Eastern European currencies were also under pressure. The Ukrainian kryvnia dropped 2.9%, the Romanian leu 1.5%, the Bulgarian lev 1.3%, the Czech koruna 1.3%, the Hungarian forint 1.1% and the Polish zloty 0.7%. The Turkish lira was hit for 1.9%, as 10-year bond yields jumped 33 bps to 7.91%. The South African rand dropped 2.6% to a six-year low. In Asia, the Malaysian ringgit dropped 2.5%, the Singapore dollar fell 1.4% and the Indonesian rupiah declined 0.8%.

We now see all the world’s major central banks trapped in a monetary experiment run amuck. Not surprisingly, especially considering the length and results from prolonged monetary stimulus, deep divisions have developed within the central banker ranks. This week saw more public policy criticism from past and present members of the Bank of Japan. There is also this deepening rift between Draghi and the Germans. Draghi continues to talk tough and assure the markets he’s ready for QE with our without German consent, surely believing they will have no choice but to come around. The Germans believe “monetary financing” is illegal. Draghi counters that it would be “illegal” if the ECB did not pursue its 2% inflation mandate. How this plays out has major ramifications for the global Bubble.

I’ll conclude with more wisdom from Bill Gross: “Markets are reaching the point of low return and diminishing liquidity.” I’ll add that it’s really important to Bubble analysis that the ability of central bankers to inflate bond prices has essentially run its course. Low returns on fixed income and virtually no return on savings foster Bubble-inflating flows to equities. But it also ensures that when this Bubble burst – a global Bubble, in stocks, bonds and asset prices generally, that has made it to the heart of contemporary “money” – there will be limited scope for Financial Sphere reflationary measures. And it’s when confidence falters in “money,” perceived “money-like” instruments and policymaking more generally, that we will come to see clearly that you can’t cure a debt crisis with more debt.

Another absolute must read from Doug Noland.  It was posted on the prudentbear.com Internet site on Friday evening---and I thank reader U.D. for finding it for us.

Bill Moyers: The Long, Dark Shadow That Plutocracy Casts on American Society

Let’s talk one more time about why inequality matters. Some people say it doesn’t, but they’re living in an ideological fairyland on the far side of the looking glass. In the real world, inequality is a deep and divisive force. We see that politically all the time, as the rich buy elections and then shape the laws to their advantage.

But in this episode let’s look at just one of the basic needs of life affected by inequality – a place to live. Across our country, millions of people of ordinary means can’t afford decent housing. In New Jersey, just on the other side of the Hudson River from where I’m sitting, three out of five renters can’t afford a two-bedroom apartment at market rates. And across the continent, in San Francisco, residents – including many from an anguished middle class -- have taken to the streets to protest the narcissistic capitalism of Silicon Valley that provides an elite few with what they want instead of the many with what they need. We could continue city by city, state by state: because among our largest, richest 20 metro areas, less than 50 percent of the homes are affordable. Less than 50 percent.

Here where I live, in New York City, inequality in housing has reached Dickensian dimensions. The middle class is being squeezed to the edge as the rich drive up real estate values and the working poor are shoved farther into squalor. As you will see in this report, the skyline of New York is a physical reminder of how wealth and power get their way without regard for the impact on the lives and neighborhoods of everyday people. So this is a story about how inequality matters, but it’s also a reflection of radical change in America, as the dark shadow of plutocracy falls across all things public.

This commentary by Bill Moyers---either in a 23:09 minute video clip, or transcript form---showed up on the alternet.org Internet site on Monday---and for length and content reasons, had to wait for today's column.  It's worth reading if you have the time---and I thank Roy Stephens for sending it.

Pearl Harbor: Roosevelt’s 9/11 --- James Perloff

"False flags do not stand alone. They are better understood – and more credibly explained to skeptics – when seen in history’s context." - James Perloff

On the morning of December 7, 1941, Japanese planes, launched from aircraft carriers, attacked the American fleet at Pearl Harbor in Hawaii, sinking or heavily damaging 18 ships (including eight battleships), destroying 188 planes, and leaving over 2,000 servicemen killed.

When the Maine sank, the proactive Assistant Secretary of the Navy had been Teddy Roosevelt. After the 1898 Spanish-American War he became governor of New York, and by 1901 was President of the United States. When the Lusitania sank, the Assistant Secretary of the Navy was his distant cousin Franklin D. Roosevelt – who likewise went on to become governor of New York and then President.

Just as coincident: during the Lusitania affair, the head of the British Admiralty was yet another cousin of Franklin D. – Winston Churchill. And in a chilling déjà vu, as Pearl Harbor approached, these two men were now heads of their respective states.

In a 1940 (election-year) speech, Roosevelt stated typically: “I have said this before, but I shall say it again and again and again: Your boys are not going to be sent into any foreign wars.” But privately, the President planned just the opposite: to bring America into the World War as Britain’s ally, exactly as Woodrow Wilson had done in World War I. Roosevelt dispatched his closest advisor, Harry Hopkins, to meet Churchill in January 1941. Hopkins told Churchill: “The President is determined that we [the United States and England] shall win the war together. Make no mistake about it. He has sent me here to tell you that at all costs and by all means he will carry you through, no matter what happens to him – there is nothing he will not do so far as he has human power.” William Stephenson, who ran British intelligence operations in the U.S., noted that American-British military staff talks began that same month under “utmost secrecy,” which, he clarified, “meant preventing disclosure to the American public.”

Much to my surprise, I got an e-mail from author James Perloff the day after I posted a link to his book "The Shadows of Power: The Council on Foreign Relations and the American Decline" about a month ago.  I'll say now now, what I said back then---and that was that this book is a "must read". 

And also an absolute must read is the above Pearl Harbor-related essay by James that he included in his e-mail to me.  The attack on Pearl Harbor was anything but a surprise---and tomorrow is the 73rd anniversary of that attack. [Another book to read on this subject is Robert Stinnett's classic tome "Day of Deceit: The Truth About FDR and Pearl Harbor"]

Draghi's authority drains away as half ECB board joins mutiny

The European Central Bank is facing a full-blown leadership crisis. Mario Draghi’s authority is ebbing, with powerful implications for financial markets and the long-term fate of monetary union.

Both Die Zeit and Die Welt report that three members of the ECB’s six-strong executive board refused to sign off on Mr Draghi’s latest statement, an unprecedented mutiny in the sanctum sanctorum of the ECB’s policy making machinery.

The dissenters are reportedly Germany’s Sabine Lautenschläger, Luxembourg’s Yves Mersch, and more surprisingly France’s Benoît Cœuré, an indication that Paris is still hoping to avoid a breakdown in relations with Berlin over the management of EMU.

The reality is that a full six months after Mr Draghi first talked loosely of a €1 trillion blitz to head off deflation risks, almost nothing has actually happened. The ECB balance sheet has shrunk by over €100bn.

This commentary by Ambrose Evans-Pritchard appeared up on the telegraph.co.uk Internet site at 3:10 p.m. GMT on their Friday afternoon---and once again my thanks go out to Roy Stephens.  It's definitely worth reading.

E.U. sanctions relief for Russia’s top banks, oil companies

The European Union has amended sanctions against Russia’s biggest lenders like Sberbank and VTB on long-term financing, and eased some sanctions on the oil industry.

The EU says Russia’s biggest lenders - Sberbank, VTB, Gazprombank, Vnesheconombank and Rosselkhozbank - will now be allowed access to long –term financing should the solvency of their European subsidiaries be at risk.

The announcement released Friday refers to “loans that have a specific and documented objective to provide emergency funding to meet solvency and liquidity criteria for legal persons established in the Union, whose proprietary rights are owned for more than 50 percent by any entity referred to in Annex III [Russian banks – Ed.].”

The E.U. has also specified the terms and conditions on which it can lift the ban on providing equipment for oil exploration.

This article showed up on the Russia Today website---and once again it's courtesy of Roy Stephens.

Anti-Russian sanctions ‘counterproductive’, not a solution – Italian FM

Penalizing Russia with sanctions is “not the solution” to the Ukrainian crisis, according to Italy’s foreign minister, who has joined a growing number of voices in Europe questioning the effectiveness of solving diplomatic issues with economic pressure.

Although Italian Foreign Minister Paolo Gentiloni deems sanctions against Russia a “necessary evil,” he believes they are “not the solution” to the crisis in Ukraine. He said he would prefer to see “dialogue at all levels” taking place.

“We respect the sanctions, they are an instrument, but we need to arrive at a political solution,” Gentiloni told journalists in Rome.  He also emphasized the importance of Russia as a business partner for Italy.

His predecessor, Franco Frattini, was last week even more forthright on Italy’s business ties with Russia. “How can you increase jobs and increase growth by decreasing trade with Russia?” he asked.

This interesting news item was posted on the Russia Today website at 5:09 p.m. Moscow time on their Friday afternoon, which was 9:09 a.m. EST.  It's another contribution from Roy Stephens.

Bulgaria Keeps Hope Alive for South Stream Revival: Energy Ministry

Bulgaria still considers the Russia-backed South Stream pipeline an important project in terms of diversifying energy supplies, but is considering several fallback options to ensure energy independence, the energy ministry said on Friday in a written statement sent to Russia's Sputnik news service.

"The South Stream project implementation is important for Bulgaria in terms of diversifying the energy supplies and will help to revive the economy and create new jobs during the construction," the ministry of economy and energy said in a statement.

It added the Bulgarian government was looking to create stronger "gas interconnections" with neighbouring countries and "stimulate exploration of own deposits".

This story appeared on the sputniknews.com website just before midnight on Friday night Moscow time---and I thank Roy Stephens for digging it up for us.

Finland green lights $8.7 billion Russian nuclear plant order

Finland has approved plans for a nuclear power plant to be built by Russia’s Rusatom Overseas with an $8.7 billion price tag, even though there are worsening economic relations between Russia and the rest of Europe.

The reactor will be built in northern Finland for the Fennovoima power company, and financed by Russia’s state-controlled Rusatom. It is scheduled to begin operation in 2024.

Fennovoima said in a statement that the decision to go ahead is important to the Finnish economy.

“I want to thank parliament for the trust they have shown in this important project. The Hanhikivi 1 nuclear power plant will generate emission-free electricity for Fennovoima’s owners at a predictable and reasonable price for decades to come. This large-scale investment will create jobs and give a much-needed boost to the economy”, said Toni Hemminki, CEO of Fennovoima.

This article showed up on the Russia Today website at 5:22 p.m. Moscow time yesterday---and the stories from Roy just keep on coming.

John Batchelor's Weekly Interview with Stephen F. Cohen

Cohen hypothesizes that Kiev may be writing off the Donbas rebels and territory as a loss and Kiev is trying to sell the idea that the remaining Ukraine is a completely unified country and therefore qualifying for NATO membership. In other words, no civil war. If this is true even the intellectual misfits of the new Kiev government may realize that they simply can't afford to continue the war. This makes for an interesting dichotomy with the Nazi style extremists that are entrenched in that government, who want this war, will at the very least keep the government completely disorganized as to which policy to follow- one of war or salvaging what is left that is economically viable before a fall into complete ruin. The choices in this case become unattractive in all directions. Also IF Kiev is stepping back from the war policy, there may be some indication from Washington that it is putting the whole mess on the back burner. Poroshenko now has a political problem that is simplified down to governance of a smaller Ukraine and a parliament that is both corrupt and irrational. As Cohen artfully states, there is no real thinking going on at the government levels.  A similar problem exists in the E.U. and in Washington - as Europe follows the incompetent leadership of Washington.

And Germany and Merkel's own political problem are still key as to how much NATO gets out of control in its provocations towards Russia. They will wonder who pays for the build up. Cohen does a good job explaining how Putin holds all the strategic cards AND he is the most rational player of all of them. None of the players except Russia has the economic health to carry on this mess in military terms. And Western policies continue to force Putin to look East (a huge failure for Europe) even as he does not wish this to happen. Unbelievable stupidity - and Europe and the USA will ultimately suffer in the end. Unless there is a nuclear war, of course. Then everyone loses.

The weekly interview with Cohen was posted on the johnbatchelorshow.com Internet site on Wednesday---and because of length and content reasons, it had to wait for today's column as well.  As usual, I thank reader Larry Galearis for bringing it to my attention---and now to yours.

Putin's speech: All About Nationalism -- Jim Rickards

Jim Rickards, Chief Global Strategist at West Shore Funds, identifies key points in Putin's speech on Thursday and explains why confrontation between Russia and the U.S. is set to continue.  He also discusses Japan, the yen, and the attempts to import inflation into that country.

This 4:02 minute video clip from CNBC Asia was posted on their website at 5:48 p.m. EST on Thursday afternoon---and I thank reader Harold Jacobsen for bringing it to our attention.  It's worth watching.

West behind falling ruble, oil prices - Russian spy chief

Washington and its allies are pursuing a regime change policy towards Russia, deliberately introducing sanctions and attacking the ruble through manipulation of world oil prices, the head of Russia's external intelligence agency has said.

Mikhail Fradkov, the head of the Foreign Intelligence Service, warned that Moscow is aware of U.S. moves to oust Putin from power.

“Such a desire has been noticed, it’s a small secret,” Fradkov - a former prime minister - told Bloomberg on Thursday. “No one wants to see a strong and independent Russia.”

He also attributed the more than 30 percent drop in oil price partly to U.S. actions. Lower prices on one of Russia's main exports placed immense pressure on the ruble, which is also suffering from sanctions. The ruble has lost 39 percent of its value against the dollar so far this year.

This very interesting commentary appeared on the Russia Today website at 3:15 a.m. Moscow time on their Friday morning---and my thanks go out to reader Harry Grant.

India, Russia to Strengthen Relations Amid Western Sanctions: Indian Envoy

India and Russia will continue to strengthen bilateral cooperation through trade and investment amid Western sanctions, Indian Ambassador to Russia P.S. Raghavan told Sputnik on Thursday.

“There are particularly exciting opportunities to enhance our economic cooperation to a level commensurate with the complementarities [?] between the economies of our two countries,” the ambassador said. He noted that while Russian-Indian economic relations are far from having reached their full potential, “conditions are in fact very favorable for a quantum jump in trade and investment flows.”

The ambassador attributed the current levels of bilateral trade and investment, which amount to only about $10 billion a year, to a lack of familiarity, saying that there is a “lack of full awareness about the opportunities available in the Russian market for the Indian business community and vice versa.”

This article showed up on the sputniknews.com Internet site at 4 p.m. Moscow time on their Friday afternoon---and I thank reader M.A. for sending it along.

India to refrain from any sanctions against Russia over Ukraine — diplomat

India will not support any sanctions against Russia, Ajay Bisaria, the Secretary of the Ministry of External Affairs in charge of the Eurasian division, told reporters on Friday.

India has sent a clear signal that it will not support any anti-Russian economic sanctions, he said.

Prime Minister Narendra Modi said earlier it was important to make further effort towards maintaining peaceful dialogue in Ukraine given the situation that had taken shape there. The Ministry of External Affairs said on its part the situation in Ukraine should be settled with account of the interests of all sides there.

Indian Sherpa in the G20, Suresh Prabhu, told TASS in September decisions on sanctions against whatever country including Russia should be taken by the world community at international platforms like the UN rather than by separate states.

This news item appeared on the itar-tass.com Internet site at 6:33 p.m. yesterday evening Moscow time, which was 10:33 a.m. in New York---and it's the final offering of the day from Roy Stephens, for which I thank him.

China arrests ex-security chief for corruption, leaking secrets

Chinese authorities have arrested former domestic security chief Zhou Yongkang and expelled him from the ruling Communist Party, accusing him of crimes ranging from accepting bribes to leaking state secrets and setting the stage for his trial.

Zhou, 71, is by far the highest-profile figure caught up in President Xi Jinping's crackdown on corruption.

He is also the most senior Chinese official to be ensnared in a graft scandal since the Communists swept to power in 1949 and the highest-ranking to be prosecuted since the fall of the Gang of Four in 1976 following the Cultural Revolution.

In a terse statement released by the official Xinhua news agency at midnight into Saturday, the party's elite, decision-making Politburo said Zhou's case had been handed over to judicial authorities.

This Reuters article, filed from Beijing, appeared on their website at 10:51 p.m. EST last night---and it's definitely worth reading.  I thank Harry Grant for sliding it into my in-box just before midnight MST last night.

Bankruptcies caused by weakening yen set new record in November

Corporate bankruptcies linked to the yen’s slide hit a new record in November, highlighting the strains on small and midsize companies as Prime Minister Shinzo Abe campaigns for re-election on his deflation-busting economic strategy.

Forty-two of the companies that failed in November cited the weakened currency as a contributing cause, bringing total bankruptcies associated with the yen so far this year to 301, almost triple that of the same period in 2013, according to a survey by Teikoku Databank Ltd.

It said surging costs of imported food, metals and construction materials are squeezing small companies.

The yen broke through 120 per dollar on Thursday in New York for the first time since 2007, as Abe’s handpicked Bank of Japan governor pumps a record amount of funds into the economy to stoke inflation.

Deflation has its ugly side.  This Bloomberg story, filed from Kyodo, showed up on the japantimes.co.jp Internet site yesterday---and it's courtesy of Manitoba reader U.M.  It's definitely worth reading.

Eric Sprott: Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on the effects of the Swiss gold referendum on gold prices earlier in the week, the decrease in sales for this year’s Black Friday sales, U.S. job numbers not reflecting the current economic status of the average individual, and the smash in gold prices on Friday morning.

This 8:31 minute audio clip hosted by Jeff Rutherford was posted on the sprottmoney.com Internet site on Friday afternoon.

Internal Memo from Jomas Thordan, President of the Swiss National Bank

From: Jomas Thordan, President

To: The Board of Directors

Date: December 1, 2014

I have been quite concerned about the outcome of the Gold Initiative referendum. That is why I have been in the media virtually every day for the last few weeks. I know that the National Bank should not conduct a campaign during a referendum of this kind but since it was a matter of national importance I had no other choice.

As you know, until 1999 we had over 40% gold backing in our balance sheet. At the time it was thought that this amount of gold was critical for the stability of the National Bank and our national currency. But fortunately we managed to change the constitution which allowed us to sell more than half of the nation’s gold at the bottom of the market. We have been bloody lucky fortunate that the Bank’s reputation was intact after this decision which cost our nation 30 Billion. It was clearly incompetent unlucky to sell the gold at the lows but market timing has never been our strong point.

I am extremely pleased that 77% of the voters agreed with my propaganda statements that gold plays no role in modern banking. Gold is a relic of the past. We can’t print gold and that is a major disadvantage when we want to manipulate manage our currency and financial markets. Our principles for managing the National Bank are now laid down by the Federal Reserve and ultimately Goldman Sachs. Here at the Bank we fully subscribe to the statement of the wise Mayer Amshel Rotschild: “Give me control of a nation’s money and I care not who make its laws.”

This tongue-in-cheek commentary showed up on the goldswitzerland.com Internet site early this past week---and although several readers sent it to me, I thought I'd wait until my Saturday column to post it.

Credit Suisse sells $24 million of notes linked to gold miners

Credit Suisse Group AG sold $24 million of U.S. structured notes tied to an index of gold-miner stocks, the largest such offering in 14 months, as investors bet the companies will rebound from close to a six-year low.

The securities, issued Nov. 25, pay three times the gains in the NYSE Arca Gold Miners Index, with returns capped at 41.25 percent, according to a prospectus filed with the U.S. Securities and Exchange Commission. If the index falls, investors lose a proportionate amount of principal.

The gold miners index has dropped 7.5 percent this year as falling oil prices and a strengthening U.S. dollar reduced demand for the precious metal, which can be used to hedge against inflation. The price of gold futures for February delivery rose 30 cents to $1,209 per ounce as of 11:16 a.m., after the commodity fell to a four-year low in November.

“I think you’ll see people are becoming more interested in mining stocks as the price has come down on gold,” said George Gero, a precious metals strategist at RBC Capital Markets LLC. “At this point, the mining stocks are probably a very cheap entry.”

This Bloomberg story found a home on the mineweb.com Internet site yesterday sometime---and I thank reader U.M. for passing it along.

LBMA to scrap GOFO rates on January 30

The LBMA has announced that the gold forward offered (GOFO) rates will be scrapped next year, with the final rates to be published on Friday January 30, it said in a release on Thursday.

It had long been rumoured that GOFO would be discontinued, as International Organisation of Securities Commissions (IOSCO) regulation played an increasing central role in the setting of benchmarks, forcing some banks to become frustrated with the red tape that surrounds the process.

The rates provide a benchmark data set used as the basis for some finance and loan agreements as well as for the settlement of gold interest rate swaps.

The rate is essentially the equivalent of LIBOR for the gold market and is used as a benchmark for dealers, central banks and others to swap gold for US dollars with miners who may need gold to meet contracts or investors for short-selling and other purposes.

This short article appeared on the fastmarkets.com Internet site yesterday---and it, too, found a home on the mineweb.com Internet site.  As Ted Butler has explained several times over the years---"GOFO is Goofy"---but it will be black armbands for months to come for the lunatic fringe.  I thank reader U.M. for another contribution to today's column.

Belgium Investigating to Repatriate All Gold Reserves

Following those in Germany and the Netherlands, Belgium's central bank is considering repatriating its gold reserves, Bullion Star market analyst and GATA consultant Koos Jansen reported last night, citing the Flemish commercial broadcaster VTM.

This short commentary appeared on the bullionstar.com Internet site yesterday---and I found this story in a GATA release.

Koos Jansen: World Gold Council Rectifies 2013 Chinese Gold Demand

My research on the Shanghai Gold Exchange and the structure of the Chinese gold market was, inter alia, confirmed in September this year by the work of Na Liu (CNC Asset Management Ltd.). As myself Na concluded Chinese wholesale gold demand equals withdrawals from the Shanghai Gold Exchange and this is far greater than demand reported by the World Gold Council.

The World Gold Council (WGC) has never openly responded to my publications. However, Na met with the WGC Market Intelligence team, the discussion that ensued led the WGC to rectify their 2013 Chinese demand numbers. From CNC Asset Management, November 27 2014:

We are pleased to report that we just had an in-depth discussion with the Market Intelligence team of the World Gold Council (WGC). Our discussion focuses on how to explain the significant gap between China’s consumer demand of gold, as defined and reported by the WGC to be just over 1,000 tonnes in 2013, and China’s wholesale demand, as defined and reported by us to be about 2,200 tonnes based on the Shanghai Gold Exchange (SGE) vault withdrawals during 2013.

The rest of the report from CNC Asset Management sums up, again, all the reasons given by the WGC that should explain the remaining difference between SGE withdrawals and WGC demand numbers. The WGC has published two reports on the Chinese gold market since April that both failed to clarify the difference. In fact, the reports led to even more speculation about why the WGC was withholding essential data about the Chinese gold market.

This must read commentary by Koos Jansen appeared on the bullionstar.com Internet site on Thursday---and it's another gold-related news item I found on the gata.org Internet site.

Lawrence Williams: Is Indian gold turnaround a game changer for prices?

Something seems to have spooked the gold bears. We noted a few days ago that there seemed to be signs of new positive momentum building for gold, but then were worried that the big failure of the Swiss gold initiative might prompt another drive down in the gold price. Indeed it did, but the move was surprisingly short-lived and gold then recovered a remarkable $70 from the $1,141 low point reached to hit $1,211 before falling back a little. It then hovered around the $1,200 mark for a day and then showed another period of strength prompting the bulls to question (in hope) that this could be the start of something much bigger. It is still having trouble advancing far past the $1,200 level though. 

Almost unnoticed on Friday with news overshadowed by speculation about the Swiss gold referendum result – by then seen as a foregone conclusion – was the news from India that the government instructed the Reserve Bank of India to relax its gold import restrictions with the cessation of the rule demanding that 20% of gold imports had to be re-exported.  All talk prior to this suggested that the RBI might actually be looking to extend gold import controls given the very high import levels over the previous couple of months and their impact on the Indian current account deficit (CAD).

But, fast forward a couple of days and we have the RBI chief implying that there could possibly be a further government-led relaxation in the import duties – an enormous apparent RBI policy reversal all within a matter of days. It had been known that the Modi Government, which came into power in the second quarter of the year, would be more sympathetic towards India’s gold sector – it drew a lot of support from it. And the inbuilt Indian positive feeling towards gold probably meant there was a lot of peripheral support for the new pro-business government for the same reasons. There was also government awareness that gold smuggling, brought on by the import duties and controls, had risen dramatically and was effectively impossible to suppress.

As Lawrie already know, supply/demand fundamentals mean nothing as long as JPMorgan et al are in control of the price in the COMEX futures market.  This commentary by Lawrie appeared on the mineweb.com Internet site yesterday---and is definitely worth reading.  I thank Manitoba reader U.M. for her last contribution to today's column.

Anglo Far-East round-table discussion on gold with Jon Ward, Simon Heapes, Alex Stanczyk, and Philip Judge

This 38-minute audio interview is definitely worth your while.  It was recorded back on November 26---and I thank Nick Laird for passing it around in the wee hours of this morning.

¤ The Funnies

Today's first photo is courtesy of Casey Research's own Dennis Miller.  His wife Jo took it with her cell phone through the window of their home in central Florida yesterday morning.  It's a flock of Nandy parakeets, or black-hooded parakeets.  They're native to South America, but released caged birds have developed self-sustaining populations in several areas of the southern U.S.---which now includes the Miller's back yard.

Our hockey team, the Edmonton Oilers, aren't doing so well these days---and this photo of their 'new' head coach was making the rounds on the Internet yesterday.

¤ The Wrap

The only plausible explanation for the counterintuitive deposits and withdrawals in SLV that comes to my mind is that a large entity has been buying on both weakness and strength whenever there is heavy trading volume. Because the identity of this entity would be revealed as soon as its share holdings exceeded 5% of total shares outstanding, because of SEC reporting requirements, the big buyer quickly transferred shares into metal which results in a withdrawal. Of course, the withdrawal does not represent an actual disposal of metal, it just appears that way, as the real intent is to camouflage a large entity’s accumulation of physical silver.

There are only a few entities as powerful and well-connected as JPMorgan which could pull off such a massive accumulation of physical silver (including Silver Eagles and metal in the SLV), so why not revert to the duck analogy – if it looks, quacks and walks like a duck, it has to be JPMorgan. Add in that the bank has probably finally allowed the CFTC to adopt position limits and the picture would seem to be complete. - Silver analyst Ted Butler: 03 December 2014

Today's pop 'blast from the past' came from the U.K. 50 years ago---late 1964.  Everyone knows the singer---and the tune.  The link is here.

Today's classical 'blast from the past' is Russian composer Sergei Rachmaninov's "Rhapsody on a Theme of Paganini" Op. 43 for piano and orchestra---which he composed in six weeks in the summer of 1934.  It has now become a staple of the classical repertoire.  Here is British pianist Steven Hough doing the honours with the BBC Symphony Orchestra at the First Night of the Proms back in 2013.  Sakari Oramo conducts.  The video is HD---and the audio track is terrific.  So put it on full screen, crank up the volume---and enjoy!  The link is here.

I'd forgotten completely about the jobs report coming out yesterday---and it wasn't until I checked my e-mails that I realized why the precious metals 'reacted' the way they did at 8:30 a.m. EST yesterday morning.  Based on past job numbers, this price action should have come as no surprise to anyone.

Here are the 6-month charts for all four precious metals, plus WTIC, which closed at a 5-year low yesterday.

Not that I want to be presumptuous here, but looking at the gold and silver charts, it's entirely possible that their respective prices could get turned over next week.  As I mentioned in my COT Report comments, the increase in the Commercial net short positions over the past few weeks is not something I wanted to see.

But, on the other hand, there's nothing [except JPMorgan et al] preventing the price from blasting higher as well.

On Tuesday the CFTC is having its position limit meeting---and as Ted said in his quote above, the fact that this meeting is happening at all means that JPMorgan is finally on side with the idea.

Here, one more time, is what silver analyst Ted Butler had to say about all this in one of the two quotes that appeared in my Thursday column.

"Long-time readers know that the issue of speculative position limits in COMEX silver has been a signature issue of mine for decades. They will remember me suddenly singing the praises of former CFTC Chairman Gary Gensler for resurrecting the matter when he first came into office in May 2009 and before Dodd-Frank was even conceived. Quite frankly, in trying to summarize all that has transpired concerning position limits for silver over the past five years, I am overwhelmed by the number of articles I’ve written on the issue to the point of being incapable of providing any links at this time because there are too many.

As it turned out, however, the issue of position limits in COMEX silver was even more important than I suggested (if that was possible).  [Speculative] position limits were fought by JPMorgan over the past five years because such an enactment would have been a disaster for the bank, which held a massively concentrated short position in COMEX silver during this time.  If JPMorgan was forced to buy back its silver short positions in excess of proposed limits, or even if the bank were prevented from adding new shorts to cap the price, the price of silver would have soared. Now that JPMorgan no longer holds a massive concentrated short position in COMEX silver---as I hope I have conveyed---the enactment of position limits could very well benefit the bank (if I am anywhere near close on how much physical silver the bank has acquired).

And as I mentioned in Thursday's missive, the only things unknown are how long it will take to reach the agreement, what the news position limits will be in each commodity and, most importantly, how far down the road is the start date for any agreed limits.

Hopefully, we should get answers of some sort at that time.

That's all I have for today.  Enjoy what's left of your weekend---and I'll see you here on Tuesday.

Ed Steer

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Sat, 6 Dec 2014 08:05:00 +0000
<![CDATA[Draghi: We Have Nothing to Fear But Gold-Buying Itself]]> http://www.caseyresearch.com/gsd/edition/draghi-we-have-nothing-to-fear-but-gold-buying-itself/ http://www.caseyresearch.com/gsd/edition/draghi-we-have-nothing-to-fear-but-gold-buying-itself/#When:06:09:00Z "Both metals appear to be in 'lock down' at the moment"

¤ Yesterday In Gold & Silver

The gold price traded quietly lower all through Far East and early London trading on their respective Thursdays.  A rally began at, or just after, the noon London silver fix.  That rally got capped and sold down starting just before 9 a.m. EST, with the New York low coming at 9:45 a.m.   It struggled higher from there until shortly before the London close---and from there chopped quietly lower into the 5:15 p.m. close of electronic trading.

The gold price was kept in a ten dollar price range yesterday, despite the face plant in the U.S. dollar index, so I shall dispense with the low and high ticks.

Gold finished the Thursday session at $1,206.50 spot, down $3.10 from Wednesday's close.  Net volume was on the lighter side at 122,000 contracts.

Like gold, silver didn't do much going into the lead-up to the noon silver fix in London---and then minutes after the COMEX open, the price went vertical, and was capped immediately by a not-for-profit seller.  After that, the silver price made several other attempts to rally above the $16.65 spot price mark, but was turned back each time.

For the second day in a row the silver price was only allowed to trade in a two bit price range, so I shall dispense with the low and high ticks in this precious metal as well.

Silver closed in New York yesterday at $16.49 spot, up six cents from Wednesday's close.  Net volume was 34,500 contracts.

The platinum price chopped sideways in a tight range until about 20 minutes before the Zurich open.  Then it rallied to its $1,244 high about twenty minutes before the COMEX close.  From there it got sold down about 14 dollars, before rallying 5 bucks in the last fifteen minutes of the electronic trading session.  Platinum gave up half of its gains---and only closed up 14 bucks on the day.

Palladium rallied above the $800 spot price mark a couple of times during the Thursday session, but got sold down for only a 2 dollar gain by the close---finishing the New York session at $796 spot.

The dollar index closed late on Thursday afternoon at 88.96---and traded virtually ruler flat until its 89.02 high tick, which came minutes before 8 a.m. in New York.  The down it went, with the 88.24 low tick coming about 11:10 a.m. EST.  The subsequent rally topped out around the 1:30 p.m. COMEX close---and it faded a few basis points during the rest of the Thursday session.  The index closed down 88.81---down 15 basis points on the day.

You'll note that JPMorgan et al were there to cap the precious metal rallies as the roof caved in on the 78 basis point decline in the U.S. dollar index between the COMEX open and the London close.

The gold stocks started off in negative territory, but quickly popped into the green around the 10 a.m. EST London p.m. gold fix---and like we've seen so many times in the past, the shares got sold down out of all proportion to the tiny loss that metal turned in on the day.  The HUI finished down 2.48 percent.

It was exactly the same for the silver equities, as Nick Laird's Intraday Silver Sentiment Index closed down 2.26%---despite the positive close for the metal.

The CME Daily Delivery Report for Day 6 of the December delivery month showed that zero gold and 13 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. Scotiabank issued 12 of them---and HSBC USA stopped 11.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that December open interest in gold dipped by 130 contracts---and now sits at 1,975 contracts.  As I said yesterday, I'm somewhat surprised at the slow pace of gold deliveries so far in December.  In silver, December o.i. dropped by 38 contracts---and is down to 573 contracts still open---minus the 13 contracts from the previous paragraph.

There were no reported changes in GLD yesterday---and as of 9:27 p.m. yesterday evening, there were no reported changes in SLV, either.

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

Over at the COMEX-approved depositories on Wednesday, they didn't receive any gold, but shipped 57,640 troy ounces out the door.  The link to that activity is here.  In silver, 599,497 troy ounces were received, but only 41,038 troy ounces were shipped out.  The link to that activity is here.

Nick sent some charts our way late yesterday evening---and the first two are the intraday averages for gold and silver for November.  They are the two minute ticks for every day of the month, so what it gives is the underlying price trends for each metal, by smoothing out the daily 'noise'.

I have never seen monthly intraday charts for gold and silver that look like these before.  The London negative bias is gone, as gold and silver prices were positive between the London open and the New York electronic close.  Now the negative bias exists between the New York 6 p.m. open and the London open the following morning.  I doubt that this trend is permanent, but it's interesting to look at.  The last time it existed was back in 1974---forty years ago.

This last chart is the weekly gold withdrawals as reported by the Shanghai Gold Exchange.  For the week ending November 21, it was 53.556 tonnes---another very healthy number---and here's Nick Laird's most excellent updated chart showing the change.

BY THE WAY---before getting to today's stories, Nick Laird has opened up his sharelynx.com website to the public for FREE for one week---and you can check it out by clicking here.  Bookmark his home page.

I don't have all that many stories today---and I hope there are a few that you find worth reading.

¤ Critical Reads

It's All Coming To An End, Bill Gross Warns

Say what you want about Bill Gross, but the legendary bond investor is absolutely spot on in the following paragraph from his latest, December, investment outlook:

How could they? How could policymakers have allowed so much debt to be created in the first place, and then failed to regulate their own system accordingly? How could they have thought that money printing and debt creation could create wealth instead of just more and more debt? How could fiscal authorities have stood by and attempted to balance budgets as opposed to borrowing cheaply and investing the proceeds in infrastructure and innovation? It has been a nursery rhyme experience for sure, but more than likely without a fairytale ending.

Markets are reaching the point of low return and diminishing liquidity. Investors may want to begin to take some chips off the table: raise asset quality, reduce duration, and prepare for at least a halt of asset appreciation engineered upon a false central bank premise of artificial yields, QE and the trickling down of faux wealth to the working class. If the nursery rhyme theme is apropos to the future, as well as the past, investors should remember that while “Jack and Jill went up the hill,” that “Jack fell down, broke his crown, and Jill came tumbling after.”

Someday soon, perhaps.

A link to Bill's complete December commentary, plus an executive summary, showed up on the Zero Hedge website at 2:23 p.m. EST on Thursday afternoon---and today's first offering is courtesy of Manitoba reader U.M.

Sears to accelerate closings, shutter 235 stores

Sears shares fell Thursday, after the struggling department store announced an adjusted net loss of $296 million—in line with the updated guidance it gave in November.

The retailer also said it's accelerating the number of stores it plans to close this year, boosting its list from the 130 underperforming stores it announced in its second-quarter earnings release, to a total of 235 stores.

Analysts called the move a step in the right direction for the company, which has been tapping into its real estate in creative ways to compensate for downward-spiraling sales. Still, they said the haircut won't be enough on its own to turn the tide at Sears, adding that it needs to close even more stores—and figure out how to become profitable.

This news item was posted on the cnbc.com Internet site early Thursday afternoon EST---and I thank reader M.A. for sending it along.

It’s official: America is now No. 2

Hang on to your hats, America.

And throw away that big, fat Styrofoam finger while you’re about it.

There’s no easy way to say this, so I’ll just say it: We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.

It just happened — and almost nobody noticed.

This MarketWatch article was picked up by the finance.yahoo.com Internet site yesterday morning EST---and I thank Casey Research's own Jeff Clark for passing it around.

George Osborne has missed his chance to end the British disease

For sheer brass, it is hard to beat the mellifluous assertions of the Chancellor. “We do not shy away from the problems that remain unresolved in the British economy,” he began.

From there George Osborne escalated to an outlandish claim. “Out of the red and into the black for the first time in a generation, a country that inspires confidence around the world because it seeks to live within its means.”

This comes a day after Société Générale said the UK “cannot compete”, is on an “unsustainable” course and has carried out “zero structural reform” – a view held to varying degrees by a great number of economists around the world.

Britain has a current account deficit of 5.2pc of GDP, in spite of the post-Lehman devaluation. It is the worst of any major country, and just about the worst in our peacetime history.

Ambrose Evans-Pritchard rips George a new one in this scathing, but longish, article posted on the telegraph.co.uk Internet site at 8:33 p.m. GMT Thursday evening---and it's the first contribution of the day from Roy Stephens.  It's definitely worth reading.

European Stocks Drop Most in Seven Weeks After Draghi’s Comments

European stocks fell after Mario Draghi said the European Central Bank will gauge the need for further stimulus early next year, quelling speculation the lender would start buying sovereign bonds soon.

The Stoxx Europe 600 Index slid 1.3 percent to 344.84 at the close of trading in London. The ECB also lowered its forecasts for euro-area inflation and gross domestic product through 2016. The stocks gauge gained as much as 0.5 percent, before losing as much as 1.4 percent.

“Markets had expected more than the ECB could deliver,” Henrik Drusebjerg, who helps manage 14 billion euros ($17 billion) as chief strategist at Carnegie Investment Bank AB in Copenhagen. “The ECB needs to see the effects of the current measures implemented and also assess the effect of the significantly lower oil price on the European economy.”

This Bloomberg story, filed from Frankfurt, appeared on their Internet site at 10:16 a.m. Denver time yesterday morning---and my thanks go out to West Virginia reader Elliot Simon for sharing it with us.

ECB paralyzed by split as irreversible deflation trap draws closer

'It is now patently clear that Draghi lacks the crucial German support for launching full-blown Q.E.'

The European Central Bank has dashed hopes for quantitative easing this year and acknowledged for the first time that the institution’s elite board is split on plans for a €1 trillion liquidity blitz.

Equity markets fell across southern Europe,with Italy’s MIB off 2.77pc, led by sharp falls in bank stocks. Spain’s IBEX dropped 2.35pc.

The euro surged by more than 1pc to $1.2455 against the dollar in early trading as speculators rushed to cover short positions. Expectations for immediate stimulus had been riding high after the ECB’s president, Mario Draghi, pledged action “as fast as possible” last month.

This Ambrose Evans-Pritchard spin on the Draghi speech showed up on The Telegraph website at 9:20 p.m. GMT yesterday evening---and it's a news item that I found all by myself!

Stunning Video Footage off Chernobyl Devastation Captured by Drone

With the Fukushima disaster having disappeared from all media coverage in recent months (and with the plan to encapsulate the radioactive plant in an ice sarcophagus recently scrapped, Japan has still to reveal what its plans are for dealing with the disaster area), the world occasionally needs a reminder of the waste land that follow when nuclear power goes horribly wrong.

For that we go back to the original nuclear disaster, Chernobyl, and US photographer Phillip Grossman who, while having taken numerous pictures of the radioactive sarcophagus and its surroundings in the past, has produced his most amazing work yet courtesy of a camera-equipped drone. It allowed him to use a high powered camera and get a bird’s eye view of the surrounding landscape.

The 3:18 minute HD video clip is a must watch---and on full screen.  There are several other still photos in this Zero Hedge article as well---and it's the second offering of the day from reader M.A.

'Russian economy not crashing, but adjusting'

The Russian economy is hurting from sanctions, low oil prices, and geopolitical tension, but predicting its imminent collapse is a fear-mongering tactic, and not entirely true, Russia’s Deputy Finance Minister tells RT.

“I don’t think the economy is really faltering it’s just adjusting to the new realities of international trade,” Aleksey Moiseev, Deputy Finance Minister of the Russian Federation, told RT.

Moiseev’s comments were in response to President Vladimir’s State of the Nation address on Thursday, which largely addressed the economic difficulties the country faces.

One of the thorns in the side of the Russian economy is the slipping oil price, which has fallen about 40 percent since its peak in June.

This Russia Today article was posted on their Internet site at 4:56 p.m. Moscow time on their Thursday afternoon, which was 8:56 a.m. EST.  It is, of course, courtesy of Roy Stephens---and worth reading.

‘Remember lessons we taught Hitler’: Top 10 quotes from Putin’s State of Nation address

In his yearly address to parliamentarians and dignitaries, Vladimir Putin gave a reminder of Russia's strength as the country that Hitler failed to defeat, while also comparing Crimea's significance to that of the Temple Mount to Jews.

In a warning to the West about further encroachment towards Russia’s borders, President Putin reminded how many previous military powers have tried, but ultimately failed, to corner Russia and then invade the largest country on Earth.

In the 1990s a weak Russia under Boris Yeltsin looked helplessly on as the US and the EU carved up Yugoslavia for their own personal gains. Almost two decades on, Putin says a repeat on Russian soil, despite the West’s desires, is unthinkable.

"They would have gladly applied the Yugoslav scenario of dismemberment and disintegration for Russia. They failed. We did not allow them to do that."

This very interesting news item showed up on the Russia Today website at 3:22 p.m. Moscow time on their Thursday afternoon---and once again I thank Roy Stephens for finding it for us.  Not only is it very interesting, it's worth reading as well.

Draghi: We Have Nothing to Fear But Gold-Buying Itself

Zero Hedge hysterically calls attention to European Central Bank President Mario Draghi's disclosure on Thursday that, as part of "quantitative easing," the bank has discussed purchasing "all assets but gold."

Zero Hedge observes: "To summarize, the ECB will willingly take on Greek bank CDOs, Italian third-lien espresso shop loans, Spanish condo HELOCs, and Portuguese used-car ABS, but not -- never -- gold."

It would have been nice if one of the reporters questioning Draghi asked him: Why not gold particularly?

This commentary, with a video of an excerpt from Draghi's remarks, was posted on their website at 11:35 a.m. EST yesterday morning---and I borrowed 'all of the above' from a GATA release yesterday.  But the first reader through the door with this story was reader U.M.

Cut in India's gold import duty unlikely before Budget

Any revision in gold import duty is unlikely to take place before the Budget and there is no proposal as of now to reduce the 10 per duty, a finance ministry official said.

"On import duty (on gold) there is no decision at the moment. Import duty whatever has to be done will form part of the budget. At the moment there is no proposal to reduce import duty on gold," the official said.

There has been widespread expectations of reduction in customs duty on gold due to the improved current account deficit situation. The Commerce Ministry has also been pitching for a cut in import duty on the precious metal.

This gold-related new item, filed from New Delhi, put in an appearance on The Times of India Internet site at 3:07 p.m. IST on their Thursday afternoon---and it's the second contribution in a row from reader U.M.

Indians have $1 trillion worth of gold!

India's love affair with gold grew stronger as it once again emerged as the world's biggest consumer of the precious metal beating China.

Bringing more cheer to the gold industry, the government eased import curbs by scrapping the '80:20' scheme. Under this scheme, 20 per cent of the imported gold had to be mandatorily exported before importing the new lot.

India imported a whopping 95,673 kg of gold in September, the highest level in the first six months of this financial year.

"The business of gold loans is about unleashing the hidden power of gold, bringing to life what is otherwise a dead investment," V.P. Nandakumar, executive chairman, Manappuram Finance Ltd -- the Rs 8,500 crore (Rs 85 billion) company, India's first listed gold loan company -- tells Shobha Warrier/Rediff.com

At the moment, much of these reserves are locked up in our safes and vaults as a dead investment. If we can put the vast reserves of gold to constructive use, it would be a major boost to the economy.

More schemes to get Indians to loan their individual gold holdings for the good of everyone.  Fortunately, this scheme will fail like all the others that have gone before it.  This article appeared on the rediff.com Internet site at 1:13 p.m. India Standard Time on their Thursday afternoon---and once again I thank reader U.M. for bringing it to our attention.

40-carat ruby on auction in Singapore

Coloured stones are gaining popularity and gemstone supplier Gemfields is tapping on the growing interest. It has brought more rubies into Singapore for an auction this year, including a rare gem unearthed recently in Montepuez, Africa.  

It is a 40.23-carat rough ruby, touted to be one of the most important rubies unearthed in recent years. The auction started on Thursday (Dec 4) and will end on Monday. 

Last month, an 8.62-carat Graff ruby was sold in Geneva for US$8.6 million (S$11.3 million). Gemfields said it chose to hold the auction in Singapore because of its convenient location, safety, pro-business environment and natural light.

This very interesting article, filed from Singapore, appeared on the channelnews.asia.com Internet site just before midnight local time on their Thursday evening---and my thanks go out to reader M.A. for digging it up for us.  Even if you don't read the article, the photo is worth the trip.

China's gold reserves may be greater than official figure

Taking advantage of the slump in international gold prices, the People's Bank of China may have purchased large amounts of gold in a bid to diversify its reserves, thereby lowering its share of U.S. government bonds, inside sources say, according to Shanghai's National Business Daily.

The People's Bank of China released data recently that showed the nation's official gold reserves stood at 1,054 tonnes as of the end of 2013.

Gold transactions at the Shanghai Gold Exchange has now hit 1,100 tonnes a quarter now and the monthly delivery volume of gold has risen to 212 tonnes from the respective amounts of 362 tonnes and 44 tonnes in January 2008, reported National Business News. The newspaper also added that the transaction volume has picked up rapidly since April 2013, when international gold prices began to plunge.

This is basically a rehash of gold-related stories about China that have appeared already.  It was posted on the wantchinatimes.com Internet site at 10:50 a.m. Beijing time yesterday---and it's the final contribution of the day from Manitoba reader U.M., for which I thank her.

¤ The Funnies

Nick Laird's friend, Jack, who lives in Innisfail in northern Queensland, had a visitor show up at his patio door the other day.  It's a Cassowary---and if it appears to have a prehistoric look about it, you would be right about that.  The second photo is of its feet---and if you think they look dangerous and like they might belong to a species of dinosaur, you would be right about that as well---because, in a way, that's what a Cassowary is.  They originated in the Pliocene Epoch of earth's evolution.  They are an endangered and protected species in Australia.

¤ The Wrap

The signs of a big buyer of physical silver still appear to be clear. The U.S. Mint continues to sell Silver Eagles at its maximum production rate and may have increased that rate, according to the sales pace so far this month, to more than 150,000 coins per day (7 day week). Yet, reliable reports from the retail dealer front indicate tepid [And that's being kind. - Ed] retail demand. To my mind, if broad retail demand is not behind the surge in Silver Eagle sales, then the surge must be explained by the heavy buying of one or a few non-retail buyers (such as JPMorgan).

Since we are less than 500,000 coins from exceeding last year’s record total sales of 42,675,000 Silver Eagles, the sales surge this year must cause one to sit up and take notice, particularly in light of reports of weak retail sales throughout most of the year. And for some reason, the pronounced buying from the Mint seems confined to silver, as sales of Gold Eagles trail badly when compared to last year and recent previous years. And forget about sales of Platinum Eagles as they are so low as to question how long the Mint will continue producing them. This adds to my conviction that there is a single big buyer behind the sales of Silver Eagles. Say what you will, but no one buys any investment asset unless that buyer perceives that the price will rise. Clearly, whomever the big buyer of Silver Eagles may be, that buyer expects sharply higher silver prices. - Silver analyst Ted Butler: 03 December 2014

With the sharp fall in the dollar index yesterday, the precious metals should have been flying to the upside during that period---and it's obvious from the charts that there were sellers there to prevent the budding rallies from getting too far, especially in gold and silver.  The shares wanted to do the same thing, but as we've seen all too often recently, regardless of the price action in the metals themselves, the shares seem to have a mind of their own, which is very counterintuitive at times---and you should be asking yourself why that is.

Gold closed above its 50-day moving average again yesterday, but not by a lot---and if you look at the 6-month gold chart below, you'll see that gold has closed within a buck or so of the same price every day this week.  This wouldn't happen in a free market.

In silver it's even more egregious, as the closing price has been within a few pennies of $16.50 every day this week---and within a 30 cent range for the last 14 trading days in a row---including the two days of the key upside reversal on Friday and Monday last.

Both metals appear to be in 'lock down' at the moment.

Platinum is still marking time below its 50-day moving average---and palladium is still a distance below its 200-day moving average.

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

And as I type his paragraph, the London open is less than ten minutes away.  The gold price has struggled back to unchanged after being down a bit in Far East trading on their Friday.  Silver was down a bit more than a percent---and it made it back into positive territory for a few minutes before getting sold back below it's Thursday closing price in New York.  Platinum has also rallied back to unchanged---and palladium is back at $800 the ounce.  Gold volume is pretty light at only 14,000 contracts---and silver's volume is 4,000 contracts.  The dollar index is up 9 basis points.

Today we get both the Commitment of Traders and Bank Participation Reports---and has been the case during the last month, I look forward with great interest to what they have to say, especially since all the price/volume data from the Friday/Monday failed key reversal to the upside will be in them.

And as I send this off into cyberspace at 5:15 a.m. EST, not much has changed in the last couple of hours.   Palladium is still up a few bucks---and the other three precious metals are down a hair from Thursday's close in New York.  Volumes in both gold and silver are very light---under 19,000 in gold and just under 5,000 in silver. Nothing to see here. The dollar index is now up 19 basis points.

Since today is Friday, I'm not sure what to expect during the balance of the trading session.  I still remember what happened on the first two Fridays in November, so I'm sort of watching for that scenario out of the corner of one eye.  But for the moment, it's very quiet out there.

That's all I have for today---and I hope you enjoy your weekend, or what's left of it if you leave west of the International Date Line.

See you tomorrow.

Ed Steer

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Fri, 5 Dec 2014 06:09:00 +0000