<![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[Mark O’Byrne: Death of ‘Safe Haven’ Gold Greatly Exaggerated]]> http://www.caseyresearch.com/gsd/edition/mark-obyrne-death-of-safe-haven-gold-greatly-exaggerated/ http://www.caseyresearch.com/gsd/edition/mark-obyrne-death-of-safe-haven-gold-greatly-exaggerated/#When:09:27:00Z "During the biggest bull market in gold in history, London was down every year"

¤ Yesterday In Gold & Silver

Gold rallied unsteadily in Far East trading on their Friday---and the high of the day came with a capped price spike just a few minutes before the London open.  From there, every rally attempt got sold down---and the low of the day came at 10:15 a.m. EDT, which was either at, or just after, the London p.m. gold fix.  From there, the gold price rallied a bit into the close.

The high and low ticks for the day were reported by the CME Group as $1,232.70 and $1,212.80 in the December contract.

Gold finished the Friday session at $1,219.40 spot, down $2.50 from Thursday's close.  Net volume was not overly heavy at 123,000 contracts.

The silver price pattern was similar to gold's, except much more subdued---and the low tick came at 1 p.m. BST in London, which was twenty minutes before the Comex open.  Silver chopped higher for the remainder of the Friday session in New York---and closed on its absolute high tick.

The low and high were reported as $17.725 and $17.44 in the December contract.

Silver finished the trading day yesterday at $17.66 spot, up 16 cents on the day.  Net volume was 35,500 contracts.

Platinum rallied a bit in early Far East trading, but then got sold back down to unchanged and remained that way until shortly after Zurich opened.  Then down it went for the rest of the day, hitting its low tick---and a new low for this move down---about 2:30 p.m. in New York.  After that, the price didn't do much.  JPMorgan et al finally close platinum below the $1,300 mark at $1,297 spot, down another 12 bucks.

Palladium got it in the neck for the second day in a row---and I thought the smack-down just after the Zurich open on Thursday morning was egregious!  But Friday's price action was even more grotesque.  After hanging around the $800 mark for most of the trading session, the HFT boyz and their algorithms showed up---and the palladium price was down over $20 by 2 p.m. EDT.  Then just minutes before the 5:15 p.m. EDT close, they showed up once again and carved another seven or eight bucks off the price.  These guys have no shame, but they obviously have an agenda---and are just as obviously pressed for time as well.

Palladium was closed at $772 spot, virtually on its low tick of the day---and down a whopping $25 on the day---3.14%.  It almost goes without saying that this was another new low for this move down.

The dollar index closed at 85.18 late on Thursday afternoon in New York---and then didn't do a lot until around 11:30 a.m. BST in London on their Friday morning.  Then away it went to the upside, with the 85.67 high coming minutes before 2:30 p.m. EDT.  From there it slid a few basis points into the close, finishing the week at 85.64---up 46 basis points on the day.

The gold stocks gapped down a bit at the open---and continued to slide from there, with the low tick coming at 3 p.m. EDT---and the shares managed to cut their loses a bit, but the HUI still closed down another 1.46%.

It was more or less the same pattern in the silver stocks---and despite the fact that the silver price finished well into positive territory, the silver equities closed down another 1.35%.

The CME Daily Delivery Report showed that 1 gold and 17 silver contracts were posted for delivery within the Comex-approved depository on Tuesday.  The First Day Notice numbers for the October delivery month weren't forthcoming, so they'll be posted on Monday evening on the CME's website---and I'll have it for you on Tuesday.

The CME Preliminary Report for the Friday trading session showed that 1 gold and 17 silver contracts were still open in the September contract---and you will carefully note that they match the numbers in the previous paragraph precisely.  The September delivery month is now done.

There was another withdrawal from GLD yesterday, this time an authorized participant took out 38,463 troy ounces.  And in keeping with tradition, there was another deposit in SLV yesterday as 767,147 troy ounces were added.  The SLV mystery continues---and deepens. 

There was a sales report from the U.S. Mint yesterday.  They sold 3,000 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and 250,000 silver eagles.

Month-to-date the U.S. Mint has churned out 51,500 troy ounces of gold eagles---13,000 one-ounce 24K gold buffaloes---and 3,050,000 silver eagles---and 600 platinum eagles.

Mint sales for September so far are light years ahead of August---up over 100 percent in gold eagles, 50 percent in buffaloes---and 50 percent in silver eagles---and I can tell you that sales this week at the bullion store where I work, have been very robust.

Over at the Comex-approved depositories on Thursday, there was another very decent withdrawal in gold, as 96,450.000 troy ounces were shipped out and, to the ounce, that number works out to exactly 3,000 kilobars.  The link to that activity is here.

It was another very busy day in silver as well, as 744,036 troy ounces were reported received---and 629,362 troy ounces were shipped out.  The link to that action is here.

The Commitment of Traders Report for positions held at the close of Comex trading on Tuesday were about what I was expecting in silver, but rather disappointing in gold.

In silver, the Commercial net short position declined by a hefty 6,792 contracts, or 34.0 million troy ounces.  The Commercial net short position is now down to 16,767 contracts, or 83.8 million troy ounces---and within spitting distance of its late May/early June record low.

For a change, it wasn't the Managed Money traders in the technical fund category going short that caused the decline, as they actually covered 1,638 of their short contracts during the reporting week.  It was the small traders [the Nonreportable category] that were involved, as their net long position declined by 4,702 contracts.  Ted says that it appears that the Managed Money is all full up on the short side---and all of this week's improvements came from these Nonreportable futures contract holders, plus Non-Commercial traders other than the technical funds.

Ted also mentioned that JPMorgan's short position in silver is now down to about 11,500 contracts, their lowest short-side corner in the Comex futures market since taking over the silver short position of Bear Stearns in 2008.  And not to be forgotten in all of this, is the equally extreme short-side corner in the Comex silver market held by Canada's Scotiabank.

In gold, the Commercial net short position only declined by 11,924 contracts, or 1.19 million troy ounces.  I was expecting around double that amount.  The Commercial net short position in that precious metal now stands at 6.43 million troy ounces.

The big changes were in the Manged Money category, as they sold an additional 3,232 long contracts---and bought 6,933 short contracts.  The small traders in the Nonreportable category also pitched 4,278 longs in addition to that.

Of course, standing there buying all the long positions offered in both metals, was JPMorgan et al.

Ted was rather surprised to see that there was no change in JPMorgan's long-side corner in the Comex gold market, as it remained around the 25,000 contract/2.5 million troy ounce mark.

Ted also remarked that the Comex futures market showed major improvements in platinum, palladium, copper and crude oil, as 'da boyz' continue to game the technical funds into extreme positions on the short side. The only big exception is the dollar index, where the technical funds are holding monster long positions---and JPMorgan et al are mega short.

And, without doubt, we've seen more improvements in the internal structure of the precious metals since the Tuesday cut-off---and also without doubt, we're back at, or below, the record lows set back in late May/early June.  And we've exceeded those lows in both platinum and palladium, as those two metals have been savaged during the latest engineered price decline.

Once again we have to contemplate the subsequent actions of JPMorgan et al, as all these shorts look to cover during the next rally---and in the dollar index, it's the opposite.  Will they let the technical funds off easy once again, or will 'da boyz' just put their hands in their pockets?

And as Ted Butler and I have said countless times that, and only that, will determine not only how high price rise from here, but how fast they get they get there as well.  Nothing else matters.

I have the usual number of stories for a weekend---and the final edit is up to you.

¤ Critical Reads

Macy's CEO Offers an Ominous Insight About American Consumers

Macy's CEO Terry Lundgren said he was expecting a rebound this year. 

It didn't happen. 

"The consumer has not bounced back with the confidence that we were all looking for," Lundgren said at the Goldman Sachs Annual Retail Conference earlier this month, weeks after the company reported sluggish second-quarter sales. 

Lundgren also said he doesn't expect things to get better in time for the holiday season. 

Why would anyone be surprised by this news, I wonder?  It was posted on the businessinsider.com Internet site at 1:25 p.m. EDT on Friday---and I thank Harry Grant for today's first story.

'Bond King' Bill Gross quits Pimco for Janus

Bill Gross, the bond market's most renowned investor, quit Pimco for distant rival Janus Capital Group Inc on Friday, the day before he was expected to be fired from the huge investment firm he co-founded more than 40 years ago.

Gross, 70, had been clashing with the firm's executive committee and had threatened to resign multiple times, a source familiar with the situation said. The committee had planned to accept his latest resignation from the post of chief investment officer on Saturday.

The surprise development, which rattled the U.S. bond market, came the day before Pimco and its parent, German insurer Allianz SE, planned to dismiss Gross, the source said.

Gross will manage the Janus Global Unconstrained Bond Fund beginning on Monday, Janus said in a statement. The fund, started in May, has just $13 million in assets.

This Reuters article appeared on the ca.finance.yahoo.com Internet site yesterday sometime---and I thank Dr. Dave Janda for bringing it to my attention.

David Stockman: Peak Debt—-Why the Keynesian Money Printers are Done

Bloomberg has a story today on the faltering of Draghi’s latest scheme to levitate Europe’s somnolent socialist economies by means of a new round of monetary juice called TLTRO—–$1.3 trillion in essentially zero cost four-year funding to European banks on the condition that they expand their business loan books. Using anecdotes from Spain, the piece perhaps inadvertently highlights all that is wrong with the entire central bank money printing regime that is now extirpating honest finance nearly everywhere in the world.

On the one hand, the initial round of TLTRO takedowns came in at only $100 billion compared to the $200 billion widely expected. It seems that Spanish banks, like their counterparts elsewhere in Europe, are finding virtually no demand among small and medium businesses for new loans.

Many small and medium-sized businesses are wary of the offers from banks as European Central Bank President Draghi prepares to pump more cash into the financial system to boost prices and spur growth. The reticence in Spain suggests demand for credit may be as much of a problem as the supply.

The monthly flow of new loans of as much as 1 million euros for as much as a year — a type of credit typically used by small and medium-sized companies — is still down by two-thirds in Spain from a 2007 peak, according to Bank of Spain data.

On the other hand, Spain’s sovereign debt has rallied to what are truly stupid heights—with the 10-year bond hitting a 2.11% yield yesterday (compared to 7% + just 24 months ago). The explanation for these parallel developments is that the hedge fund speculators in peripheral sovereign debt do not care about actual expansion of the Spanish or euro area economies that is implicit in Draghi’s targeted promotion of business lending (whether healthy and sustainable, or not). They are simply braying that  “T” for targeted LTRO is not enough; they demand outright sovereign debt purchases by the ECB—-that is, Bernanke style QE and are quite sure they will get it. That’s why they are front-running the ECB and buying the Spanish bond. It is a patented formula and hedge fund speculators have been riding it to fabulous riches for many years now.

This commentary, with some excellent charts, showed up on David's website on Friday someday---and it's the first offering of the day from Roy Stephens.

Doug Noland: What We Know

Heightened global market instability has began to be transmitted to U.S. securities markets.

There’s much that we simply don’t know. There is as well a lot we know with an important degree of confidence.

Some months back I highlighted an exceptional Bank of America Merrill Lynch research report, “Pig in the Python – the EM Carry Trade Unwind” (Ajay Singh Kapur, Ritesh Samadhiya and Umesha de Silva). Especially in light of recent market developments, it’s a good time to revisit this thesis and highlight some of their data.

From “Pig in the Python,” February 2014: “Since 3Q2008, the US Federal Reserve QE has unleashed a massive $2 TN debt-driven carry trade into emerging markets, disproportionately increasing their forex reserves (by $2.7 TN from end-3Q 2008), their monetary bases (by $3.2 TN), their credit and monetary aggregates (M2 up by $14.9 TN), consequently boosting economic growth and asset prices (mainly property and bonds). As the Fed continues to taper its heterodox policy, we believe these large carry trades are likely to diminish, or be unwound.”

Doug's must read commentary showed up on the prudentbear.com Internet site on Friday evening---and it's courtesy of reader U.D.

Whoodathunkit: Secret tapes show New York Fed is the tool of the big banks

Barely a year removed from the devastation of the 2008 financial crisis, the president of the Federal Reserve Bank of New York faced a crossroads. Congress had set its sights on reform. The biggest banks in the nation had shown that their failure could threaten the entire financial system. Lawmakers wanted new safeguards.

The Federal Reserve, and, by dint of its location off Wall Street, the New York Fed, was the logical choice to head the effort. Except it had failed miserably in catching the meltdown.

New York Fed President William Dudley had to answer two questions quickly: Why had his institution blown it, and how could it do better? So he called in an outsider, a Columbia University finance professor named David Beim, and granted him unlimited access to investigate. In exchange, the results would remain secret.

After interviews with dozens of New York Fed employees, Beim learned something that surprised even him. The most daunting obstacle the New York Fed faced in overseeing the nation's biggest financial institutions was its own culture. The New York Fed had become too risk-averse and deferential to the banks it supervised. Its examiners feared contradicting bosses, who too often forced their findings into an institutional consensus that watered down much of what they did.

This story went viral the moment it got posted on the Internet yesterday.  This version, which is a must read, appeared on the propublica.org Internet site at 5 a.m. EDT on Friday morning---and I found it in a GATA release.

There are three other versions that were sent to me.  The original Bloomberg story headlined "The Secret Goldman Sachs Tapes" was written by Michael Lewis of "Flash Boys" fame---and it's a must read as well.  I thank Roy Stephens for sending that version.  Zero Hedge couldn't help themselves---and their take on it is headlined "How Goldman Controls the New York Fed: 47.5 Hours of "The Secret Goldman Sachs Tapes" Explain"---and this commentary is courtesy of reader 'David in California'.  The New York Post also jumped into the fray with an article entitled "Tapes showing meek oversight of Goldman are about to rock Wall Street"---and this one is courtesy of reader Brad Robertson.

Alex Jones Interviews Doug Casey

Alex was the dinner speaker last Saturday night at the Casey Summit in San Antonio---and his speech, along with the zeal with which it was delivered, received decidedly mixed reviews.

But here he is in an interview with Doug Casey.  It was posted on the youtube.com Internet site yesterday sometime.  It's a 2-part interview---and the first installment starts at the 2:35 minute mark and runs until the 17:30 minute mark.  Then, after a five minute break/commercial, the interview starts again at the 22:40 minute mark---and ends at 43:10.

I've had no time to watch it as of yet, but it will be in the pile of things I have to read/listen to, before the weekend is done.

‘Extraordinary hypocrite’: U.K. whistleblower says HSBC chief Douglas Flint ignored fraud for years

A whistleblower of HSBC fraud has denounced the bank’s chairman, Douglas Flint, as “an extraordinary hypocrite” following the financier’s suggestion that those who expose crime in Britain’s financial services sector should be rewarded and celebrated.

Flint made the comment at the launch of Britain’s Chartered Institute for Securities & Investment’s (CISI) “Speak Up” initiative launched on Tuesday. The program was set up to encourage financial services firms to adopt a policy that assists staff in reporting legislative, regulatory and company policy violations.

Calling on U.K. financial firms to take a more proactive approach to tackling misconduct in the workplace, Flint said firms should “encourag[e] the calling out of both good and bad behaviour” and reward and praise “those who escalate their concerns even if they are sometimes wrong”.

But HSBC whistleblower and financial campaigner Nicholas Wilson condemned Flint’s comments, insisting they were disingenuous. In an exclusive interview, Wilson told RT he had attempted to expose fraud in HSBC for years, yet Flint had turned a blind eye.

This article appeared on the Russia Today website at 1:14 p.m. Moscow time on their Thursday afternoon---and I thank Harry Grant for sending it our way.

Six banks in U.K. talks over forex manipulation fines

Six banks have entered settlement discussions with the U.K.'s main markets regulator over the alleged manipulation of foreign exchange in what could amount to record fines.

Each of the banks -- Barclays, Citigroup, HSBC, JPMorgan Chase, Royal Bank of Scotland, and UBS -- are facing fines in the hundreds of millions of pounds from the Financial Conduct Authority, according to people familiar with the situation.

The settlement talks, which typically last eight weeks, are only with the FCA and do not include the United States or any other domestic regulator.

This Financial Times story showed up on their website yesterday sometime---and it's posted in the clear in this GATA release.

Interim deal reached in Ukrainian gas row

Trilateral natural gas talks Friday in Berlin have resulted in temporary relief for Ukraine, delegates at the conference confirmed.

Russian, Ukrainian and European officials met in Berlin in an effort to avert a gas crisis for the upcoming winter.

Russia meets about a quarter of the gas needs for Europe, though the bulk of that volume runs through the Soviet-era transit system in Ukraine. Contractual woes in 2006 and 2009 forced Russian gas company Gazprom to cut gas supplies through Ukraine and European leaders are worried about a repeat of the crisis given ongoing acrimony between Kiev and Moscow.

The original headline to this UPI story, filed from Berlin yesterday, read "Ukraine, Europe, Russia make progress in gas talks"---and it's another contribution from Roy Stephens.

The Threat of War and the Russian Response

U.S. actions in Ukraine should be classified not only as hostile with regard to Russia, but also as targeting global destabilization. The U.S. is essentially provoking an international conflict to salvage its geopolitical, financial, and economic authority. The response must be systemic and comprehensive, aimed at exposing and ending U.S. political domination, and, most importantly, at undermining U.S. military-political power based on the printing of dollars as a global currency.   

The world needs a coalition of sound forces advocating stability —in essence, a global anti-war coalition with a positive plan for rearranging the international financial and economic architecture on the principles of mutual benefit, fairness, and respect for national sovereignty.

CURBING THE ARBITRARINESS OF RESERVE CURRENCY ISSUERS

This coalition could be comprised of large independent states (BRICS); the developing world (most of Asia, Africa, and Latin America), which has been discriminated against in the current global financial and economic system; CIS countries interested in balanced development without conflicts; and those European nations not prepared to obey the disparaging U.S. diktat. The coalition should take measures to eliminate the fundamental causes of the global crisis.

Sergei Glaziev is an Advisor to the President of the Russian Federation---and a Full Member of the Russian Academy of Sciences.  This commentary of his showed up on the globalaffairs.ru Internet site on Tuesday---and it's certainly worth reading.  I thank Roy Stephens for sharing it with us.

British parliament approves airstrikes against IS group in Iraq

The British parliament voted overwhelmingly on Friday to join a U.S.-led coalition against the Islamic State militant group. Belgium and Denmark also announced that they would join the international effort against the jihadists.

British lawmakers voted 524 to 43 in favour of military action, paving the way for the Royal Air Force to immediately join strikes targeting the Islamic State (IS) group, also known as ISIS or ISIL.

The vote came after Prime Minister David Cameron recalled parliament from recess to back military action following an official request from the Iraqi government.

This article appeared on the france24.com Internet site early this morning Europe time--and I thank Roy Stephens for his final offering in today's column.

Three King World News Blogs

1.  Andrew Maguire [#1]: "Stunning 650 Tonnes of Gold Bought in Takedown"  2. Ronald-Peter Stoferle: "Concerned About the Gold and Silver Smash - Just Read This"  3. Andrew Maguire [#2]: "Final Stages of Historic Capitulation in Gold and Silver"

[Note:  Besides my usual disclaimer on our daily dose of hyperbole out of King World News that's posted below---I, and others, have some real issues with this 650 tonne figure---and here are just two of them.  This amount of gold represents almost 80 percent of the current contents of the GLD ETF---and 25 percent of yearly gold production.  Considering the fact that the goings-on inside the LBMA are totally opaque, I'd like to see some proof for what appears to be an outlandish claim. - Ed]

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

8 Stunning Images That Show How Much Natural Resources Are Mined Each Year

The market for precious metals is not as big as you might think.

One year's worth of mined platinum is only the size of a car. But it's worth about $8 billion.

Visual Capitalist took one year's production of eight commodities, lumped each of them into a three-dimensional cubes, and put them next to landmarks around the world.

They also calculated the value of each cube.

Wow!  Talk about a reality check!  This short, but truly amazing photo essay showed up on the businessinsider.com Internet site at 4:49 p.m. EDT on Thursday afternoon---and it's an absolute must read.  I was amazed---and you will be too!!!  I thank reader Harry Grant for his third offering in today's column.

Cheapest way to buy Royal Mint gold? Not from the Royal Mint

For years the Royal Mint has sold collectible coins commemorating special events direct to the public.

But "bullion" coins made for investment purposes – such as Sovereigns, Britannias or Lunars (introduced last year) – have until now been available only through dealers.

Bullion coins are generally produced to a less perfect finish than special-edition coins made for collectors. This means their price tracks more precisely the value of the gold they contain. By comparison, collectable coins typically go on sale – initially at least – for substantially more than the value of the gold they contain.

From this week the Royal Mint offers a bullion-coin service through which individuals can buy as few as one coin at a time directly. Buyers create an online account and buy coins via the Mint’s website, where prices change constantly according to the gold market.

Once the transaction is complete the Mint dispatches the coins in insured mail which – for a "limited time" – is free within Britain.

This interesting essay appeared on the telegraph.co.uk Internet site at 8:14 a.m. BST on their Friday morning---and it's an article I found on the gata.org Internet site.

German Bullion Dealers Report Major Increase in Sales

Suppressed prices for gold and silver are obviously considered buying rates by German investors. The German precious metals trade reports a surge in sales.

“For about a week we record considerably increased turnover again, which is now on previous year’s level, so it doubled compared to the recent months.”, Rene Lehman from the internet dealer Münzland in Dresden told Goldreporter.

“We can confirm that customer demand has considerably increased in the recent days.“, said Dominik Kochmann, CEO of ESG Edelmetalle in Rheinstetten.

Daniel Marburger, Director of Coininvest GmbH in Frankfurt/Main also stated that "In the past seven working days we have seen an extreme surge in demand."

Well, dear reader, as I said further up in today's column, bullion demand here in Edmonton---especially silver---has really taken flight at our store this week as well.  And since JPMorgan et al have put it on sale below the cost of production---why the hell not!!!  And that is investment advice---and the buyers have figured that out all by themselves!  This news item was posted on the German website goldreporter.de early yesterday evening Europe time---and I found it embedded in a GATA release.

Mark O'Byrne: Death Of 'Safe Haven' Gold Greatly Exaggerated

It would appear to us that the factors that would make gold a safe-haven asset have not gone away. 

In fact these factors are strengthening, as described above. The only rational explanation appears to be that gold remains an investment safe-haven as it has always done, but that this is not yet being recognised by the price discovery process in the market.

Adding in the fact that there is a continued disconnect between, on the one hand, the global physical gold market primarily driven out of China and India, and on the other hand, the New York gold futures market and unallocated London bullion market on the other hand, then this disconnect should not be expected to persist over the medium term.

This is especially the case given the heightened geopolitical and macroeconomic risks. 

With the gold price not yet signalling the geopolitical and macroeconomic alarm bells that many would have expected it to, the question of gold price manipulation remains a valid question.

This must read commentary appeared on the Irish website goldcore.com on Friday.  It also showed up in a GATA release as well.

Alasdair Macleod: Valuing gold and turkey farming

Defeating markets is the primary objective of central banking, GoldMoney research director Alasdair Macleod writes today, adding that it will come at the expense of hyperinflation, since debt is so overwhelming that interest rates, while already at zero, cannot be raised without collapsing the world economy.

Macleod's analysis is headlined "Valuing Gold and Turkey Farming" and it was posted on the goldmoney.com Internet site on Friday.  I found it posted on the gata.org Internet site yesterday---and it's worth reading.

Koos Jansen: New Shanghai exchange discourages exporting gold from China

In the first installment of his review of the operations of the new Shanghai International Gold Exchange in Shanghai's free-trade zone, gold researcher and GATA consultant Koos Jansen writes, among other things, that the exchange seems designed to discourage export of gold from China.

Jansen's analysis is headlined "The Workings of the Shanghai International Gold Exchange, Part 1" and it's posted at the Singapore Internet site bullionstar.com early Thursday evening local time.  I found this gold-related story on the gata.org Internet site yesterday.  It's long---and a bit thick, but worth your while.  I stole 'all of the above' from another GATA release.

Lawrence Williams: Hong Kong-China gold exports weak again, but does it matter?

Reported Hong Kong net exports of gold to mainland China were again at an extremely low level in August at a mere 21.1 tonnes.  In previous years the Hong Kong figures have been taken by global gold analysts as something of a proxy for total Chinese gold imports, even though gold was known to have entered the Chinese mainland by other routes, but this had been assumed to be in relatively insignificant quantities.  This year, though, China has eased the path to passage of gold through other ports of entry – notably Shanghai and Beijing – for which no data is forthcoming and given that this easing coincides with the apparent downturn in the Hong Kong figures, it could well be the case that imports via these alternative routes have been replacing gold which had previously come in via Hong Kong.

On the face of things, if one takes the Hong Kong figures for net gold exports to China alone (see table below), Chinese demand appears to have fallen by a massive 33% this year from 725 tonnes to 485 tonnes.  But this is belied by figures for withdrawals from the Shanghai Gold Exchange which are only down by around half this percentage, and which have been particularly strong in the past few weeks.  This has also coincided with price premiums over the London gold price again appearing in Shanghai.

This commentary by Lawrie was posted on the mineweb.com Internet site yesterday sometime---and it's also worth reading.

¤ The Funnies

Even a shutter speed of 1/4,000 of a second couldn't entirely freeze the movement of the tips of the primary flight feathers on this female mallard duck I photographed three weeks ago.

¤ The Wrap

There is no doubt in my mind that the technical funds are being herded onto the short side of COMEX silver, gold and copper by their counterparties, the collusive commercials which are buying every contract that the technical funds sell or go short. I have to stop here to make a point that has been bothering me lately.

As clear as the silver manipulation has become to increasing numbers of observers, it is important to recognize that it is not as simple (or complex) as some maintain it is. It is not commercial selling that is fueling the move to new lows, as the commercials have been buying hand over fist. Yes, the commercials get things rolling to the downside by HFT tricks and spoofing, but that’s only to get the technical funds to sell so that the commercials can buy. That’s spelled out without exception in the evolving COT data.

It’s too bad that many observers and commentators (not subscribers) have failed to grasp this manipulation basic because it then leads to unprovable conclusions, such as it’s the government driving gold and silver prices lower by having the bullion banks sell short. Perhaps there is government involvement is some way, but it is the technical funds selling short on price declines, not the commercials. The commercials only sell on price rises. All the data confirm this. - Silver analyst Ted Butler: 24 September 2014

Today's pop 'blast from the past' dates back to 1978---three years after the beginning of the permanent negative gold bias in London---and neither the artist, Billy Joel---nor the tune---needs any further introduction. The link is here.

Today's classical 'blast from the past' is one I heard on CBC-FM yesterday as I was driving around the city running errands.  It's Frédéric Chopin's Piano Concerto No. 2 in F minor, Op. 21 that he composed in 1830 when he was around 20 years old.  In this youtube.com video, Russian pianist Evgeny Kissin does the honours---and the Warsaw Philharmonic Orchestra accompanies, with Antoni Wit conducting.  The link is here.

Well, it was only platinum and palladium that set new low price tick for this move down on Friday---and it took brute force to engineer that price decline in palladium during the Comex trading session in New York.  Like everything else that's been going on in the precious metals, it was more than obvious that there was nothing free market about it.  And as I mentioned at the top of this column, it looked like it had an air of desperation about it as well.

Here are the 6-month charts in all four precious metals.

I mentioned the circumstances surrounding the next rally in the precious metals---and other commodities---in my comments regarding the Commitment of Traders Report, so I shall not repeat them here.

Yesterday I posted a chart regarding the "London Gold Price Bias"---which has been negative every year since 1975.  Here's the chart once again, along with my comments---and I've added others to it to complete the picture.  This is 'THE JUICE' of today's column---and I urge you to spend more than a few minutes on it.

"Here's the 5-year chart of that bias using the LBMA's own data.  It actually begins about 40 minutes before the London open, which is about 2:20 p.m. in the Hong Kong trading session---and the negative bias continues until the London p.m. fix at 3 p.m. BST, or 10 a.m. EDT.  After that, the price rallies until 2:45 p.m. Hong Kong time the following morning.  This is the 5-year average---and using a 2-minute tick and about 1,100 trading days, it removes all the 'noise'---and leaves the trend stripped naked for all to see."

Here's another chart based directly on LBMA price data going back 44 years.

In theory, and without considering commissions, what the above charts shows in plain English is that if you invested a hundred bucks at the London a.m. gold fix on January 2, 1970---and sold your position at the London p.m. gold fix the same day---and then reinvested the proceeds the next day at the London a.m. fix---and sold at the p.m. fix---and did that every business day for 44 years, you would the have the magnificent sum of $12.87 cents in your trading account as the closing of trading on September 10, 2014.

For the first four years on the above chart, the bias was positive [low morning fix and a higher afternoon fix], so you made money---from $100 up to around $330. The bias was deliberately turned negative in London beginning on January 2, 1975---and that's plain to see on this chart, especially when you see how the gold price performed as the years progressed.  If you 'bought high and sold low' every business day for 39 years, your $380 at the peak turned into $12.87.

Then Nick Laird took the same $100---bought the London p.m. fix and sold the position at the London a.m. fix the following day and re-invested the proceeds just as he did before, for the same 44 year period---and this is what that chart looks like.  Your initial hundred bucks would have turned into $27,711 on September 10, 2014.

Of course you would have done infinitely better ex-London if you'd sold your position at 2:20 p.m. in Hong Kong---and then invested the proceeds at the p.m. fix the same day in London.

And here's another chart that hits you between the eyes.

It shows that between 1999 and 2012---during the biggest bull market in gold in history, London [the red bars] was down every year.  That's the 'negative price bias' in action.

This pattern wouldn't exist in a free mark market---which it isn't!

So when they talk about rigging the gold market in London, it's not the individual fixes that matter, it's the negative bias between the morning and afternoon gold fixes that is the "fix"---and it's been negative for 39 years in a row.  It's a good bet that around 90 percent of all the volume in gold [or any other commodity for that matter] occurs between 2:45 p.m. in Hong Kong---and the 3 p.m. BST gold fix in London.

Before heading off to bed, I'd like to quickly remind you of the 40th Annual New Orleans Investment Conference from October 22-25, 2014.  That's less than four weeks away!  If you're interested, you can find out everything you need to know by clicking here.

That's it for the day---and the week.

See you on Tuesday.

]]>
Sat, 27 Sep 2014 09:27:00 +0000
<![CDATA[Currency Wars Deepen: Russia, Kazakhstan Buy Very Large 30 Tons of Gold in August]]> http://www.caseyresearch.com/gsd/edition/currency-wars-deepen-russia-kazakhstan-buy-very-large-30-tons-of-gold-in-au/ http://www.caseyresearch.com/gsd/edition/currency-wars-deepen-russia-kazakhstan-buy-very-large-30-tons-of-gold-in-au/#When:06:14:00Z "New lows were set for this move down across the board"

¤ Yesterday In Gold & Silver

The gold price didn't do much of anything in Far East trading until after 1 p.m. on their Thursday afternoon.  At that point the HFT boyz showed up---and by shortly after the London open, had gold at a new low for this move down.  From there the gold price rallied a few bucks until 9:30 a.m. in New York---and the away it went to the upside---running into resistance at the p.m. gold fix---and then getting capped at 10:45 a.m. EDT.  At that point it rallied in a much more subdued manner, hitting its high tick shortly before 2:30 p.m. in electronic trading.  The price didn't do much after that.

The low and high ticks were recorded by the CME Group as $1,206.60 and $1,225.30 in the December contract.

Gold finished the Thursday session in New York at $1,221.90 spot, up $5.30 from Wednesday's close.  Net volume was enormous at 172,000 contracts, with a third of that amount occurring before the 10:30 a.m. BST London a.m. gold fix---5:30 a.m. EDT.

Here's the 5-minute gold chart courtesy of reader Brad Robertson---and you can see that there was a lot of volume around the 9:30 a.m. to 10:45 a.m. rally in New York.  Add 2 hours to this chart for EDT.

Silver opened on the usual down tick at 6 p.m. on Wednesday evening in New York---and continued down from there, helped along by the HFT algos starting an hour before London opened.  They did push silver to a new low for this moved down, but it was only by a few pennies.  Silver made lot of attempts to rally after that, but you can tell by the sawtooth pattern in the Kitco chart below that the not-for-profit sellers were out and about.  The high tick in New York trading came at 10:45 a.m. EDT---and that was it for the day.

The low and high ticks were reported as $17.27 and $17.69 in the December contract.

Silver closed yesterday at $17.50 spot, down 17.5 cents from Wednesday's close.  Net volume was pretty hefty at 53,000 contracts, with just over 70 percent of that amount coming after the morning gold fix in London.

The price pattern in platinum was far more subdued, but the low tick, like the other precious metals, came moments after the Zurich open.  The subsequent rally to its high tick of the day also ran into a willing seller at the magic 10:45 a.m. EDT mark, just like for gold and silver.  The price bias was quietly lower for the remainder of the Thursday session.  Platinum closed lower by 13 dollars, but would have finished much higher if 'da boyz' hadn't show up at 10:45 a.m. EDT.  Ditto for the other three precious metals.

Palladium traded lower right from the get go on Thursday morning Tokyo time---and was sitting at $806 spot just minutes after the Zurich open.  Then it got its lights punched out by JPMorgan et al---and within an hour, the price was down to $792---and also a new low tick for this move down.  It rallied back above $800 the ounce within ninety minutes, but then drifted quietly lower for the rest of the day, closing down 18 bucks.

The dollar index closed late on Wednesday afternoon in New York at 85.06---and when it opened on Thursday in the Far East, it moved quietly higher, but began to rally with more conviction starting at 2 p.m. Hong Kong time, an hour before the London open.  It reached it 85.47 high just after 9 a.m. BST in London---and hung in there until around 9:30 a.m. EDT before selling off a bit.  The dollar index closed at 85.18, up another 12 basis points.

The gold stocks opened down a bit, but quickly rallied into positive territory, only to get cut off at the knees at 10:45 a.m. EDT when 'da boyz' showed up to cap the rallies in all four precious metals.  The stocks got sold down a bit, but rallied back as the day wore on---and the HUI closed up 0.31%, which is better than the alternative.

The silver equities followed a similar pattern, as Nick Laird's Intraday Silver Sentiment Index closed up 0.36%.

The CME Daily Delivery Report showed that 5 gold and 24 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that 6 gold and 41 silver contracts are still open in the September contract.  From that, you have to subtract the deliveries posted in the prior paragraph.

Monday and Tuesday are the last delivery days in the September contract, so what's left of these numbers should show up in tonight's preliminary report.  With luck, we may also get First Day Notice delivery numbers for October, but it's more likely that they'll show up in Monday's report---and I'll have them for you on Tuesday morning.  October isn't a big delivery month in either gold or silver, so I'm not expecting anything out of the ordinary as far as deliveries are concerned.

There were no reported changed in GLD yesterday---and I'm happy to say that the 2,397,570 troy ounces that were reported deposited in SLV on Wednesday, was not the Tuesday volume double counted---so that second deposit was legit.  Where is all this silver coming from---and who the heck is depositing it?  Questions with no answers at the moment---and we may never know the answers.

And as of 10:14 p.m. EDT yesterday evening, there were no reported changes in SLV yesterday.

Since yesterday was Thursday, Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with what was going on inside SLV for the week ending Wednesday, September 24---and this is what he had to report:  "Analysis of the 24 September 2014 bar list, and comparison to the previous week's list---3,141,611.3 troy ounces were added (all to Brinks London). No bars were removed or had a serial number change."

"The bars added were from: Solar Applied Materials (1.5M oz), Valcambi (0.3M oz), Krasnoyarsk (0.3M oz), Kazakhmys (0.3M oz), and 13 others."

"As of the time that the bar list was produced, it was overallocated 181.7 oz.  All daily changes are reflected on the bar list, except the 2,397,420.0 oz deposit last night (24 September 2014)."

[I'm in discussions with Joshua about the contents of that last sentence---and I'll report back once we have settled things. - Ed]

"About 2.8M oz of the deposits appear to be fresh bars (never in SLV before)."  The link to Joshua's website is here.

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

There was no in/out movement in gold worth mentioning in the Comex-approved depositories on Wednesday.  In silver, there was nothing reported received---and 1,064,562 troy ounces were shipped out.  Most of the 'out' activity was at Canada's Scotiabank and Brink's, Inc.  The link to that action is here.

I have the usual number of stories for a weekday column---and I'm sure you'll find the odd one of interest.

¤ Critical Reads

U of T's Auerbach: Fed Has Created a $2.7 Trillion Time Bomb

The Federal Reserve has built a $2.7 trillion time bomb that will cause economic mayhem if not carefully diffused, says Robert Auerbach, a professor of public affairs at the University of Texas at Austin.

Although the Fed has pumped trillions of dollars into the economy since 2008, most of it has remained idle in the form of private bank's excess reserves it continues to hold, he writes in an article for The Huffington Post.

Excess reserves exploded under the former Fed Chairman Ben Bernanke and have continued soaring under current Chair Janet Yellen, from $1.6 billion in August 2008 — almost nothing in central bank terms — to $2.7 trillion as of Sept. 4, notes Auerbach, a former economist with the House Financial Services Committee, the U.S. Treasury's Office of Domestic Monetary Affairs and the Fed.

There's nothing really new here, but it's nice to be reminded that this potential inflationary bombshell still hangs over the market.  I doubt very much that interest rates on these excess reserves will be removed, as the interest created out of thin air on the excess reserves created out of thin air, are being used to recapitalize the banking system.  This news item appeared on the moneynews.com Internet site at 8:04 a.m. EDT on Thursday---and today's first story is courtesy of West Virginia reader Elliot Simon.

James Grant: Don't get hysterical over deflation

Looking ahead to GDP data on Friday, with Jim Grant, founder and editor of Grant's Interest Rate Observer.  Grant outlines the risks to the U.S. economy.

This 1:53 minute video clip appeared on the cnbc.com Internet site at 3 p.m. yesterday afternoon---and its courtesy of reader Ken Hurt.

Survey: Three Out of Four Americans Feel Like Recession Continues

Americans have a bleak view of the economy and their own financial situations, according to a new study from the Public Religion Research Institute.

While the Great Recession officially ended in June 2009, only 21 percent of Americans believe it's really over, while 72 percent believe it continues.

Only 7 percent of Americans report they are in excellent shape financially, while 34 percent say they're in good shape, 37 percent say they're in fair shape, and 20 percent say they're in poor shape.

Just 30 percent believe the economy has improved during the past two years, while 35 percent say it has worsened, and 33 percent say it is about the same.

This article put in an appearance on the moneynews.com Internet site at 8:20 a.m. EDT on Thursday morning---and it's the first offering of the day from Elliot Simon.

Eric Holder is Resigning

Eric Holder Jr., the nation's first black U.S. attorney general, is preparing to announce his resignation Thursday after a tumultuous tenure marked by civil rights advances, national security threats, reforms to the criminal justice system and five and a half years of fights with Republicans in Congress.

Two sources familiar with the decision tell NPR that Holder, 63, intends to leave the Justice Department as soon as his successor is confirmed, a process that could run through 2014 and even into next year. A former U.S. government official says Holder has been increasingly "adamant" about his desire to leave soon for fear he otherwise could be locked in to stay for much of the rest of President Obama's second term.

Holder already is one of the longest serving members of the Obama cabinet and ranks as the fourth longest tenured AG in history. Hundreds of employees waited in lines, stacked three rows deep, for his return in early February 2009 to the Justice Department, where he previously worked as a young corruption prosecutor and as deputy attorney general — the second in command — during the Clinton administration.

This NPR news item showed up on the Zero Hedge website yesterday---and it's courtesy of reader 'David in California'.

N.Y. officials downplay subway attack reports

Iraq's prime minister said Thursday that captive militants for the Islamic State of Iraq and Syria (ISIS) told his intelligence agents of an alleged plot to attack subways in the United States and Paris.

U.S. law enforcement officials told CBS News they are investigating the threat, but as of overnight, there was still no intelligence on any credible specific plot against the U.S.  A half-dozen French officials contacted by The Associated Press said they knew of no plot.

FBI Director James Comey told reporters Thursday afternoon that he was unaware of any threat directed at U.S. subways.

Not that I have a suspicious mind, but currents events in the Middle East are the perfect cover for the powers-that-be to drop another 9/11 event [or more than one] on the world.   I found this CBS story from yesterday in a Zero Hedge piece---and it's the second article in a row from reader 'David in California'.

G7 Urges to Continue Trilateral Talks Between EU, Ukraine, Russia

The foreign ministers of G7 countries stressed the importance of continuing trilateral talks between the European Union, Russia and Ukraine in a joint statement on Thursday.

"We welcome that the trilateral talks between Ukraine, Russia and the EU will continue. It is equally important to continue the discussions between Russia, Ukraine and the EU on resolving outstanding energy issues," reads the statement, released by the foreign ministers of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and High Representative of the European Union.

On September 12, Russia, Ukraine and the European Union held a trilateral meeting, which resulted in a compromise to put off the implementation of Kiev's free trade pact with the EU until December 2015.

This story is from the RIA Novosti website---and it was posted there just after midnight Moscow time on their Friday morning---and I thank Roy Stephens for his first of many contributions to today's column.

E.U. to discuss lifting sanctions against Russia in October — diplomatic source

The European Union may begin discussions on lifting sanctions against Russia in October, and lifting the first block of sanctions is not probable before November, a European diplomatic source told ITAR-TASS on Friday.

The source said the de-sanctions' process may be organized only on the step-by-step basis depending on development of the situation in Ukraine.

The diplomat said about two possible ways of lifting sanctions, “where both are on the step-by-step basis, and lifting of the entire block at a time will not be possible.”

This story, filed from Brussels, showed up on the itar-tass.com Internet site on Friday morning Moscow time---and it's another contribution from Roy Stephens.

Kremlin ready for energy company bailout

Russian energy companies feeling the squeeze from Western economic sanctions can appeal for help from the government, the deputy energy minister said Thursday.

Russia relies heavily on oil and natural gas revenues to support its economy. When sanctions targeting Russian energy companies went into force earlier this year, Andrei Belousov, an economic adviser to the Kremlin, said the Central Bank of Russia may sell some of its foreign currencies to blacklisted companies in an effort to offset the punitive measures.

Deputy Energy Minister Kirill Molodtsov said Thursday the federal government was on standby should sanctions-strapped companies need support.

"In a situation when the companies came under sanctions, they can appeal to the government for support, if there is such a need," he said.

This UPI story, filed from Moscow, appeared on their Internet site at 9:03 a.m. EDT yesterday morning---and I thank Roy Stephens for bringing it to our attention.

What is to be done about a world where everything is for sale?

Next time you read about an auctioneer’s gavel coming down on a $150 million painting bought by some flunkey representing the ruling family of Qatar, don’t ooh or aah, but think of those monsters in Iraq and Syria who have their children pose on video while holding up the severed heads of innocents. And no, it’s not a stretch — without Qatar’s gold Islamic State would not exist, not even in the movies.

Let me put it another way: had Calvin Coolidge or Herbert Hoover given White House dinners for Al Capone, the outcry would have been heard all the way down to Patagonia. Yet, as reported in these here pages by Charles Moore, not only did the head of the family lunch with the Queen at Windsor, a cousin and his mother also lunched the next day at Windsor and caused a stir because they were not included in the Queen’s carriage. They sponsored Ascot this year, and Elizabeth Anson was their PR person. She burst into tears after failing to include them in the lead carriage. All I can say is shame on Ascot, more shame on Anson, and eternal shame on the stuffed shirts who forced the Queen to break bread with these characters.

They say Brits will do anything for money, but the rest of the Western world is just as bad. Just look at how a tiny Gulf nation of 250,000 goatherds managed to land the World Cup in 2022. To call the bribes Qatar must have paid to Fifa delegates colossal would be an understatement. But forget the 50-degree-Celsius heat and that football is unplayable in that hellhole, the scandal of modern-day slavery as practised by the Qataris is a far bigger depravity, overlooked by the West. In fact, calling foreign workers indentured servants is a euphemism; they are modern-day slaves. Foreign workers do not enjoy a minimum wage in Qatar, nor do they have any rights. They are not allowed to change jobs, however feudal the conditions, get a driving licence, rent a room or open a checking account unless they have their employer’s permission. Thousands have died while working in appalling conditions (hundreds of Nepalese alone), which provoked an investigation by the Norway-based Global Network for Rights and Development, which sent a researcher and a photographer. Last week the Qatari government confirmed that the two have been arrested and are in prison. So much for European influence in that sweaty hellhole.

This very interesting article appeared on the spectator.co.uk Internet site on Sunday---and I thank South African reader B.V. for sharing it with us.

Welcome to Barack Obama’s Syrian Gong Show

Folks, this war is only three days old and its already a gong show. Its become at least a four-front affair—with Obama’s “broad” coalition amounting to little more than a few stealth Arab nations renting back to Washington the equipment and American trained pilots it had earlier provided them.

The President’s shock-but-not-awe campaign apparently incepted not with bombs on the Islamic State’s capital of Raqqah but via a tomahawk barrage on some Nusra Front rebels in northwestern Syria. These were anti-regime fighters of the not-so-moderate persuasion who had been recently driven there after a bloody struggle with ISIS. As explained by the WSJ:

In July, the Islamic State routed its rivals including the Nusra Front and allied Islamist rebels from eastern Syria and they are now concentrated in the western half of the country, where they are fighting the regime along with other factions.

So these folks were fighting both of Washington’s declared enemies—–the Assad regime and ISIS—but it obliterated them anyway, and some of their women and children, too. That apparently makes for a three-front war, as the WSJ further explained---

This long commentary by David Stockman appeared on his website on Thursday sometime---and I thank reader U.D. for passing it around.

Malaysian P.M. --- Kiev not naming concrete schedule for experts to enter Boeing crash site

The Ukrainian government could not provide a concrete schedule when international experts could enter the Boeing crash site in eastern Ukraine, Malaysian Prime Minister Najib Razak said after meeting with his Ukrainian counterpart Arseniy Yatsenyuk in New York.

“Kiev cannot give us any guarantees, including on the date of access, and we have to depend on them. According to Yatsenyuk, armed clashes still continue in the area, that’s why it is impossible to get to the crash site,” Mr. Najib said on Wednesday.

Asked whether Malaysia could initiate talks with self-defense militias to allow safe passage of the team, Najib said a “communication line” is still open but Kiev’s sensitivity should be taken into consideration.

The Malaysian prime minister stressed that international experts should get to the site ahead of the winter season that could affect the forensic evidence. He also expressed concerns over unclaimed remains of passengers and the crew of the crashed plane.

This RIA Novosti article appeared on their website at 10:40 a.m. Moscow time on their Thursday morning---and it's another story courtesy of Roy Stephens.

Japan’s Abe Confirms Plans to Meet Russian President, Date to Be Fixed

Japanese Prime Minister Shinzo Abe confirmed early Friday he still hoped to meet with Russian President Vladimir Putin, although no date had been set for Putin's visit to the island nation yet.

"As for Vladimir Putin's visit to Japan, I do hope that it will take place, although his agenda is still to be set," Shinzo Abe said at a press conference.

"We had a phone talk [with Putin] on my birthday, September 21. We agreed to continue a dialogue between our nations," Abe told journalists.

This short article appeared on the RIA Novosti website at 4:16 a.m. Moscow time this morning, which was 8:16 p.m. Thursday evening in New York---and it's the final offering of the day from Roy Stephens.

Three King World News Blogs

1. Bill Haynes: "Stunning Demand" One Individual Buying $40 Million of Gold  2. Egon von Greyerz: "Global Market Collapse and Wealth Destruction is Now Upon Us"  3. John Hathaway: "Absolutely Stunning Developments in Gold"

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

Gold Downside Risk Seen ‘Significant’ to Goldman Sachs

Goldman Sachs Group Inc.’s Jeffrey Currie says the worst isn’t over yet for gold after prices erased almost all of this year’s gain.

“Risks are significantly skewed to the downside,” said Currie, who told investors to sell last year before gold’s biggest collapse since 1980. “Much of the support was coming from political uncertainty in Ukraine and what was going on in Middle East,” and those concerns have faded, he said in a telephone interview yesterday.

After bullion’s rally in the first half of the year beat gains for commodities, equities and Treasuries, the metal is heading for its first quarterly decline in 2014. Demand for precious metals as a protection of wealth has been eroded by the outlook for a strengthening U.S. economy, which helped spark a rally in the dollar as the Standard & Poor’s 500 Index of equities surged to a record this month.

With bulls hit stories like this, you'd think that Currie's hand has to be shaking a little when he reaches for his paycheque/paycheck.  Like John Hathaway and many others, Jeffrey Currie will never talk about the real reason why precious metal prices are in the dumps, even though they all know better.  This Bloomberg story, filed from New York, was posted on their Internet site at 6:38 a.m. Denver time on Thursday morning---and I found it on the Sharps Pixley website.

U.K. moves to extend Libor rigging laws to oil, gold and currency markets

Traders who manipulate key oil, gold and currency benchmarks will be handed the same huge fines or jail sentences as those who rig Libor under government proposals to tackle market abuse.

The Treasury launched a formal consultation on Thursday to extend the new legislation to cover the foreign exchange, fixed income and commodity markets. Under the proposals, the legislation would cover the London Gold Fixing and the LMBA Silver Price, which determine the price of the precious metals in the London market.

Also targeted is the ICE Brent futures contract, "which acts as the crude oil futures market's principal financial benchmark", the Treasury said.

“The integrity of the City matters to the economy of Britain. Ensuring that the key rates that underpin financial markets are robust, and that anyone who seeks to manipulate them is subject to the full force of the law is vital," said Andrea Leadsom, economic secretary to the Treasury.

That's all very cute, but as I've said before---and in my presentation at the Casey Summit on Sunday---it's not the fixes that matter, it's the bias between the morning and afternoon gold fix.  It has been negative every year since 1975.  I'll have a chart on this in The Wrap section.  This story appeared on the telegraph.co.uk Internet site at 11:13 a.m. BST on their Thursday morning---and I thank reader "Roger in La La Land" for sending it along.  Phil Barlett sent us the Bloomberg take on this.  It's headlined "U.K. Seeks to Criminalize Manipulation of 7 Benchmarks".

LBMA names Citigroup as gold and silver market maker

The London Bullion Market Association (LBMA) said on Thursday it appointed Citigroup as a market maker, underscoring the bank's ambitions to expand into the precious metals sector while others are exiting due to regulatory concerns.

LBMA said it named Citibank, a unit of Citigroup, as a spot market-making member effective Thursday. Currently, LBMA has 12 market makers that serve in either one, two, or all three of the spot, forwards, and options markets. They make markets by quoting two-way prices in both gold and silver products to other market makers.

This just exchanges one crook for another.  Exit Deutsche Bank---enter Citibank.  Please move along, nothing to see here.  This Reuters story, filed from New York, appeared on their Internet site at 3:40 p.m. EDT yesterday---and I found it on the gata.org Internet site.

Silver, Gold and Currencies Revalued Overnight - Mike Maloney

In this video, Mike explains the mechanics behind what he sees coming: short term deflation followed by big or even hyperinflation as central banks try to print their way out of the mess they have created. The result is the same as it has always been throughout history, with gold delivering either a technical knockout or a complete decimation of currency.

No surprises here, as many analysts, including myself---have been discussing this for years.  It's just the timing that remains unknown.  This 9:02 minute video clip was posted on the youtube.com Internet site on Wednesday---and it's certainly worth your time.

Weak gold price has Dubai consumers clamoring for more

With local gold prices dipping below the 140 dirhams a gram (for 22-karat) level for the first time this year, it was enough to unleash a manic round of buying at jewellery stores in the United Arab Emirates and the Gulf over the weekend. If the current levels -- of around Dh140 -- can sustain itself, it could lead to a surge in buying ahead of the key festivals of Eid and Diwali next month, industry sources say.

Industry feedback suggests that on Friday itself nearly 1.5 tonnes of gold could have been bought at retail level transactions across the Gulf, with the UAE accounting for nearly half of that. On Monday, with the price at Dh139.25 a gram, the level of consumer interest was sustained.

"The month with Diwali" -- the Indian festival when buying jewellery is rated as auspicious -- "represents a peak buying period for the trade in the Gulf, and this year it's doubly so with Eid also falling in the same month," said Shamlal Ahmad, director of International Operations at Malabar Gold & Diamonds. "Shoppers are clearly bringing forward their purchases to make use of the soft prices."

This positive gold-related story, filed from Dubai, appeared on the gulfnews.com Internet site at 5:31 p.m. local time on their Wednesday afternoon---and it's definitely worth reading.  I found it embedded in a GATA release yesterday.

With 50 Tonnes of Gold Smuggled in 10 Days, India's Physical Gold Premiums Set to Double

As the price of precious metals that is eschewed daily by status-quo-hugging talking-heads on business media as indicative of the days of hard money being over continues to come under 'pressure', demand for physical gold remains extremely high. With India's festive season about to begin, The Hindustan Times reports a massive surge in gold smuggling in the last 10 days as heavy demand for gold during Dussehra (for which booking and supply starts today when Navratri begins) has dragged 50 tonnes of gold across the borders to avoid the government's capital controls. As Bloomberg adds, physical gold premiums may double by the end of October.

This is really two stories in one, so you can pick and chose, or read both of them---and they're both worth you while.  It was posted on the Zero Hedge Internet site at 9:11 a.m. EDT on Thursday morning---and I thank reader M.A. for finding it for us.

Currency Wars Deepen - Russia, Kazakhstan Buy Very Large 30 Tons of Gold in August

Latest official gold reserve data from the International Monetary Fund (IMF) shows that Russia again added to its gold reserves in August, with the Central bank of the Russian Federation purchasing  232,510 ozs (7.23 tonnes) and bringing its total gold reserves to 35.769 million ozs or 1,112.5 tonnes. 

Likewise, the National Bank of Kazakhstan purchased a massive 795,213 ozs or 24.7 tonnes in August bringing its total gold reserves to 5.848 million ozs (181.9 tonnes).

Turkey was also a gold buyer in August and the Turkish central bank adding 96,783 ozs (3 tonnes) to bring its total official gold reserves to 16.45 million ozs (511.6 tonnes), which is the world's 12th largest official gold holding.

According to the IMF data, other countries which added to their gold reserves in August included the central banks of Azerbaijan and Ukraine.

This commentary was posted over at the goldcore.com Internet site yesterday---and its definitely worth reading.

¤ The Funnies

The first photo is one that Nick Laird took the other day.  It's a Hercules Moth---and with a wing span that can reach 27 cm/11 inches---they are monsters in every sense of the word.

¤ The Wrap

I’ve written about technical funds and the COT Report for ages, so this may seem to be old stuff. But I’m talking about a relatively new pattern, namely, the emergence of collective short positions in the managed money category on a scale never witnessed before, particularly in COMEX silver. Simply put (and I recognize this is not a simple subject) and over the past two years, the technical funds have come to establish at times far larger gross short positions than they did in previous years. This is especially true in COMEX silver, but also true in COMEX gold and copper, as well as in other commodities.

There is no question in my mind that the increased willingness of the technical funds to hold much larger short positions than they previously held is the reason we have witnessed a series of new price lows in silver and other commodities. In other words, the only reason we are at---and have seen the new price lows in silver---is because of the record amount of technical fund short selling on the COMEX. - Silver analyst Ted Butler: 24 September 2014

It was another salami-slicing day in all four precious metals, but especially for palladium, where the engineered price decline just after the Zurich open was embarrassingly obvious.   And as I mentioned earlier, new lows were set for this move down across the board.

Here are the 6-month charts once again.

And as I write this paragraph, the London open is about ten minutes away.  All four precious metals rallied in one form or another in early Far East trading on their Friday, but all ran into sellers of last resort shortly after 9 a.m. Hong Kong time---but all are trading up a fraction of a percent at the moment.

Net gold volume is a bit under 28,000 contracts---and silver's net volume is around 9,200 contracts.  Both volume numbers are pretty chunky for this time of day, so even these minor price rallies in Far East trading have been running into JPMorgan et al.  The dollar index is up 14 basis points.

I mentioned the negative "London Bias" in a gold-related story in the Critical Read section.  Here's the 5-year chart of that bias using the LBMA's own data.  It actually begins about 40 minutes before the London open, which is about 2:20 p.m. in the Hong Kong trading session---and the negative bias continues until the London p.m. fix at 3 p.m. BST, or 10 a.m. EDT.  After that, the price rallies until 2:45 p.m. Hong Kong time the following morning.  This is the 5-year average---and using a 2-minute tick and about 1,100 trading days, it removes all the 'noise'---and leaves the trend stripped naked for all to see.

And as I send this off into cyberspace at 5:00 a.m. EDT, I see that very little is happening from a price perspective.   The tiny gold spike moments before the London open got sold down in short order---and that's all the 'excitement' there was.  Net gold volume is just over 37,000 contracts---and silver's net volume is a hair over 12,000.  The dollar index is up 7 basis points at the moment.

Since today is Friday, nothing would surprise me during the New York trading session, but at the moment, all is quiet.

Enjoy your weekend, or what's left of it---and I'll see you here tomorrow.

]]>
Fri, 26 Sep 2014 06:14:00 +0000
<![CDATA[Rickards Tells Anglo Far-East the Methods, Objectives, and Perps of Gold Market Rigging]]> http://www.caseyresearch.com/gsd/edition/rickards-tells-anglo-far-east-the-methods-objectives-and-perps-of-gold-mark/ http://www.caseyresearch.com/gsd/edition/rickards-tells-anglo-far-east-the-methods-objectives-and-perps-of-gold-mark/#When:06:11:00Z "The powers-that-be are pulling out all the stops"

¤ Yesterday In Gold & Silver

The gold price didn't do a lot during the Wednesday trading session---and the high, if you wish to dignify it with that name, appeared to come shortly after the London open.  The 'low' came around 11:30 a.m. EDT---and the price didn't do much after that.

The high and low ticks are barely worth the effort of looking up, but they were reported as $1,226.70 and $1,216.20 in the December contract.

Gold ended the Wednesday session in New York at $1,216.60 spot, down $6.30 from Tuesday's close.  Net volume checked in at around 123,000 contracts.

The silver price didn't have much direction yesterday.  The 'high' came about forty minutes before London opened---and the 'low' was at the 3 p.m. BST London p.m. golf fix---and the subsequent 'rally' didn't get far.

The CME Group reported the high and low ticks as $17.87 and $17.51 in the December contract, which is the current front month---and the next big delivery month.  It's the same for gold as well.

Silver closed on Wednesday at $17.675 spot, down 10.5 cents from yesterday---and net volume was very brisk at 47,000 contracts.

Platinum rallied up until shortly after Zurich opened---and that was pretty much it for the day, as that white metal got closed virtually on its low tick of the day---as da boyz took a $12 gain and turned it into a $12 loss.

Palladium's high tick, which came at the same moment as platinum's high tick, had that metal up ten bucks.  But JPMorgan et al showed up once again---and the gain ended up being only two dollars by the end of the Wednesday session in New York.

The dollar index closed late yesterday afternoon EDT at 84.70---and then didn't do much until just before noon in London.  At that point a rally began that topped out at the 85.07 mark.  It fell back to 84.95 by 11:00 a.m. EDT---and then rallied weakly, closing the Wednesday session at 85.06---up another 36 basis points.

The dollar index is up 6.5 percent since July 1.

Here's the 3-year dollar index chart once again to put this current rally in some sort of historical perspective.

The gold stocks opened in the red, but by just after 10:30 a.m. EDT were back in the black.  That lasted for less than twenty minutes---and they never got a sniff of positive territory after that.  The HUI finished down 1.21%---erasing half of Wednesday's gain.

The silver stocks were down 2 percent by shortly after 10 a.m. EDT---and the subsequent rally only got a whiff of unchanged before it got sold down once again.  The absolute low came at 2:30 p.m. in New York---and they rallied a bit into the close, as Nick Laird's Intraday Silver Sentiment Index closed down 1.74%.

The CME Daily Delivery Report showed that zero gold and 10 silver contracts were posted for delivery within the Comex-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that there are just 13 gold and 70 silver contracts left open in the September contract.

There were no reported changes in GLD yesterday, but that can hardly be said about SLV, as another 2,397,420 troy ounces of silver were reported deposited by an authorized participant.

When I typed the above number, it seems strangely familiar, so I checked the deposit of about that size that was made into SLV on Tuesday---and that worked out to 2,397,570 troy ounces, so I'm wondering out loud if there was an error of some kind, such as double counting.  I'll find out today---and then report on this tomorrow, so stay tuned.

The good folks over at the shortsqueeze.com Internet site updated their website with the short positions in both SLV and GLD as of the close of trading on September 15.

In SLV, the short position declined from 14,299,000 shares/troy ounces down to 13,729,200 troy ounces, a decrease of only 570,000 shares/troy ounces, or 3.98%.  During the reporting period, a hair over 8.0 million troy ounces of silver was deposited, so it's obvious that the remaining short position in SLV is of the 'plain vanilla' type---and JPMorgan, along with any other authorized participant, are no longer short the metal in SLV---and 'value investors' have been depositing the metal and taking shares in lieu of the physical, which is a rather strange way to do things.

GLD went the other way, as the short position increased from 1,339,090 troy ounces up to 1,551,990 troy ounces, an increase of 212,900 ounces, or 15.90%.  This sounds like a lot, but in the grand scheme of things it really isn't---and all of it would of the 'plain vanilla' variety as well.  In some respects I'm surprised it was as low as that considering the price action in gold during the reporting period.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with the current data from both their gold and silver ETFs for the week ending on Sept 19.  Once again both ETFs declined during the reporting week, as their gold ETF sold off 31,200 troy ounces---and their silver ETF was lower by 132,814 troy ounces.

There was another sales report from the U.S. Mint yesterday.  They sold 2,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 35,000 silver eagles.

There was no gold deposited over at the Comex-approved depositories on Tuesday, but 35,497 troy ounces were shipped out.  Virtually all of it came out of Canada's Scotiabank---and the link to that activity is here.

And, for a change, there was virtually no action in silver, as nothing was reported received---and a tiny 17,443 troy ounces were shipped out.

I have the usual number of stories for a mid-week column---and here's hoping that you'll find the odd one that interests you.

¤ Critical Reads

NYSE Margin Debt Is Drifting Higher Again

The New York Stock Exchange publishes end-of-month data for margin debt on the NYXdata website, where we can also find historical data back to 1959. Let's examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter.

Unfortunately, the NYSE margin debt data is about a month old when it is published. Following its February peak, real margin declined sharply for two months, -3.9% in March -3.2% in April and was flat in May. It then jumped 5.7% in June, its largest gain in 17 months. June saw a 0.9% decline, but the August number has drifted higher, up 0.6%, and is now only is 1.9% below the February peak.

This article, with three excellent charts, appeared on the businessinsider.com Internet site at 3:37 p.m. EDT on Wednesday afternoon---and today's first story is courtesy of reader U.D.

Hussman: The U.S. Economy Is Becoming a Ponzi Scheme

The United States has evolved into a nation with a Ponzi economy, in which the continuous expansion of debt is the only thing that keeps prosperity alive, according to Federal Reserve critic John Hussman.

In his weekly commentary, Hussman, founder of the eponymous Hussman Funds family of mutual funds, said the U.S. economy appears fine on the surface, but that capital accumulation and labor force participation have buckled below – with dire prospects for the American future.

"Over time, growth in the standard of living is chained to and limited by growth in productivity," he wrote.

"When the most persistent, most aggressive and most sizable actions of policymakers are those that discourage saving, promote debt-financed consumption and encourage the diversion of scarce savings to yield-seeking financial speculation rather than productive investment, the backbone that supports a rising standard of living is broken."

This excellent article showed up on the moneynews.com Internet site at 7:01 a.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for sharing it with us.

Kyle Bass on CNBC

This 1:07 minute CNBC video clip with Kyle has obviously been heavily edited, but it's certainly worth your time---and I thank reader Ken Hurt for sending it our way.

David Stockman: The Fed’s Credit Channel is Broken and Its Bathtub Economics Has Failed

Among the many evils of monetary central planning is the conceit that 12 members of the FOMC can tweak the performance of a $17 trillion economy on virtually a month to month basis—using the crude tools of interest rate pegging and word cloud emissions (i.e. “verbal guidance”). Read the FOMC meeting minutes or the actual transcripts (with a five-year release lag) and they sound like an economic weather report. Unlike the TV weathermen, however, our monetary politburo actually endeavors to control the economic climate for the period immediately ahead.

Accordingly, the Fed is preoccupied with utterly transient and frequently revised-away monthly release data on retail sales, housing starts, auto production, business investment, employment, inflation and the like. But its always about the latest ticks in the data—never about the larger patterns and the deeper longer-term trends.

And of course that’s the essence of the Keynesian affliction. The denizens of the Eccles Building—-overwhelmingly academics and policy apparatchiks—-rarely venture into the blooming, buzzing messiness of the real economic world. They simplistically believe, therefore, that the US economy is just a giant bathtub that must the filled to the brim with “aggregate demand” and all will be well.

This longish essay by David appeared on this Internet site yesterday sometime---and I thank Roy Stephens for his first offering of the day.

Joesph Stiglitz — "The U.S. will always pay its debt. Because it just prints the dollars."

"Let me assure you the U.S. will always pay its debt. How do I know that? If you borrow money from the United States you get a piece of paper, a bond. And what does the paper say? We promise to pay, say a thousand dollars. How do I know the United States could always pay that? Because they just print those dollars. You know, you can imagine a temporary shortage of electricity and the printing press didn't work but apart from that it is inconceivable that we would not... we promise to pay you these little pieces of paper, you were foolish enough to accept that promise, and we will deliver those pieces of paper. But Greece can't deliver those pieces of paper. When it borrowed in drachma it could deliver those pieces of paper called drachma. But now it promises to pay in euros and it doesn't control the printing of the euros. That's done from Frankfurt. And so they can't get access to those euros. So in essence the euro created the potential for sovereign debt crises in Europe. A problem that had not been there before." - Joseph Stiglitz, The Future of Europe, UBS International Center of Economics in Society, University of Zurich, Basel, January 27, 2014

The arrogance of this little twerp is evident in the contempt he holds the audience as he says these words---and the link to that video, along with a few other choice quotes of his, were posted at the mikenormaneconomics.blogspot.de Internet site on Tuesday---and my thanks go out to Michael Cheverton for bringing it to our attention.  It's worth your time.

Don’t Be a Freedom Wimp: Live from the Casey Research Summit in San Antonio

On Day Two of the Casey Research Summit in San Antonio, the emphasis was decidedly on the “deep state,” as Doug Casey termed it: what it is, what it’s doing, and how to thrive despite its ubiquitous reach.

The deep state begins with government, an institution Doug describes as intrinsically evil and destructive. That’s because it’s empowered by enforced coercion—one of only two ways in which humans interact with one another (the alternative being voluntary co-operation).

But the deep state is more. It’s not only the massive, prying, regulating apparatus of the federal government, but also the corporate structure that depends on government largess, and the lapdogs in the media and academic community that serve to perpetuate its message. All of these elements are held together with money and propaganda, and they combine to deny the vast majority of citizens true freedom.

Doug described America’s “top dogs”—a few thousand elites who all know each other. They went to the same schools, belong to the same clubs, socialize amongst themselves, and scratch each other’s backs. No conspiracy needed. They all know exactly what to do to maintain their position without being told. It’s a closed party, and as Doug said, “We ain’t invited.”

This short commentary on Doug's speech was written by Doug Hornig---and was posted on the Casey Research website yesterday---and is worth reading.

Barclays Fined Twice in One Day for Compliance Failures

Barclays Plc was fined twice in one day for client account failures in the U.K. and the U.S., hurting the bank’s effort to rehabilitate a tarnished image. It agreed to pay a total of $77 million in penalties.

The bank will pay $15 million to the Securities and Exchange Commission to settle claims that its U.S. wealth-management business failed to maintain an adequate internal compliance system and made trades and charged commissions without client approval.

In the U.K., Barclays agreed to pay 38 million pounds ($62 million) to Britain’s market regulator for failing to properly protect 16.5 billion pounds of client assets between 2007 and 2012. Flaws in account naming or data suggested assets belonged to Barclays instead of its clients, which could have caused customers to lose money if the bank became insolvent, the Financial Conduct Authority said.

Once a crook---always a crook!  This Bloomberg news item appeared on their website at 5 p.m. Denver time on Tuesday afternoon---and it's the second contribution of the day from Elliot Simon.

French business leaders target minimum wage, public holidays

France’s famously generous employment rights could be a thing of the past if radical new proposals unveiled by business leaders are adopted, though fierce opposition from politicians and trade unions are likely to prevent that from happening.

Employers’ association Medef announced its proposals, which it said will help create one million new jobs over five years, in a 100-page document on Wednesday, though details had already been leaked to the press earlier this month.

They include plans to reduce the number of public holidays, relax minimum wage laws and alter France’s historic 35-hour working week law to allow employees at certain companies to work longer hours without receiving overtime payments.

These drastic changes are needed if France is to revive its flagging economy and tackle its pressing unemployment problem, the report says – the latest figures put the number of jobless in France at a record high of almost 3.5 million as of July, an 0.8 percent increase on the month before and the ninth consecutive monthly rise.

This article appeared on the france24.com Internet site yesterday yesterday---and I thank South African reader B.V. for finding it for us.

Germany's Ukip threatens to paralyse eurozone rescue efforts

The stunning rise of Germany’s anti-euro party threatens to paralyse efforts to hold the eurozone together and may undermine any quantitative easing by the European Central Bank, Standard & Poor’s has warned.

Alternative für Deutschland (AfD) has swept through Germany like a tornado, winning 12.6pc of the vote in Brandenburg and 10.6pc in Thuringia a week ago. The party has broken into three regional assemblies, after gaining its first platform in Strasbourg with seven euro-MPs.

The rating agency said AfD’s sudden surge has become a credit headache for the whole eurozone, forcing Chancellor Angela Merkel to take a tougher line in European politics and risking an entirely new phase of the crisis. “Until recently, no openly Eurosceptic party in Germany has been able to galvanise opponents of European 'bail-outs’. But this comfortable position now appears to have come to an end,” it said.

This Ambrose Evans-Pritchard story showed up on the telegraph.co.uk Internet site at 9:50 p.m. BST on their Tuesday evening---and the first reader through the door with this story yesterday was Roy Stephens.

German Central Bank Head Weidmann: 'The Euro Crisis Is Not Yet Behind Us'

An extended period of calm on the bond markets has led many to conclude the euro crisis is over. But German central bank head Jens Weidmann says in an interview that the coast still isn't clear and that there is still great need for reforms.

SPIEGEL: Mr. Weidmann, you are notorious for being a tough critic of European Central Bank President Mario Draghi. But the euro crisis seems to be over, largely thanks to ECB intervention. Has he not been proven right?

Weidmann: It's not about being right or a personal confrontation. When it comes to extremely important monetary policy decisions, the ECB Governing Council does its utmost to find the correct path. And the decisions are so difficult because the crisis is not yet behind us, even if the current calm on the financial markets might suggest as much.

SPIEGEL: Yet Spain, once wracked by the euro-zone crisis, can today borrow money more cheaply than ever before in the history of the monetary union. Do you not think that is a consequence of Mario Draghi's 2012 pledge to save the euro "whatever it takes"?

This interview appeared on the German website spiegel.de at 1:00 p.m. Europe time yesterday afternoon---and it's another story courtesy of Roy Stephens.

Edward Snowden wins Sweden's 'alternative Nobel prize'

Fugitive U.S. intelligence leaker Edward Snowden is one of the winners of the 2014 Right Livelihood Award, described as Sweden's "alternative Nobel prize".

He splits the honorary award with Alan Rusbridger, editor of U.K. newspaper The Guardian, which wrote extensively on government surveillance, based on his leaks.

Cash prizes went to three activists from Pakistan, Sri Lanka and the U.S.

Mr. Snowden's award seems to have caused embarrassment in Sweden.

This news item was posted on the bbc.com Internet site at 11:30 a.m. EDT on Wednesday---and this article is the second contribution of the day from reader B.V.

Russia tops ISIS threat, Ebola worst of all? Lavrov puzzled by Obama’s U.N. speech

Following the U.S. President’s speech at the UN, Russian FM Sergey Lavrov was puzzled with Barack Obama’s ranking of international threats: deadly Ebola virus top, followed by so-called Russian aggression and ISIS in Syria and Iraq only third?

Gathered at the U.N. headquarters in New York, the world leaders attending the 69th General Assembly heard Barack Obama highlighting the three most significant global threats today.

“As we gather here, an outbreak of Ebola overwhelms public health systems in West Africa, and threatens to move rapidly across borders. Russian aggression in Europe recalls the days when large nations trampled small ones in pursuit of territorial ambition. The brutality of terrorists in Syria and Iraq forces us to look into the heart of darkness,” the U.S. leader said at the beginning of his statement.

Reacting to the speech, Russia’s Foreign Minister Sergey Lavrov spoke with astonishment.

This news story appeared on the Russia Today website at 7:47 p.m. Moscow time on their Wednesday evening, which was 1:47 p.m. EDT.  Harry Grant beat Roy Stephens by 6 minutes on this story which arrived in my in-box at 11:47 p.m. last night.

Death threats for Saudi pilots after raids on jihadists

Saudi pilots who conducted air strikes on jihadists in Syria received online death threats Wednesday after photos were published of those involved, among them a son of the crown prince.

The official Saudi Press Agency (SPA) released photographs of eight airmen it said were involved in Tuesday's US-led operation, carried out with Gulf allies.

In one picture they stood, some smiling, in green flight suits with arms around each other in front of one of their fighter jets.

One of the pilots involved in the raids is a son of Crown Prince Salman bin Abdul Aziz himself, according to Saudi newspapers.

This AFP article appeared on the france24.com Internet site at 4:05 p.m. Europe time yesterday afternoon---and I thank reader B.V. for bringing it to my attention, and now to yours.

Eric Sprott: Ebola, the tipping point

We are currently in the midst of the largest ever Ebola outbreak in Western Africa, and this could just be the beginning. The number of cases and deaths has risen steadily, from a handful of people in Guinea at the end of March 2014 to several thousand now (Figure 1), not only in Guinea, but in Liberia, Sierra Leone, recently extending to Nigeria and the Democratic Republic of Congo (DRC).

A key metric to understand just how severe the epidemic can become is the basic reproductive rate, or R0, which measures the number of cases an infected patient generates while he is in his infectious period. A 2007 research paper by epidemiology experts at the “Université Pierre et Marie Curie” in Paris have found that Ebola has a R0 of about 2.7, which means the number of cases can multiply at a very fast pace. One of the key recommendations from the study is to implement control measures rapidly to prevent the spread of the epidemic. They say that increasing hospitalization rates significantly reduces the predicted epidemic size.

Unfortunately, the world’s response to this crisis has been nothing short of underwhelming; according to the World Health Organization (WHO), the seriousness of this Ebola crisis has been “underestimated” by authorities, meaning that they really have no idea of how many people are currently infected. More recently, the WHO declared that if left unchecked, the epidemic could affect over 20,000 people within 9 months. In reality, it could be even more given the historical R0 of the disease and the lack of proper health care infrastructure.

This eye-opening essay by Eric showed up on the sprott.com Internet site yesterday---and it's definitely worth reading.

"Get To Work Mr. Chinese Chairman": China Set To Fire Its Central Bank Head, Unleash The Liquidity Floodgates

In what is certainly the most important news of the day, The Wall Street Journal reports that China's long-serving central banker Zhou Xiaochuan, "the face of the Chinese economy to markets globally" is about to be given the boot.

According to the WSJ, "Chinese leader Xi Jinping is considering replacing Mr. Zhou, say party officials, as part of a wider personnel reshuffle that also comes after internal battles over economic reforms." And while it is true that at the age of 66, Zhou has passed China's retirement age, and his departure will be spun as an old man spending more time with his family, the reality is that this is part of a major Chinese shift in the "balance of power between reformist and reactionary forces, with the momentum for reforms being eroded by the loss of growth momentum in the economy," said Eswar Prasad, a Cornell University China expert.

Zhou's replacement: a career banker, who will do the bidding of, you guessed it, banks, which means "liquidity to the max." Per the WSJ, "The top contender to succeed Mr. Zhou at the People's Bank of China is Guo Shuqing, a former banker and top securities regulator who is currently governor of Shandong, a prosperous eastern province, the officials said."

This Zero Hedge article put in an appearance on their website at 11:12 a.m. EDT on Wednesday morning---and I thank reader 'David in California' for passing it around yesterday.  It's longish, but worth skimming, at least until your eyes start to glaze over.

Jim Rickards from Alice Springs, Australia

Jim's next speaking engagement after Alice Springs was at Casey Research's Summit in San Antonio.  Surprisingly enough, I ran into Jim on the Alamo tour last Thursday afternoon---and he was jet lagged and pretty bagged.  But after a good night's sleep, he was up up and at 'em as the opening speaker on Friday morning.  I don't know how he does it.

This youtube.com video runs for 42:34 minutes---and it is, of course, courtesy of Harold Jacobsen.

Three King World News Blogs

1. Gerald Celente: "Increased Worldwide Danger to Rock Gold Market"  2. David P: "Despite Drop, Gold Coiled to Break $2,000 and Silver Above $70"  3. Jeffrey Saut: "Quote of the Week---and a Chart That Will Stun Global Readers"

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

Gold price seen near tipping point for mine cuts, closures

The price of gold, down more than a third in three years, is approaching the tipping point where the mining industry would see a spike in the number of producers reducing output or even shutting down operations.

Several mines globally have already suspended output in the past 18 months, but not as many as industry watchers expected as producers focused on slashing costs and reworking mine plans to extract more profitable, higher-grade ounces.

But with bullion's slide this week to a nine-month low of $1,208.36 an ounce, those defenses may not be enough.

"$1,200 is a critical level. The industry has geared itself around $1,200," said Joseph Foster, portfolio manager at institutional investor Van Eck Global. "If it falls below that level, then there are a lot of mines around the world that are really going to struggle."

This Reuters article, filed from Vancouver, showed up on their website at 1:07 a.m. EDT this morning---and I thank reader Harry Grant for sliding it into my in-box just before midnight MDT last night.

Royal Canadian Mint Introduces One Gram Size Gold Maple Leaf Bullion Coins

The Royal Canadian Mint’s Gold Maple Leaf bullion coin is now available in a new one gram size. The coins are packaged into sets of 25 and referred to as the “Maplegram 25″ product.

“The Royal Canadian Mint always strives to innovate and diversify its products to offer customers new ways to own high-quality precious metals which set new standards for the global bullion industry,” said Marc Brûlé, Interim President and CEO of the Royal Canadian Mint. “The Mint’s new Maplegram25 product gives investors a novel way to purchase Gold Maple Leaf bullion coins in a highly liquid format that preserves and celebrates all the trademark qualities of the Maple Leaf brand.”

Because of their tiny size, I'm sure the premium over spot will be quite hefty.  This is no way to buy gold bullion for investment purposes, so stay miles away from this product unless you just have to own one for its novelty value.  This story appeared on the mintnewsblog.com Internet site yesterday sometime---and it's the final offering of the day from Elliot Simon.

Rickards tells Anglo Far-East the methods, objectives, and perps of gold market rigging

*Cease fire in Ukraine holding, Putin is getting what he wants
*What is driving the current drop in the gold price, entry points?
*Proper portfolio allocation to gold
*Comprehensive review of gold price manipulation, techniques, and proofs
*Motives, players, tools
*The end game is in view, what is it?

John Ward interviews Jim in this audio podcast done on September 17 that was posted on the physicalgoldfund.com Internet site yesterday---and it's courtesy of Harold Jacobsen.  It runs for just under 45 minutes, so it may be a good idea to pop the top off a cold one before you dig in.  I borrowed the headline from the GATA release on this interview---and Chris Powell's introduction is worth the read as well.  The link to that is here.

¤ The Funnies

¤ The Wrap

Technical funds are speculators (and so are commercials in reality). The quantities of contracts being sold short by the technical funds are so massive that those quantities can’t help but crush prices. This is what should be focused on and is shockingly clear in the dominant pattern of increasing technical fund short sales over the past two years.

Take the current decline in silver prices to new four year lows. From the July 29 COT Report to last week’s report, technical funds (in the managed money category) sold nearly 34,000 contracts of new short contracts in COMEX silver, as silver prices fell nearly three dollars. I would not be surprised if the technical funds added as many as 5,000 or 6,000 new shorts in the COT report coming this Friday. It is not possible that the aggressive short sale (all on new price lows) of the equivalent of 170 to 200 million oz of silver wouldn’t drive the price of silver lower. This is the guts of the silver manipulation, not wild conspiracy theories. - Silver analyst Ted Butler: 24 September 2014

Except for palladium, it was another down day for the precious metals on Wednesday---and platinum set a new low for this move down as well.

Here are the 6-month charts for all four---and the platinum chart is the standout.

And as I write this paragraph, London has just opened---and I see that the HFT boyz have been busy in all four precious metals once again, with platinum at a new low for this move down again, and the other three precious metals are well below their late afternoon closing prices in New York on Wednesday.  Gold volume is just under 25,000 contracts net---and silver's net volume is a bit over 10,000 contracts.  Both these numbers are pretty heavy for this time of day.

The dollar index, which had done nothing through most of the Far East trading session, began to rally shortly after 2 p.m. Hong Kong time---and less than an hour before the London open.  It's currently up 26 basis points.  All four precious metals were already at their lows of the day before the dollar index began to rally, so it's not possible to pin their price movements on that.

It's obvious that the bear raids in the precious metals, copper and oil, by JPMorgan et al have reached a new level of ferocity the likes of which I, nor anyone else reading these words, has ever seen since I began tracking these markets back in 1999.  The powers-that-be are pulling out all the stops on this one.  When it all ends is now impossible to tell.  One thing is for sure, is that the engineered price declines we've been witnessing for the past couple of months have nothing whatsoever to do with supply and demand.  It's all paper games between 'da boyz' and the technical funds in the managed money category.

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT---I see that the HFT boyz set a new low gold price, or perhaps a double bottom shortly after London opened.  It's hard to tell which---and that won't be known for a while yet.  At the moment, gold is rallying a bit.

Ditto for silver.

Net gold volume is now a hair under 40,000 contracts---and silver's net volume is north of 14,000 contracts.

Platinum also set a new low by a dollar or so after the London open---and palladium got slammed by 14 bucks at the same time, but is well off its low tick at this point.  The dollar index is now up 35 basis points, but as I mentioned earlier, this is just a fig leaf for the HFT boyz and their algorithms to hide behind, as with the exception of palladium, most of the lows were set before the dollar index made its big move just before the London open.

I'm off to bed---and I haven't a clue as to what to expect when I power up my computer later this morning, but I'll mentally prepare myself for any eventuality.

See you tomorrow.

]]>
Thu, 25 Sep 2014 06:11:00 +0000
<![CDATA[Gold Price Suppression Covered Fully by GATA’s Chris Powell on ‘The Larry Parks Show’]]> http://www.caseyresearch.com/gsd/edition/gold-price-suppression-covered-fully-by-gatas-chris-powell-on-the-larry-par/ http://www.caseyresearch.com/gsd/edition/gold-price-suppression-covered-fully-by-gatas-chris-powell-on-the-larry-par/#When:06:15:00Z "JPMorgan et al capped---and then beat the rallies down"

¤ Yesterday In Gold & Silver

After rallying a few dollar in early Far East trading on their Tuesday morning, the gold price didn't do much until about 9:20 a.m. BST in London.  The two-step price rally got capped at, or just after, the noon London silver fix---and by the 8:20 a.m. Comex open in New York, almost all the gains had vanished.  The gold price traded flat from there into the 5:15 p.m. EDT close of electronic trading.

The low and high ticks were reported by the CME Group as $1,214.70 and $1,237.00 in the December contract.

Gold finished the Tuesday session at $1,222.90 spot, up $8.10 from Monday's close, but would have obviously closed materially higher if allowed to do so.  Net volume was 140,000 contracts, with a big chunk of that used by JPMorgan et al to put out the rally fire in morning trading in London.

Brad Robertson sent along the 5-minute gold chart for the appropriate period---and you can see where all the volume occurred.  Note the big volume spike at the noon silver fix in London at 5:00 a.m. MDT on this chart.  That's the moment that last big spike in the gold price occurred.  The sell-off began shortly after that.  Don't forget to add two hours for EDT, as the time on this chart is MDT.  The 'click to enlarge' feature really helps here.

The silver price spiked as well shortly after 9 a.m. in London---and the price got hammered flat just as it caught sight of the $18 spot price---and it was obvious that there was a "Do Not Pass $17.95 Spot" line in the sand after that, when you check the Kitco chart below.

The low and highs were reported as $17.61 and $17.99 in the December contract.

Silver finished the Tuesday trading session at $17.78 spot, up the magnificent sum of 5 cents the ounce.  Net volume was 44,500 contracts, with half of that coming before the Comex open, as da boyz were obviously at battle station in this metal as well.

Platinum's rally began right at the 10 a.m. open in Zurich---and met the sellers of last resort around 9:20 a.m. London time.  Like gold, platinum also had a secondary rally that got capped shortly after the noon London silver fix---and it was all down hill from there.  Da boyz turned a big gain into a 3 dollar gain.

Palladium followed a similar pattern, although it managed to shake off the selling in the New York session---and actually rallied a bit until shortly after 11 a.m. in New York.  Then it traded ruler flat into the 5:15 p.m. close of electronic trading.  Palladium closed up 12 bucks but, like all the other precious metals yesterday, would have closed at an eye-watering price if da boyz had just put their collective hands in their pockets.  But, dear reader, that's precisely why they're there.

The dollar index closed late on Monday afternoon in New York at 84.70---and didn't do much until shortly after 2:30 p.m. Hong Kong time.  At that point it began to drift lower---and that decline really picked up steam starting at precisely 9 a.m. BST in London.  The low tick of 84.37 came minutes before 8:00 a.m. EDT.  From there it rallied back to 84.75 before trading more or less sideways into the close.  The index finished the trading day at 84.70---unchanged on the day.

There certainly was correlation between the dollar index and the precious metal price at the first part of the index move, but it was obvious that JPMorgan et al had to work hard to make the precious metal prices fit the dollar index action.   And in my opinion, they were less than successful.

The gold equities gapped up a bit over 2 percent at the open, sold off a bit into the 11 p.m. EDT London close---and then rallied until 3 p.m. before they got sold down a bit into the close.  The HUI finished up 2.02%.

The silver equities also jumped up at the open---and they followed a very similar path to the gold stocks, as Nick Laird's Intraday Silver Sentiment Index closed up 2.26%.

The CME Daily Delivery Report showed that 1 lonely gold contract and 31 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  There was nothing exciting to look at is as far as issuers and stoppers went, so I shan't link the webpage today.

The CME Preliminary Report for the Tuesday trading session showed that there are 14 gold and 113 silver contracts still open in the September contract---minus the contracts posted in the previous paragraph.

Another day---and another withdrawal from GLD.  This time it was 38,465 troy ounces.  And as of 9:56 p.m. yesterday evening, there were no reported changes in SLV.

Another day---and another decent sales report from the U.S. Mint.  They sold 2,800 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---345,000 silver eagles---and another 100 platinum eagles.

Mint sales for September are substantially ahead of August sales already---and I have a story about that courtesy of Mark O'Byrne over at goldcore.com in the Critical Reads section further down.

It was a pretty big day in both gold and silver over at the Comex-approved warehouses on Monday.  In gold, there was only 1,125 troy ounces reported received, but a chunky 164,093 troy ounces was shipped out.  Of that amount, 160,750 troy ounces came out of JPMorgan's vault.  I've seen that number before, so I decided to divide it by 32.15 troy ounces---and came out with precisely 5,000 kilobars of gold.  The link to that activity is here.

In silver there was a very chunky 1,204,226 troy ounces reported received---all into the CNT Depository---and only 1,000 ounces were shipped out.  The link to that action is here.

I have a reasonable number of stories, but the most import one is the last one.  So if you have limited time, just read the headlines of the other stories as you work your way down to the last offering of the day.  Its title is today's column headline.

¤ Critical Reads

Mortgage Originations Down By 60-70%…..But Everything Is OK!

Mortgage originations for the first quarter of this year fell off a cliff.  JPMorgan reported a decline of 71 percent, as I recall, and I think Citibank reported a drop of 66 percent.  Now, the second quarter’s bloodletting has come in and the numbers are about the same… down more than 60 percent year-over-year, if memory serves and it often does.

I’m not bothering to look any of these numbers up and doing this by memory because the details don’t matter… my point will be the same regardless of a few percentage points in one direction or another on any given statistic.  I’m close enough in all cases, anyway.

Forbes reported that the first quarter of 2014, “saw the lowest mortgage origination volumes since Q3 1997.”  And the headline, “MBA Lowers Mortgage Originations Forecast, came with a story explaining thatthe updated refinance total is around 60 percent lower than 2013 refinance originations.”

Even credit unions went straight into the tank this year, originating an annualized $42.6 billion in real estate loans in the first quarter, down from $102.9 billion in the first quarter of 2013, according to an Nation Credit Union Association (NCUA) press release.

This longish, but very interesting guest commentary appeared on David Stockman's website yesterday---and I thank Roy Stephens for today's first news item.

Shrinking Bond Desks Taken by Journeymen as Masters Fade

It was the profession that inspired Sherman McCoy in the novel “The Bonfire of the Vanities.” In the 1980s, the excitement in the trading room, with hundreds of people talking on the phone, was palpable, like a sporting event, said Kerry Stein, head of credit trading at Lloyds Securities Inc.

Those days are gone.

“It’s surprising how quiet a place could be compared to what I had known,” said Stein, who began trading bonds in 1985 at Drexel Burnham Lambert Inc., the house of Michael Milken, who was nicknamed the junk-bond king.

As trading in dollar-denominated bonds declined 22 percent in the past five years to an average daily $809 billion, so have the jobs, leaving even some of the most senior traders and salesmen moving from firm to firm. Dozens of journeymen are populating an industry that used to attract the young in throngs, lured by money and prestige, according to Michael Maloney, president of fixed-income recruiting firm Michael P. Maloney Inc.

This news item appeared on the Bloomberg Internet site at 7:52 a.m. Denver time on Tuesday morning---and I thank West Virginia reader Elliot Simon for sending it our way.

Record-breaking year for contemporary art

The contemporary art market, buoyed by high demand and massive growth in China, smashed through the $2-billion mark for the first time in a record-breaking 2013/14, according to new figures released on Tuesday.

In the year from July 2013, sales of contemporary art at public auctions reached $2.046 billion dollars, up 40 percent on the previous year, according to Artprice, a Paris-based organisation which keeps the world's biggest database on the contemporary art market.

This growth, despite a gloomy global economic climate, came as China pushed past America to top the world market by raking in 40 percent of auction earnings.

"As many pieces are being sold in China as in the United States, United Kingdom and France together," said Artprice in its annual report.

This interesting AFP article, filed from Paris, appeared on the news.yahoo.com Internet site early yesterday afternoon EDT---and it's courtesy of reader M.A.

Renowned Market Historian: BABA Marks The Top

Wouldn’t it be ironic if this great bull market ended last Friday, on the occasion of Alibaba’s record-setting IPO, the largest in history?

More than a few of the investment advisers I monitor are entertaining that possibility, especially in light of Monday’s triple-digit loss in the Dow and the NASDAQ's decline of more than 1%. Alibaba dropped over 4% on its second day of trading.

Those advisers point out that history’s most significant market tops have often been accompanied by high-profile events that prompt the average investor to overcome any residue of skepticism they may be harboring.

Nevertheless, there have been a number of disturbing developments in recent months that distinguish today’s market from those that prevailed at other points in this bull market. And, according to at least one market historian, these developments suggest that a market top of no small significance is imminent.

This commentary by Mark Hulbert appeared on the David Stockman website yesterday sometime---and it's the second offering of the day from Roy Stephens.

Time to worry? Russell 2000 hits 'death cross'

The Russell 2000 has been diverging from the broader market over the last several weeks, and now technicians point out it has flashed a bearish signal. For the first time in more than two years, the small-cap index has hit a so-called death cross.

A death cross occurs when a nearer-term 50-day moving average falls below a longer-term, 200-day moving average. Technicians argue that a death cross can be a bearish sign.

While traders have already been quite bearish on the Russell 2000 so far this quarter, no other major U.S. index is near its death cross.

More evidence of the recent weakness in small-cap stocks: the Russell 2000 is currently about 7 percent below its all-time high set at the start of the quarter on July 1, while both the Dow and S&P 500 are just off their own record levels hit last week.

This CNBC story showed up on their website at 1:23 p.m. EDT on Monday afternoon and it's the first of two articles I found in yesterday's edition of the King Report.

Rockefellers to sell oil assets as part of $50B global warming fight

The Rockefellers, who made their vast fortune on oil, will on Monday join and other philanthropies and high-wealth individuals in a pledge to sell and get out of a total of $50 billion US worth of fossil fuel assets.

The Global Divest-Invest coalition will announce Monday that the Rockefeller family and others have joined the global movement to divest fossil fuel investments, a day before 120 heads of state address the United Nations to discuss what efforts their countries are making to address a marked long-term increase in greenhouse gas emissions.

Since the movement began in 2011, some 650 individuals and 180 institutions which together own $50 billion in assets have pledged to divest from fossil fuels over five years using a variety of approaches.

I don't know why this is such a big story, as someone else will be happy to buy these assets---and the pollution these companies produce will still be there.  But if you're a desperate environmentalist, any port in a storm, I suppose.  This article was posted on the very left-leaning cbc.ca Internet site on Monday---and it's courtesy of reader Brad Robertson.

In two charts: Mario Draghi's plan to save the eurozone isn't working

After a new monetary stimulus package failed to drum up appetite from the euro area's biggest banks, two gauges of confidence in the eurozone recovery have fallen.

Banks shunned the European Central Bank's (ECB) most recent measure, which attracted just attracted just €82.6bn (£65.2bn) of interest from banks this September.

Designed to revive inflation in the eurozone, the demand was much lower than the €150bn (£120bn) expected by analysts.

The poor performance has been reflected in measures of confidence, as analysts worry that the eurozone could drift closer towards outright deflation.

This article showed up on the telegraph.co.uk Internet site at 3:57 p.m. BST in London on Monday---and it's the second commentary of the day from yesterday's edition of the King Report.

Merkel Hopes to Settle Gas Dispute Between Russia and Ukraine

With a major trade meeting between Russia and Ukraine approaching, German Chancellor Angela Merkel has advocated Tuesday for a long-term solution to the gas dispute between the two countries on Tuesday, AP reports.

Merkel said said that although there have been some “small successes” to calm the Ukraine crisis, a long-term working solution has yet to be found. The dispute over payments for past deliveries and future gas prices is one of the major issues which must be resolved “as quickly as possible”, Merkel told on Tuesday.

The German Chancellor’s statement comes concurrently with E.U. Energy Commissioner Guenther Oettinger who warned Russia not to use gas as a weapon against Ukraine, AFP said.

This brief article appeared on the RIA Novosti Internet site at 7:30 p.m. Moscow time on their Tuesday evening, which was 1:30 p.m. in New York.  I thank South African reader B.V. for sharing it with us.

Putin leaves Germany’s factories in a worse state than anyone imagined

Key gauges of Germany manufacturing slumped in September, falling to a 15-month low as ongoing tensions over Ukraine weighed on the sector.

Markit’s purchasing managers’ index (PMI) for the sector dropped to 50.3, from 51.4 a month earlier. The reading is barely above 50, implying that the sector is expanding, but slowly.

No analyst polled by Reuters expected a number this bad.

The most pessimistic expert forecast that the PMI figure would fall to 51, while the average analyst believed Germany’s PMI would drop to 51.2.

Germany’s factories are particularly exposed to any conflict between Russia and its neighbours, as well as the tit-for-tat sanctions exchanged between Russia and the E.U.

This article, which is certainly worth reading, appeared on the The Telegraph's website at 9:24 a.m. BST on their Tuesday morning---and I thank Roy Stephens for sending it our way.

Furious Obama Says Calls to Putin Going Straight to Voice Mail

In what he called “a provocative and defiant act,” President Obama charged on Tuesday that Russian President Vladimir Putin has started letting his calls go directly to voice mail.

Speaking at the White House before this week’s NATO summit, a visibly furious Obama said that Putin’s new practice of letting his calls go straight to voice mail “hampers our ability to discuss the future of Ukraine and other important issues going forward.”

Having left dozens of voice mails for the Russian President, Obama said that he tried to reach him via e-mail on Monday night but received an out-of-office auto reply.

This very tongue-in-cheek piece -- wink))) -- from The Borowitz Report, showed up on The New Yorker website in very early September---and it's another offering from reader B.V.

Golan Heights: Israel military shoots down Syrian fighter jet

The Israeli military shot down a Syrian fighter jet that infiltrated its airspace over the Golan Heights on Tuesday morning — the first such downing in decades, heightening tensions in the volatile plateau.

The military said a "Syrian aircraft infiltrated into Israeli air space" in the morning hours and that the military "intercepted the aircraft in mid-flight, using the Patriot air defence system."

The military would not say what type of aircraft was downed and said the circumstances of the incident were "unclear."

A defence official identified the downed aircraft as a Sukhoi Su-24 Russian fighter plane. Previously, it was reported to have been a MiG aircraft. He said the Syrian jet penetrated 800 metres into Israeli air space and tried to return to Syria after the Patriot missile was fired.

This AP news item appeared on the news.ca.msn.com Internet site at 5:14 a.m. BST on Tuesday morning local time---and I thank Brad Robertson for his second story of the day.

Syrian General: ‘Moderate Opposition’ in Syria Figment of Obama’s Imagination

The "moderate opposition" that U.S. President Barack Obama said Washington would train and equip to address the Islamic State (IS) militant threat in Iraq and Syria does not exist, Maj. Gen. Yahya Suleiman told Rossiya Segodnya International Information Agency on Tuesday.

"We are accustomed to the fact that the United States is often hypocritical. The biggest hypocrisy was displayed by the American side, when the U.S. president announced that there is a "moderate opposition" in Syria. However, this was nothing more than a figment of his [Barack Obama's] own imagination," Maj. Gen. Suleiman said.

"At the same time, such a statement had special meaning and was made in order to satisfy the U.S. allies that got involved in a conspiracy against Syria - especially the Gulf states led by Saudi Arabia. That is why the United States, feeding them with promises, agreed that they prepare 5,000 fighters," Maj. Gen. Suleiman added.

This article appeared on the RIA Novosti website at 8:29 p.m. Moscow time on their Tuesday evening, which was 12:29 p.m. EDT.  It's the third offering of the day from reader B.V.

Weeks of U.S. Strikes Fail to Dislodge ISIS in Iraq

After six weeks of American airstrikes, the Iraqi government’s forces have scarcely budged the Sunni extremists of the Islamic State from their hold on more than a quarter of the country, in part because many critical Sunni tribes remain on the sidelines.

Although the airstrikes appear to have stopped the extremists’ march toward Baghdad, the Islamic State is still dealing humiliating blows to the Iraqi Army. On Monday, the government acknowledged that it had lost control of the small town of Sichar and lost contact with several hundred of its soldiers who had been besieged for nearly a week at a camp north of the Islamic State stronghold of Falluja, in Anbar Province.

By midday, there were reports that hundreds of soldiers had been killed there in battle or mass executions. Ali Bedairi, a lawmaker from the governing alliance, said more than 300 soldiers had died after the loss of the base, Camp Saqlawiya. The prime minister ordered the arrest of the responsible officers, although a military spokesman put the death toll at just 40 and said 68 were missing.

This essay appeared on The New York Times website on Monday sometime---and in their print edition yesterday.  It's another contribution from Roy Stephens.

U.S. to Take Action Against Islamic State Disregarding ‘Geography or Borders’: Reports

"We will not allow geography or borders to prevent us from taking action [against the IS]," Kerry said at a press conference following his meeting with Iraqi President Fuad Masum, as quoted by Associated Press (AP).

"We will hold them [IS militants] responsible for their grotesque atrocities," Kerry stressed, adding that "we will not allow them to find safe haven where they think they can have sanctuary against accountability."

Earlier on Tuesday, U.S. President Barack Obama pledged to continue the fight against IS militants and to build up the anti-IS international coalition, which now comprises over 40 countries.

The Unites States carried out a number of airstrikes against IS positions in Syria on Tuesday, using aircraft, drones and Tomahawk missiles. Saudi Arabia, Jordan, Bahrain, Qatar and the United Arab Emirates also reportedly took part in the attacks.

This news story showed up on the RIA Novosti website at 12:45 a.m. Moscow time on their Wednesday morning---and once again I thank Roy Stephens for sending it.

Russia warns U.S.-led coalition: Those who carry out strikes in Syria face blowback

The Russian Foreign Ministry has said that those countries initiating one-sided military scenarios take international legal responsibility for their consequences. It comes as the U.S.-led coalition begins its anti-ISIS strikes in Syria.

"Attempts to achieve one's own geopolitical goals in violation of the sovereignty of countries in the region only exacerbate tensions and further destabilize the situation," the statement said.

The launch of the U.S.-led operation against the jihadist movement Islamic State (formerly known as ISIS or ISIL) has seen strikes targeting training camps, headquarters and weapons supplies in northern and eastern Syria. However, eight civilians have been killed in the strikes since the start of the attack, three of them children. At least 30 militants have also been declared dead.

Syria, in its turn, said in a statement that it’s prepared to cooperate with any international anti-terrorism effort. The country won’t stop the fight with IS extremists, the Syrian Foreign Ministry said.

This news item was posted on the RIA Novosti website at 2:21 p.m. Moscow time on their Tuesday afternoon---and it's courtesy of Roy Stephens as well.

'China won’t support sanctions against Moscow'

China will never support any sanctions against Russia and will never join them, Valentina Matviyenko, speaker of the Russian parliament’s upper house said, citing Chinese President Xi Jinping, with whom she met on Tuesday.

Both Russia and China believe the sanctions are illegal, ineffective and counterproductive, according to Matviyenko. They are nothing but an attempt “to exert pressure on sovereign states to change their position and to weaken them and suppress their development,” she stressed.

Matviyenko thanked Beijing for its public position towards Western sanctions imposed on Russia over the Ukrainian conflict. China has offered an “absolutely objective” assessment of what is now going on in Ukraine. Moreover, no sanctions will affect the long-term strategic partnership between Moscow and Beijing, which reflects the interests of both peoples, she noted.

This Russia Today story was posted on their website at 12:41 p.m. yesterday afternoon Moscow time---and it's the final offering of the day from Roy Stephens, for which I thank him.

Three King World News Blogs

1. William Kaye [#1]: "Sovereign Buy Orders in Gold, But Watch Silver For Price Gains"  2. Stephen Leeb: "China, Russia, Germany, India---and a Road Map to $10,000 Gold"  3. William Kaye [#2]: "Gold, Silver, Hindenburg Omens & A Full-Blown Collapse"

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

Mark O'Byrne: Gold, Silver Bullion Coin Sales Robust Despite Sell Off

Despite the recent bout of price weakness, gold American eagle coin sales from the U.S. Mint have picked up significantly from last month.

The latest bullion coin sales figures from the U.S. Mint show a tentative pickup and robust retail bullion demand, with September sales stronger for both the  American Eagle and American Buffalo gold coins as well as for the American Eagle silver 1 oz coins.

Month-to-date for September, gold Eagle sales across all coin sizes have already reached 43,200 oz compared to total gold Eagle sales of 25,000 oz in August. This is also well ahead of September 2013, when total gold Eagle sales for the month only touched 13,000 oz.

Gold American Buffalo 1 oz sales so far this month have reached 10,500 oz, up from 8,000 oz in August, and 5,500 oz in July. With a strong first quarter, year-to-date American Buffalo sales are now running at a cumulative 135,500 oz for 2014.

Here's the commentary by Mark that I mentioned at the top of this column.  He's done an excellent job of reporting on this, so why should I re-invent the wheel by trying to put this in my words.  It was posted on the goldcore.com Internet site yesterday---and I thank him on your behalf.

Venezuela opens gold vault to impromptu inspection -- So how about it, central banks?

Francisco Rodriguez, an economist with Bank of America Corp., was at a routine meeting with Venezuelan central bank officials last week when he sprung an unusual question on them: Can you show me your gold?

He'd been itching to take a peek for years and now was the time to ask. With the government's bonds sinking toward prices that indicate investors are bracing for the possibility of default, the country's $15 billion of gold bars are crucial to ensuring debt payments are met. His first impression once inside the vaults? Those bars don't take up a lot of room.

"You picture that amount of money requiring a lot of space when, in reality, it all fits in five small cells that were not even full to the top," Rodriguez, a Venezuela native who covers Andean economies for Bank of America Corp. in New York, said in a telephone interview yesterday. He said he started counting frantically in his head, summing up figures scrawled out on signs near each pile of the metal. By his quick math, the gold was all there.

This Bloomberg item, filed from Mexico City, showed up on their Internet site at 6:00 p.m. MDT yesterday evening---and was something I found at the gata.org Internet site.

Gold Reserve says awarded $740.3 million in Venezuela Brisas arbitration

The International Centre for Settlement of Investment Disputes (ICSID) determined Venezuela must pay U.S.-based miner Gold Reserve $740.3 million for terminating its Las Brisas gold concession, the company said on Monday.

Socialist-run Venezuela in 2009 formally ended the concession in one of Latin America's largest gold deposits as part of a strategy to increase state control of key economic sectors.

Gold Reserve then sought $2.1 billion in damages at the World Bank's ICSID for what it deemed an expropriation.

"While the company is pleased with the award, it is less than the value of the Brisas project at today's gold and copper prices and Venezuela will substantially benefit from the development of the mine," the company said in a statement on its website.

This gold-related news item, filed from Caracas, put in an appearance on the Reuters website at 9:20 p.m. EDT on Monday evening---and I found it embedded in another GATA release from yesterday.

China will take control of gold pricing, Sprott's Charles Oliver says

Sprott Asset Management gold portfolio manager Charles Oliver tells the Sprott Money News' Jeff Rutherford that China is well on its way to taking control of the monetary metal's price-determination mechanisms and building its gold reserves to a much higher level.

The interview is 8:54 minutes long---and was posted on the sprottmoney.com Internet site on Monday.  I thank Chris Powell for wordsmithing the above paragraph of introduction.

Gold price suppression covered fully by GATA's Chris Powell on 'The Larry Parks Show'

Thanks to the interviewer's knowledge of the issue and willingness to spend time on it, your secretary/treasurer got to cover many aspects of the Western gold price suppression scheme last week on "The Larry Parks Show," broadcast on the Manhattan Neighborhood Network in New York. Parks was so adept because he is executive director of the Foundation for the Advancement of Monetary Education.

Among the aspects discussed were the U.S. government's having authorized itself to rig all markets secretly, the U.S. government documents recently disclosed showing that central banks are trading secretly in all major U.S. futures markets, the other documents GATA has compiled proving the gold price suppression scheme, why the gold mining industry refuses to do anything about it, why the scheme will keep succeeding until gold investors shun "paper gold," and the treason of the central bankers in developing countries.

I posted this video interview in yesterday's column as well, but never had the chance to watch it before I did.  Well, yesterday afternoon I viewed it from start to finish---and Chris is at the very top of his game here.  If you want to understand the "why" of the precious metal price management scheme [along with the price management scheme in copper and crude oil] this interview explains it in all its horrid details.

Chris uses the word "treason" to describe the action of central banks in the suppression gold/commodity prices---and that's precisely what it is.

If you didn't have the opportunity to watch this yesterday---then drop everything and watch it now.  And if you did take the time to view it, it's certainly worth a second look.  Without doubt it's the most important commentary that I've posted in this column for a very long time---and it's an absolute must watch.  As I also said yesterday, it deserves wide distribution---and now that I've actually watched it, that's what this interview deserves, so please pass it around.  Thanks.

It was posted on the gata.org Internet site at 10:39 p.m. EDT Sunday evening.

¤ The Funnies

Now that I'm back in Edmonton, I've got three more Canada geese photos for you---and they're part of the same set that I posted a week ago.  An extremely high shutter speed and 6 frames a second catches all kinds of things that the human eye never sees.  Here are more examples of that.  In two of the three shots, the sun catches the light in such a way that some of the feather appear bluish in colour, which is certainly a result of refraction---and it's particularly noticeable in the third photo.  Except for cropping for maximum visual impact, these photos came straight out of the camera untouched.

¤ The Wrap

The main physical signal in silver to me continues to revolve around the turnover or movement of metal into and out from the COMEX-approved silver warehouses. On four days of the past week, turnover was well below year-to-date averages, but Wednesday’s very large turnover (3 million oz), brought the entire week’s turnover to an above average 4.8 million oz. Total COMEX silver inventories declined 1.1 million oz to 180.7 million oz.

I continue to be focused on the physical turnover---and not what the total inventory might be. Interestingly, total COMEX silver inventories are up the same amount year to date as the average weekly movement. Stated differently, the increase in total COMEX silver inventories this year is equal to just 1 of the 36 average weekly movements this year. The less than 5 million oz increase in total inventories compares to the more than 160 million oz moved in and out for the past eight and a half months. I’m convinced the physical movement of 160 million oz of silver seems much more important than the increase of 5 million oz over the same time. - Silver analyst Ted Butler: 20 September 2014

I must admit that I wasn't at all surprised by what I saw in the Kitco precious metal charts when I got out of bed late yesterday morning.  JPMorgan et al capped---and then beat the rallies down in the same old way as they've always done it.

Here are the 6-month charts for both gold and silver with yesterday's trading price/volume data added.

Yesterday's volume wasn't overly heavy in either metal, but it was more than enough to turn back the price spikes in morning trading in London.

And as I write this paragraph, the London open is 15 minutes away---and there's not much going on as far as the gold price is concerned.  Silver, after it's usual down tick at the open, has now rallied back to unchanged.  Platinum has rallied more or less quietly during the Far East trading session---and is now up 11 bucks.  Palladium is also up at the moment---and its tiny rally attempt to the $820 spot mark, ran into the usual sellers of last resort.

Gold volume is only 16,000 contracts net---and silver volume is pretty decent at 6,000 contracts.  The dollar index is chopping a few basis points around unchanged.

Yesterday was the cut-off from this Friday's Commitment of Traders Report.  Without doubt there was some deterioration in the Commercial net short positions of JPMorgan et al after yesterday's price action, but the report should still be one for the record books when it gets posted on the CFTC's website at 3:30 p.m. EDT.

And as I hit the send button on today's efforts, I note that the tiny rallies in all four precious metals appeared to end shortly after London trading began---and only palladium is up on the day but, it too, is obviously running into resistance.  Gold volume is just over 25,000 contracts, which is close to 'normal'---whatever that means these days---and silver's volume is 11,000 contracts, which is pretty heavy for such tiny price action.  The dollar index continues to chop around either side of unchanged.

I highly suspect that we've seen the price bottom in all four precious metals.  Of course I've hinted at that before and look what has happened in the interim.  But there is a limit to how much shorting the technical funds/Managed Money traders are prepared to do, or can afford, once they've pitched all their long positions.  That is the limiting factor to the downside---and once that point is reached, the bottom is in.

They went massively short during the engineered price declines both on Friday and early Monday morning in Far East trading---and I would guess that they're pretty 'full up' on the short side.

Now it's only a matter, as I've also said on numerous occasions, as to how da boyz react when the Managed Money traders attempt to cover their short positions in all four precious metals---plus copper and crude oil.  That, and only that, will determine how high we go in price---and how fast we get there. 

Before heading off to bed, here's an offer from Casey Research that you should seriously consider.  The San Antonio conference entitled "Thriving in a Crisis Economy" is soon to become available in audio form---all 26 hours of it.  Also included is a bonus CD that shows all the charts and graphs of each speaker, including mine.

For a limited time, Casey Research is offering you a special, discounted price of $295 for preordering your copy of the Casey Research 2014 Summit Audio Collection today. That's a full $100 off the regular price of $395.

You can find out all the details by clicking here, which I urge you to do, as it cost nothing to check it out.

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

]]>
Wed, 24 Sep 2014 06:15:00 +0000
<![CDATA[Is the World Gold Council’s CEO Angling For a Tin-Foil Hat?]]> http://www.caseyresearch.com/gsd/edition/is-the-world-gold-councils-ceo-angling-for-a-tin-foil-hat/ http://www.caseyresearch.com/gsd/edition/is-the-world-gold-councils-ceo-angling-for-a-tin-foil-hat/#When:06:10:00Z "Da boyz are after silver in a big way"

¤ Yesterday In Gold & Silver

The gold price rallied a hair in Far East trading on their Monday morning, but that all ended at 9 a.m. Hong Kong time as the HFT boyz and their algorithms took an eight or nine dollar slice off the golden salami.  After that, the price didn't do much until shortly after 11 a.m. EDT---and the rally that began at that time got dealt with in the usual manner at one minute before noon, before it got too far into positive territory---and it wasn't allowed to close there.

The low and high tick were reported as $1,208.80 and $1,221.00 in the December contract.

Gold closed in New York on Monday at $1,214.80 spot, down $1.40 from Friday's close.  Net volume was 131,000 contracts.

Silver opened flat on Monday morning in the Far East but, like gold, the HFT traders and their algorithms showed up at 9 a.m. Hong Kong time as well---and within an hour had silver down over 50 cents.  From there it rallied in fits and starts back to just above unchanged by noon in New York---and at that time met the same fate as the gold price---getting closed down on the day.

The low and highs were reported by the CME Group as $17.865 and $17.325 in the December contract.

Silver finished the trading session on Monday at $17.73 spot, down 6 cents from Friday's close.  Net volume was a stunning 74,000 contracts.

Platinum and palladium had charts very similar to the gold charts, but mini versions---and both metals, like gold and silver, were closed at a new low for this move down. Platinum was closed down 12 bucks---and palladium was closed down 9 bucks, but was briefly below $800 during the day.  Here are the charts.

The dollar index close late on Friday afternoon in New York at 84.78---and then climbed to its 85.85 'high' tick of the day around 11:20 a.m. EDT.  From there it slid lower---and closed at 84.70, which was down 8 basis points from Friday.

The gold stocks gapped down---and then stayed down for the remainder of the day, except for a small rally around noon when gold rallied as well.  Even though gold made it into positive territory for a bit---and only closed down a dollar or so, the HUI closed down another 2.89%.

The silver equities headed for the basement the moment that trading began in New York.  The noon rally didn't last---and the stocks continued lower---and Nick Laird's Intraday Silver Sentiment Index closed down a chunky 3.64%.

The CME Daily Delivery Report showed that zero gold and 220 silver contracts were posted for delivery on Wednesday.  The biggest short/issuer was Jefferies by far with 188 contracts.  There were about 10 long/stoppers, none which really stood out---and the link to yesterday's Issuers and Stoppers Report is here if you wish to check it out.

The CME Preliminary Report for the Monday trading session showed that there are 16 gold and 387 silver contracts still open in September, from which you can subtract the 220 silver contracts in the prior paragraph.

There was 57,698 troy ounces of gold withdrawn from GLD yesterday---but it was totally different over at SLV, as there was another monster deposit.  This time there was 2,397,570 troy ounces were added by an authorized participant.

I forgot all about Joshua Gibbons, the "Guru of the SLV Bar List" while was in San Antonio, so I'll make amends here.  As of the close of trading last Wednesday, this is what he had to say: "Analysis of the 17 September 2014 bar list, and comparison to the previous week's list---4,844,010.2 troy ounces were added (all to Brinks London). No bars were removed or had a serial number change.

The bars added were from: Solar Applied Materials (2.8M oz), Henan Yuguang (1.4M oz), Nordeutsche (0.3M oz), and 4 others.  As of the time that the bar list was produced, it was over-allocated 594.3 oz.  All daily changes are reflected on the bar list, except the 959,072.0 oz deposit last night (17 September 2014).

About 2.5M oz of the deposits were bars that had been in SLV before, with another 2.3M oz of fresh bars."

There was a decent sales report from the U.S. Mint.  They sold 3,700 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---660,000 silver eagles---and 100 platinum eagles. 

There wasn't much activity in gold at the Comex-approved depositories on Friday, as only 3,407 troy ounces were shipped out---and nothing was reported received. 

The silver activity was off the charts once again, as 2,656,293 troy ounces were reported received, with all the action at Brink's, Inc.---CNT---and Canada's Scotiabank.  Only 165,152 troy ounces were shipped out.  The link to that activity is here---and it's worth a look.

Nick Laird sent us this chart on the weekend.  It's the weekly deliveries from the Shanghai Gold Exchange right up until September 12, 2014---and as you can tell, the chart is doing what it's supposed to, moving from lower left to upper right.

I've kept the stories down to as few as possible, but there's still a lot.  The final edit is yours.

¤ Critical Reads

Falling used-car prices roil the auto market

Used-car prices are sliding, a boon to penny-pinchers, but troubling for new-car sales.

The auto industry sales recovery in recent years means millions of used cars, many coming off lease, are starting to flood the market. The result is a decline in used-car prices that zoomed sky-high after the recession. And the decline is leading to talk that new-car auto sales growth may be peaking.

"We're going to see a tremendous increase in used-car supply over the next couple of years," says Larry Dominique, an executive vice president of auto-pricing site TrueCar.

That used-car cascade could dampen new-car sales in three ways.

This is very interesting story showed up on the usatoday.com Internet site on Sunday---and the first story of the day is courtesy of reader Ward Pace.

'I had no choice,' says Sarkozy of political comeback

Former French president Nicolas Sarkozy said Sunday that he "had had no choice" but to return to politics, stating that he had never seen such "despair" in France.

In a 45-minute prime time television interview on France 2, Sarkozy outlined his bid to lead the opposition UMP party and launched a scathing attack on Socialist President François Hollande.“I don’t want my country to be condemned to the humiliating state of affairs that we have today or the perspective of total isolation'' that he predicts will happen if France's far-right National Front party continues its rise.

This news item appeared on the france24.com Internet site on Sunday---and it's the first offering of the day from Roy Stephens.

‘Europe getting fed up with the U.S. business influence’

Europeans’ anger with their governments over US-led sanctions against Russia can go “quite far” as they are fed up with US business influence helping arms exporters and NATO, but not average Europeans, former British diplomat William Mallinson told RT.

RT: On Friday, French farmers in the city of Brest in Brittany set local tax office on fire, in protest against tit-for-tat sanctions with Russia. Is the Russian food ban hitting European businesses that bad, making people that desperate?

William Mallinson: Yes. What we have to remember is that the EU is originally founded on the livelihood for farmers and for supplying food to Europeans. Despite the fact that there is a very large number of huge farms, in France, in particular, [there are] still a lot of small farmers. The French agriculturalists are one of the most powerful political forces in France. I remember the Poujadists in 1960-70s [a movement named after Pierre Poujade that articulated the economic interests and grievances of shopkeepers and other proprietor-managers of small businesses facing economic and social change - RT]; they are quite capable of causing major problems for the government.

This article showed up on the Russia Today website at 1:32 p.m. Moscow time on their Monday afternoon---and it's the second contribution of the day from Roy Stephens.

Russian sanctions ‘de facto against European business’ – Alstom chief

Russia has become a strategic market for thousands of European companies, and sanctions put E.U. business at risk, Philippe Pegorier, President of Alstom Russia , told RT at a Sochi Investment Forum.

“Sanctions against Russia are de facto sanctions against European business,” Philippe Pegorier, President of Alstom Russia, and Chairman of the Association of European Business in Russia (AEB), the largest foreign business association in the country, told RT over the weekend at an international business forum in Sochi .

“We don’t need the government or the E.U. to decide where our priorities are, for us, for many European companies, Russia is a strategy partner and we will remain a strategy partner,” he said.

Pegorier has warned that sanctions against Russia could cause 300,000 layoffs in Germany and at least 100,000 in France.

This is another article from the Russia Today website.  This one was posted there at 3:39 p.m. Moscow time yesterday afternoon---and it's also courtesy of Roy Stephens.

Moscow warns ‘circles in Washington’ over hindering peace process in Ukraine

Moscow is bewildered by Washington’s warmongering rhetoric, which accompanied President Petro Poroshenko’s visit to the U.S. Russia has also noted all the Russia-unfriendly opinions voiced recently by hawkish American politicians.

“We’ll keep in mind all signals, including those unfriendly towards Russia, that were heard during the visit of the Ukrainian president to Washington,” commented Russia’s Deputy Foreign Minister Sergey Ryabkov. “We do regret that there are quite influential circles [within the American establishment] that are unambiguously working against the emerging stabilization [in Ukraine],” Ryabkov said.

In short, U.S. senators urged to supply Ukraine with arms to fight against Russia and President Putin.

Senator Robert Mendez, a Democrat who runs the Foreign Relations Committee told CNN, "We should provide the Ukrainians with the type of defensive weapons that will impose a cost upon Putin for further aggression."

This story was also posted on the Russia Today website yesterday, just before lunch Moscow time---and my thanks go out to Roy Stephens once more.

Turkish security troops clash with Kurds, as thousands flee ISIS

Turkey's security forces closed the border with Syria through which thousands of Kurds are trying to flee IS, after clashes between Kurds and soldiers on the Turkish side of the divide.

The separatist Turkey-based Kurdistan Workers Party (PKK), which is classed as a terrorist organization by Istanbul, called for a solidarity demonstration on Sunday, after 70,000 Kurds crossed from Syria in just 24 hours.

Hundreds of Kurds duly showed up near the barbed wire border fence - some volunteering to join the struggle against IS, others asking to bring over aid to the refugees on the other side of the border.

This Russia Today story, filed from Moscow at 12:43 p.m. Moscow time on the their Sunday afternoon is also courtesy of Roy Stephens.

Lavrov tells U.S. to respect Syria’s sovereignty while tackling ISIS

Washington should respect the sovereignty of Syria in its attempts to deal with the Islamic state, Russia’s Foreign Minister Sergey Lavrov said in a phone call with his US counterpart, John Kerry.

Lavrov and Kerry talked on Sunday at the initiative of the US Secretary of State, Russia’s Foreign Ministry said in a statement.

During the conversation, the Russian FM stressed “the importance of coordinated action... by the international community aimed at countering the threat” coming from the Islamic State (IS, formerly ISIS).

However, he warned against “double standards” and “distortion of facts” during the battle against the terrorist group, which has declared a caliphate in the occupied territories of Syria and Iraq.

This is the final story from the Russia Today website---and the final offering of the day from Roy Stephens as well.

South Africa in '$50m deal' for Russian nuclear reactors

Russia's atomic energy agency said Monday it will provide up to eight nuclear reactors to South Africa by 2023 in a $50m strategic partnership between the two countries.

The delivery of the reactors will enable the foundation of the first nuclear power plant based on Russian technology on the African continent, the Rosatom agency said in a statement.

Director general Sergey Kirienko estimated the value of the deal at between $40 to $50 billion, given that one reactor costs around $5 billion, according to the Itar-Tass news agency. 

This news item was posted on the france24.com Internet site at 7:25 p.m. Europe time on Monday evening---and I thank South African reader B.V. for sharing it with us.

Eight King World New Blogs/Audio Interviews

1. John Embry:  "The Wild Action in Gold, Silver and Other Markets"  2. Michael Pento: "It's Terrifying to Look at What's Really Happen in the U.S."  3. David P: "Despite Pressure, is Silver Ready to Turn Mega-Bullish?"  4. Robert Fitzwilson: "Western Vampire Machine Waging War Against Russia and China"  5. James Turk: "Two Shocking Charts Expose the Stunning Collapse in the U.S."  6. Richard Russell: "The Grim and Devastating Tragedy of America"  7. The first audio interview is with Bill Fleckenstein----and the second audio interview is with Nigel Farage.

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

Koos Jansen: Chinese gold demand rises 5 percent as international exchange opens

China's gold demand, the off take from the Shanghai Gold Exchange for the most recent week reported, rose nearly 5 percent as China bought the dip, gold researcher and GATA consultant Koos Jansen writes. Jansen also reports the comments made at the opening ceremony of the exchange's international subsidiary, where the governor of the People's Bank of China said that China wants to become a major force in gold pricing.

This article appeared on the bullionstar.com Internet site early on Saturday morning Singapore time---and I found it embedded in a GATA release.

Is World Gold Council's CEO angling for a tin-foil hat?

MineWeb's Lawrence Williams reports an interesting comment by the World Gold Council's chief executive, Aram Shishmanian, about the opening of the international subsidiary of the Shanghai Gold Exchange.

"The growth of the Shanghai Gold Exchange to become the world's largest physical gold exchange provides compelling evidence that the future for gold is physical," Shishmanian said. "As the market shifts from west to east, the expansion of strong gold trading hubs in Asia will improve price discovery, liquidity, transparency, and efficiency, all of which will transform the landscape of the global gold market."

So, then, does the World Gold Council believe after all that the present gold market is not really physical and transparent at all but rather shadowy and highly manipulated by derivatives and that, as a result, price discovery needs to be improved?

That kind of talk could sound like an application for a tin-foil hat. Williams should ask Shishmanian whether he wants one. We here at GATA's tin-foil hat factory would be delighted to oblige.

The rest of this commentary by Chris Powell, along with the mineweb.com story from Lawrie, falls into the must read category---and it was posted on the gata.org Internet site on Saturday.

Russia central bank buys more gold and builds bilateral trade with China

While we will probably have to wait another few days until the IMF publishes its latest statistics for the global picture, the Russian central bank has announced that it has added another 9.3 tonnes of gold to its official gold reserves. This is as tensions now seem to be diminishing in Ukraine which could, if the latest agreement holds, lead to Western sanctions against Russia being gradually withdrawn.

Russian gold reserves now stand at 1,113.5 tonnes, the world’s fifth largest national holding, thus climbing even further above China’s 'official' 1,054 tonnes. However few out there seem to believe that China doesn’t have more gold than it announces to the IMF, but is holding considerable amounts in some other government controlled accounts. Overall Russia has just about doubled its gold reserves since the 2007/2008 financial crisis and its central bank has been a net buyer almost every month since. The figures suggest that that the monthly increases have primarily come from the central bank taking in a significant proportion of the country’s domestic gold output which averaged around 20 tonnes a month in 2013; last year Russia was the world’s third largest producer of gold and this year could surpass Australia and move into the No. 2 position behind China.

Russia, like China, perhaps somewhat belatedly, has come to see its gold holdings as a significant positive in any new world financial order that may develop over the next decade.  American financial policy has dominated world trade for almost a century but there are powerful economic forces out there – notably involving various countries, including China and Russia, building trade ties in their own domestic currencies and thus starting to bypass the dollar. Energy trade is particularly significant in this respect as the U.S. dominance in setting the terms of world trade has been very much down to the virtually total dominance of the dollar in global oil and gas transactions.

Historically the country with the most gold has been able to dominate global trade – barbarous relic or no – and while the West may see this coming to an end there is an enormous, and ever wealthier, part of the world’s population which still believes in gold as the key global monetary asset. China and Russia are both strong believers in gold and the potential negotiating position it enables. At some stage soon the validity of their belief is going to be put to the test.

Here's another commentary from Lawrie.  This one was posted on the mineweb.com Internet site on Monday sometime---and I thank West Virginia reader Elliot Simon for pointing it out.  It's certainly worth reading as well.

Hugo Salinas Price: The tribute the world pays to the empire

In his latest commentary Hugo Salinas Price, president of the Mexican Civic Association for Silver, explains how foreign exchange surpluses kept in the bonds of countries that issue reserve currencies are actually the tax or tribute lesser countries pay to the empires that dominate them. Countries that hold such bonds in exchange for their exports have not really been paid and never will be paid, Salinas Price writes. In the old days, he adds, exporting nations could be paid by exchanging fiat currencies for gold.

His commentary is headlined "The Tribute the World Pays to the Empire" and it's posted at the civic association's Internet site, plata.com.mx---and I found all of the above in a GATA release on Sunday.  I can't get this website to load on either my home computer, or my laptop. So if it doesn't work for you, there's nothing I can do to help.

Established rivals may keep Shanghai trade zone's gold exchange in check

China's launch of an international gold exchange in the Shanghai Free-Trade Zone 11 days ahead of schedule last week, may not be much help as it seeks to compete with established gold markets such as New York, London or Singapore.

While China is the largest physical gold consumer in the world, the financial infrastructure may lag that of Singapore and Hong Kong in handling a gold market.

Gold traders believe the gold market in the FTZ would attract domestic and foreign investors to trade, but catching up with the major international players will not come quickly.

This gold-related news item showed up on the South China Morning Post website in the wee hours of Monday morning local time---and it's another item I found on the gata.org Internet site.

New Gold Fix Planned By LBMA In Desperate Attempt to Maintain Status Quo

The London Bullion Market Association (LBMA) is quietly planning its new gold fix in a desperate attempt to maintain the status quo.

Reuters reported Friday that according to the LBMA, there are at least 15 companies interested in running the upcoming replacement to the London ‘Gold Fixing’ auction. Like the recently introduced replacement to the ‘Silver Fixing’ which is now being run by the CME Group and Thomson Reuters, the LBMA has appointed itself as the coordinator for a new London Gold Price auction and is currently soliciting Requests for Proposals (RfPs) from interested parties.

When the new silver fixing auction was being debated in the summer, the World Gold Council (WGC) took the initiative and organised a conference of gold market participants including miners and refiners to work out the key features of a new gold price auction. This WGC initiative appears to have been shot down by the LBMA who felt threatened that a gold mining representative organisation was muscling in on the London gold ‘price discovery’ mechanism.

In advance of the LBMA choosing the winning bid, which may well be CME Group/Thomson Reuters again, the LBMA will be holding another seminar for ‘market participants’ that will feature presentations from the short-listed candidates. 

This article appeared on the Zero Hedge website at 4:15 p.m. Sunday afternoon---and I thank reader Harry Grant for sending it our way.

U.K.'s Royal Mint's Tip for Investors: Go for Gold

It has provided gold coins for kings, queens, and governments for hundreds of years, but the Royal Mint is opening its services to the public with a new trading website.

It is encouraging members of the public to become gold investors, claiming that the precious metal is now "relatively affordable."

It is hoped that the website will convince everyday investors to buy bullion coins struck in gold or silver directly from the Royal Mint, after previously being put off by the complexity of investing.

This article put in an appearance on the telegraph.co.uk Internet site at 11:33 p.m. BST on their Sunday evening---and this is another gold-related item I found in a GATA release.

Gold price suppression covered fully by GATA secretary treasurer Chris Powell on 'The Larry Parks Show'

Thanks to the interviewer's knowledge of the issue and willingness to spend time on it, your secretary/treasurer got to cover many aspects of the Western gold price suppression scheme last week on "The Larry Parks Show," broadcast on the Manhattan Neighborhood Network in New York. Parks was so adept because he is executive director of the Foundation for the Advancement of Monetary Education.

Among the aspects discussed were the U.S. government's having authorized itself to rig all markets secretly, the U.S. government documents recently disclosed showing that central banks are trading secretly in all major U.S. futures markets, the other documents GATA has compiled proving the gold price suppression scheme, why the gold mining industry refuses to do anything about it, why the scheme will keep succeeding until gold investors shun "paper gold," and the treason of the central bankers in developing countries.

The interview being so comprehensive, it would be an especially good one for gold investors and anti-imperialists to recommend to government officials, financial journalists, and gold and silver company executives.

The interview is 30 minutes long---and can be viewed at the Vimeo Internet site.  This GATA release and embedded video easily falls into the absolute must watch category---and should be given the widest possible distribution.

¤ The Funnies

¤ The Wrap

Certainly, the signals in silver from everywhere I look are much different than the prices being set on the COMEX. Despite the pronounced price weakness, investment holdings in the big silver ETF, SLV, have grown and not shrunk, both on an absolute basis and relative to the big gold ETF, GLD.  Even though the price of silver has gone down---and has gone down relative to gold’s price, there are no indications of investment selling of physical silver, only indications of buying.  

There is no compatibility between price action and the holdings in the two largest public investment vehicles in silver and gold. One would appear to be wrong, either the collective behavior of silver and gold investors when it comes to physical metal holdings or the price-setting mechanism on the COMEX. This is a disconnect that demands an eventual re-connection. The easiest re-connection must involve a radical change in the price of silver and not a change in collective investment behavior. The price of silver is wrong, not public reaction to a price thought too cheap. - Silver analyst Ted Butler: 20 September 2014

Another slice out of the salami in all four precious metal yesterday, particularly in silver, as all hit new lows for this move down.  And as you already know, da boyz are after silver in a big way, as it's the problem child for both JPMorgan and Canada's Scotia bank.  I would guess that between them, they hold a bit over half of the entire short position of the 'Big 8' traders in the Commercial category of the Commitment of Traders Report.

Here are the 6-month charts for all four precious metals.  Platinum is most likely at its most oversold position in many years---and that goes for the other three precious metals as well.

And as I write this paragraph, the London open is 15 minutes away.  With the exception of silver, the other three precious metals are all up a tiny amount on the day.  Gold volume is a bit over 15,000 contracts, which isn't overly heavy---but silver's volume is very brisk at 7,700 contracts.  The dollar index is flat.

Today is the cut-off for this Friday's Commitment of Traders Report---and I would guess that we'll see new records pretty much across the board in gold and silver---and close to records in platinum and palladium as well.  Of course that depends on today's price action, so we'll see how things turn out as the trading day progresses, particularly in New York.

And as I fire this out the door to Stowe, Vermont at 5:00 a.m. EDT, I see that the prices of all four precious metals went vertical shortly after 9 a.m. BST in what had all the hallmarks of a 'no ask' market---and it remains to be seen how long JPMorgan et al allow these rallies to last.  Judging by the volumes in both gold and silver at the moment, they are hard at work as sellers of last resort.  Right now [4:50 a.m. EDT] net gold volume has exploded to a bit over 35,000 contracts---and silver's net volume is 14,000 contracts.  So unless a black swan of some type shows up, it's a pretty good bet that these rallies will meet the same fate as every other rally.

Here are the gold and silver charts as of 4:45 a.m. EDT---9:45 a.m. BST in London.

I'm back home in Edmonton now that the Casey conference is done.  I was amazed at the quality of not only the speakers, but also the calibre of the attendees.  After talking with many---and I'm happy to report that the "can do" spirit is still very much alive in America.  I was delighted to meet so many readers while I was there---and I was humbled by their kind words.  So a profound "thank you" hardly seems adequate.

After flying for a good chunk of Monday, I must admit that I'm a pretty tired puppy.

I'm off to bed---and after watching the early morning action in London, nothing will surprise me when I power up my computer later this morning.

See you tomorrow.

]]>
Tue, 23 Sep 2014 06:10:00 +0000
<![CDATA[Silver’s ETF Demand Outpaces Gold By the Most Ever]]> http://www.caseyresearch.com/gsd/edition/silvers-etf-demand-outpaces-gold-by-the-most-ever/ http://www.caseyresearch.com/gsd/edition/silvers-etf-demand-outpaces-gold-by-the-most-ever/#When:08:16:00Z "It was another unhappy day for precious metal enthusiasts"

¤ Yesterday In Gold & Silver

The gold price chopped around unchanged in a very right range during all of Far East and most of London trading on Friday---and that state of affairs lasted until just minutes before 9 a.m. EDT.  At that point the selling pressure began anew---and JPMorgan et al had the gold price down to a new low by around 1:35 p.m. EDT, just a few minutes after the close of Comex trading.  After that, the price rallied a few dollars into the close.

The high and low ticks were recorded by the CME Group as $1,229.20 and $1,214.20 in the December contract.

Gold finished the Friday session in New York at $1,216.20 spot, down $8.60 from Thursday's close.  Net volume was very decent at 167,000 contracts.

Brad Robertson sent us the 5-minute tick gold chart once again---and you can see the big volume spike that occurred at 10:45 a.m. in New York, which shows as 8:45 a.m.MDT on this chart.  The big volume spike was on the secondary low, not the absolute low.

After the obligatory down tick at the 6 p.m. open in New York on Thursday evening, the silver price never got a sniff of positive territory after that---and followed almost an identical path to gold except for the fact that the HFT boyz and their algorithms really put the boots to the technical funds, as they closed silver just off its low tick of the day.

The high and low were recorded as $18.595 and $17.78 in the December contract.

Silver closed in New York yesterday at $17.79 spot, down a whopping 73 cents from Thursday's close.  Net volume was very heavy at 64,000 contracts.

Platinum was up a few bucks by noon in Hong Kong trading, but that was its high---and it slowly got sold down, hitting its low about 12:45 p.m. EDT---and about 45 minutes after the Zurich close.  The boyz close platinum down 9 bucks.

Palladium's high was also at noon in Hong Kong---and the decline in price from there was very orderly until around 10:20 a.m. EDT.  The HFT boyz and their algorithms showed up---and that was that, as they hit palladium for another 18 bucks.

The dollar index closed late on Thursday afternoon in New York at 84.29---and then traded flat until a few minutes after 12 o'clock noon Hong Kong time---and then away it went to the upside once again.  By the close of trading, the index had gained 49 basis point, everything it lost on Thursday, and closed at 84.78.

The gold stocks opened down a bit---and continued lower, hitting their low tick a few minutes before 2 p.m. EDT, which more or less coincided with the low tick in gold.  The HUI closed down another 1.69%.

The silver equities also opened down a hair, but hung in there until around 10:15 a.m. before heading lower with a vengeance---and there was no recovery at all, as they close on their absolute low tick.  Nick Laird's Intraday Silver Sentiment Index closed down another 3.32%.  The silver stocks have now given back all of their gains for 2014.

The CME Daily Delivery Report showed that 5 gold and 149 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The biggest short/issuer was Jefferies with 147 contracts---and there were about a dozen long/stoppers---and you can take a look at yesterday's Issuers and Stoppers Report linked here, if you wish to see the list. 

The CME Preliminary Report for the Friday trading session showed that 24 gold and 403 silver contracts are still open in the September contract---and don't forget to subtract the figures in the previous paragraph to get the up-to-date number.

There was a withdrawal from GLD yesterday.  This time it was 250,032 troy ounces---8 metric tonnes of the stuff.  And as of 1:18 a.m. EDT this morning, there were no reported changes in SLV.

The U.S. Mint had a sales report.  They sold 2,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 100,000 silver eagles.

Month-to-date the mint has sold 39,500 troy ounces of gold eagles---8,000 one-ounce 24K gold buffaloes---1,760,000 silver eagles---and 400 platinum eagles.  Based on these sales numbers, the silver/gold ratio for the month stands at 37 to 1.

There was a very decent amount of gold shipped out of the Comex-approved depositories on Thursday---160,755 troy ounces to be exact---with virtually all of it coming out of Canada's Scotiabank.  Nothing was reported received---and the link to that activity is here.

In silver, it was almost the same thing, as 282,291 troy ounces were shipped out---and with the exception of a few thousand ounces, it came out of Scotiabank as well.  Nothing was reported received there, either---and the link to that activity is here.

Here's a very sad looking 5-year silver chart---and what it shows is that the closing price on Friday was the lowest in four year---and it takes us all the way back to the beginning of the runaway bull market in silver in September of 2010.  All the gains in the interim have vanished thanks to JPMorgan et al.

The Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, was pretty much in line with the expectations that both Ted Butler and I had.

The Commercial net short position in silver fell by 6,394 contracts, or 32.0 million troy ounces.  The Commercial net short position is now down to 117.8 million troy ounces, which is still shy of its low back in late May/early June.  The managed money long selling/short buying accounted for 5,925 contracts of the decline during the reporting week.  Ted pegs JPMorgan's short-side corner in the Comex gold market at 13,000 contracts, down a thousand from the prior week's report.

The Commercial net short position in gold dropped by 21,712 contracts or 2.17 million ounces---and the new and improved Commercial net short position now stands at 7.62 million troy ounces.  The Managed Money in the technical fund category accounted for 19,912 contracts of the total amount.  As Ted Butler says, it's the Commercial traders running the Managed Money up and down through the moving averages that is determining the price, which they do for fun, profit---and price management purposes.  Supply and demand fundamentals no longer matter.  Ted says that JPMorgan's long-side corner in the Comex gold market was unchanged at 25,000 contracts, or 2.5 million ounces, compared to the prior week's report.

And, without doubt, there has been massive improvement since the Tuesday cut-off.  Of course we'll have to wait until next Friday's report before we see how much it was.

Here's Nick Laird's "Day of World Production to Cover Comex Short Positions" of the 4 and 8 largest traders in all physical commodities traded on the Comex.  Three of the four precious metals are still permanently pinned to the right-hand side of this chart---and gold would be there as well, except for JPMorgan's long-side corner in that metal.

Since the 20th of the month fell on a weekend, the good folks over at The Central Bank of the Russian Federation updated their website with August's data yesterday.  It showed that they increased their physical gold reserves by another 300,000 troy ounces during that period---and they now hold 35.8 million troy ounces in their reserves.  Here's Nick's most excellent chart showing that change.

Despite my best efforts, I have a decent number of stories for you today.

¤ Critical Reads

Marc Faber: There's a bubble in everything---everywhere!

Even after the Dow and the S&P 500 closed at new all-time highs, closely followed contrarian Marc Faber keeps sounding the alarm.

"We have a bubble in everything, everywhere," the publisher of The Gloom, Boom & Doom Report told CNBC's "Squawk Box" on Friday. Faber has long argued that the Federal Reserve's massive asset purchasing programs and near-zero interest rates have inflated stock prices.

The catalyst for a market decline, as he sees it, could be a "raise in interest rates, not engineered by the Fed," referring an increase in bond yield

There are two short interviews back to back here, both totaling a bit over 4 minutes---and they run concurrently.  The first reader through the door with this CNBC video clip yesterday, was Ken Hurt.

Household Net Worth Hits Record $81.5 Trillion In Q2 Driven By Stock Market Surge

[Early Thursday], the Fed released its latest Z.1 (Flow of Funds report) for the second quarter, there were no surprises: thanks to the relentless liquidity injections by global central banks (charted here) resulting in record stock market levels, total household net worth rose once more, increasing by $1.4 billion in the quarter (up from a downward revised $1.2 billion in the previous quarter) to a new record high $81.5 billion.

This was the result of a $95.4 trillion in total assets, offset by $13.9 trillion in liabilities, mostly mortgage debt of $9.4 trillion, as well as some $3.2 trillion in consumer credit, which may or may not account entirely for the student debt bubble.

But perhaps most importantly, the percentage of financial assets as a percentage of total, just rose to the record high level it has never in the past surpassed: 70.3%. As the chart below shows, this is the highest proportion that financial assets have ever hit in the entire history of modern US society. Every time financial assets hit 70.3% of total, either housing values finally pick up and offset the disproportional increase in financial assets, or there has been a crash in financial asset values themselves.

This article, with some excellent charts, appeared on the Zero Hedge website at 1:46 p.m. EDT on Thursday---and it's the first of two stories in a row that I found in yesterday's King Report.

Doug Noland: Only for wonks

Of late, talk has been that the ECB’s balance sheet would come to the rescue. Count me as deeply skeptical of all the bullish ECB “QE” liquidity propaganda. As such, I see a world of somewhat waning liquidity abundance with an increasingly destabilizing King Dollar bias. There’s risk that escalating EM stress and attendant “hot money” outflows lead to a self-reinforcing de-risking/de-leveraging dynamic. EM companies and countries at this point have way too much dollar-denominated debt. At some point, contagion might negatively impact market expectations for the global economy at large, perhaps leading to a more generalized global “risk off” backdrop.

From the Z.1 we know that Security Credit was up $161bn year-over-year, or 13.7%, to a record $1.333 TN. Fed Funds and Repurchase Agreements were little changed y-o-y at $3.792 TN. Security Broker/Dealer Assets were actually down about 5% y-o-y to $3.388 TN. Funding Corps were down 3.3% y-o-y to $1.312 TN. Clearly, securities leveraging remains integral to overall Credit system operations.

At the same time, there are important sources of global leverage outside the purview of Fed monitoring and Z.1 reporting. There are myriad avenues for “carry trades,” securities shorting and “off-shore” securities financing vehicles, not to mention the murky world of (hundreds of Trillions of) derivatives.

Doug's commentary was posted on the prudentbear.com Internet site on Friday evening---and it's a must read that I'll deal with later today.  I thank reader U.D. for sending it along.

The Scotland Referendum: Who Voted How And Why?

The following post-referendum poll from Lord Ashcroft does a good summary of who voted how and why. However, the most telling distinction is the following:

  • Voters aged 16-17: YES: 71%; NO: 29%
  • Voters aged 65+: YES: 27%; NO: 73%

How will last night's vote look like in 5, 10 or 15 years when today's 17 year olds are Scotland's prime demographic?

This short Zero Hedge article has an excellent set of numbers---and it's worth a minute of your time.  I thank reader U.D. for sharing it with us.  There was a story about this subject as well posted on the euobserver.com Internet site yesterday.  It's headlined "Scotland's referendum - nothing and everything changes".  My thanks go out to Roy Stephens for that one.

Spain, Italy, Belgium: Battle lines drawn for independence after Scottish vote

The Scots have lost their stab at independence by a tiny 10-percent margin. Analysts predicted that only a ‘yes’ vote would send waves throughout Europe, but the dire economic situation of other independence-seeking regions can’t be eclipsed so easily.

In a historic referendum on Thursday, Scotland voted 55 to 45 percent to stay in the four-nation United Kingdom.

This 'yes' vote, many have said, would become a major precedent for others to follow - but can this apparent loss by an already prosperous Scotland serve as a demotivator for others? After all, according to the Venetians, or the Catalans, the far more centralized nature of their own main governments - just one factor to consider here - puts them in a markedly different situation to that of Scotland.

This article appeared on the Russia Today website at 9:47 a.m. Moscow time on their Friday morning, which was 1:47 a.m. EDT---and it's courtesy of Roy Stephens.

Catalonia to press ahead with referendum after Scottish No

Catalan leader Artur Mas has said the Scottish referendum has reinforced his plan to hold a similar vote at home.

Speaking in Barcelona on Friday (19 September), he noted that the devolved Catalan parliament is likely to pass a law on the referendum later the same day.

“I will sign the decree on this consultation in Catalonia. In fact, I will call this consultation on 9 November as agreed some months ago with the majority of Catalan political forces”.

He said he would have preferred it if Scotland had voted Yes.

This news item showed up on the euobserver.com Internet site at 4:06 p.m. Europe time yesterday---and it's the second story in a row from Roy Stephens. 

Europe's Banks Show Tepid Interest as E.C.B. Begins Program of Cheap Loans

Banks borrowed less than expected from the European Central Bank in a disappointing start for a program intended to encourage more lending to businesses and households and to pump money into the ailing eurozone economy.

The central bank said on Thursday that it would allot nearly 83 billion euros, or about $107 billion, to 255 commercial banks next week. Estimates of how much money banks would borrow had varied widely, but many analysts said before the announcement that anything less than €100 billion would be a disappointment.

The program is part of a broader effort by the central bank to inject as much as €1 trillion into the eurozone economy, and the borrowing data on Thursday was closely watched as an indicator of whether the central bank would be able to meet its goal. The loans are meant to drive down the cost of borrowing and encourage lending, especially in countries like Italy and Portugal, where a lack of credit has impeded economic growth.

This article appeared on The New York Times website on Thursday sometime---and it's something I found in yesterday's edition of the King Report.

CIA puts on hold all spying operations in Western Europe

The CIA’s European Division has halted its operations in Western Europe in response to several spying scandals in Germany and the continent’s negative reaction to the revelations of spying by the National Security Agency on European leaders and citizens.

The stand-down order has been in effect for two months. It was designed to give CIA officers time to examine whether they were being careful enough and to evaluate whether spying on allies is worth running the risk of discovery, a U.S. official who has been briefed on the situation told the Associated Press.

Case officers in friendly European countries have largely forbidden from undertaking "unilateral operations" such as meeting with sources they have recruited within allied governments. The continent’s countries have long been used as safe venues to conduct meetings between CIA officers and sources from the Middle East and other high priority areas; those encounters have been rerouted to other locales.

The spying stand-down comes at an inopportune time, AP reported, citing worries over Western extremists heading to Syria and Iraq to join with the Islamic State, as well as the standoff with Russia over influence on Ukraine and the independence movement in the eastern part of the country. Tensions have grown between the US and its European allies since Edward Snowden's NSA revelations in June 2013.

This very interesting story appeared on the Russia Today website at 6:20 p.m. Moscow time on their Friday evening---and it's another contribution from Roy Stephens. 

War over? Both sides in Ukraine conflict sign treaty banning military action

Kiev and self-defense forces signed a memorandum aimed at effectively halting all fighting in eastern Ukraine after talks in Minsk. It creates a buffer zone, demands a pullback of troops and mercenaries, and bans military aviation flybys over the area.

The signed memorandum consists of nine points, former Ukrainian president Leonid Kuchma told journalists following peace talks in Minsk, Belarus.

“The first one is stopping the use of weapons by both sides, the second is terminating new formations of units on military bases as of September 19. The third is banning the use of all types of weapons and offensive action,” Kuchma said.

The agreement outlines a buffer zone of 30 km (18.6 miles) and bans all military aircraft from flying over part of eastern Ukrainian territory, except for the OSCE's aerial vehicles, Kuchma told RIA Novosti following the meeting.

This story showed up on the Russia Today website at one minute to midnight Moscow time on their Friday night, which as 3:59 p.m. EDT.  I thank Roy Stephens for sending it our way.

Third convoy carrying Russian humanitarian aid crosses Ukrainian border

The 200 trucks are carrying foods, including cereals and canned products, power generators, medical supplies, warm clothes and bottled drinking water - 2,000 tonnes all in all.

Before the convoy’s departure Ukrainian customs officials and International Red Cross representatives were repeatedly invited to inspect the cargo. Both refused without offering any reasons.

It is a third batch of Russian humanitarian aid being delivered to the southeast of Ukraine by truck The first two convoys delivered a total of four thousand tonnes humanitarian supplies to Lugansk.

This article showed up on the itar-tass.com Internet site at 5:22 a.m. Moscow time on their Saturday morning---and once again I thank Roy Stephens for finding it for us.

G20 states are for Russia’s participation in G20 November summit — official

The Group of Twenty (G20) members have supported Russia’s participation in the G20, Australian chief treasurer Joe Hockey told reporters on Friday. He will preside over the G20 meeting of foreign ministers and heads of Central Banks that will be held on September 20 -21.

Asked whether Australia would try to block Russia’s participation in the G20 summit in Brisbane due in November, Hockey said not Australia, but G20 members take decisions on anybody’s participation in G20 work.

The G20 member countries say the door should not be closed, and Russia should take part in the forum. The dialogue should be continued, according to all the G20 member countries. He said G20 is an economic, not a political forum.

This article appeared on the itar-tass.com Internet site at 8:34 a.m. on Friday morning Moscow time---and it's another story from Roy Stephens.

China Fines GlaxoSmithKline $492 Million, Seeks to Jail Former Manager for Bribery

Drug maker GlaxoSmithKline was fined $492 million on Friday for bribing doctors in China in the biggest such penalty ever imposed by a Chinese court.

The court sentenced the company's former China manager, Briton Mark Reilly, and four Chinese co-defendants to prison but postponed the sentences for two to four years, suggesting they may never be served. The court said it granted leniency because the defendants confessed.

The case, first publicized in mid-2013, highlighted the widespread use of payments to doctors and hospitals by sellers of drugs and medical equipment in a poorly funded health system that Chinese leaders have promised to improve. The fine is the largest such penalty ever imposed by a Chinese court.

This very interesting article showed up on the newsmax.com Internet site at 7:38 a.m. EDT on Friday---and it's the first offering of the day from West Virginia reader Elliot Simon.

Japan postpones new sanctions against Russia — source

Japan has decided to delay the announcement of a new round of sanctions against Russia over the Ukraine crisis, which had been earlier planned for Friday, senior government sources have told ITAR-TASS.

The postponement comes as Tokyo wants to follow Moscow’s reaction towards the move. However, Japan has not yet decided to call off the sanctions and is expected to detail the restrictions later.

The announcement could be made next week during the visit of Japanese Prime Minister Shinzo Abe to New York, where he will attend the session of the United Nations General Assembly.

Japanese media reports said Tokyo was due to announce the expansion of sanctions against a range of individuals from Russia and the self-proclaimed Luhansk and Donetsk People’s Republics, to be subject to the asset freeze and visa ban.

This article put in an appearance on the itar-tass.com Internet site on Friday morning Moscow time---and it's the final offering of the day from Roy Stephens, for which I thank him.

Japan government cuts economic view, warns of stalling consumption

Japan's government cut its overall economic assessment for the first time in five months as private consumption is struggling to recover from the slump caused by April's sales tax hike, clouding the outlook for a sustained recovery.

The government on Friday cut its view on private consumption, which accounts for about 60 percent of the economy, saying that consumer spending is seen pausing although a pick-up trend remains intact.

The assessment followed a run of weak indicators, including falling household spending, which raised doubt about the strength of an expected bounce in the current quarter - a crucial factor for Prime Minister Shinzo Abe's decision in December on whether to proceed with a second tax rise next year.

So much for rampant money printing.  A Japanese bond isn't worth the paper it's printed on.  This Reuters story, filed from Tokyo, was posted on their website at 12:25 p.m. EDT on Friday---and it's another article I found in yesterday's edition of the King Report.  It's worth reading.

Three King World News Blogs

1. Art Cashin: "The Next 7 Days May Trigger a Global Stock Market Crash"  2. Bill Fleckenstein: "Responds to Outrageous CNBC Interview"  3. John Ing: "Russians Stunned as Chinese Leader Pushed Gold Backed Yuan

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

Lawrence Williams: The future for gold is physical

At an event [on Thursday] to mark the start of Shanghai Gold Exchange’s gold trading in the city’s free-trade zone (SFTZ) and the creation of the International Board, the Shanghai Gold Exchange and the World Gold Council have stated they will be actively cooperating to develop the SFTZ as an international hub for gold and to work together to develop the gold market in the region. The event was attended by Zhou Xiaochuan, Governor of the People’s Bank of China, Mr. Xu Luode, the Chairman of Shanghai Gold Exchange and Aram Shishmanian, CEO of the World Gold Council.

This collaboration follows on from a partnership signed between the China Gold Association and the World Gold Council in Beijing last week at the China Gold Congress and Expo, which they jointly sponsored. This partnership seeks to promote further international enterprise in China and to enhance the global understanding of China’s role within the global supply chain.

As we commented on the report concerning WGC and PBoC co-operation, one hopes these co-operations are close and will thus help lift the veil on some of the statistical anomalies that beset analytical reports on the massive Chinese gold sector.

This commentary by Lawrie was posted on the mineweb.com Internet site on Thursday---and is worth reading.

Julian Phillips: Of course gold is manipulated -- the London Gold Pool, 1961-68

In his latest commentary about gold market manipulation, Julian Phillips of the Gold Forecaster letter reviews the establishment of the London Gold Pool, the gold market-rigging mechanism of the Western central banks in the 1960s. The U.S. dollar survived the gold pool's collapse, Phillips writes, because the dollar was still required to purchase oil from the Middle East.

I found this gold-related story embedded in a GATA release yesterday---and I thank Chris Powell for writing the above paragraph of introduction.

What are your questions for former Fed Chairman Alan Greenspan in New Orleans?

GATA again will have a big part in the New Orleans Investment Conference this year, what with GATA Chairman Bill Murphy and your secretary/treasurer making presentations, your secretary/treasurer debating Casey Research founder Doug Casey about whether the gold market is manipulated, and former Federal Reserve Chairman Alan Greenspan not only speaking but taking questions from the audience.

Conference sponsor Brien Lundin of Gold Newsletter and the Jefferson Companies in Louisiana is asking for help in devising questions for Greenspan, and GATA has appended his appeal.

This GATA release from yesterday is worth your time, if you have any left, that is.

Silver’s ETF Demand Outpaces Gold by Most Ever

Investors in exchange-traded funds backed by silver have stayed loyal to the metal longer than those who bought gold.

The CHART OF THE DAY shows shares outstanding for the biggest U.S. silver ETF surpassing those for the nation’s largest gold fund by the most since 2006, when the iShares Silver Trust was created. Retail buyers are sticking with silver even as prices fell 4.4 percent this year, the most of any precious metal. Gold’s 2 percent gain wasn’t enough to halt declines in selling, and assets in the SPDR Gold Trust are set for a second annual loss.

“The perception is that silver will do well, and should outperform gold as the economic recovery strengthens,” Tom Kendall, the head of commodities research at Credit Suisse in London, said in a telephone interview. “Belief in silver’s dual properties, as a financial asset and also as an industrial metal, appears to remain strong.”

Well, dear reader, there's nothing in here that you don't already know, as Ted Butler and I have been talking about this for several months already. The reasons given for why silver is pouring into SLV is mostly bulls hit, but it's nice to see that at least one news outlet has considered it worth featuring.  This silver-related article was posted on the Bloomberg website at 5 p.m. MDT on Thursday---and I thank Elliot Simon for bringing it to our attention.

¤ The Funnies

The first photo is of an osprey that reader Mark O'Brien sent me yesterday.  We met at the Casey Conference here in San Antonio---and he's provided a photo for us before---and this one is certainly worth sharing as well.  The second is an echidna that Nick Laird found wandering around his yard---and since most won't have the foggiest idea of what they are, it's worth posting as well. 

¤ The Wrap

It occurred to me that there were two separate warm up games in which silver ran to $50; in April 2011 and thirty years before that in 1980, when the Hunt Brothers were found to have manipulated the price of silver higher. In fact, the long term chart of silver is defined by the two sharp surges to $50 on those two occasions, amid years of flat or declining prices, not dissimilar to the past three and a half years. To my knowledge, few other commodities have that unusual double spike in price that exists in silver.

More remarkable is that each silver price run to $50 came from extremely low price levels existing in the years before the two price spikes. In other words, when silver does run, history indicates that it runs like it is on fire; racking up the biggest percentage gains of all. Those two facts alone – that silver ran to $50 twice and the gains far exceeded the historic gains of any commodity (or market) – should be enough to attract investors at current depressed prices. After all, no one can deny that silver can’t go to $50 again, seeing how it’s been there twice already. And if it does run again, the percentage gains will likely exceed any other commodity or market. - Silver analyst Ted Butler: 17 August 2014

While I was sitting around the dinner table with a group of my readers who were kind enough to come to the conference, two names came up while we were talking about my pop 'blasts from the past'.  Those names were Paul Anka and Carlos Santana.  So rather than choose, here's one by each.  For Paul Anka click here---and for Carlos Santana click here.

The subject of classical guitar also came up, as did one of my recent 'blast from the past' featuring that instrument, so here's another.  It's not exactly classical---but it's a gas!  The link is here.

Well, it was another unhappy day for precious metal enthusiasts as da boyz and their algorithms worked their magic once again---and even I was taken aback by the pounding that JPMorgan et al handed to silver.  But that is their problem child---and the only question remaining is "are we at the bottom yet?"

As both Ted and I have mentioned on several occasions, it's not the price at the low---it's the number of long contracts that JPMorgan et al can get the brain-dead/black-box technical funds to sell, along with the number of short contracts that they can entice them into buying at the same time.  We weren't there with yesterday's COT Report, but we should be there now.

And there should be no question as to how we got where we are---and that's because of the paper games played in the Comex futures market, all aided and abetted by the CME Group and the CFTC.  It's flat out illegal, but who's going to stop them?

Here are the 2-year charts for all four precious metals that show you where we are vs. where we've been over the longer term.

But looking forward as I did several times last week, we should now only concern ourselves with how da boyz react when the technical funds begin to cover as the next rally commences.  Will they let the tech funds off easy like they did last time, or will this time be different? 

Stay tuned.

I'm done for the day---and the week.

I'll be here on Tuesday, but that report will be brief as well, as Monday is a travel day---and I get back into Edmonton in the evening.

]]>
Sat, 20 Sep 2014 08:16:00 +0000
<![CDATA[Super-Rich Rush to Buy ‘Italian Job’-Style Gold Bars]]> http://www.caseyresearch.com/gsd/edition/super-rich-rush-to-buy-italian-job-style-gold-bars/ http://www.caseyresearch.com/gsd/edition/super-rich-rush-to-buy-italian-job-style-gold-bars/#When:06:02:00Z "Another day of engineered price declines across the board"

¤ Yesterday In Gold & Silver

Not surprisingly the HFT boyz and their algorithms were busy right from the moment that trading began in New York at 6 p.m. on Wednesday evening, taking gold down another few bucks.  The price recovered from there---and then traded flat until at, or just after, the noon London silver fix on their Thursday morning.  At that point the boyz showed up again and took gold down to a new low for this move down about five minutes before the 8:20 a.m. Comex open.  Gold rallied off that low---and then got cut off at the knees again at, or shortly after the 10 a.m. EDT London p.m. gold fix.  It then traded flat for the remainder of the Thursday session.

The CME Group recorded the low and high ticks as $1,216.30 and $1,228.70 in the December contract.

Gold closed in New York yesterday at $1,224.80 spot, up $1,60 on the day.  Net volume was very decent at 145,000 contracts.

Brad Robertson sent us the 5-minute tick chart for gold----and you can see that more that 90 percent of the volume occurred during the down-up move between the London silver fix and 10:40 a.m. EDT.  Add two hours for New York time.

Silver was subject to the same treatment, so I'll spare you the play-by-play, as the chart pattern was almost a carbon copy of gold's.

JPMorgan et al put the lumber to platinum and palladium as well---and also during the same time period---and they both closed at new lows for this move down as well.  Here are the charts.

The dollar index closed late on Wednesday afternoon in New York at 84.73---and then rallied to its 84.81 high at 8 a.m. Hong Kong time on their Thursday morning.  From there the index slid lower for the remainder of the Thursday trading session---and closed at 84.29---down 44 basis points on the day, giving up a large portion of its gain from the Fed news on Wednesday.

You will carefully note, dear reader, that none of the precious metals gained anything back on Thursday that they lost during the "sell precious metals/buy the dollar index" rampage that went on, on Wednesday.  It never works like that, or rather, it's not allowed to work like that.

The gold stocks opened lower and moved lower until they rallied a bit along with gold once the London p.m. 'fix' was in.  Despite the fact that the gold price traded flat from there, the stocks continued to weaken---and the late-day rally that started minutes before 2 p.m. EDT also sold off a bit into the close as the HUI finished down another 1.32 percent.

The silver equities began the same way as gold, but there was no late-day rally to save them, as Nick Laird's Intraday Silver Sentiment Index closed down another 2.27%.

The CME Daily Delivery Report showed that zero gold and only 6 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 there are 24 gold and 379 silver contracts still open in the September delivery month---minus the contracts mentioned in the previous paragraph.

There were no reported changes in GLD yesterday---and as of 9:38 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The U.S. Mint had another tiny sales report.  They sold 1,500 troy ounces of gold eagles---and that was all.

There were no reported deposits in either gold or silver over at the Comex-approved depositories on Wednesday.  There was a 4,212 troy ounce withdrawal in gold---and 244,249 withdrawn in silver.

In keeping with my schedule in San Antonio, I've kept the number of stories down the bare minimum once again.

¤ Critical Reads

The Fed Fesses Up: After Printing $3 Trillion It Sees No “Escape Velocity”……Ever!

Wall Street’s and the media’s attention was riveted single-mindedly on whether or not the Fed would include in its statement the two words, “considerable time,” the two vaguest, stretchable latex words available that describe absolutely nothing and leave the door wide open for wishful thinkers of every stripe. That’s what the Fed’s gyrations since the financial crisis have so successfully accomplished; they have reduced the market, a place of price discovery, to a crummy joke.

The Fed delivered those two words, but during the press conference, Fed Chair Janet Yellen doused them with so many qualifiers that they’ve become even more meaningless, if that were even possible.

Wishful thinkers still see Yellen as a pure dove, while others worry that she has turned into a closet hawk who is afraid of letting this tsunami of free liquidity inflate asset bubbles and build up risks so immense that even a minor hiccup would bring down the entire financial system once again. And this time, under her watch.

Clearly, FOMC members, and particularly Yellen, would try hard to dodge blame. But after having printed $3 trillion, and after having forced short-term rates to near zero – and below the rate of inflation – for what likely will be more than six years, and after having messed with the markets throughout, they too can imagine that blame for the fiascos these policies might end up causing will be hard to dodge.

This guest commentary by Wolf Richter was posted on David Stockman's website on Thursday some time---and today's first article is courtesy of Roy Stephens.

Dirty Secret of $1 Trillion Loans is When You Get Your Money Bac

Imagine a trillion-dollar market that runs on faxes and phone calls while routinely tying up investors’ money for months before they get any return.

That’s not fiction: It’s the unregulated market for leveraged corporate loans. In a financial system that is increasingly automated, the origination and trading of loans is in the relative dark ages while money pours in from mainstream investors such as Kansas and New York pension plans and mutual funds catering to individuals seeking high yields in an era of near-zero interest rates.

The antiquated structure of a market that’s ballooned from a mere $35 billion in 1997 poses a growing threat, raising the odds of gridlock in a downturn when investors expect to get their money back with a click of a button. As of yet, no regulators have taken responsibility for fixing the deficiency.

This longish, but very interesting Bloomberg article, filed from New York, appeared on their Internet site at 9:29 a.m. Denver time yesterday morning---and it's courtesy of reader Howard Wiener.

CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday.

It was kind of a strange segment.

Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy.

Sounding taken aback, Fleckenstein answered: "I don't misunderstand monetary policy. I closed my short fund in 2009 because I knew the Fed would print money."

"If you want to pursue idiots like the Fed, and their crazy policies, and you think you can get out in time, go for it," Fleckenstein said. 

This article, with the 2:27 minute video clip at the bottom of the page, was posted on the CNBC website at 11:52 a.m. EDT on Tuesday---and I thank reader David Ball for sending it our way.

Scotland Rejects Independence From Britain in a Close Vote

Voters in Scotland rejected independence from Britain in a referendum that had threatened to break up a 307-year union, according to projections by the BBC and Sky early Friday.

The outcome was a deep disappointment to the vocal, enthusiastic pro-independence movement led by the Scottish first minister, Alex Salmond, who had seen an opportunity to turn a centuries-old nationalist dream into reality, and forced the three main British parties into panicked promises to grant substantial new power to the Scottish Parliament.

The decision spared Prime Minister David Cameron of Britain a shattering defeat that would have raised questions about his ability to continue in office and diminished his nation’s standing in the world.

This article appeared on The New York Times website---and Roy Stephens sent it our way very late last night.  Roy also sent a Reuters article about it linked here.

‘Flemish independence: better to become good friends than stay together in a bad marriage’

An independent Flanders with Brussels as its capital will be best for the Flemish people who represent 60 percent of the Belgium population, and provide 80 percent of its economy, Flemish MP Tom van Grieken told RT.

Following in the footsteps of Scotland, Veneto in Italy and Catalonia in Spain, and Belgium’s Flemish region may become the next to hold a referendum on independence. The Flanders area of northern Belgium has been claiming its own sovereignty for years, and if it succeeds, Belgium may be no more, along with its being the symbol of a united Europe.

The 2008 financial crisis has boosted separatism movements in Europe, with rich and developed regions in a number of countries starting to voice their discontent with policies from the capital, and the necessity to feed economically weak regions. However, for such Scotland, Catalonia and Flanders it is also a question rooted in the history of the formation of the countries they belong to.

Dutch-speaking Flanders and French-speaking Wallonia have always been rich and well-developed regions, connected to each other despite language and cultural differences. The artificial creation of the Belgian state put these nations into a difficult situation, forcing them to coexist with people they don’t feel any connections with. Meanwhile, Scotland’s independence vote has inspired the Flemish people with hope to finally create their own state.

This interesting article put in an appearance on the Russia Today website at 11:43 a.m. on their Thursday morning, which was 3:43 a.m. EDT---and it's another contribution from Roy Stephens.

President Poroshenko Comes Calling on Washington—Bearing Big Lies and a Tin Cup

Ukrainian President Petro Poroshenko’s visit to Washington [was] the consummation of a marriage made back in February, when the Obama administration ripped up a compromise agreement between elected president Yanukovich and the rebels who were seeking to overthrow him. Overnight, the U.S. government endorsed the rebels’ seizure of power, and it has not wavered in its support of the coup leadership from that point.

Poroshenko will arrive in town buoyed by Congressional passage of H.Res. 726, a resolution “Strongly supporting the right of the people of Ukraine to freely determine their future, including their country’s relationship with other nations and international organizations, without interference, intimidation, or coercion by other countries.”

The lie is in the very title of the bill, however, as in supporting an anti-democratic coup against a legally elected government, the US has undermined, not supported, the right of the Ukrainian people to “freely determine their future… without interference…by other countries.”

This guest commentary by Daniel McAdams appeared on the David Stockman website on Thursday---and once again I thank Roy Stephens for sending it.

Obama declines to give Ukraine 'lethal aid' despite Poroshenko's plea

President Barack Obama has declined to supply Ukraine with “lethal aide” despite the passionate plea for more military equipment that Ukrainian President Petro Poroshenko made to Congress earlier on Thursday.

During a White House meeting between the two leaders that occurred after Poroshenko’s address to Congress, President Obama said the United States would keep working to mobilize the international community in order for the conflict in Ukraine to be solved diplomatically, Reuters reports.

Following the meeting, Poroshenko said he was pleased with Washington’s help, and expressed hope that the shaky ceasefire in Ukraine would eventually lead to stability and peace.

Earlier in the day, however, Poroshenko suggested that NATO give “special” security status to Ukraine. Addressing the US Congress, he called on Washington to provide Kiev with “more military equipment, lethal and non-lethal” to “keep peace” in the eastern part of his country.

This is the second article from the Russia Today website.  It was posted there at 2:48 p.m. Moscow time yesterday afternoon---and it's also another offering from Roy Stephens.  Roy also sent a link to Poroshenko's speech in front of the Imperial Senate. [I know, it is nauseating, but still, please do watch it.  What Poroshenko is saying is that which the US deep state is thinking, and as such, it deserves our utmost attention (even if that means grabbing a psychological barf bag). - The Saker]---and the link is here

The Tower of Babel Comes to Paris: The Folly of Obama’s “War” on ISIS

U.S. imperialism was once a fearsome force—-mainly for ill. Under the latter heading, Washington’s savage destruction of Vietnam four decades ago comes readily to mind. But now the American Imperium has become just a gong show on the Potomac—even as its weapons have gotten more lethal and its purposes more  spurious and convoluted.

There is no more conspicuous proof than Obama’s quixotic “war” on ISIS. The quote marks are necessary, of course, because the White House insists that this is merely a counter-terrorism project that is not really a war; that the campaign to “degrade, disrupt and destroy” the Islamic State will not deploy a single American soldier—at least not one with his or her boots on; and that the heavy lifting on the ground against the barbaric ISIS hordes will be conducted by a “broad coalition” of so far nameless nations.

In truth, the whole thing is a giant, pathetic farce. There will be no coalition, no strategy, no boots, no ISIS degradation, no gain in genuine safety and security for the American homeland. This is an utterly misbegotten war against an enemy that has more urgent targets than America, but a war which will nonetheless fire-up the already boiling cauldron of Middle Eastern tribal, religious and political conflict like never before. There is no name for what Obama is attempting except utter folly.

Even before Secretary Kerry brought his medicine show to Paris, it was evident there is no coalition of the willing—or even the bought.

This commentary by David Stockman showed up on his website on Thursday sometime---and it's the final contribution of the day from Roy Stephens, for which I thank him.

Jim Rickards on Europe and China

Jim was interviewed on Russia Today's "Boom Bust" program on Wednesday and, as usual he has lots to say.  The interview runs from the 3:40 minute mark to the 11:20 minute mark.  Also on the program following Jim, is Marshall Auerback---and there aren't any flies on him, either.

I thank reader Harold Jacobsen for bringing this interview to our attention.

Three King World News Blogs

The first interview is with David P. out of Europe---and it's headlined "A Major War is Now Raging in the Gold Market"---and the second with Egon von Greyerz is entitled "Here is the Great-Game Changer That Will Shock the World".  And lastly is this commentary by Nigel Farage---and it bears the headline "The Chilling Truth About Putin, Europe and Gold"

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

Super-rich rush to buy 'Italian Job'-style gold bars

The super-rich are looking to protect their wealth through buying record numbers of "Italian job" style gold bars, according to bullion experts.

The number of 12.5 kg gold bars being bought by wealthy customers has increased 243pc so far this year, when compared to the same period last year, said Rob Halliday-Stein founder of BullionByPost.

The bars which are made from pure gold and are worth more than £300,000 each at today's prices of $1,223 (£760) an ounce.

The sales of 1kg gold bars, worth about £25,000 each, has doubled during the three months ended August, when compared to the same period last year, according to ATS Bullion sales figures.

Sales of the more popular gold coins such as the quarter ounce sovereign and one ounce Krugerrand have also doubled this year, according to figures from BullionByPost.

This gold-related news item appeared on The Telegraph's website at 10:45 a.m. BST on Thursday London time---and I found it embedded in a GATA release.  It is, of course, worth reading.

Gold and silver end game is here, Embry tells USA Watchdog

USA Watchdog's Greg Hunter this week interviewed Sprott Asset Management's John Embry about manipulation of the monetary metals markets. "I have never seen it any more intense in terms of pressure in the paper market, which indicates we are near the end and there is something seriously wrong with the system," Embry says.

The interview is headlined "Gold and Silver End Game Here: John Embry" and can be read and watched at USAWatchdog.com Internet site. Harold Wiener was one of the first people through the door with this interview, but I borrowed the above paragraph of introduction from Chris Powell.

China Opens Gold Market to Foreigners Amid Price Ambition

China will give foreign investors direct access to its gold market for the first time today as the biggest-consuming nation seeks to exert more influence over prices while boosting the yuan’s global use.

The Shanghai Gold Exchange will start trading contracts in the city’s free-trade zone that will be linked to its domestic spot market and available to about 40 international members including Goldman Sachs Group Inc. and UBS AG. Access was previously limited to some Chinese units. Gold in China this year cost as much as $31 an ounce more and $42 less than the London spot price, according to data compiled by Bloomberg.

“It’s indicative of the ambition to move the gold market more to where the consumption is,” Victor Thianpiriya, commodity strategist at Australia & New Zealand Banking Group Ltd., said by phone from Singapore. “It makes sense that price discovery occurs in the center of consumption.”

This Bloomberg article, co-filed from Singapore and Beijing, appeared on their website at 8:05 a.m. MDT yesterday---and it's another article I found in a GATA release very early yesterday morning.

¤ The Funnies

¤ The Wrap

This was the real lesson of the 2011 price run – unlike 1980, silver ran to $50 without a big buyer, just as it will likely be on the next big move up. The actions taken in 2011 to smash the price – two $15 declines in a week or less – because they were so in your face, will be hard to replicate in light of how accepted the manipulation premise has become. So many more observers are aware of the silver manipulation today that the actions of 2011 will not be easily replicated. But if you think such outrageous efforts to smash the price will succeed, then the solution is simple – sell at $50.

I don’t think corrupt government and exchange officials will turn back silver at $50 the next time it gets there; leaving only one resolution, namely, that the price must burn itself out to the upside. Here’s how the price of silver will truly explode – with no artificial exchange interference, all the buying from both investors and industrial users must be satisfied by actual selling or because the price gets too high to consider buying. In that case, almost by definition, the price must go a lot higher than $50. - Silver analyst Ted Butler: 17 September 2014

Well, dear reader, it was another day of engineered price declines across the board in all four precious metals---with all of them occurring during the same time frame, which is hardly indicative of a free market.  Here are the 6-month charts for all four precious metals, so you can see the salami slicing both on Thursday and Wednesday.

The other interesting aspect of Thursday's new lows was the fact that da boyz didn't have the fig leaf of a skyrocketing dollar index to hide behind.  This time they had to do the dirty with the dollar heading down to a 44 basis point loss on the day vs. the 66 basis point rally it had on Wednesday.  Pinning the rise and fall of the precious metals on what's going on with the dollar index is such bulls hit---but we hear it a lot.

Just like yesterday, I'm filing early again---and as I write this paragraph, it's 12:30 p.m. Hong Kong time---and the London open is still two and a half hours away.  The gold price got sold down five bucks or so in early morning trading in the Far East, but then rallied back above unchanged by noon in Hong Kong---and has now been sold back down to unchanged.  It was the same in silver, but it's now about a nickel below its Thursday closing price in New York.  Platinum and palladium aren't doing much.  Gold volume is already north of 26,000 contracts, which is monstrous for this time of day---and silver's volume is already at 4,200 contracts, which is more than double what it was this time yesterday.  The dollar index isn't doing a thing.

Today we get the Commitment of Traders Report for positions held at the close of Comex trading on Tuesday---and Ted and I are hoping for a more impressive set of numbers than we got in last Friday's report.  It's too bad that Wednesday and Thursday price action won't be included, as both days set new lows yet again for this move down in all four precious metals---and on big volume as well.  But whatever the numbers are, I'll have them for you tomorrow.

And as I sent this off into cyberspace at 2:14 a.m. EDT, I see that the gold price is jumping around a bit, silver is down---and platinum and palladium still aren't doing much.  Gold volume is now over 40,000 contracts, an astounding number for this time of day---and silver's volume is north 6,000 contracts, a pretty big number as well. The dollar index is up a handful of contracts.

That's all I have for today.  Since today is Friday, I shan't hazard a guess as to how the trading action will go for the remainder of the day, but nothing will surprise me, nor should it you.

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

]]>
Fri, 19 Sep 2014 06:02:00 +0000
<![CDATA[Eric Sprott: Get Your Money ‘Out of Banks and Into Something Tangible’]]> http://www.caseyresearch.com/gsd/edition/eric-sprott-get-your-money-out-of-banks-and-into-something-tangible/ http://www.caseyresearch.com/gsd/edition/eric-sprott-get-your-money-out-of-banks-and-into-something-tangible/#When:05:52:00Z "I'd forgotten all about the FOMC meeting"

¤ Yesterday In Gold & Silver

The gold price didn't do much during most of the Wednesday trading session.  But that all changed at precisely 2 p.m. EDT when Janet spoke---and that was that.  The initial down spike at that time didn't amount to much, but about forty minutes later the HFT boyz put in an appearance and quickly had gold down to a new low.  The sell-off ended at precisely 4 p.m. EDT---and from there it traded sideways into the 5:15 p.m. close of electronic trading.

The high and low ticks were recorded by the CME Group as $1,240.50 and $1,222.00 in the December contract.

Gold finished the Wednesday session at $1,223.20 spot, down $11.70 from Tuesday's close.  Net volume was 125,000 contracts with a big chunk of that occurring between 2 and 4 p.m. in New York.

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

Brad Robertson sent along the 5-minute tick gold chart---and you can see the big volume on the engineered price decline.  Don't forget to add two hours for EDT.

The silver chart was very similar except for a brief [and capped] rally at the Comex open.  Then it traded sideways until 2 p.m.---and you already know the rest.

The high and low in silver yesterday were recorded as $18.80 and $18.49---however, it wasn't a new low for silver, as that would be tough to do, as the metal is basically sold out to the downside.

Silver closed on Wednesday at $18.52 spot, down 16.5 cents from Tuesday.  Net volume was 32,500 contracts.

And here's the New York Spot Silver [Bid] chart---and for the most part, it looks similar to gold's.

Platinum hit its high of the day about half an hour before Zurich opened---and it was all down hill to its 4:30 p.m. EDT low.  It recovered a few bucks into the close---and it, too, hit a new low for this move, down 13 bucks on the day.

Palladium hit its high just before lunch in Zurich---and it, like platinum, got sold down as well, closing almost on its low, down an even ten bucks---but nowhere near a new low.

The dollar index closed late on Tuesday afternoon in New York at 84.07---and traded basically flat until a few minutes before Yellen opened her mouth at 2 p.m.  The dollar rallied---and then retreated but, once again, it looked like the HFT boyz spun their algorithms---and away went the dollar to the upside.  I'm sure there was a certain amount of short covering involved, but it didn't start by itself.  The dollar index closed at 84.73---up 66 basis points on the day---and massively in overbought territory.

And here's the 3-year dollar index to put what's currently happening in some sort of historical perspective.

The gold stocks traded a tad lower for most of the New York session yesterday, but after the initial sell-off at 2 p.m. EDT, they had the audacity to rally into positive territory before the HFT boyz and their algorithms showed up---and it was all over, except for the crying, as the HUI closed down 2.45%.

The silver stocks followed an identical pattern, but Nick Laird's Intraday Silver Sentiment Index closed down 'only' 1.88%.

The CME Daily Delivery Report showed that only 1 gold and 9 silver contracts were posted for delivery within the Comex-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that there are 28 gold contracts still open in September, down 4 contracts from yesterday's report.  In silver, there are 389 contracts still open, after 233 contracts were subtracted for the deliveries posted for today.

There were no reported changes in GLD yesterday but, once again, there was another big deposit into SLV.  This time an authorized participant added 959,072 troy ounces of the stuff.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the latest activity in their gold and silver ETFs---and they're still going down.  As of the week ending last Friday, their gold ETF shed another 7,507 troy ounces---and their silver ETF dropped by 99,636 troy ounces. 

There was a tiny report from the U.S. Mint yesterday. They sold 3,000 troy ounces of gold eagles---and that was all.

There was no in/out movement in gold over at the Comex-approved depositories on Tuesday.  However, silver more than made up for it as 591,510 troy ounces were received---and an eye-watering 2,447,550 troy ounces were shipped out.  The deposit was at CNT---and 90 percent of the withdrawal was from Brink's, Inc.  The link to that action is here

The in/out movement in Comex silver, along with the continued deposits into SLV are simply stunning---and it's for good reason that Ted Butler can't figure out why more people aren't talking about it, as this is big news.

While on that subject, here's a timely chart that Nick Laird slid into my in-box yesterday.  It shows the total weekly silver holdings of all transparent silver ETFs---and the big increase in the last couple of months [to a new all-time high] is all because of the silver pouring into SLV.

I have less stories today, but I hope you find the odd one of interest.

¤ Critical Reads

Yellen: Fed balance sheet to take years to shrink

Federal Reserve Chair Janet Yellen says "it could take until the end of the decade" to shrink the Fed's record investment portfolio to more normal levels.

The Fed's response to the 2008 financial crisis has swollen its balance sheet to more than $4.4 trillion from less than $1 trillion roughly six years ago. Fed officials responded to the downturn in the economy with three rounds of bond purchases to try to hold down long-term borrowing rates to spur spending.

The Fed plans to end its latest round of buying Treasurys and mortgage bonds after its next meeting in October. It would then look to reduce its balance sheet once it begins raising a key short-term rate from its record low near zero.

The above three paragraphs are all there is to this brief AP story from yesterday---and it's courtesy of West Virginia reader Elliot Simon.

U.S. House passes Fed audit bill but measure is seen doomed in Senate

The U.S. House of Representatives today overwhelmingly passed a bill that would open up Federal Reserve monetary policy decisions to a congressional audit, reviving a measure passed in 2012.

But the legislation approved by the Republican-dominated House is expected to meet a fate similar to its predecessor's: death in the Democratic-controlled Senate.

The "Federal Reserve Transparency Act" passed 333-92 in a bipartisan vote. It is largely similar to the 2012 "Audit the Fed" bill championed by former libertarian Representative Ron Paul.

I thank reader Brad Robertson for sending me this Reuters story yesterday, but I borrowed the headline from a GATA release. 

Food-stamp enrollment in Illinois outpaces job creation by nearly 2-to-1

Illinois’ sluggish jobs recovery is coming at a tremendous cost. For every post-recession job created in Illinois, nearly two people have enrolled in the Supplemental Nutrition Assistance Program, commonly known as food stamps.

In the recession era, the number of Illinoisans dependent on food stamps has risen by 745,000. Without adequate job creation in the state, Illinois families have had no choice but to depend upon food stamps to put bread on the table.

The Prairie State has had the worst recovery from the Great Recession of any state in the U.S. There are nearly 300,000 fewer Illinoisans working today than in January 2008, and 170,000 fewer payroll jobs.

This interesting article was posted on the illinoispolicy.org Internet site on Tuesday---and I found it in yesterday's edition of the King Report.

Scottish independence vote spurs Texan secessionists

Thursday’s vote to decide whether Scotland should be independent of the United Kingdom has bolstered Texans campaigning to split the state from the United States.

Texas Nationalist Movement president Daniel Miller, who wants the state’s legislature to put the secession question on a state-wide ballot, said Scotland’s referendum is a positive sign for his movement.

“If Scotland can do it, so can Texas,” Miller told Reuters. The top US cattle- and oil-producing state would be the 12th largest economy in the world, larger than Mexico or Spain, said Miller, whose organisation has campaigned for secession since the late 1990s.

Miller said Scotland’s referendum has increased interest in the Texas movement and the fact that a free Texas would lose big federal institutions like NASA and multiple military bases was of no concern to him.

“Win or lose, the Scottish referendum is both serving as a source of inspiration and information about what’s happening here in Texas,” Miller said.

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

$30 million bounty set to identify who shot down MH17 in Ukraine

$30 million will be given to those who help identify the perpetrators of the downing of the Malaysian Airlines flight MH17 in eastern Ukraine that killed all 298 on board, said an independent German fraud investigation company.

Two months have passed since the Malaysia Airlines plane on its way from Amsterdam to Kuala Lumpur was shot-down in eastern Ukraine on July 17 with 298 crew and passengers on board who all died in the crash. A preliminary report into the disaster carried out by Dutch investigators and issued on September 9 said that the MH17 crash was a result of structural damage caused by a large number of high-energy objects that struck the Boeing from the outside.

The investigation company Wifka, based in Schleswig-Holstein, north Germany said that it has been charged with investigating the case of the downing.

Wifka said that the client who preferred to stay anonymous will pay $30 million dollars to whoever provides evidence that identifies those behind the shoot down.

This story appeared on the Russia Today website at 4:11 p.m. Moscow time on their Wednesday afternoon, which was 8:11 a.m. EDT in New York.  It's the second offering in a row from Roy Stephens.  South African reader B.V. sent us a similar story headlined "‘£18million for whoever tells us who shot down MH17’: German detective agency offers huge bounty after anonymous backers provide massive war chest".  It was posted on the dailymail.co.uk Internet site yesterday as well.

Ukrainian Prime Minister Orders to Keep Troops on Full Combat Alert

Ukrainian Prime Minister Arseniy Yatsenyuk said Wednesday he had ordered the defense minister to keep the country's armed forces in the highest state of combat readiness.

"I ask the defense minister and the interior minister [to ensure] full combat readiness and supply everything that the army or the National Guard needs," he said.

Earlier on Wednesday, a Russian Foreign Ministry's human rights representative stressed the countries, truly interested in putting an end to the crisis in Ukraine, must suppress the attempts to derail the ceasefire by what he called the "war party" in Kiev.

This short article appeared on the RIA Novosti website at 4:22 p.m. Moscow time yesterday afternoon---and I thank Roy Stephens for sending it.

Russia Calls Law on Special Status of Donbas 'Step in Right Direction'

Russia views the recent Ukrainian law on special status of parts of the Donetsk and Luhansk region as a step in the right direction, the Foreign Ministry said on Wednesday.

"This document is regarded by Russia as a step in the right direction and in line with the agreements outlined in the Geneva joint statement by Russia, Ukraine, the United States and the EU on April 17, as well as in the Berlin declaration of July 2," the ministry said in a statement.

"It creates a foundation for the launch of a comprehensive constitutional process in Ukraine, including the start of a dialogue aimed at facilitating the national reconciliation in that country," the statement said.

The ministry also expressed hope that all the provisions of the law would be strictly implemented by Kiev authorities in order to avoid a return to confrontation and violence in eastern Ukraine.

This story is also from the RIA Novosti website.  This one showed up there at 6:05 p.m. Moscow time yesterday evening---and once again my thanks go out to Roy Stephens.

Pay up, Gazprom tells Ukraine

The future relationship between Ukraine and natural gas company Gazprom depends on resolving lingering debt issues, the Russian company said.

Gazprom says it's owed $5.3 billion from Ukrainian energy company Naftogaz. Similar debt issues in 2006 and 2009 resulted in suspension of gas deliveries, and Gazprom said it's time to pay up.

"The future relationships between the companies are fully dependent on settling the debt payout issue," the company's board said in a statement Tuesday.

This UPI story appeared on their Internet site at 8:41 a.m. EDT yesterday---and it's another contribution from Roy Stephens.

Cold Turkey: Ankara not keen on supporting US led anti-ISIS coalition

Turkey remains a key ally of the US despite Ankara’s refusal to back Washington’s bombing campaign against the Islamic State in Syria, the State Department said. Ankara is fighting claims that militants are entering Syria and Iraq through its territory.

"When it comes to Turkey, we share a partnership with them that's essential," deputy spokeswoman Marie Harf said on Wednesday.

"They play a key role obviously in the region. And ISIS is a threat to Turkey's security. And they felt the ripple effect from this, quite frankly, more than most countries in the region."

Turkey was present at a meeting last week, where the US tried to get a coalition together to deal with the problem presented by the Islamic State (IS, formerly ISIS/ISIL). Although 10 Muslim nations in the Middle East did sign up, such as Saudi Arabia and Qatar, Turkey abstained.

This news item appeared on the Russia Today website at 4:12 p.m. Moscow time on their Wednesday afternoon---and it's the final offering of the day from Roy Stephens, for which I thank him on your behalf.

People's Bank of China pumping 500bn yuan through SLF to top 5 banks

Sina.com reports that the PBOC will use their Standard Lending Facility to add 500bn in liquidity.

Not sure what to make of this news on the face of it as they have been drawing liquidity out of the system, but nothing around this size.

Update: Sina.com is citing a banking analysist Qui Guanhua whi says they will be providing 100bn yuan to each bank today and tomorrow with a 3 month duration.

It looks like a short term pump rather than anything more worrying but we’ll keep an eye on it.

That's all there is to this story that was posted on the forexlive.com Internet site on Tuesday---and it's another article I found embedded in yesterday's edition of the King Report.

Jim Rickards: Hedge Against the Next Crisis

Cash, gold and “real” assets, such as infrastructure and agricultural resources, are the place to be for investors, argues best-selling author and economist James Rickards.

Rickards, who wrote The Currency Wars and The Death of Money, is adamant that he is not a pessimistic sort of guy. But he has few soothing words to say about the economy.

The global economy, in his view, has been in depression since 2007 and investors may yet face either deflation or much higher inflation – and potentially both.

“Ultimately inflation has to come,” he says.

Jim made these comments when he was speaking in Australia last week---and an executive summary of what he had to say was posted on the afrsmartinvestor.com.au Internet site.  I thank Harold Jacobsen for digging this up for us.

Three King World News Blogs

1. Rick Rule: "Massive Fund Flows Pouring Into Gold and Silver"  2. Gerald Celente: "Propaganda Aside, It's Bad Out There and Getting Worse"  3. Victor Sperandeo: "Legend Warns of Destructive New Policies for U.S. and Europe"  

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

Gold loses luster on Fed; Barclays cuts forecast

Gold prices dipped Wednesday on concerns about a stronger dollar ahead of the Federal Reserve policy statement and in response to Barclays lowering its gold forecast.

But the precious metal may get a reprieve in the short term as the Fed’s statement, released after gold settled, reiterated that the central bank will keep interest rates low for a “considerable time” after it curtails its bond buying program.

As for the vote on Scotland’s independence, Edward Meir of INTL FCStone expects the “no” vote to prevail, but said markets could get dicey if it doesn’t.

“We do expect to see a massive short-covering rally in gold if Scotland votes ‘yes’, an event that should be momentous in terms of the economic fallout on both the U.K. and Europe,” Meir said.

Well, dear reader, the only reason that gold 'dipped' yesterday, is because JPMorgan et al were standing by to make sure it happened.  This marketwatch.com story showed up on their website at 3:22 p.m. EDT yesterday---and I found this article over at the Sharps Pixley website.

Mike Kosares: Scottish secession, not the Fed, just knocked gold down

Gold has been knocked down last night, not by anything said or done by the Federal Reserve yesterday, but by rising fear of Scotland's secession from the United Kingdom and the separatism it is likely to encourage throughout Europe, Mike Kosares of Centennial Precious Metals in Denver writes.

This fear---and the usual algorithmic trading programs, Kosares contends, have goosed the dollar.

This has "Zip-a-Dee-Doo-Dah" about Scotland.  Da boyz always like to hit gold and silver at the 6 p.m. EDT open---and after what they did earlier in the day, the down ticks at the open were 'all the usual suspects' in action, kicking the precious metals while they were down.  This commentary appeared on the usagold.com Internet site yesterday---and I found it over at the gata.org Internet site.

Facing Death in the Search for Silver

This brief 3:47 minute video clip, was 'borrowed' from The Telegraph---and posted on The New York Times website at 3:47 p.m. EDT on Tuesday.  And I was wrong, this is Roy Stephens' last offering of the day.

Sprott's Thoughts: Get Your Money ‘Out of Banks and into Something Tangible’

In a recent call with Eric Sprott, founder of Sprott Inc., he said he was still buying physical gold -and planned to keep buying it for as long as he could. The gold shortage that he talked about in our May interview is still there, and economically, things aren’t getting better. “When people finally decide they want to buy gold, there probably won’t be any gold,” he explained.

This interview by Henry Bonner was posted on the sprottglobal.com Internet site on Wednesday---and it's definitely worth reading.

¤ The Funnies

These two photos of juvenile lesser scaups are two more from Sunday.  I was lucky on the first one, as the bird was dry.  The scaup is a diving duck---and they also have a 'wet' look, which you can see in the group shot that follows---and I apologize for the red reflection in these shots as well, but better that, than no shots at all.  I also have to be careful what I say about ducks from this point onward, as I had an ornithologist correct me on one of my duck photos from a week or so ago.  It was juvenile goldeneye, not a scaup.  I also have at least one English teacher reading this column---and I have to watch my "its and it's" far more carefully, as well.

¤ The Wrap

Almost eerily, the exact same cause (insufficient physical supply) resulted in the silver price run to $50 in 2011. Unlike what occurred in 1980, there was no coordinated manipulative buying in the price run in 2011; only broad-based investor buying, particularly in the publicly traded silver Exchange Traded Funds (ETFs), like SLV. If the crooks at the CFTC and CME had been able to pin the 2011 silver run to futures speculators manipulating the price upward, they would have taken that action by now. The reality is that there was no Hunt-like culprit to blame for the 2011 price run, so the actions taken by the regulators to cause prices to crash were strictly to bail out silver short sellers, particularly JPMorgan; just like occurred in 1980. - Silver analyst Ted Butler: 17 September 2014

I'd forgotten all about the FOMC meeting, so I was shocked when I first say the swan dive in gold and silver once I'd checked into the hotel in San Antonio.  But once I discovered the reason, all became clear.  It was just JPMorgan et al using this opportunity to kick the crap out of these two metals once again, especially if they could set new lows in the process, which they proceeded to do in both gold and platinum.

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

It's not even lunchtime in Hong Kong as I check on trading in the Far East---and it should have come as no shock to anyone that the HFT boyz and their algorithms were standing at the ready when trading began at 6 p.m. EDT in New York yesterday evening.  All four precious metals got smacked---and both gold and platinum set new lows for this move down.

Not surprisingly, volumes in gold and silver are very decent as well---15,000 in gold and 4,000 in silver, which is very high for this time of day.  Of course I'm sure that the technical funds/managed money were pitching longs and going short in all four precious metals, with JPMorgan et al gobbling up the opposite side of those trades.  The dollar index is down 9 basis points as of 11:15 a.m. Hong Kong time.

I'm off to bed, as it's been a very long day---and after yesterday's surprise, nothing will faze me when I check the charts this morning.

See you tomorrow.

]]>
Thu, 18 Sep 2014 05:52:00 +0000
<![CDATA[Gold’s Move From West to East is Said Intended to Rebalance FX Reserves]]> http://www.caseyresearch.com/gsd/edition/golds-move-from-west-to-east-is-said-intended-to-rebalance-fx-reserves/ http://www.caseyresearch.com/gsd/edition/golds-move-from-west-to-east-is-said-intended-to-rebalance-fx-reserves/#When:05:50:00Z "I was not overly happy with the price action on the rallies"

¤ Yesterday In Gold & Silver

Looking at the Kitco chart below, you can see that the gold price made four attempts to rally during the Tuesday trading session, with the most impressive one coming at 11:40 a.m. EDT when the dollar index fell out of bed.  But each time there was a not-for-profit seller in the wings to make sure that those rallies didn't go anywhere, by throwing whatever Comex paper was necessary at them.

The low and high ticks were recorded as $1,232.20 and $1,243.20 in the December contract.

Gold closed in New York yesterday at $1,234.90 up only $2.20 on the day when all was said and done.  Obviously the price would have finished quite a bit higher if JPMorgan hadn't shown up when the did.  Net volume was only 113,000 contracts, so it wasn't overly difficult for 'da boyz' to keep the gold price in line.

After the obligatory down tick at the 6 p.m. open, the chart pattern in silver was more or less the same, so I won't dwell on it much further, but the price capping after the 11:40 a.m. rally is more than obvious.

The low and high ticks were reported by the CME Group as $18.61 and $18.885 in the December contract as well.

Silver finished the Tuesday session at $18.685 spot, up 3 whole cents from Monday. Net volume was 35,500 contracts.

The platinum and palladium charts looked similar in some ways to the gold and silver charts, with the most conspicuous feature in both being the rally at 11:40 a.m. EDT.  Platinum finished up 4 dollars---and palladium closed up 8 bucks.  Here are the charts.

The dollar index closed late on Monday afternoon in New York at 84.25---and then jumped around in a 25 basis point range for a large portion of the Tuesday session---and really looked like it wanted to head south a couple of times, but it appeared that a willing buyer was showing up to catch the proverbial falling knife until it really took at header at 11:40 a.m. EDT.  It's low tick of 83.90 was met with a buyer of last resort---and it rallied back to just above the 84.00 mark, closing the Tuesday session at 84.07---down 18 basis points.  I'm just speculating here, but it's a good bet that the dollar index would have closed significantly lower if left to its own devices, which it apparently wasn't.  Here's the 3-day chart.

The gold stocks opened a bit lower, but then quickly rallied into positive territory once gold rallied in New York.  But more than half of those gains disappeared by the end of the Tuesday session---and the HUI only finished up 0.48%.

The silver stocks got sold down much harder at the open---and the subsequent rally into positive territory didn't hold---as Nick Laird's Intraday Silver Sentiment Index closed down 0.15%.

The CME's Daily Delivery Report showed that zero gold and 251 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  There were only two short/issuers---Jefferies with 196 contracts and Barclays with 55. There's a decent list of long/stoppers---and it's worth a quick look. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that there are still 33 gold contracts open in September---and 609 silver contracts, down 15 from Monday's report.  But from those 609 contracts must be subtracted Thursday's 251 contract delivery.

I wasn't entirely surprised to see a withdrawal from GLD yesterday.  This time an authorized participant withdrew 134,637 troy ounces.  And as of 8:23 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was another sales report from the U.S. Mint.  They sold 3,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 850,000 silver eagles.

Over at the Comex-approved depositories on Monday, they reported that 32.250 troy ounces of gold were withdrawn---and all of it was from Canada's Scotiabank.  Nothing was reported received.  The link to that activity is here.

It was much busier in silver, of course, as 598,756 troy ounces were received---and a smallish 30,417 troy ounces were removed.  The big deposit was at CNT.  The link to that action is here.

As promised, I have a lot fewer stories today---and will probably have less as the balance of the week progresses.

¤ Critical Reads

BlackRock calls for U.S. stock market reforms

BlackRock Inc, the world's largest asset manager, has asked regulators to force exchanges to lower their access fees and require greater transparency of broker dealer-run trading venues known as "dark pools."

The New York-based company outlined a set of proposals aimed at boosting public confidence in the equity markets in a letter on its website to the U.S. Securities and Exchange Commission dated Sept. 12. It said that while the market is "not broken or in need of large scale change," improving current rules would help promote fairness, order and efficiency.

Questions about the safety and fairness of the mostly electronic markets have risen in recent years following a raft of high-profile trading glitches by numerous market participants, causing hundreds of millions of dollars of losses. Those concerns hit the mainstream in late March with author Michael Lewis' book "Flash Boys: A Wall Street Revolt," which claimed the markets were rigged in favor of high-speed traders.

This Reuters story, filed from New York, appeared on their Internet site at 6:01 p.m. EDT on Monday evening---and it's something I found in yesterday's edition of the King Report.

United Offers $100,000 Buyouts to Flight Attendants

United Airlines, the only major U.S. carrier to post a quarterly loss this year, is offering its flight attendants buyouts of as much as $100,000 as it seeks to rein in costs.

Employees who accept the early-exit plan will be eligible for lump-sum payments, said a spokeswoman, Megan McCarthy, who declined to disclose the formula needed to reach the maximum. United also is recalling 1,450 furloughed attendants, most of whom took voluntary leave one to two years ago, she said.

United, a unit of United Continental Holdings Inc., is hoping for at least 2,100 takers from an attendants workforce of more than 23,000 after some senior employees sought the offer, McCarthy said. Attendants back from furlough also will help United bolster airports that were too thinly staffed, she said.

This Bloomberg story, filed from Atlanta, showed up on their website at 10 p.m. Denver time on Monday evening.  Reader Michael Cheverton, who sent me this story, had this to say about it---"Hi Ed, the staggering part about this article is that they say UAL shares are up 31% this year. For an industry that is in shambles and a company that will probably never make a profit again, that says something pertinent about just how screwed up the markets are."  He would be right about that.

France’s ‘super-rich’ take their fortunes to Belgium

A fifth of France’s 100 richest people have moved a total of €17 billion to neighbouring Belgium in recent years, a report showed at the weekend, saying the exodus is largely due to French socialist President François Hollande’s tax policies.

The report, published in Belgian financial daily L’Echo, lists France’s richest man, LVMH CEO Bernard Arnault, media moguls Stéphane Courbit and Bernard Tapie, as well as the Mulliez family, which controls the Auchan supermarket chain, among those who have made the move.

But many of France’s wealthy appear to have crossed over the border only recently.

Many “have shown up in the past three years, in other words since François Hollande was inaugurated as president,” the paper writes, attributing it to the socialist government’s pressure to get the economy back into the black amid soaring unemployment and a ballooning deficit. 

This news item showed up on the france24.com Internet site sometime on Monday---and it's the first contribution of the day from Roy Stephens.

Putin, Merkel Discuss Ukrainian Ceasefire, Gas Deliveries to Europe

Russian President Vladimir Putin and German Chancellor Angela Merkel discussed in a phone call on Monday the situation around the current ceasefire regime and deliveries of Russian gas to Europe, the Kremlin said.

"Putin and Merkel exchanged opinions on the situation with deliveries of Russian natural gas to EU member-states and agreed that the consultations in a three party format should continue," a statement on the Kremlin website said.

The leaders also discussed the development of the situation in Ukraine with focus on the importance of strict compliance with the ceasefire regime by the sides of the internal Ukrainian conflict and the effective monitoring of the situation by the Organization for Security and Cooperation in Europe, the Kremlin said.

This article appeared on the RIA Novosti website at 11:57 p.m. Moscow time on their Monday night, which was 3:57 p.m. in New York.  I thank South African reader B.V. for sharing it with us.

Gas onus on Ukraine, Gazprom says

Reliable natural gas deliveries to Europe depend largely on contractual issues in Ukraine, Russian energy company Gazprom said Tuesday.

Gazprom in June cut gas supplies to Ukraine because of ongoing disputes over pricing and debt. Ukraine pays some of the highest prices for natural gas in the region. Russia had offered a discounted price, though the Ukrainian government said it suspected the offer was politically motivated.

Russia meets about a quarter of Europe's gas needs, though most of that gas runs through the Soviet-era transit network in Ukraine. Similar rows in 2006 and 2009 left European consumers in the cold and Gazprom says the onus is now on Ukraine.

This UPI article put in an appearance on their website at 10:28 a.m. EDT on Tuesday---and it's the second contribution of the day from Roy Stephens.

Russia Central Bank Responds To Domestic Dollar Shortage, Starts Currency Swaps

With the ruble hitting record lows once again today against the U.S. dollar, it appears concerns over U.S. dollar liquidity are growing in Russia. The Russian central bank has unveiled an FX swap operation, allowing firms to borrow dollars in exchange for Rubles for a duration of 1 day (at a cost of 7%p.a.). Of course, this squeeze on USD funding - driven by Western sanctions - will, instead of isolating Russia, force Russian companies (finding USD transactions prohibitively expensive) into the CNY-axis, thus further strengthening the Yuanification of world trade and the ultimate demise of the USD as reserve currency.

And funding sanctions appear to have driven the Central Bank to supply U.S. dollar liquidity into an apparently squeezed market...

As Bloomberg reports---"Sanctions and closed access to foreign-exchange liquidity from the West” is feeding demand for dollars, DmitryPolevoy, chief economist ING.

Foreign-exchange liquidity has “virtually dried out,” with volumes sinking to about $100 million per day, compared with $1 billion to $2 billion previously, according to Natalia Orlova, the chief economist for OAOAlfa Bank in Moscow.

This article appeared on the Zero Hedge website at 2:50 p.m. EDT yesterday afternoon---and it's another contribution from reader B.V.

What draws Modi to China

Modi is due to visit the U.S. in exactly twelve days from now. But there is nothing of the American rhetoric that used to mark a Manmohan Singh visit to the White House.

An idea was thought of initially to propitiate Modi by granting him the privilege of addressing the US Congress. But it has been quietly shelved.

The heart of the matter is that there had been a pronounced 'militarization' of India's strategic outlook through the past 10-15 years, which was a period of high growth in the economy that seemed to last forever.

In those halcyon days, geopolitics took over strategic discourses and pundits reveled in notions of India's joint responsibility with the United States, the sole superpower, to secure the global commons and the 'Indo-Pacific'. 

This longish commentary falls into the must read category, especially for any serious student of the New Great Game.  It was posted on the Asia Times website yesterday sometime---and it's courtesy of Roy Stephens.

China's leaders refuse to blink as economy slows drastically

China’s leaders have brushed aside warnings of an incipient credit crunch in the Chinese economy, determined to purge excesses from the financial system despite falling house prices and the deepest industrial slowdown since the Lehman crisis.

Industrial production dropped 0.4pc in August from a month earlier, a rare event that highlights how quickly China is coming off the boil. The growth of fixed asset investment fell to record lows.

“It is a shockingly sharp deceleration,” said Wei Yao, from Société Générale. “What is surprising is the calm response from Beijing. The new leadership’s tolerance for short-term pain seems to have jumped by another big notch.”

Electricity output has dropped 2.2pc over the past year as the authorities continue to force dinosaur industries into closure, chipping away at excess capacity.

This commentary by Ambrose Evans-Pritchard showed up on the telegraph.co.uk Internet site at 7:59 p.m. BST on Monday---and I thank Roy Stephens for sending it our way.  It's worth reading.

Three King World News Blogs

1. John Embry: "War in Silver Rages as People’s Confidence in the West Fades".  2. Stephen Leeb: "China, Russia, Gold---and a New World Order Rising From the East"  3. Jeffrey Saut: "Warren Buffett, Charlie Munger, City Slickers---and Just One Thing"

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

Gartman Letter cites Koos Jansen and Gold Newsletter on Chinese gold demand

Regarding Chinese gold demand, which we wrote about yesterday, it is open to debate and our old friend, Brien Lundin of the Jefferson Companies in New Orleans, wrote to share his insights. We've chosen to share them further with our readers, with his approval. Brien wrote:

* * *
Hi, Dennis:

In your letter this morning, you noted that Chinese gold demand was recently reported to be down about 50 percent year over year. This is erroneous information from the World Gold Council, as I've been noting in Gold Newsletter -- that there's a lot of misinformation on this topic. The mainstream financial media keeps parroting numbers from the World Gold Council and other sources, which typically rely on import statistics from Hong Kong.

However, China has recently opened up new ports of entry for gold, a move that has correspondingly reduced the import numbers from Hong Kong.

"Much more relevant are gold delivery statistics from the Shanghai Gold Exchange, which directly indicate wholesale gold demand in China. Koos Jansen is today's leading reporter of Chinese gold demand dynamics, and he relies on the Shanghai Gold Exchange numbers for his analyses. Using the SGE reports, Jansen notes that Chinese gold demand year to date is down about 17 percent from last year's torrid pace.

This commentary appeared in a GATA dispatch yesterday.

China advances gold exchange launch, Singapore delays contract

China will launch its international gold exchange 11 days ahead of schedule, sources said on Tuesday, racing ahead in the scramble to set up an Asian bullion benchmark as rival Singapore is forced to delay its gold contract due to technical issues.

Asia, home to the world's top two gold buyers - China and India, has been clamouring to gain pricing power over the metal and challenge the dominance of London and New York in trading.

The state-run Shanghai Gold Exchange (SGE) will launch the global gold bourse in the Shanghai free-trade zone on Thursday, two sources familiar with the matter told Reuters. The SGE had initially planned the launch for Sept. 29.

This gold-related article showed up on the Reuters website at 12:41 a.m. on Tuesday---and it's another story I found over at the gata.org Internet site.

Gold's move from West to East is said intended to rebalance FX reserves

China may join other emerging countries in boosting gold reserves as the precious metal makes up a smaller share of its foreign-exchange holdings compared with developed economies, said a London-based researcher.

The country hasn't announced any changes to state gold reserves since authorities in 2009 said holdings totaled 1,054.1 metric tons. While China holds the world's biggest foreign-exchange reserves, bullion accounts for 1.1 percent of the total, compared with about 70 percent for the U.S. and Germany, the biggest gold holders, World Gold Council data show.

"It is clear that Western central banks over time will be reducing their reserves and China and other Asian countries will be increasing," David Marsh, managing director at the Official Monetary and Financial Institutions Forum, said in a Sept. 11 interview in Beijing. "Gold will become more traded among central banks in the next 30 years because there are colossal imbalances in world gold holdings as a percentage of overall asset reserves."

Central banks, net buyers of gold for 14 straight quarters, last year helped limit bullion's losses that were the most since 1981 and may increase purchases to as much as 500 tons this year after adding 409 tons last year, the London-based council said Aug. 14. The precious metal rose 3 percent this year as geopolitical tensions boosted demand for a haven.

I found this Bloomberg story embedded in a GATA release yesterday---and it's certainly worth reading.

¤ The Funnies

This Canada goose was using its wings to balance as it picked its way over the rocks as it came from the water onto land.  I wasn't planning on keeping these, because they didn't appear to have any redeeming features when I viewed them on the screen on the back of the camera.  However, when I put them up on the computer monitor at home, I was amazed at the complexity of the feather structure on the underside of the wing.  You don't normally get this view of a goose---and if you do, it's fleeting.  However a shutter speed of 1/4,000 of a second stopped the wing action cold---and they can be examined at your leisure.

¤ The Wrap

An additional signal in the physical silver market that has been unusual and unexpected (at least by me) are the deposits into the big silver ETF, SLV. This week close to 6.5 million oz. of silver were deposited into the trust and over the past four weeks nearly 14 million oz. have been deposited. I don’t recall a previous occasion of extended price weakness and significant metal inflows into the SLV, so the deposits were certainly unexpected by me. Clearly, there have been no net inflows into the big gold ETF, GLD, further highlighting the deposits into SLV. Between a different COMEX warehouse movement pattern and dissimilar ETF metal flows, the stagnant level of silver/gold price ratio becomes even more suspicious.

The real question is who is behind the net new buying of SLV shares? By process of elimination, we know it’s not technical trend-following or price-momentum traders because these traders never buy on extended price declines. By default, the new net buyers of shares of SLV must be value-type traders, attracted by silver’s low and undervalued price. As such, it would appear that these new buyers in SLV are unlikely to sell on yet-lower silver prices and may continue to buy. I may be missing something, but I don’t see how this is bearish. - Silver analyst Ted Butler: 13 September 2014

I must admit that I was not overly happy with the price action on the rallies in both gold and silver yesterday.  It was obvious, at least to me, that they got capped in the same old way.  Volume wasn't overly heavy, so maybe I'm overreacting, but I must admit to be overly sensitive to what happens to rallies, especially in silver, before they get out of hand.  Let's see what happens next time this happens. 

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

And as I type this paragraph, it's barely noon Hong Kong time---and the London open is still three hours away.  I'm way ahead today because I have a plane to catch early tomorrow morning---and I'll be filing today's column as soon as I can, as 5:00 a.m. comes way too early.

At the moment, none of the precious metals are doing a thing.  Gold volume is 7,400 contracts---and silver's net volume is only 1,500 contracts.  As you can tell, unless there is some serious price action, there's no Globex volume worth mentioning between the 6 p.m. open in New York---and the London open the following morning.  The real big volume is always in New York.

Yesterday was also the cut-off for Friday's Commitment of Traders Report---and although I'm expecting good things in it, yesterday's volume/price action will certainly take away a bit from the positive number, as 'da boyz' were either selling longs or going short against all comers in the gold and silver 'rallies' we had yesterday.

And as I fire this off to Stowe, Vermont at 2:10 a.m. EDT, gold, silver and platinum are up a bit---and palladium is flat.  Gold and silver volume is fumes and vapours at 8,700 and 1,700 contracts respectively.  The dollar index is flat.

See you tomorrow.

]]>
Wed, 17 Sep 2014 05:50:00 +0000
<![CDATA[Indian Trade Deficit Widens as Gold Imports Surge 176%]]> http://www.caseyresearch.com/gsd/edition/indian-trade-deficit-widens-as-gold-imports-surge-176/ http://www.caseyresearch.com/gsd/edition/indian-trade-deficit-widens-as-gold-imports-surge-176/#When:06:14:00Z "They took the precious metals lower than even I expected"

¤ Yesterday In Gold & Silver

NOTE:  I'm off to the Casey Conference in San Antonio tomorrow morning---and until my Tuesday column next week, my daily offerings from the Lone Star State [including the one tomorrow] are going to be shockingly short, with the Critical Reads and The Photos and Funnies sections taking the biggest hits.  Besides my presentation, I have lots of events I will be participating in while I'm there---and something has to get sacrificed.  I hope you'll agree that it's better than no column at all. - Ed

Gold got sold down a few dollars by the HFT boyz at the Sunday open in New York---and it printed another new low for this move down.  From there gold rallied a bit, with the high of the day coming shortly before 1 p.m. BST in London.  Then the New York crowd took over---and the gold price got sold down a bit, although it did manage to finish up on the day.

The low and high ticks, such as they were, were reported by the CME Group as $1,226.30 and $1,239.20 in the December contract.

Gold finished the Monday session at $1,232.70 spot, up $4.40 from Friday's close.  Net volume was pretty light at only 91,000 contracts.

Silver opened down, as usual---as it has except for one day this month so far.   Then, like gold, it rallied until around lunchtime in Hong Kong---and chopped sideways in a very tight range for the remainder of the Monday trading day.

The low and high ticks aren't worth the effort to look up.

Silver finished the Monday session at $18.655 spot, up 4.5 cents from Friday's close.  Net volume was certainly on the lighter side at only 24,500 contracts.

Platinum didn't do a lot, but rallied sharply just before lunch in Zurich.  That rally got stepped on around 2 p.m. Europe time---and 'da boyz' in New York turned a gain into a five dollar loss by the close of electronic trading at 5:15 p.m. EDT.  The trading pattern for palladium was very similar---and the decent rally in that metal also met its maker at 2 p.m. Zurich time, about twenty minutes before the Comex open.  Palladium finished up a buck.

The dollar index closed late on Friday afternoon in New York at 84.22---although the ino.com chart below shows it opened in New York on Sunday evening at 84.15.  From there it rallied to its 84.40 high minutes after 8 a.m. EDT, which was the time that the rallies in all four precious metals came to an end.

From that high, the index sold off 20 basis points by the 10 a.m. EDT London p.m. gold fix---and then rallied a handful of basis points into the close.  The index closed at 84.25.  Here's the 3-day chart.

The gold stocks opened in positive territory, but fell into negative territory right away---and then struggled back as the trading day in New York wore on.  The stocks managed to close in positive territory, as the HUI edged higher, up 0.12%.

The silver equities followed a similar path, but couldn't manage to get back above unchanged after their initial sell-off.  Nick Laird's Intraday Day Silver Sentiment Index closed down 0.36%.

The CME Daily Delivery Report showed that only 5 gold and 5 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  With a big chunk of silver contracts left to deliver in September, you have to wonder what the short/issuer[s] is/are waiting for, as it's not beneficial to them to wait until the last minute---unless, of course, they're waiting for the silver to deliver.

The CME Preliminary Report for the Monday trading session showed that there are still 33 gold contracts open in the September contract, down 12 contracts from Friday's report.  In silver, there are still 609 contracts left, down 15 from Friday---and subtracting the 5 contracts posted for delivery in each metal in the previous paragraph, doesn't change things much.

I was rather surprised [but happy] to see that there was no withdrawal from GLD yesterday---and as of 7:40 p.m. EDT yesterday evening there were no reported changes in SLV, either.

The U.S. Mint had another sales report yesterday.  They sold 7,000 troy ounces of gold eagles---3,000 one-ounce 24K gold buffaloes---and 200 platinum eagles.

Over at the Comex-approved depositories on Friday, there was a big 112,258 troy ounce gold deposit into HSBC USA---the custodian for GLD---and a tiny 1,794 troy ounces were reported withdrawn.  The link to that activity is here.

In silver, it was another fairly busy day, as there was 625,813 troy ounces deposited---and 5,049 troy ounces removed.  The lion's share of that disappeared into the vault over at Brink's, Inc.  The link to that action is here.

Since this is my Tuesday column, I have a fair number of stories for you today and, as usual, the final edit is all yours.

¤ Critical Reads

BIS central bank warns against 'illusion of permanent liquidity'

Loose monetary policies have created an "illusion of permanent liquidity" that is spurring investors to make risky bets and push up asset prices, the Bank for International Settlements said Sunday.

"The longer the music plays and the louder it gets, the more deafening is the silence that follows," Claudio Borio, who heads the BIS's monetary and economic unit, told reporters.

"Markets will not be liquid when that liquidity is needed most," he warned, urging "sound prudential policies (and) extra prudence on the part of market participants themselves".

This AFP story appeared on the france24.com Internet site at 4:25 p.m. Europe time on Sunday---and I thank South African reader B.V. for today's first story.  Reuters had a similar story.  It was headlined "Central banks inflating 'elevated' asset prices: BIS"---and I found that one at the gata.org Internet site on Sunday.

Inflation Watch: How Much $1 Used To Get You!

The dollar ain't quite what it used to be.  While a buck can't get you more than a quick snack today, you once could get three barrels of whiskey or ounce of silver for it.  Here are a few things that you used to get for just 110 cents from inflation [rampant money printing - Ed] stepped in.

This tiny, but very interesting article, is certainly worth a minute of your time.  It showed up on the Zero Hedge website at 3:06  p.m. EDT on Sunday---and it's courtesy of reader Harry Grant.

Record S&P 500 Masks 47% of NASDAQ Mired in Bear Market

Beneath the U.S. stock market’s record-setting gains, trouble is stirring.

About 47 percent of stocks in the NASDAQ Composite Index are down at least 20 percent from their peak in the last 12 months while more than 40 percent have fallen that much in the Russell 2000 Index and the Bloomberg IPO Index. That contrasts with the Standard & Poor’s 500 Index, which has closed at new highs 33 times in 2014 and where less than 6 percent of companies are in bear markets, data compiled by Bloomberg show.

The divergence shows the appetite for risk is narrowing as the Federal Reserve reins in economic stimulus after a five-year rally that added almost $16 trillion to equity values. It’s been three years since investors saw a 10 percent decline in the S&P 500 and they’re starting to avoid companies that will suffer the most when the market stumbles, said Skip Aylesworth, a portfolio manager for Hennessy Funds in Boston.

No surprises here, as this bubble is being blown up by fewer stocks each passing day.  This Bloomberg article, filed from New York, showed up on their Internet site at 2:33 p.m. Denver time on Monday---and it's another article I found in a GATA release.

Deutsche Bank Strategists: Bonds are in a Bubble

Most of the bubble talk these days focuses on stocks. But Deutsche Bank strategists led by Jim Reid see frothiness brewing in the global government bond market.

"The worry is that there is nowhere left for this bubble to go given that it is now in the hands of the lenders of last resort (governments and central banks with regulators ensuring other large captive buyers)," they write in a commentary obtained by MarketWatch.

"Although we think this bubble needs to be maintained to ensure the solvency of the current financial system, the best case scenario is that it slowly pops over time via negative real returns for bondholders. The worst-case scenario being future restructuring."

The Barclays U.S. Treasury 20-Year-Plus index has returned 15.5 percent so far this year.

Bond-investment star Jeff Gundlach, CEO of DoubleLine Capital, doesn't see a bubble brewing in Treasurys. He told CNBC that doesn't anticipate major moves by Treasurys for the rest of the year, with the Federal Reserve unlikely to raise interest rates anytime soon.

This article put in an appearance on the moneynews.com Internet site at 9:08 p.m. EDT on Sunday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

NYT: Subprime Loans Rear Their Ugly Heads Again

Remember the subprime mortgage loans that helped spark the 2008-09 financial crisis?

They may be gone for a while, but other areas of the subprime lending market, particularly auto loans, have begun to look worrisome, The New York Times reports.

Deep subprime auto loans, those made to people with credit scores below 550, soared 13 percent in the second quarter from the year-earlier period, according to Experian.

"We're five years into the new cycle, so you've got to imagine that there are excesses cropping up," William Ryan of Portales Partners research firm told the paper.

Why should anyone be surprised at this turn of events?  This is another news item from the moneynews.com Internet site.  This one showed up there at 1:31 p.m. EDT yesterday---and it's the second offering in a row from Elliot Simon.

Calpers to Exit Hedge Funds, Divest $4 Billion Stake

The California Public Employees’ Retirement System plans to divest the entire $4 billion that it has with hedge funds, saying they’re too expensive and complex.

The decision to eliminate 24 hedge funds and six hedge fund-of-funds, isn’t related to the performance of the program, said Ted Eliopoulos, the interim chief investment officer. The board of the $298 billion pension, known as Calpers, hasn’t decided where to invest the money after the pullout, which will take about a year, he said.

“We concluded that we would eliminate the hedge fund program in order to reduce the complexity, reduce the costs in the program, particularly in relation to our view that given the scale of Calpers, we would not be able to scale a hedge fund program to a size that would really move the needle,” Eliopoulos said today in an interview.

The largest U.S. pension is getting out of hedge funds even as other large public plans such as New Jersey’s add to the private portfolios. Calpers has been working to reduce risk after the global financial crisis wiped out more than a third of its wealth, forcing it to increase contributions from taxpayers to cover losses. Calpers first invested in hedge funds in 2002 to help meet target returns to cover the growing cost of government retiree benefits.

This Bloomberg news item, filed from Sacramento, appeared on their Internet site at 5:30 p.m. EDT yesterday---and I thank reader G. Roberts for sending it our way.

A constitutional amendment to take Big Money out of U.S. politics dies quietly

This week the U.S. Senate considered a constitutional amendment that would have allowed Congress and state legislatures to limit the power of money in politics. The debate was not much covered in the media because the outcome was so predictable. But the party-line vote that killed it should not go unnoted.

A remarkable majority of the American public — 79 percent according to Gallup — want campaign finance reform. The right and left, the Tea Party and Occupy Wall Street, even Jon Stewart and Bill O’Reilly agree that, left unchecked, Big Money corrupts politics and undermines democracy.

That was one of the few things Thomas Jefferson and Alexander Hamilton agreed on, and both the American and French Revolutions were fought in part to get the financial power and privilege of aristocracy out of governance.

But even George III after Yorktown and Louis XVI on the eve of execution were more popular than Congress is today, and the strangely perverse partisanship that characterized the debate on the amendment this week helps to explain why.

This interesting Reuters article appeared on their website last Friday sometime---and I thank Harry Grant who sent it our way on Saturday.

Scots Independence Campaign Nears Climax as Polls Diverge

Prime Minister David Cameron will return to Scotland for the second time in a week to fight for the future of the U.K. as campaigning ahead of the referendum on independence reaches its climax.

Activists were out in force across Scotland during the final weekend before the Sept. 18 ballot that might trigger the breakup of the union after more than three centuries. With opinion polls showing contradictory findings, both the “yes” and “no” campaigns said they were poised to win, introducing further uncertainty to financial markets fixed on Scotland.

Scottish First Minister Alex Salmond, the head of the pro-independence campaign, and Alistair Darling, the former U.K. chancellor of the exchequer who fronts the Better Together group, reprised arguments today over the economy, the pound and state-funded health care if Scots back independence. With the debate increasingly polarized, the focus now is on appealing to undecided voters in the final three days of the campaign.

This Bloomberg article, co-filed from London and Edinburgh, showed up on their Internet site at 8:30 a.m. MDT on Sunday---and it's the first offering of the day from Roy Stephens.

Treasure Map: The NSA Breach of Telekom and Other German Firms

According to top-secret documents from the NSA and the British agency GCHQ, the intelligence agencies are seeking to map the entire Internet, including end-user devices. In pursuing that goal, they have broken into networks belonging to Deutsche Telekom.

When it comes to choosing code names for their secret operations, American and British agents demonstrate a flare for creativity. Sometimes they borrow from Mother Nature, with monikers such as "Evil Olive" and "Egoistic Giraffe." Other times, they would seem to take their guidance from Hollywood. A program called Treasure Map even has its own logo, a skull superimposed onto a compass, the eye holes glowing in demonic red, reminiscent of a movie poster for the popular "Pirates of the Caribbean" series, starring Johnny Depp.

Treasure Map is anything but harmless entertainment. Rather, it is the mandate for a massive raid on the digital world. It aims to map the Internet, and not just the large traffic channels, such as telecommunications cables. It also seeks to identify the devices across which our data flows, so-called routers.

Furthermore, every single end device that is connected to the Internet somewhere in the world -- every smartphone, tablet and computer -- is to be made visible. Such a map doesn't just reveal one treasure. There are millions of them.

The breathtaking mission is described in a Treasure Map presentation from the documents of the former intelligence service employee Edward Snowden which SPIEGEL has seen. It instructs analysts to "map the entire Internet -- Any device, anywhere, all the time."

This longish, but very interesting essay, showed up on the German website spiegel.de at noon Europe time on Sunday---and my thanks go out to Roy Stephens once again.

Outrage as E.U. blocks democratic challenge to U.S. trade deal: Comment

There is something rotten in the state of Europe when an unelected, unaccountable EU body can glibly inform millions of us that we no longer have the right to question its most dangerous and unpopular policies.

This is exactly what has just happened, as the European Commission has announced that it will not allow a European Citizens' Initiative (ECI) to challenge the secret trade talks it is holding with the US government, supposedly on our behalf.

The ruling is a slap in the face for the 230 civil society organisations from across Europe that have lined up behind the initiative, and the millions of European citizens they represent. The ECI is the only vehicle available to us to challenge the shadowy bureaucrats of the European Commission. Now even this seems to be too much scrutiny for them.

The negotiations on the Transatlantic Trade and Investment Partnership (TTIP) have become one of the hottest political topics across Europe. TTIP is effectively a new bill of rights for multinational corporations, granting them unprecedented powers and undermining vital labour, environmental and food safety standards in the name of 'free' trade.

This commentary appeared on the politics.co.uk Internet website at 10:03 a.m. BST last Friday afternoon---and it's worth reading.   I thank South African reader B.V. for his second contribution to today's column.

The E.U.’s Fiscal Watchdogs—–Still Howling and Toothless as France and Italy Pile on the Debt

When it comes to fiscal policy in the E.U., you can break whatever fiscal rules you want, provided you are big enough.

France qualifies, so does Germany. If you are small like Greece and Cyprus, then you may find yourself in bed with the Troika.

For the third time France has declared it will heavily overshoot its already twice-delayed budget deficit target next year, setting up tough negotiations with European partners previously reluctant to grant Paris more time to bring its public finances within E.U. limits.

Michel Sapin, finance minister, announced that the required deficit target of 3 per cent of national output was being pushed back a further two years to 2017 in the latest sign of the deep-seated economic problems confronting President François Hollande and his socialist government.

This excellent commentary by Mike 'Mish' Shedlock was posted on David Stockman's website on Sunday---and I thank Roy Stephens for sending it.

Only a monetary 'nuclear bomb' can save Italy now, says Mediobanca

The OECD has drastically cut its growth forecast for Italy. The depression will drag on though most of 2015.

The economy will contract by 0.4pc this year. It will remain stuck in the doldrums next year with growth of just 0.1pc.

If so, Italy’s public debt will spiral to dangerous levels next year, ever further beyond the point of no return for a country without its own sovereign currency and central bank.

“This is catastrophic for the finances of the country. We’re heading for a debt ratio of 145pc next year,” said Antonio Guglielmi, global strategist for Mediobanca.

This Ambrose Evans-Pritchard blog is datelined Monday---and it's certainly worth reading.  I thank Roy Stephens once again.

Slovak Prime Minister Warns Ukraine of ‘Ultimate Disintegration’

Slovakia's Prime Minister Robert Fico on Saturday warned Ukraine about the perils associated with the European and possibly NATO integration, saying the east European nation was tittering on the brink of an ultimate collapse.

"I think that Ukraine will find it hard to stand against all the challenges associated with the EU integration, because it is now facing an absolute disintegration… I also disagree with the assumption that Ukraine could one day become a NATO member since this would undermine security in the region," Fico said in an interview with the Bratislava-based newspaper Novy Cas.

"Only diplomatic steps can put an end to what is now happening in Ukraine. Look, there's already been a third wave of senseless sanctions, and what has changed? Nothing. We can only expect more firm response measures from Russia," the Slovak official noted.

Robert Fico also told the country's daily that he would sooner step down than see a NATO military base built in Slovakia.

This short, but very interesting article put in an appearance on the RIA Novosti website at 9:16 p.m. Moscow time on their Saturday evening, which was 3:16 p.m. in New York.

Dutch stage tomato fight against Russian sanctions

Dutch stage tomato fight against Russian sanctions, and under one of the photos it says; The Netherlands vies with Mexico as the world's largest tomato exporter, and it sent $100 million worth to Russia last year. Dutch farmers have been offered a subsidy to either dispose of excess crops or donate them to food banks.

This 6-photo AP 'news' item appeared on the cbc.ca website, but it doesn't say what day.  I thank reader 'Andres A' for bringing it to our attention.

NATO members 'start arms deliveries to Ukraine'

NATO countries have started delivering arms to Ukraine to help its soldiers fight pro-Russian separatists in the east, the defence minister says.

Valery Heletey did not give details of the weapons being delivered or name the countries involved.

A similar statement earlier was denied by five NATO members, including the U.S.

This article appeared on the bbc.com Internet site at 3:07 p.m. EDT on Sunday afternoon---and it's courtesy of reader James Skinner.

Lavrov: No haste in MH17 tragedy probe, despite media hype

The report on the Malaysian jet crash is very “calm” and doesn’t provide much information about the tragedy, said Russian Foreign Minister Sergey Lavrov. He added that despite all the hype around the crash, the investigators do not seem to be in a hurry.

In a Saturday interview to Russian channel TV-Center, Foreign Minister Sergey Lavrov revealed he was disappointed by the latest report from Dutch experts on the reasons of Malaysia airplane crash. Malaysian airplane with 298 people on board crashed in Donetsk region July 17. Many western media outlets started accusing Russia without providing any evidence.

However, despite the political tensions, the report provided by the Dutch Safety Board from September 9 is “calm” while the investigators are taking their time with the probe.

“There are no demands that experts resume their work at the crash site,” Lavrov said. “There were also no attempts to go there to collect, as they say, the wreckage and to see how the whole plane looked like. Nobody spoke about it out loud.”

This Russia Today news item appeared on their website at 2:15 p.m. Moscow time on their Saturday afternoon, which was 6:15 a.m. EDT.  It's another contribution from Roy Stephens.

E.U., Kiev, Moscow gas talks suspended

A spokesperson for the Russian Energy Ministry said Monday it was postponing trilateral talks with the European Union and Ukraine.

Talks were scheduled for Saturday. A ministry spokesperson told state news agency RIA Novosti an alternate date depended on Energy Minister Alexander Novak's schedule.

"We told the European Commission that the proposed date is not suitable for us," the spokesperson said. "Another date is being discussed."

The European Union last week enforced new sanctions on the Russian energy sector in response to ongoing crises in eastern Ukraine.

This UPI story, filed from Moscow, appeared on their website at 8:58 a.m. EDT on Monday---and it's another contribution from Roy Stephens.

Washington’s War Against Russia — Paul Craig Roberts

The new sanctions against Russia announced by Washington and Europe do not make sense as merely economic measures. I would be surprised if Russian oil and military industries were dependent on European capital markets in a meaningful way. Such a dependence would indicate a failure in Russian strategic thinking. The Russian companies should be able to secure adequate financing from Russian Banks or from the Russian government. If foreign loans are needed, Russia can borrow from China.

If critical Russian industries are dependent on European capital markets, the sanctions will help Russia by forcing an end to this debilitating dependence. Russia should not be dependent on the West in any way.

The real question is the purpose of the sanctions. My conclusion is that the purpose of the sanctions is to break up and undermine Europe’s economic and political relations with Russia. When international relations are intentionally undermined, war can be the result. Washington will continue to push sanctions against Russia until Russia shows Europe that there is a heavy cost of serving as Washington’s tool.

This commentary by Paul was posted on this website on Sunday---and certainly falls into the must read category, especially for all students of the New Great Game.

Iran Blames U.S. for Violating States’ Sovereignty Under Pretext of Fighting IS

The Secretary of Iran’s Supreme National Security Council (SNSC) Ali Shamkhani blamed Washington for violating Syria’s and other regional countries’ sovereignty, Straits Times reports.

“The U.S. seeks to continue its unilateralism and violate the countries’ sovereignty under the pretext of fighting terrorism,” said Shamkhani in a statement, cited by the official IRNA news agency.

He also expressed his doubts concerning the efficiency of U.S. counter-terrorism policy, claiming that airstrikes targeting ISIS fighters won’t have any positive effect and will only strengthen the radical group’s positions.

Iran’s Parliament Speaker Ali Larijani supported Shamkhani’s position, calling US strategy “irrational”. He said that U.S. way of countering terrorism would not lead to transformation in the Middle-East and help to dismantle ISIS, but rather cause waves of alienation and resentment in the region.

This article was posted on the RIA Novosti website at 9:25 p.m. on Saturday evening Moscow time---and I thank reader B.V. for finding it for us.

Iran refuses to help 'self-serving' U.S. fight ISIS

Iran has refused an offer from the United States to join a global alliance preparing to combat Islamic State militants, according to Iran's supreme leader, Ayatollah Ali Khamenei.

Khamenei said Monday that the US offered to discuss a coordinated effort with Iran against Islamic State (IS, also known as ISIS or ISIL), a common foe in the region, in the midst of an escalating campaign of violence that continues to claim lives across Iraq in Syria.

“The American ambassador in Iraq asked our ambassador (in Iraq) for a session to discuss coordinating a fight against Daesh (Islamic State),” said Khamenei, the state-run Islamic Republic News Agency reported, according to Reuters.

“Our ambassador in Iraq reflected this to us, which was welcomed by some (Iranian) officials, but I was opposed. I saw no point in cooperating with a country whose hands are dirty and intentions murky.

This is a news item that appeared on the Russia Today website at 4:20 p.m. Moscow time on their Monday afternoon---and it's the second last contribution of the day from Roy Stephens.

China to invest $100 billion in India over 5 years

Chinese president Xi Jinping will bring along with him $100 billion or Rs 6 lakh crore of investment commitments over five years during his upcoming India visit next week. This is nearly thrice the $35 billion secured by Prime Minister Narendra Modi during his Japan trip.

Jinping will land in Modi's home state Gujarat on September 17 — the Prime Minister's birthday — following his visit of Tajikistan, Maldives and Sri Lanka.

Confirming this, Liu Youfa, China's consul-general in Mumbai, told TOI, "On a conservative estimate, I can say that we will commit investments of over $100 billion or thrice the investments committed by Japan during our President Xi Jinping's visit next week. These will be made in setting up of industrial parks, modernization of railways, highways, ports, power generation, distribution and transmission, automobiles, manufacturing, food processing and textile industries."

The above three paragraphs are all there is to this brief story that appeared on The Times of India website at 1:55 a.m. IST on their Saturday morning---and it's the final offering of the day from reader B.V.

Snowden claims NSA collected data on New Zealanders

Documents from former National Security Agency contractor Edward Snowden claim Australian and New Zealand Internet data on private citizens was collected by the NSA.

The documents indicate a major undersea telecommunications cable -- linking New Zealand, Australia and North America -- was tapped to collect the data, beginning in 2012 or early 2013. Moreover, the documents suggest the government of New Zealand was aware of the program.

Information on the data collection was published Monday in the Sydney, Australia, Morning Herald and the website The Intercept.

New Zealand Prime Minster John Key denied his country's intelligence agency, the Government Communications Security Bureau, was involved in the mass surveillance of citizens, although Snowden claimed Key was aware of the program.

This UPI article, filed from Auckland, showed up on their website 10:37 a.m. EDT on Monday.  It's the final offering of the day from Roy Stephens, for which I thank him.

Seven King World News Blogs/Audio Interviews

1. David P:  "Gold, Crazy Markets, War in Russia---and "The Entrance to Hell"  2. Dr. Paul Craig Roberts: "Accuses U.S. Banks of Gold and Silver Smash"  3. Robert Fitzwilson: "The Global Ticking Time Bomb, Economic War---and World War III"  4. James Turk: "We Are About to See a Repeat of 2011 in Gold and Silver"  5. Richard Russell: "Total Systemic Failure---and Worst U.S. Nightmare"  6. The first audio interview is with John Mauldin---and the second audio interview is with Dr. Paul Craig Roberts

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

Sprott Money's Weekly Wrap-Up interviews your humble scribe

With Eric and John not available for the second Friday in a row, I drew the short straw once again.  This audio interview runs for 7:36 minutes---and it was posted on the sprottmoney.com Internet site on Friday.

Koos Jansen: China again buys the dip in gold---and silver gets scarcer

Declining gold prices again have pushed demand up on the Shanghai Gold Exchange as China buys the dips, while silver inventories on the Shanghai Futures Exchange continue to fall, gold researcher and GATA consultant Koos Jansen reports.

It was posted on the bullionstar.com Internet site on Friday at 3:57 p.m. Singapore time---and I found it embedded in a GATA release yesterday.  I thank Chris Powell for wordsmithing the above paragraph of introduction.

Ron Paul: Will the Swiss vote to get their gold back?

Former U.S. Rep. Ron Paul writes today that he hopes that the people of Switzerland vote to repatriate their gold when they hold a referendum on the issue on November 30.

Paul argues that approval of the proposal at referendum will repudiate the financial elites behind unlimited government. He writes:

"The Swiss people appreciate the work their forefathers put into building up large gold reserves, a respected currency, and a strong, independent banking system. They do not want to see centuries of struggle squandered by a central bank. The results of the November referendum may be a bellwether, indicating just how strong popular movements can be in establishing central bank accountability and returning gold to a monetary role."

Paul's commentary is headlined "Will the Swiss Vote to Get Their Gold Back?" and it was posted at the Internet site of the Ron Paul Institute for Peace and Prosperity on Sunday.  This article is one I found on the gata.org Internet site on Monday.

Anxious Scottish investors have been buying gold

Scottish investment in physical gold has surged by 42 percent in the past fortnight -- on top of the traditional rise in gold demand at this time of the year.

The figure, which comes from Bullionvault.com, the world's biggest online platform for private investors who want to trade physical gold and silver, suggests that anxious Scotland-based investors are turning to gold as a means of insuring against the uncertainties posed by a 'yes' vote in Thursday's referendum.

Bullionvault analysed customer data over the year, stripping out those of 50,000 customers who lived in the UK and then dividing this group further into postcodes north and south of the border.

It then averaged the proportion of transactions typically undertaken by Scotland-based traders out of the whole of the UK over the past year. That figure was then compared to the proportion of Scottish transactions undertaken in the first half of September.

This gold-related news story was posted on the telegraph.co.uk Internet site at 2:36 p.m. BST on their Monday afternoon---and it's another article I found over at the gata.org Internet site yesterday.

Export Growth to Lift Italian Gold Jewellery Demand and Bullion Imports to Six-Year High

Metallis are releasing this snapshot on Italy’s export-focused gold jewellery fabrication to coincide with the recent conclusion of the Vicenza Fair as this marks a good opportunity to review developments so far this year and prospects for the rest of 2014 for Italy and its main overseas markets.

The key findings of the consultancy’s recent research is that Italian gold jewellery demand is on track to rise 11% in 2014 to a six-year high of 128 tonnes. This marks a continuation of the growth seen in 2013, when fabrication made a historic turnaround; then a 24% rebound began a recovery from a decade or so of consecutive losses.

Domestic scrap is also forecast to finish 2014 down 22%, while inflows of scrap could fall by almost 30%. All this is slated to lift gross gold bullion imports by 15% to just over 105 tonnes, their highest level since 2008.

Even stronger growth of 39% for the first half is reported in shipments to China/Hong Kong. Meader noted, “this boom is interesting as it shows the 18-carat segment in China is still going strong, even if the far larger 24-carat sector, which Italy doesn’t serve, couldn’t match 2013’s heady results”.

This interesting story appeared on the sharpspixley.com Internet site on September 5.

Private homes in Iran hold more gold than Central Bank

The Shahrvand Daily reports that according to Gold and Jewelry Producers and Exporters, more than 100 tonnes of the country's gold is stashed in people's homes.

Although the former head of Iran's Central Bank under the Ahmadinejad administration had said the Bank had 500 tonnes of gold in storage, recent reports from the Central Bank put its gold stores at 90 tonnes: in other words, less than what is stored in Iranian homes.

The report by Shahrvand indicates: "Few countries in the world see the public move toward buying gold or foreign currency as investment and steering away from investing in production and adding value to the economy."

These three paragraphs are all there is to this gold-related story that appeared on the pyavand.com Internet site on Sunday---and it's another article I found on the sharpspixley.com Internet site.

AngloGold Ashanti of South Africa Abandons Spin Off Plans

AngloGold Ashanti, one of the world’s largest gold mining firms, said on Monday that it would abandon plans to spin off its international mining operations and raise $2.1 billion in new capital.

The company, based in Johannesburg, said last week that it was planning to spin off its operations outside of South Africa into a new entity to be listed in London. AngloGold Ashanti had also sought to raise new capital in order to reduce its debt ahead of the restructuring.

On Monday, the company said that a number of shareholders, although supportive of the strategic logic of the transaction, expressed concerns about several aspects of the deal, including the level of fund-raising needed for the restructuring to go forward.

“AngloGold Ashanti has, therefore, decided not to proceed with the restructuring and capital raising, as currently proposed,” the company said in a news release on Friday. “The company will continue to evaluate all options to address debt levels and unlock value, taking into account the feedback from its shareholders and its business needs.”

This news story showed up on The New York Times website at 9:31 a.m. EDT on Monday---and it's another story that Chris Powell posted on the gata.org website yesterday.

South African gold, PGM, diamond and copper outputs down sharply

The South African mining sector seems to be going through a particularly rough patch at the moment and this will also have a strongly negative effect on the country’s economy given the importance of metals and minerals in the country’s exports. According the latest Statistics South Africa preliminary data for July, the country’s overall mining production decreased by 7.7% year-on-year.

Not surprisingly, given that the month covered the tail end of the country’s debilitating platinum mining strike, platinum group metals output was down a huge 45.2% year on year.  PGMs had been one of the country’s most significant metal exports of late having comfortably overtaken gold – which, somewhat surprisingly, also saw a 14.6% year on year reduction in output.  Diamond production was down 10% and copper 15.9%

Top places for South African mineral sales values in July were held by coal at R8.13 billion (US$739 million) and iron ore R5.16 billion (US$469 million) despite the fall in global prices for these bulk metals and minerals. Even with the strike impact, PGMs followed close behind at R5.1 billion ($464 million) with gold nowadays only at R3.69 billion ($335 million).

The above three paragraphs are all there is to this interesting story that was posted on the mineweb.com website last Friday.  It's certainly worth skimming.

Indian trade deficit widens as gold imports surge 176%

India's trade deficit widened in August from a year earlier as imports of gold surged 176 percent after policy makers eased shipment curbs.

The shortfall was $10.8 billion last month, wider than $10.7 billion a year earlier, with exports rising 2.4 percent and imports growing 2.1 percent. Gold shipments surged to $2 billion from $739 million in August last year after the government allowed more banks and traders to buy bullion overseas.

India is easing emergency measures taken when the current-account deficit widened to an all-time high, as faster growth boosts inflows. While the shortfall will widen this year through March 2015 after shrinking in the previous 12 months, it will stay sustainable, according to a Reserve Bank of India report last month.

"We can manage with monthly gold imports of about $2 billion and the jump in the August number is largely due to last year's low base after a sudden clampdown," Shubhada Rao, an economist at Yes Bank Ltd. in Mumbai, said yesterday. "The jump may look alarming, but there is no reason for panic."

This Bloomberg article, filed from New Delhi, put in an appearance on their Internet site at 12:30 p.m. Denver time on Monday---and it's another gold-related story I found over at the gata.org Internet net site.

Diver Finds 2,750-year-old Gold Coin in Bulgaria

A diver has found what is believed to be the oldest gold coin ever discovered in Bulgaria, Bulgarian news agency BTA reported on September 9. The coin was found in shallow waters near the resort town of Sozopol on Bulgaria’s Black Sea coast.

The diver saw the gleaming coin by accident, the report said, and later passed it on to Bozhidar Dimitrov – a native of Sozopol and former diver himself, who is now head of the National History Museum in Sofia.

BTA quoted numismatist Vladimir Penchev from the National History Museum saying that the coin is not solid gold, but made of electrum – the naturally occurring alloy of gold and silver, used to mint some of the earliest metal coins in human history.

This particular coin appears to have been minted in the kingdom of Lydia in western Anatolya, sometime in the second half of the seventh century BCE, which put the coin’s age at more than 2750 years, he said.

This short, but very interesting article---with a photo to match---was posted on the sofiaglobe.com Internet site last Tuesday---and it's another article that Chris Powell posted on the gata.org Internet site yesterday.

¤ The Funnies

I was out at the usual spot on Sunday---and it was a lovely day.  I was surrounding by Canada geese on all sides, a few hundred.  Since there are only a dozen or so raised on the pond, the rest were obviously not local birds, as they're beginning to gather for the long migration to the southern U.S.A.  The first shot is of a group a bit less than 20 meters away---and this photo came right out of the camera untouched---and uncropped.

Sitting still for an hour or more has its virtues---and I got these excellent red-necked grebe shots.  It's just too bad about the reflection of the red building in the water.  I took a couple of dozen photos---and since I couldn't decide which of these two were the best, you're getting them both.  I'm sure the day will come when the parents stop feeding their brood, but it wasn't Sunday.

¤ The Wrap

[Last] week, 9.1 million ounces of silver were moved into or taken out from the COMEX silver warehouses, about the highest weekly turnover yet, as total inventories rose 1.6 million oz to 181.8 million oz.  Taken with the above average turnover over the past few weeks, if anything, the turnover seems to be intensifying. The 9.1 million oz turnover this week was more than 56% of all the silver mined in the world for a week (16 million oz). Considering that this spectacle of physical turnover is unprecedented in any other commodity, is it unreasonable to wonder why it exists only in silver and in the warehouses licensed by the COMEX?

An additional signal in the physical silver market that has been unusual and unexpected (at least by me) are the deposits into the big silver ETF, SLV. This week close to 6.5 million oz of silver were deposited into the trust and over the past four weeks nearly 14 million oz have been deposited. I don’t recall a previous occasion of extended price weakness and significant metal inflows into the SLV, so the deposits were certainly unexpected by me. Clearly, there have been no net inflows into the big gold ETF, GLD, further highlighting the deposits into SLV. Between a different COMEX warehouse movement pattern and dissimilar ETF metal flows, the stagnant level of silver/gold price ratio becomes even more suspicious. - Silver analyst Ted Butler: 13 September 2014

All in all, it was a pretty quiet trading day in both gold and silver on Monday---but both metals, along with platinum and palladium began to head south around 8 a.m. EDT as the dollar index peaked and began to head south as well.

Not that I want to stick my neck out, but if forced to bet, I'd guess that the bottom is in for all four precious metals and, like I said on Saturday, if we're not at the bottom, we're very close.  I said about a week or so ago that it wouldn't surprise me in the slightest if we got one more kick in the ass to downside before we were done---and that not only turned out to be the case, but they took the precious metals lower than even I expected.

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

If things remain quiet until the Comex close at 1:30 p.m. EDT this afternoon in New York, we should see another Commitment of Traders for the record books on Friday.

And as I write this paragraph, the London open is about 55 minutes away.  After opening flat in New York at 6 p.m. yesterday evening, the gold price rallied a few bucks---and is now trading sideways.  Ditto for silver, platinum and palladium.  Net gold and silver volumes are very quiet---gold a hair over 13,000 contracts and silver a few contracts over 3,600.  The dollar index, after falling 15 basis points in early Far East trading, is back to unchanged.

But as wonderful as current bullish structure is in the Comex futures market, how fast and how high we rally will be determined by how the Commercial traders respond as the technical funds/managed money traders begin to cover and go long.  Nothing else matters!!!

The last rally off the record COT structure back in very early June only added $100 to the gold price and $2.75 to the silver price, as the Commercial traders let the managed money traders off with barely a spanking.  If JPMorgan et al decided to put their hands in their pockets and go on vacation for a couple of weeks, we would have precious metal prices [particularly silver] that would be the stuff of legend for a thousand years.

So, we wait some more.

And as I hit the send button on today's effort at 5:55 a.m. EDT, I note that three of the four precious metals are moving higher, but palladium isn't doing much.  Net volume in gold is 19,000 contracts, but certainly doesn't reflect the volume associated with this current move to the upside, as the CME volume data is delayed by at least ten minutes.  The same can be said for silver, as its net volume is 5,800 contracts at the moment.  The dollar index went through a 25 basis point down-up-down move that has brought it back to basically unchanged.

Here's the Kitco gold charts as of 4:53 a.m. EDT.

With all four precious metals totally sold out to the downside, nothing will surprise me when I check the Kitco charts when I get up later this morning.

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

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