<![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[Jim Rickards: Why the U.S. is Letting China Accumulate Gold]]> http://www.caseyresearch.com/gsd/edition/jim-rickards-why-the-u.s.-is-letting-china-accumulate-gold/ http://www.caseyresearch.com/gsd/edition/jim-rickards-why-the-u.s.-is-letting-china-accumulate-gold/#When:06:28:00Z "One wonders what that was all about"

¤ Yesterday In Gold & Silver

Monday's trading day in gold was very similar to the trading day it had the previous Monday---February 23---where gold prices rose sharply in Far East trading---and then ran into the usual suspects that turned the gold price lower starting a couple or hours before the London open.  This Monday's sell-off ended minutes before 4 p.m. EST in electronic trading---and after that, the price traded flat into the 5:15 p.m. close.

The high and low ticks were reported by the CME Group as $1,223.00 and $1,204.20 in the April contract.

Gold closed yesterday at $1,205.90 spot, down $7.80 from Friday's close.  Net volume was decent at around 119,000 contracts.

Here's the 5-minute gold chart courtesy of Brad Robertson.  It starts from around 2:30 a.m. EST yesterday morning and, unfortunately, doesn't include any of the big volume associated with the goings-on in the Far East trading session on their Monday.  As you can tell from the chart below, most of the volume occurred between 5 and 9 a.m. Denver time, which was between noon and the close of trading in London.  The 'click to enlarge' feature really helps here.

It was more or less the same chart pattern for silver and, like gold, there was a bit of a price bounce at the noon London silver fix, but that got dealt with at the COMEX open about fifty minutes later.  Silver's low also came minutes before 4 p.m. EST---and the price rallied about a nickel into the close.

The high and low ticks for silver were recorded as $16.79 and $16.35 in the May contract.

Silver finished the Monday session at $16.355 spot, down 21.5 cents from Friday's close.  Net volume wasn't overly heavy at 24,000 contracts.

Platinum traded five dollars either side of unchanged all Monday long---and closed at $1,184 spot, down a buck from Friday.

Palladium didn't do much of anything either up until the equity markets opened in New York at 9:30 a.m. EST yesterday---and within an hour or so, the price had popped by a bit more than ten bucks---and it closed at $826 spot, up 11 dollars from Friday.  The rally in palladium continues.

The dollar index closed at 95.26 late on Friday afternoon in New York.  It made it as high as 95.50 in early Far East trading, but then headed lower starting about fifteen minutes before London opened---and about the same time as gold and silver began to head in that direction as well.  The low came at 12:20 p.m. in London---and then rallied back to 95.51 by 1 p.m. EST.  From there it chopped sideways into the close, finishing at 95.49---up 23 basis points from Friday's close.

The gold stocks opened unchanged, but headed south fifteen minutes later.  They hit their low tick shortly before 3 p.m. EST---and closed just off their lows.  The HUI finished down 2.62 percent, giving up all its Thursday and Friday gains in one go.

The silver equities opened up---and then chopped around unchanged until finally giving up the ghost shortly after 11 a.m. EST.  Like the gold shares, they too hit their low ticks just minutes before 3 p.m. EST---and rallied a bit into the close.  Nick Laird's Intraday Silver Sentiment Index finished the day down 1.41 percent.

I forgot to mention this in my Saturday column, but for the month of February, the HUI was down 4.80 percent---and Nick Laird's Intraday Silver Sentiment Indexed finished lower by 5.68 percent.

Although I'm not happy to see these numbers, these loses have to be put in their proper perspective, especially in gold, as it declined by $85 during the month, so the drop in the shares wasn't all that bad.  Silver was down about 60 cents for the month.

The CME Daily Delivery Report for Day 3 of the March contract showed that 1 gold and 200 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.   The largest short/issuer in silver was Citigroup out of its in-hours [proprietary] trading account and, once again, the tallest hog at the trough [in every sense of the word] was JPMorgan once again out of its in-house [proprietary] trading account.  Ted Butler has a few choice things to say about JPMorgan and March silver deliveries in the quote in The Wrap section---and it's a must read. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that March open interest in gold declined by 39 contracts---and the current o.i. for March now sits at 163 contracts.  In silver, the open interest declined by 156 contracts, leaving 1,383 still open minus, of course, the 200 contracts mentioned in the previous paragraph.

There was pretty big withdrawal from GLD yesterday, as an authorized participant took out 249,582 troy ounces---about 8 tonnes.  And as of 7:24 p.m. EST yesterday evening, there were no reported changes in SLV.  But when I checked the iShares.com Internet site at 10:57 p.m., they showed that 382,736 troy ounces were deposited by an authorized participant, which I thought a rather strange amount.

The U.S. Mint had a sales report to start off the new month.  They sold 1,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 320,000 silver eagles.

I'm still waiting for the 2014 annual report from The Royal Canadian Mint---and I'm still checking their Internet site every day, but so far, nothing.  I'm expecting that they will announce rather poor gold maple leaf sales year-over-year, but a "surprising" increase in silver maple leafs in the fourth quarter after "disappointing" third quarter sales---along with "record sales" for the calendar year.  This would be a mirror image of what was reported by the U.S. Mint last year.  If that indeed turns out to be the case, I would assume that JPMorgan has been a big buyer there as well.  We'll see.

There were no reported receipts in gold at the COMEX-approved depositories on Friday, but 16,107.650 troy ounces were reported shipped out.  That works out to 501 kilobars---and all but one of those came out of HSBC USA's vault.  The link to that activity is here.

It was another pretty decent day in silver, as 550,205 troy ounces were received---and 282,499 troy ounces were shipped out.  The link to that action is here.

Nick Laird provided the intraday moving averages for both gold and silver for the month of February---and they look very familiar---almost like their 5-year long-term average chart, which is also posted here.

Here's gold for February.

And here's silver for February.

And here's the 5-year intraday chart for gold.  The similarities between the 1-month and 5-year charts are too obvious to be a coincidence.

I have an essay coming out in the next few days about this---and will post it in this space when it shows up on the Internet.

Since this is my Tuesday column, I have more than the usual number of stories, so I you can find the time to wade through the ones you like.

¤ Critical Reads

ISM Manufacturing Tumbles To 13-Month Lows, Employment Slumps, Construction Spending Plunges

Despite a collapse in U.S. macro data in February, Markit somehow managed to conjure a better than expected 55.1 print for US Manufacturing PMI. Under the covers employment creation was the slowest since July and inflationary pressures loom as selling prices rose notably. ISM Manufacturing printed 52.9 - a small miss vs 53.0 expectations - down for the 4th month in a row to 13-month lows, with employment at its weakest since June 2013.

Construction spending's modest rebound in (seemingly un-weather-affected) December (after dropping in November) has been destroyed with a 1.1% drop in January (against expectations of 0.3% rise) for the biggest drop in 8 months.

This Zero Hedge commentary, with lots of charts, showed up on their Internet site at 10:08 a.m. EST yesterday morning---and today's first story is courtesy of reader M.A.

U.S. Savings Rate Surges to Highest Since 2012 as Consumers Save "Gas Tax Cut" Instead of Spending

Following December's worse than expected drop in personal spending (and slowing growth in incomes), analysts were expected the usual hockey-stick bounce... it did not happen.

Despite all the exuberance over low gas prices, US personal spending dropped 0.2% in January - twice as bad as the 0.1% drop expected and the 3rd miss in a row. The spending drop was driven in large part by a slide in non-durables.

Personal income also missed expectations, rising just 0.3% (against a +0.4% expectation) hovering at its lowest growth since September. The savings rates surged to 5.5% - its highest since Dec 2012.

This is another Zero Hedge piece.  This one was posted on their website at 8:41 a.m. EST on Monday morning.

Chicago nears fiscal free fall with latest downgrade

Chicago drew closer to a fiscal free fall on Friday with a rating downgrade from Moody's Investors Service that could trigger the immediate termination of four interest-rate swap agreements, costing the city about $58 million and raising the prospect of more broken swaps contracts.

The downgrade to Baa2, just two steps above junk, and a warning the rating could fall further still, means the third-biggest U.S. city could face even higher costs in the future if banks choose to terminate other interest-rate hedges against fluctuations in interest rates. All told, Chicago holds swaps contracts covering $2.67 billion in debt, according to a disclosure late last year.

"This is an unfortunate wake-up call for anyone still asleep over the fiscal cliff facing the city of Chicago," said Laurence Msall, president of the Chicago-based government finance watchdog, The Civic Federation.

This Reuters article, filed from Chicago, appeared on their website at 6:16 p.m. EST on Friday evening---and I thank Norman Willis for sending it along.

John Hussman: A Who's Who of Awful Times to Invest

Unless we observe a rather swift improvement in market internals and a further, material easing in credit spreads – neither which would relieve the present overvaluation of the market, but both which would defer our immediate concerns about downside risk – the present moment likely represents the best opportunity to reduce exposure to stock market risk that investors are likely to encounter in the coming 8 years.

Last week, the cyclically-adjusted P/E of the S&P 500 Index surpassed 27, versus a historical norm of just 15 prior to the late-1990’s market bubble. The S&P 500 price/revenue ratio surpassed 1.8, versus a pre-bubble norm of just 0.8. On a wide range of historically reliable measures (having a nearly 90% correlation with actual subsequent S&P 500 total returns), we estimate current valuations to be fully 118% above levels associated with historically normal subsequent returns in stocks. Advisory bullishness (Investors Intelligence) shot to 59.5%, compared with only 14.1% bears – one of the most lopsided sentiment extremes on record.

This worthwhile read appeared on the Zero Hedge website at 4:30 p.m. EST yesterday afternoon---and it's the first offering of the day from Dan Lazicki.

The Next Empire

Throughout history, political, financial, and military leaders have sought to create empires. Westerners often think of ancient Rome as the first empire. Later, other empires formed for a time. Spain became an empire, courtesy of its Armada, its conquest of the New World, and the gold and silver extracted from the West. Great Britain owned the 19th century but lost its empire due largely to costly wars. The U.S. took over in the 20th century and, like Rome, rose as a republic, with minimal central control, but is now crumbling under its own governmental weight.

Invariably, the last people to understand the collapse of an empire are those who live within it. As a British subject, I remember my younger years, when, even though the British Empire was well and truly over, many of my fellow Brits were still behaving in a pompous manner as though British “superiority” still existed. Not so, today. (You can only pretend for so long.)

But this does suggest that those who live within the present empire—the U.S.—will be the last to truly understand that the game is all but over. Americans seem to be hopeful that the dramatic decline is a temporary setback from which they will rebound.

Not likely. Historically, once an empire has been shot from its perch, it’s replaced by a rising power—one that’s more productive and more forward thinking in every way. Yet the U.S. is hanging on tenaciously, and like any dying empire, its leaders are becoming increasingly ruthless, both at home and abroad, hoping to keep up appearances.

This right-on-the-money commentary was a guest post by Jeff Thomas over at the internationalman.com Internet site yesterday---and it falls squarely into the absolute must read category.

How Billionaires in London Use Secret Luxury Homes to Hide Assets

On London’s Billionaires Row in Hampstead, the seven-bedroom Carlton House with its 50-foot ballroom, underground swimming pool and 10-person Turkish bath is for sale for 14 million pounds ($21.5 million).

It’s being sold to repay BTA Bank after British courts seized assets from the Kazakh lender’s one-time chairman, billionaire Mukhtar Ablyazov. The lender accused him of embezzling about $6 billion from the bank, claims he says are false and politically motivated.

It took the U.K. High Court to establish that the home, with its marble bathrooms, crystal chandeliers and cherry-wood elevator, belongs to the 51-year-old, because the property was bought through a network of offshore companies that hid his identity. He argued it was his brother-in-law’s and he just rented it after his family moved to England in 2009.

This longish, but interesting Bloomberg article, showed up on their website at 3:00 a.m. Denver time yesterday---and I thank West Virginia reader Elliot Simon for sending it along.

"Spectacular Developments" In Austria: Bail-In Arrives After €7.6 Billion Bad Bank Capital Hole "Discovered"

Slowly, all the lies of the "recovery", all the skeletons in the closet, and all the bodies swept under the rug are emerging.

Moments ago, Austrian ORF reported that there have been "spectacular developments" in the case of the Hypo Alpe Adria bad bank, also known as the Heta Asset Resolution, where an outside audit of Heta's balance sheet exposed a capital hole of up to 7.6 billion euros ($8.51 billion) which the government was not prepared to fill, the Austrian Financial Market Authority said.

As a result, according to Reuters, the bad bank that was created in the aftermath of the Hypo collapse, is itself about to be unwound, as the bad bank itself goes bad!

"Austria's Financial Market Authority stepped in on Sunday to wind down "bad bank" Heta Asset Resolution and imposed a moratorium on debt repayments by the vehicle set up last year from the remnants of defunct lender Hypo Alpe Adria."

This is another Zero Hedge offering.  This one showed up on their website at 7:59 p.m. on Sunday evening EST---and it's courtesy of David Caron.  It's definitely worth reading.  There was a follow-up ZH article on Monday headlined "Lehman Moment For Austrian "Bad Bank" Means Worse Coming"---and it's worth skimming as well.

Spain's Catalonia prepares to set up own foreign missions, tax system amid independence drive

Catalonia is preparing its own tax system, and creating a network of foreign missions as it prepares for a snap regional vote on independence. Recently Spain’s top court ruled that the region’s symbolic referendum vote in November was unconstitutional.

Nationalist leaders in the northeastern region have urged a snap local vote on the issue of independence on September 27, AFP reported.

Catalan president Artur Mas and his government are reportedly working on tax, diplomacy, and social security restructuring in case Catalonia becomes an independent state.

This Russia Today article, courtesy of reader M.A., was posted on their Internet site at 2:41 p.m. Moscow time on their Sunday afternoon, which was 6:41 a.m. in Washington.

Theater of the Absurd: Spain to Provide 14% of Funds For Third Greek Bailout

The ink is not even dry on the much fought extension of the Greek bailout, so hated in Greece because it perpetuates the "austerity" memorandum conditions and already Spain, which as a reminder is suddenly not on very good speaking terms with the Syriza government, is stoking the anti-austerity fire in Athens even more when moments ago Spain's Guindos revealed that not only is a third Greek bailout imminent, and will cost Europe's (and America's via the IMF) taxpayers between €30 and €50 billion, but that Spain, whose banks were completely insolvent as recently as 2 years ago and were only "saved" thanks to the ECB's direct and indirect (repo) bond monetization pathways will provide between 13% and 14% of the funding!

Yep, you couldn't make this stuff up!  This is yet another Zero Hedge article from yesterday morning EST.

As Greek Default Fears Return, Government Considers "Borrowing" Pensions to Repay IMF

Greek short-term default risk jumped over 300bps today putting the odds of a restructuring at 50-50 within the next year as the warnings we issued last week with regard Greece's imminent default on its IMF loan loom. Seeking to reassure its lenders (and avoid yet more capital flight), Reuters reports the Greek government said it was "exploring solutions," including delaying payments to suppliers or try to raise up to 3 billion euros by borrowing from state entities such as pension funds

As Reuters reports, Athens is running out of options to fund itself despite striking a deal with the euro zone in February to extend its bailout by four months. Faced with a steep fall in revenues, it is expected to run out of cash by the end of March, possibly sooner.

This Zero Hedge article appeared on their Internet site 14:54 p.m. EST on Monday afternoon---and it's another contribution from Roy Stephens.  Roy also sent me this Ambrose Evans-Pritchard commentary on the same issue.  It's from 7:52 p.m. GMT yesterday evening---and it's headlined "Greece eyes last central bank funds to avert IMF default".

ECB uncomfortable with leading role in Greek funding drama

European Central Bank policymakers decamp to Cyprus on Wednesday wrestling with the uncomfortable fact that they may hold the keys to Greece's continued membership of the euro.

With no political appetite for a 'transfer union' that could see wealthier countries subsidize Greece, the central bank figures prominently among the main options for staving off an impending funding crunch in Athens.

This is awkward for the ECB, an independent central bank desperate to stay out of the political debate over Greece's future but whose lender-of-last-resort function may leave it as the only institution able to stop an economic collapse there.

"The ECB is justified in being cautious because of the highly political exposure," said Richard Portes, professor of economics at London Business School, noting that the bank has just completed a sensitive, political debate over a sovereign bond-buying plan.

This Reuters piece, filed from Frankfurt, was posted on their website at 12:00 noon EST on Monday---and it's another contribution from Elliot Simon.

Humiliated Greece eyes Byzantine pivot as crisis deepens

Greece's new currency designs are ready. The green 50 drachma note features Cornelius Castoriadis, the Marxisant philosopher and sworn enemy of privatisation.

The Nobel poet Odysseus Elytis - voice of Eastward-looking Hellenism - honours the 200 note. The bills rise to 10,000 drachma, a wise precaution lest there is a hyperinflationary shock as Greece breaks out of its debt-deflation trap at high velocity.

The amateur blueprints are a minor sensation in Greek artistic circles. They are only half in jest.

Greece's Syriza radicals have signed a fragile ceasefire with the eurozone's creditor powers. Few think this can last as escalating deadlines reach their kairotic moment in June.

This longish commentary by Ambrose Evans-Pritchard appeared on The Telegraph's website at 2:24 p.m. GMT on Saturday afternoon---and it's also courtesy of Roy Stephens.

Kerry meets with Russia’s Lavrov over Ukraine crisis

U.S. Secretary of State John Kerry held tense talks with his Russian counterpart in Geneva Monday to end fighting in Ukraine, where the U.N. says more than 6,000 have died in less than a year.

The meeting with Sergei Lavrov in an upscale Geneva hotel came less than a week after Kerry accused Moscow of lying to his face about its involvement in the conflict, which has triggered the worst post-Cold War crisis between the U.S. and its allies, and Russia.

Both were due to brief media on the substance of the meeting later in the day.

High-stakes talks between Kiev and Moscow were also set to get under way in Brussels to resolve a bitter gas dispute, which threatens deliveries to Europe, after Russia began direct supplies to parts of separatist-held eastern Ukraine.

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

Russian Jewish community blasts Ukraine and Baltics nations for glorifying Nazi collaborators

Russia’s largest Jewish organization has condemned the authorities of Ukraine, Baltic nations and Moldova over their official line of support to persons and groups known for close cooperation with Nazi Germany and crimes against humanity during WWII.

The Federation of Jewish Communities of Russia (FJCR) approved the resolution ‘Against reviewing the result of the Second World War’ on Friday.

In this document, the leaders of the Russian Jewry again noted that the current regime in Kiev was portraying as heroes and liberators the OUN-UPA group (Organization of Ukrainian Nationalists – Ukrainian Insurgents’ Army), regardless of the fact that its members had only gained notoriety by killing thousands of civilians over their ethnic roots, mostly Jews and Poles.

FJCR delegates drew attention to the actions of the authorities of the Baltic countries who "made heroes of former SS officers."

This very disturbing article appeared on the Russia Today Internet site at 12:27 p.m. Moscow time last Friday afternoon---and it's another contribution from Roy Stephens.

U.S. Urges E.U. to Refrain From Business With Moscow Amid Russia-Cyprus Deals

The United States is urging its European partners to refrain from doing business with Russia over its alleged role in the Ukrainian crisis, U.S. State Department Deputy Spokesperson Marie Harf said, commenting on the bilateral agreements between Russia and Cyprus signed last week.

“We’ve been clear that this is not the time for business as usual with Russia,” Harf said during a press briefing on Monday. “We’ve stressed with our European allies and partners the importance of unity in pressing Russia to stop fueling conflict in eastern Ukraine. That’s certainly something we feel very strongly about.”

Russia and Cyprus signed nine documents on cooperation, including military, naval and anti-terrorism agreements during the visit of Cyprus President Nicos Anastasiades to Moscow.

I would guess that we're going to find out pretty quick if Europe intends to completely break with Washington on the Ukraine/Russia embroglio.  If they were smart, that's what they'd do---and this would be an easy place to start.  This article, filed from Washington, appeared on the sputniknews.com Internet site at 4:45 a.m. Moscow time on their Tuesday morning---and it's courtesy of Roy Stephens once again.

Germany Foreign Minister Warns against Speculation on Nemtsov Murder

Germany’s Foreign Minister Frank-Walter Steinmeier cautioned on Sunday against speculation over the killing of Russian opposition leader Boris Nemtsov.

"I don’t think we should speculate on the issue," Steinmeier told German public broadcaster ARD, noting that: "Nobody knows the perpetrator yet."

"We hope for a swift and transparent investigation into the case," he said.

This TASS article, filed from Berlin, was picked up by the russia-insider.com Internet site around 10 a.m. Moscow time this morning, which was 2 a.m. in Washington.  It's another offering from Roy Stephens.

Nemtsov Murder Fuels Suspicion, Fails to Spur Russia Sell Off

While the murder of Russian opposition leader Boris Nemtsov sparked international outrage, it won’t dissuade investors after the country’s assets rose the most worldwide last month, according to Prosperity Capital Management Ltd. and Landesbank Berlin Investment GmbH.

“Political markets have short legs, so I do not change my positioning in Russian assets,” Lutz Roehmeyer, who oversees $1.1 billion of assets as a money manager at Landesbank Berlin, said by e-mail Sunday. Investors “accepted that Russian democracy is not at western standards and the security situation or judicial system is far from perfect,” he said.

U.S. President Barack Obama and German Chancellor Angela Merkel condemned the killing on Friday of Nemtsov, a former deputy prime minister under Boris Yeltsin and critic of Russian President Vladimir Putin. Ukraine President Petro Poroshenko said he was a “bridge” between the two countries. Dmitry Peskov, Putin’s spokesman, said the president would take the investigation under his “personal control” and believed the killing to be a provocation.

This Bloomberg news item, with at 2:33 minute video clip embedded, was filed from Moscow at 7:43 a.m. MST on Sunday afternoon---and I thank Elliot Simon for his third story of the day.

Putin Predicted Washington Would Employ Assassination Tactic Against Russia — Paul Craig Roberts

The Washington-financed Russian opposition has not, as Washington hoped it would, joined the Western anti-Putin media campaign. Possibly the Washington-financed Russian NGOs have wised up from observing events in Ukraine. In place of “more democracy,” they got a Washington stooge government squandering Ukraine’s last cent on a losing war.

The most likely explanation of Nemtsov’s murder is that the CIA decided, as Nemtsov was completely marginalized as an opposition politician with 5% as against Putin’s 85%, that Nemtsov was worth more dead than alive. But the ploy, if that is what it is, has not worked inside Russia.

Part of the circumstantial evidence that Nemtsov’s murder was a CIA tactic to destabilize Russia is the orchestrated US media. The New York Times, Washington Post, Wall Street Journal, NPR, and the rest of the presstitutes were ready on cue with reports insinuating that Putin was responsible.

This short, but right-on-the-money commentary appeared on Paul's website on Sunday sometime---and I thank Roy Stephens for sliding it into my in-box very late last night.  It's definitely worth reading.

U.S. government is authorized to rig all markets in secret, GATA secretary tells KWN

Western governments are legally authorized to rig all markets in secret and as a result investigations of market rigging by the investment houses central banks use as intermediaries are not likely to produce anything, GATA secretary/treasurer Chris Powell tells King World News in an interview last Thursday.

Elaborating, Chris recalls the single hearing given to GATA consultant Reginald Howe's gold market-rigging lawsuit in U.S. District Court in Boston in November 2001, at which an assistant U.S. attorney asserted that the U.S. government has the power under the Gold Reserve Act of 1934 to rig the gold market through intervention by the U.S. Treasury Department's Exchange Stabilization Fund.

This brief commentary by Chris, along with the 9:48 minute KWN audio interview, are definitely worth your while.  I thank Harold Jacobsen for pointing it out.

What Top Hedge Fund Managers Really Think About Gold: Jeff Clark -- Casey Research

In the January issue of BIG GOLD, I interviewed a plethora of experts on their views about gold for this year. The issue was so popular that we decided to republish a portion of the edition here.

Given their level of success, these fund managers are worth listening to: James Rickards, Chris Martenson, Steve Henningsen, Grant Williams, and Brent Johnson. Some questions are the same, while others were tailored to their particular expertise.

I hope you find their comments as insightful and useful as I did…

This selection of interviews appeared in yesterday's edition of the Casey Daily Dispatch---and it's worth reading.

Chris Martenson Interviews Grant Williams

This 54:20 minute youtube.com video/audio interview was posted on their Internet site on February 28---and it's definitely a must listen from beginning to end, especially the part about gold.  The discussion turns to gold at the 23:30 minute mark---and the gold commentary lasts for about 20 minutes.  I thank Roy Stephens once again for finding it for us.

U.S. Mint American Eagle gold coin sales tumble in February

U.S. Mint American Eagle gold coin sales in February were the weakest for the second month of the year since 2007, and down 77 percent from January, according to data on Friday, as investors eyed the soaring stock markets.

The U.S. Mint sold 18,500 ounces of gold bullion coins this month, down from 31,000 ounces in February 2014 and the lowest for the second month of the year since 2007 when just 4,000 ounces were sold.

Just 81,000 ounces of gold coins were sold in January, the smallest amount for the first month of the year since 2008.

This follows weak full-year sales in 2014, which were the lowest since 2007.

No surprises here, as retail bullion sales continue to be disastrous.  Ted says that it's only JPMorgan buying silver eagles hand over fist that's keeping their sales elevated like they are.  This Reuters article, filed from New York, was posted on their website at 4:38 p.m. EST last Friday---and I thank Orlando, Florida reader Dennis Mong for sending it to me on Saturday.

Treasure Hunt: North Carolina authorities search for $4M in missing gold

Thieves stole $4.8 million in gold bars from an armored car on Interstate-95 near Wilson Sunday in a brazen robbery that ranks as one of the richest in North Carolina history.

The armored vehicle was going from Miami to Massachusetts. But around 6:50 p.m. Sunday, Wilson County deputies responded to a report of an armed robbery on northbound I-95 near mile marker 114. 

Authorities said two armed TransValue Inc. security guards were transporting gold and silver to Attleboro, Massachusetts, which is a major hub of jewelry outlets.

When this robbery gets solved, it's a good bet that it will turn out to be an inside job.  This gold-related news item appeared on the wncn.com Internet site at 9:58 a.m. EST on Monday morning---and I thank Texas reader Roger DeReu for sending it our way.  The Zero Hedge spin on this is headlined "$4 Million in Gold Bars Stolen in 11th Largest Heist in History"---and that's courtesy of reader M.A.

Ronan Manly: Bank of England traded gold in 1980s to control price and made a profit

The Bank of England was intimately involved with the daily London gold price fixings through the 1980s, long after the demise of the London Gold Pool price-control system, gold researcher and GATA consultant Ronan Manly reports today, adding that documents suggest that the bank was trading gold for its own account in order to help control the price and even boasted of making a profit doing so.

Manly also reports that the bank today evades questions about this activity. His commentary is headlined "The Bank of England and the London Gold Fixings in the 1980s" and it was posted on the bullionstar.com Internet site on Saturday.  I thank Ronan for passing it along---and Chris Powell for writing the above preamble.  It's on the longish side, but an absolute must read nonetheless.

Greece revokes approval for Eldorado Gold’s Skouries project

Greece has revoked the approval required by Vancouver-based Eldorado Gold to complete construction of the Skouries project processing plant.

The company on Monday announced that its subsidiary Hellas Gold on Friday received the notice from Greece's Ministry of Productive Reconstruction, Energy and Environment, which indicated that the ministry might, however, reverse its decision once it had completed an internal review process.

The ministry did not give a time frame within which it would complete its review process.

TSX- and NYSE-listed Eldorado said it believed the ministry’s decision had no legal basis and the company would, if necessary, act to protect its legal rights.

This miningweekly.com article, filed from Toronto, was posted on their Internet site yesterday sometime---and I thank South African reader B.V. for digging it up for us.

Indian government moves to paperize gold and call it monetization

To curb gold imports and monetise large idle stocks of the precious metal, Finance Minister Arun Jaitley today announced three schemes, including redeemable gold bonds which will carry a fixed rate of interest.

The minister proposes to introduce a gold monetisation scheme, which will replace both the present gold deposit and gold metal loan schemes.

"The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks and other dealers would also be able to monetize this gold," Mr. Jaitley said in his budget speech.

India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes of gold each year.

Lots of luck with these "schemes".  The Indian government just never gives up, does it?  This article appeared on the hindu.com Internet site at 4:22 p.m. IST on their Saturday afternoon---and I found it in a GATA release.  It's certainly worth skimming---and the embedded photo makes it doubly worth the trip.

Indian Gold import duty stays at 10%; industry worried

Jewellers and the bullion trade were disappointed with the Union Budget 2015 as the expected cut in import duty on gold from 10 per cent did not happen. The high rate has been responsible for elevated levels of gold smuggling, they say.

“For the gem and jewellery industry, the only reaction is disappointment,” Vipul Shah, chairman, Gem Jewellery Export Promotion Council, said. “The budget overlooked a significant area to curb black money and a long-pending demand from the industry to reduce the gold import duty.”

However, the Union Finance Minister announced steps for monetisation of gold in the budget.

This is another gold-related story from The Hindu website.  It appeared there just after midnight Sunday morning India Standard time---and I found it on the Sharps Pixley Internet site.

Jim Rickards: Why the U.S. is Letting China Accumulate Gold

A lot of people think about gold as a percentage of a country’s total reserves. They are surprised to learn that the United States has 70 percent of its reserves in gold. Meanwhile, China only has about 1 percent of its reserves in gold. People look at that and think that’s an imbalance. But those are not very meaningful figures in my view.

The reason is that a country’s reserves are a mixture of gold and hard currencies, and the currencies can be in bonds or other assets. The United States doesn’t need other currencies. We print dollars, so why would we hold euros and yen?

The U.S. doesn’t need them, so it makes sense that the country would have a very large percentage of its reserves in gold. China, on the other hand, has greater need for other currencies.

A better metric, in my opinion, is to look at a country’s gold holdings as a percentage of GDP. GDP is a representation of how big a country’s economy is. It’s the gross value of all the goods and services.

This must read commentary by Jim put in an appearance on the dailyreckoning.com Internet site on Monday sometime---and I thank Dan Lazicki for the final story in today's column.

¤ The Funnies

Here are the last three shots from the Grand Canyon area as I was driving off the South Rim plateau.  The first, which is cropped, was one that I took while standing in the middle of State Highway 64 on a rather steep hill looking more or less East.  The 'stuff' hanging from the cloud on the right hand side of the photo is called virga---precipitation that evaporates before it reaches the ground.  Don't forget the 'click to enlarge' feature.

The last two photos [uncropped] were taken at the bottom of the above-mentioned hill and around the bend.  The second of the two photos below was taken just to the right of the first photo shown below---and the virga you see in the second photo below is the same patch that appears in the cropped photo above.  The canyon in these two photos is of the Little Colorado River, which drains the Painted Desert and the Petrified Forest, a couple of places we'd been just a few days prior.

¤ The Wrap

A few observations. First, in this day and age of almost non-stop findings and reports that the big banks have conspired to fix prices in almost all the markets they deal in, the COMEX March silver deliveries would seem to certify that they are certainly the kingpins of COMEX silver. I’m sure all these banks could come up with a litany of cockamamie stories as to why they must deal in silver for their own accounts away from the simple explanation that they are just speculating and controlling the market, but you would be hard-pressed to come up with clearer evidence to the contrary than in the March silver deliveries so far.

Second, the fact that JPMorgan, in its proprietary trading account, was the largest stopper of 735 deliveries (6.7 million oz) would seem to coincide with my speculation that the bank has been accumulating physical silver in a serious manner, even as a number of its own customers issued deliveries this month – an apparent conflict of interest.

But the biggest concern is this – JPMorgan has been the biggest short in COMEX silver futures since taking over Bear Stearns and the bank’s taking of physical silver deliveries this month has occurred while it is still the biggest short with 18,000 contracts (90 million oz) still held net short. In order for JPMorgan to have taken delivery of 735 contracts this month for their own account and benefit means it had to be long those futures contracts while at the same time being short many more futures contracts. This is permitted by the CFTC and the CME, as commercials can hold open long and short positions in the same month (not allowed for non-commercials)

Please step back and consider what I just said.

By being the largest COMEX silver short, JPMorgan has exerted the largest negative price influence on silver while, at the same time, has stepped up as the largest taker of physical silver on the COMEX in the first two [now three - Ed] delivery days of the March contract. Is this not, on its face, the most egregious and crooked circumstance that one can imagine? Manipulate the price lower and then scoop up the metal at bargain prices with the blessing of the regulators.  With such blessings, it’s no wonder JPMorgan is considered the U.S.’s most politically connected bank. - Silver analyst Ted Butler: 28 February 2015

I'd like to think that the three charts posted before the Critical Reads section pretty much sums up Monday's price action in both gold and silver.  There was nothing free market about what happened to those two metals.  Only platinum and palladium appeared to be trading outside the pervue of the JPMorgan et al.  Of course what the dollar index was doing was irrelevant once again.

Here are the 6-month charts for both gold and silver as of the close of trading yesterday.

I started on this column mid-afternoon yesterday---and so as of midnight EST last night, I was basically finished.  Needless to say, I'd been watching the goings-on in gold and silver during Far East trading on their Tuesday morning starting with a grim resignation, followed a few hours later by astonishment.

After rallying about three bucks or so, the HFT traders and their algorithms put in an appearance shortly after 9 a.m. Hong Kong time---and an hour later had gold down about 15 bucks and silver by around 40 cents.  Then a surprise buyer showed up at that point and by noon had their respective prices back to where they were before the engineered price decline.

One wonders what that was all about.

There were similar, but somewhat smaller price moves in platinum and palladium.

And as I type this paragraph, the London open is thirty minutes away.  Gold and silver prices are up a bit, platinum is trading unchanged---and palladium is down a few bucks.  All is relatively quiet at the moment---as are current volume levels.  That wasn't true earlier, of course, as net gold volume has already blown out to just over 42,000 contracts---and silver's net volume is around the 11,700 contract mark.  The dollar index is down 17 basis points.

Since today is Tuesday, it's the cut-off for this Friday's Commitment of Traders Report.  We also get the companion Bank Participation Report for March--and this will allow Ted to recalculate JPMorgan's short-side corner in the COMEX silver market.  It will also give us our monthly peek at what the world's banks are up to in the precious metal markets---and as you already know, they're up to quite a bit.

And as I hit the 'send' button on today's column at 5:10 a.m. EST, I see that not much has happened since the big down/up moves in Tuesday morning trading in the Far East.  Prices and volumes are very quiet in all four precious metals at the moment.  Gold is up a couple of bucks---silver and platinum are down a hair---and palladium is now down 5 dollars.  Net gold volume is just under 50,000 contracts---and silver's net volume is just over 13,000 contracts.  The gold and silver markets have barely been able to fog the proverbial mirror since the big price/volume action earlier in the day.  The calm before another storm, perhaps.

Once again the dollar index is in rally mode.  It was as low as 95.21 less than an hour before the London open---and is now at 95.45---up 24 basis points off that low---and virtually back to unchanged from Monday's close in New York.

Like I said further up, I have no idea what to make of the early morning price action in the Far East on their Tuesday morning.  Maybe it's something, but they again, it may turn out to be nothing.  As I've said before on countless occasions---and I'll say it again now---unless JPMorgan et al decide to, or are instructed to, gold and silver prices are not going to rally a meaningful amount.

We're still miles away from a bullish configuration in the Commitment of Traders Report but, having said that, we could still have decent rallies off these current lows in both silver and gold regardless.  However, if JPMorgan et al resume going short against all comers in this theoretical rally, it's a given that at some point, it will end in the same old way.

That's more than enough for one day---and I'll see you here tomorrow.

Ed Steer

]]>
Tue, 3 Mar 2015 06:28:00 +0000
<![CDATA[Apple Buying a Third of World’s Gold to Meet Demand For iWatch?]]> http://www.caseyresearch.com/gsd/edition/apple-buying-a-third-of-worlds-gold-to-meet-demand-for-iwatch/ http://www.caseyresearch.com/gsd/edition/apple-buying-a-third-of-worlds-gold-to-meet-demand-for-iwatch/#When:09:45:00Z "Russia and/or China might be forced to play the gold card"

¤ Yesterday In Gold & Silver

The gold price did little of anything during the Far East trading session on their Friday---and it got sold down about five bucks the moment that London opened.  From there it chopped rather unsteadily higher, with the high tick coming minutes before the London close, which was about 10:55 a.m. EST.  From there it got sold down into the 1:30 p.m. COMEX close---and did little after that.

The CME Group reported the high and low ticks as $1,219.20 and $1,204.10 in the April contract.

Gold finished the Friday session in New York at $1,213.70 spot, up $4.50 from Thursday's close.  Net volume was nothing special at 105,000 contracts.

It was more or less the same price chart in silver, although there was no rally at all after the short price spike at 9:15 a.m. EST in New York yesterday.  Once that was over, the metal chopped sideways into the close.

The high and low ticks, which were barely worth looking up, were reported as $16.70 and $16.425 in the May contract.

After its low tick an hour after the Zurich open, the platinum price rallied until noon in New York, before getting sold down a few dollars into the close.  The metal finished the day at $1,185.00 spot, up 13 bucks on the day.

The palladium chart was sort of a mini version of the platinum price chart---and it closed at $815 spot, up 8 dollars from Thursday's close.

The dollar index closed late on Thursday afternoon at 95.27---and it chopped quietly lower until its 94.86 low, which came a minute or so after 8:00 a.m. in New York.  From there it chopped higher until noon---and it didn't do much after that, closing at 95.26---which was basically unchanged from Thursday's close.

The gold stocks gapped up a bit at the open---and then proceeded to follow the gold price like a shadow for the remainder of the Friday session, as the HUI closed up 1.45 percent.

It was more or less the same chart pattern for the silver equities, except their highs came just before 11:00 a.m. EST---and then they traded lower until almost the end of COMEX trading, before rallying into the 4:00 p.m close of the New York equity markets.  Nick Laird's Intraday Silver Sentiment Index closed up 1.31 percent.

The CME Daily Delivery Report for Day 2 of the March delivery month showed that zero gold and 141 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  There were a lot of issuers and stoppers---and the one that stood out was JPMorgan, which issued 42 contracts out of its client account---and then stopped 77 contracts in its in-house [proprietary] trading account.  Trading against its clients best interests again methinks.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in March increased by 29 contracts---and now stands at 202 contracts.  In silver, the March open interest fell by 1,588 contracts down to 1,554 contracts remaining---and the big drop was the First Day Notice deliveries posted in yesterday's column.  You can also subtract the 141 contracts posted for delivery on Tuesday.

There were no reported changes in GLD yesterday---and as of 7:18 p.m. EST yesterday, there were no reported changes in SLV, either.

The U.S. Mint had a tiny sales report yesterday.  They sold 59,000 silver eagles---and that was all.

Setting aside the possibility that the mint might add some sales to February's total on Monday, for the month the mint reported selling 18,500 troy ounces of gold eagles---12,000 one-ounce 24K gold buffaloes---and 3,022,000 silver eagles.  Based on these sales, the silver/gold sales ratio works out to 99 to 1.  Gold sales continue to be worse than awful, as retail demand has all but dried up---and Ted Butler's "big buyer" still appears to be active in the silver eagles market.

It was another quiet day in gold over at the COMEX-approved depositories on Thursday, as only 700 troy ounces were received---and 482.250 troy ounces [15 kilobars] were shipped out.

It was another zero movement day in silver, although 1,296,519 troy ounces were shifted from the Eligible to Registered category over at the CNT Depository---which means nothing in the grand scheme of things.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was more or less what Ted and I were expecting.

In silver, the Commercial net short position declined by 5,574 contracts, which works out to 27.9 million troy ounces.  The Commercial net short position is now down to 210.7 million troy ounces, which is still way up in nose bleed territory.

The Big 4 traders reduced their net short position by around 2,400 contracts, but the '5 through 8' traders only reduced their short position by about 300 contracts.  The small traders, Ted Butler's raptors, added about 2,900 contract to their long position.   Ted pegs JPMorgan's short-side corner in the silver market at around 18,500 contracts.

On the other side of this were the hapless and brain-dead technical traders in the Managed Money category, as they sold 3,920 long contracts, but they also decreased their short position by 503 contracts as well, which Ted was happy to see.  The reason being that despite the ongoing engineered price decline during the reporting week, the Managed Money may have been pitching longs, but they weren't adding to their short positions, which is a good sign that they may not be suckered into going mega short the silver market if JPMorgan tries to force them to go there.

In gold, the Commercial net short position declined by 8,057 contracts, or 805,700 troy ounces of the stuff.  The Commercial net short position now sits at 13.57 million troy ounces, which is still way too high to suit me.

The Big 4 traders reduced their short position by 2,200 contracts---and the '5 through 8' traders did the same.  The smaller traders/raptors added 3,500 contracts to their long position.

In the Managed Money category of the Disaggregated COT Report, these technical funds sold 4,000 long contracts and also added 2,205 contracts to their short positions.

Ted mentioned that the technical funds in the Managed Money category are close to the point where they've sold all their accumulated long positions in both silver and gold---and unless "da boyz" can force these same traders further onto the short side, we may be at---or close to---a temporary bottom.  If that turns out to be the case, then a rally of some size may be in our future.

So we wait.

I want to spend a minute talking about what I call the "unblinking longs" in all four precious metals.  These are non-technical fund traders in the Managed Money category of the Disaggregated COT Report.   They do not respond to the usual buy/sell signals that drives the brain-dead technical funds in this same category.  They remain long through thick and thin---and the highs and the lows.  They hold very large long positions.

In palladium, it's north of 15,000 contracts, platinum it's something over 25,000 contracts, in silver it's a bit over 40,000 contract---which is an eye-watering number, by the way---and in gold it's a bit north of 110,000 contracts.  These are not small numbers---and I've always asked myself who they might be---and what their reason for being there is.

I don't know if this situation is good or bad, but they're always there.  I expect that at some point in the future, we'll find out.

Before getting into the stories, here' Nick's "Days of World Production to Cover Short Positions" chart showing the short positions of the 4 and 8 largest traders in all physically traded commodities on the COMEX.  Nothing much has changed since I last posted this chart, except that the 'Big 8' in silver are down to 148 days [from 156 days] of world silver production to cover all their short positions.  The other three precious metals aren't much better---and everybody seems to think that this state of affairs is perfectly OK.

I have a lot of stories for a Saturday/weekend column---and a few of them I've been saving for today's missive for length and content reasons, and some for both reasons.  Four or five of them fall into the absolute must read category---and I hope you can find the time in what's left of your weekend to give them the attention they so richly deserve.

¤ Critical Reads

Q4 GDP Revised Down to 2.2% From 5.0%: Full Breakdown

There was much hope that when Q3 GDP soared to 5%, primarily on the back of Obamacare spending recalendarization and a massive consumption/personal saving data revision, that the US economy would finally enter lift-off mode. Those hopes were reduced by about 60% when moments ago the BEA announced that Q4 GDP was revised from the original 2.64% print to only 2.18%, which while better than expected, was the lowest economic growth rate since the "polar vortex."

The main reason for the revision: a substantial drop in growth contribution from private inventories, which instead of adding 0.82% to the bottom GDP line, only contributed 0.12% in Q4 following the first revision. To be sure, this was perfectly expected, and is exactly what we said would happen last month after the first inventory number.

This short commentary, with a couple of excellent charts, appeared on the Zero Hedge website at 8:46 a.m. EST on Friday morning---and I thank Dan Lazicki for today's first story.

Chicago PMI Crashes Most Since Lehman to Lowest Since July 2009

January's brief 'hope' bounce following 3 months of weakness is long forgotten as February's Chicago PMI crashes to 45.9 (missing expectations of 57.5) - its lowest since July 2009.

This is the biggest MoM drop since Lehman in Oct 2008. New Orders suffered the largest monthly decline on record.

Seems like it is time to blame the weather... PMI says it is "difficult to gauge magnitude of weather and port strike" but blames it nonetheless.

This is the second story in a row from the Zero Hedge website.  This one showed up there at 9:48 a.m. EST yesterday---and it's also the second in a row from reader Dan Lazicki.

"Monetary Policy is Bankrupt" Dr. Lacy Hunt Warns "Bonds, Not Stocks, Are a Good Economic Indicator"

I think the S&P is disconnected from the fundamentals in the US economy. Growth last year was a quarter slower than it was in 2013. We’re on the cusp of either zero inflation or deflation. Corporate profits using the Bureau of Economic Analysis numbers, compiled using data from the Internal Revenue Service, showed year over declines in all the first three quarters of last year (4Q is not yet available). In the third quarter, the after-tax profits adjusted for inventory gains/losses and over/under depreciation were 7% below a year ago.

The standard of living declined again in 2014. And a lot of the growth we had in 2014 really was a massive building of inventories, which is often the case when stock prices are high and top line is decelerating.

The economy enters 2015 in very weak shape. None of the big ticket sectors are doing well. Capital spending is declining, being paced by extreme weakness in oil & gas drilling, which has really been the driving force in manufacturing over the last four years. The best you can say about the housing sector is that it is flat. Not a very important sector.

Vehicle sales are below the best levels of last year and the trade sector is deteriorating. It is very difficult to move the US economy forward by selling things over the counter and through the shopping cart. The US economy is very fragile. And the fragility is highlighted by the fact that firms simply do not have pricing power.

This rather longish interview with Lacy appeared on the Zero Hedge website at 6:15 p.m. EST Friday evening---and it's also courtesy of Dan Lazicki, for which I thank him. It's worth reading if you have the time.

How Much Will You Pay to Park Cash as Central Banks Go Negative?

Central banks are stooping to new lows to conquer weak inflation.

The monetary guardians of the euro area, Switzerland, Sweden and Denmark are now imposing negative interest rates on bank deposits or on funding operations that feed through to the real economy. Analysts at Commonwealth Bank of Australia reckon almost a quarter of worldwide central-bank reserves now carry a negative yield.

By confounding the onetime idea that they had to stop cutting borrowing costs at zero, monetary-policy makers are seeking to spur spending over saving. They also expect their currencies to weaken as capital inflows are discouraged.

The risk is that negative rates backfire and result in even less demand. That could happen if people begin stuffing their cash under mattresses, or if rates below zero eat into the profit margins of banks or distort financial markets.

This very interesting Bloomberg article, filed from London, appeared on their Internet site at 3:27 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for sending it our way.  There was another Bloomberg story about this by Mohamed A. El-Erian early Friday morning as well---and it's headlined "10 Things to Know About Negative Bond Yields".  I thank Dan Lazicki for this one as well.

Doug Noland: Periphery Fragility List

The Chinese Credit Bubble has been historic, dwarfing the fateful Japanese Bubble from the eighties. Arguably, China’ Bubble today even exceeds its mirror image U.S. Bubble. I have also referred to the Chinese renminbi link to the dollar as the King of All Currency Pegs. The bullish consensus scoffs at notions of Chinese fragility. With an international reserve position of $3.8 TN (and shrinking), the belief is that China has more than sufficient “money” to stimulate the economy, recapitalize the banking system and support the renminbi. Yet with anecdotes suggesting mounting outflows and heightened nervousness, a destabilizing dislocation in renminbi trading becomes a real possibility.

How long will the PBOC be willing to use the nation’s reserves to allow speculators, fraudsters and Chinese elite to cash out of China at top dollar? Chinese officials confront great challenges that will require difficult decisions. So far, bullish sentiment remains impervious to the major uncertainties enveloping China’s economy, financial system and policy making. The perception that Chinese officials have everything well under control could soon be challenged.

Meanwhile, signs of Bubble excess become increasingly conspicuous in the U.S. – Silicon Valley, Manhattan, upper-end real estate around the country, subprime auto loans, jumbo mortgages, record corporate debt issuance, etc. Record stock and bond prices – record prices for anything that provides a yield. Record hedge fund assets, in the face of ongoing performance issues. Record ETF assets. Resurgent derivative markets.

The list goes on and on.  Doug's weekly commentary appeared on his creditbubblebulletin.ca website yesterday evening---and I thank reader U.D. for sending it my way.

Here’s how the clash between the NSA Director and a senior Yahoo executive went down

In an unusual public exchange, the director of the National Security Agency and a senior Yahoo executive clashed over cyber-spying Monday, illustrating the growing chasm between Washington and Silicon Valley over whether intelligence officials should have broad access to the products being developed by the nation's top technology firms.

For a normally staid Washington cyber-security conference, this one hosted by New America, the tense back-and-forth had the packed audience of executives, senior policy makers, bureaucrats and journalists buzzing.

Speaking at the signature event of the conference, NSA Director Adm. Mike Rogers called for a "legal framework" that would enable law enforcement and anti-terrorism officials to tap into encrypted data flowing between ordinary consumers -- echoing a stance laid out by other administration officials, including FBI Director James Comey and Attorney General Eric J. Holder. But technology executives as well as many cybersecurity experts argue there is no way to build in such "back doors" without fundamentally undermining the security that protects online communications around the world. In response to recent revelations about government snooping, firms such as Apple and Google have designed their latest mobile software to make it impossible for the companies to turn over data from smartphones and tablet computers to police -- even when authorities have a search warrant.

This extremely interesting article showed up on The Washington Post website on Monday---and I thank reader P.F. for sharing it with us.

Foreign governments gave millions to foundation while Clinton was at State Department

The Clinton Foundation accepted millions of dollars from seven foreign governments during Hillary Rodham Clinton’s tenure as secretary of state, including one donation that violated its ethics agreement with the Obama administration, foundation officials disclosed Wednesday.

Most of the contributions were possible because of exceptions written into the foundation’s 2008 agreement, which included limits on foreign-government donations.

The agreement, reached before Clinton’s nomination amid concerns that countries could use foundation donations to gain favor with a Clinton-led State Department, allowed governments that had previously donated money to continue making contributions at similar levels.

The new disclosures, provided in response to questions from The Washington Post, make clear that the 2008 agreement did not prohibit foreign countries with interests before the U.S. government from giving money to the charity closely linked to the secretary of state.

This is the second story in a row from The Washington Post---and this one is courtesy of Norman Willis.  It was posted on their Internet site on Wednesday sometime.

Deeper Ties to Corporate Cash for Doubtful Climate Researcher

For years, politicians wanting to block legislation on climate change have bolstered their arguments by pointing to the work of a handful of scientists who claim that greenhouse gases pose little risk to humanity.

One of the names they invoke most often is Wei-Hock Soon, known as Willie, a scientist at the Harvard-Smithsonian Center for Astrophysics who claims that variations in the sun’s energy can largely explain recent global warming. He has often appeared on conservative news programs, testified before Congress and in state capitals, and starred at conferences of people who deny the risks of global warming.

But newly released documents show the extent to which Dr. Soon’s work has been tied to funding he received from corporate interests.

He has accepted more than $1.2 million in money from the fossil-fuel industry over the last decade while failing to disclose that conflict of interest in most of his scientific papers. At least 11 papers he has published since 2008 omitted such a disclosure, and in at least eight of those cases, he appears to have violated ethical guidelines of the journals that published his work.

No surprises here.  Another so-called climate change "expert" caught with his hand in the proverbial cookie jar.  This long essay appeared on The New York Times website last Saturday---and for obvious reasons had to wait for today's column.  It's the second offering of the day from reader P.F.

The Neoconservative Threat to World Order — Paul Craig Roberts

This week I was invited to address an important conference of the Russian Academy of Sciences in Moscow. Scholars from Russia and from around the world, Russian government officials, and the Russian people seek an answer as to why Washington destroyed during the past year the friendly relations between America and Russia that President Reagan and President Gorbachev succeeded in establishing. All of Russia is distressed that Washington alone has destroyed the trust between the two major nuclear powers that had been created during the Reagan-Gorbachev era, trust that had removed the threat of nuclear Armageddon. Russians at every level are astonished at the virulent propaganda and lies constantly issuing from Washington and the Western media. Washington’s gratuitous demonization of the Russian president, Vladimir Putin, has rallied the Russian people behind him. Putin has the highest approval rating ever achieved by any leader in my lifetime.

Washington’s reckless and irresponsible destruction of the trust achieved by Reagan and Gorbachev has resurrected the possibility of nuclear war from the grave in which Reagan and Gorbachev buried it. Again, as during the Cold War the specter of nuclear Armageddon stalks the earth.

Why did Washington revive the threat of world annihilation? Why is this threat to all of humanity supported by the majority of the US Congress, by the entirety of the presstitute media, and by academics and think-tank inhabitants in the US, such as Motyl and Weiss, about whom I wrote recently?

This commentary by Paul is one of today's stories that falls into the absolute must read category.  It appeared on this website on Thursday---and had to wait for a spot in today's column.  By the way, did I mention that this an absolute must read---because it certainly is.  Do it now!  I thank Roy Stephens for sending it to me.

The Real American Exceptionalism: From Torture to Drone Assassination, How Washington Gave Itself a Global Get-Out-of-Jail-Free Card

"The sovereign is he who decides on the exception,” said conservative thinker Carl Schmitt in 1922, meaning that a nation’s leader can defy the law to serve the greater good. Though Schmitt’s service as Nazi Germany’s chief jurist and his unwavering support for Hitler from the night of the long knives to Kristallnacht and beyond damaged his reputation for decades, today his ideas have achieved unimagined influence. They have, in fact, shaped the neo-conservative view of presidential power that has become broadly bipartisan since 9/11. Indeed, Schmitt has influenced American politics directly through his intellectual protégé Leo Strauss who, as an émigré professor at the University of Chicago, trained Bush administration architects of the Iraq war Paul Wolfowitz and Abram Shulsky.

All that should be impressive enough for a discredited, long dead authoritarian thinker. But Schmitt’s dictum also became a philosophical foundation for the exercise of American global power in the quarter century that followed the end of the Cold War. Washington, more than any other power, created the modern international community of laws and treaties, yet it now reserves the right to defy those same laws with impunity. A sovereign ruler should, said Schmitt, discard laws in times of national emergency. So the United States, as the planet’s last superpower or, in Schmitt’s terms, its global sovereign, has in these years repeatedly ignored international law, following instead its own unwritten rules of the road for the exercise of world power.

This longish essay by Alfred W. McCoy is your second absolute must read story in a row.  It was posted on the tomdispatch.com Internet site via the Asia Times on Tuesday---and for length and content reasons, had to wait for today's column.  It is, like the Paul Craig Roberts commentary that preceded it, a very disturbing read.  But no matter how ugly, it is the truth.  Not surprisingly, it's courtesy of Roy Stephens once again.

Leonard Nimoy, world famous as Mr. Spock on 'Star Trek' TV series and films, dies at 83

In 1975, Leonard Nimoy published an autobiography with the defiant title, "I Am Not Spock" — an attempt to show the world he had many more facets than the pointy-eared character that had come to define him.

Yet two decades later, after proving that with a career that became a rich blend of roles beyond "Star Trek" along with directing, writing and photography, he bowed to fate with "I Am Spock," a revisionist sequel.

Nimoy had come to appreciate Mr. Spock's enduring legacy and the inspiration the man of logic provided the actor and his fans alike.

"He's a part of me," he wrote in his second memoir. "Not a day passes that I don't hear that cool, rational voice commenting on some irrational aspect of the human condition."

I remember watching Star Trek on TV in Toronto back in the summer of 1967---and I've been a 'trekkie' ever since.  It makes me sad [and old] to post this story.  This AP article, filed from Los Angeles, appeared on the canada.com Internet site yesterday---and I thank reader M.A. for bringing it to my attention---and now to yours.

Foreign Real Estate Is the New Swiss Bank Account

Financial privacy is essentially dead.

I think it’s only prudent to assume that sooner or later all the details of your financial life will come to rest in a government computer—if they haven’t done so already—and to plan accordingly.

We live in a world where pretty much every penny you earn, save, and spend is stored in a permanent record somewhere and can be retrieved for scrutiny one day if needed.

It’s not a comfortable or happy thing. But no matter how unpleasant it is, I believe it’s a reality we have to face.

This most excellent commentary was written by International Man's senior editor, Nick Giambruno---and it's worth your while, especially if you're an American citizen.

How Real Is the European Deflation Threat?

Oppenheimer Funds’ Alessio de Longis and Principal Global Investors CEO Jim McCaughan discuss the impact of the threat of deflation on banking and the economy. They speak on “Bloomberg Surveillance.”

This 5:58 minute Bloomberg video clip was posted on their website at 5:05 a.m. MST on Friday---and it's another offering from Dan Lazicki.

Alasdair Macleod: The euro may be riskier than you think

GoldMoney research director Alasdair Macleod writes that Greece and the European Union are both in terribly weak positions relative to the other and that this may bear more heavily than expected on the euro, which has no long history and thus less credibility than other currencies.

Macleod's commentary is headlined "The Euro May Be Riskier Than You Think" and it was posted on the goldmoney.com Internet site on Friday.  I found it embedded in a GATA release.

You will get nothing unless you honour our deal, Germany warns Greece

Germany is expected to approve the new eurozone bail-out deal for Greece in a parliamentary vote on Friday but has warned that Athens will receive nothing unless it honours its commitments under the deal.

Wolfgang Schaeuble, the German finance minister, said he was “stunned” after his Greek counterpart, Yanis Varoufakis, spoke again of a debt restructuring on Greek radio, and the Athens government indicated it would block plans to privatise strategic assets.

“If the Greeks violate the agreements, then they have become obsolete," a visibly angry Mr Schaeuble said at a meeting to persuade German MPs to support the deal in today’s vote. The meeting in Berlin came after Germany’s biggest-selling newspaper launched a campaign against the Greece deal, printing “NEIN!” across an entire inside page, and encouraging readers to take selfies holding the page up and send them in for publication.

“No more billions for greedy Greeks,” the newspaper added, in only slightly smaller print. The page was printed in the blue and white of the Greek flag, instead of Bild’s more usual red and white.

This story appeared on the telegraph.co.uk Internet site at 9:29 p.m. GMT on Thursday evening---and it's courtesy of Roy Stephens.

Greek PM says 'forget about third bailout'

Greece won’t be seeking a third international bailout after the four-month extension of its current program expires, Greek Prime Minister Alexis Tsipras said.

In a televised speech to his government, Tsipras also said the country has requested a reduction of its debt, despite European creditors demanding that Greece pay it in full.

"Some have bet on a third bailout, on the possibility of a third bailout in June. I'm very sorry but once again we will disappoint them," the PM declared, adding that “the Greek people put an end to bailouts with their vote."

Well, dear reader, it sounds like he's put a stake in the ground on this issue, so we'll see how things progress over the next four months, if it gets that far.  This news item appeared on the Russia Today website at 9:28 p.m. Moscow time on their Friday evening---and it's courtesy of Roy Stephens.

Ukraine pays Gazprom $15 million for 24 hours worth of gas

Ukraine’s Naftogaz has paid Gazprom $15 million for gas delivery. At current levels, the prepayment covers one day's gas consumption and will be spent by Tuesday, Gazprom spokesperson Sergey Kupriyanov said.

“Today at 9:20am MSK Gazprom received a payment from Ukraine’s Naftogaz in the amount of $15 million. At the current level of supply this sum will be enough roughly for one day,” he said.

"If Naftogaz paid for another 24 hours, it means the resources would last through Monday till Tuesday," he said.

The relatively small prepayment suggests Kiev is buying time before trilateral talks in Brussels on march 2nd. Russian energy minister Alexander Novak had warned Kiev’s failure to pre-pay would mean a cut-off.

This news item showed up on the Russia Today website at 7:10 a.m. Moscow time on their Friday morning---and once again it's another contribution from Roy Stephens.

Dubai’s deal with Kiev includes no weapons supplies – UAE Foreign Ministry

The United Arab Emirates is not selling military equipment to Ukraine, despite earlier statements by Kiev officials, the UAE Foreign Ministry said.

“An agreement on cooperation in defense technologies the UAE and Ukraine signed recently does not stipulate any contracts for deliveries of weaponry to the Ukrainian side,” said Faraj Faris al-Mazrouei, adviser to UAE Foreign Minister Abdullah bin Zayed Al Nahyan.

The deal was only one element in a future system of cooperation between the two countries in the field of defense technologies, RIA Novosti reported al-Mazrouei as saying, citing the Emarat Al-Yawm news portal.

The UAE and Ukraine signed a memorandum of understanding on military-technical cooperation during the IDEX-2015 defense exhibition in Abu Dhabi earlier this week.

This Russia Today story appeared on their website at 7:28 p.m. Moscow time on their Friday evening---and it's also courtesy of Roy Stephens.

Boris Nemtsov, Russian opposition leader, shot dead in Moscow

Boris Nemtsov, a Russian opposition leader and sharp critic of President Vladimir Putin, was gunned down Saturday near the Kremlin, officials said. Nemtsov was killed just a day before a protest planned against Putin's rule.

The death of Nemtsov, a 55-year-old former deputy prime minister, ignited a fury among opposition figures who assailed the Kremlin for creating an atmosphere of intolerance of any dissent. Putin quickly offered his condolences and called the murder a provocation.

Putin ordered Russia's law enforcement chiefs to oversee the probe. "Putin noted that this cruel murder has all the makings of a contract hit and is extremely provocative," presidential spokesman Dmitry Peskov said in remarks carried by Russian news agencies.

Nemtsov assailed the government's inefficiency, rampant corruption and the Kremlin's Ukraine policy, which has strained relations between Russia and the West to a degree unseen since Cold War times.

This news story was posted on the cbc.ca Internet site at 5:14 p.m. EST yesterday afternoon---and I thank reader David Caron for bringing it to our attention.  There was a story about this on the Russia Today website as well---and it's headlined "Opposition politician Boris Nemtsov killed in the center of Moscow".  I thank Juli Placek for that one.

Nemtsov was no threat to Russian government - presidential spokesperson

Boris Nemtsov did not pose a threat to the Russian government, according to presidential press secretary Dmitry Peskov. The murder of the Russian opposition figure has been called a "provocation" by a number of politicians and public figures.

“With all due respect to the memory of Boris Nemtsov, in political terms he did not pose any threat to the current Russian leadership or Vladimir Putin. If we compare popularity levels, Putin’s and the government’s ratings and so on, in general Boris Nemtsov was just a little bit more than an average citizen,” Peskov said on Saturday.

Russian President Vladimir Putin has condemned the assassination and expressed his condolences to the family, Peskov added. “Putin has stressed that this brutal murder has all [the] signs of a contract murder and is extremely provocative.”

Irina Khakamada, an opposition figure who was Nemtsov's ally in the SPS party (Union of Right Forces), called the murder a "provocation" aimed at destabilizing Russia.

This is Russia Today news item appeared on their Internet site at 3:18 a.m. Moscow time on their Saturday morning, which was 7:18 p.m. in Washington on their Friday evening.  I thank Roy Stephens once again---and it's definitely worth reading.

Breaking news: FALSE FLAG IN MOSCOW!

There is no doubt in my mind at all that either this is a fantastically unlikely but always possible case of really bad luck for Putin---and Nemtsov was shot by some nutcase or mugged, or this was a absolutely prototypical western false flag: you take a spent politician who has no credibility left with anyone with an IQ over 70, and you turn him into an instant "martyr for freedom, democracy, human right and civilization".

By the way if, as I believe, this is a false flag, I expect it to be a stunning success in the West and a total flop in Russia: by now, Russians already can smell that kind of setup a mile away and after MH-17 everybody was expecting a false flag.  So, if anything, it will only increase the hostility of Russians towards the West and rally them around Putin.  In the Empire, however, this will be huge, better than Politkovskaya or Litvinenko combined.  A "Nemtsov" prize will be created, a Nemtov statue will be place somewhere (in Warsaw?), the U.S. Congress will pass a "Nemtsov law" and the usual combo package of "democratic hagiography" will be whipped-up.

What worries me most is that the Russian security services did not see this one coming and let it happen.  This is a major failure for the FSB which will now have a lot at stake to find out who did it.  I expect them to find a fall-guy, a patsy, who will have no provable contacts with any western services and who, ideally, might even have some contacts with the Russian services (like Andrei Lugovoi).

As for the "liberal" or "democratic" "non-system" - it will probably re-brand the upcoming protests as a "tribute to Nemtsov" thereby getting more people into the streets.

There are folks in Langley tonight who got a promotion.

This very interesting commentary/speculation was posted on the vineyardsaker.com Internet site on Friday evening sometime---and it is, once again, courtesy of Roy Stephens.

No, Obama, Russia's Economy Isn't 'in Tatters'

Bashing the Russian economy has lately become a popular pastime. In his state of the nation address last month, U.S. President Barack Obama said it was "in tatters." And yesterday, Anders Aslund of the Peterson Institute for International Economics published an article predicting a 10 percent drop in gross domestic product this year -- more or less in line with the apocalyptic predictions that prevailed when the oil price reached its nadir late last year and the ruble was in free fall.

Aslund's forecast focuses on Russia's shrinking currency reserves, some of which have been earmarked for supporting government spending in difficult times. At $364.6 billion, they are down 26 percent from a year ago and $21.6 billion from the beginning of this year. Aslund expects $166 billion to be spent on infrastructure investments and bailing out companies, and another $100 billion to exit via capital flight and other currency outflows. As a result, given foreign debts of almost $600 billion, "Russia's reserve situation is approaching a critical limit," he says.

What this argument ignores is that Russia's foreign debts are declining along with its reserves -- that's what happens when the money is used to pay down state companies' obligations. Last year, for example, the combined foreign liabilities of the Russian government and companies dropped by $129.4 billion, compared with a $124.3 billion decline in foreign reserves. Beyond that, a large portion of Russian companies' remaining foreign debt is really part of a tax-evasion scheme: By lending themselves money from abroad, the companies transfer profits to lower-tax jurisdictions. Such loans can easily be extended if sanctions prevent the Russian side from paying.

This opinion piece put in an appearance on the bloombergview.com Internet site at 2:51 p.m. EST on Thursday afternoon---and I thank South African reader B.V. for digging it up for us.

China Just Sided With Russia Over the Ukraine Conflict

When it comes to the Ukraine proxy war, which started in earnest just about one year ago with the violent coup that overthrew then president Yanukovich and replaced him with a local pro-U.S. oligarch, there has been no ambiguity who the key actors were: on the left, we had the west, personified by the US, the European Union, and NATO in general; while on the right we had Russia. In fact, if there was any confusion, it was about the role of that other "elephant in the room" - China.

To be sure, a question few asked throughout the Ukraine civil war is just whose side is China leaning toward. After all the precarious balance of power between NATO and Russia had resulted in a stalemate in which neither side has an obvious advantage (even as the Ukraine economy died, and its currency hyperinflated, waiting for a clear winner), and the explicit or implicit support of China to either camp would make all the difference in the world, not to mention the world's most formidable axis.

We finally got the answer.

Xinhua reported that late on Thursday Qu Xing, China's ambassador to Belgium, was quoted as blaming competition between Russia and the West for the Ukraine crisis, urging Western powers to "abandon the zero-sum mentality" with Russia.  Cited by Reuters, Xing said that Western powers should take into consideration Russia's legitimate security concerns over Ukraine.

Reuters' assessment of Xing speech: "an unusually frank and open display of support for Moscow's position in the crisis."

This is another Zero Hedge news story---and it showed up on their website at 2:25 p.m. EST on Friday afternoon---and once again I thank Dan Lazicki for sharing it with us.

Collapse of Russia will prove major test for U.S. – Stratfor

American think-tank Stratfor has issued a new 'Decade Forecast,' which says the E.U. will decay, China will end up in "a communist dictatorship," and Russia will disintegrate...though it hasn't done so yet, despite such predictions taking place in the past.

“It is unlikely that the Russian Federation will survive in its current form,” the forecast’s chapter dedicated to Russia begins. The research maintains that Moscow’s “failure to transform energy revenues into self-sustaining economy” will eventually lead to a “repeat of the Soviet Union's experience in the 1980s and Russia's in the 1990s,” with the process accompanied by a demographic decline that is set to “really hit” Russia.

However, the forecaster's founder and CEO, George Friedman, recently said that Russia has the ability to emerge from U.S.-led sanctions and the recent drop in the ruble due to falling oil prices. "Russians' strength is that they can endure things that would break other nations," Friedman said, suggesting that the country "has military and political power that could begin to impinge on Europe."

This article, which certainly falls into the absolute must read category, was posted on the Russia Today website on Tuesday evening Moscow time---and for content reasons, had to wait for today's column.  I thank Norman Willis for bringing it to my attention---and now to yours.

The rise of fascism is again the issue -- John Pilger

The recent 70th anniversary of the liberation of Auschwitz was a reminder of the great crime of fascism, whose Nazi iconography is embedded in our consciousness.

Fascism is preserved as history, as flickering footage of goose-stepping blackshirts, their criminality terrible and clear. Yet in the same liberal societies whose war-making elites urge us never to forget, the accelerating danger of a modern kind of fascism is suppressed; for it is their fascism.

"To initiate a war of aggression…," said the Nuremberg Tribunal judges in 1946, "is not only an international crime, it is the supreme international crime, differing only from other war crimes in that it contains within itself the accumulated evil of the whole."

Had the Nazis not invaded Europe, Auschwitz and the Holocaust would not have happened. Had the United States and its satellites not initiated their war of aggression in Iraq in 2003, almost a million people would be alive today; and Islamic State, or ISIS, would not have us in thrall to its savagery. They are the progeny of modern fascism, weaned by the bombs, bloodbaths and lies that are the surreal theatre known as news.

Like the fascism of the 1930s and 1940s, big lies are delivered with the precision of a metronome: thanks to an omnipresent, repetitive media and its virulent censorship by omission. 

This is your fourth and last absolute must read of the day.  It, too, is on the longish side.  It appeared on the Asia Times website on Thursday---and once again I thank Roy Stephens for bringing it to our attention.

Moscow confirms India considering free trade zone with Eurasian Economic Union

India has proposed creating a free trade zone with the Eurasian Economic Union of Russia, Kazakhstan, Belarus and Armenia, said Alexey Pushkov, head of the International Committee of Russian State Duma.

"The question was raised by India, which is now considering a free trade agreement with the Eurasian Economic Union. This is a new level in our relationship. The possibility is being discussed," he told reporters Friday during an official visit to New Delhi.

On Thursday TASS reported that India will start negotiating a comprehensive free trade agreement with the Customs Union of Russia, Belarus and Kazakhstan within the next six months.

The Eurasian Economic Union of Armenia, Belarus, Kazakhstan and Russia started functioning in January 2015.

This news item showed up on the Russia Today Internet sit at 2:38 p.m. Moscow time on their Friday---and it's the final offering of the day from Roy Stephens, and I thank him on your behalf.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on new U.S. economic data, the chaos in the foreign exchange market, the scam in precious metals on the COMEX, the options expiry, and possibility of changes to India’s gold import taxes.

This 8:17 minute audio interview conducted by sprottmoney.com's Geoff Rutherford, appeared on their website yesterday.

Gold Prices Need To Move Higher, Reserves Aren’t Being Replaced

Kitco News speaks with Bear Creek Mining chairman Catherine McLeod-Seltzer to see how she sees the industry set up for 2015. “A lot of write-offs were taken in the industry,” she says. “But I think people are ready for a fresh start. They see reasons why metals prices have bottomed and may start to move up,” she adds.

According to McLeod-Seltzer, the industry is just in a cycle and she thinks it has bottomed. “The price has been within a range quite stable, so I think that’s part of the bottoming process. And I do know that we consume 90 million ounces a year of our reserves as an industry, and we’re not replacing them,” she says, adding that prices need to move higher in order to support the struggling mining companies.

It's obvious that its not only the male members of the precious metal mining industry that are clueless.  Prices will rise when they're allowed to rise---and not a moment sooner.  This 5:06 minute video interview was posted on the kitco.com Internet site yesterday---and it's courtesy of Dan Lazicki.

Switzerland accounts for 60% of India’s gold imports

As much as three-fifths of India's total gold imports last year came from Switzerland, reflecting a significant jump in just a couple of years.

India imported 471.9 tonnes of gold from Switzerland in 2014, according to precious metals consultancy GFMS Thomson Reuters that quoted a country-by-country breakdown of gold imports and exports released by the Alpine country for the first time since 1980. This represents 61% of India's total gold imports of 769 tonnes last year as per World World Gold Council data.

Industry sources say that the quantum of gold imports from Switzerland has increased to around 60% in 2013 and 2014 from an average 45%-50% in the decade through 2012.

This very interesting gold-related news item from India, which was filed from Mumbai, appeared on the indiatimes.com Internet site at 7:02 p.m. IST on their Thursday evening---and I found it on the Sharps Pixley website in the wee hours of this morning.

China plans yuan-denominated gold fix this year, sources tell Reuters

China plans to launch a yuan-denominated gold fix this year to be set through trading on an exchange, sources familiar with the matter said, as the world's second-biggest bullion consumer seeks to gain more say over the pricing of the precious metal.

The Chinese benchmark would be derived from a new 1-kilogram contract to be launched on the state-run Shanghai Gold Exchange, a senior source directly involved in the process told Reuters.

China, also the top producer of gold, feels that its market weight should entitle it to be a price-setter for bullion and it is asserting itself at a time when the established benchmark, the century-old London fix, is under scrutiny because of alleged price-manipulation.

This Reuters article, filed from Singapore, put in an appearance on their Internet site at 3:07 a.m. EST on Friday morning---and I found this gold-related story on the gata.org Internet site.

Hong Kong January gold exports to China confirm strong demand

The latest figures for net gold exports from Hong Kong into China confirm the latter nation’s strong demand in the run up to the Chinese New Year holiday. The figure for January was 76 tonnes, up from 71 tonnes in December, but it should be realised that this Hong Kong figure relates specifically to Chinese gold imports – not total demand – and then only to a diminishing proportion of the Asian dragon’s total gold imports.

If one views known export levels from the U.S. and Switzerland, where official statistics differentiate between gold going to Hong Kong and to mainland China direct, then the percentage moving in via Hong Kong is perhaps only 60% of total Chinese gold imports – still significant, but well below earlier years when Hong Kong will have accounted for perhaps 90% or more of total Chinese gold imports and was thus used as a proxy by Western analysts for the total figure – a pattern which continues today in much mainstream media coverage of Chinese gold import figures.

Last year China relaxed import controls to allow far more direct shipments via other ports of entry – notably Shanghai and Beijing which has reduced the amounts routed through Hong Kong.

I reported on the Chinese gold imports through Hong Kong the other day, but just gave the number---and didn't elaborate on it.  Lawrie has done the heavy lifting for me/us---and it was posted on the mineweb.com Internet site at 2:45 p.m. GMT yesterday.  It's certainly worth reading.

Apple buying a third of world’s gold to meet demand for iWatch

Technology giant Apple may soon buy up one third of the world’s gold in order to meet the demands of its highly anticipated Apple Watch, according to reports.

Interest in the high-end model, featuring 18-karat gold casing, is picking up and the firm is already taking the necessary steps to have enough of them in stock. According to WSJ.com, Apple plans to start producing more than one million units per month in the second quarter of the year, anticipating high demand from Asian markets, mainly China.

Josh Centers, from TidBits, estimates that each gold watch will contain 2 troy ounces (62.2 grams) of gold. So, based on the estimated sales figure, he concludes that Apple will need 746 tons of gold a year, or about 30% of the world’s annual production.

I'm sure the watch will do well initially, but its novelty value won't last forever.  Of course if it is successful, they may get a phone call from the powers-that-be saying that this is not the best idea in the world. This tiny story appeared on the mining.com Internet site on Thursday sometime---and I thank James Ackers for sharing it with us.

¤ The Funnies

Here are five more photos of the Grand Canyon as Day 2 came to a close---and the weather improved as we headed back in the direction of Flagstaff via Desert View Drive, which is State Highway 64.  But first is another shot of a mule deer from the small herd that I posted yesterday.  The "God beams" streaming in from the left in photo #3 have a scientific name.  They're called crepuscular rays.  Photo 4 and 5 are exterior and interior shots of the Desert View watchtower which is located at the 7,438 ft/2,267 meter level---and is one of the highest points on the South Rim.  Don't forget the 'click to enlarge' feature.

¤ The Wrap

It seems highly plausible that of the many thousands of individual and corporate entities capable of investing less than $2 billion in physical silver, that one or two might emerge in time. Even more amazing is that there really isn’t room for more than one or two big buyers.  It would seem impossible for, say, ten such buyers to purchase, for a combined $20 billion, one billion ounces of silver bullion because that’s all that exists in the world and little of that is available for sale at current prices.

This is what makes silver so special – the dollar to physical ounce conversion. Please consider what the $20 billion that would buy up the entire one billion ounces of silver bullion (1,000 oz bars) in the world would buy in gold. At current prices, $20 billion would buy less than 17 million ounces of gold, an amount that would no doubt influence the price of gold immensely, but at the same time only represents less than 1% of all the gold bullion in the world (3 billion oz of gold bullion, not the 5.5 billion oz of all forms of gold). Again, this is a simple financial equation - what would have more price impact, the purchase of 100% of what exists in the world or the purchase of less than 1% of what exists in the world?

For those potential big buyers which decided to look more closely as a result of answering the question as to why so much physical silver could be bought with so little money, the answer is also simple and easily documented. The answer is because 8 or less crooked traders on the COMEX are short the equivalent of 325 million oz, or more than 40% of annual world production and a third of all the silver bullion that exists. No other commodity has such an extremely concentrated short position and if this short position didn’t exist, the price of silver would be much higher. And at current depressed silver prices, who in their right mind could legitimately hold such a large short position? If any number of potential big buyers make it to this point with an open mind, it would be easy to verify what I claim, since the data are published weekly by the CFTC. -- Silver analyst Ted Butler: 25 February 2015

Today's first pop 'blast from the past' dates back to 1968---and a British rock group called The Zombies.  They didn't have all that many hits, but the ones they had were great---and one of them is linked here.  While I'm at it, here's another one.

Today's classical 'blast from the past' was something I ran across when I was looking for English madrigals.  This selection is the famous Miserere by Gregorio Allegri that he composed sometime in the 1630s---and I've posted this before.  You can read the incredible story surrounding it by clicking hereThe Tallis Scholars do the honours.

In April 1994, they sang this work in the newly-restored Sistine Chapel in the Vatican, and performed it in February 1994 in the Basilica di Santa Maria Maggiore in Rome to commemorate Palestrina's 400th anniversary---and the latter performance is the one posted here.  I consider it to be the definite recording of this work.  It's beyond sublime---and the link is here.

It was another day where not too much should be read into the price action. I was happy to see prices up on the day, rather than the big down day that I feared might materialize.  Once again there wasn't a lot of volume.

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

Well, the U.S. is not stopping or even slowing down much when it comes to the pressure they're putting on Russia vis-à-vis the Ukraine.  Push is really becoming shove now---and I'm sure that "the dogs of war" will be howling in the Western press in the days ahead about the event in Moscow yesterday.

Even China has put their marker down on the Russia/Ukraine embroglio---and the reason is obvious, because they know that if Russia falls, they're next on the USA's list.

Sooner or later one would think that this war will show up in the gold price---notwithstanding any improvement in demand from Apple's new iWatch.

I've always thought that the day would come when, in pure self defence, Russia and/or China might be forced to play the gold card whether they wanted to or not.

If this, in fact, does happen, then the U.S. will be able to point a finger at Russia and/or China and say that it was all their fault.  How materially higher precious metal prices would affect the Western bullion and investment banks that currently hold massive COMEX short positions in all four of these metals, is something that remains to be seen.  At the same time one has to consider where the metal will come from to meet the demands of all the precious metal ETFs on Planet Earth if/when this event does occur.  Questions with no answers at the moment.

And notwithstanding anything I just said, I'm still amazed how the powers-that-be can keep this dog and pony show going across all markets.  For those of us who have been around the block a few times, the current economic, financial and monetary situation is beyond absurd---and there's no way that any part of it will be ever be brought under control successfully.  The whole scenario will blow up, or melt down---and you'll excuse me for thinking that may be the grand plan, as no attempt is being made in any quarter to put the brakes on any of this.

It will all end terribly---and in a heap.  But as to what will emerge from the rubble after that, I haven't a clue.

So we wait.

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

I'll see you here on Tuesday.

Ed Steer

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Sat, 28 Feb 2015 09:45:00 +0000
<![CDATA[Brien Lundin: Don’t Expect Much From the Justice Probe of Gold Market Rigging]]> http://www.caseyresearch.com/gsd/edition/brien-lundin-dont-expect-much-from-the-justice-probe-of-gold-market-rigging/ http://www.caseyresearch.com/gsd/edition/brien-lundin-dont-expect-much-from-the-justice-probe-of-gold-market-rigging/#When:06:24:00Z "We're up against all the money, power---and evil in the world"

¤ Yesterday In Gold & Silver

The gold rally that began in Far East trading on their Thursday morning got capped at, or shortly after, the London a.m. gold fix---and then once the COMEX opened, that was that.  By the close of London trading at 11 a.m. EST, the not-for-profit sellers had the gold price back in the box---and from there it chopped quietly sideways into 5:15 p.m. close of electronic trading.

The high and low fix were reported as $1,219.90 and $1,203.40 in the April contract.

Gold finished the Thursday session in New York at $1,209.20 spot, up $5.00 from Wednesday's close.  Net volume was pretty decent at around 123,000 contracts, about a third more than Wednesday's volume.

Silver traded with a positive bias until shortly after 3 p.m. Hong Kong time---and then away it went to the upside, with the high tick coming around 10 a.m. GMT in London.  From there "da boyz" worked their magic in the same fashion as they did in gold---and from 11 a.m. EST onwards the silver price chopped sideways into the close.

The high and lows ticks were recorded by the CME Group as $16.86 and $16.49 in the March contract.  Net volume was pretty chunky at 45,000 contracts.

Silver was closed yesterday at $16.53 spot, down a half a cent from Wednesday.  Net volume was way up there at 45,000 contracts.

Platinum also got capped at 10 a.m. GMT in London---and it was down hill until its New York low, which came at 2:00 p.m. EST on the dot.  The price didn't do much after that, closing at $1,171 spot, up two bucks on the day.  It was up over $20 at one point until "da boyz" showed up.

Palladium chopped higher until 9 a.m. or so in New York---and by 10:30 a.m. most of its gains had gone the way of the Dodo bird as well.  Palladium finished the Thursday session at $810 spot, up 3 dollars on the day.

The dollar index closed late on Wednesday afternoon in New York at 94.20.  It traded sideways until shortly after 9 a.m. in London---and then rolled over with a vengeance.  "Gentle hands" were there to prevent it from touching the 94.00 level for the umpteenth time this week---and by the time the HFT boyz were done with it, the 95.34 high tick was in at 1 p.m. EST.  It faded a handful of basis points into the close, but finished at 95.27---and up an eye-watering 106 basis points on the day.

It should obvious to all except the willfully blind that someone hit the buy the dollar/sell the precious metals button to prevent the former from heading south---and the latter from heading north.  However, if you check the precious metal charts, gold and silver got a lot of help heading lower once the COMEX opened, because they weren't falling fast enough to suit someone.  The engineered price declines in those two metals ended at 11 a.m. EST, while the dollar index was still rallying.

I've been commenting  for a week or so about the "gentle hands" at the 94.00 level.  Here's the 3-month dollar index---and you can see that those "gentle hands" have been busy for a lot longer than that.

The gold stocks gapped up a bit at the open---and then chopped quietly higher, before turning lower at 1 p.m., which was the time that the rally in the dollar index ended.  From there they chopped lower, giving back about a percent of their gains, as the HUI closed up 1.11 percent.

The silver equities also gapped up at the open, but then traded in a wide range either side of unchanged---and Nick Laird's Intraday Silver Sentiment Index closed down 0.44 percent.

The first part of the CME's Daily Delivery Report showed that 37 gold and zero silver contracts were posted for delivery today---and that completes the February delivery month in gold as well as silver.  The largest short/issuer was HSBC USA with 33 contracts and, once again, it was JPMorgan as the biggest long/stopper with 34 contracts in its client account.

The First Day Notice figures for March delivery in silver showed that 1,252 contracts were posted for delivery on Monday.  The two short/issuers of note were Canada's Scotiabank with 917 contracts---and Jefferies with 268 contracts.  There were about 20 long/stoppers in total, but the biggest three were JPMorgan, Citigroup and Credit Suisse with 658, 175 and 158 contracts---and all for their respective in-house [proprietary] trading accounts.

The link to yesterday's Issuers and Stoppers Report that contains all the above data, is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest for February is now zero, as is silver.  March open interest in gold is only 173 contracts---and I expect that to be much lower by the end of Monday trading.  Silver open interest for March is currently at 3,185 contract---but minus the 1,252 posted above.  I also expect silver's March o.i. to be quite a bit lower at the end of tomorrow's trading session with, or without, any new deliveries being posted.

There were no reported changes in GLD---and as of 9:51 p.m. EST yesterday evening, there were no reported changes in SLV, either.

Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with what happened over at the iShares.com Internet site for the reporting period ending on Wednesday---and this is what he had to say.

"Analysis of the 25 February 2015 bar list, and comparison to the previous week's list.
5,406,583.7 troy ounces were added (all to Brinks London), no bars were removed or had serial number changes.
"

"The bars added were from: Kazakhmys (1.1M oz), Solar Applied Materials (0.9M oz), Krasnoyarsk (0.9M oz), Met-Mex (0.6M oz), and 18 others."

"As of the time that the bar list was produced, it was overallocated 1.9 oz---and all daily changes are reflected on the bar list."

For the second day in a row, there was no sales report from the U.S. Mint.

There was no in/out activity worth mentioning in gold at the COMEX-approved depositories on Wednesday---and zero in/out activity in silver.

I don't have a whole lot of stories to post at this point in the evening, but that may have changed by midnight.

¤ Critical Reads

U.S. Posts First Negative Inflation Print Since Lehman on Gas Price Plunge

As previewed earlier today, January CPI data was historic in that, 6 years after Lehman, the US just reported its first negative headline CPI print, with overall inflation, or rather deflation, in January coming at -0.1%, in line with expectations, and down from the 0.8% in December. On a monthly basis, CPI tumbled by 0.7% from December, driven almost entirely by collapsing energy prices. Excluding the Great financial crisis, one has to go back a few years to find the last time the US posted annual headline deflation.... all the way back to August 1955, or just about the time Mary McFly was trying not to dance with his mother.

Here is the culprit for the plunge: "The energy index fell 9.7 percent as the gasoline index fell 18.7 percent in January, the sharpest in a series of seven consecutive declines. The gasoline decrease was overwhelmingly the cause of the decline in the all items index, which would have risen 0.1 percent had the gasoline index been  unchanged. The fuel oil index also fell sharply, and the index for natural gas turned down, although the electricity index rose."

Today's first news item was posted on the Zero Hedge website at 8:52 a.m. EST on Thursday morning---and it's courtesy of Dan Lazicki.  Elliot Simon sent a similar story from the marketwatch.com Internet site yesterday morning---and it's headlined "Inflation trend turns negative for first time since 2009".

Goldman Workers Reaped $2 Billion From 2008 Awards Last Year

While Goldman Sachs Group Inc. employees may get less compensation than in the past, many cashed in last year for a payday they’ve been awaiting since the depths of the financial crisis.

Employees exercised options worth $2.03 billion in 2014. More than 96 percent of the contracts were granted as part of 2008 compensation. Last year marked the first time bankers were able to take advantage of those awards.

Goldman Sachs’s stock has more than doubled since it granted 36 million options in December 2008 to give top performers incentive to stay. The bank had been forced to slash compensation costs that year, as a global credit crisis endangered the firm and pushed its shares down 61 percent.

The more-than $2 billion total disclosed in a regulatory filing this week is the pretax gain from exercising the options. Recipients -- who can choose to keep the stock or convert it to cash -- may include former employees who left the New York-based company after receiving the options.

This Bloomberg offering appeared on their Internet site at 3:00 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

Greenspan: "The Stock Market is Great", But the Economy Feels Like Its in "The Late Stages of the Great Depression"

While conflicting economic data leaves hope for both bulls and bears, Alan Greenspan warns that, unlike Yellen, "U.S. economic growth is not strong." He then slays another pillar - suggesting the exuberant job growth is anything but (as he focuses on weak productivity as he pinpoints entitlements as "crowding out capital investment" in America.

The maestro then breaks the golden rule of central bankers and explains how The Fed was, in fact, the main driver of the P/E multiple expansion in stocks; and when asked if this ends as badly as last time? He concludes "It depends...When real interest rates start to move up, that's when the crisis could hit."

The interview is somewhat stunning in its honesty (for a central banker) as he warns global "effective demand is extraordinarily weak - tantamount to the late stages of the great depression."

How about being in the early stages of a depression, Alan?  This story, along with an embedded 9:29 minute CNBC video clip, showed up on the Zero Hedge website at 5:50 p.m. EST yesterday afternoon---and it's worth your while.  I thank Dan Lazicki for his second offering in today's column.

Grand Central: That Didn’t Go Well, Madame Chair

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, February 26, 2015

Federal Reserve officials might have felt comfortable after the passage of the Dodd-Frank Act in 2010 that the central bank had escaped the rewrite of the nation’s financial regulatory laws with most of its powers intact. After Fed Chairwoman Janet Yellen’s testimony before the House Financial Services Committee Wednesday, they might not be so confident anymore.

“Fed reforms are needed and I for one believe Fed reforms are coming,” Committee Chairman Jeb Hensarling (R., Texas) said in a statement before Ms. Yellen’s second day of semi-annual testimony before Congress.

That was the nice part.

Ms. Yellen was skewered by House Republicans — some observers felt rudely – who accused the Fed chief of politicizing the institution by meeting regularly with Obama Administration officials and congressional Democrats and speaking out on the problem of inequality, an issue Democrats hold as their own. Their broader point was that the Fed shouldn’t claim its independence is sacred when it pushes back against legislative proposals from the right that would open it to more scrutiny from the legislative branch of government.

Jon Hilsenrath, the author of this piece, is widely known to be the unofficial mouthpiece for the Fed at The Wall Street Journal---and the story should be read with that in mind---and it is worth reading.  I found it in today's edition of the King Report.

Reforming the Fed: Who’s Right; Who’s Wrong?

Democrats on the other hand, despite overwhelming proof that the Dodd-Frank Wall Street Reform and Consumer Protection Act has actually allowed Wall Street to grow systemically more dangerous and more corrupt since its passage, is irrationally wedded to this legislation.

No amount of evidence will change the Democrats’ position on Dodd-Frank. JPMorgan gambling with hundreds of billions of bank depositors’ money in the London Whale fiasco where $6.2 billion got flushed down the toilet will not change their mind. Cartel activity among the big banks in the interest rate market, precious metals market, foreign currency market will not change their mind. Bank chat rooms called “The Bandits Club,” “The Mafia” and “The Cartel,” where brazen market rigging is alleged to have occurred will not change their mind. Endless criminal investigations and multi-billion dollar settlements will not change their mind. Scandal after scandal destroying public trust in Wall Street and its regulators will not change their mind.

Then there is the New York Fed – the least appropriate body in all the world to be simultaneously carrying out monetary policy via instructions from the Federal Open Market Committee with the involvement of the biggest Wall Street banks while simultaneously attempting to engage in regulatory oversight of the same banks.

This short, but worthwhile commentary put in an appearance on the wallstreetonparade.com Internet site on Thursday sometime---and I thank Richard O'Mara for bringing it to our attention.

For propaganda & "democracy promotion": State Dept seeks budget to counter Russia Today

Citing Russia Today’s influence, Secretary of State John Kerry asked U.S. lawmakers for more money for propaganda and “democracy promotion” programs around the world.

“Russia Today (sic) can be heard in English, do we have an equivalent that can be heard in Russian? It’s a pretty expensive proposition. They are spending huge amounts of money,” Kerry told the House Appropriations Subcommittee, apparently forgetting that Voice of America had been broadcasting in Russian since 1947.

He had also raised the topic earlier in the day, before the House Foreign Affairs committee, where Representative Ed Royce (R-CA), opened the hearing with the allegation that “Russia’s military aggression is matched only by its propaganda.” To Kerry’s approval, Royce went on to claim that “Russia is spending more than $500 million annually to mislead audiences, sow divisions, and push conspiracy out over RT television.”

Royce’s remarks echo the claim made by Broadcasting Board of Governors (BBG) chief Andrew Lack last month, when he listed “Russia Today” (sic) in the same breath as ISIS and Boko Haram as one of the challenges facing his agency.

Well, dear reader, here's the issue as I see it---and I can't believe that I'm actually saying this at my age, but RT has been the only credible news voice out there---and has been for years.  All one has to do is compare the coverage of the Ukraine/Crimea/Flight MH17 situation from RT and similar Russian sources, alongside the 'coverage' by the rest of the Western media, which includes---sadly---Canada's media.   The thoughtful public that's looking for hard news has its eyes and ears open on the Internet---and they have delivered their verdict---and the correct one I might add.  How did it come to this?  This Russia Today news item put in an appearance on their website at four minutes past midnight on their Thursday morning, which was 4:04 p.m. in Washington.  I thank reader P.F. for sending it our way---and it's certainly worth reading.

‘U.S. spends millions on overseas propaganda, but no one is buying it’

Despite the U.S.’ bottomless PR budget to influence overseas, people are not attracted by what’s on offer as they are tired of U.S. interventionism, exceptionalism, and the bombing of their countries, Daniel McAdams of the Ron Paul Institute told RT.

U.S. Secretary of the State, John Kerry, said he is concerned the U.S. is falling behind when it comes to putting out information. He stressed that RT’s influence is growing worldwide and the U.S. doesn’t have“an equivalent that can be heard in Russian.” Claiming that RT has huge costs he asked for money to be provided for the Broadcasting Board of Governors (BBG) in the U.S. RT’s budget for 2015 is $220 million while the budget of the BBG is $721 million. Kerry also heaped praise on the appointment of Andrew Lack as a head of BBG who recently put RT into the same context as ISIS and Boko Haram.

RT: John Kerry insinuated the U.S. is losing the public relations war with Russia. What do you make of that?

Daniel McAdams: The numbers speak louder than words: $700 and some million versus $200 and some, maybe up to $300 million for RT. I think the problem the U.S. has is they have an unlimited advertising budget, but the product they’re selling is not very attractive overseas. People are tired of U.S. interventionism; they’re tired of U.S. exceptionalism; they’re tired of the U.S. bombing their country – if you’re a Somali, you don’t care about listening to a radio broadcast from the U.S., you just wish the U.S. would stop bombing you.

This Russia Today news item showed up in my in-box courtesy of Roy Stephens long after I'd written the comments at the bottom of the previous story.  This RT piece appeared on their Internet site at 12:24 p.m. on their Thursday afternoon---and it's worth reading as well.

Bailed-out RBS offers staff ‘outrageous’ bonuses despite £3.5 bn losses in 2014

Royal Bank of Scotland (RBS) chief Ross McEwan has conceded the 80 percent state-owned bank will pay staff lucrative bonuses from a pool of £421 million, despite the fact it faced losses of £3.5 billion in 2014.

McEwan took control of the scandal-ridden bank in 2012 after it became insolvent and received a £45 billion bailout at UK taxpayers’ expense.

The RBS chief told BBC Radio 4 he would not be taking a £1 million bonus this year. 2015 marks the second year he has declined to accept the annual financial reward.

Commenting on bonuses awarded to other RBS staff, McEwan admitted people are “quite right” to view them as “outrageous.”

He would be right about that, dear reader.  This Russia Today news item, courtesy of Roy Stephens, put in an appearance on their Internet site at 4:26 p.m. Moscow time on their Thursday afternoon.

Cyprus praises Russia, lets in warships

The Cypriot president has, on a visit to Moscow, showcased his country’s economic dependence on Russia and the emergence of an increasing threat to E.U. and U.S. unity on sanctions.

Nicos Anastasiades used the trip, on Wednesday (25 February), to formalise an accord for Russian warships to use Cypriot military bases, and to speak out against EU policy on Ukraine.

Referring to Russia as a “great country”, the 68-year old politician said: “I think it’s increasingly felt by our European counterparts that action against such a great country as Russia leads to countermeasures on the part of Russia which have negative results, not only for Cyprus, but also for a number of other European Union countries”.

This interesting news item, filed from Brussels, appeared on the euobserver.com Internet site at 8:35 a.m. EST Europe time on their Thursday morning---and I thank South African reader B.V. for sending it our way.

Insight: West's offer to rebuild Ukraine faces reality check

Western powers are preparing what they say may be their most potent weapon against Moscow's interference in Ukraine - a multi billion dollar aid package to rebuild a near-bankrupt state and realize the European dream cherished by many Ukrainians.

There is just one problem: foreign governments and international financing institutions are not willing to pour money into a dysfunctional state. Only this week the businessman brought in by the new authorities to clean up the tax service was himself suspended pending a corruption inquiry.

Donors say the former Soviet republic, crippled by war and corruption, is unable or unwilling even to identify how many roads, power plants and schools its 45 million people need, let alone meet new European standards for farms and factories.

"There's strong resistance because many people in various ways benefited from the old, inefficient and largely corrupt system," said Kalman Mizsei, the head of the E.U.'s advisory mission to Ukraine.

This Reuters article, co-filed from Brussels and Washington, showed up on their website at 11:42 a.m. EST Thursday morning---and it's worth skimming.  My thanks go out to Jim Skinner for passing it along.

The world's top 10 gold producers

In 2014, preliminary estimated gold production by the top publicly-traded and non state-owned gold mining companies amounted to 30M oz, in line with the 2013 totals.

Three out of the 10 miners suffered a decline in their attributable gold output while six of them achieved growth.

With 6.25M oz of gold produced in 2014, Canada's Barrick Gold Corp. holds first place in global ranking, well ahead of its competitors.

Compared to 2013's 7.17M oz, Barrick’s gold output declined by 13%, mainly because of significant drop in output at its Cortez Mine (-33%), as well as a number of gold mines in Australia and USA which Barrick sold during the year.

This interesting gold-related article appeared on the mining.com Internet site yesterday some time---and my thanks go out to Dan Lazicki for finding it for us.

Gold 'Absolutely' a Safe Haven - BMO Analyst

Kitco News speaks with BMO’s Jessica Fung to see how she sees gold and silver set up for the coming year.

Based on her research, Fung says she expects U.S. dollar strength, which has hindered upside potential for metals prices, to continue. “In this environment, where we expect the U.S. dollar to continue to strengthen, I think we’re going to maintain a very high gold-to-silver ratio,” she says, adding that this increasing ratio hasn’t allowed silver to keep up with any gold price upswings.

Looking to global uncertainty, Fung says gold is ‘absolutely’ a safe-haven. “It always will be and that is what it will take to drive prices higher,” she adds.

It's scarey when they use the word 'analyst' to describe people like this.  She's just another mouthpiece spouting  things about precious metals that she has no real understanding of.  This 4:08 minute video clip appeared on the kitco.com Internet site yesterday---and it's another contribution from Dan L.

Mark O'Byrne: 12 reasons why Ritholtz and many experts are mistaken on gold

GoldCore's Mark O'Byrne has replied conscientiously to fund manager and financial writer Barry Ritholtz's ridicule of gold investment and gold investors, "12 Rules of Goldbuggery," which can be found at Rithotlz's Internet site.

O'Byrne's reply is headlined "12 Reasons Why Ritholtz and Many Experts Are Mistaken On Gold" and it was posted on the goldcore.com Internet site yesterday.

I'm grateful to Mark for riding to the defence of us "gold enthusiasts"---but I personally wouldn't have dignified Ritholz's commentary with a rebuttal of any kind.  No feedback at all is worse punishment that the reasoned and learned response of Mr O'Byrne.  But I salute him, thank him---and owe him a beer if we ever meet.  The links to both are embedded in this GATA release.

Koos Jansen: 1973 EU Central Bank’s Traded Gold in Secret at Free Market Price

The more I read about it the more clear it becomes that the euro, at first a monetary block in Europe, was spawned right after the U.S. abandoned gold in 1971. The European Community (EC) block was the biggest threat for the US hegemony in the seventies, if Europe would unite it could break the U.S. dollar. Europe’s aggregated gold reserves were (and still are) greater than U.S. holdings, a crucial reserve asset when fully utilized.

Soon after the inception of the Bretton Woods system in 1944 the U.S. needed to suppress the price of gold because they printed far more dollars than they had gold to back it up, finally the suppression failed in 1968 when the London Gold Pool collapsed. What followed was a two-tier system; monetary gold was valued at a fixed price far below the free market price of gold.

The two-tier system created by the American monetary wizards was anything but sustainable; foreign central banks could buy gold at the U.S. Treasury for dollars at a discount, subsequently selling the gold on the free market for a higher price, though the agreement was central banks would not trade with the private market.

Because the dollar was overvalued (against gold) European central banks exchanged billions of dollars for thousands of tonnes of gold, draining U.S. gold reserves.

This excellent commentary by Koos appeared on the Singapore website bullionstar.com yesterday---and the first reader through the door with it was Dan Lazicki.  It's certainly worth reading.

Frank Homes: China’s Love for Gold: You Ain’t Seen Nothing Yet

The Chinese New Year, which [kicked off last week], is the largest and most widespread cultural event in mainland China, bringing with it massive consumer spending and gift-giving. During this week alone, an estimated 3.6 billion people in the China region travel by road, rail and air in the largest annual human migration.

Imagine half a dozen Thanksgivings and Christmases all rolled into one mega-holiday, and you might begin to get a sense of just how significant the Chinese New Year festivities and traditions are.

According to the National Retail Federation, China spent approximately $100 billion on retail and restaurants during the Chinese New Year in 2014. That’s double what Americans shelled out during the four-day Thanksgiving and Black Friday spending period.

As I’ve discussed on numerous occasions, one of the most popular gifts to give and receive during this time is gold—a prime example of the Love Trade.

There's nothing really new in this piece that you haven't already heard about in this column, or elsewhere---and Frank is just putting his spin on mostly old news.  But, having said that, his 'spin' is worth reading---and it was posted on the dailyreckoning.com Internet site yesterday---and I thank Dan Lazicki for his final contribution to today's column.

Lawrence Williams: Russia cools gold reserve additions in January

The latest announcement from the Russian Central Bank shows, that after several months of continuing high levels of additions to its gold reserves last year, it made no new gold purchases in January, although it did offload a substantial volume of U.S. Treasuries from its foreign reserves in December.

There had been speculation late last year that Russia would, in fact, sell some of the gold it had been accumulating (171 tonnes last year) to help protect its currency in light of U.S. and E.U. sanctions and the sharp drop in energy prices which had adversely impacted the nation’s exports.

However, this proved not to be the case and it looks as though any transactions to help mitigate the decline in the ruble was accomplished through the sale of U.S. Treasuries. Altogether, over the whole of 2014, Russia appears to have disposed of more than $50 billion in its holdings of U.S. Treasuries to support the ruble and to buy gold. Some $22 billion of these sales was undertaken in December when the Central Bank bought 18.7 tonnes of gold worth around $7.5 billion.

I neglected to post this story when Lawrie first put it up on the mineweb.com Internet site four days ago, as I had my own piece on it.  But, having read it for a second time, it's worth your while if you have the time.

Brien Lundin: Don't expect much from Justice probe of gold market rigging

The good news is that manipulation of the gold market has finally come under investigation by the authorities, with the U.S. Justice Department opening up an investigation into 10 major banks.

The bad news is that the investigation is centering around potential rigging of the daily price fixings for gold, silver, platinum, and palladium. I know that a number of my colleagues in the hard-money industry may disagree, but I don't think this amounts to a hill of beans in the big picture.

My greater concern is the level of longer-term price manipulation, being accomplished by either the central banks or deep-pocketed institutions, acting either in concert or simply with the same motivations. So while you'll see a lot of outrage in the blogosphere over this investigation, unless it turns up documentation of a broader strategy of manipulation, there'll be nothing to see here. Move on.

I couldn't agree more.  The price management scheme is COMEX-centric---and has to do with position limits, high-frequency trading and the like---something Ted Butler has been going on about for a couple of decades.  The CFTC's ex-chairman Gary Gensler wanted to put a fork in all this, but was told in no uncertain terms to butt out. The fixes themselves are mostly irrelevant.  This part of Brian's monthly news letter is posted in the clear in this GATA release from yesterday---and the rest of it is worth reading as well.

¤ The Funnies

One thing I noticed when I was in all the top tourist spots around Arizona---old Scottsdale, Sedona, Jerome and Grand Canyon etc---was the quality of the native arts and crafts offered for sale in the touristy-type stores.  I've been around, but I'd never seen the likes of this before.  I took the first four photos in Hopi House at the Grand Canyon on Day 2 of our stay there.  The quality was top drawer, with prices to match, of course.   These photos only hint at what's available.  Don't forget the 'click to enlarge' feature.  All these photos were shot indoors, of course, using only available light.

The photo below is a Navajo sand painting---and the artistry and time that goes into this and the other art works shown here, is staggering.

There were half a dozen mule deer feeding alongside the road on our way out of the park.  This was taken from the rental car---and from point blank range, as there's no depth-of-field worth mentioning.  I hardly had to crop it all.  They had very strange colourations for deer.  Most deer are various shades of one colour.  Not these ones---and I thought there was something wrong with my camera when I first viewed them on my computer screen.  This variety of mule deer is much smaller than the ones we have back here in Alberta.  These were of the "very large dog" variety.

¤ The Wrap

A few words regarding the news stories this week on the Justice Department and the CFTC investigating ten large banks in connection with precious metals manipulation. The stories seem to suggest some urgency or new development, but the investigation has been ongoing for some time and appears to be centered on the London Fix.

I suppose some wrongdoing could eventually be uncovered, as whenever big bankers convene in private, it is time to have a firm grasp on one’s wallet. But any precious metals investigation not centered on the COMEX is a sideshow.

Needless to say, I hope I’m reading it all wrong, but there is very little chance the CFTC is about to do a turnabout and address the concentrated short position in COMEX silver. The same goes for the DoJ. Both agencies have looked at this matter, then looked away and aren’t about to look again, much to their joint shame. Physical investment buying will break the back of the manipulation, not some wimpy and bought and paid for regulators. - Silver analyst Ted Butler: 25 February 2015

What was gained in late Far East and early London trading on Thursday, was all taken back by JPMorgan et al as the London trading session went along---but the real hatchet job on silver and gold came at the start of trading on the COMEX in New York---and ended at the London close.  They even had the audacity to close silver for a loss.

You may feel that what happened to the precious metals occurred entirely in response to what was happening to the almighty dollar, but a fair and objective examination of the precious metal price charts---with the minor exception of platinum---compared to the dollar index itself, will not bear that out.

Please don't forget for one minute that we're up against all the money, power---and evil in the world.  The "evil" part came during a chat I had with Jim Rickards in San Antonio last September.

Here are the 6-month chart for all four precious metals, updated with Thursday's price/volume data.

And as I write this paragraph, the London open is about fifteen minutes away---and the tiny rallies in both gold and silver that occurred in early afternoon trading in Hong Kong have already vanished---and all four precious metals are trading basically unchanged from there respective closes on Thursday in New York.  Net gold volume is just under 14,000 contracts---and net silver volume is just shy of 3,000 contracts, with virtually all of it in the new front month, which is May.  The dollar index is trading slightly lower---and is currently down 12 basis points.  Nothing to see here, please move along.

Today we get two reports of interest.  The first thing will be the gold withdrawals from the Shanghai Gold Exchange---and the second is the long-awaited Commitment of Traders Report---and I'll have all that for you in tomorrow's column.

And as I hit the send button on today's effort at 5:28 a.m. EST this morning, I note that all four precious metals got sold down a bit at the London open, but all are making some attempt at recovering at the moment.  Net volume in gold is now up to just about 23,000 contracts---and silver's net volume checks in at just over 5,500 contracts.  Not much to see here.  The dollar index is continuing to slide---and is currently down 14 basis points.

I have no idea what the rest of the trading session will bring.  But since it's Friday---and the last trading day of the month, it wouldn't surprise me in the slightest if the powers that be wanted to end the day, week and month on a sour note.  But as I always say at times like this, I'd love to be spectacularly wrong.

That's it for the day.  Enjoy your weekend, or what's left of it if you leave west of the International Date Line---and I'll see you here on Saturday.

Ed Steer

]]>
Fri, 27 Feb 2015 06:24:00 +0000
<![CDATA[Austrian Audit Agency Faults Central Bank Over Gold at the Bank of England]]> http://www.caseyresearch.com/gsd/edition/austrian-audit-agency-faults-central-bank-over-gold-at-the-bank-of-england/ http://www.caseyresearch.com/gsd/edition/austrian-audit-agency-faults-central-bank-over-gold-at-the-bank-of-england/#When:06:18:00Z "I'm not expecting a lot to happen as the March contract goes off the board"

¤ Yesterday In Gold & Silver

As I noted in The Wrap section of yesterday's column, there was a decent rally in gold in early Far East trading on their Wednesday.  But that all ended/got capped around 3 p.m. Hong Kong time---and an hour before the London open.  It was all quietly down hill for the remainder of the day, with the New York low coming shortly before the 1:30 pm. EST COMEX close.  From there, it rallied a few dollars into the close.

The high and low were reported by the CME Group as $1,211.70 and $1,200.70 in the April contract.

Gold closed yesterday at $1,284.20 spot, up $2.90 from Tuesday's close.  Net volume was very much on the lighter side at only 95,000 contracts, with a bit more than a third of that coming before the London a.m. gold fix at 10:30 a.m. GMT.

The rally in silver in morning trading in the Far East was much more substantial, with the high tick of the day coming shortly before 11 a.m. Hong Kong time---and from there it followed a very similar price path to gold.

The high and low ticks were recorded as $16.28 and $16.70 in the March contract.

Silver finished the Wednesday trading session in New York at $16.535 spot, up 22.5 cents on the day---and well of its high.  Gross volume was almost 100,000 contracts, but netted out to a tiny 1,600 contracts, as almost all of it was roll-overs out of the March contract.

Platinum also had a decent early morning rally in Far East trading but, like gold, a willing seller appeared at 3 p.m. Hong Kong time---and the low tick of the day came shortly before the COMEX close, just like gold and silver.  Platinum closed at $1,168 spot, up 5 bucks on the day.

Palladium inched higher through the entire Wednesday session---and broke through the $800 spot price mark for the final time shortly before lunch in New York.  It closed at $804 spot, up 12 dollars on the day.

The dollar index closed late on Tuesday afternoon in New York at 94.47---and then spent the entire Wednesday session chopping lower in a fairly wide range, much like it did on Tuesday.  The 91.16 low tick came about 9:20 a.m. in London---and it rallied back to about unchanged on the day at precisely 8 a.m. in New York.  From there it chopped lower into the close, finishing the Wednesday session at 94.20---which was down 27 basis points from Tuesday.

The gold stocks opened up---and stayed in positive territory all day.  The HUI closed up 1.77 percent.

After opening about unchanged, the silver equities rallied strongly until shortly before noon EST---and then chopped lower for the remainder of the Wednesday trading session.  Nick Laird's Intraday Silver Sentiment Index closed up 2.24 percent---and well off its high tick.

The CME Daily Delivery Report showed that 58 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, there were three different short/issuers but, once again, it was JPMorgan stopping them all for its client account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest for February fell by 267 contracts leaving 95 left to deliver.  But only 58 are posted for delivery tomorrow, so the balance will be on this CME's Daily Delivery Report this evening, along with the First Day Notice numbers for March.  In silver, the February open interest declined down to 3 contracts---and as you'll note in the previous paragraph, those are already posted for delivery on Friday, so silver is done for month.  Only gold has February contracts left to deliver.

There were no changes in GLD yesterday---and as of 9:24 p.m. EST yesterday evening there were no reported changes in SLV, either.

The good folks over at the shortsqueeze.com Internet site updated the short positions in both GLD and SLV as of the close of trading on February 15---and this is what they had to report.

It was no surprise to see that SLV's short position dropped by a very chunky 34.03 percent---from 20.72 million shares/troy ounces, all the way down to 13.67 million shares/troy ounces.  That would probably be JPMorgan buying all the SLV shares that fell off the table during the current price decline in silver that they engineered---paying down their SLV short position in the process.  On top of that, 5.41 million ounces of silver were deposited in SLV since the February 15 cut-off for this report, so it's a lead-pipe cinch that the short position in SLV is down even more---and probably significantly more.  But we won't know until about March 9 at the earliest.

GLD's short position declined by an even larger percentage, as it was down by 37.05 percent---from 1.49 million troy ounces to 935,000 troy ounces.  This is the lowest number I can remember seeing in a very long time.

These are the most aggressive short coverings I've seen in any one 2-week period---and it's got my "spidey senses" tingling.  But I think I'll take a blue pill and lie down until the feeling goes away.

Switzerland's Zürcher Kantonalbank updated their website with the activities in their gold and silver ETFs as of the close of trading on Friday, February 20---and this is what they had to report.  Both ETFs are continuing their respective declines, as their gold ETF shed another 10,015 troy ounces---and their silver ETF dropped by another 104,196 troy ounces.

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

There was very decent in/out movement in gold at the COMEX-approved depositories on Tuesday.  80,375.000 troy ounces were reported received, which works out to precisely 2,500 kilobars---and 16,075 troy ounces [500 kilobars] were shipped out.  As you may have noticed recently, the in/out activity in the depositories is indicating that kilobars are a de facto "good delivery" bar for gold now---and will officially become so when gold sports its "new" price at some point in the future.  The link to that activity is here.

In silver, there was 584,789 troy ounces reported received---and 80,744 troy ounces shipped out.  Almost all the activity was at Canada's Scotiabank.  The link to that action is here.

Nick sent around some gold charts vs. some of the world's currencies to show that the precious metal is still a store of value---and here's gold vs. the local currencies in Argentina, the Ukraine---and "Mother Russia".

I started off with very few stories yesterday, but as the evening progressed, that all changed.  Now I have quite a few, so I'll happily leave the final edit up to you.

¤ Critical Reads

Morgan Stanley to Pay $2.6 billion to Settle Charges Over Mortgages

Morgan Stanley said Wednesday that it has agreed to pay $2.6 billion to settle with the federal government over its role in the mortgage bubble and subsequent financial crisis.

The settlement makes Morgan Stanley the latest Wall Street bank to reach a settlement with federal authorities, following the billions paid by JPMorgan Chase, Bank of America and Citigroup.

The $2.6 billion will go to "resolve certain claims" the Justice Department intended to bring against Morgan Stanley related to its mortgage division, the bank said in a regulatory filing.

The Justice Department declined to comment. In the regulatory filing, Morgan Stanley said the agreement is not been finalized and could fall though.

This AP story, filed from New York, appeared on the abcnews.go.com Internet site at 7:25 p.m. EST on Wednesday evening---and today's first news item is courtesy of West Virginia reader Elliot Simon.

Lure of Wall Street Cash Said to Skew Credit Ratings

Michelle Choi, an analyst for Moody’s Investors Service, gave a credit rating to bonds issued by a New Jersey town in September. In October, she switched sides and started working for the town’s underwriter, Morgan Stanley.

Choi is one of hundreds of employees at Moody’s and other credit-rating companies, including Standard & Poor’s and Fitch Ratings, who’ve gone to work for Wall Street since the 2008 financial crisis exposed the conflicts at the heart of the ratings business.

While there’s no evidence that Choi’s job-hunting influenced the grade she gave Evesham Township’s debt, and the town chose Morgan Stanley after Choi rated its bond, the rising number of job changes in the industry raises a question: can credit analysts be impartial about grading bonds while looking for employment at banks that underwrite them?

No!  Really???  Who would have thought that???  I'm shocked---tee hee!  This Bloomberg news item appeared on their Internet site at 5:00 p.m. Denver time yesterday afternoon---and it's the second contribution in a row from Elliot Simon.

Crude Oil Inventories Surge For 7th Week in a Row to Record Highs Amid Record Production

Oil prices dumped (last night's major 8.9 million barrel inventory build from API), pumped (the Saudi minister claiming "demand is growing" - which just seems like total fiction given economic backdrops and China's VLCC count plunge), and then this morning, dumped setting the scene for this morning's EIA inventory data. Against expectations of an 8 million barrel build, crude inventories saw a 8.43 million barrel build (5 times higher than the 5 year average). Record levels of production and record total inventory sent WTI plunging out of the gate but it is stabilizing for now...

U.S. oil production hit a new record high... (despite the declining rig count - perhaps finally putting a nail in that meme)...

This short, but very interesting Zero Hedge story contains some excellent charts---and is definitely worth your time.  It was posted on their website at 10:37 a.m. EST yesterday---and I thank Dan Lazicki for sending it our way.

Rent walkouts point to strains in U.S. farm economy

Across the U.S. Midwest, the plunge in grain prices to near four-year lows is pitting landowners determined to sustain rental incomes against farmer tenants worried about making rent payments because their revenues are squeezed.

Some grain farmers already see the burden as too big. They are taking an extreme step, one not widely seen since the 1980s: breaching lease contracts, reducing how much land they will sow this spring and risking years-long legal battles with landlords.

The tensions add to other signs the agricultural boom that the U.S. grain farming sector has enjoyed for a decade is over. On Friday, tractor maker John Deere cut its profit forecast citing falling sales caused by lower farm income and grain prices.

Many rent payments – which vary from a few thousand dollars for a tiny farm to millions for a major operation – are due on March 1, just weeks after the U.S. Department of Agriculture (USDA) estimated net farm income, which peaked at $129 billion in 2013, could slide by almost a third this year to $74 billion.

This Reuters article filed from Chicago, was posted on their Internet site at 5:45 a.m. EST on Monday morning---and it's another item I found in Wednesday's edition of the King Report.  It's a must read.

The disappeared: Chicago police detain Americans at abuse-laden 'black site'

The Chicago police department operates an off-the-books interrogation compound, rendering Americans unable to be found by family or attorneys while locked inside what lawyers say is the domestic equivalent of a CIA black site.

The facility, a nondescript warehouse on Chicago’s west side known as Homan Square, has long been the scene of secretive work by special police units. Interviews with local attorneys and one protester who spent the better part of a day shackled in Homan Square describe operations that deny access to basic constitutional rights.

At least one man was found unresponsive in a Homan Square “interview room” and later pronounced dead.

Brian Jacob Church, a protester known as one of the “NATO Three”, was held and questioned at Homan Square in 2012 following a police raid. Officers restrained Church for the better part of a day, denying him access to an attorney, before sending him to a nearby police station to be booked and charged.

This article showed up on theguardian.com Internet site at 9:43 p.m. GMT on Tuesday evening---and I found it embedded in a GATA release.

Retire Abroad and Offshore Your IRA: International Man

Money represents your energy and your time: the days, the weeks, the months, the years it takes you to earn it, and all the things you hope to do with it.  In short, money is like stored life.

Taxation, inflation, and artificially low interest rates are therefore similar to a needle and syringe tapped directly into your vein, sucking the life right out of you.

Sure, you can diversify your investments and take actions to minimize your taxes, but that alone is insufficient if the after-tax returns on your portfolio don’t keep up with the real rate of inflation—which is always higher than the cooked “official” numbers—let alone your investment goals.

The problem will only be compounded as politicians the world over look for more ways to tax or otherwise extract stored purchasing power. Investment income and retirement savings will be a juicy target. Just look at how capital gains and dividend tax rates have increased in recent years.

This commentary by International Man's senior editor Nick Giambruno appeared on his website yesterday and, if you are an American citizen, it's certainly worth reading.

Kicking another can: E.U. gives France until 2017 to fix deficit

The European Commission on Wednesday (25 February) gave France another two years to bring its budget within EU rules - the third extension in a row - saying that sanctions represent a "failure".

France has until 2017, having already missed a 2015 deadline, to reduce its budget from the projected 4.1 percent of GDP this year to below 3 percent.

"Sanctions are always a failure," said economic affairs commissioner Pierre Moscovici adding that "if we can convince and encourage, it is better".

Valdis Dombrovskis, a commission vice-president dealing with euro issues, admitted that France is the "most complicated" case discussed on Wednesday.

What a farce this European Union has turned into!  This article appeared on the euobserver.com Internet site at 7:34 p.m. Europe time on Wednesday evening---and it's courtesy of Roy Stephens.

Greece to stop privatisations as Syriza faces backlash on deal

Greece's Left-wing Syriza government has vowed to block plans to privatise strategic assets and called for sweeping changes to past deals, risking a fresh clash with the eurozone's creditor powers just days after a tense deal in Brussels.

"We will cancel the privatisation of the Piraeus Port," said George Stathakis, the economy minister. "It will remain permanently under state majority holding. There is no good reason to turn it into a private monopoly, as we made clear from the first day.

"The deal for the sale of the Greek airports will have to be drastically revised. It all goes to one company. There is no way it will get through the Greek parliament."

The new energy minister, Panagiotis Lafazanis, warned that Syriza will not sell the Greek state's 51pc holding of the electricity utility PPC, power grid ADMIE or state gas company DEPA. "There will be no energy privatisations," he said.

This commentary by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 7:52 p.m. GMT on Wednesday evening---and I thank Roy Stephens for sending it our way.  It's worth reading.

Kiev introduces rationing, as falling hryvnia causes shopping binge

Ukrainian supermarkets have imposed rationing of basic products after the drastic fall in the value of the hryvnia. The currency has lost 70 percent of its value causing people to stockpile food and buy electronics as a hedge.

Restrictions apply for goods such as cooking oil, flour and sugar, Ukraine’s news agency UNN reports Wednesday. Retailers may sell no more than two bottles of sunflower oil, and two packs of buckwheat per customer and, depending on the store, from 3 to 5 kilograms of flour and sugar.

Bread, rice, potatoes, meat and milk are not yet rationed, but are not so plentiful on supermarket shelves.

Stores have also see higher demand for household appliances, as people consider consumer electronics an investment as prices increase on a daily basis, RIA reports. Inflation in Ukraine is expected to reach 27 percent by the end of 2015.

This must read Russia Today news item showed up on their Internet site at 2:12 p.m. on Wednesday afternoon Moscow time, which was 6:12 a.m. in Washington.  I thank Roy Stephens for digging it up for us.

This is What Happens to Gold in a Hyperinflationary Currency Crisis: Ukraine Edition

As Ukraine's socio-economic situation goes from worse to worst-er, today's announcement by President Poroshenko that the government will take actions to stabilize the currency (which as we previously noted, appears to be heading for hyperinflation) has Ukrainians rushing for the exits into precious metals... with only one goal in mind - wealth preservation.

This is what gold does in a fiat-currency crisis. Now if only Ukraine actually still had some gold...

Furthermore, according to RIA, on Tuesday, Ukrainian television channel Ukraina announced that with the new exchange rate, the minimum wage in Ukraine stands at around $42.90 per month, which according to the channel, is lower than in Ghana or Zambia.

Although this is a gold-related story, I thought it fit best in this spot.  The embedded hryvnia/gold chart is one you know well.  This brief article appeared on the Zero Hedge website at 1:22 p.m. EST on Wednesday afternoon---and I thank Dan Lazicki for sending it.

Inside the Ukraine: John Batchelor interviews Stephen F. Cohen

The astounding military events along with the political fallout are far more dramatic under Minsk2 than at anytime during the active Ukraine Civil War.

The danger for continued war in Ukraine will depend on whether Kiev gets outside help.  Whether NATO is involved in the fighting will likely depend on the dove side of the E.U., Merkel and Hollande and others, deciding to go along with Washington. That has not changed, but for Cohen, this is less likely.  However Kiev's fortunes have declined even more since Poroshenko refused a surrender of his forces in the Debaltseve Caldron.  Cohen does a wonderful job of describing those final moments in the Cauldron. As it stands now there is no military of any usefulness for Kiev in the west of Ukraine, and as been stated several times, arming an army actually requires an army to arm---and Kiev simply does not have a military left.

The U.S. (who significantly was not invited to the recent Minsk talks) now has been making even more belligerent war talk. And Moscow is silent; the critical time is at hand. Putin knows. This is a deciding moment for the West, the United States, NATO, Europe, Russia and Ukraine. If Washington continues to push the war option we are looking at boots on the ground and serious political problems in Europe and for NATO.

Ordinarily I'd post this on Saturday, but here it is now, as it's very timely.  This 39:47 minute audio interview from Tuesday is certainly a must listen if you have the interest, which you should.  I thank Larry Galearis for bringing it to our attention.

Kiev trying to invalidate weapons withdraw plan, undermine Minsk deal – militia officials

Kiev is trying to invalidate the plan of heavy weaponry withdrawal from the demarcation line in eastern Ukraine, thus undermining the Minsk peace deal, Donbass officials claim. An OSCE top official says Kiev is not pulling away its artillery.

According to the peace deal, heavy weapons must be withdrawn from the agreed demarcation line starting February 22. But Donetsk representative Denis Pushilin and Lugansk representative Vladislav Deynego have claimed in a joint statement that Kiev is “attempting to invalidate the plan.”

The Organization of Security and Co-operation in Europe (OSCE), which has a monitoring mission in the conflict area, said Kiev has so far failed to begin moving its weapons from the demarcation line.

“Ukrainian military forces keep silent for the moment being. They don’t pull out their heavy weaponry and say that a pause is needed. That is what really triggers certain concern of the OSCE, as this pause may last indefinitely,” said the Russian ambassador to the organization, Andrey Kelin.

This news story put in an appearance on the Russia Today website at 1:54 a.m. Moscow time on their Thursday morning---and it's another contribution from Roy Stephens.

Seven Russian banks downgraded by Moody's

Ratings agency Moody's lowered its assessment of seven Russian financial institutions, including the banking arm of Gazprom, because of recessionary threats.

The downgrade for Sberbank, Bank VTB, Gazprombank, Russian Agricultural Bank, Agency for Housing Mortgage Lending, Vnesheconombank and Alfa-Bank follows a lowering by Moody's of the government debt rating to Baa3, the lowest investment grade rating, last week.

Moody's said it also lowered the financial strength ratings of Sberbank, Bank VTB, JSC , Gazprombank and Alfa bank.

"This is due to Moody's expectation that the prolonged recessionary environment in Russia will produce a very challenging operating environment for the country's leading banks and thereby impact their financial fundamentals," the ratings agency said in a Tuesday profile.

Without doubt this move is politically motivated.  This UPI article, filed from London, showed up on their Internet site at 5:59 a.m.---but doesn't give the time zone, but I would assume EST.  I thank Roy Stephens for sharing it with us.

Putin: Gas supplies to Europe could suffer in 3-4 days if Kiev doesn't pay

Russia will cut off gas supplies to Ukraine if Kiev fails to pay in “three or four days,” President Vladimir Putin said, adding that this "will create a problem" for gas transit to Europe.

“Gazprom has been fully complying with its obligations under the Ukraine gas supply contract and will continue doing that,” Putin told reporters after talks with the president of Cyprus on Wednesday. “The advance payment for gas supply made by the Ukrainian side will be in place for another three to four days. If there is no further prepayment, Gazprom will suspend supplies under the contract and its supplement. Of course, this could create a certain problem for [gas] transit to Europe to our European partners.”

However, Putin expressed the hope that it would not come to that, stressing that “it depends on the financial discipline of our Ukrainian partners.”

This news item was posted on the Russia Today Internet site at 2:07 p.m. Moscow time on their Wednesday afternoon---and it's another offering from Roy Stephens.

Bad for Business: After NSA Hack China Stops Buying Major U.S. Tech Brands

China has been axing major U.S. technology companies from its government purchasing list in favor of local brands. Some analysts believe fears over NSA spy technology could be to blame.

The list of products for the Central Government Procurement Center (CGPC), which is approved by the Chinese Ministry of Finance, includes over 5,000 products, 2,000 of which were added in the last two years, and almost entirely from domestic companies. Among those products, foreign brands have fallen by a third, and among security-related products, by a half. As of two years ago, Cisco Systems had 60 items on the list, but now has none. Among other companies, whose products were excluded from the list are Intel’s security brand McAfee, Apple, and Citrix. 

Though there are non-espionage-related reasons why China might be preferring local brands, the decline in foreign products does seem to coincide with the leaks made by NSA whistleblower Edward Snowden in 2013 about massive US spying programs. 

This article showed up on the sputniknews.com Internet site at 1:33 a.m. Moscow time this morning---and has been updated since.  I thank Roy Stephens for his final contribution to today's column.

Dollar Vigilante cites GATA in review of complaints about gold market rigging

In a review of complaints of manipulation of the monetary metals markets, Justin O'Connell of the Dollar Vigilante cites GATA Chairman Bill Murphy's "groundbreaking" testimony to a hearing held by the U.S. Commodity Futures Trading Commission in 2010.

O'Connell's commentary is headlined "A Brief Recent History of Precious Metals Manipulation Investigations" and it was posted on the dollarvigilante.com Internet site yesterday---and it's something I found on the gata.org Internet site yesterday.

Koos Jansen: Austrian audit agency faults central bank over gold at Bank of England

Austria's government audit office has criticized the nation's central bank for depositing a disproportionate amount of the nation's gold reserves with the Bank of England, Bullion Star market analyst and GATA consultant Koos Jansen reports today. Jansen adds that the Austrian central bank has been steadily converting its foreign-vaulted gold from "unallocated" to "allocated" status -- that is, from being a mere credit against the depository to being ownership of particular metal.

This very interesting commentary by Koos showed up on the Singapore website bullionstar.com on their Wednesday sometime---and I found this story in a GATA release as well.

Lawrence Williams: Can platinum regain its premium over gold in Q2-Q3?

Since writing my article on what I saw as the likely reasons behind platinum’s poor performance of late despite the metal being in an apparent substantial supply deficit, a couple more things on the metal have come to my attention – one perhaps marginally positive and the other negative.

On the positive side, precious metals consultancy, Metals Focus, in its latest Precious Metals Weekly, reckons that there’s a good chance that platinum will regain its premium over gold, perhaps as soon as in Q2 this year and possibly get back to a premium level during the year averaging as much as $100 over the gold price (which is pretty much the normal situation). However there’s little in their opinion on the fundamentals side to support this argument, the key factor, being in their view, that when the U.S. Fed eventually ceases shilly-shallying and starts to raise interest rates, it will be the gold price which bears the bulk of any adverse reaction in the markets and platinum less affected. To an extent this is perhaps fair comment, but one suspects that the gold price is already taking into account a modest interest rate increase later this year and while there may be a knee-jerk reaction when the announcement is made, one suspects any price downturn will be short lived.  And anyway, the way the markets behave a fall in the gold price will likely also see a platinum price downturn too.

This commentary by Lawrie is definitely worth reading---and he was kind enough to post my comments that I made on his previous article on platinum that he posted on Tuesday.  This article appeared on the mineweb.com Internet site at 12:21 p.m. GMT yesterday afternoon.

Lawrence Williams: Have the big banks been manipulating gold and silver prices?

For many years most of the perennially bullish precious metals commentators, led in terms of continuing vehemency on the matter by the Gold Anti Trust Action Committee (GATA), have been claiming that precious metals prices are being heavily manipulated by the big commercial banks in collusion with the U.S. Fed and other central banks. And they cite as evidence various documentation, mostly quite old, obtained under freedom of information requests, together with some seemingly very strange volume and price movements on the COMEX markets at potentially key inflection points for precious metals prices, as well as the huge short positions held in all four major precious metals by a small group of major banks in particular. It has always been the gold bulls’ gripe that the evidence they have come up with has been totally ignored by the mainstream media, but is this all changing?

In a key article published on Monday this week, perhaps arguably the most prestigious global mainstream financial newspaper of all, The Wall Street Journal, reported that at least 10 major global banks are being investigated for precious metals market rigging by the U.S. authorities. The paper notes specifically that it has received reliable information that prosecutors in the Justice Department’s antitrust division are scrutinizing the benchmark price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation, presumably into activities on the major commodities markets.

This commentary by Lawrie appeared on the mineweb.com Internet site at 3:44 p.m. London time yesterday afternoon---and it's certainly worth your while.

China gold imports from Hong Kong rebound in January

China's gold imports from Hong Kong rose in January from the previous month, data showed on Thursday, reflecting increased demand ahead of the Lunar New Year.

Net gold imports from main conduit Hong Kong climbed to 76.118 tonnes last month from a three-month low of 71.381 tonnes in December, according to data e-mailed to Reuters by the Hong Kong Census and Statistics Department.

Jewellery demand typically rises ahead of the Chinese New Year, which fell in February this year. Analysts say import demand from the world's second biggest gold consumer after India is likely to recover this year.

This short Reuters article, filed from Singapore, appeared on their Internet site at 3:05 p.m. India Standard Time on their Thursday afternoon---and I found it on the Sharps Pixley website at 5:30 a.m. EST this morning.  Most of what else is written about China's imports in this piece is pure bulls hit, so just read around it.

¤ The Funnies

Here are four more Grand Canyon shots from Day 2.  The three predominant tree species as this altitude are the ponderosa pine, the Pinyon pine---and the Utah juniper.  The fantastic trunks of the Utah juniper are on display in photo three---and in photo 4---plus I used their foliage to frame shots of the canyon in the first two photos, plus every other canyon photo I took as well.  Very handy these trees!  Note the two tiny figures in photo #2---almost lost in the grandeur.  Don't forget about the 'click to enlarge' feature.

















¤ The Wrap

I’d be remiss if I didn’t mention my speculation that JPMorgan has amassed upwards of 300 million oz of physical silver over the past four years in the big buyer discussion. JPM is the most powerful and, in many ways, the most sophisticated trader in the world. I would also add most connected and crooked. This bank, in my opinion, controls the silver market. How they accumulated as much silver as I claim they’ve acquired is a testimony to their skill, power and treachery. But not even JPMorgan was able to buy 100 million ounces of physical silver in a short time (aside from the first big price take down in 2011).

If JPM did buy as much physical silver as I allege, that tightens the physical market even further and makes the price impact of the next big buyer that comes along more potent. It also validates the big buyer premise because JPMorgan wouldn’t buy that much silver if it wasn’t looking to score big.  And while it does create the possibility that JPMorgan could then sell the physical silver it acquired to the next big buyer which comes along at discounted prices, in reality that would only occur if JPMorgan sold the silver it accumulated at a loss and, in effect, subsidized the next big buyer’s purchase. That would not be in keeping with JPMorgan’s reason for existence. - Silver analyst Ted Butler: 25 February 2015

Except for the early price action in Far East trading on their Wednesday morning, it was very quiet yesterday---and most of the early gains were bled away as trading in London and New York progressed.  Of course yesterday was the day when all the big boys had to be out of the March  COMEX silver contract---and the over-the-top gross volume I spoke of at the top of this column, indicated that this was precisely what they did.  Everybody else has to be out today.

Here are the 6-month charts for all four precious metals updated with yesterday's data.

And as I write this paragraph, the London open is about thirty minutes away.  Once again there were smallish rallies in all four precious metals in morning trading in the Far East on their Thursday.  However, it does appear that these rallies ran into selling in early afternoon trading Hong Kong time for the second day in a row.

Gold's net volume at the moment is barely over 15,000 contracts---and silver's net volume checks in around 2,600 contracts---and most of silver's volume is now in the new front month which is May.  It's very quiet out there.  The dollar index is virtually comatose---and only down about 3 basis points at the moment.

I must admit that I'm not expecting a lot to happen as the March contract goes off the board.  As I said, all the small traders have to be out by the COMEX close at 1:30 p.m. EST this afternoon---and first day notice numbers come out this evening EST.

So where to from here you ask?  Beats me.  I still don't think we've seen the bottom of this engineered price decline, although I reserve the right to be wrong.  I'll have a much better feel for things once I've seen tomorrow's Commitment of Traders Report.  I've been commenting on it off and on all week---and this is what Ted Butler had to say about it to his paying subscribers yesterday.

"Finally, there was likely some further improvement in the COT market structure thru Tuesday’s cutoff for the reporting week, in that there was further speculative and technical fund selling and commercial buying on the series of new price lows in gold and silver to be reported in Friday’s release. However, the overall decline in price this week was muted---and COMEX trading volumes were not large, suggesting the reduction in the total commercial net short position was not as large as the two previous reports, at least in gold. One wild card is that there was a significant price decline on high volume on the cutoff day of the previous COT report, raising the possibility that not all of the speculative selling and commercial buying in that report was recorded in a timely manner and may show up this week. That’s a cute way of saying I’m not sure of how much commercial buying occurred this week."

And as I send this out the door to Stowe, Vermont at 4:50 a.m. EST, I note that prices have  continued to chop higher in all four precious metals since I wrote my prior comments about two hours and change ago.  Once again silver is leading the charge but, having said that, they're all doing very well for themselves at the moment.  Net gold volume is around 26,000 contracts, which isn't overly heavy considering the price action---and silver's net volume is only 5,100 contracts.  I find this lack of volume rather surprising---and it appears on the face of it that JPMorgan et al aren't really resisting these rallies too much.  Let's see if that continues. The dollar index still isn't doing much---but is now up 2 whole basis points.

The whole world now seems to know what the bullion banks have been up to in the precious metal markets for the last couple of decades---and even though not a lot appears to be going on out in the open, it's a sure bet that under the surface there's plenty happening---and it can't blow up quick enough to suit me.

Before heading off to bed, I'd like to point out that Casey Research is hosting another FREE on-line video event entitled "Going Vertical: Deep-Value Stocks to Own in a Rising Gold Market".

Eight investing and junior exploration experts talk about their experiences in previous bear markets---and what you need to do now to prepare your portfolio for maximum gains when the market turns bull. Including one MUST-OWN stock pick from Louis James.

Guests include Pierre Lassonde, co-founder and chairman, Franco-Nevada, Bob Quartermain, president, CEO, and director, Pretium Resources, Doug Casey, Rick Rule, founder and chairman, Sprott Global Resource Investments, Ron Netolitzky, chairman and director, Aben Resources, Frank Holmes, CEO and CIO, U.S. Global Investors---plus Jeff Clark and Louis James.

This FREE VIDEO will air on March 10 at 2:00 p.m. EST.  It will also be available for viewing after the initial stream for those who have schedule conflicts.  You can find out all about it, plus you can sign up as well, by clicking here.

That's it for another day---and based on what's happening at the moment, the rest of the Thursday trading session may prove to be far more exciting than I was expecting.

See you tomorrow.

Ed Steer

]]>
Thu, 26 Feb 2015 06:18:00 +0000
<![CDATA[Big Banks Face Scrutiny Over Pricing of Precious Metals]]> http://www.caseyresearch.com/gsd/edition/big-banks-face-scrutiny-over-pricing-of-precious-metals/ http://www.caseyresearch.com/gsd/edition/big-banks-face-scrutiny-over-pricing-of-precious-metals/#When:06:20:00Z "As you also already know, supply/demand fundamentals mean nothing"

¤ Yesterday In Gold & Silver

It was a volatile trading session for gold yesterday, but it all happened within a very tight price range---and appeared to center around the $1,200 price mark.  The high tick came at exactly 9 a.m. Hong Kong time on their Tuesday morning---and the low tick came at the London afternoon gold fix---and the subsequent rally got hammered flat during the next two hours of trading.  Then, starting a minute or so after 12 o'clock noon in New York, the gold price rallied back towards the $1,200 spot price mark---and made it shortly after the COMEX trading session ended.  From there, the price traded basically flat into the close.

The CME Group recorded the high and low ticks as $1,204.40 and $1,190.00 in the April contracts.

Gold finished the Tuesday session in New York at $1,201.30 spot, down 50 cents from Monday's close.  Net volume checked in around 105,000 contracts---about the same daily volume it has been for last five trading days or so.

Here's the 5-minute gold chart courtesy of Brad Robertson---and as you can tell, almost all yesterday's volume occurred between the London afternoon gold fix---and 11:45 a.m. EST.  Before and after, there was there was virtually no volume worth mentioning.  Don't forget to add two hours for EST---and the 'click to enlarge' feature really helps with this chart.

The silver chart looked very similar, with the high tick coming in morning trading in Hong Kong.  But the low tick of the day came a few moments after 12 o'clock noon in New York.  From there it chopped quietly higher and, like gold, closed almost unchanged.

The high and lows were reported as $16.04 and $16.455 in the March contract.

Silver closed yesterday at $16.31 spot, down a penny.  Net volume was only 16,000 contracts, but gross volume was, not surprisingly, very high as traders continue to roll out of the March contract and into future months.

Platinum's chart was a mini version of both the gold and silver charts.  Platinum closed at $1,163 spot, up two bucks on the day.

Palladium, as usual, was trading in a world all its own, closing at $792 spot, up another 7 dollars from Monday's close---and heading back to the $800 spot mark.  Will it be allowed to get there?

The dollar index closed late on Monday afternoon in New York at 94.55---and continued on with the rally that it was currently in.  That rally developed even more momentum starting about 3 p.m. Hong Kong time, which was an hour before the London open.  The 94.86 high tick came at the 10:30 a.m. GMT London a.m. gold fix---and then the index chopped lower in a very wide range, closing at 94.47---which was down 8 basis points from Monday's close.

Not surprisingly, the gold stocks hit their high at the same time as the metal itself, which was shortly before 11 a.m. EST.  From there they chopped lower---and never got a sniff of positive territory after that, even though the gold price recovered to virtually unchanged.  The HUI closed down 0.56 percent---and as you can tell, there was a problem with the main data feed---and the chart is not "all there" so to speak.  Nick Laird's HUI chart looked the same, or I would have posted that in lieu of.

The silver equities spiked well into positive territory, but fell back to unchanged as the not-for-profit sellers took the price to its noon low tick.  From there they traded in a tight range either side of unchanged, closing down 0.06 percent.

The CME Daily Delivery Report showed that 266 gold and 9 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  The big short/issuer sitting in the bushes until the last day turned out to be none other than HSBC USA with 255 contracts.  JPMorgan stopped 261 contracts in its client account.  The nine contracts in silver were issued by Jefferies and stopped by Canada's Scotiabank.  The link to yesterday's Issuers and Stoppers Report is here.

The CME's Preliminary Report for the Tuesday trading session showed that February open interest was unchanged from Monday at 362 contracts minus, of course, the 266 contracts posted for delivery tomorrow.  The remaining gold contracts for February delivery will be posted in tomorrow's column.  In silver, there are still 12 contracts outstanding, minus the 9 posted above.  The remaining 3 will be in tomorrow's Preliminary report.

There were no reported changes in GLD---and as of 9:46 p.m. EST yesterday evening, there were no changes in SLV, either.

The U.S. Mint had another sales report.  They sold 1,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and another 253,500 silver eagles.

There was very little gold activity over at the COMEX-approved depositories on Monday, as only 643.000 troy ounces were reported received---and 128.600 were shipped out.  That's 20 kilobars and 4 kilobars respectively.  As always, it was a pretty big day in silver, as 886,249 troy ounces were shipped in, but only 20,180 were shipped out the door.  The link to the silver activity is here.

Once again I have a very decent number of stories for you today---and I hope you find some in here that are of interest to you.

¤ Critical Reads

Stocks and Bonds Soar as Dollar Dives

Despite being told by The Fed that stocks are over-valued, investors decided today was the day to take that money off the sidelines and BTFATH. Everything is surging in equity land as bad data, worse earnings, and Ukraine were trumped by a little old lady in Washington and a self-referential list of growth-destroying reforms for Greece. However, as investors sell sell sell their dollars (USD Index down hard) they are buying US Treasuries with both hands and feet...

This short Zero Hedge piece, with three excellent charts, appeared on their Internet site at 11:25 a.m. EST on Tuesday morning---and I thank Dan Lazicki for today's first story.

U.S. Macro Crashes Near 1-Year Lows, February Running At 90% Data Miss Rate

Despite this morning's U.S. Services PMI rise, U.S. macro data is running at a 90% miss rate in February and Richmond Fed's tumble from 6 to 0 (11mo lows) along with The Conference Board's Consumer Confidence dropping the most since Oct 2013 merely confirm this trend. This is the biggest 4-month slump in Richmond Fed since 2010 as practically every sub index deteriorated. California, Florida and New York saw over consumer confidence collapse and Texas saw 'present situation' plunge. US Macro data is now nearing its lowest in a year...

This is another brief Zero Hedge offering from Dan Lazicki.  It was posted on their Internet site at 10:45 a.m. EST yesterday morning.

U.S. Economic Confidence Tumbles Back Into Negative Territory as "Hope" Fades

With economic data serially disappointing in 2015, it is probably not entirely surprising that Gallup's U.S. Economic Confidence Index fell to an average of -2 last week (with the biggest drop since July). This is the first time the index has had a negative weekly average since late December. Both the current conditions and outlook sub-indices tumbled but it was the future 'hope' index that fell the most with more people now saying the future will be 'poor' than believe it will be 'good'.

As Gallup reports, the U.S. Economic Confidence Index fell to an average of -2 for the week ending February 22.

This is the first time the index has had a negative weekly average since late December. Prior to that, the index had consistently been in negative territory since Gallup began tracking it daily in 2008.

This is another rather short Zero Hedge article from yesterday.  It showed up on their website at 2:51 p.m. EST---and it's the third contribution in a row from Dan Lazicki.

This is Why Hewlett-Packard is Firing 58,000 employees

The biggest scandal in today's release of Hewlett Packard Q1 earnings was not that, just as the NASDAQ is knocking on 5000's door, it reported revenues of $26.8 billion missing consensus expectations of $27.3 billion, while beating non-GAAP EPS by 1 cent to $0.92 (up from $0.90 a year ago) entirely due to a massive reduction in outstanding stock and some truly gargantuan non-GAAP add backs (GAAP EPS declined from $0.74 a year ago to $0.73) pushing the stock down 7% after hours.

The biggest scandal was the company announced that having cut 44,000 workers so far, it will cut 58,000 jobs by the end of 2015.

Incidentally, just 10 years ago Hewlett Packard employed a total of 58,000 people in the entire US.

So why is the company axing 58 thousand workers? Simple: so it can cut enough costs on top and continue to fund its now exponential surge in stock buybacks, which in the just concluded quarter was a record $1.6 billion, an increase of 178% from a year ago, and 66% more than the company spent on CapEx, in the process making its shareholders even richer while its management team get massive equity-linked bonuses.

This tiny article, with an embedded chart that's worth the trip, appeared on the Zero Hedge Internet site at 6:58 p.m. EST on Tuesday evening---and it's another story from Dan Lazicki.

"This Shorting Opportunity is as Great as 2007-2009", Billionaire Crispin Odey Warns

We have seen though some strange things, with Economics 101 turned on its head. We’ve seen that falling prices produce more supply, as the biggest producers see that they can take market share and use the opportunity by reducing average costs through excess production. We’ve seen that in the oil, minerals and iron ore industries. We have also seen in the last couple of years that as bond yields fall, governments are able to issue more debt.

But this time round the problem we have as well is that politics will start to rear its head and we are left to deal with politicians who are increasingly critical of the capitalist system’s ability to allocate capital and provide for society.

For me the shorting opportunity looks as great as it was in 07/09, if only because people are still looking at what is happening and believe that each event is an individual, isolated event. Whether it’s the oil price fall or the Swiss franc move, they’re seen as exceptions....

This down cycle is likely to be remembered in a hundred years, when we hope it won’t be rated for “How good it looks for its age!”. Sadly this down cycle will cause a great deal of damage, precisely because it will happen despite the efforts of the central banks to thwart it.

This commentary was embedded in another Zero Hedge article from yesterday afternoon.  This one showed up there at 3:12 p.m. EST---and it's now five in a row from Dan.  It certainly worth reading.

J.P. Morgan to start charging big clients fees on some deposits

J.P. Morgan Chase & Co. is preparing to charge large institutional customers for some deposits, citing new rules that make holding money for the clients too costly, according to a memo reviewed by The Wall Street Journal and people familiar with the plan.

The largest U.S. bank by assets is aiming to reduce the affected deposits by billions of dollars, with a focus on bringing the number down this year, these people said. The move is the latest in a series of steps large global banks have been discussing in recent months to discourage certain deposits due to new regulations and low interest rates.

J.P. Morgan’s steps are among the most detailed and widespread. Specifics are likely to be unveiled Tuesday by J.P. Morgan executives at the bank’s annual strategy outlook with investors, these people said. Among other points, the bank is expected to stress alternatives customers affected by the deposit moves can use for their excess cash.

This WSJ article was picked up by the marketwatch.com Internet site at 8:36 a.m. EST on Tuesday morning---and the first reader through the door with it was Norman Willis.

Bank of New York Mellon in settlement talks over forex fraud, sources tell Reuters

Bank of New York Mellon Corp. is in settlement talks with the U.S. Justice Department and New York attorney general over claims the bank defrauded clients in foreign exchange transactions, according to sources familiar with the matter.

BNY Mellon last week revealed that it would take a $598 million charge as it sought to resolve matters including "substantially all" foreign exchange litigation it faced, though it did not specify which cases.

The bank faces several lawsuits, including class actions, stemming from allegations that it misled clients about how it determined currency exchange rates for certain transactions.

The Justice Department, which has a lawsuit against BNY Mellon pending in Manhattan federal court, is engaging in settlement talks, a person familiar with the matter said.

This story appeared on the Reuters website at 4:40 p.m. EST yesterday afternoon---and I found it embedded in a GATA release.

Janet Yellen's Advice to Rand Paul

Federal Reserve Chair Janet Yellen mostly succeeded in her attempt to be vague about Fed policy in her semiannual appearance before Congress on Tuesday. On one issue, however, she was unequivocal -- and correct: A congressional audit of the Fed's interest-rate decisions is a very bad idea. 

The Fed is already "extensively audited," she said, and Senator Rand Paul's bill to audit it even more "would politicize monetary policy." Were such congressional micromanagement possible in the 1970s, she pointed out, former Fed Chairman Paul Volcker would probably not have been able to defeat inflation by pushing up interest rates to double digits and forcing the economy into a recession. 

Undermining the central bank's political independence would ultimately harm the economy. Studies show that independent central bankers are better stewards of their economies than are politically appointed finance chiefs. The reason is simple: Politicians often favor easy-money policies that promote short-term growth and boost their re-election chances, even if they bring on inflation later.

Well, no shades of gray here.  Bloomberg is no friend of Rand Paul.  This short editorial appeared on the Bloomberg website at 3:35 p.m. EST yesterday afternoon---and I thank Dan Lazicki for sending it.

The New York Sun: Janet Yellen's audit

It strikes us that it was passing strange for Chairman Janet Yellen to wave a copy of the central bank’s audited financial statement as a prop in answering Congress on Senator Rand Paul’s “Federal Reserve Transparency Act.” She did this earlier today at the hearing of the Senate Banking Committee. Her suggestion that a standard financial audit is what the Transparency Act is all about was almost contemptuous. So was her suggestion that the bill that has already twice passed the House — September’s bipartisan vote was 333 to 92 — is somehow designed to politicize monetary policy.

Just to underline the point, what Mrs. Yellen held up was an audited report of the kind that is done by accountants using green eye shades. What the Congress wants is a look not only at the books but also at the Fed’s holdings and minutes and transactions overseas. It is not an attempt to interfere with Fed policy. It is an attempt to find out what the Federal Reserve is doing. It’s just shocking that the Federal Reserve would want to deny to its creator this kind of inspection once every, oh, say, century.

There's no question where The N.Y. Sun lies on this issue, either.  This editorial put in an appearance on The New York Sun's website yesterday---and I found it on the gata.org Internet site.  It's worth reading.

Ex-Plunge Protection Team Whistleblower: "Governments Control Markets; There Is No Price Discovery Anymore"

One year after the great stock market crash in 1987, US President Ronald Reagan launched the "Working Group on Financial Markets." Conspiracy theorists believe, however, that the real task of this committee is to protect against a renewed slump in the stock market. In the jargon of Wall Street, the working group is known as the "Plunge Protection Team."

One glimpse at a few days during 2007/8 and it is clear that 'someone' with infinitely deep pockets was able to support markets on several critical days - though, of course, anyone proclaiming intervention was propagandized away as a conspiracy theory wonk. However, as Dr. Pippa Malmgren - a former member of the U.S. President’s Working Group on Financial Markets - it is not conspiracy theory, it is conspiracy fact: "there's no price discovery anymore by the market... governments impose prices on the market."

In this 38-minute interview Lars Schall, for Matterhorn Asset Management, speaks with Dr Pippa Malmgren, a US financial advisor and policy expert based in London. Dr Malmgren has been a member of the U.S. President’s Working Group on Financial Markets (a.k.a. the “Plunge Protection Team”). They address, inter alia...

I've had several readers send me this interview over the last few days---and have put off posting it until now.  The interview runs for 38 minutes---and you can read all about it, as Zero Hedge has put their spin on it which, along with the interview, is worth your while.  This is also courtesy of Dan Lazicki.

Bill Bonner: The Day the ATMs Run Out…

Please remember this warning when you go to the ATM to get cash… and there is none!

While we were thinking about what was really going on with today’s strange new money system, a startling thought occurred to us.  Our financial system could take a surprising and catastrophic twist that almost nobody imagines, let alone anticipates.

Do you remember when a lethal tsunami hit the beaches of Southeast Asia, killing thousands of people and causing billions of dollars of damage?  Well, just before the 80-foot wall of water slammed into the coast an odd thing happened: The water disappeared.

This very interesting article by Bill showed up on the dailyreckoning.com Internet site on Tuesday sometime---and once again I thank Dan Lazicki for sharing it with us.  It's certainly worth reading.

Washington Has Resurrected the Threat of Nuclear War — Paul Craig Roberts

Foreign Affairs is the publication of the elitist Council on Foreign Relations, a collection of former and current government officials, academics, and corporate and financial executives who regard themselves as the custodian and formulator of US foreign policy. The publication of the council carries the heavy weight of authority. One doesn’t expect to find humor in it, but I found myself roaring with laughter while reading an article in the February 5 online issue by Alexander J. Motyl, “Goodbye, Putin: Why the President’s Days Are Numbered.”

I assumed I was reading a clever parody of Washington’s anti-Putin propaganda. Absurd statement followed absurd statement. It was better than Colbert. I couldn’t stop laughing.

To my dismay I discovered that the absolute gibberish wasn’t a parody of Washington’s propaganda. Motyl, an ardent Ukrainian nationalist, is a professor at Rugers University and was not joking when he wrote that Putin had stolen $45 billion, that Putin was resurrecting the Soviet Empire, that Putin had troops and tanks in Ukraine and had started the war in Ukraine, that Putin is an authoritarian whose regime is “exceedingly brittle” and subject to being overthrown at any time by the people Putin has bought off with revenues from the former high oil price, or by “an Orange Revolution in Moscow” in which Putin is overthrown by Washington orchestrated demonstrations by US financed NGOs as in Ukraine, or by a coup d’etat by Putin’s Praetorial guards. And if none of this sends Putin goodbye, the North Caucasus, Chechnya, Ingushetia, Dagestan, and the Crimean Tarters are spinning out of control and will do Washington’s will by unseating Putin. Only the West’s friendly relationship with Ukraine, Belarus and Kazakstan can shield “the rest of the world from Putin’s disastrous legacy of ruin.”

What we see here with Motyl is the purest expression of the blatant propagandistic lies that flow continually from the likes of Fox “News,” Sean Hannity, the neocon warmongers, the White House, and executive branch and congressional personnel beholden to the military/security complex.

This very interesting and disturbing commentary by Paul was posted on his Internet site on Tuesday sometime---and the stories from Dan just keep on coming.

Making Me Pay For My Crimes Would Send “Message of Uncertainty to the Markets”: Bank President to Spanish Judge

A Spanish judge by the name of Fernando Andreu recently violated one of the most important unwritten rules of global finance: namely, that banks and bankers are effectively immune to all laws of all lands (barring, of course, Iceland). As I reported roughly 10 days ago, Andreu had ordered Bankia, its parent company state-owned BFA, the bank’s former chairman, Rodrigo Rato, and three other former directors to pay an €800 million civil liability bond for signing off on fraudulent financial statements in the run up to the bank’s 2011 IPO.

If the defendants fail to cough up the full amount before March 13th, the authorities will embargo assets belonging to them with the equivalent market value. With the clock ticking down and the days flying by, it was just a matter of time before the defendants hit back – and hard!

The first to hit back was Rodrigo Rato, the bank’s former chairman and one-time IMF president. In a 75-page notice of appeal that was leaked to the Spanish press, Rato cautioned that Judge Andreu’s “premature” decision to force the six defendants to compensate the thousands of shareholders they are accused of defrauding could end up provoking a “much greater evil” than that it is supposed to address.

In the worst case scenario, the document warns, it could send a “message of uncertainty to the markets,” which could in turn exert downward pressure (otherwise known as gravity) on the already semi-defunct bank’s share price. This is not the first time that a panicked banker has used this argument; indeed, it is the preferred alibi of all 21st-century banking racketeers.

This very interesting news item/commentary was posted on the wolfstreet.com Internet site on Monday---and it's courtesy of Brad Robertson.

The Reason Why the Eurogroup Rushed to Approve the Greek Reform Package?

As we noted earlier today, there was some confusion over the plight of the Greek reform proposal document, which initially was said to have been delayed until today, only for the Troika, pardon, Institutions, to flip around and say they had actually received it before midnight on Monday. How could the two be possible? Courtesy of Yannis Koutsomitis, who had the simple but profound idea of looking at the properties tab in the leaked Varoufakis draft of the agreed to proposals, we now know.

As it turns out, the reason why not only the Troika received an agreed to version of the Greek reform proposals "before midnight on Monday", but rushed these through with a favorable agreement today, is that, drum-roll, the European Commission drafted the entire letter!

All Yanis Varoufakis had to do was agree to the letter that the Troika had previously written and agreed in advance was agreeable to it, and send it back. The skeptics are encouraged to play around the original pdf "leak" found here.

As for the actual author of the "Greek" reform package, a document which was created at 10:09 pm on Monday, February 23, 2015 (so technically, yes, before midnight on Monday) was one Declan Costello of the European Commission.

This interesting news item showed up on the Zero Hedge website at 11:51 p.m. EST on Tuesday morning---and it's another contribution from Dan Lazicki.

Tensions high as Greece scrambles to keep rescue deal alive

Greece has vowed to shake up labour markets and push through far-reaching reforms to avert a fresh showdown with eurozone creditors this week, hoping to stave off bankruptcy within days as cash runs dry.

The radical Syriza government submitted a five-page list of measures to EMU officials in Brussels in time for a deadline on Monday, including an assault on trade union powers that risks setting off a revolt by the movement's Communist and hard-left factions.

Failure to reach an agreement would lead to yet another round of crisis talks, backed by the threat that the European Central Bank could at any time cut off emergency liquidity support for Greek lenders and effectively force the country out of the euro.

This Ambrose Evans-Pritchard commentary appeared on the telegraph.co.uk Internet site at 8:23 p.m. GMT on Monday evening local time---and I thank Roy Stephens for sending it along very early on Tuesday morning.  It's worth reading.

Eurozone clears path for Greek bailout extension

Eurozone finance ministers on Tuesday (24 February) approved a list of reforms submitted by Athens and cleared the path for national parliaments to endorse a four-month extension of the Greek bailout, which otherwise would have run out on 28 February.

"We call on the Greek authorities to further develop and broaden the list of reform measures, based on the current arrangement, in close coordination with the institutions," the Eurogroup of finance ministers said in a press statement.

National parliaments, notably Germany's Bundestag, will still have to approve the move this week.

The three international creditors - the European Central Bank, the European Commission and the International Monetary Fund - earlier that day gave an assessment of the reforms plan and said they were "sufficiently comprehensive to be a valid starting point" for the bailout loans to be extended and paid out.

This news item was posted on the euobserver.com Internet site at 7:17 p.m. Europe time yesterday evening---and it's courtesy of Roy Stephens.  There was also a story about this in The Telegraph yesterday evening GMT---and it's headlined "Troika raises fresh concerns over Greece's last-ditch debt deal"---and I found it today's edition of the King Report.

David Stockman: Kick-The-Can Has Morphed Into a Blatant Farce

The whole Kabuki dance in the Eccles Building is about hand signals to Wall Street carry traders; its a reflection of the desperate fear of our monetary politburo that having inflated for the third time this century the mother of all financial bubbles, they must now keep it going literally one meeting at a time—lest it splatter again and destroy the illusion that an egregious spree of money printing has saved the main street economy.

Likewise, it now transpires that the bruising political war of words between the Germans and the “radical” Greek government has been suspended for another few weeks. And the reason is a pathetic fear that unites the parties despite their irreconcilable substantive policy differences. Namely, that the markets will crater upon even a hint that a real solution is on the table, and that the way to keep the beast at bay is to cover their eyes, kick-the-can and hope something turns up to avert the next crisis a few weeks down the road.

Still, this is getting beyond juvenile. If there were any adults in the room they would focus on quickly shaping a workable Greek default and exist—-not on perpetuating the lie that Greece can ever recover from its debt servitude to the EU superstate and IMF.

Ironically, the fire breathing leftists who have taken over in Athens have compliantly strapped on the poodle collar left behind by the Samaras government. It seems that their game-theory spouting Keynesian financial spokesman, Yanis Varoufakis, also fears a thundering upset in the casino. So the Syriza government stumbles forward——now visibly toting the massive debt imposed on them by the Eurozone and IMF in order to bailout the German, French and Italian banks.

This longish, but worthwhile commentary by David put in an appearance on his Internet site yesterday sometime---and it's another contribution from Roy Stephens.

East Ukraine artillery withdrawal focus of FMs meeting – as Poroshenko buys UAE weapons

While the foreign ministers of France, Germany, Russia and Ukraine were meeting in Paris to talk about the Eastern Ukraine peace settlement, it was revealed that the Ukrainian president has struck a deal on arms supplies from the UAE.

The four ministers agreed on the need for the ceasefire to be respected, as well as on the need to extend the OSCE mission in Eastern Ukraine, reinforcing it with more funding, personnel and equipment.

It’s important for Kiev troops and the rebels to start withdrawing heavy weapons right now, without waiting for the time “when not a single shot is fired,” Russian Foreign Minister Sergey Lavrov said after the meeting. He added that his German and French counterparts thought it a positive development that the Donetsk and the Lugansk rebels had started to pull their artillery back.

This story was posted on the Russia Today website at 11:44 a.m. Moscow time on their Tuesday morning, which was 3:44 a.m. in Washington.  I thank Roy Stephens for sending it along.

OPEC will hold extraordinary meeting if oil plunge continues – cartel president

The OPEC member states are discussing the possibility of an emergency meeting should oil prices continue to fall, said Nigerian Oil Minister, and OPEC President Diezani Alison-Madueke. Prices have dropped by than half since their peak last summer.

If the price “slips any further it is highly likely that I will have to call an extraordinary meeting of OPEC in the next six weeks or so,” said Alison-Madueke, as quoted by the Financial Times, adding that discussions are already underway.

“Almost all OPEC countries, except perhaps the Arab bloc, are very uncomfortable,” she said. As the cartel’s president, she is responsible for maintaining communication with member countries and Secretary-General El-Badri in case of an emergency meeting.

This Russia Today news story showed up on their Internet site at 3:05 p.m. Moscow time on their Tuesday afternoon---and it's another contribution from Roy Stephens, for which I thank him.

Big Banks Face Scrutiny Over Pricing of Precious Metals

U.S. officials are investigating at least 10 major banks for possible rigging of precious-metals markets, even though European regulators dropped a similar probe after finding no evidence of wrongdoing, according to people close to the inquiries.

Prosecutors in the Justice Department’s antitrust division are scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation, these people said. The agencies have made initial requests for information, including a subpoena from the CFTC to HSBC Holdings PLC related to precious-metals trading, the bank said in its annual report Monday.

HSBC also said the Justice Department sought documents related to the antitrust investigation in November. The two probes “are at an early stage,” the bank added, saying it is cooperating with U.S. regulators.

Also under scrutiny are Bank of Nova Scotia , Barclays PLC, Credit Suisse Group AG , Deutsche Bank AG , Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Société Générale SA, Standard Bank Group Ltd. and UBS AG , according to one of the people close to the investigation.

I had a lot of readers send me this Wall Street Journal story yesterday---and the first person through the door with a link that I could use was Ken Hurt.  But reader Michael McKay sent it to me as well, along with the following comments, which I thought worth sharing:  "This article was on the Front Page of the print edition.  Because this edition (central) serves Chicago, the seat of the Commodity markets, you can be very sure this was noticed by ALL the top folks. Trust me Ed, I was 23 years in those circles. This is the revealing of an open open secret that is the next big thing. But it it also true that the C[ommodity?] Markets are so very specialized that only those closest to the Metals know how significant this is.  I recommend keep pushing your index finger into the open wound that this story is.  Leverage is there."  From your lips, to God's ears, Michael!

Bank of England denies secret futures trading on CME Group exchanges in U.S.

Bank of England Governor Mark Carney today told the Treasury Committee of the House of Commons that the bank is not participating in CME Group's program by which central banks receive discounts for their secret trading in all major U.S. futures markets.

Carney's denial came in response to a question from committee member Steve Baker, Conservative for Wycombe in England.

While no mainstream financial news organizations will question central banks about their secret trading in the markets, at least the issue seems to have come to the attention of some elected officials in Britain.

I found this worthwhile commentary, plus a video link, posted on the gata.org Internet site yesterday.

Gold and silver prices: The next bank rigging scandal?

The world's biggest banks are still reeling from the consequences of the Libor and foreign exchange scandals, but U.S. authorities are now investigating the possibility of more rigging.

Several banks are being scrutinised over how they set influential benchmarks in the markets for gold, silver, platinum and palladium in London, with at least 10 under investigation from the Department of Justice (DoJ) and Commodities and Futures Trading Commission (CFTC), according to reports.

The benchmarks, which influence the prices of financial products as well as valuable jewellery, were set by a telephone conference call by a group of banks until last year, when they were overhauled amid mounting scrutiny of market rigging.

This gold-related news item showed up on the telegraph.co.uk Internet site at 12:36 p.m. GMT yesterday---and in many respects its similar to the WSJ story further up.  It's another item I found in this morning's edition of the King Report.

Jim Armitage: For HSBC bashers, this latest misfortune is pure gold

If you thought HSBC-bashing would quickly drop off the list of national sports, think again.

As if all the chicanery and wrongdoing around its Swiss tax evasion foundry weren’t enough, now it admits it’s also under investigation for possible rigging of the gold price.

This time, the U.S. regulators are probing, but the possible collusion happened here in London.

It’s tempting now to tally up a list of the charges and suspicions against HSBC, from sanctions busting to aiding Mexican drug cartels, through Libor and currency fixing to, now, potentially manipulating the price of gold, silver, platinum and palladium.

Probably guilty as charged, especially in gold.  This article appeared on the London Evening Standard Internet site at yesterday GMT---and it's courtesy of Nick Laird

Swiss Watchdog Says It's Looking at Possible Gold Market Manipulation

Switzerland's competition commission WEKO is looking into possible manipulation of price fixing in the precious metals market, its spokesman said today.

"We have a preliminary investigation into the manipulation of gold and precious metal price fixing," the spokesman said. He declined to say which banks were involved.

The spokesman said this preliminary investigation began in 2014, without elaborating.

This Reuters story appeared on their Internet site at 12:48 p.m. EST yesterday---and it's another gold-related news item I found in a GATA release.

Gold Holdings of Eurozone Rise to 10,792 Tonnes – ECB’s “Reserve of Safety” Accumulated

The Euro zone raised its gold holdings by 7.437 tonnes to 10,791.885 tonnes in January, International Monetary Fund data released overnight showed.

The rise in gold holdings was small in tonnage terms and in percentage terms  – especially when viewed in the light of the recently launched ECB’s €1 trillion Q.E. monetary experiment.

Nevertheless, the rise in Euro-area gold holdings shows how the ECB continue to view gold as an important monetary asset. Mario Draghi said of gold in October 2013 that gold is a “reserve of safety” that “gives you a value-protection against fluctuations against the dollar.”

Draghi told an open forum at Harvard’s Kennedy School of Government, why central banks want gold and what value it offers. He said that there were “several reasons” to own gold including “risk diversification”.

This commentary by Mark O'Byrne was posted on the goldcore.com Internet site yesterday---and it's definitely worth reading.  There was another story about this over at the mineweb.com---and it's headlined "Kazakhstan adds gold for 28th straight month".

Investment Forecasts For 2015: Interview with Nick Barisheff

G-E:  What is your overall Investment Outlook for 2015?

Nick:  I am seeing 2015 as a year of great volatility and uncertainty and there are many problem areas that could get dramatically worse. Unless something goes drastically wrong, like a Swiss currency issue out of the blue or something along those lines, I don’t think the gold price will do much until September, and will likely stay in the $1,100 to $1,300 range. If nothing dramatic happens, we will have volatility and uncertainty. The U.S. equity markets are experiencing increasingly greater volatility.

G-E:  What asset classes are considered today very inexpensive relative to historical standards and current global economic conditions?

Nick:  For the precious metals sector, gold, silver and platinum are very inexpensive today. Right now there is a rare anomaly where platinum is below the price of gold and silver is grossly undervalued with respect to gold. The silver/gold ratio is around 73:1. Based on the US geological survey of how much gold to silver is in the ground, there is sixteen times more silver than gold in the earth’s crust. Under the U.S. Coinage Act when you had the bimetallism standard, it was 16:1. In 1980 the ratio was 16:1. If the ratio reverted to the mean it would be around 56:1. The prices are way out of line for silver and there is a depressed gold price. Platinum is grossly undervalued, silver is grossly undervalued relative to gold and gold is dramatically undervalued.

Undervaluation brings us to the $10,000 per ounce gold figure. Until 2012, the U.S. debt and the gold price had a positive correlation of 97%. Then the figures diverge through manipulation, the gold price goes down and the US debt keeps rising. To get back to the correlated relationship that has been there for at least 20 years, the gold price would have to return to around $1,800. Gold is undervalued, silver is more undervalued and platinum is undervalued, so there is a lot of catching up to do. Instead of getting distracted by the manipulation, consider it a gift from the central banks. Right now gold, silver and platinum are all at a discount, so it is an ideal time to buy as much as you can.

Nick has never been able to develop the courage to say that precious metal prices are managed, even though he knows they are. This interview with Toronto-based Bullion Management Group CEO Nick Barisheff appeared on the gold-eagle.com Internet site on Sunday---and I thank reader M.A. for pointing it out.  It's certainly worth reading as well.

Lawrence Williams: Platinum price puzzles

If anything demonstrates the illogicality of the precious metals markets, it appears to be platinum. But is this really the case? Currently the metal is languishing at around a five-year low, yet most analysts put global platinum supply as being in a substantial deficit situation ever since last year’s South African platinum mine strikes, which took a substantial hunk of the metal out of the markets. Platinum is also selling at a lower price than gold – around $40 an ounce lower at the moment – which is a relatively rare, but not unknown, occurrence.

Indeed the world’s most respected platinum analysts at Johnson Matthey suggested that the platinum deficit last year was upwards of 1.1 million ounces – and in a total global market of around 8.5 million ounces, that is a big percentage deficit of getting on for 13%. Not only was platinum in deficit in 2014, but it had also been in deficit for the previous two years too, although not as large.

Indeed most analysts have been falling over each other to predict better things for platinum prices this year. In the recent LBMA metals forecasting competition both platinum and its sister metal palladium were seen as the precious metals price winners over the year, and while it is early days yet, recent market prices suggest that this may not actually happen.

As you already know, dear reader, platinum prices are managed just as much as the other three precious metals.  It's price won't rise until JPMorgan et al decide---because as you also already know, supply/demand fundamentals mean nothing.  Prices are set in the COMEX futures market by "da boyz"---and until that changes, nothing changes.  This isn't rocket science.   As Chris Powell said: "There are no markets anymore---only interventions." This commentary by Lawrie showed up on the mineweb.com Internet site at 2:17 p.m. GMT yesterday afternoon---and it's the final contribution of the day from Dan Lazicki, for which I thank him.

¤ The Funnies

These photos were taken on Day 2 at Grand Canyon---January 11.  It's not raining or snowing---and cloud base has lifted by a couple of hundred feet and is more well defined.  You can't see the North Rim, which is about 10 miles/16 kilometers away, because it's about 1,000 feet/330 meters higher than than the South Rim, so it's buried in cloud/fog.  These are just general canyon shots along the trail.   You'll need to use the 'click to enlarge' feature to see the people in photo #2---and that gives you some idea of scale.  I cropped the last photo in order to enhance the sense of danger, which is all too real.  There's nothing below her but air for many thousands of feet.

By the way, if you're not up on your Grand Canyon statistics, I found this excellent Reader's Digest version of the whole place linked here.

¤ The Wrap

Even though the headline number of the total commercial net short position [in silver in last Friday's COT Report] has declined by nearly 14,000 contracts since January 27, the concentrated net short position of the eight largest shorts has hardly budged---and remains over 65,000 contracts. This is still a manipulative position on its face since it represents more than 325 million ounces and 40% of world annual production, an amount unequalled among all commodities. Reviewing the dismal earnings reports by those companies that mine silver, I have uncovered not a one holding any of the 325 million oz held short by the 8 crooked COMEX shorts. Excepting JPMorgan, I doubt any of the other seven big shorts own much real silver, even though the concentrated short position represents more than 30% of all the silver bullion in the world. This is simply preposterous and illegal. - Silver analyst Ted Butler: 21 February 2015

I'm not sure what, if anything should be read into yesterday's gold price action because, once again, there wasn't a lot of volume---and there was little net volume in silver, although roll-over activity was very high, of course.

But, whatever action there was will be in Friday's Commitment of Traders Report, as yesterday at the close of COMEX trading was the cut-off.

Here are the 6-month charts for all four precious metals updated with Tuesday's price/volume action.

And as I write this paragraph, the London open is about forty-five minutes away---and there certainly has been some rather interesting price activity in Far East trading on their Wednesday.  I'm guessing that the Chinese New Year holiday has come to an end---and that traders are back at their desks over there.

Right out of the chute at 6 p.m. EST yesterday evening, all four precious metals powered higher, particularly silver, which I thought very unusual.  Depending on which metal you're looking at, the fun ended by 9 or 10 a.m. Hong Kong time---but started again with somewhat less enthusiasm in early afternoon trading.

Gold volume is very chunky at 25,000 contracts net, so this rally obviously ran into ferocious opposition by JPMorgan et al---but silver's net volume is only 2,870 contracts.  Gross volume is north of 10,500 contracts, so roll-over activity is already way up there, as the large traders have to be out by the end of COMEX trading today---and the rest of the traders tomorrow.

Thinking about that silver rally last night I'm wondering if it involved a decent amount of short covering, as the net volume is very light.  But there's no way of knowing for sure, because all the price/volume activity occurred after the cut-off for the COT Report on Friday---and by the time the next report is available, this trading action will be buried.

And as I send this off to Stowe, Vermont at 4:50 a.m. EST, I note that the tiny rallies in all four precious metals in early afternoon trading in the Far East, ended at 3 p.m. Hong Kong time, which was an hour before the London open.  And, with the exception of palladium, which is knocking on the $800 price door once again, the other three precious metals are heading quietly lower, but on such light volume, the price trend hardly matters.

Net gold volume is up to a bit over 31,000 contracts, an increase of only 6,000 contracts from two and a half hours ago---and silver's net volume is only 3,340 contracts, up only 500 contracts in the same time period.  There's nothing going on---and nothing to see at the moment.  The dollar index is now down 32 basis points---and coming awfully close to the 94.00 level once more.  It will be interesting to see if "gentle hands" put in an appearance once again.

That's all I have for today which, once again, is more than enough---and I look forward to the rest of Wednesday's trading activity with more than the usual amount of interest.

See you tomorrow.

Ed Steer

]]>
Wed, 25 Feb 2015 06:20:00 +0000
<![CDATA[Jim Grant: It’s Clear Why Gold Should Be Better]]> http://www.caseyresearch.com/gsd/edition/jim-grant-its-clear-why-gold-should-be-better/ http://www.caseyresearch.com/gsd/edition/jim-grant-its-clear-why-gold-should-be-better/#When:06:30:00Z "We still haven't had that definitive wash-out to the downside"

¤ Yesterday In Gold & Silver

Not surprisingly, the gold price didn't do too much in Far East trading on their Monday, but that all changed the moment that London opened---and about an hour later the gold price had printed its low tick of the day.  The subsequent rally lasted until a few minutes after 10:30 a.m. EST, before running into the usual sellers, who sold it down to just under unchanged from Friday's close---and that's where it stayed into the 5:15 p.m. EST close of electronic trading.

The low and high ticks were reported as $1,190.60 and $1,210.30 in the April contract.

Gold closed in New York yesterday at $1,201.80 spot, down $2.10 from Friday's close.  Despite the rather interesting price action, the associated net volume was pretty light at only 107,000 contracts.

Here's the 5-minute tick chart courtesy of Brad Robertson.  The volume spikes are noticeable on the larger price moves, but it certainly wasn't big volume.  The 'click to enlarge' feature works wonder here---and don't forget to add two hours for EST.

The silver price action was similar in most respects to what happened in gold.  The only two exceptions were that the high tick of the day came at the London p.m. gold fix---and the subsequent sell-off after that finished above the unchanged price mark from Friday.

The low and highs were reported by the CME Group as $16.065 and $16.59 in the March contract---and intraday move of more than 3 percent.

Silver finished the Monday session at $16.32 spot, up 5 cents on the day.  It would have closed materially higher if allowed to do so, which it obviously wasn't  Net volume was only 23,000 contracts, but there was very decent roll-over activity, as gross volume was very high.

The platinum price followed virtually the same price path as gold---and very similar to its price path on Friday.  It finished the Monday session at the same price as Friday's close as well---$1,161 spot---and because of that, the platinum chart looks somewhat weird.

All four precious metals had tiny, but not noteworthy rallies in early Far East trading on their Monday morning, but the most noticeable one was in palladium.  Once the high tick was in around 1:30 p.m. Hong Kong time, it hit its low of the day in mid morning trading in Zurich.  From there it rallied to its high around 12:30 p.m. in New York---and that was pretty much it for the day.  Palladium closed the Monday session at $785 spot, up 8 bucks from Friday's close.

The dollar index closed late on Friday afternoon in New York at 94.32.  From there it didn't do a lot until shortly before 3 p.m. Hong Kong time.  At that point it rallied to its 94.89 high tick, which came at 11:00 a.m. GMT in London.  From there it headed lower for the next five hours, hitting its 94.46 low tick minutes before 11 a.m. EST.  Then it rallied a handful of points into the close, finishing the Monday session at 94.55, which was up 23 basis points from Friday.

The gold stocks opened down a bit more than a percent, but rallied to their highs when gold hit its peak at 10:30 a.m.  Then the not-for-profit seller appeared.  They sank back into negative territory by lunchtime---and then developed a positive bias starting around 2:40 p.m in New York trading---and manged to squeeze out a bit of a gain, as the HUI closed up 0.40 percent.

It was another big losing day for the silver equities.  Despite the fact that silver spent a decent part of the morning session in positive territory---and close up as well, their associated equities barely got a sniff of the positive side of the ledger.  They followed a virtually identical price path as their golden brethren, but they closed down 2.19 percent.

In the last three trading days, with silver closing down less than 25 cents during those days, the silver equities have lost about 10 percent of their value.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  That was a big surprise.

The CME Preliminary Report for the Monday trading session showed that February gold open interest dropped a chunky 119 contracts---and the total o.i. for February is now down to only 362 contracts.  But regardless of the number of contracts remaining in the current delivery month, the short/issuer has to post them for delivery within the next 36 hours or so.  Silver's February open interest declined by almost half---from 23 contracts, down to 12 contracts.

There were no reported changes in GLD yesterday---and as of 7:50 p.m. EST yesterday evening, there were no reported changes in SLV, either.  But when I was editing this column at 2:45 a.m. EST, I noted that the folks over at iShares.com updated their website---and it showed that an authorized participant added 1,435,395 troy ounces.

There was a decent sales report from the U.S. Mint yesterday.  They sold 3,000 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---and 465,000 silver eagles.

There was no gold movement of any kind at the COMEX-approved depositories on Friday.  In silver, there 340,564 troy ounces reported received---and 349,820 troy ounces shipped out.  The link to that activity is here.

Despite by best efforts, I have a very decent number of stories for you today---and I'll leave the final edit up to you.

¤ Critical Reads

Amid Weak Supply, Existing Home Sales Hit Nine-Month Low

U.S. home resales fell sharply to their lowest level in nine months in January amid a shortage of properties on the market, a setback that could temper expectations for an acceleration in housing activity this year.

The National Association of Realtors said on Monday existing home sales declined 4.9 percent to an annual rate of 4.82 million units, the lowest level since April last year.

"The general tone of this report was weak and it adds to a wide array of housing indicators that have been pointing in the wrong direction, underscoring continued sluggishness in this crucial segment of the economy," said Millan Mulraine, deputy chief economist at TD Securities in New York.

This Reuters piece was picked up by the foxbusiness.com Internet site yesterday---and I thank reader M.A. for today's first story.

Dallas Fed Manufacturing Outlook Crashes to April 2013 Lows

The Dallas Fed manufacturing outlook plunged in January - despite Richard Fisher's claims that "everything is awesome" and low oil prices are a net positive for Texas - so it is perhaps not surprising that - with a backdrop of rig count collapses and oil price lows - February's data (delivered late) plunged to -11.2 (against expectations of -4, the 3rd miss in a row, well below every economist's estimates). This is the lowest since April 2013. This is the fastest 3-month decline since April 2013.

Is anyone really surprised? Except of course Richard Fisher  and his esteemed colleagues in the business community in Texas believe that the collapse in oil prices is a net positive for Texas:

"we will lose about 150,000 [oil-based] jobs, but we will pick them up elsewhere since we are a consumer society," and low oil prices is good for everyone.

This commentary, along with some excellent charts, showed up on the Zero Hedge website at 10:45 a.m. EST on Monday morning---and it's the second offering in a row from reader M.A.

Largest U.S. refinery joins nationwide oil strike

Workers at the largest refinery in the United States on Saturday joined a nationwide oil refinery strike as the union representing them pushes for a new contract that improves wages and safety.

The United Steelworkers union, which represents about 30,000 workers at refineries, terminals, petrochemical plants and pipelines across the country, said the strike expanded at midnight Friday to include the largest refinery in the U.S., the Motiva Enterprises refinery in Port Arthur, Texas.

The union said employees at two other refineries and a chemical plant in Louisiana also planned to strike at the end of Saturday.

So far strikes are underway or have been called at 15 plants, including 12 refineries with a fifth of U.S. crude processing capacity.

This news item was posted on the news.xinhuanet.com Internet site on Sunday sometime---and I thank Bill Busser for sending it our way.

JPMorgan tops list of risky banks: government study

JPMorgan Chase & Co. bears the highest potential hazard to the financial system if it were to fail, a staff study released by a U.S. government research agency showed, providing a first-of-its-kind numerical risk ranking of U.S. banks.

The bank had a "systemic risk score" of 5.05 percent for 2013 in a group of 33 large U.S. bank holding companies, the study by staffers at the Treasury Department's Office of Financial Research (OFR) said.

The study's numerical score is a measure of a bank's risk as a ratio of the total risk contained by a worldwide group of banks. The scores are based on metrics such as size, interconnectedness, complexity and cross-border activities, OFR said.

The OFR said the study reflected the views of the authors, not of the office or the Treasury Department. The findings come as U.S. regulators seek to finalize rules for capital buffers big banks need to hold, to make them more resilient and contain systemic risk if one of them were to collapse.

This should come a no surprise, dear reader.  This Reuters article, filed from Washington, appeared on their website a week ago today---and I thank Karen Brown for bringing it to my attention---and now to yours.

Yellen Faces Congress Amid Direst Threat to Fed Since 2010

Chair Janet Yellen testifies before Congress this week with the Federal Reserve facing its gravest political threat since the drafters of the Dodd-Frank act tried to strip it of its supervisory powers.

The Fed is being pressured from the left and the right. Senator Elizabeth Warren of Massachusetts and other Democrats have blasted the central bank for being too cozy with the banks it oversees. Republicans, including potential 2016 presidential contender Senator Rand Paul of Kentucky, have focused on its aggressive monetary policy.

Lawmakers from both parties are demanding greater transparency and accountability from an institution that has the power to impose capital requirements for banks and influence how much Americans pay for a mortgage or an auto loan.

“They’re under attack,” said Hester Peirce, a former Republican staff attorney to the Senate Banking Committee, where Yellen begins two days of congressional testimony at 10 a.m. Tuesday.

This Bloomberg story appeared on their Internet site at 10:00 p.m. Denver time on Friday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

Whatever Became of Economists and the American economy–Paul Craig Roberts

According to the official economic fairy tale, the US economy has been in recovery since June 2009.

This fairy tale supports America’s image as the safe haven, an image that keeps the dollar up, the stock market up, and interest rates down. It is an image that causes the massive numbers of unemployed Americans to blame themselves and not the mishandled economy.

This fairy tale survives despite the fact that there is no economic information whatsoever that supports it.

Real median household income has not grown for years and is below the levels of the early 1970s.  There has been no growth in real retail sales for six years.  How does an economy dependent on consumer demand grow when real consumer incomes and real retail sales do not grow?

Good questions from Paul.  This commentary put in an appearance on his Internet site on Monday sometime---and the first reader through the door with it was Rob Bentley.

Chip Maker to Investigate Claims of Hacking by N.S.A. and British Spy Agencies

Gemalto, a French-Dutch digital security company, said on Friday that it was investigating a possible hacking by United States and British intelligence agencies that may have given them access to worldwide mobile phone communications.

The investigation follows news reports on Thursday that the National Security Agency in the United States and the Government Communications Headquarters in Britain had hacked Gemalto’s networks to steal SIM card encryption codes.

The claims — reported on a website called The Intercept — were based on documents from 2010 provided by Edward J. Snowden, the former N.S.A. contractor.

The American and British intelligence agencies are said to have stolen the encryption key codes to so-called smart chips manufactured by Gemalto, which are used in cellphones, passports and bank cards around the world.

This story, filed from London, was posted on The New York Times website last Friday---and it's the first offering of the day from Roy Stephens.

This is the Biggest Problem Facing the World Today: 9 Countries Have Debt-to-GDP Over 300%

If anyone has stopped to ask just why global central banks are in such a rush to create inflation (but only controlled inflation, not runaway hyperinflation... of course when they fail with the "controlled" part the money para-drop is only a matter of time) over the past 5 years, and have printed over $12 trillion in credit-money since Lehman, the bulk of which has ended up in the stock market, and which for the first time ever are about to monetize all global sovereign debt issuance in 2015, the answer is simple, and can be seen on the chart below.

It also shows the biggest problem facing the world today, namely that at least 9 countries have debt/GDP above 300%, and that a whopping 39% countries have debt-to-GDP of over 100%!

We have written on this topic on countless occasions in the past, so we will be brief: either the Fed inflates this debt away, or one can kiss any hope of economic growth goodbye, even if that means even more central bank rate cuts, more QEs everywhere, and stock markets trading at +? while the middle class around the globe disappears and only the 0.001% is left standing.

This brief article, with two excellent tables of numbers, was posted on the Zero Hedge website at 11:20 a.m. EST yesterday morning---and the first person through the door with this particular story was reader M.A. once again.  It's worth a minute of your time.

Which New World Order Are We Talking About? - International Man

Those of us who are libertarians have a tendency to speak frequently of “the New World Order.” When doing so, we tend to be a bit unclear as to what the New World Order is. Is it a cabal of the heads of the world’s governments, or just the heads of Western governments? Certainly bankers are included somewhere in the mix, but is it just the heads of the Federal Reserve and the IMF, or does it also include the heads of JPMorgan, Goldman Sachs, etc.? And how about the Rothschilds? And the Bundesbank—surely, they’re in there, too?

And the list goes on, without apparent end.

Certainly, all of the above entities have objectives to increase their own power and profit in the world, but to what degree do they act in concert? Although many prominent individuals, world leaders included, have proclaimed that a New World Order is their ultimate objective, the details of who’s in and who’s out are fuzzy. Just as fuzzy is a list of details as to the collective objectives of these disparate individuals and groups.

So, whilst most libertarians acknowledge “the New World Order,” it’s rare that any two libertarians can agree on exactly what it is or who it’s comprised of. We allow ourselves the luxury of referring to it without being certain of its details, because, “It’s a secret society,” as evidenced by the Bilderberg Group, which meets annually but has no formal agenda and publishes no minutes. We excuse ourselves for having only a vague perception of it, although we readily accept that it’s the most powerful group in the world.

Nick Giambruno, the senior editor over at the International Man website sent this my way yesterday, suggesting that you might find it of interest---and it certainly falls into the absolute must read category as far as I'm concerned.

Three E.U. dreams that have turned into nightmares

Three stories that were making daily headlines last week all had one very important thing in common. One was the shambles unfolding over Ukraine. The second was the ongoing shambles over Greece and the euro. The third was the ever-growing flood of refugees from Africa and the Middle East desperately trying to escape to safety in Europe.

Over Ukraine, I cannot recall any issue in my lifetime when the leaders of the West have got it so hopelessly wrong. We are treated to babyish comparisons of President Putin to Hitler or Stalin; we are also told that this crisis has only been brought about by Russia’s “expansionism”. But there was only one real trigger for this crisis – the urge of the E.U. continually to advance its borders and to expand its own empire, right into the heartland of Russian national identity: a “Europe” stretching, as David Cameron once hubristically put it, “from the Atlantic to the Urals”.

The “expansionism” that was the trouble was not Putin’s desire to welcome the Russians of Crimea back into the country to which they had formerly belonged; or to assist the Russians of eastern Ukraine in their determination not to be dragged by the corrupt government in Kiev they despised into the E.U. and NATO. It was that of an organisation founded on the naive belief that it could somehow abolish nationalism, but which finally ran up against an ineradicable sense of nationalism that could not simply be stream-rollered out of existence. We poked the bear and it responded accordingly.

This commentary appeared on the telegraph.co.uk Internet site at 7:57 p.m. GMT on Saturday---and I thank Rob Malek for sending it our way.

Reports of Clashes Between Kiev and DPR Forces Close to Mariupol

Clashes between government forces and the militia of the Donetsk People's Republic [DPR] are continuing on Sunday in the village of Shyrokyno close to Mariupol, representatives of the DPR have told RIA Novosti. According to information from medics, two separatist fighters have been wounded in the fighting.

The village of Shyrokyno is located on the coast of the Sea of Azov in the Donetsk region, between the towns of Mariupol, which is controlled the government forces, and Novoazovsk, which is under the control of the self- proclaimed DPR. In autumn, the town was under DPR control, but then became neutral territory before the Ukrainian government's Azov battalion took control in February. 

On Sunday a DPR representative released a statement reporting the death of one DPR fighter, and two more wounded after an attack from Kiev government forces, while the Ukrainian National Guard reported two fatalities in the course of fighting on Sunday.

This news item showed up on the sputniknews.com Internet site at 6:41 p.m.Moscow time on their Monday evening, which was 10:41 a.m. EST.  It's another offering from Roy Stephens.

Putin: France, Germany genuinely want to find compromise over East Ukraine

The leaders of France and Germany genuinely want to find a compromise that would help end the conflict in eastern Ukraine, Russian President Vladimir Putin said in his latest interview.

Speaking to Rossiya 1 TV channel on the conflict and the breakthrough of the Minsk agreement, Putin said that “it seemed to me [the leaders of France and Germany], have a genuine desire to find such compromise solutions that would lead to the final settlement [of the conflict]...”

He cited the Minsk protocol which includes the decentralization of power in Ukraine and a “reference explaining what it implies.” The authors of the reference are "our German and French partners,” he said, adding that this speaks of their sincerity in finding a compromise.

“I had the impression that our partners have more trust in us than distrust, and in any case believe in our sincerity,” Putin said on Monday.

This article was posted on the Russia Today website at 7:25 p.m. Moscow time on their Monday evening---and it's the second contribution in a row from Roy Stephens.

France to host meeting on Ukraine crisis on Tuesday

France will host a meeting on Tuesday on Ukrainian crisis in a fresh diplomatic move to enforce the ceasefire deal agreed a week ago despite escalating violence in the country, a government source said on Monday.

A source from Quai d'Orsay press centre told Xinhua that top diplomats of France, Germany, Russia and Ukraine will try to push trough the peace accord breached with recent fighting which claimed two victims on Monday.

More than a week after Minsk agreement, Ukraine's military refused to start withdrawing heavy weapons from the front line in the east as independence-seeking insurgents had not stopped attacking government positions.

The above three paragraphs are all there is to this news item posted on the xinhuanet.com Internet site at 10:15 p.m. Europe time [I believe] on their Monday evening---and I thank Bill Busser for sending it our way shortly after I'd filed today's column.

Lavrov: Time to decide if we want U.N. focused and effective or on the sidelines

The U.N. would be effective in settling international disputes, if some member-states didn’t try to use it for dominating world affairs, Russian Foreign Minister believes, adding that such efforts led to bombings in Serbia, war in Iraq and chaos in Libya.

Sergey Lavrov has called for the U.N., about to celebrate its 70th anniversary, to be an independent and effective leader in global decision-making, despite attempts by some of its members to usurp the organization’s functions.

“It’s time to answer the question: do we really want the see the U.N. an effective and influential instrument of preserving peace and security or are we ready to allow it turn into the arena of propagandist struggle, with the U.N. being excluded from the process of finding key solutions to international problems,” Lavrov said, at the open debate for the United Nations Security Council (UNSC), held on Monday in New York.

Sergey is right on the money in this blunt speech---and it's certainly worth reading if you have the time.  It was posted on the Russia Today website at 4:15 p.m. Moscow time on their Monday afternoon---and that makes it three stories in a row from Roy.

Russia Ratifies $100 Billion BRICS Bank

A BRICS Bank - as an IMF alternative and to enable nations to become less dependent on the global reserve currency - was originally discussed at The BRICS Summit in 2012.  Then at the 2014 BRICS Summit, the framework for The BRICS Bank was approved as "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies."

Headquartered in Shanghai and chaired by Russia, this week saw what appears to be the final step in the creation of BRICS New Development Bank as RT reports, The Russian State Duma has ratified the $100 billion BRICS bank that will serve as a pool of money for infrastructure projects in Russia, Brazil, India, China and South Africa. It is expected to start fully functioning by the end of 2015.

As Russia Today reports:  The Russian State Duma has ratified the $100 billion BRICS bank that’ll serve as a pool of money for infrastructure projects in Russia, Brazil, India, China and South Africa, and challenge the dominance of the Western-led World Bank and the IMF.

The New Development Bank is expected to start fully functioning by the end of 2015, according to the Russian Finance Ministry.

I seem to remember posting a story about this very recently, but I couldn't find it in my last three columns, so here it is again---maybe.  This Zero Hedge piece is their spin on a Russia Today story from Saturday---and once again I thank reader M.A. for sharing it with us.

Pepe Escobar: China -- Year of the Sheep, Century of the Dragon?

Seen from the Chinese capital as the Year of the Sheep starts, the malaise affecting the West seems like a mirage in a galaxy far, far away. On the other hand, the China that surrounds you looks all too solid and nothing like the embattled nation you hear about in the Western media, with its falling industrial figures, its real estate bubble, and its looming environmental disasters. Prophecies of doom notwithstanding, as the dogs of austerity and war bark madly in the distance, the Chinese caravan passes by in what President Xi Jinping calls “new normal” mode.

“Slower” economic activity still means a staggeringly impressive annual growth rate of 7% in what is now the globe’s leading economy. Internally, an immensely complex economic restructuring is underway as consumption overtakes investment as the main driver of economic development. At 46.7% of the gross domestic product (GDP), the service economy has pulled ahead of manufacturing, which stands at 44%.

Geopolitically, Russia, India, and China have just sent a powerful message westward: they are busy fine-tuning a complex trilateral strategy for setting up a network of economic corridors the Chinese call “new silk roads” across Eurasia. Beijing is also organizing a maritime version of the same, modeled on the feats of Admiral Zheng He who, in the Ming dynasty, sailed the “western seas” seven times, commanding fleets of more than 200 vessels.

This longish essay by Pepe, filed from Beijing, certainly falls into the absolute must read category---and it was posted on the tomdispatch.com Internet site on Sunday sometime---and I thank reader M.A. for his final contribution to today's column.

Jim Rickards --- China: Profit from the Greatest Unwind in Economic History

Early signs indicate that the greatest unwind in modern economic history could begin this year in China. For many investors, the fallout will be painful. If you’re properly positioned ahead of time, however, I believe you can profit.

To do so, it’s important to understand the dynamics in play. Bubbles have three consistent characteristics: They are easy to spot; they persist longer than most investors expect (that’s why they’re bubbles in the first place); and they end badly with massive losses for investors who are still in at the top.

These three traits are related in terms of investor psychology and behavior. Even when investors see a bubble, they often cannot resist riding the wave, because they assume they’ll be smart enough to get out at the right time. The fact that bubbles last longer than most analysts expect tends to validate this investor assumption. People waiting on the sidelines for bubbles to pop are routinely ridiculed by those reaping large gains as the bubble expands.

But in the end, the bubble profiteers tend to stay too long at the party and suffer massive losses, as bubble markets can easily lose 30% or more in a matter of months, sometimes weeks, as assets are dumped and investors head for the exits. Today, the greatest bubbles in modern economic history are in China.

This commentary by Jim appeared on the dailyreckoning.com Internet site on Monday---and I thank Nitin Agrawal for sliding it into my in-box in the wee hours of this morning.  It's certainly worth reading as a contrast piece to the Pepe Escobar article that precedes it.

CFTC subpoenaed HSBC Bank USA for documents on precious metals trading

The Commodity Futures Trading Commission issued a subpoena to HSBC Bank USA in January seeking documents related to the bank's precious metals trading operations, HSBC said in its annual report and accounts statement on Monday.

The U.S. Department of Justice also issued a request to HSBC Holdings in November seeking documents related to a criminal antitrust investigation that the DoJ is conducting in relation to precious metals, it added.

"HSBC is cooperating with the U.S. authorities in their respective investigations," the bank said. "These matters are at an early stage."

HSBC was one of a number of banks named in lawsuits filed in U.S. courts last year alleging a conspiracy to manipulate gold, silver, platinum and palladium prices, plus precious metals derivatives, during the daily precious metals fixes.

Well, dear reader, HSBC USA---which is an entirely different legal entity than the U.K.'s HSBC---is up to their neck in the gold price management scheme.  I would think that they also have their nose in silver as well, but not as much as in the past.  It's impossible to tell if they're involved in platinum and palladium, but it would be no surprise if they were, as the Bank Participation Report states "3 or less" U.S. banks---and you can safely bet your entire net worth that HSBC USA is on that very short list.

This Reuters story, filed from London, appeared on their website at 9:44 a.m. EST on Monday morning---and it's an item I found on the Sharps Pixley website.

Ten Banks, Including JPM, Goldman, Deutsche, Barclays, SocGen and UBS, Probed For Gold Rigging

No matter how many times the big banks are caught red-handed manipulating precious metals, some failed former Deutsche Bank prop-trader (you know who you are) will take a vociferous stand based on ad hominem attacks and zero facts that no, what you see in front of you is not precious metal rigging at all but a one-off event that has nothing to do with a criminal banking syndicate hell bent on taking advantage of anyone who is naive and dumb enough to still believe in fair and efficient markets.

The last time this happened was in November when we learned that "UBS Settles Over Gold Rigging, Many More Banks To Follow", and sure enough many more banks did follow, because in Europe, where the stench of gold market manipulation stretches far beyond merely commercial banks, and rises through the central banks, namely the BoE and ECB, culminating with the Head of Foreign Exchange & Gold at the BIS itself, all such allegations have to be promptly settled or else the discovery that the manipulation cartel in Europe involves absolutely everybody will shock and stun the world, which heretofore was led to believe that such things as gold market (not to be confused with Libor or FX) manipulation only exist in the paranoid delusions of a few tinfoil fringe-blogging lunatics.

However, as usually happens, someone always fails to read the memo that when it comes to gold-market manipulation one must i) find nothing at all incriminating if one is a paid spokesman for the entities doing the manipulation such as former CFTC sell-out Bart Chilton or ii) if one can't cover it, then one must settle immediately or else the chain of revelations will implication everyone.

This Zero Hedge gold-related news item appeared on their website at 10:17 p.m. EST last night---and I thank Elliot Simon for digging it up for us.  It's certainly worth reading.

Ask the Expert: Hugo Salinas Price

In an interview with Geoff Rutherford of Sprott Money News, Hugo Salinas Price, president of the Mexican Civic Association for Silver, describes his plan for introducing an undenominated silver coin for savings and emergency money in Mexico. He adds that countries buying gold, such as Russia and China, are preparing for war if one that is forced on them by Western meddling, and don't want to have to rely on the currency of a potential enemy.

This longish audio interview, complete with an equally longish audio transcript, appeared on the sprottmoney.com Internet site yesterday---and it's certainly worth your time.  I stole the above paragraph of introduction from a GATA release.

Jim Grant: It's Clear Why Gold Should Be Better

Gold Stock Analysts' keynote speaker is Jim Grant and Kitco News sits with the interest rate guru himself to see how he sees central bankers affecting gold prices this year. "My hunch is that [the Fed] will be very slow to raise its rate," he says, adding that it will prove to be difficult for the central bank this year. "I think central banks are mainly marching to the same beat of the same drummer. The drummer is of radical intervention," he says. Looking to gold prices, Grant says he is frustrated because he sees "clearly why gold ought to be doing better." He says he can't imagine how anyone can have confidence in the current doctrines of central bankers. "It seems to me that the world will eventually see that these policies are non-starters, or if they are starting they won't end well...that for me is a simple case for gold."

This 7:27 minute video interview appeared on the kitco.com Internet site yesterday sometime---and my thanks go out to Dan Lazicki for sending it our way.

Why the "1%" Hates the Gold Standard

By now everybody knows that the primary consequence, one which we originally predicted back in 2009 - and many have since agreed - was completely intended, of the past 6 years of unprecedented monetary policy has been to push wealth inequality to record levels, not just in the US but across the world. What may not be so clear is precisely when this period of unprecedented wealth disparity started. The answer, as the following handy chart from NPR shows, is that long before QE, the wealth gap for the 1% really started in the early 1980s, courtesy of none other than Greenspan's "great moderation."

More importantly, and what is certainly not known, is that between 1930 and 1970, it was only the "bottom 90%" that saw their incomes rise.

This is how the NPR qualified this dramatic variance in wealth gaps, the first of which benefited most Americans, especially the middle-class, and which ended with a thud in the early 1970s, and the second which was unleashed in the early 1980s.

This brief Zero Hedge piece, with a couple of embedded charts, appeared on their website at 5:16 p.m. EST last Friday---and I thank reader Norman Willis for sharing it with us.

No wonder The Telegraph won't touch gold price suppression

If you're wondering why mainstream financial news organizations refuse to report the biggest financial news story in history -- the rigging of all major markets by Western central banks -- another reason has emerged in the last few days with the resignation of the chief political writer of the London Telegraph, Peter Oborne.

The Telegraph is a great newspaper with a wide scope, the standard bearer of the British Conservative Party, whose reporting is often cited favorably by GATA and frequently has been brave, as when a couple of years ago it exposed the scandal of expense padding by members of Parliament, including Conservative members.

But The Telegraph won't touch surreptitious intervention by Western central banks in the gold market any more than any other respectable Western financial news organization will, and departing The Telegraph, Oborne complained that the newspaper had gone soft in its reporting about a big investment bank that is a major advertiser, HSBC. Reports about Oborne's resignation are collected at the Google news archive.

This very interesting GATA release, along with a few critical read links, appeared on their website yesterday---and it certainly falls into the absolute must read category.

Fears of Greek exit spark Gold rush for the rich

Panicked investors are rushing to buy gold bullion on growing fears that Greece could be forced out of the Eurozone and currency wars devalue savings held in bank accounts.

BullionByPost has seen the highest demand for gold bullion in its six year history, an exclusive report for the Sunday Telegraph can reveal.

The precious metal dealer, which sold £96m worth of coins and bars last year, said demand during the first five weeks of the year was up 40pc, when compared to the same period a year earlier.

Demand for 1kg gold bars, worth an estimated £26,000 each, has increased by 74pc when compared to 2014.

This gold-related story appeared on The Telegraph's website at 1 p.m GMT on Saturday afternoon---and I thank South African reader B.V. for sending it along.

South African gold miners rescued after a fire at Harmony Gold

South Africa's Harmony Gold said on Sunday all 486 miners who were trapped underground following a fire had been rescued.

The blaze occurred about 2.3 km (1.43 miles) underground during maintenance on an air cooler at the Kusasalethu mine, a deep level operation west of Johannesburg that is Harmony's single largest gold producer.

The fire started around 0800 GMT and initially some 200 miners were unaccounted for. All operations other than essential services at the mine had been suspended, the company said.

"All 486 employees have been brought to the surface safely," company spokeswoman Charmane Russell said.

This Reuters article, filed from Johannesburg, appeared on their Internet site at 3:02 p.m. EST on Sunday afternoon---and I found it on the gata.org Internet site.  An AFP/Reuters article on this subject appeared on the Australian Internet site abc.net.au at 12:46 p.m. ACDT on Sunday---and it's headlined "South Africa mine fire: Nearly 500 workers rescued after blaze contained".  I thank Brad Robertson for finding it for us.

Shanghai Gold Exchange Chairman: India Will Become SGE’s Largest Partner

The latest Indian Bullion Bulletin has just been released wherein the chairman of the Shanghai Gold Exchange (SGE) Xu Luode presents the SGE’s international ambitions.

"The Chinese government regards the gold market as an indispensable component of China’s financial market and attaches great importance to its growth and development."

Xu provides an excellent all round update of the SGE, though he’s somewhat exaggerating the performances of the SGE International Board (SGEI) up until now IMVHO. I don’t blame him though, the SGEI has great potential!

One way to enhance SGEI trading would be to allow individual foreign investors to have easy access to the international exchange and its wide range of products, which is currently limited to SGEI members (banks, refineries, etc). Xu notes this will change soon.

This longish, but very worthwhile read by Koos Jansen, appeared on the bullionstar.com Internet site yesterday sometime---and I thank Dan Lazicki for digging it up for us.

Gold Meeting: Nixon & Pompidou -- 1971, Azores

President of France Georges Pompidou, President of the United States Richard Nixon and National Security Advisor of the United States Henry Kissinger met on December 13 and 14, 1971, at the Azores to negotiate the value (rigging) of gold and all other major currencies in the world at the time.

Three months prior to the meeting Nixon had halted the convertibility of US dollars into gold for foreign nations at the US Treasury. The French were the most vocal critics of the United States’ flexible monetary policy, or what some people call endless money printing.

This very long essay by Koos appeared on the Singapore website bullionstar.com on Sunday sometime---and it's the final offering of the day from Dan Lazicki.

¤ The Funnies

This was still Day One at Grand Canyon.  It was wet, cold and miserable---and the humidity was 100 percent, with a temperature barely above freezing.  The altitude on the South Rim, somewhere between 6,800 and 7,400 feet ASL [2,072m/2,255m] didn't help either---and altitude sickness could certainly be an issue for some.  The air is thin---and that's being kind.  Here are a couple of photos of elk, or wapiti, a very common animal in some parts of Arizona---and common in Alberta as well.  The Arizona variety is somewhat smaller than their more northern cousins in the U.S. and  western Canada.  The 'click to enlarge' feature helps here.

This fellow is a red-breasted nuthatch climbing around on a Utah Juniper.  Because they climb vertically either up or down, here's a rarely seen "back" shot of this critter.  A different lens and a flash would have been useful here.  They're very common in Edmonton as well, so one of these days, these particular photos are going to end up in the trash, as the fall into the "barely acceptable" category.

This creature is a rare albino alligator.

¤ The Wrap

Regular readers know that I am convinced that the changes in positions on the COMEX are the driving force behind changes in gold and silver prices. Essentially, up until the present, very little else matters in gold and silver prices. Not what China or India are buying, not changes in currencies, not what’s going on in the Ukraine or Greece and not what the Fed says or does. What determines gold and silver prices are position changes on the COMEX and the COT report bears that out. I know I appear to write this incessantly, but because this simple fact is not yet universally accepted, to me it means I haven’t been incessant enough. That’s where the predictions of what new COT reports will show come in.

I know most folks who look at the COT reports for the first time have their eyes glaze over. It’s not an easy report to read because unless you are well-versed in the intricacies of futures trading, it is virtually impossible to fully comprehend on a quick study basis. I would estimate that most subscribers fall into that camp. Further, even many of those who comment on gold and silver on a regular basis are not comfortable in analyzing the reports with some even resorting to claiming the data are unreliable (as a self-defense mechanism in lieu of an admission of not understanding the data).

But the COT reports are the very best of all government statistical reports and, as it turns out, explain most, if not all price movements in gold and silver. In addition, this is the data that prove the price manipulation on the COMEX. The trick is for me to make it as simple as possible for those with no need to understand the intricacies of futures trading and at the same time provide the detailed data desired by those who are intensely familiar with futures trading. That why I make “predictions” from time to time; it’s a way of bringing real time credibility, not so much to myself, but to the premise that this is what controls prices. And the basic premise is that the COMEX commercials rig prices lower to force the technical funds to sell so that the commercials can buy and vice versa. Certainly, if I was consistently wrong in those expectations I would stop issuing them, as who wants to be embarrassed by faulty predictions? - Silver analyst Ted Butler: 21 February 2015

Even though we saw new lows for this move down in three of the four precious metals, I wouldn't read much into that, as the associated volumes were very low.  And as Ted Butler pointed out on the phone yesterday, there was a lot of price activity well off the lows [and Friday's closes] as well, so that may have negated any improvements in the Commercial net short positions in either or silver or gold.

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

First Day Notice for delivery into the March silver contract is only days away---and all the traders have to be out of these contracts by Thursday at the latest, unless they're standing for delivery.  The big traders have to be out by the close of trading tomorrow---and the rest by the COMEX close on Thursday.  Friday is first day notice---and those numbers should be up on the CME's website late on Thursday evening, so I should have them for you in Friday's column.

And as I write this paragraph, the London open is about forty minutes away.  Like Monday, all four had tiny rallies that lasted until just after 1 p.m Hong Kong time---and most of those gains have vanished.  Basically there's nothing going on.  Net gold volume is around 8,100 contracts---and silver's net volume is barely discernible at 1,300 contracts, as well over 50 percent of the current gross volume of 3,100 contracts is roll-overs out of March.  As I said in the previous paragraph, the rolls out of March are going to be super heavy for the next three trading days---and it's in full swing now, but it's unusual to see in Far East trading.  The dollar index has a positive bias at the moment---and is currently up 7 basis points.

Today, at the close of COMEX trading, is the cut-off for this Friday's Commitment of Traders Report.  We still haven't had that definitive wash-out to the downside with the associated big price moves---and volumes to match.  Along with that would come RSI readings of well under 30---and as you can see from the gold and silver charts posted above, we aren't even close---and it would take a number of big down days in a row to get us that low as well.

I suppose the bottom could be in now, but using the past as prologue---and if forced to bet ten bucks---I'd say that event lies in our future somewhere.  The only unknown is just how ugly JPMorgan et al are going to make it.

And as I said on Saturday---"So we wait some more."

And as I send this off into cyberspace at 4:50 a.m. EST, I see that all four precious metals continue to work their way quietly lower in price---and all are down a bit from Monday's New York close.  Gold's net volume is just north of 15,500 contracts---and silver's net volume is around 2,500 contracts.  Silver's gross volume is approaching 6,000 contracts.  For both metals, this is very quiet volume for this time of day.  The dollar index is up 27 basis points.

I have no idea what to expect as the Tuesday trading session unfolds in London and New York, but a big down move wouldn't surprise me at all.  However, I'd love to be proven spectacularly wrong.

That's more than enough for one day---and I'll see you here tomorrow.

Ed Steer

]]>
Tue, 24 Feb 2015 06:30:00 +0000
<![CDATA[Ronan Manly: Spotlight on Greece’s Gold Reserves and Grexit]]> http://www.caseyresearch.com/gsd/edition/ronan-manly-spotlight-on-greeces-gold-reserves-and-grexit/ http://www.caseyresearch.com/gsd/edition/ronan-manly-spotlight-on-greeces-gold-reserves-and-grexit/#When:09:20:00Z "JPMorgan et al took another tiny slice out of each precious metal "

¤ Yesterday In Gold & Silver

It was another nothing sort of a day in gold.  It rallied a bit once the noon London silver fix was done, but that was capped---and the price was sold down to its low, a hair below $1,200 spot, shortly after 2:30 p.m. EST.  After that it rallied quietly into the close.

The high and low ticks were reported by the CME Group as $1,215.30 and $1,197.70 in the April contract.

Gold closed on Friday at $1,203.90 spot, down another $3.30 on the day.  Net volume was pretty light at 103,000 contracts.

The silver price followed a similar path, except the low came shortly after the COMEX close---and the price didn't do much after that.

The high and low in that metal were recorded as $16.555 and $16.16 in the March contract.

Silver closed in New York yesterday at $16.265 spot, down another 11 cents. There was lots of roll-over volume, but it all netted out to 18,500 contracts, which wasn't a lot.

The platinum price traded lower in a fairly decent price range on Friday.  It closed at $1,161 spot, down eight dollars from Thursday's close.

Palladium traded flat until Zurich opened---and then it got sold down before chopping sideways into the close.  It finished the day at $777 spot, down 7 bucks from Thursday.

The dollar index closed late on Thursday afternoon in New York at 94.40---and then didn't do a thing until shortly after 2 p.m. Hong Kong time on their Friday afternoon.  The it rallied to its 94.77 high shortly after 9 a.m. EST.   Once the London p.m. gold fix was done an hour later, the index rolled over, crashing to its 94.05 low before "gentle hands" appeared once again.  The index finished the day at 94.32---down 8 basis points from Thursday's close.

Here's the 3-day dollar chart, so you can see the number of times that "gentle hands" showed up at, or just below, the 94.00 mark.

The gold stocks opened up---and stayed up---and were up a bit more than 2 percent by 1 p.m. EST.  But at that point, a thoughtful soul appeared in the COMEX futures market and sold gold down to its low tick of the day---and the shares followed.  The HUI closed up only 0.25 percent.

The silver equities spent less than 30 minutes in positive territory at the beginning of the Friday trading session in New York---and headed lower from there.  Nick Laird's Intraday Silver Sentiment Index closed down a chunky 3.62 percent.

In the last two trading days of the week, silver has dropped by the magnificent sum of 23 cents.  During that same period, the silver equities are down almost 8 percent.   What for-profit sellers would ever trade like this?

The CME Daily Delivery Report showed that 96 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  The lone short/issuer was HSBC USA---and JPMorgan was the main long/stopper once again with 89 contracts for its client account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that February's gold open interest declined by 67 contracts, leaving 481 contract still open---minus the 96 contracts posted for delivery on Tuesday.  Silver open interest increased by 3 contracts, leaving 23 contracts still open in the February.  There are only three days left in the February delivery month, so we'll see some decent activity very early next week---and mostly in gold, of course.

For the second day in a row there was a deposit in GLD.  This time an authorized participant added 57,602 troy ounces.

Just eye-balling the GLD numbers, this ETF now holds 2.05 million more troy ounces of gold than it had at the the beginning of the year---and the most interesting part is that since the top of the latest gold rally on January 22---and a drop of about $110 in the interim---there have only been three smallish withdrawals from GLD in that time period.

And as of 9:53 p.m. EST yesterday evening, there were no reported changes in SLV.

Since the beginning of the year, the amount of silver in SLV has declined by about 5.25 million troy ounces---and there were only three days during that period that silver was actually added to this ETF.  All the rest of the activity has been withdrawals.

As Ted Butler continues to point out, this points to a severe shortage in physical silver.

There was another tiny sales report from the U.S. Mint on Friday.  They sold 69,500 silver eagles---and that was all.

Month-to-date the mint has sold 14,000 troy ounces of gold eagles---9,000 one-ounce 24K gold buffaloes---and 2,244,500 silver eagles.  This puts the silver/gold sales ratio for the month at 68 to 1.

There was only one kilobar of gold activity at the COMEX-approved depositories on Thursday, so I shan't bother to link that "action".  It was busier in silver of course, as 806,597 troy ounces were reported received, but only 29,668 troy ounces were shipped off to parts unknown.  The link to the silver activity is here.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday was not quite as good as both Ted and I were hoping for, but certainly in the ballpark.

In silver, the Commercial net short position declined by 5,736 contracts, or 28.7 million troy ounces.  That reduces the Commercial net short position down to 238 million troy ounces, which is still an outrageously high number.  Ted pegs JPMorgan's short position between 100-105 million troy ounces, which is almost 50 percent of the total amount.  I would guess that Canada's Scotiabank holds a short position in silver almost the same size as JPM's.

Under the hood in the Disaggregated COT Report, it was virtually all the Managed Money, as they sold 531 longs---and put on 4,960 short contracts, for a total of 5,491 contracts.  The raptors [the Commercial traders other than the Big 8] happily took the other side of the Managed Money trade, as they added about 5,300 long contracts.  The balance of 400 or so contracts showed up as a reduction in the short position of the Big 4 traders, which would include JPMorgan.

In gold, the Commercial net short position declined by 26,956 contracts---and the Commercial net short position in that precious metal is now down to 14.36 million troy ounces.

Under the hood in the Disaggregated report, the technical funds in the Managed Money category dumped 12,240 long contracts, plus they added 11,605 short contracts---for a total of 23,845.  On the other side, it was the Big 8 and the smaller commercial traders [the raptors] either covering shorts or adding longs.

As I've already pointed out, the report wasn't as good as we hoped---and my comments that we still have about fifty or so dollars to the downside left in gold---and maybe a buck or a bit more in silver---still stands.

Remember that it's not the price that determines the bottom, but the number of long contracts that the Commercial traders can force the technical funds in the Managed Money category to puke up.  But if the Commercials really want to get aggressive, then they will attempt to get these same technical funds to not only dump their remaining long positions, but also got them to go massively short as well---and if that's the case, we are nowhere near a price bottom.

So we await developments.

Since yesterday was the 20th of the month, the good folks over at The Central Bank of the Russia Federation updated their website with January's data---and it showed that they didn't add any gold to their reserves during that month---and their reserves remain at 38.8 million troy ounces.  Here's Nick Laird's charts showing the current status.

Considering it's a Saturday column, I don't have a large number of stories for you today, but a couple of them are on the lengthy side, so I hope you have the time to spend on them this weekend if you consider them fit to read.

¤ Critical Reads

It Begins: Goldman Cuts Q1 GDP Due to Snow

... we think that negative snowstorm effects could potentially subtract as much as half a percentage point from Q1 growth compared with a neutral baseline, although there is still plenty of time for activity to bounce back within the quarter. In light of our analysis, we reduced our Q1 GDP tracking estimate by two-tenths to +2.8%. -- Goldman Sachs, February 20, 2015

Back on Monday, we warned that "The Last Time This Happened, U.S. GDP Crashed By 5%", and by this we of course mean the Polar Vortex 2.0 that has gripped the U.S. in a spell of Russian revenge by way of the "Siberian Express" which has blanketed the U.S. in record cold weather.

As a reminder, it was precisely a year ago that economists, clearly unable to realize during the fact that heavy snowfall (in the winter) is disastrous to seasonally-adjusted GDP, decided to blame the harsh weather after the reported GDP fact. After what fact? After seeing Q1 2014 GDP rising as much as 2.5% just shortly before the BEA announced that Q1 GDP was in fact... -2.9%!

This short article appeared on the Zero Hedge website at 10:54 a.m. EST on Friday morning---and today's first story is courtesy of reader M.A.

WSJ: Subprime Consumer Debt Soars to 7-Year High

Subprime consumer borrowing — encompassing auto loans, credit card loans and personal loans — climbed to $189 billion in the first 11 months last year, the highest total since 2007, according to a study compiled for The Wall Street Journal by Equifax.

That borrowing accounted for 41 percent of total consumer lending outside of home mortgages.

The trend stems from lenders and investors seeking high yields in a low-interest rate environment. So it's no wonder that total household debt rose $306 billion, or 2.7 percent, in the fourth quarter from a year earlier to the highest level since 2010.

"We're going from an era where for many years credit was extremely tight to an era where credit is now looser," Gabriel Dalporto, chief marketing officer of LendingTree, told The Journal.

This news item appeared on the moneynews.com Internet site at 8:40 a.m. EST yesterday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

Port strike cuts production at Honda Indiana plant

A labor dispute involving dockworkers that has crippled international trade through the West Coast's seaports has prompted Honda to cut production sharply at its Greensburg, Ind., plant because of a parts shortage.

Honda spokeswoman Anita Sipes said the automaker has tried to use alternative means of getting parts. But she said the dockworkers' contract dispute is preventing Honda's Greensburg plant from getting critical items, including electronics and transmissions, because of cargo bottlenecks at 29 West Coast ports.

To deal with production cuts brought on by that parts shortage, Honda identified Monday and Friday of this week and Feb. 23 as days employees can stay home without pay, take paid time off or come in to work for training or other duties.

Production at the Honda plant will be cut in half for the rest of the week, but Sipes said Honda will re-evaluate the decision as the week progresses.

That's all there is to this brief article that appeared on the usatoday.com Internet site at 6:48 p.m. EST on Wednesday evening---and I thank Bill Busser for passing it around yesterday.

Doug Noland: The Curse of Moneyness

Financial innovation occurs more subtly and incrementally. Pay really close attention or you’re bound to miss it all. There are variations of financial instruments, institutions, market norms and government involvement. Success, real or perceived, ensures the envelope is pushed – in the markets and with policy. As we’ve witnessed, cumulative incremental policy experimentation over time can result in fundamentally revamped doctrine. In the markets and in real economies, incremental (“frog in the pot”) changes over the life of protracted booms can amount to profound transformations. And that is exactly what’s been experienced with “money” and monetary management.

The nineties saw the age-old issue of fractional reserve banking completely turned on its head. The “evolution” to market-based Credit fashioned what I refer to as the “infinite multiplier effect” – “money” and Credit created, miraculously, out of thin air like never before. With their implicit government backing, the GSEs enjoyed unlimited capacity to issue new debt liabilities – fed by insatiable demand from both home and abroad. During the mortgage finance Bubble, Wall Street relished in the capacity for seemingly limitless issuance of “money”-like mortgage- and asset-backed securities, most guaranteed by the GSEs that were backed by the federal government.

The phenomenal policy response to the bursting of the mortgage finance Bubble unleashed the “global government finance Bubble”. The world has now seen the evolution of unfettered electronic “money” advance to its final act, with profound yet unappreciated ramifications. For the past twenty-five years, each new Bubble has seen the scope of “money” widen to the point of ensuring Credit expansion sufficient to reflate increasingly impaired financial and economic systems. Yet each reflationary episode only compounded global financial imbalances and economic maladjustment. These days, concerted desperate reflationary measures see perilous expansion at the heart of “money” and at the very foundation of global Credit.

Doug's must read weekly Credit Bubble Bulletin appeared in my in-box yesterday evening courtesy of reader U.D., for which I thank him.

Carl Bernstein: The CIA and the Media

In 1953, Joseph Alsop, then one of America’s leading syndicated columnists, went to the Philippines to cover an election. He did not go because he was asked to do so by his syndicate. He did not go because he was asked to do so by the newspapers that printed his column. He went at the request of the CIA.

Alsop is one of more than 400 American journalists who in the past twenty‑five years have secretly carried out assignments for the Central Intelligence Agency, according to documents on file at CIA headquarters. Some of these journalists’ relationships with the Agency were tacit; some were explicit. There was cooperation, accommodation and overlap. Journalists provided a full range of clandestine services—from simple intelligence gathering to serving as go‑betweens with spies in Communist countries. Reporters shared their notebooks with the CIA. Editors shared their staffs. Some of the journalists were Pulitzer Prize winners, distinguished reporters who considered themselves ambassadors without‑portfolio for their country. Most were less exalted: foreign correspondents who found that their association with the Agency helped their work; stringers and freelancers who were as interested in the derring‑do of the spy business as in filing articles; and, the smallest category, full‑time CIA employees masquerading as journalists abroad. In many instances, CIA documents show, journalists were engaged to perform tasks for the CIA with the consent of the managements of America’s leading news organizations.

This is your big read of the day.  Carl Bernstein, along with cohort Bob Woodward, are legends in the media---and the book, along with the movie "All the President's Men" is based on their Pulitzer Prize winning work at The Washington Post back in the early 1970s.  I remember it like it was yesterday.  This 25,000 word essay appeared in the October 1977 edition of Rolling Stone magazine---and if you have the time and the interest, it's definitely worth reading.  It was something that I was saving for today's column---and I thank reader Norman Willis for bringing it to my attention---and now to yours.

Dutch Government Releases MH17 Documents, Many Redacted

The Dutch government released dozens of documents Tuesday about the aftermath of the downing of Malaysia Airlines Flight 17, but much of the information was redacted.

One of the Dutch broadcasters that requested the information be made public, RTL News, said it would protest against the number of redactions and take the government to court if necessary to compel it to reveal more details.

"We want the relevant facts so that a serious reconstruction can be made of the Cabinet's performance" after the crash, RTL's deputy editor, Pieter Klein, said on the broadcaster's website.

Prime Minister Mark Rutte's government is coming under increasing pressure to reveal all it knew about the risks of allowing passenger planes to fly over conflict-torn eastern Ukraine last year.

This AP story, filed from The Hague, was picked up by the abcnews.co.com Internet site back on February 10---and I thank South African reader B.V. for sending it along.

Danish Krone Collapses After Hints of Capital Controls

Following numerous rate cuts and backdoor Q.E. (halting government bond issuance), Denmark's Krone is collapsing this morning following the head of Denmark's Economic Council, Hans Jorgen Whitta-Jacobsen said:

  • DENMARK'S CENTRAL BANK WILLING TO USE CAPITAL CONTROLS IF NECESSARY TO DEFEND DKK PEG

This has sparked the biggest drop in DKK against EUR since 2001 and as SEB chief strategist Carl Hammer exclaimed, "currency markets are extremely nervous."

Damage control is beginning:

  • *DANSKE: VERY, VERY UNLIKELY DENMARK WOULD IMPOSE FX CONTROLS
  • *DANSKE BANK SENIOR ANALYST JENS NAERVIG PEDERSEN SPOKE BY PHONE

This brief Zero Hedge piece, complete with two excellent charts, showed up on their Internet site at 8:39 a.m. EST yesterday morning---and it's the second offering of the day from reader M.A.  There was a story about this in The Telegraph yesterday as well.  It's headlined "Denmark Ready to Impose Capital Controls to Protect Currency"---and I found it embedded in a GATA release.  As I said before---and I'll say it again now, it's only a matter of time before Denmark's central banks abandons the Euro peg as well, but their putting on a hell of a show in the interim.

Eurozone Officials Reach Accord With Greece to Extend Bailout

Ending an acrimonious standoff, European leaders hashed out a deal on Friday to extend Greece’s bailout by four months, giving the troubled country a financial lifeline and avoiding a bankruptcy with potentially destabilizing consequences for the region.

The agreement, reached at an emergency meeting of eurozone finance ministers here, paves the way for Greece to unlock further aid from its bailout, worth 240 billion euros, or $273 billion. But the creditors will dole out the funds only if Greece meets certain conditions, setting the stage for tense negotiations that could unsettle the markets and create more political friction with Germany and other European countries.

If Athens moves slowly, it might not get the money for months. Or the deal could fall apart altogether, again raising the prospect of a messy Greek departure from the euro currency.

“As long as the program isn’t successfully completed, there will be no payout,” Wolfgang Schäuble, the German finance minister, said after the negotiations.

This New York Times news item, filed from Brussels, appeared on their website yesterday some time---and it's the first offering of the day from Roy Stephens.  The BBC had a story about this yesterday as well.  It was headlined "Greece bailout: Four-month extension in Eurozone deal"---and it's courtesy of Brad Robertson.

No Evidence of Russian Military Hardware Presence in Ukraine – Hollande

French President Francois Hollande said Friday at a joint news conference with German Chancellor Angela Merkel that he was unable to confirm the presence of Russian military hardware in Ukraine.

“We cannot confirm that Russian tanks had entered Ukraine,” Hollande said.

Earlier on Friday, Ukrainian military spokesman Andriy Lysenko claimed that some 20 Russian tanks, military hardware and ammunition were seen heading from Russia to the Ukrainian territory.

Ukrainian authorities, alongside the United States, have persistently accused Russia of sending its troops and equipment to war-torn eastern Ukraine, without providing any evidence.

This won't make the neocons in Washington too happy.  This story, filed from Paris, put in an appearance on the sputniknews.com Internet site at 4:59 p.m. Moscow time on their Friday afternoon---and it's another offering from reader M.A.

Pepe Escobar: E.U. Reeling Between U.S. and Russia

Washington has certainly succeeded in permeating an already embattled EU with a little extra – what else – chaos, by pitting the “West” against Russia.

The Obama administration – infested with neo-con cells, those ghosts inside the machine – have always believed that a package of Western sanctions plus a Saudi-unleashed oil price war would be enough to bring down the Russian economy, thus “changing its behavior” on Ukraine, and in the best scenario provoking regime change in Moscow.

Well, it’s not working. Minsk 2.0 – as fragile an agreement as it is – de facto shows Germany (assisted by France), the leading European powers, trying to break away from the American Chaos project.

This must read commentary by Pepe appeared on the sputniknews.com Internet site at 3:13 p.m. Moscow time on their Friday afternoon, which was 7:13 a.m. EST in Washington.  My thank go out to reader B.V. for his second contribution to today's column.

A Ukraine Update: Stephan F. Cohen and John Batchelor

Batchelor and Stephen Cohen are mostly coming to the same conclusions as everyone else about Minsk2.  But the logic and information train is much more interesting. If Minsk2 fails, then Cohen expects a resumption of fighting in the spring when 1) more Ukrainian army troops can be trained and 2) weapons from Poland and the U.S. can be stockpiled for the offensive. Supposedly Poland is a source of old Soviet armor and SP guns etc. that the military is already familiar.

Also discussed is the American training group moving (en route?) to Ukraine, and it is either 400 (as Cohen mentions) or 600 - the latter virtually a battalion of U.S. troops. These are supposedly parachutists. 

The deplorable state of the Ukrainian military and its ability to fight is discussed as well. Something like half of Kiev's forces are gone and what is left is poorly trained and poorly motivated. It is doubtful that it is capable of winning against the rebels. Cohen also speculates, correctly, I think, that Kiev is not at all in control of the extreme militias like the Azov Battalion that has publicly stated it would not honour any Minsk Agreement. That should mean that these paramilitary groups are just as hostile or indifferent to Kiev as the Donbass rebels are.... He then speculates correctly that Poroshenko has no real power in Kiev, and his enthusiasm for leadership is declining, and that perhaps he is preparing to leave, . Summing up: the Ukrainian military is in disarray, the government is very shaky, the economy is only maintained by money (IMF) from the West (and is probably illegally sent) and Russian energy, and it is likely that the war will be pursued only with boots on the ground from the West. That doesn't leave much solidity to the concept of "proxy" war...

Putin's situation was also well explained. He only wants this ended to avoid war with the West and to rebuild his country. He has more cards to play yet. And it appears like a partitioning of Ukraine will be the remaining solution. Cohen sees no possibility for any cooperation like a federated relationship; Kiev has obviously targeted civilians and infrastructure in its efforts and the rightful rage of the rebels toward the west will guarantee a permanent separation.

This 39:50 minute audio interview with Stephen Cohen appeared on the johnbatchelorshow.com Internet site on Tuesday---and I thank Larry Galearis for sending it our way yesterday.

Global Politics – a war of meanings: Nikolai Starikov

Today, the world is in a situation that can be characterized as a dead end that the liberal financial-oriented world economy drove itself into after remaining the dominant economic system following the collapse of the USSR. Not going into much more detail on that theme, since doing so would require a whole other in-depth discussion, I will simply point out that, as historical experience and logical consideration confirm, this economic system cannot work without theft. On its own, without infusions from outside, it is not able to sustain itself, therefore a long period in which no one goes to war and no one is robbed, for countries sitting at the top of the liberal “food chain”, will always mean a crisis of the economic system itself. The need for war or theft is a matter of life and death for many (if not for all) countries of the West. The danger for the West today is that “potential victims” are nowhere to be found. In the world of today, the approximate parity of strength is like it was before two world wars, which itself increases many times over the risk of a new world conflict. A classical conflict, as during the previous two world wars, or as a hybrid, hidden beneath a large number of local conflicts (the main goal of which will be not to allow the nuclear weapons deterrent to be used!) together with informational and economic aggression.

What goals are the wars’ organizers aiming for?

First and foremost is a breaking of established economic ties, a deepening everywhere of the economic slide, except for in agreed-upon “economic growth spots”. In the First and Second World Wars this zone was the USA and once again they are trying to repeat this scenario. In addition, a goal of starting wars is the nullification or depreciation of “pre-war” debts and a restart of the world economy. An analysis of the upcoming conflict’s probable zones of destruction and (or) thievery which will permit the world economy to be restarted while preserving the existing economic model and the currently-constituted “economic food chain” for the existing financial elites shows that the level of accumulated contradictions can only be resolved at the expense of Russia and her demolition. The situation in the disparate and ailing enclaves of Europe and Asia, surrounded by the raging chaos that will come from the destruction of our country, will allow the United States to retain for itself the role of regulator of the world’s economy, island of stability, and the source point for new growth. Growth for itself, for Europe, and for Asia under the USAs security guarantees, paid for by the robbery of our country and our people.

This very thoughtful and profound essay, which is on the longish side, appeared on the vineyardsaker.blogspot.ca Internet site on Wednesday---and falls squarely into the absolute must read category for any serious student of the New Great Game.  For length and content reasons, it had to wait for Saturday's column---and I thank Roy Stephens for pointing it out.

CIA-planted ‘evidence’ may force IAEA review of Iran’s alleged nuke arms program – report

Doctored blueprints for nuclear weapon components supplied to Iran by the CIA 15 years ago could force the IAEA to review its conclusions on Iran’s atomic program, which was potentially based on misleading intelligence, Bloomberg reports.

The details of the Central Intelligence Agency operation back in 2000 were made public as part of a judicial hearing into a case involving Jeffrey Sterling, an agent convicted of leaking classified information on CIA spying against Iran.

“The goal is to plant this substantial piece of deception information on the Iranian nuclear-weapons program, sending them down blind alleys, wasting their time and money,” a May 1997 CIA cable submitted to the court reads.

The intelligence in question pertains to fake designs of atomic components that were transferred to Iran in February 2000.

Why should we be surprised, dear reader.  This Russia Today story, based on a Bloomberg article, appeared on the Russia Today Internet site at 16 minutes after midnight on Saturday morning Moscow time, which was 4:16 p.m. in New York.  I thank Roy Stephens for sending it---and it's certainly worth reading.

Pepe Escobar: China pivots everywhere

As for the Middle Kingdom as a whole, it has ventured much further than the initial proposition of producing cheap goods and selling them to the rest of the planet, virtually dictating the global supply chain.

Now Made in China is going global. No less than 87 Chinese enterprises are among the Fortune Global 500 – their global business booming as they take stakes in an array of overseas assets.

Transatlantic trade? That’s the past. The wave of the future is Trans-Pacific trade as Asia boasts 15 of the world’s top twenty container ports (with China in pride of place with Shanghai, Hong Kong, Shenzhen, Guangzhou).

Sorry, Britannia, but it’s Asia – and particularly China – who now rule the waves. What a graphic contrast with the past 500 years since the first European trading ships arrived in eastern shores in the early 16th century.

This is Pepe's second must read commentary in today's column.  This one appeared on the Russia Today website at 11:01 a.m. Moscow time on their Friday morning---and it's the final offering of the day from Roy Stephens, for which I thank him on your behalf.

There's a place in Japan where hundreds of wild foxes are waiting for you to play with them

This very interesting photo essay appeared on the sunnyskyz.com Internet site back on February 6, 2015---and it's definitely worth a minute of your time.  I thank reader M.A. for digging it up for us.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on the continual lack of growth in the economy despite “official” data being released, Gold holding steady through tense Greek talks in the Eurozone, and Indian gold imports show that hope is still on the horizon for precious metals.

This 8:59 minute audio interviews with Eric was conducted by Geoffrey Rutherford---and it's worth your while if you have the time.

Platinum reaches biggest discount to gold in nearly two years

Platinum's discount to gold hit its highest level on Friday since the gold price crash of April 2013, as concerns over the euro zone outlook lifted demand for the yellow metal as a haven, while dampening sentiment towards platinum.

Prices of the white metal fell to 5-1/2 year lows on Friday, weighed by concerns that turmoil in the currency bloc could hurt demand from the European car sector, which accounts for nearly a fifth of annual platinum consumption.

Gold meanwhile recovered from Wednesday's six-week low as investors weighed up whether euro zone finance ministers will reach a deal that would prevent a possible Greek exit from the euro zone.

One can only fantasize about what the real spread might be if both these metals were allowed to trade freely.  This short Reuters article, filed from London, appeared on their website at 2:30 p.m. GMT on their Friday afternoon---and I thank Elliot Simon for sharing it with us.

What You Need to Know About Russia, Putin, and Gold

With Russia rising to the forefront of world affairs as well as natural-resource-related events, we thought it timely to find out more about Russians’ attitudes toward gold. We’ve been in touch with Russian bullion expert Dmitriy Balkovskiy for over a year and decided to get his take.

Here’s the view from Russia…

Jeff Clark: You mentioned to me previously that Russia is not quite as bullish on gold as the West portrays.

Dmitriy: It seems to me that Western gold investors are too optimistic about Putin’s love affair with gold. The reality is not as straightforward as it’s sometimes portrayed by Western media.

First, a little background. The old Soviet Union viewed gold and silver as strategic metals and a matter of national security. Private ownership of precious metals in any form except jewelry and numismatic coins was strictly forbidden. People went to jail for merely owning a gold bar.

This very interesting interview by BIG GOLD's Jeff Clark appeared on the internationalman.com Internet site yesterday---and it's definitely worth reading.

Ronan Manly: Spotlight on Greece's gold reserves and Grexit

Greece holds or claims to hold a fairly substantial gold reserve, GATA consultant Ronan Manly writes today, but where it's held, whether it has been irrevocably pledged to the European Central Bank, whether Greece can recover it if it withdraws from the euro bloc, and whether it can be put in play or already has been put in play are open questions.

I thank Ronan for sending me this article yesterday---and I thank Chris Powell for wordsmithing the above paragraph of introduction.  It's a must read.

Lawrence Williams: China gold demand up 17% Y.T.D.

With another 59 tonnes of gold withdrawn from the Shanghai Gold Exchange (SGE) in week 6, Chinese demand, as represented by the SGE, is already up 32% on last year at 374 tonnes (as against 320 tonnes a year ago) – and last year’s first six weeks were a previous record, although perhaps not directly comparable as the New Year holiday fell a little earlier in 2014. With this year’s holiday period now in full swing, and with the SGE closed for the week long duration, we are going to see something of a fall-off, which is probably one of the factors adversely affecting the global gold price over the past week. If you take this much gold demand off the market then prices are almost certain to weaken, although it is gold in the pipeline from the West to China and other points East which should be setting the pattern and this will still be substantial.

Gold analysts believe, not without reason, that Chinese demand will now fall off in intensity perhaps through to the beginning of Q3 as it did last year, once the New Year gift giving is out of the way. Thus SGE withdrawals once market activity re-commences effectively in ten days’ time, will be followed particularly closely by those looking to try and assess the likely level of overall Chinese demand in 2015. While the country’s economy is seen as slowing down considerably, it is not considered to be in recession so there has still been a continuing build-up of wealth and in those seen as entering the middle classes who have particularly embraced a gold-buying culture.

This must read commentary by Lawrie appeared on the mineweb.com Internet site yesterday---and I found it all by myself.

¤ The Funnies

The day we arrived at the Grand Canyon was the same day as I took the photos in Winslow and at meteor crater that I posted earlier this week.  By the time we got there, the land altitude had increased enough where we were right at cloud base, something most of us only experience when we're in an airplane.

The lookout points [like in photo #1 below] are the only areas that are fenced.  Once you're away from them, the trails follow the edge of the canyon---and if you're at all squeamish about heights, this place takes a bit of getting used to.  In some spots you'll bounce once or twice on the way to the bottom, but in most places it's a mile straight down to the canyon floor.  Don't forget the "click to enlarge" feature.





I'll have more and better canyon photos next week, as this was only day one.

The first of the two bird photos below is of a white-breasted nuthatch---and the second is a mountain chickadee, which is a bit different that the black-capped variety that most of us are used to seeing.  Both were sitting in the same Utah juniper which, if you haven't see one before, is quite amazing---and I'll have a photo of one next week.  Once again I had the wrong lens and no flash, so these were the best photos I could get under the circumstances.   They're are cropped quite a bit as well---and the moment I get better ones, these are going in the trash, although I doubt if I'll ever see another mountain chickadee in my life.











¤ The Wrap

Fifteen years ago, talk of a silver shortage and wildly escalating prices were mocked (except by those who looked beneath the surface). By 2011, prices had risen tenfold and silver was closer to a worldwide physical shortage than ever in history. Currently we’re back to the mocking stage, but that is as unlikely to remain permanent as it was before that. The 2011 peak in price and unprecedented physical tightness came as a result of a 65 year consumption deficit and the ongoing COMEX manipulation. Yes, it is true that same manipulation caused prices to then crash and the resultant cooling of investment demand relaxed the physical tightness; but the question is---what now? Can the 10 billion ounce depletion of world silver bullion inventories (1940 thru 2006) be restored any time soon or ever, particularly at the current depressed prices? (No knock on gold, but the yellow metal has never experienced even one year of lower world inventories, to say nothing of silver’s 65 consecutive years of inventory depletion). Can the increasingly blatant COMEX silver manipulation become permanent or self-perpetuating in light of these circumstances?

I know these things are hard to consider objectively in the face of continued deliberate price declines, but, nonetheless, remain at the core of the decision to invest in silver, namely, there is so little of the stuff remaining. As far as the question of why large investors haven’t rushed into silver, I am convinced some will. Certainly, large investors have done so in the past, in the form of the Hunt Brothers and Warren Buffett. The case of Mr. Buffett is particularly instructive and, I believe, should serve as the model for the future. - Silver analyst Ted Butler: 18 February 2015

Today's pop blast from the past is off the Beatles "Double White" album, if you remember what an album is.  I've posted this George Harrison tune before, as it's a classic---and really done up right in this particular cover.  It's an all-star cast of performers, including George's son, Dhani Harrison---and does he ever look like his dad!  I remember George when he was that age!  Of course Prince steals the show---and proves beyond all doubt that he's one of the greatest guitarists of all time.  I never liked the guy, but that's beside the point as you'll soon find out.  Turn up your speakers and enjoy.  The link is here.

Today's classical "blast from the past" is one that most people might recognize as a popular tune, but its real origins were in the classical era.  The song is from the 1953 Broadway musical Kismet---and I remember this song when I was a little boy, as it was a big hit on the radio back then.  There was no TV in those days.  The popular tune was called "Stranger in Paradise"---but the music itself was one of the Polovtsian Dances from Alexander Borodin's opera Prince Igor.

Here's the video clip of Borodin's Polovtsian Dances from that opera done up right at the Bolshoi Theatre in Moscow---complete with French subtitles---and I thank reader M.A. for sharing this with us.  The link is here.  The video is world class, so put it on full screen and turn it up.

I was hoping that we were going to make it through the Friday trading session relatively unscathed---and maybe even with tiny gains.  But those hope were dashed later in New York trading---and JPMorgan et al took another tiny slice out of each precious metal once again.

Here are the 6-month charts in all four.  As you can tell, we should be pretty much done to the downside soon, but we have to have some sort of big ugly washout that will scare the bejesus out of everyone before "da boyz" are through.  Unless things end differently this time, that scenario still lies in our future---fifty or so bucks in gold and a dollar or so in silver, plus maybe twenty or so bucks each in platinum and palladium.

I'd like to look past the absolute bottom, but I'll pass on that until we reach it---and with these tiny slices of the salami, it may take a while.  But as I just said above, the final washout could be brief and ugly---and using the past as prologue, they usually are.

So we wait.

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

I'm off to bed early tonight, as I'm a tired puppy---and I'll see you here on Tuesday.

Ed Steer

]]>
Sat, 21 Feb 2015 09:20:00 +0000
<![CDATA[SGE Withdrawal of 59 Tonnes in Week 6—Y.T.D. 374 Tonnes]]> http://www.caseyresearch.com/gsd/edition/sge-withdrawal-of-59-tonnes-in-week-6-y.t.d.-374-tonnes/ http://www.caseyresearch.com/gsd/edition/sge-withdrawal-of-59-tonnes-in-week-6-y.t.d.-374-tonnes/#When:06:09:00Z "Another tiny slice off the gold and silver salamis"

¤ Yesterday In Gold & Silver

The gold price wandered higher in Far East and early London trading on their Thursday, with the high tick coming about 12:30 p.m. GMT in London.  It was all down hill from there into the low, which came shortly before 4 p.m. EST in electronic trading.  After that, the price didn't do much.

The high and low ticks were recorded by the CME Group as $1,222.90 and $1,205.20 in the April contract.

Gold finished the Thursday session in New York at $1,207.20 spot, down $6.10 from Wednesday's close.  Net volume was nothing special at only 107,000 contracts.

The silver price followed the gold price very closely yesterday, so I shan't add anything to what I've already said about gold.  And it was, like in gold, just another slice---albeit tiny---off the proverbial salami.

The high and low ticks were reported as $16.77 and $16.32 in the March contract.

Silver was closed yesterday at $16.375 spot, down 12 cents on the day.  Net volume was only 24,000 contracts.

The platinum price followed a similar price path to gold and silver, except its low tick came around the London p.m. gold fix.  It rallied five bucks after that, before trading flat for the remainder of the New York session, closing at $1,169 spot---and unchanged on the day.

Palladium chopped around unchanged for almost the entire Thursday session, but the moment the London p.m. gold fix was in, it rallied ten bucks or so before getting capped.  The metal closed at $784 spot, up 9 dollars on the day.

The dollar index closed late on Wednesday afternoon in New York at 94.10---and after dipping below the 94.00 level on a couple of occasions, hit its 93.87 low about 8:30 a.m. in London trading.  At that point 'gentle hands' put in an appearance again---and its 94.44 high tick came around 2:45 p.m. EST.  After that it traded flat.  The index closed at 94.40---and up 30 basis points from Wednesday's close.  Operation "Save the Buck" was successful once again.

Like on Wednesday, the gold stocks opened in the green, but slipped into the red for the last time shortly before 11 a.m. EST---and it was a steady decline after that, with the stock closing just off their lows.  The HUI finished down 2.36 percent, giving up all of Wednesday's gains, plus a bit more.

The silver equities didn't even get a sniff of positive territory on Thursday---and were under water right off the bat---and got sold down hard from there, as Nick Laird's Intraday Silver Sentiment Index got smoked to the tune of 4.12 percent, which certainly was out of all proportion the 12 cent loss in the metal itself.

The CME Daily Delivery Report showed that 81 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  Barclays was the short/issuer on 77 of them---and JPMorgan stopped 78 in its client account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in February dropped by 4 contracts down to 548 contracts still open, minus the 81 posted for delivery in the previous paragraph.  Silver's February open interest only dropped by 36 contracts---and there are still 20 contracts left open for delivery this month.

Much to my surprise, an authorized participant added 48,002 troy ounces of gold to GLD---and as of 9:17 p.m. EST yesterday evening, there were no reported changes in SLV.

Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with the weekly data from the iShares.com Internet site as of the close of business on Wednesday---and this is what he had to report.  "Analysis of the 18 February 2015 bar list, and comparison to the previous week's list:
No bars were added, removed or had serial number changes.  As of the time that the bar list was produced, it was underallocated 8,640.5 oz.
"

"A 3,971,458.7 oz. deposit on Wednesday is not yet reflected, and should be on next week's list."

"About 2.7M oz. of bars were removed from JPM London V, and a different 2.7M oz. of bars were added to Brinks London in a 'substitution' (that I believe JPM is allowed to do per their contract, but that I believe iShares is not allowed to do)."

There was a tiny sales report from the U.S. Mint.  They sold 25,500 silver eagles---and that was it.

It was a very busy day in gold over at the COMEX-approved depositories on Tuesday, as 80,375.000 troy ounces were reported received---and 64,375 troy ounces were shipped out.  Most of the activity was at Canada's Scotiabank, including the receipt of 2,000 kilobars.  The other receipt was 500 kilobars in JPMorgan's vault.  The link to all the activity is here.

In silver there was 40,038 troy ounces received---and 364,000 ounces were shipped out the door.  The link to that action is here.

The Shanghai Gold Exchange updated their data showing the withdrawals for the week ending Friday, February 13---and it was another big week, as 59.120 tonnes were reported withdrawn.  And here's Nick's most excellent chart showing the update.  Koos Jansen has a story about this linked here, if you can't wait to scroll down to it in the Critical Reads section below.

It will be interesting to see what gold withdrawals are like from the SGE once one we get past the Chinese New Year.

I have the usual number of stories for a week-day column---and I hope you find some of interest.

¤ Critical Reads

Stunning Images of the "Siberian Express" FreezeNado

More than 100 million Americans are set to be impacted by the arctic blast known as the "Siberian Express" as record (low) temperatures are being broken across the eastern third of the nation. NBC News reports, Chicago is experiencing its coldest February since 1875 with roads in an "ice skating rink-like condition." From ice geysers to snow-golf and frozen falls, we can only imagine the breath-taking impact this 'polar-vortex'-esque weather will have on U.S. GDP...

The coldest outbreak of the season is pushing south into the eastern United States this week. Temperatures will be running as low as 30 to 40 degrees below normal across the Ohio Valley and Mid-Atlantic on Friday morning. Thursday night’s departure from normal temperatures is shown above in Celsius.

And the forecast for tomorrow is even lower...

This Zero Hedge article that appeared on their Internet site, was sent to me by reader M.A. at 4:55 p.m. EST yesterday afternoon.  The dateline on the article says 9:15 p.m. EST yesterday evening, so it's obviously been edited since it was originally posted.   It's definitely worth reading.  There's also this sensational photo essay posted on the dailymail.co.uk Internet site on Wednesday evening GMT headlined "Niagara Falls has frozen over as extreme winter weather continues across the East Coast"---and the photos are amazing!

Thousands rally in Buenos Aires over prosecutor's death

Tens of thousands of people demanding justice marched Wednesday in Buenos Aires to mark a month since the suspicious death of a prosecutor who accused the Argentine president of involvement in a cover-up over a 1994 bombing.

“I am here because I want to see justice done for someone who gave his life for the truth,” said teacher Marta Canepa, 65, among those traipsing the 1.7 kilometres (just over a mile) under the banner “Homage for Prosecutor Alberto Nisman.”

Drenched in driving rain and led by prosecutors and opposition figures, the rally is the first major public show of defiance in a murky case that has ignited a political firestorm in Argentina and piled the pressure on President Cristina Kirchner, 61, in her last year in office.

Nisman was found in his Buenos Aires apartment with a bullet through his head on January 18, the day before he was to go before a congressional hearing to testify that Kirchner and her foreign minister plotted to shield Iranian officials implicated in the 1994 bombing of the AMIA Jewish-Argentine charity federation.

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

Icelandic Bankers Sentenced to Prison

The Supreme Court of Iceland today upheld prison sentences issued by Reykjavík District Court in December 2013 on four former key executives and majority owners of Kaupþing Bank in the so-called Al-Thani case in what is the heaviest sentence ever given in Iceland for economic fraud, ruv.is reports. The four were charged with market manipulation in relation to Sheik Mohammed Bin Khalifa Al-Thani of Qatar’s acquisition of more than five percent of shares (worth ISK 25.7 billion) in Kaupþing Bank shortly before it collapsed in autumn 2008. 

The case was taken to the Supreme Court after the defendants appealed the Reykjavík District Court’s ruling.

Hreiðar Már Sigurðsson, former CEO of the bank, got the longest sentence at five and a half years, unchanged from the Reykjavík District Court’s ruling. Sigurður Einarsson, former chairman of the board, had his sentence reduced from five years to four while investor, and one of the bank’s biggest shareholders, Ólafur Ólafsson, had his sentence lengthened from 3.5 years to 4.5 years and Magnús Guðmundsson, director of Kaupþing Luxembourg, got 4.5 years instead of 3 years.

Wow!  This brief, but very interesting article showed up on the icelandreview.com Internet site late last week---and I thank Phil Barlett for sharing it with us.

Snowden Docs: NSA, GCHQ Hacked Largest SIM Maker to Monitor Your Cellphone

American and British intelligence hacked into the computer network of one of the world’s biggest manufacturers of SIM cards, stealing encryption keys used to protect the privacy of cellphone communications worldwide.

That information is revealed in a 2010 document from British intelligence agency Government Communications Headquarters. The top-secret report is the latest to be leaked by National Security Agency whistleblower Edward Snowden.

The document was made public on journalist Glenn Greenwald’s website, the Intercept. Greenwald has been publishing such documents since Snowden first leaked them in June 2013.

A joint unit of operatives from the NSA and the GCHQ committed the breach, the Intercept reported. The hack gave the agencies the ability to secretly monitor a large portion of the world’s cellular communications, including both voice and data.

This story was posted on the sputniknews.com Internet site at 12:45 a.m. Moscow time on their Friday morning, which was 4:45 p.m. in Washington on Thursday afternoon.  It's the second offering of the day from Roy Stephens.

Germany rejects Greek bailout extension request

Germany rejected Greece's 6-month bailout extension request, according to German Finance Ministry spokesman. The two sides have until Friday to agree on a deal, otherwise, Greece runs out of money.

German Finance Ministry spokesman Martin Jaeger told Bloomberg News in an emailed statement that the terms proposed by Greece do not meet the earlier agreed conditions of providing financial aid.

However, the European Commission sees the request as a good omen showing the Greek government’s willingness to reach a compromise on stabilizing the economic situation in the eurozone.

This news item put in an appearance on the Russia Today website at 12:11 a.m. Moscow time on their Thursday morning---and I thank reader "h c" for finding it for us.  A similar story headlined "Greece caves in, Germany plays hardball" appeared on the euobserver.com Internet site at 3:48 p.m. Europe time Thursday afternoon---and it's courtesy of Roy Stephens.

Greece Drops Key Bailout Demands, but Germany Still Objects

Greece heads to another round of negotiations Friday after dropping key demands for a bailout settlement, but still faced stiff opposition from lead lender Germany, which criticized Athens' latest proposals as a "Trojan horse" designed to dodge its commitments.

Eurozone finance ministers agreed to hold their third meeting on the Greek debt crisis in just over a week after Athens formally requested a six-month extension of loan agreements with rescue creditors that expire this month.

Going back on recent election campaign pledges, Prime Minister Alexis Tsipras' new left-wing government said it would honor debt obligations and agree to continued supervision from bailout lenders and the European Central Bank.

Late Thursday, Tsipras held telephone conversations with French President Francois Hollande and German Chancellor Angela Merkel after Germany sharply criticized the Greek offer during preparatory talks in Brussels.

This AP story, filed from Athens, was picked up by the abcnews.go.com Internet site at 5:34 p.m. EST on Thursday afternoon---and I thank West Virginia reader Elliot Simon for bringing it to our attention.

Central Bankers' Worst Nightmares Are Unfolding in Greece

The situation in Greece boil down to the single most important issue for the financial system, namely collateral.

Modern financial theory dictates that sovereign bonds are the most “risk free” assets in the financial system (equity, municipal bond, corporate bonds, and the like are all below sovereign bonds in terms of risk profile). The reason for this is because it is far more likely for a company to go belly up than a country.

Because of this, the entire Western financial system has sovereign bonds (US Treasuries, German Bunds, Japanese sovereign bonds, etc.) as the senior most asset pledged as collateral for hundreds of trillions of Dollars worth of trades.

Indeed, the global derivatives market is roughly $700 trillion in size. That’s over TEN TIMES the world’s GDP. And sovereign bonds… including even bonds from bankrupt countries such as Greece… are one of, if not the primary collateral underlying all of these trades.

Lost amidst the hub-bub about austerity measures and Debt to GDP ratios for Greece is the real issue that concerns the EU banks and the EU regulators: what happens to the trades that EU banks have made using Greek sovereign bonds as collateral?

This commentary by Phoenix Capital Research appeared on the Zero Hedge website yesterday morning at 10:25 a.m. EST---and it's courtesy of reader M.A.  It's worth your time.

Finance ministers in emergency meeting over Greece

Euro zone finance ministers including Michael Noonan travel to Brussels on Friday for an emergency meeting amid mounting uncertainty about the status of Greece’s application for a loan extension.

With Greece’s bailout due to expire at the end of next week, Athens submitted a formal request for a six-month loan extension on Thursday, but this was rejected by Berlin within hours. A German finance ministry spokesman said it was “not a substantial proposal for a solution”.

Greece faces an uphill battle to secure support for its extension request when all 19 euro zone finance ministers, the eurogroup, meet on Friday.

Slovakia became the latest country to voice concerns about concessions to Greece, with prime minister Robert Fico saying he was “calm” about the prospect of a Greek exit from the euro.

This news item was posted on the irishtimes.com Internet site at 1:00 a.m. GMT on their Friday morning---and I thank Roy Stephens for sending it.

Ukraine fighting rages despite efforts to revive truce

Renewed fighting has occured in eastern Ukraine despite European efforts to revive a fresh ceasefire, a day after pro-Russian separatists who spurned the truce forced thousands of government troops to withdraw from the strategic town of Debaltseve.

Artillery was still raining down near Debaltseve, a strategic railway hub, on Thursday, and the Ukrainian military said its troops had come under fire elsewhere from rebels.

Western nations have refused to give up on a peace deal negotiated last week even though rebels disavowed it to seize Debaltseve.

Thousands of besieged Ukrainian troops pulled out of the town on Wednesday in one of the worst defeats for the Kiev government of a 10-month war that has killed more than 5,000 people.

I'm not sure whether this is "old news" or not, so we'll see how things shake out over there in the next few days.  The article appeared on the aljazeera.com Internet site at 3:18 a.m. GMT this morning---and once again I thank Roy Stephens for sharing it with us.

Debaltsevo fallout in Banderastan: An E.U. Coalition of the Willing?

When I first heard of Poroshenko's latest idea about sending peacekeepers to the Ukraine, I had figured that he was talking about UN peacekeepers, the only ones with any possible legality for such an operation.  Turns out I had "underestimated" Poroshenko.  His idea is even crazier: he wants *E.U.* "peacekeepers"!

Am I the only one who is detecting a distinctly American "handwriting" behind this latest idea?  Look again: the idea is this - first go to the UN and when the Russians and Chinese veto it, then turn to the E.U. and use E.U. states to make a "coalition of the willing".  Why?  Let me spell out the rationale here:

The prime goal of the USA was to get Russia to militarily intervene in the Donbass to trigger a continental war.  Now that this has clearly failed, they want the Europeans to enter the Donbass with exactly the same goal.  Once the EU peacekeepers are deployed, all it would take is a bloody false flag (an artillery strike, or a bomb) killing enough E.U. peacekeepers to raise the immediate need to protect them.  Except that the E.U. does not have any "E.U. armed forces" so can you guess who would be sent it?  Exactly - NATO.

Will the Europeans fall for that?  I doubt it.  Even the Eurocretins seemed to have lost their taste for crazy U.S. Neocon schemes.  Besides, Russia is not Serbia and there is no way the E.U. will bypass the UNSC for a military operation, not without triggering a huge political crisis inside Europe.  To me this latest plans smacks of something McCain and Saakashvili could have cooked up and not something coming out of this White House.  God knows I have no sympathy for the Obama Administration or for the Eurocretins in Brussels, but this latest stunt is dumb even by their standards.

This commentary appeared on the vineyardsaker.blogspot.ca Internet site yesterday sometime---and my thanks go out to Roy S. once again.  It's definitely worth reading.

Russia P.M. Medvedev orders commencement of gas deliveries to embattled Donbass

Russia’s prime minister has ordered the Energy Ministry and state-owned corporation Gazprom to prepare for natural gas deliveries to the self-proclaimed Donetsk and Lugansk Republics after the Kiev regime stopped selling fuel to the regions.

There is a problem related to natural gas deliveries, caused by the decision of Ukrainian authorities that has not yet been canceled. The situation is that natural gas is not delivered to a number of settlements,” Dmitry Medvedev told ministers at a cabinet meeting on Thursday.

I would like the Energy Ministry and Gazprom to prepare their suggestions on rendering aid to these regions in the form of natural gas supplies. Of course this will be needed only if Kiev does not take urgent measures to resume gas supplies under the usual scheme."

In any case, people must not freeze there. Prepare the necessary suggestions and report on what is done,” Medvedev said.

This Russia Today story was posted on their website at 1:34 p.m. Moscow time on their Thursday afternoon, which was 5:34 a.m. EST.  It's also courtesy of Roy Stephens.

Russia Launches Own 'SWIFT' Service, Links Up 91 Credit Institutions

Almost 91 domestic credit institutions have been incorporated into the new Russian financial system, the analogous of SWIFT, an international banking network.

The new service, will allow Russian banks to communicate seamlessly through the Central Bank of Russia. It should be noted that Russia's Central Bank initiated the development of the country's own messaging system in response to repeated threats voiced by Moscow's Western partners to disconnect Russia from SWIFT.

Joining the global interbank system in 1989, Russia has become one of the most active users of SWIFT globally, sending hundreds of thousands of messages per day. In general, SWIFT provides a secure communication network for more than ten thousands of financial institutions around the world, approving transactions of trillions of US dollars.

This article appeared on the sputniknews.com Internet site a week ago---and it appeared on the Zero Hedge website yesterday, which is where reader M.A. found it.  I thank him for sending it our way.

Turkey eyes deal with China on missile defense despite NATO concern

Turkey's defense minister said on Thursday the country does not plan to integrate a new missile defense system with NATO infrastructure and officials said a $3.4 billion deal with China was still under consideration.

NATO member Turkey chose China Precision Machinery Import and Export Corp as a preferred bidder in 2013, prompting U.S. and Western concern about security and the compatibility of the weaponry with NATO systems.

Defense Minister Ismet Yilmaz, in a written response to a parliamentary question, indicated Ankara planned to go ahead with the Chinese system, saying the evaluation of bids had been completed and no new offers received.

I'm sure that the U.S. is underwhelmed by this turn of events.  This Reuters article, filed from Ankara, put in an appearance on their Internet site at 3:25 p.m. EST yesterday---and it's another contribution from reader "h c", for which I thank him.

Indian stocks not compelling; crude can jump 15-20%: Marc Faber

The first full-fledged Budget is most likely to announce a slew of reforms, but the key is in implementation and India's bureaucratic red tape serve is an impediment, says Marc Faber, who is the editor and publisher of 'The Gloom, Boom and Doom' report. He said, "I am sure that Narendra Modi would proceed at a much faster pace and implement further reforms if he could."

Faber has been overweight on banks but right now Indian equities do not appear compelling due to steep valuations, he told CNBC-TV18 in an interview. He reminds foreign investment flows has a big role to play in equity market's performance, and right now global investment scenario appears shaky on the back of Chinese slowdown.

Talking about crude, which has seen bit of a pull back in the last few sessions, Faber said there are strong signs that bad days are over for the commodity and prices may rebound 15-20 percent from current levels.

This 9:14 minute video interview [including transcript] with "Dr. Marc" appeared on the moneycontrol.com Internet site at 6:02 p.m. IST on their Wednesday evening---and my thanks go out to Ken Hurt for digging it up for us.  It's rare to see Marc on TV in India---and this interview is worth your while if you have the time.  His comments on the crisis in Greece are right on the money.

A "frightening" trend emerging in gold: analyst Doug Pollitt

This must watch 5:11 minute video interview with Doug appeared on the bnn.ca website at 8:10 a.m. EST on Thursday morning---and my thanks go out to Howard Brown for digging it up for us.

Barrick Gold Corp suffers monster US$2.8 billion write-down, plans asset sales, layoffs and major debt reduction

Barrick Gold Corp. is putting its Porgera and Cowal operations up for sale and setting a major debt reduction target for 2015 as the company starts to implement a long-discussed strategy to become leaner and less centralized.

The Toronto-based miner also reported a monster fourth quarter loss on Wednesday evening of US$2.85 billion. Barrick took a widely-expected US$930-million write-down on the Lumwana mine (which is poised to close), and an unexpected US$778-million impairment on Cerro Casale, a project that would be tough to justify at current metal prices. There were also write-downs on other assets.

Back in the summer, chairman John Thornton talked about a plan to take Barrick “back to the future” with a leaner model that would empower managers at the mine level. The company provided more details of that plan on Wednesday, noting that it will cut head office jobs by nearly half.

Barrick also said it will continue to repair its balance sheet in the short term, with a plan to reduce net debt by “at least” US$3 billion in 2015. The gold miner acknowledged that it got away from its roots by taking on too much debt in recent years.

It couldn't happen to a finer bunch of crooks.  This Financial Post article showed up on the msn.com Internet site on Wednesday---and I thank Brad Robertson for finding it for us.

March date set for gold fix switch

The deadline for the gold fix to enter the digital age is nearing.

The London Bullion Market Association said today that the gold benchmark will be set via an electronic platform managed by ICE Benchmark Administration beginning on March 20.

The new LBMA Gold Price will be set twice daily -- at 10:30 GMT and 15:00 GMT -- in dollars, euros, and sterling. It will replace the current private telephone conference between a group of four banks, the remnants of a cozy system that has existed since 1919.

But nothing will change, as JPMorgan et al will continue to control precious metal prices through their gaming of the COMEX futures market.  And as I said in this space yesterday, until that changes, nothing changes.  This gold-related news item showed up on the wsj.com website at 12:50 p.m. EST yesterday---and I found it embedded in a GATA release.

Gold Bars In France Worth $500,000 Robbed From Pensioner By Fake Cops

A curious and sad story broke last night about a pensioner in Paris who had US$500,000 worth of gold bars stolen from his home by con-artists posing as police officers.

The criminals arrived at his home claiming to investigate a gold robbery according to Agence France Presse. The pensioner was asked if he had gold bullion and he told them that he did and allowed them into his home to inspect it.

While one of the robbers distracted the 69-year old with paper work the other stole his gold - 13 bars, each weighing 1 kilogram or 32.15 ounces each with a total value of US$500,000.

The story lacks details but if it proves to be true then it is a cautionary tale for owners of gold who take possession.

This AFP story, which is definitely worth reading, found a home on the goldcore.com Internet site yesterday---and the first reader through the door with it was Norman Willis.

Chinese Lunar Year Gold Buying Frenzy Started

Every year around January first, the Chinese ramp up gold buying at the retail level to an unprecedented pace. The Chinese calendar (Lunar Year) is slightly different than the Western (Gregorian) calendar. The Chinese New Year will be celebrated on February 19, 2015, this time to begin the year of the goat. For the occasion the Chinese buy each other gifts, quite often in the form of gold.

We can see elevated gold purchases on wholesale level (SGE withdrawals) of late, rapidly being sold to end consumers in the shops at the moment. China Gate News Channel reported on January 3rd a “stampede phenomenon” in a shopping mall in Beijing, were gold was sold at a rate of 400,000 yuan per minute.

400,000 yuan per minute means it’s likely more than 0.6 metric tonnes of gold is sold per day in just one shopping mall in Beijing. How many of these shopping malls are there across China? I wish I knew.

This commentary by Koos Jansen appeared on the bullionstar.com Internet site way back on January 9---and I don't know how I missed it.  It certainly falls into the absolute must read category.

SGE Withdrawals 59 Tonnes in Week 6---YTD 374 Tonnes: Chinese Gold Soap Opera Extended Another Season

The latest numbers from the Shanghai Gold Exchange (SGE) shows that a little over 59 tonnes have been withdrawn from the vaults in week 6 of 2015, down 0.35 % week over week. SGE withdrawals, which are often used as a proxy for Chinese wholesale gold demand, account for an amazing 374 tonnes year to date, up 17 % y/y.

Corrected by the volume traded on the Shanghai International Gold Exchange (SGEI), withdrawals in week 6 were at least 51 tonnes. Year to date withdrawals corrected by SGEI volume were at least 333 tonnes.

I can’t prove it at this stage, but I think domestic withdrawals are more likely to be 374 tonnes year to date than 333 tonnes. The Chinese import huge amounts of gold which obviously is not going through the SGEI. In addition, it seems unlikely every trade on the SGEI is withdrawn from the vaults in the Shanghai Free Trade Zone to be exported. The SGEI is not yet the place to buy gold.

This must read commentary by Koos Jansen showed up on the bullionstar.com Internet site yesterday---and it's a story I found on the gata.org Internet site.  As I mentioned further up in today's column, it will be interesting to see what withdrawals are like from the SGE once the Chinese New Year fades in the rear view mirror.

Lawrence Williams: Copper and gold -- parallels in massive supply deficit scenarios

I have just written an article for Mineweb covering a prediction that global copper supply is heading for a very large deficit – perhaps as much as 1.5 million tonnes by 2018.  (See: Copper heading for 1.5 million tonne deficit by 2018).  I have also penned an article on what I see as a looming gold supply deficit (indeed it may actually be with us already) on these pages (See: 2015 global gold supply deficit could be substantial).

There are some interesting parallels between the two articles with one particular factor standing out – notably Chinese demand.  In terms of copper the current weak copper price is largely because there has been something of a hiatus in Chinese copper purchases in line with something of a downturn in the Chinese economic growth.  Note this is not a recession in the economy, but a downturn in the levels of growth seen in the recent past.  The Chinese economy still seems to be growing, but at a slower rate.  The analyst bandwagon has seized on the slowdown as showing that the supercycle, primarily generated by Chinese demand for industrial metals of all kinds, has thus ended.  The copper article stems from analysis by senior Bernstein analyst, Paul Gait, that in fact the Chinese generated supercycle is only around one-third into its course and the Asian dragon still has a huge amount of  ground to make up on  all other industrialised nations in terms of per capita metal consumption.

With exploration curtailed, and nowadays huge lead times in taking a major new mine from discovery to production (figures of 30 years are being quoted) the world is facing a major copper shortage in the years ahead.

Gold is running into a very similar situation on the supply side.  We may well have seen peak gold last year as low gold prices are already leading to new project cancellations and curtailments, closures of uneconomic operations and a big downturn in exploration expenditures.  Coupled with older mines running out of ore and declining grades at other older operations it is beginning to look like this is the year global new mined gold production may be about to start to fall.

Alas, the copper price is another one that the Big 8 traders are in full control of.  But the situation is reversed in this metal vs. the precious metals, as the Commercial traders are massively long the COMEX futures market in copper.  This commentary by Lawrie makes it three must reads in a row---and I found this on his website  late yesterday evening Denver time.

¤ The Funnies

Besides the Painted Desert and the Petrified Forest, the other reason I stopped in Winslow, Arizona was to see one of the natural wonders of the world that I'd read about, and seen photos of since I was a kid---and that was the famous meteor crater, or Barringer crater, just west of town.  When I got there, I found out that it was a major tourist attraction, but very tastefully done.  Here are three photos which---individually and collectively---don't do it justice.  The last photo shows the crater rim along with the surrounding countryside, so you can get the "lay of the land" so to speak.  Don't forget about the "click to enlarge" feature.

Here's what Niagara Falls looked like yesterday as the deep freeze in eastern North American grinds on.

¤ The Wrap

If I’m reasonably close on my guesstimates, we’re probably past the halfway mark in undoing the commercial build up in total shorts since late December in gold and may be coming close to that in silver. But considering that gold rallied about $125 from late December to the recent highs and has now given up $100 of the rally (at the lows on Wednesday), this has been a particularly successful commercial rig job so far. In silver, at the lows earlier today, close to $2 of the $2.80 rally was wiped out. Certainly, all the commercial contracts bought back recently were bought at lower prices than previously sold – that’s the essence of the rig job.

If I had to speculate, I would guess that the big commercials will look to engineer prices lower in order to buy more gold and silver short contracts back, but the exact timing and precise short-term price direction is always unknowable. If it wasn’t the most important influence on current prices, I would be reluctant to speak of the COT at all because it might cause a long term silver investor to abandon positions. Even though the COT market structure isn’t bullishly configured, that doesn’t rule out the possibility of sharp rallies, particularly after the recent sharp declines. But barring something out of the blue and non-COT related, it’s hard to bet on the crooked commercials not prevailing as they usually do. - Silver analyst Ted Butler: 18 February 2015

Another day---and another tiny slice off the gold and silver salamis.  Both metals were up until about thirty minutes after the noon London silver fix---and that was all she wrote, as "da boyz" in New York squashed the budding rallies in both metals.

Here are the 6-month charts for both gold and silver updated with yesterday's price/volume data.  The salami slices are more than obvious here.

But as I said yesterday, we could get some sort of counter-trend rally out of this, but I'm firmly of the belief that JPMorgan et al will want to cover as many of their current short positions as they can, so there's still more pain to the downside yet to come.

As I write this paragraph, the London open is about an hour away.  Gold and silver have crawled  a bit higher in Far East trading, but platinum and palladium aren't doing a thing.   Net gold volume is actually under 6,000 contracts.  A lower number I've never seen at this time of day.  Silver's net volume is only 2,100 contracts.  It's not even this quiet between Christmas and New Years!  The dollar index isn't doing much either---and is currently up 4 basis points.

Today we get the latest Commitment of Traders  Report for positions held at the close of COMEX trading on Tuesday---and as Ted and I have both mentioned, we're expecting big things from it.  But whatever the numbers are, I'll have all the details for you in tomorrow's column.

And as I hit the 'send' button on today's effort at 4:50 a.m. EST, I see that all four precious metals began to head lower the moment I wrote the previous paragraph an hour before the London open---and all are down below their Thursday afternoon closes in New York.   Platinum is down the most, followed by gold.  Net gold volume has blossomed to almost 14,000 contracts, more than double what it was almost three hours ago, but still very light volume.  Silver's net volume is now a hair over 4,000 contracts.  The dollar index is now up 24 basis points.  For the moment, things are unfolding as I expected they might---and it only remains to be seen if this price trend continues for the remainder of the day.

Before heading off to bed, I'd like to point out one last time that this is the final day to join Casey's Club, as this will probably be our only opening for the rest of 2015.

All of our markets have taken a beating of late, but that’s not the time to back away.  On the contrary, it means many incredible companies are extremely undervalued and selling for a fraction of their worth. This is a great time to buy into the right junior resource stocks at bargain prices---and we’re opening Casey’s Club with a special report that outlines our top 11 undervalued companies to get started with. Membership in Casey’s Club gives members access to all the sectors we cover and they’ll get updates on these 11 companies, as well as others, as the markets do begin to recover and prices go up.

It costs absolutely nothing to check this out, dear reader, which you can do so by clicking here.

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

Ed Steer

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Fri, 20 Feb 2015 06:09:00 +0000
<![CDATA[The Reserve Bank of India Lifts Ban on Import of Gold Coins, Medallions by Banks]]> http://www.caseyresearch.com/gsd/edition/the-reserve-bank-of-india-lifts-ban-on-import-of-gold-coins-medallions-by-b/ http://www.caseyresearch.com/gsd/edition/the-reserve-bank-of-india-lifts-ban-on-import-of-gold-coins-medallions-by-b/#When:06:05:00Z "If that was the case, it worked like a charm"

¤ Yesterday In Gold & Silver

After trading virtually flat for all of Far East, most of London trading---and early trading in New York, the gold price got hit at 11:00 a.m. EST on the dot just as London closed for the day.  The low tick came thirty minutes later---and then at precisely 2 p.m. EST, the gold price rocketed 12 bucks higher in just minutes, which was probably a result of the release of the Federal Reserve's January meeting---and crawled higher from there, closing virtually on its high tick of the day.

The low and high were recorded by the CME Group as $1,197.20 and $1,213.40 in the April contract.

Gold closed in New York yesterday afternoon at $1,213.30 spot, up $3.50 from Tuesday's close.  Considering the price volatility, net volume was pretty light at around 111,000 contracts.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson---and you should note the volume spikes on the price moves throughout the trading session.  Considering the price volatility in New York, the associated volume can hardly be called robust.

Silver didn't do much in price and volume terms on Wednesday, either.  The Far East high tick, such as it was, came shortly after 2 p.m. Hong Kong time---and less than an hour before the London open.  from that point the silver price chopped quietly and unsteadily lower, with the low tick coming shortly before the 1:30 p.m. COMEX close.  Like gold, silver also had its little price spike at 2 p.m. in electronic trading on the Fed news, or lack thereof---and recovered all its losses on the day in the process.  From that point onwards, the price didn't do a lot.

The high and low were recorded as $16.575 and $16.23 in the March contract.

Silver finished the Tuesday session at $16.495 spot, up 2.5 cents on the day.  Gross volume was pretty high, but once the roll-overs were taken out, net volume dropped down to only 26,000 contracts.

The platinum charts was a mini version of the gold chart---and the palladium charts was a mini version of the platinum chart, sort of.  Platinum closed at $1,169 spot, down four dollars---and palladium finished the Wednesday session at $775 spot, down an even five bucks.  Here are the charts.

The dollar index closed late on Tuesday afternoon at 94.13---and from there came close to dipping back below the 94.00 mark late in Far East trading on their Wednesday morning.  Then, starting at 2 p.m. Hong Kong time, the index began to chop higher, hitting its 94.50 high tick minutes after 12 o'clock noon in New York.   It hung in there at that level until the Fed news at 2 p.m. EST---and then fell like a stone within minutes to within an eyelash of 94.00 once again.  It "recovered" a handful of basis points from there---and didn't do much for the remainder of the day.  The dollar index closed yesterday at 94.10---which was basically unchanged from Tuesday.

The gold stocks spent half of Wednesday morning fighting to stay in positive territory, but finally gave up the ghost shortly after 11 a.m. EST---and traded down a percent and change until 2 p.m. EST.  Then they blasted into positive territory immediately on the out-of-the-blue price spike in gold---and then crawled higher for the remainder of the New York trading session.  The HUI closed up 2.02 percent.

In most respects, the silver equities followed the path of their golden brethren, complete with the 2 p.m. EST price spike---and Nick Laird's Intraday Silver Sentiment Index closed up 1.77 percent.

The CME Daily Delivery Report showed that zero gold and 36 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The only short/issuer was Jefferies---and they stopped 16 contracts as well.   Canada's Scotiabank stopped the other 20 contracts.

Even though February, like January, isn't a big delivery month in silver, there have been 420 silver contracts posted for delivery already this month.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest dropped by the 49 gold contracts being delivered today---and February o.i. is now down to 552 contracts.  Silver's February open interest is still unchanged at 56 contracts, but 50 contracts of that amount can be subtracted as per the Friday deliveries posted in the previous paragraph.

There was a small 9,600 troy ounces of gold withdrawn from GLD yesterday---and I would suspect that this amount represented a fee payment of some kind.  But the big surprise was in SLV, as authorized participants deposited a whopping 3,971,459 troy ounces yesterday.  It's a safe bet that this was deposited to cover part of an existing short position in this ETF.

And because it was deposited on a Wednesday, it's a good bet that it won't be in tomorrow's SLV bar list report from Joshua Gibbons---and it certainly won't be in next week's short position report from the folks over at shortsqueeze.com.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in their gold and silver ETFs as of the close of business on Friday, February 13---and this is what they had to report.  Their gold ETF dropped, but only by 2,565 troy ounces.  However, their silver ETF had a very chunky withdrawal of 268,457 troy ounces.

There was a very decent sales report from the U.S. Mint yesterday.  They sold 5,000 troy ounces of gold eagles---3,000 one-ounce 24K gold buffaloes---and 625,000 silver eagles.

There wasn't a lot of gold movement at the COMEX-approved depositories on Tuesday, as only 8,407 troy ounces were reported received---and two kilobars were shipped out.

But it was another very decent day for silver movement, as 498,299 troy ounces were reported received---and 532,516 troy ounces were shipped out.  The link to that activity is here.

I don't have a lot of stories today---and that suits me, and probably you, just fine.

¤ Critical Reads

Soros Shifts to Europe, Asia as Investors Cut U.S. Equities

Soros Fund Management, the family office of billionaire hedge fund manager George Soros, cut holdings of U.S. stocks in the fourth quarter and shifted assets globally.

Soros, which manages almost $30 billion, moved about $2 billion into companies in Asia and Europe, according to a person familiar with the strategy. The New York-based firm returned about 8 percent in 2014 and is up 1.5 percent this year, said the person, who asked not to be identified because the firm is private.

Other big hedge fund managers made a similar call on U.S. equities as a slide in oil prices hammered energy holdings. Hedge funds held about $1.6 trillion of U.S. equities at the end of the year compared with $1.8 trillion in the prior quarter, according to data compiled by Bloomberg, based on 886 filings.

This Bloomberg business story appeared on their website at 2:49 p.m. Denver time on Tuesday afternoon---and it's the first offering of two in a row from U.A.E. reader Laurent-Patrick Gally.

Buffett Ends $3.7 Billion Exxon Investment Amid Oil Plunge

Warren Buffett’s Berkshire Hathaway Inc. exited a $3.7 billion investment in Exxon Mobil Corp. amid a slump in oil prices.

Crude has fallen by about half since June as U.S. production surged and the Organization of Petroleum Exporting Countries resisted output cuts. The decline has ravaged oil company profits and forced major producers and drillers to slash spending and fire thousands of workers.

Berkshire has “not really had the hot hand in energy,” Fadel Gheit, an analyst for Oppenheimer & Co. in New York, said in a phone interview. “The whole energy sector obviously is now traded in completely different circumstances.”

Buffett built Berkshire into the fourth-biggest company in the world through acquisitions and by picking stocks like Coca-Cola Co. and the former Washington Post Co. that multiplied in value in the years after he bought them. Still, he’s had a mixed record when it comes to investing in energy companies.

This Bloomberg business story appeared on their Internet site at 2:37 p.m. MST yesterday afternoon---and is the second in a row from Laurent-Patrick Gally.

Market Top Is Near: 7-Charts Which Ring the Bell

If it’s all about the economy, stupid, then stock-market bulls may want to think twice about betting on further gains.

With the S&P 500 reaching an all-time intraday high for a second straight trading session on Tuesday, that would suggest the economy’s recent struggles, as depicted by disappointing fourth-quarter growth in gross domestic product, a sharp decline in retail sales and continued weak inflation readings, will eventually give way to improving growth. Read more about recent economic data.

But as the above chart, joined by the following charts, shows, investors often ignore disappointing economic information as a bull market progresses, just as they did before the previous two recessions. And when market prices just start building rapidly on themselves, without a strong economic platform or continued stimulus from the Federal Reserve, the market bubble that is created should eventually pop.

As the saying goes, there’s nothing as bullish as a fresh record, except the last one.

This worthwhile guest commentary appeared on David Stockman's website on Wednesday sometime---and it's the first offering of the day from Roy Stephens.

Marc Faber: U.S. shares to correct 50%; China is growing only at a maximum of 4%

Dr. Marc Faber opines on the expensive U.S. market, IPO foibles and the increase in bonds carrying a negative yield. His biggest warning is a 50% correction in shares.

This is part #2 of a BoomBust interview that showed up on the Russia Today website on Saturday---and the interview with Marc begins at the 3:20 minute mark---and it runs until about 11:45 minutes.  Reader Ken Hurt sent it our way.

European court confirms Polish complicity in CIA rendition

A European Court of Human Rights ruling that Poland allowed a secret CIA jail on its soil became final on Tuesday (17 February) after the court rejected an appeal request.

The Strasbourg court last July found the Polish government had colluded with the CIA to establish the secret detention facility at the Stare Kiejkuty military base.

The court said Poland had failed to launch a proper investigation into human rights violations on two individuals who had been tortured at the CIA prison camp in 2002 and 2003.

Poland challenged the July ruling and appealed the case at the court’s Grand Chamber of five judges in October.

This news item put in an appearance on the euobserver.com Internet site at 9:38 a.m. on their Wednesday morning, which was 3:38 a.m. EST.  It's another offering from Roy Stephens.

Moscow Promises Canada's 'Clumsy' Sanctions Won't Go Unanswered

New sanctions by Canada against Russia are an attempt to undermine the Minsk agreements and hamper normal bilateral relations between Moscow and Ottawa, Russian Foreign Ministry spokesman Alexander Lukashevich said Wednesday.

"The decision by the Canadian authorities on the further expansion of sanctions against official Russian figures and companies under the guise of the events in Ukraine look like a clumsy attempt to hamper the fulfillment of the agreements on settling the conflict reached in Minsk on February 12 with the active and constructive role of Russia," Lukashevich said in a statement published on the ministry's website.

The diplomat added that Canada's sanctions would not be left without a response from Moscow.

This story showed up on the sputniknews.com Internet site at 3:33 p.m. Moscow time on their Wednesday afternoon, which was 7:33 a.m. in New York.

ECB risks crippling political damage if Greece forced to default

The political detonating pin for Greek contagion in Europe is an obscure mechanism used by the eurozone's nexus of central banks to settle accounts.

If Greece is forced out of the euro in acrimonious circumstances - a 50/50 risk given the continued refusal of the creditor core to acknowledge their own guilt and strategic errors - the country will not only default on its EMU rescue packages, but also on its "Target2" liabilities to the European Central Bank.

In normal times, Target2 adjustments are routine and self-correcting. They occur automatically as money is shifted around the currency bloc. The US Federal Reserve has a similar internal system to square books across regions. They turn nuclear if monetary union breaks up.  The Target2 "debts" owed by Greece's central bank to the ECB jumped to €49bn in December as capital flight accelerated on fears of a Syriza victory. They may have reached €65bn or €70bn by now.

A Greek default - unavoidable in a Grexit scenario - would crystallize these losses. The German people would discover instantly that a large sum of money committed without their knowledge and without a vote in the Bundestag had vanished.

This longish commentary by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site at 8:54 p.m. GMT yesterday evening---and I found it all by myself.  It's definitely worth reading.

Swiss prosecutor raids HSBC office, opens criminal inquiry

Geneva's public prosecutor searched HSBC's lakeside Swiss office on Wednesday after opening a criminal inquiry into allegations of aggravated money laundering, the second probe to hit the bank this week.

Europe's largest lender is in regulators' sights after details about how its Swiss private bank allegedly helped wealthy clients dodge taxes were leaked to the media and published last week.

In an unusual move, the Geneva prosecutor's office notified the media of the raid as it was going on. It searched two HSBC offices and said its investigation could target individuals, who would be liable to a fine and up to five years in prison if found guilty of serious money laundering offences.

"As of now, we aim at securing all the information concerning the accounts and clients who have been mentioned as detaining funds resulting from criminal offences," Attorney General Olivier Jornot told reporters.

This Reuters article, filed from Geneva, put in an appearance on their website at 2:50 p.m. EST on Wednesday afternoon---and I thank reader 'h c' for finding it for us.

Chris Martenson: The U.S.’s Suicidal Strategy on Ukraine

As I’ve written previously, the West, especially the U.S., was instrumental in toppling the democratically elected president of Ukraine back in February 2014. US officials were caught on tape plotting the coup, and then immediately supported the hastily installed and extremist officials that now occupy the Kiev leadership positions.

In short, the crisis in Ukraine was not the result of Russia’s actions, but the West’s. Had the prior president, Yanukovych, not been overthrown, it’s highly unlikely that Ukraine would be embroiled in a nasty civil war. Relations between Russia and the West would be in far better repair.

Russia, quite predictably and understandably, became alarmed at the rise of fascism and Nazi-sympathetic powers on its border. Remember the repeated statements by Kiev officials recommending extermination of the Russian speakers who make up the majority living in eastern Ukraine? Were a parallel situation happening in Canada, for example, I would fully expect the U.S. to be similarly and seriously interested and involved in the outcome.

The only people seemingly surprised by this predictable Russian reaction toward protecting its people and border interests are the neocons at the U.S. State Department who instigated the conflict in the first place. In my experience, these are dangerous people principally because they seem to lack perspective and humility.

Let's call them what they really are---sociopaths at best, psychopaths at worst.  This must read commentary by Chris showed up in yesterday's edition of the Casey Daily Dispatch.

Hundreds of Ukraine Troops Surrender as Besieged Town of Debaltseve Falls to Rebels

According to Reuters government forces started pulling out of the east Ukraine town on Wednesday after a fierce assault by the rebel separatists which Europe said violated a crumbling ceasefire. President Petro Poroshenko said before flying to the town of Debaltseve that more than 80 percent of his troops in the rail hub had already left following a heavy bombardment and street-by-street fighting despite the truce that took effect on Sunday.

As previously reported, according to the pro-separatists rebels the ceasefire does not apply to Debaltseve, which links the two rebel-controlled regions of eastern Ukraine, Donetsk and Luhansk.

Bloomberg adds, that "some Ukrainian troops are leaving the town as “full scale” street fighting continues following a small tank battle, Ilya Kyva, a deputy police chief of the Donetsk region, said by phone on Wednesday. Kyva wouldn’t say how many Ukrainian soldiers had left or how many still remained surrounded by the rebels. Ukrainian Eurobonds fell to a record as fighting was also reported near the coastal city of Mariupol."

It appears that all the stories about the fighting in the Ukraine I posted in yesterday's column were right on the money.  This speaks volumes about the credibility of the Russian news services.  This news items appeared on the Zero Hedge website at 8:10 a.m. EST yesterday morning---and I thank reader M.A. for sharing it with us.  There was also commentary about this on The Telegraph's website as well---and it's headlined "Defeated Ukrainians take the 'road of life' on their retreat from Debaltseve".

The strategic implications of the battle for Debaltseve: [Updated]

The Novorussians are in control of most of Debaltsevo (officially 90% officially 100% as of midnight GMT).  More relevantly, there is no more organized resistance.  Russian sources say that about 1,000 junta soldiers have refused to surrender and are hiding in the outskirts or have fled to the south end of the cauldron.  The Novorussians are not even bothering to hunt them down or return their sporadic (and inaccurate) fire: they are waiting for hunger and cold to force them to give up.  A spokesman for the Novorussians has reported that all communications between the junta forces in the cauldron and their commanders have been suppressed.  Russian TV stations are showing footage of Novorussian soldiers raising their flag over the center of the city.

That the forces in the Debaltsevo cauldron were doomed was pretty clear for a while already, but what is still amazing is the speed at which the collapse has taken place.  Clearly, we are dealing with a catastrophic collapse of combat capability of the junta forces.

The Russian media is also showing many video clips of surrendering junta soldiers in and around Debaltsevo.  Those who surrender are treated for their wounds, washed, clothed, fed and they will be sent home as soon as possible.

During his recent press conference in Hungary, Vladimir Putin has confirmed that the Ukrainian forces in Debaltsevo has been defeated.  He also confirmed that the U.S. has been sending weapons to the junta and he added that he was absolutely sure that while this could kill more people, it would make no difference at all because the Ukrainian soldiers have no desire to fight whereas the morale of the Novorussians was extremely strong.

This hot-off-the-press, up-to-the-minute commentary on the situation in Debaltsevo was posted on the vineyardsaker.blogspot.ca Internet site just after midnight EST this morning.  It's on the longish side, but definitely worth your time, if you have the interest---which you should.  And, not surprisingly, it's courtesy of Roy Stephens.

Merkel in Moscow and Minsk: Der Spiegel Says Putin Has Won

As we have also previously said, Der Spiegel shows this was a Western not a Russian initiative. The Russians did not initiate it. Merkel did. According to Der Spiegel she first floated the idea at the end of January when she was dining at a restaurant in Strasbourg with Hollande and European Parliament President Martin Schultz. 

This is the key to understanding what happened in Minsk. Because it is difficult for some in the West to acknowledge that the initiative was launched by Merkel because of the critical condition the Ukrainians are in and that this forced Merkel to make major concessions to Putin in Minsk, parts of the Western media are trying to deny the fact.

An article by Niall Ferguson in the Financial Times says it was Putin who invited Merkel and Hollande to Moscow in order to divide the West and prevent the US sending arms to Kiev. An editorial in the London Times says the same thing. Der Spiegel shows this is untrue.

Thirdly, as we have also said, the initiative was Merkel’s not Hollande’s. Hollande was brought along purely to give Merkel diplomatic cover. Der Spiegel does not openly say so, but a German Chancellor cannot afford to be seen cutting unilateral deals at the expense of other European states with the Russians in Moscow, as Ribbentrop and Molotov once did.

This long, but VERY interesting article, is certainly worth reading if you have the time and the interest.  I highly recommend it.  It was posted on the russia-insider.com internet site very early yesterday morning in North America---and my thanks go out to Roy Stephens for bringing it to our attention.

Russia Dumps Most U.S. Paper Ever as China Reduces Treasurys Holdings to January 2013 Levels

Back in December, Socgen spread a rumor that Russia has begun selling its gold. Subsequent IMF data showed that not only was this not correct, Russia in fact added to its gold holdings. But there was one thing it was selling: some $22 billion in U.S. Treasurys, a record 20% of its total holdings, bringing its U.S. paper inventory to just $86 billion in December - the lowest since June 2008.

It wasn't just Russia: the country that has ever more frequently been said to be in the same camp as Russia - and against the U.S. - namely China, also sold another $6 billion in Treasurys in the last month of 2014, which would have made its U.S. treasury holdings equal with those of Japan, if only Tokyo hadn't also sold over $10 billion in the same month.

And while we know that Russia used at least some of the proceeds to buy gold, the bigger question is: just what is China buying with all these stealthy US$-denominated liquidations, and how much gold does the PBOC really have as of this moment.

This brief, but most excellent article, appeared on the Zero Hedge website at 9:02 p.m. EST yesterday evening---and the two embedded charts are worth the trip.  I thank reader M.A. for sending it our way.

Paulson Keeps Gold Stake as Investors Lose Love for Metal

Billionaire hedge fund manager John Paulson stuck with his holding in the world’s biggest gold exchange-traded product at a time when other investors were dumping the metal.

Paulson & Co., the largest holder of the SPDR Gold Trust, kept its stake at 10.23 million shares in the three months ended Dec. 31, a government filing showed. The position was unchanged for a sixth straight quarter.

Assets in the SPDR fund slumped 11 percent in 2014, and reached 704.83 metric tons in January, the lowest since September 2008. Gold prices dropped 1.5 percent last year, capping a consecutive annual decline for the first time since 1998. Gains for equities and the prospect of rising U.S. interest rates prompted some investors to lose faith in the metal as a store of value.

This short news item was posted on the newsmax.com Internet site at 5:56 a.m. EST on Wednesday morning---and it's courtesy of West Virginia reader Elliot Simon.

Lawrence Williams: Global silver production up 3.8% in 2014

According to precious metals specialist research consultancy Metals Focus, a company which was primarily formed by former GFMS analysts and marketers following the latter’s acquisition by Thomson Reuters a couple of years ago, global silver output may have peaked in 2014. The consultancy is one of the primary analytical firms involved in researching precious metals supply and demand, and in its latest Precious Metals Weekly newsletter gives us some insight into what it sees happening this year in terms of global silver production.

Indeed, as with gold, the weakness in the silver price is at last beginning to have an impact on global mine production and Metals Focus sees mine output flattening out after several years of fairly strong production growth. As the consultancy points out the mining cycle is such that new mine decisions are largely taken when prices are high, but that it may take several years to bring a big new mine into production and by the time it comes on stream the price situation may have changed dramatically. The silver price has been falling for the past three years and is now around 65% below its 2011 peak which leaves many silver producers now sitting on all-in sustaining costs (AISC) levels close to, or even higher than the value of sales. With no real price respite in sight this will undoubtedly lead to new projects being curtailed and possible mine cutbacks and closures – indeed this is already beginning to happen.

This commentary by Lawrie is deficient in the fact that nothing is mentioned about the extreme short position held by the Big 8 traders in the COMEX futures market which, as Ted Butler pointed out, are mostly domestic and foreign banks.  This, and this alone, is why  the silver price is as low as it is.  And until that situation changes, nothing changes.  This commentary by Lawrie appeared on the mineweb.com Internet site at 2:41 p.m. GMT yesterday afternoon---and it's worth reading.

RBI lifts ban on import of gold coins, medallions by banks

The Reserve Bank of India today lifted the ban on imports of gold coins and medallions by banks and trading houses.

In a notification the RBI also said banks are permitted to import gold on consignment basis. Domestic sales will be, however, permitted against up-front payment only.

"While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed," it said.

The RBI and the government have been receiving requests for clarification on some of operational aspects of guidelines on import of gold after withdrawal of restrictions on import of the metal on November 28 last year, the notification said.

This brief gold-related news item, filed from Mumbai, appeared on the Economic Times of India website at 9:22 p.m. IST on their Wednesday evening---and I found it on the gata.org Internet site.

Middlekoop and Macleod see a gold-based reset

Gold-based transformations of the world financial system are envisioned in two commentaries today, one by Willem Middlekoop, author of "The Big Reset," who writes today in Koos Jansen's space at Bullion Star a commentary headlined "A New Gold Standard in the Making".

And GoldMoney research director Alasdair Macleod, writing at Gold-Eagle, wonders if the Russian government has figured out that Western central banks don't have the gold they claim to have---and if Russia is ready to undertake a reset of its own. Macleod's commentary is headlined "Gold and Russia".

The links to these commentaries are posted in this GATA release from yesterday---and both fall into the absolute must read category.

¤ The Funnies

I'm going to take a break from Arizona for a day and feature three photos that gold market analyst Lawrie Williams sent my way from his trip to Cape Town, South Africa to attend the recently-concluded Cape Town Mining Indaba.  I thought they were worth sharing---and I hope you do as well.

These photos were taken when he was on a boat excursion---and show the city from a perspective that few ever get to see.  The first photo shows Signal Hill and Lion's Head in the foreground---and Table Mountain in the background, with clouds called the "tablecloth" spilling over the edge.



The second photo is a little further around the coast and show the "tablecloth" clouds on Table Mountain more clearly.



And lastly, further around the coast still, comes a mountain formation the locals call the "Twelve Apostles".







¤ The Wrap

It would appear the influence of COMEX futures positioning is at play in silver and gold prices. Certainly, if the price action for this week, month, year---and years past---is not fully explained by changes in the COT market structure, then I am at a loss to explain it in different terms. I actually feel badly for anyone who thinks silver and gold prices are dependent on any other financial news or events other than COMEX trading. That’s not to sound cocky or say it will always be this way, because that’s not the case in the long run. But it happens to be the case right now---and has been for a very long time.

In simple terms, we went lower on Tuesday and Wednesday---and in the case of every previous significant sell-off in gold and silver---because the commercials (led by JPMorgan) set prices lower through means of HFT and other dirty tricks on the COMEX in order to induce technical fund selling so that the commercials could buy. If this is not the story 100% of the time, then it's the story 99% of the time. In any case, this is the manipulation that increasing numbers of observers are coming to grasp. The clincher is that it is confirmed in evolving COT data. Never has there been a significant decline in the price of silver or gold without significant commercial buying.

That brings us to the current “count.” I would be surprised if the COT report to be released on Friday and covering trading through the close of business on Tuesday, didn’t feature hefty declines in the headline number of the total commercial net short position. For COMEX gold, considering there were two significant down days in the reporting week, Tuesday when new price lows were set---and last Thursday, Feb 11 when the 50-day moving average was first penetrated to the downside, I would guess another 30,000 net contracts or so were taken off the total commercial net short position. In silver, the 50-day moving average wasn’t violated until Tuesday, but there could have been a reduction in the headline number of as many as 5,000 to 10,000 contracts. - Silver analyst Ted Butler: 18 February 2014

It was another very quiet day in the precious metal markets, at least up until the U.S. equity markets opened.  Then shortly after that, the price began to head lower---and by the time the HFT boyz were done after the 11 a.m. EST London close, the gold price was down twelve bucks.

That was all gained back on the release of the January minutes from the Federal Reserve at 2 p.m. EST---and you'll excuse me for thinking that the morning sell-off in the precious metals was done to counteract the expected jump in their respective prices when the minutes were released.  If that was the case, it worked like a charm.

Here are the 6-month charts for all four precious metals---and nothing should be read into yesterday's price shenanigans in New York on a longer-term basis, despite the positive dojis on their respective charts.

And as I type this paragraph, the London open is fifteen minutes away.  Not much is going on in Far East trading with the Chinese New Year now in full swing---and it's one of the reasons why trading volume has been so light during these hours for the last day or so.  The smallish gains in all four precious metals that accrued during early morning trading in the Far East on their Thursday are all staring to slip away, but are still up a hair from their closes in New York yesterday afternoon---and volume is a little heavier than it was this time yesterday, probably because of those early rallies---such as they were.  The dollar index is down 8 basis points---and trading on both side of the 94.00 mark at the moment.

We seem to be in some sort of holding pattern at the moment. Although I'm expecting the engineered price declines to continue in both gold and silver in the days ahead, the fact is that these markets could move strongly to the upside as well.

But unless it's the big "reset," any rallies or sell-offs will be paper trading on the COMEX at the hands of JPMorgan et al---and nothing to do with supply and demand, a fact that was more than adequately covered in Ted's quote above.

And as I hit the 'send' button on today's column at 5:15 a.m. EST, I note that there's a bit of positive price activity in three of the four precious metals [palladium is down a buck], but nothing much should be read into this, either.  Net gold volume is closing in on 24,000 contracts---and silver's net volume is a hair over 6,500 contracts.  The dollar index is back above the 94.00 mark, but only by 4 basis points---and it's currently down 6 basis points from its close in New York yesterday.  It will be interesting to see if this is the start of another "gentle hands" rescue as the Thursday trading day unfolds.

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

Ed Steer

]]>
Thu, 19 Feb 2015 06:05:00 +0000
<![CDATA[Divers Find Record Trove of Gold Coins in Mediterranean]]> http://www.caseyresearch.com/gsd/edition/divers-find-record-trove-of-gold-coins-in-mediterranean/ http://www.caseyresearch.com/gsd/edition/divers-find-record-trove-of-gold-coins-in-mediterranean/#When:06:15:00Z "Even Stevie Wonder could see what happened yesterday"

¤ Yesterday In Gold & Silver

Well, dear reader, you don't need me to explain what happened in the precious metal market yesterday, as we've seen it all before.  It's just "da boyz" and their HFT buddies running the stops for fun, profit and price management purposes.

In gold, the price was under some sort of pressure starting around 9 a.m. Hong Kong time---and by 1 p.m. in London, the price was down about twelve bucks.  There was a tiny rally during the next hour of trading, but at 9 a.m. in New York, the HFT spun their algorithms---and that was that, with the low coming minutes after 12 o'clock noon EST.  The gold price rallied quietly higher from there into the close of electronic trading.

The high and low tick were reported by the CME Group as $1,236.70 and $1,203.30 in the April contract.

Gold closed in New York yesterday at $1,209.80 spot, down $18.10 from Friday's close---and it was down about twenty bucks from Monday's close.  Net volume was only 140,000 contracts---and that doesn't include Monday's volume, which I've already subtracted from that figure.

Reader Brad Robertson sent me the 5-minute tick chart for gold yesterday.  It starts around 7:25 p.m. MST/9:25 p.m. EST on Monday evening, which was early morning in Far East trading---and runs through until the COMEX close in New York yesterday.  Note the huge volume spike once the HFT traders spun their algorithms---and the technical funds puked their long positions.  They probably added to their short positions as well.  Don't forget the 'click to enlarge' feature!

Not surprisingly, it was silver that got hit the worst---and the chart below tells you all you need to know.  You don't need the play-by-play on this, as you've heard it all before---and are probably just as tired of reading about it, as I am writing about it.

The high and lows were reported as $16.26 and $17.40 in the March contract---an intraday move of 6.5 percent.

Silver finished well off its low at $16.47 spot, down 85 cents from Friday's close---and 83 cents from Monday's close.  Net volume on Tuesday was 49,000 contracts---that's net of Monday's volume and Tuesday's roll-overs.  And considering the severity of the engineered price decline, that's not a lot of volume.  I'll have more on this volume issue in The Wrap.

Ditto for platinum, except its low tick came just before 10:30 a.m. EST.  It bounced off its low by five bucks or so---and then traded ruler flat into the close, finishing the day at $1,173 spot, down 32 dollars from Monday's close.

The palladium price chart was a very mini version of the platinum chart.  Palladium was closed at $781 spot, down only six bucks from Monday.

The dollar index closed late on Monday afternoon at 94.43---and after a down/up move of about 15 basis points in Far East trading on their Tuesday, the index hit its 94.45 high about 8:20 a.m. GMT in London.  By noon in London, it was at its 93.85 low---and at that juncture it was 'rescued' once again---and then chopped sideways, closing at 94.13---down 30 basis points on the day.

Once again the currency moves had zero to do with what was happening in the precious metals, as their price action there was 100 percent engineered in the COMEX futures market.

The gold stocks gapped down a bit more than 2 percent at the open---and continued to slide a bit as the trading day wore on.  Not even the gold rally that began at noon EST---and continued for the rest of the day---helped the equities, as the HUI close virtually on its low tick, down 3.32 percent.

The silver equities followed a similar price pattern and, once again, the silver rally off its price low that began at noon EST made no difference, as the silver shares continued to slide.  Nick Laird's Intraday Silver Sentiment Index closed down a chunky 4.51 percent.

The CME Daily Delivery Report showed that 50 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Jefferies was the short/issuer on all of them---and JPMorgan stopped 48 of them in its client account. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in February increased by one lonely contract---and now stands at 602 contracts, minus the 50 mentioned in the previous paragraph.  The February o.i. in silver was unchanged at 56 contracts.

There were no reported changes in GLD yesterday---and as of 9:12 p.m. EST yesterday evening, there were no reported changes in SLV.

The U.S. Mint didn't have a sales report, either.

Over at the COMEX-approved depositories on Friday, there were 32,150.000 troy ounces of gold reported received---and that works out to exactly 1,000 kilobars of the stuff---and 16,075.000 troy ounces were shipped out.  That amount works out to exactly 500 kilobars.  All of the in/out activity was at Canada's Scotiabank---and the link to that is here.

Although gold kilobars of four nines fineness are not classified as "good delivery" by the LBMA or the COMEX just yet, the day will come when they will be---and that will probably occur the day that gold gets repriced.

In silver, nothing was reported received, but a very chunky 1,222,866 troy ounces were reported shipped out.  Three different depositories were involved---and the link to that action is here.

I'm happy to say that I don't have all that many stories for you today, so that should give you more time to read the ones you didn't get around to in the Critical Reads section of yesterday's column.

¤ Critical Reads

David Stockman: Wall Street’s Calling the Sheep: Buy the Dip Now, Join the Slaughter Later

Yes, indeed. They bought the dip again, nudging the S&P 500 to another “record close”. This time the magic number was 2097 and its represented a tiny gain of 0.3% from the last record close, which was 2090 on December 29th.

Needless to say, there were a lot of thrills and spills in between. As shown below, the broad market index has been staggering upward like a drunken sailor for the last three months. Just about 90 days ago on November 17, in fact, the S&P 500 hit a then record high of 2073 before plunging on five separate occasions by 3-4% toward the 2000 marker during the interim.

So it all adds up to a 1.2% net gain since mid-November. Call it a 4% annualized rate. The question at hand, therefore, is who in their right mind would want to play on the jagged curves shown below for 4% a year?

Indeed, the sharp dips here pictured are not even half the story. The real risk/reward equation is the prospect of gaining perhaps 4% when buying the dips versus a 30-50% bloodbath when comes the next slaughter.

This very interesting commentary by David, with lots of good charts, appeared on his website yesterday afternoon EST---and I thank Roy Stephens for today's first story.

Large Student Debt Load Limits Young Americans' Home-buying

Younger Americans are struggling to keep up with steadily-rising student debt loads, a burden that is limiting their ability to buy homes.

The Federal Reserve Bank of New York said Tuesday that the percentage of student loans 90 days or more overdue rose to 11.3 percent in the final three months of last year, up from 11.1 percent in the previous quarter. That's the highest in a year. Total student borrowing now stands at $1.16 trillion, the most on record and 7.1 percent higher than 12 months earlier.

Previous research by the New York Fed has found that younger Americans with student loans are less likely to take out mortgages than those without student debt. That's a reversal from the pre-recession pattern.

Before the 2008-09 downturn, 30-year-olds with student debt were more likely to have mortgages because of their higher levels of education and higher potential incomes, the New York Fed says. Now they are slightly less likely to have mortgages than 30-year-olds without student debt.

This story appeared on the moneynews.com Internet site at 1:33 p.m. EST on Tuesday afternoon---and I thank West Virginia reader Elliot Simon for sharing it with us.

UPDATE: Operation Chokepoint Is Worse Than We Thought -- Mike Maloney

From: Staff Report, 113th Congress, December 8, 2014

"At a minimum, Operation Choke Point is little more than government-mandated de-risking. FDIC, in cooperation with the Justice Department, made sure banks understood – or in their own language, “got the message” – that maintaining relationships with certain disfavored business lines would incur enormous regulatory risk.

The effect of this policy has been to deny countless legal and legitimate merchants access to the financial system and deprive them of their very ability to exist. Accordingly, Operation Choke Point violates the most fundamental principles of the rule of law and accountable, transparent government."

This 8:19 minute video update from Mike appeared on the youtube.com Internet site yesterday morning---and if you run your business through an American bank, it's a must watch.  Bill Busser was the first reader through the door with it.

U.S. Embedded Spyware Overseas, Report Claims

The United States has found a way to permanently embed surveillance and sabotage tools in computers and networks it has targeted in Iran, Russia, Pakistan, China, Afghanistan and other countries closely watched by American intelligence agencies, according to a Russian cybersecurity firm.

In a presentation of its findings at a conference in Mexico on Monday, Kaspersky Lab, the Russian firm, said that the implants had been placed by what it called the “Equation Group,” which appears to be a veiled reference to the National Security Agency and its military counterpart, United States Cyber Command.

It linked the techniques to those used in Stuxnet, the computer worm that disabled about 1,000 centrifuges in Iran’s nuclear enrichment program. It was later revealed that Stuxnet was part of a program code-named Olympic Games and run jointly by Israel and the United States.

Kaspersky’s report said that Olympic Games had similarities to a much broader effort to infect computers well beyond those in Iran. It detected particularly high infection rates in computers in Iran, Pakistan and Russia, three countries whose nuclear programs the United States routinely monitors.

I posted two stories about this in my column yesterday.  Here's The New York Times' commentary on this issue---and I thank Roy Stephens for his second contribution to today's column.

Expert: Oil Price Wars Fatally Wounded the Petrodollar

Q: Would you tell us about your ideas in regards to the “financialization of the global order"?

For some time, the international order was structured around the United Nations and the corpus of international law, but more and more the West has tended to bypass the U.N. as an institution designed to maintain the international order, and instead relies on economic sanctions to pressure some countries.

We have a dollar-based financial system, and through instrumentalizing America's position as controller of all dollar transactions, the U.S. has been able to bypass the old tools of diplomacy and the U.N. -- in order to further its aims.

But increasingly, this monopoly over the reserve currency has become the unilateral tool of the United States -- displacing multilateral action at the U.N.

This must read interview appeared on the russia-insider.com Internet site on Sunday---and it's courtesy of Roy Stephens once again.

Nigel Farage on "The Great Game of Poker Over the Future of the Euro"

"There is a great game of poker taking place for the future of this currency," Nigel Farage exclaims as he  deservedly takes a small victory lap over his warnings of the anti-democratic nature of the dis-union that has been created.

As his warnings that "the E.U. will crush, and kill, and destroy nation state democracy," have gone unheeded, this last week has seen The Eurogroup's behavior justify everything Farage has feared... Juncker: "there can be no democratic choice against the Euro."

This 4:28 minute video clip shows Nigel off at his best---and even his European Parliamentary colleagues applaud him louder now than they ever used to.  It was posted on the zerohedge.com Internet site at 9:50 p.m. EST on Tuesday evening---and it's courtesy of reader M.A.

Greek crisis talks collapse in acrimony as Syriza defies EMU

Greece is on a collision course with the eurozone’s creditor powers after emergency talks ended in acrimony on Monday night, triggering the most serious political crisis since the launch of the euro.

The Leftist Syriza government reacted with fury to eurozone demands that it must stick to the country’s discredited austerity plan, describing the draft text as “absurd and unacceptable”.

Yanis Varoufakis, the Greek finance minister, said Eurogroup finance ministers had ignored a deal already agreed with the European Commission for a four-month delay and a “new contract for growth”, returning instead to old demands. "The only way to solve Greece is to treat us like equals; not a debt colony,” he said, predicting that E.U. authorities would soon have to withdraw their latest “ultimatum”.

The talks were halted after four hours of stormy exchanges, risking a traumatic showdown that could precipitate the biggest default in world history and force Greece out of the euro by the end of the month.

This commentary by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 9:24 p.m. GMT on Monday evening---and I received it from Roy Stephens too late to make yesterday's column.  It's worth reading.

Stockman to Obama: Butt Out of the Greek Crisis - You've Dispensed Enough Keynesian Poison at Home

At the moment, Europe is struggling to pass an inflamed financial gallstone. The sooner that Greece is permitted to escape the debt clogged financial ducts fashioned by its Brussels paymasters, the sooner the entirety of Europe can begin the cure of debt liquidation and return to honest finance.

In their wooden-headed insistence that Greece remains obligated to 100% of its crushing $350 billion debt load, the Germans are, ironically, doing the work of the financial gods. By making it literally impossible for the new Greek government to abide by its voter mandate,  Berlin is paving the way for “Grexit” and is thereby setting-up the catalyst for the Euro’s demise. And with it, of course, the obliteration of the E.U.’s rotten regime of bank bailouts, central bank money printing and fiscal policy anesthesia.

Hallelujah! Europe and the world desperately need a big, bloody sovereign default, and there is no more worthy case than Greece. As Finance Minister Varoufakis so inconveniently stated last week, Greece is a “bankrupt state” and has been since the crisis first erupted back in 2010.

Accordingly, the Brussels bailout transfer of that impaired debt from the banks and investors, which had so richly earned the right to experience deep losses owing to their lack of prudence, to E.U. taxpayers was a stupendous act of economic and political folly. It paved the way for the very evil that the fiscally resolute Germans profess to fear the most. Namely, central bank financing of state deficits and the unleashing of politicians to thereby ultimately bankrupt it.

Wow!  No shades of grey here!  This worthwhile commentary by Mr. Stockman showed up on the zerohedge.com Internet site at 3:15 p.m. EST on Tuesday afternoon---and I thank reader U.D. for sending it our way.

Hungary gets gas deal after welcoming Putin, breaking ranks with West

Russian President Vladimir Putin arrived in Budapest, Hungary, on Tuesday for his first official visit to a Western country in more than eight months, stirring protest against the Hungarian government's warming ties with the Kremlin and fears that they will inflict division in the European Union.

Putin and Hungarian Prime Minister Viktor Orban appeared to be expecting mutual validation from the summit -- the Kremlin leader demonstrating that he still has friends in the West in spite of the Ukraine crisis and Orban ensuring his country's energy security with new deals on gas imports and a major upgrade of its nuclear facility.

At least 2,000 Hungarians took to the streets on the eve of the Kremlin leader's visit to protest what they see as an unwelcome return to dependence on Moscow for reliable power supplies, as well as Orban's apparent disregard for the violence inflicted on neighboring Ukraine by Russia-backed separatists.

This news item appeared on the latimes.com Internet site yesterday at 3 p.m. Pacific Standard Time---and I thank International Man senior editor Nick Giambruno for bringing it to our attention.

Yet another monumental failure for the junta in Kiev

All my sources confirm that Debaltsevo is mostly in Novorussian hands and that the junta forces are in full retreat to the south of the pocket.  All the top Novorussian brass was on hand today, including Kononov, Motorola, Givi, Mozgovoi and Zakharchenko as were many tens of Ukrainian prisoners.  It appears that the junta forces were unable to provide the kind of resistance they showed in Peski, and that make sense because in Peski they were not surrounded and they had the fire support of Ukrainian forces just north and west of them.  This time the cauldron is too deep and the "lid" too strong. 

You can see that the cauldron "lid" has now closed on Debaltsevo from the north and that the junta forces are either surrendering of fleeing south where there is quite literally nothing for them to do then to wait until they run out of food and ammo.  Bottom line: it's over for the Ukie forces in the Debaltsevo cauldron.

Amazingly, the freaks in Kiev as still insisting that there is no cauldron but only a "bridgehead".  The good news is that apparently nobody buys that nonsense any more and the mothers and wives of the men caught in the cauldron are trying everything they can to force the Ukie high command to accept the Novorussian offer of an evacuation corridor.  The try to protest in front of the General Staff building in Kiev, then the blocked traffic.  In a particularly poignant moment one of these women put a megaphone next to a cellphone to amplify the voice of her son/husband calling from the cauldron and announcing that they had for about 3 hours of supplies left.

This short commentary appeared on the vineyardsaker.blogspot.ca website yesterday---and it's definitely a must read.  However, like all 'war stories' this one should be read with your eyes wide open.  But, having said that, if I had to believe this, or a main stream media source, it would be no contest.  You can decide for yourself.  I thank reader M.A. for finding it for us.

"Ukrainian government should not keep its troops from surrendering."--Putin

The President discussed the new Ukrainian effort to relieve its grouping in the Debaltsevo cauldron.

The Russian leader appearing at a press conference to discuss the outcome of  the meeting with Hungary’s Prime Minister Viktor Orban, said that the continuing clashes between the Ukrainian forces and the militia are not a surprise to him.

“It was predictable. I talked about it in Minsk. It was clear that whoever is in the cauldron will attempt to break out, escape, while the militias who are holding their positions will resist.”

“I hope the responsible [sic] parties in Kiev will not prevent its surrounded troops from laying down their arms and returning to their families.”

This news item showed up on the fortruss.blogspot.ca website yesterday---and it's also courtesy of Roy Stephens.  There was another story on the same website headlined  "Ukrainian troops surrender by the hundreds"---and it's worth a quick look as well.  We'll find out soon enough how much truth there is to all this.

Canada’s Prime Minister Announces New Anti-Russia Sanctions

The Prime Minister of Canada, Stephen Harper, has issued a statement announcing fresh economic sanctions and travel bans against 37 Russian and Ukrainian individuals, and economic sanctions against 17 Russian and Ukrainian entities over their alleged role in the escalation of the situation in Ukraine.

"In coordination with our EU and U.S. partners, Canada is once again intensifying its response to the situation [in southeastern Ukraine] by announcing further sanctions against Russian and Ukrainian individuals and entities," Harper said Tuesday as quoted in a statement released on his official website.

According to the statement, the new restrictive measures target, among others, Director General of the Rossiya Segodnya International Information Agency Dmitry Kiselev, Russian Deputy Defense Minister Anatoly Antonov and deputy head of the Russian Armed Forced general staff Andrei Kartapolov.

It's embarrassing to have to post stories like this, as Harper is a totally paid for American whore.  Too bad, as there was time when he was a real decent guy.  Roy Stephens, who sent me this sputniknews.com story from 4:01 a.m. Moscow time on their Wednesday morning, feels exactly the same way.

Peter Hambro: Banking Heir Who Lost Millions in Gold Wants to Raise More

Peter Hambro, descended from a wealthy line of Anglo-Danish bankers, recalls receiving a bottle of whisky as a gift from his mother’s gardener.

It was a token of thanks after seeing a good return on his investment in Hambro’s Russian gold mining business. “I’ve made so much money, the least I can do is give you a drink,” Hambro, 70, remembers the gardener saying at the time.

Those days are long gone.

Petropavlovsk Plc, once worth more than $3 billion as the price of gold it dug in the Russian Far East soared, has lost 99 percent of its value in the past five years. For anyone who has hung on from the start, it has been an astonishing ride as the stock rocketed more than 10-fold from its listing price in 2002, before losing all of those gains and more. The company is forecast to report a third straight annual net loss for 2014.

This interesting article, filed from London, showed up on the bloomberg.com Internet site at 5:01 p.m. Denver time on Monday afternoon---and it's courtesy of Chris Powell.

Koos Jansen details how the World Gold Council underestimates China's gold demand

Gold researcher, Bullion Star market analyst, and GATA consultant Koos Jansen explains in painstaking detail why he has concluded that China's effective gold demand is much higher than what the World Gold Council estimates it to be.

There's way too much information here, but as I've said on many occasions over the years, you can't believe anything that comes out of the WGC, GFMS or CPM Group.  I wish you luck wading through it all, but you should attempt it.  It's headlined "Koos Jansen vs. WGC/GFMS/CPM Update"---and was posted on the bullionstar.com Internet site yesterday sometime---and I found it embedded in a GATA release.

Zero Hedge claims vindication for Mylchreest's study of gold-suppressing yen trade

Two months ago we showed, and explained in great detail, how in the new normal the role of gold is nothing more than a funding "currency" to allow the BOJ to sell Yen against it (on a borrowed basis, which is also why the LBMA halted reporting its GOFO data as of the end of February, as it would not be pleasant for the central bank cartel to demonstrate just how much institutional gold shortfall there developed following major BOJ interventions).

Well, dear reader, this is way above my pay grade---and I have no idea whether it's true or not.  For the second time in today's column, you can be the judge.

I found this Zero Hedge piece embedded in an article on the gata.org Internet site yesterday.

Divers find record trove of gold coins in Mediterranean

Scuba divers have discovered the largest trove of gold coins ever found off Israel's Mediterranean coast -- about 2,000 pieces dating back more than 1,000 years, the country's antiquities authority said Tuesday.

"The largest treasure of gold coins discovered in Israel was found in recent weeks on the seabed in the ancient harbour in Caesarea," the authority said in a statement.

It was by pure chance that members of a diving club in the Roman-era port had come across the coins, which the authority said weighed nine kilograms (almost 20 pounds) but described as "priceless".

"At first they thought they had spotted a toy coin from a game and it was only after they understood the coin was the real thing that they collected several coins and quickly returned to the shore in order to inform the director of the dive club about their find," it said.

This extremely interesting AFP story, filed from Jerusalem, was picked up by the news.yahoo.com Internet site yesterday---and I thank Washington reader S.A. for finding it for us.  The photo of the gold coins is worth the trip all by itself---and use the 'click to enlarge' feature for a really good look.

¤ The Funnies

The first photo is of the visitor's centre at the exit from Petrified Forest National Park.  As you can tell, the shadows were getting pretty long---and colours of the desert were at their peak.  As a matter of fact, they were almost too intense.

The photo below was taken less than an hour after the one above---and I was blasting down Interstate 40 towards Winslow, Arizona---which you can just make out over the headlights of the oncoming truck traffic in the center of this picture.  Taking photos at night while driving at 100 kilometers/hour on cruise control on a semi-busy highway---camera in one hand and steering wheel in the other---is not something that I would do again anytime soon.

"Well, I'm a standing on a corner in Winslow, Arizona---and such a fine sight to see.
It's a girl, my Lord, in a flatbed Ford slowin' down to take a look at me.
" - The Eagles: "Take It Easy"[1972]

Even up here in Canada, I was always aware of the association between the above song and the town itself---but had no idea that the town had capitalized on it to such an extent.  So when I saw the setup the next morning as I was driving around town----how could I resist?





"A handout picture released by Israel's Antiquities Authority shows some of the gold coins recently found on the seabed in the ancient harbour in Caesarea" -- From the last story in today's column.



A Pink fairy armadillo!  I'd never heard of such a creature until a reader sent me this photo on the weekend.





¤ The Wrap

That the unusually frantic pace of physical inventory movement has been unique to COMEX silver of all commodities, it warrants attention and analysis (speculation). Or at least, that’s what I contend. But another thought occurred to me as a result of the subscriber’s question that strikes a familiar theme of mine. As you know, I contend (as do many others) that paper (futures) COMEX silver trading artificially and illegally dictates prices to the world of physical silver, particularly the concentrated short position by the eight largest COMEX traders.

The weekly movement of physical silver into and out from the COMEX has had no discernible effect on price---and is quantified at an average weekly turnover of 5 million oz (less recently). While this level of physical movement is very large  when compared to other commodities and past silver movement, it is miniscule when compared to COMEX weekly futures trading volume (around 750 million oz equivalent) or typical changes in the weekly COT report on open positions (25 million oz equivalent). I realize that futures trading volume exceeds physical movement in all commodities, but not to the extent seen in silver. Certainly, in terms of relative world production, no commodity has a larger concentrated short position. My point is simple – because COMEX futures trading volume and concentrated positioning is so much larger than the quantities of silver in the physical world, it shouldn’t be hard to see which is setting the price. - Silver analyst Ted Butler: 14 February 2015

I'm not going to dwell on what happened in the precious metal market on Tuesday.  It's at time like this I like to point out that even Stevie Wonder could see what happened yesterday, as it was that obvious.

Here are the 6-month charts for all four precious metals, so you can see the "lay of the land" as of the close of trading yesterday.

In my daily conversation with Ted, we both expressed the same concern---and that was that despite the huge engineered price declines in both gold and silver [also platinum] yesterday, the volumes weren't anywhere near what they would have to be to indicate that a final low is in, in either gold or silver.  Not even close.

I figure the JPMorgan et al could hit gold for another $50 or $60 without breaking into a sweat---and silver close to a buck, if not a bit more.  But can they or will they?  Beats the hell out of me.  But if I had to bet $10---I'd say they're going to do precisely that.

The only thing that Ted and I were trying to divine was how they were going to "slice the salami" to the downside this time around---in one single thrust, or will it be death by a thousand cuts once again?  I suppose that all depends on how big a hurry they're in.

Hopefully all of yesterday's price/volume action will be included in this Friday's Commitment of Traders Report, because yesterday at the close of COMEX trading was the cut-off for it.

And as I write this paragraph, the London open is forty minutes away.  All four precious metals are back to unchanged after being down a hair in early Far East trading on their Wednesday.   I think the church mouse died, as net volumes are literally microscopic; with gold at 8,100 contracts---and silver at 2,400 contracts.  The dollar index hasn't been doing much of anything all night long, but happens to be up 7 basis points at the moment.

And as I put the finishing touches on today's effort at 4:45 a.m. EST, I see that there's still nothing going on in any of the four precious metals, as all are still virtually unchanged from Tuesday's close in New York.  Gold's net volume is just now approaching 12,000 contracts---and silver's net volume is barely 3,500 contracts, with few roll-overs.  The dollar index is back to unchanged as well.

Hello---is anyone out there???

I doubt very much that that this current slumberfest will last the remainder of the Wednesday trading session.  There's an old saying that one should "never short a quiet market".  I suppose there was a lot of truth to that statement when the markets were free and fair.  But with the precious metal prices rigged seven ways to heaven, going long this market under the current circumstances is not the safest bet in town either.

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

Enjoy your day---and I'll see you here tomorrow.

Ed Steer

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